Isabella Mariam

The High Court of Judicature at Bombay Division Bench of Justice Ravindra V. Ghuge and Justice Gautam A. Ankhad dismissed a petition challenging the forfeiture of residential flats under the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 (SAFEMA). The Court held that no prejudice was caused to the petitioners and confirmed that the forfeiture order dated 28 September 1993 remained valid. It further directed that the petitioners were not entitled to relief under writ jurisdiction and declined to grant any stay of the operation of the judgment. The Court recorded that the forfeiture had attained finality through earlier judicial proceedings and that the challenge filed decades later was devoid of merit. The directive was issued that the notice seeking possession of the properties was a lawful consequence of the forfeiture order.

The case concerned two flats situated at Baug-e-Rehmat Co-operative Housing Society Ltd., Kurla, Mumbai. The properties were originally purchased in 1980 by Abdul Razak Suleman Memon and his wife, Hanifa Memon. The petitioners claimed that in 1992, Abdul Razak Memon and his daughter-in-law, Reshma Memon, transferred the flats to petitioner no. 1 and her deceased husband for a consideration of ₹6,75,000. The petitioners contended that they had paid the consideration through bank transactions and continued paying utility bills and maintenance charges, asserting ownership.

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In 1992, a detention order under the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (COFEPOSA) was issued against Tiger Memon, the son of Abdul Razak Memon. Subsequently, on 13 August 1993, a show-cause notice under section 6(1) of SAFEMA was issued against Tiger Memon, his relatives, and associates, including Abdul Razak Memon and Reshma Memon. The notice recorded that the flats were in the occupation of Ibrahim Mohd Khan, the deceased husband of petitioner no. 1.

On 28 September 1993, the Competent Authority passed an order under section 7 of SAFEMA forfeiting several properties, including the flats in question. This order was challenged before the Appellate Tribunal for Forfeited Property, New Delhi, but the appeals were dismissed on 4 November 1999. A further writ petition filed in 2000 before the Bombay High Court was dismissed in 2005 for non-prosecution. The order of forfeiture thus attained finality.

Parallel to this, following the serial bomb blasts of 12 March 1993, Tiger Memon and members of his family were declared absconding terrorists under section 8(3)(a) of the Terrorist and Disruptive Activities (Prevention) Act (TADA). The Designated TADA Court issued notices and on 14 January 1994 attached the flats, appointing the Court Receiver as custodian. The petitioners and their family continued occupying the flats as agents of the Court Receiver, paying royalty of ₹2,000 per month until 2008. They also issued public notices asserting their purchase of the flats in 1992.

In July 2008, the TADA Court revoked the attachment of flat no. 405 but maintained attachment over flat no. 406. On 26 March 2025, the TADA Court lifted attachment on flat no. 406 and ordered release of possession to the Central Government. On 9 April 2025, symbolic possession of flat no. 406 was handed to the Competent Authority. Thereafter, on 2 July 2025, notices were issued to the petitioners directing them to hand over physical possession of both flats within 30 days.

The petitioners contended before the High Court that they were bona fide purchasers for consideration and that the forfeiture order was not binding on them. They argued violation of natural justice as no show-cause notice or opportunity of hearing was granted to them. They relied upon the Supreme Court judgments in Attorney General for India v. Amratlal Prajivandas (1994) 5 SCC 54 and Income Tax Officer v. V. Mohan (Civil Appeal Nos. 8292-8293 of 2010), arguing that holders under section 2(2)(e) of SAFEMA are entitled to a hearing before forfeiture.

The Competent Authority opposed, arguing that there were no registered sale deeds in favour of the petitioners and that they had failed to prove ownership. It was argued that electricity and maintenance receipts did not establish title and that the petitioners never filed civil suits asserting ownership. It was further stated that the forfeiture order had been confirmed in appellate proceedings and attained finality. The CBI supported these arguments, stating that the petition was without merit.

The Bench recorded that the petitioners had suppressed material facts, including that Abdul Razak Memon and Hanifa Memon had challenged the forfeiture before the Appellate Tribunal and that further proceedings before the High Court were dismissed in 2005. The Court observed: “It is well settled law, as held in Bhaskar Laxman Jadhav v. Karamveer Kakasaheb Wagh Education Society and Kishore Samrite v. State of U.P., that a litigant, who suppressed the material facts, is not entitled to any relief.” The judges stated that the petitioners were obliged to disclose this fact but had not done so.

On ownership, the Court stated: “Section 54 of the Transfer of Property Act, 1882 mandates that the sale of immovable property of the value of one hundred rupees and above can be effected only by a registered instrument. The expression ‘only’ in the section is of significance.”

On the claim of being bona fide purchasers, the Bench observed: “Since there is no valid purchase of the flats, in our view, the Petitioners cannot be considered as transferees in good faith or valuable consideration.”

Addressing reliance on Amratlal Prajivandas, the Court quoted: “The idea is to reach his properties in whosoever’s name they are kept or by whosoever they are held. The independent properties of relatives and friends, which are not traceable to the convict/detenu, are not sought to be forfeited.” The Court held that this judgment was of no assistance since the petitioners failed to establish the flats were not illegally acquired properties of Tiger Memon.

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The Court further noted: “It is inconceivable that a bona fide purchaser for value would remain silent and refrain from asserting such rights for over three decades.” It concluded that no violation of natural justice occurred, as notices were issued to the Memons and challenges had failed before appellate bodies.

The Division Bench concluded: “For all the above reasons, we find no merit in the Petition. In our view, no prejudice is caused to the Petitioners either by the Impugned Order or Respondent No.1’s notice dated 2nd July, 2025 directing the Petitioners to hand over physical possession of the flats within 30 days.”

At the pronouncement, the petitioners’ counsel sought stay of the judgment for four weeks. The Court recorded: “The prayer is rejected, as the Petitioners have suppressed material facts, and also since 1993, there is no stay in the operation of the Impugned Order.”

Advocates Representing the Parties

For the Petitioners: Dr. Sujay Kantawala, Advocate with Mr. Mohammed Zain Khan, Ms. Aishwarya Kantawala, Ms. Khyati Daga, Sumas Patel, Mr. Ashraf Kapoor, and Mr. Danish Ansari, instructed by One Legal, Advocates.

For the Respondents: Ms. Manisha Jagtap, Advocate with Ms. Mansi Joshi; Mr. Amit Munde, Special Public Prosecutor; and Mr. Mayur S. Sonavane, Additional Public Prosecutor for the State of Maharashtra.

Case Title: Zaibunissa Ebrahim Khan and Ors. v. The Competent Authority, SAFEMA/NDPS and Ors.

Neutral Citation: 2025: BHC-AS:36976-DB

Case Number: Writ Petition (St.) No. 16599 of 2025

Bench: Justice Ravindra V. Ghuge and Justice Gautam A. Ankhad