Section 105H CrPC: Forfeiture of Property in Certain Cases
Section 105H of the Code of Criminal Procedure, 1973 formed part of Chapter VIIA, dealing with reciprocal arrangements for assistance in certain matters and procedures for attachment and forfeiture of property. The provision empowered the Court, after notice and hearing, to determine whether property represented proceeds of crime and, where appropriate, to order its forfeiture to the Central Government.
Meaning and scope of Section 105H CrPC
Section 105H provides the adjudicatory stage of the forfeiture process contemplated by Chapter VIIA. It operates after a show-cause notice under section 105G CrPC. The Court must consider the explanation to the notice, the material available before it and give the affected person a reasonable opportunity of being heard before recording whether the property in question is proceeds of crime.
For this Chapter, the expression "proceeds of crime" is defined in section 105A as property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to an offence to which Chapter VIIA applies, or the value of such property.
Statutory text of Section 105H CrPC
105H. Forfeiture of property in certain cases.
(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 judgment, 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.
Key requirements before forfeiture
- Show-cause notice: The process under section 105H follows a notice issued under section 105G.
- Consideration of explanation and material: The Court must consider the response, if any, and the material before it.
- Opportunity of hearing: The affected person, and where relevant the person through whom property is held, must receive a reasonable opportunity of being heard.
- Ex parte determination: If the concerned person does not appear or represent the case within the thirty-day period specified in the notice, the Court may decide on the evidence available.
- Identification of property: If proceeds of crime cannot be identified item by item, the Court may specify the property which, to the best of its judgment, represents such proceeds.
- Effect of finding: Property found to be proceeds of crime stands forfeited to the Central Government free from encumbrances.
Connection with Sections 105A to 105L
Section 105H should be read as part of the complete statutory sequence. Section 105D concerns tracing and identifying unlawfully acquired property; section 105E deals with seizure or attachment; section 105F concerns management of seized or forfeited property; and section 105G provides for notice before forfeiture. After a finding under section 105H, section 105I may become relevant to fine in lieu of forfeiture, while section 105J addresses certain transfers made after attachment or notice.
Practical effect of an order under Section 105H
A finding that property is proceeds of crime has a direct proprietary consequence: the property stands forfeited to the Central Government free from all encumbrances. In the case of company shares, sub-section (4) requires the company to register the Central Government as transferee. The reference to the Companies Act, 1956 is retained here because it forms part of the enacted text of section 105H(4).
This article is a general explanation of the statutory provision and is not a substitute for advice on the facts of a particular proceeding.