Section 9 of SAFEMA, Smugglers Act : Section 9: Fine In Lieu Of Forfeiture

Explanation using Example

Imagine a scenario where Mr. A, a businessman, has been investigated by the authorities for alleged smuggling activities. During the investigation, it is discovered that Mr. A owns a luxury car worth $100,000. However, Mr. A is only able to prove that $40,000 of the income used to purchase the car was obtained through legitimate means. The remaining $60,000 is suspected to be from illegal activities.

The competent authority, under the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976, declares that the car stands forfeited to the Central Government under section 7, since Mr. A could not prove the source of more than half of the funds used to acquire it.

However, the authority decides to give Mr. A an option to pay a fine instead of forfeiting the car. According to section 9(1), the fine would be one and one-fifth times the value of the unproved part, which is $60,000. Therefore, Mr. A has the option to pay a fine of $72,000 (1.2 times $60,000) to retain his car.

Before the fine is imposed, Mr. A is given the opportunity to present his case and be heard, as required by section 9(2).

After considering his options, Mr. A decides to pay the fine within the allowed time frame. Upon payment, the competent authority revokes the declaration of forfeiture under section 7, as per section 9(3), and Mr. A's car is released from the threat of forfeiture.