Property sale amid seizure procedure by govt illegal: SC
New Delhi: The sale of a property during its seizure proceedings by government agencies is illegal and the new owner who purchases it in good faith cannot lay its claim over it, the Supreme Court ruled.
A bench of justices RM Lodha and AR Dave said once the notice is issued by the government agency for forfeiture, the right over the property stands vested in the government and it cannot be sold by its owner.
"Such sale has no legal sanction. The sale is null and void. It is not protected so as to enable the purchaser to prove that he is transferee in good faith for adequate consideration. As a matter of law, no title came to be vested in the appellants (purchaser)," the bench said.
The verdict came on a plea by one Winston Tan seeking court`s direction to the Enforcement Directorate to grant him the possession of a flat in Bengaluru, sold to him when it was being forfeited by the ED.
The ED had issued notice for seizure of the property after its owner Ismail Shabandari was charged under Conservation of Foreign Exchange and Prevention of Smuggling Activities Act (COFEPOSA).
Ismail was detained after it was found that he had received Rs 92 lakh from Dubai and had made payments in India to various persons.
During the proceeding for forfeiture of his flat, he stealthily sold the property to Tan who was not aware about the action taken by ED which refused to allow him to take possession of the flat.
Tan then approached the apex court after the trial court and then the Karnataka High Court refused to grant him the relief. The apex court too dismissed his plea.
"It is true that appellant (Tan) had obtained encumbrances certificates from the sub-registrar prior to purchase which show that there were no encumbrances to the subject flat. It is also true that the appellants had obtained loan from Vijaya Bank for purchase of the said flat.
"...But unfortunately these facts are of no help to him as the sale in their favour was effected after notices were issued to the vendors. Such sale has no legal sanction," the bench said.
More from India
More from World
More from Sports
More from Entertaiment
- Watch: Mother beats her infant son in Bareilly, tries to strangulate him
- Women can enter inner sanctorum of Haji Ali Dargah: Mumbai HC
- Watch: PM Modi's speech on Transforming India at NITI Aayog
- Mysterious fever claims 12 lives in Noida within 15 days
- Panel discussion on Mumbai HC allowing women to enter Haji Ali Dargah
- No ''tech traces'' of American University attack found: Pakistan to Afghanistan
- Intex unveils Cloud Tread smartphone for multi-taskers at Rs 4,999
- India vs West Indies, 1st T20I: Squads, date, time, venue, TV listing, live streaming
- Need to change laws, speed up processes to transform India: PM Narendra Modi
- Maharashtra's internal security law a 'jolt to democracy', says Shiv Sena