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THE SMUGGLERS AND FOREIGN EXCHANGE MANIPULATORS (FORFEITURE OF PROPERTY ACT, 1976)

Title : THE SMUGGLERS AND FOREIGN EXCHANGE MANIPULATORS (FORFEITURE OF PROPERTY ACT, 1976)

Year : 1976

ACT NO. 13 OF 1976.
[25th January, 1976.]


An Act to provide for the forfeiture of illegally acquired properties of smugglers and foreign exchange manipulators and for matters connected therewith or incidental thereto.

WHEREAS for the effective prevention of smuggling activities and foreign exchange manipulations which are having a deleterious effect on the national economy it is necessary to deprive persons engaged in such activities and manipulations of their ill-gotten gains;

AND WHEREAS such persons have been augmenting such gains by violations of wealth-tax, income-tax or other laws or by other means and have thereby been increasing their resources for operating in a clandestine manner;

AND WHEREAS such persons have in many cases been holding the properties acquired by them through such gains in the names of their relatives, associates and confidants ;

BE it enacted by Parliament in the Twenty-sixth Year of the
Republic of India as follows:-



(1) This Act may be called the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976.

(2) It extends to the whole of India except the State of Jammu and Kashmir.

(3) It shall be deemed to have come into force on the 5th day of
November, 1975.



(1) The provisions of this Act shall apply only to the persons specified in sub-section (2).

(2) The persons referred to in sub-section (1) are the following, namely:-

(a) Every person-

(i) Who has been convicted under the Sea Customs Act,1878 (8 of 1878), or the Customs Act, 1962 (52 of 1962), of an offence in relation to goods of a value exceeding one lakh of rupees ; or

(ii) Who has been convicted under the Foreign Exchange
Regulation Act, 1947 ( 7 of 1947), or the Foreign Exchange
Regulation Act, 1973 (46 of 1973), of an offence, the amount or value involved in which exceeds one lakh of rupees; or

(iii) Who having been convicted under the Sea Customs Act,
1878 (8 of 1878), or the Customs Act, 1962 (52 of 1962), has been convicted subsequently under either of those Acts ; or

(iv) Who having been convicted under the Foreign Exchange
Regulation Act, 1947 (7 of 1947), or the Foreign Exchange
Regulation Act, 1973 (46 of 1973), has been convicted subsequently under either of those Acts ;

(b) Every person in respect of whom an order of detention has been made under the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (52 of 1974)

Provided that-

(i) Such order of detention, being an order to which the provisions of section 9 or section 12A of the said Act do not apply, has not been revoked on the report of the Advisory Board under section 8 of the said Act or before the receipt of the report of the Advisory Board or before making a reference to the Advisory Board; or

(ii) Such order of detention, being an order to which the provisions of section 9 of the said Act apply, has not been revoked before the expiry of the time for, or on the basis of, the review under sub-section (3)of section 9, or on the report of the Advisory Board under section 8, read with sub-section (2) of section 9, of the said Act ; or

(iii) Such order of detention, being an order to which, the provisions of section 12A of the said Act apply, has not been revoked before the expiry of the time for, or on the basis of, the first review under sub-section (3) of that section, or on the basis of the report of the Advisory Board under section 8, read with sub-section (6) of section 12A, of that Act ; or

(iv) Such order of detention has not been set aside by a court of competent jurisdiction ;

(c) Every person who is a relative of a person referred to in clause (a) or clause (b) ;

(d) Every associate of a person referred to in clause (a)or clause(b)

(e) Any holder (hereafter in this clause referred to as the present holder) of any property which was at any time previously held by a person referred to in clause (a) or clause (b) unless the present holder or, as the case may be, any one who held such property after such person and before the present holder, is or was a transferee in good faith for adequate consideration.

Explanation 1.-For the purposes of sub-clause (i) of clause (a), the value of any goods in relation to which a person has been convicted of an offence shall be the wholesale price of the goods in the ordinary course of trade in India as on the date of the commission of the offence.

Explanation 2.-For the purposes of clause (c), "relative", in relation to a person, means-

(i) Spouse of the person;

(ii) Brother or sister of the person;

(iii) Brother or sister of the spouse of the person;

(iv) Any lineal ascendant or descendant of the person;

(v) Any lineal ascendant or descendant of the spouse of the person;

(vi) Spouse of a person referred to in clause (ii), clause (iii), clause (iv) or clause (v)

(vii) Any lineal descendant of a person referred to in clause (ii) or clause (iii).

Explanation 3.-For the purposes of clause (d), "associate", in relation to a person, means-

(i) Any individual who had been or is residing in the residential premises (including outhouses) 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 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 clause (iii)

(vi) The trustee of any trust, where-

(a) The trust has been created by such person; or

(b) 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 the 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.

Explanation 4.-For the avoidance of doubt, it is hereby provided that the question whether any person is a person to whom the provisions of this Act apply may be determined with reference to any facts, circumstances or events (including any conviction or detention)which occurred or took place before the commencement of this Act.

Act not to apply to certain persons. Act not to apply to certain persons.

1*[2A.On and from the commencement of the provisions of Chapter VA of the Narcotic Drugs and Psychotropic Substance

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1. Ins. by Act 2 of 1989, s.22 (w.e.f. 29-05-1989).

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Last updated on August, 2016

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