Section 68F: Seizure or freezing of illegally acquired property

1[68F. Seizure or freezing of illegally acquired property.– (1) Where any officer conducting an inquiry or investigation under section 68E has reason to believe that any property in relation to which such inquiry or investigation is being conducted is an illegally acquired property and such property is likely to be concealed, transferred or dealt with in any manner which will result in frustrating any proceeding relating to forfeiture of such property under this Chapter, he may make an order for seizing such property and where it is not practicable to seize such property, he may make an order that such property shall not be transferred or otherwise dealt with, except with the prior permission of the officer making such order, or of the competent authority and a copy of such order shall be served on the person concerned:

Provided that the competent authority shall be duly informed of any order made under this subsection and a copy of such an order shall be sent to the competent authority within forty-eight hours of its being made.

(2) Any order made under sub-section (1) shall have no effect unless the said order is confirmed by an order of the competent authority within a period of thirty days of its being made.

Explanation.— For the purposes of this section, “transfer of property” means any disposition, conveyance, assignment, settlement, delivery, payment or other alienation of property and, without limiting the generality of the foregoing, includes–

(a) the creation of a trust in property;

(b) the grant or creation of any lease, mortgage, charge, easement, licence, power, partnership or interest in property;

(c) the exercise of a power of appointment of property vested in any person, not the owner of the property, to determine its disposition in favour of any person other than the donee of the power; and

(d) any transaction entered into by any person with intent thereby to diminish directly or indirectly the value of his own property and to increase the value of the property of any other person.]

1. Ins. by Act 2 of 1989, s. 19 (w.e.f. 29-5-1989)

Simplified Explanation

Section 68F of the NDPS Act provides legal provisions for seizing or freezing property suspected to be acquired through illegal means. The goal is to prevent the concealment, transfer, or misuse of such property, ensuring its availability for potential forfeiture under the Act.

Key Provisions of Section 68F

1. Authority to Seize or Freeze (Subsection 1):
   • Officers conducting inquiries or investigations under Section 68E can act when they have reason to believe:
     • A property under investigation is illegally acquired.
     • The property is at risk of being concealed, transferred, or dealt with in a way that could obstruct forfeiture proceedings.
   • They may:
     • Seize the property if practicable.
     • If seizure is not feasible, issue an order to prohibit the transfer or dealings related to the property without prior permission from:
       • The officer issuing the order, or
       • The Competent Authority (as defined in Section 68D).
   • A copy of the order must be served on the person concerned and communicated to the Competent Authority within 48 hours of issuance.

2. Confirmation by Competent Authority (Subsection 2):
   • The seizure or freezing order remains valid only if:
     • The Competent Authority confirms the order within 30 days from its issuance.
     • If the Competent Authority does not confirm the order, it becomes ineffective.

3. Explanation of “Transfer of Property”:
   • The term “transfer of property” is broadly defined to include any act that diminishes the value of a person’s property or increases the value of another person’s property. Examples include:
     • Trust creation: Transferring property to a trust.
     • Granting interests: Leases, mortgages, charges, easements, licenses, or partnerships related to the property.
     • Appointment of property: Assigning property to another person through powers not vested in the owner.
     • Value alteration transactions: Any act intended to reduce the property value for personal benefit or to benefit another party.

Purpose of Section 68F

The provision aims to:

1. Safeguard Illicit Properties: Ensure that properties suspected to be acquired illegally are available for further legal action, such as forfeiture.
2. Prevent Misuse: Stop any attempts to move, hide, or dispose of such properties.
3. Enable Efficient Enforcement: Provide officers with tools to act swiftly against risks of property concealment.

Safeguards Against Misuse

1. Reasonable Belief: Officers must have valid grounds to believe that the property is illegally acquired and at risk.
2. Communication with Competent Authority: Orders issued under this section must be promptly reported to the Competent Authority for review.
3. Time-Limited Confirmation: Orders need to be confirmed within 30 days, ensuring oversight and preventing arbitrary actions.

Practical Implications

• Law Enforcement: Provides enforcement agencies the power to temporarily restrict dealings in suspicious property.
• Financial Investigations: Ensures assets linked to drug trafficking or other offenses remain traceable and recoverable.
• Legal Accountability: The requirement for confirmation ensures judicial or administrative oversight.