Section 68B: Definitions

1[68B. Definitions. — In this Chapter, unless the context otherwise requires,

(a) “Appellate Tribunal” means the Appellate Tribunal 2[referred to in] section 68N;

(b) “associate” in relation to a person whose property is liable to be forfeited under this Chapter, means–

(i) any individual who had been or is residing in the residential premises (including out-houses) of such person;

(ii) any individual who had been or is managing the affairs or keeping the accounts of such person;

(iii) any association of persons, body of individuals, partnership firm, or private company within the meaning of the Companies Act, 1956 (1 of 1956), of which such person had been or is a member, partner or director;

(iv) any individual who had been or is a member, partner or director of an association of persons, body of individuals, partnership firm or private company referred to in sub-clause (iii) at any time when such person had been or is a member, partner or director of such association, body, partnership firm or private company;

(v) any person, who had been or is managing the affairs, or keeping the accounts, of any association of persons, body of individuals, partnership firm or private company referred to in sub-clause (iii);

(vi) the trustee of any trust, where,–

(1) the trust has been created by such person; or

(2) the value of the assets contributed by such person (including the value of the assets, if any, contributed by him earlier) to the trust amounts, on the date on which contribution is made, to not less than twenty per cent. of the value of the assets of the trust on that date;

(vii) where the competent authority, for reasons to be recorded in writing, considers that any properties of such person are held on his behalf by any other person, such other person;

(c) “competent authority” means an officer of the Central Government authorised by it under section 68D;

(d) concealment means the concealment or disguise of the nature, source, disposition, movement or ownership of property and includes the movement or conversion of such property by electronic transmission or by any other means;

(e) “freezing” means temporarily prohibiting the transfer, conversion, disposition or movement of property by an order issued under section 68F;

(f) “identifying includes establishment of proof that the property was derived from, or used in, the illicit traffic;

(g) illegally acquired property”, in relation to any person to whom this Chapter applies, means,–

(i) any property acquired by such person, whether before or after the commencement of this Chapter, wholly or partly out of or by means of any income, earnings or assets derived or obtained from or attributable to 3[the contravention of any provisions 4[ of this Act or the equivalent value of such property; or]]

(ii) any property acquired by such person, whether before or after the commencement of this Chapter, for a consideration, or by any means wholly or partly traceable to any property referred to in sub-clause (i) or the income or earning from 5[such property or the equivalent value of such property; or[

6[(iii) any property acquired by such person, whether before or after the commencement of the Narcotic Drugs and Psychotropic Substances (Amendment) Act, 2014, wholly or partly out of or by means of any income, earnings or assets the source of which cannot be proved, or the equivalent value of such property,]

and includes–

(A) any property held by such person which would have been, in relation to any previous holder thereof, illegally acquired property under this clause if such previous holder had not ceased to hold it, unless such person or any other person who held the property at any time after such previous holder or, where there are two or more such previous holders, the last of such previous holders is or was a transferee in good faith for adequate consideration;

(B) any property acquired by such person, whether before or after the commencement of this Chapter, for a consideration, or by any means, wholly or partly traceable to any property falling under item (A), or the income or earnings therefrom;

7[(h) “property” means any property or assets of every description, whether corporeal or incorporeal, movable or immovable, tangible or intangible, wherever located and includes deeds and instruments evidencing title to, or interest in, such property or assets;]

(i) relative means

(1) spouse of the person;

(2) brother or sister of the person;

(3) brother or sister of the spouse of the person;

(4) any lineal ascendant or descendant of the person;

(5) any lineal ascendant or descendant of the spouse of the person;

(6) spouse of a person referred to in sub-clause (2), sub-clause (3), sub-clause (4) or sub-clause (5);

(7) any lineal descendant of a person referred to in sub-clause (2) or sub-clause (3);

(j) “tracing” means determining the nature, source, disposition, movement, title or ownership of property;

(k) “trust” includes any other legal obligation.

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

2. Subs. by Act 28 of 2016, s. 227, for “for Forfeited Property constituted under” (w.e.f. 1-6-2016).

3. Subs. by Act 9 of 2001, s. 32, for “illicit traffic” (w.e.f. 2-10-2001).

4. Subs. by Act 16 of 2014, s, 20, for “of this Act; or” (w.e.f. 1-5-2014).

5. Subs. by Act 16 of 2014, s. 20, for “such property”, (w.e.f. 1-5-2014).

6. Ins. by s. 20, ibid. (w.e.f. 1-5-2014).

7. Subs. by s. 20, ibid., for clause (h) (w.e.f. 1-5-2014).

Simplified Explanation

Section 68B provides definitions for specific terms used in Chapter VA of the NDPS Act, which deals with the forfeiture of illegally acquired property. This section clarifies key concepts critical for interpreting and implementing the provisions under this chapter.

Key Definitions in Section 68B

1. Appellate Tribunal (Clause a):
   • Refers to the tribunal established under Section 68N to handle appeals against decisions made by the Competent Authority under this chapter.
2. Associate (Clause b):
   • Includes individuals or entities connected to the person whose property is liable for forfeiture.
   • Specific categories:
     • (i) Individuals residing in the offender’s residence (including out-houses).
     • (ii) Individuals managing the offender’s affairs or accounts.
     • (iii) Associations, firms, or companies where the offender was/is a member, partner, or director.
     • (iv) Members, partners, or directors of the same entities as above.
     • (v) Individuals managing the affairs or accounts of these entities.
     • (vi) Trustees of trusts where:
       1. The offender created the trust.
       2. The offender contributed at least 20% of the trust’s assets.
     • (vii) Any person holding property on behalf of the offender, as determined by the Competent Authority.
3. Competent Authority (Clause c):
   • An officer of the Central Government authorized under Section 68D to oversee proceedings for the forfeiture of illegally acquired property.
4. Concealment (Clause d):
   • Refers to disguising or hiding the nature, source, movement, ownership, or disposition of property.
   • Includes actions like electronic transfers or other means to obscure illicit origins.
5. Freezing (Clause e):
   • Temporarily restricting the transfer, conversion, disposition, or movement of property through an order issued under Section 68F.
6. Identifying (Clause f):
   • Establishing proof that property was derived from or used in illicit drug trafficking activities.
7. Illegally Acquired Property (Clause g):
   • Refers to property obtained:
     • (i) Wholly or partly from income, earnings, or assets linked to contraventions under the NDPS Act or its equivalent value.
     • (ii) Using funds traceable to such illicit property.
     • (iii) From sources that cannot be proved legitimate, wholly or partly.
   • Includes:
     • (A) Property previously held by offenders but transferred to others unless the transfer was bona fide and for adequate consideration.
     • (B) Property acquired with funds traceable to such previously held property.
8. Property (Clause h):
   • Any asset, whether:
     • Tangible or intangible,
     • Movable or immovable,
     • Corporeal or incorporeal,
     • Located anywhere.
   • Includes documents or deeds evidencing title or interest in such assets.
9. Relative (Clause i):
   • Includes:
     • Spouse, siblings, or their spouses.
     • Lineal ascendants and descendants (including those of the spouse).
     • Spouses of the above.
10. Tracing (Clause j):
    • Determining the nature, source, ownership, or movement of property linked to illicit trafficking.
11. Trust (Clause k):
    • Includes any other legal obligation in which property or assets are held for beneficiaries.

Purpose of Section 68B

1. Legal Clarity:
   Defines terms to ensure uniform interpretation during proceedings related to forfeiture of property.
2. Comprehensive Coverage:
   • Expands the scope to associates, relatives, and trustees, ensuring that illegally acquired assets cannot be hidden under proxies.
   • Provides tools for enforcement agencies to trace, freeze, and eventually confiscate such properties.
3. Support for Law Enforcement:
   • Enables authorities to act decisively against property acquired through drug trafficking or related offenses.

Relevance in Practice

• The definitions form the backbone of the property forfeiture mechanisms under Chapter VA.
• These provisions ensure that drug traffickers cannot shield illicitly acquired assets by transferring them to associates, relatives, or trusts.
• Authorities can freeze or trace such properties effectively, even across jurisdictions.