S.68F NDPS Act | Power To Seize Illegally Acquired Property Exercisable Only If 'Reason To Believe' Based On Cogent Materials: Kerala High Court

Justice V.G. Arun clarified that the 'reason to believe' should not be merely on assumptions.

It was observed:

“It is thus beyond cavil that the power to seize or freeze a property can be exercised only if there is reason to believe, based on inquiry, investigation or survey, that the property is illegally acquired. The 'reason to believe' should be based on cogent materials and not mere assumptions.”

In the present case, an officer issued a notice proposing to confiscate a scooter of the 1^st petitioner on the premise that it was purchased by the proceeds of the narcotic dealings of the petitioners' son, who was accused in an NDPS case. Aggrieved, the petitioners came before the High Court.

The petitioners contended that the scooter was purchased in 2020, when their son was only 14 years old and therefore, it cannot be an illegally acquired property. The prosecutor argued that the power under Section 68F NDPS Act can be exercised by an officer conducting investigation if he has reason to believe it was illegally acquired.

The Court looked into Sections 68E and 68F of the NDPS Act, which deal with identification and seizure/freezing of illegally acquired property. It noted that there is a procedure to be followed after receiving information that property was illegally acquired.

It observed that the provision mandates that the officer should first be satisfied about the information before initiating action for seizure or freezing a property. On being satisfied, the officer must record his reasons before taking steps to trace and identify the property. These steps include inquiry, investigation or survey in respect of any person, place, property, assets, documents etc.

The Court also clarified that the inquiry, investigation or survey has to be carried out in accordance with the directions of the competent authority. Thereafter, seizure order can be only if there is reason to be believe that the property would be disposed of.

“After tracing and identifying the illegally acquired property, the officer can make an order for seizing or freezing such property, if he has reason to believe that the property is likely to be concealed, transferred or dealt with in any manner which will result in frustrating the proceeding relating to forfeiture of that property,” it observed.

The Court remarked that as per the definition in Section 68B(g), a property to be illegally acquired must have been acquired wholly or partly by means of an income derived from an action in contravention of the Act.

In the present case, it cannot be assumed that the scooter was illegally acquired since it was purchased when the petitioners' son was 14 years old.

Therefore, it allowed the petition and quashed the notice issued by the officer.

Case No: Crl.M.C. No. 7306 of 2025

Case Title: Usman Kunju and Anr. v. State of Kerala and Anr.

Citation: 2025 LiveLaw (Ker) 694

Counsel for the petitioners: Mohanan M.K., Steewaugh Shaji Cherian

Counsel for the respondents: Vipin Narayanan – Public Prosecutor

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