Chapter VIIA
Section 105H CrPC: Forfeiture of property in certain cases
New Law Update (2024)
Section 109 BNSS
TRIAL COURT
Punishment
Procedural – Evidence / Witnesses
Cognizable?
Bailable?
Compoundable?
Bare Act Text
(1) The Court may, after considering the explanation, if any, to the show-cause notice issued under section 105G and the material available before it and after giving to the person affected (and in a case where the person affected holds any property specified in the notice through any other person, to such other person also) a reasonable opportunity of being heard, by order, record a finding whether all or any of the properties in question are proceeds of crime: Provided that if the person affected (and in a case where the person affected holds any property specified in the notice through any other person, such other person also) does not appear before the Court or represent his case before it within a period of thirty days specified in the show-cause notice, the Court may proceed to record a finding under this sub-section ex parte on the basis of evidence available before it.
(2) Where the Court is satisfied that some of the properties referred to in the show-cause notice are proceeds of crime but it is not possible to identify specifically such properties, then, it shall be lawful for the Court to specify the properties which, to the best of its judgement, are proceeds of crime and record a finding accordingly under sub-section (1).
(3) Where the Court records a finding under this section to the effect that any property is proceeds of crime, such property shall stand forfeited to the Central Government free from all encumbrances.
(4) Where any shares in a company stand forfeited to the Central Government under this section, then, the company shall, notwithstanding anything contained in the Companies Act, 1956 (1 of 1956) or the articles of association of the company, forthwith register the Central Government as the transferee of such shares.
Important Sub-Sections Explained
Section 105H(1)
This sub-section empowers the Court to determine whether properties are proceeds of crime, ensuring the affected person or anyone holding property on their behalf receives a fair hearing. It also allows for ex parte orders if the recipient of a show-cause notice fails to respond within thirty days.
Section 105H(3)
This sub-section specifies the critical outcome of a finding that property constitutes proceeds of crime. Upon such a determination by the Court, the property is immediately forfeited to the Central Government, free from any existing encumbrances.
Landmark Judgements
P.P. Abdulla and Ors. v. The Inspector of Customs, Customs House, Cochin (2012):
This Kerala High Court judgment clarified the procedural aspects of Chapter VII-A of the CrPC, including Section 105H. It underscored the mandatory requirement of issuing a show-cause notice and affording a reasonable opportunity of being heard to the affected party before ordering forfeiture, thereby upholding principles of natural justice.
Union of India v. Padam Narain Gupta (2008):
Though primarily dealing with SAFEMA, the Supreme Court in this case laid down significant principles regarding the forfeiture of illegally acquired property. It clarified the burden of proof and the necessity for a clear nexus between the property and its illicit source, which are foundational concepts applicable by analogy to ‘proceeds of crime’ under Section 105H CrPC.