1[68M. Certain transfers to be null and void.– Where after the making of an order under sub-section (1) of section 68F or the issue of a notice under section 68H or under section 68L, any property referred to in the said order or notice is transferred by any mode whatsoever such transfer shall, for the purposes of the proceedings under this Chapter, be ignored and if such property is subsequently forfeited to the Central Government under section 68-I, then, the transfer of such property shall be deemed to be null and void.]
1. Ins. by Act 2 of 1989, s. 19 (w.e.f. 29-5-1989)
Simplified Explanation
Section 68M deals with the transfer of property that is under investigation or subject to an order for forfeiture. It ensures that transfers made after the initiation of certain legal actions, such as seizure, notices, or orders regarding illegally acquired property, are considered null and void if the property is later forfeited to the Central Government.
Key Provisions of Section 68M:
- Application to Property Under Investigation:
- If an order is made under Section 68F(1) (related to the seizure of illegally acquired property) or a notice is issued under Section 68H (for show cause notice about the acquisition of illegally acquired property) or Section 68L (in relation to trust properties), any transfer of property subject to these actions will be treated as invalid for the purposes of the forfeiture proceedings.
- Transfer Ignored:
- Any transfer of property that happens after the order or notice is issued will be ignored during the proceedings under this Chapter. This means that even if the property is transferred to another person, the transfer will not be recognized in the context of the forfeiture process.
- Null and Void if Forfeited:
- If the property is eventually forfeited to the Central Government under Section 68-I (after proceedings and findings that the property is illegally acquired), the transfer of that property before forfeiture will be deemed null and void.
- This provision ensures that individuals cannot escape forfeiture by transferring property to another party once the legal proceedings have started.
Purpose and Significance of Section 68M:
- Preventing Fraudulent Transfers:
- The section prevents individuals from trying to hide or transfer their illegally acquired property to others in an attempt to avoid forfeiture.
- This provision serves as a deterrent against the fraudulent transfer of assets once investigations or legal actions have begun.
- Ensuring Fairness in Forfeiture Proceedings:
- By declaring any transfer of the property as null and void once an order or notice has been issued, this section ensures that the Central Government is able to retain control over the property that is suspected of being illegally acquired, preventing its removal from the jurisdiction of the law.
- This ensures that forfeiture proceedings are not frustrated by attempts to transfer ownership of the property to others.
- Strengthening the Legal Framework:
- This section strengthens the legal framework to fight against the illegal acquisition of property, as it limits the ability of individuals to manipulate the ownership of their assets to avoid forfeiture.
- It ensures that property transfers are scrutinized if they take place after legal actions have been initiated, maintaining the integrity of the forfeiture process.
Practical Implications
- For Affected Individuals:
- If a person is under investigation for holding illegally acquired property, they cannot transfer that property to someone else to escape the legal consequences. Any transfer made after the investigation has begun (indicated by an order or notice) will be treated as invalid.
- This means that individuals involved in such investigations need to be cautious of attempting to transfer property, as it will not prevent forfeiture.
- For Legal Professionals:
- Lawyers representing clients under investigation should advise them that any attempted transfer of property during the investigation or after receiving notice of potential forfeiture will not be valid in the context of the proceedings.
- Legal professionals must ensure that property transfers made during such periods are scrutinized thoroughly, as they may be ignored or declared null and void during forfeiture proceedings.
- For Law Enforcement and Competent Authorities:
- Authorities need to monitor the status of properties subject to investigation or notice, ensuring that no fraudulent transfers take place during the process.
- Any transfer of property that takes place after a forfeiture order or investigation notice should be thoroughly examined, and steps should be taken to challenge the legitimacy of such transfers.
Example:
If a person is under investigation for illegally acquiring property, and a notice under Section 68H is served, the individual cannot transfer that property to a relative or third party to avoid forfeiture. If, after the investigation, the property is forfeited by the Central Government, any transfer of the property made after the notice or order will be null and void, meaning the person cannot escape forfeiture by transferring the property.
Section 68M thus provides a safeguard in the legal process, ensuring that attempts to transfer illegally acquired property after legal proceedings have begun are not valid, and the forfeiture process remains intact.
