Section 68H: Notice of forfeiture of property

1[68H. Notice of forfeiture of property. — (1) If, having regard to the value of the properties held by any person to whom this Chapter applies, either by himself or through any other person on his behalf, his known sources of income, earnings or assets, and any other information or material available to it as a result of a report from any officer making an investigation under section 68E or otherwise, the competent authority has reason to believe (the reasons for such belief to be recorded in writing) that all or any of such properties are illegally acquired properties, it may serve a notice upon such person (hereinafter referred to as the person affected) calling upon him within a period of thirty days specified in the notice to indicate the sources of his income, earnings or assets, out of which or by means of which he has acquired such property, the evidence on which he relies and other relevant information and particulars, and to show cause why all or any of such properties, as the case may be, should not be declared to be illegally acquired properties and forfeited to the Central Government under this Chapter.

(2) Where a notice under sub-section (1) to any person specifies any property as being held on behalf of such person by any other person, a copy of the notice shall also be served upon such other person.

2[Provided that no notice for forfeiture shall be served upon any person referred to in clause (cc) of sub-section (2) of section 68A or relative of a person referred to in that clause or associate of a person referred to in that clause or holder of any property which was at any time previously held by a person referred to in that clause.]

3[Explanation.— For the removal of doubts, it is hereby declared that in a case where the provisions of section 68J are applicable, no notice under this section shall be invalid merely on the ground that it fails to mention the evidence relied upon or it fails to establish a direct nexus between the property sought to be forfeited and any activity in contravention of the provisions of this Act.]]

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

2. Ins. by Act 9 of 2001, s. 35 (w.e.f. 2-10-2001).

3. Ins. by Act 16 of 2014, s. 22 (w.e.f. 1-5-2014).

Simplified Explanation

Section 68H of the Narcotic Drugs and Psychotropic Substances Act, 1985 establishes the procedural requirements for issuing a notice regarding the forfeiture of property suspected to be illegally acquired. This section ensures due process by allowing the person affected to present evidence and justify the legitimacy of their property before it is forfeited to the Central Government.

Key Provisions of Section 68H

1. Issuance of Notice (Subsection 1):
   • If the competent authority, based on:
     • The value of the properties held by a person.
     • Their known sources of income, earnings, or assets.
     • Any information obtained via investigation under Section 68E or otherwise,
     • Has reason to believe that the properties are illegally acquired, it may issue a notice to the affected person.
   • The reasons for this belief must be recorded in writing, ensuring transparency and accountability.
   • The notice requires the person to:
     • Indicate the sources of income or assets used to acquire the property.
     • Provide evidence to support their claims.
     • Furnish relevant information to demonstrate why the property should not be forfeited.
   • A 30-day period is provided for the person to respond to the notice.

2. Service of Notice on Other Persons (Subsection 2):
   • If the notice identifies any property held on behalf of the affected person by another individual, a copy of the notice must also be served to that individual.
   • This provision ensures that all parties with potential interests in the property are informed.

3. Exemption from Notice (Proviso to Subsection 2):
   • No notice of forfeiture is to be served upon:
     • Individuals mentioned in clause (cc) of Section 68A(2).
     • Relatives, associates, or holders of property formerly possessed by such individuals.
   • This avoids redundancy in proceedings and focuses enforcement actions.

4. Clarification on Evidence (Explanation):
   • Even if the notice:
     • Does not explicitly mention all evidence relied upon.
     • Fails to establish a direct connection between the property and an illegal activity,
     • It is still valid, provided Section 68J applies (which presumes certain properties to be illicit in specific cases).
   • This explanation ensures that minor procedural lapses do not invalidate the notice.

Purpose of Section 68H

The purpose of this section is to:

• Provide Fair Opportunity: Allow the affected person to justify their ownership and present evidence before property is forfeited.
• Ensure Accountability: Require the competent authority to record reasons for their belief in writing, promoting transparency.
• Prevent Misuse: Mandate the service of notices to all relevant parties and exclude certain categories to prevent unnecessary actions.

Practical Implications

1. For Affected Individuals:
   • They must respond promptly to such notices within the stipulated timeframe.
   • Failure to provide evidence or justify ownership can result in forfeiture.
2. For the Competent Authority:
   • Ensure detailed documentation and compliance with procedural requirements to avoid challenges in higher forums.
3. Legal Safeguard:
   • Balances enforcement actions with the rights of individuals, ensuring properties are not forfeited without proper examination.