Jain Vs. Union of India & Anr  Insc 686 (19 October 2006)
Sinha & Dalveer Bhandari
out of SLP (Civil) No.6402 of 2006] S.B. SINHA, J.
before us was detained under Section 3 of the Conservation of Foreign Exchange
and Prevention of Smuggling Activities Act, 1974 (for short
"COFEPOSA"). He is the Managing Director of a company, registered and
incorporated under the provisions of the Companies Act, known as M/s. Sundesh
Springs Private Limited. It was an exporter and held a valid licence therefor.
The company was to export products of alloy steel. Upon exporting of alloy
steel, it was entitled to credits under the Duty Entitlement Pass Book (DEPB)
Scheme introduced by the Government of India with an object of encouraging
exports. He allegedly misdeclared both the value and description of goods upon
procuring fake and false bills through one Prabhjot Singh. The said Prabhjot
Singh was said to have been operating three firms, viz. M/s. S.P. Industrial
Corporation, M/s. Aaysons (India) and
M/s. P.J. Sales Corporation, Ludhiana. It
was allegedly found that non-alloy steel, bars, rods, etc. of value ranging
from Rs. 15/- to Rs. 17/- per kg. were exported in the guise of alloy steel
forgings, bars, rods, etc. by declaring their value thereof from Rs. 110/- to Rs.
150/- per kg. and the export proceeds over and above the actual price were
being routed through Hawala Channel. The officers of the Directorate of Revenue
Intelligence (DRI) searched the factory as well as the residential premises of
Appellant and that of Prabhjot Singh. Various incriminating documents were
recovered. Appellant and the said Prabhjot Singh made statements under Section
108 of the Customs Act. Prabhjot Singh allegedly admitted to have supplied fake
bills to units owned and controlled by Appellant on commission basis without
actual supply of the goods. It was also found that Appellant had declared goods
exported as "alloy steel" whereas after the tests conducted by
Central Revenue Control Laboratory, they were found to be "other than
alloy steel", i.e., non-alloy. The Consul (Economic), Consulate General of
India at Dubai allegedly confirmed the existence
of a parallel set of export invoices. Invoices with a higher value were
presented before the Indian Customs Authorities with a view to avail DEPB
incentives but in fact invoices with a lower value were presented for
aforementioned allegations, an order of detention was issued on 5.4.2005.
Appellant moved for issuance of a writ of Habeas Corpus before the High Court
of Judicature of Punjab and Haryana. The said writ petition
was dismissed by an order dated 23.11.2005 by a learned Single Judge. A letters
patent appeal, concededly which was not maintainable, was filed thereagainst
which was dismissed by reason of the impugned judgment.
before the High Court, the principal ground urged on behalf of Appellant in
questioning the legality or validity of the order of detention was unexplained
delay in passing the order of detention which did not find favour with the High
Court. Before us, several other grounds, viz., non placement of vital/ material
documents before the detaining authority, non- supply of documents relied on or
referred to in the order of detention as also non-application of mind on the
part of the detaining authority had been raised. In the meantime admittedly the
period of detention being over, Appellant had been set at large. He was
released from custody on 17.5.2006. This appeal, however, has been pressed as a
proceeding under the Smugglers and Foreign Exchange Manipulators (Forfeiture of
Property) Act, 1976 (for short "SAFEMA"), has been initiated against
first deal with the question of unexplained delay. In this regard we may notice
the following dates.
13.10.2003, Appellant was arrested. He was discharged on bail on 6.1.2004.
Several inquiries were conducted both inside and outside India. A report in relation to overseas
inquiry was received on 12.5.2004. On 25.6.2004 proposal of detention was sent
which was approved on 2.12.2004.
20.12.2004, the authorities of the DRI stated that transactions after
11.10.2003 were not under scrutiny. Furthermore, the authorities of the DRI by
a letter dated 28.02.2005 requested the Bank to defreeze the bank accounts of
Appellants. The order of detention was passed on 5.4.2005.
learned Additional Solicitor General, who appeared on behalf of Respondent has
drawn our attention to a long list of dates showing that searches were
conducted and statements of a large number of persons had to be recorded. The
final order of detention was preceded not only on the basis of raids conducted
in various premises, recording of statements of a large number of witnesses,
carrying on intensive inquiries both within India and outside India, obtaining
test reports from three different laboratories but also the fact that despite
notices Appellant and his associates did not cooperate with the investigating
authorities. They initiated various civil proceedings from time to time,
obtained various interim orders and, thus, delay in passing the order of
detention cannot be said to have not been explained.
counsel would contend that keeping in view the nature and magnitude of an
offence under COFEPOSA, a distinction must be made between an order of
detention passed under COFEPOSA vis-a-vis other Acts as per the law laid down
by this Court in Rajendrakumar Natvarlal Shah v. State of Gujarat and Others [(1988) 3 SCC 153] and
in that view of the matter the High Court must be held to have arrived at a
delay to some extent stands explained. But, we fail to understand as to why
despite the fact that the proposal for detention was made on 2.12.2004, the
order of detention was passed after four months. We must also notice that in
the meantime on 20.12.2004, the authorities of the DRI had clearly stated that
transactions after 11.10.2003 were not under the scrutiny stating:
our letter mentioned above, your office was requested not to issue the DEPB
scripts to M/s.
Impex Limited and M/s. Siri Amar Exports, only in respect of the pending
application, if any, filed by these parties up to the date of action i.e.
11.10.2003 as the past exports were under scrutiny being doubtful as per the
intelligence received in this office. This office never intended to stop the
export incentives occurring to the parties, after the date of action i.e.
11.10.2003. In the civil, your office letter No. B.L.-2/Misc. Am-2003/Ldh dated
17.05.2004 is being referred, which is not received in this office. You are,
therefore, requested to supply photocopy of the said letter to the bearer of
this letter as this letter is required for filing reply to the Hon'ble Court." Furthermore, as noticed
hereinbefore, the authorities of the DRI by a letter dated 28.02.2005 requested
the Bank to defreeze the bank accounts of Appellant.
said documents, in our opinion, were material.
was, therefore, difficult to appreciate why order of detention could not be
passed on the basis of the materials gathered by them.
no doubt true that if the delay is sufficiently explained, the same would not
be a ground for quashing an order of detention under COFEPOSA, but as in this
case a major part of delay remains unexplained.
also place on record that Sen., J. in Rajendrakumar Natvarlal Shah (supra),
while laying down various stages of the procedures leading to an order of
detention, opined that rule as to unexplained delay in taking action is not
inflexible and a detention under COFEPOSA may be considered from a different
question came up for consideration recently in Rajinder Arora v. Union of India
and Others [(2006) 4 SCC 796] wherein it has been held:
no explanation whatsoever has been offered by the Respondent as to why the
order of detention has been issued after such a long time. The said question
has also not been examined by the authorities before issuing the order of
question as regard delay in issuing the order of detention has been held to be
a valid ground for quashing an order of detention by this Court in T.D. Abdul Rahman
v. State of Kerala and others [AIR 1990 SC 225] stating:
conspectus of the above decisions can be summarised thus: The question whether
the prejudicial activities of a person necessitating to pass an order of
detention is proximate to the time when the order is made or the live-link
between the prejudicial activities and the purpose of detention is snapped
depends on the facts and circumstances of each case. No hard and fast rule can
be precisely formulated that would be applicable under all circumstances and no
exhaustive guidelines can be laid down in that behalf. It follows that the test
of proximity is not a rigid or mechanical test by merely counting number of
months between the offending acts and the order of detention. However, when
there is undue and long delay between the prejudicial activities and the
passing of detention order, the court has to scrutinise whether the detaining
authority has satisfactorily examined such a delay and afforded a tenable and
reasonable explanation as to why such a delay has occasioned, when called upon
to answer and further the court has to investigate whether the causal
connection has been broken in the circumstances of each case.
when there is unsatisfactory and unexplained delay between the date of order of
detention and the date of securing the arrest of the detenu, such a delay would
throw considerable doubt on the genuineness of the subjective satisfaction of
the detaining authority leading to a legitimate inference that the detaining
authority was not really and genuinely satisfied as regards the necessity for
detaining the detenu with a view to preventing him from acting in a prejudicial
manner." The delay caused in this case in issuing the order of detention
has not been explained. In fact, no reason in that behalf whatsoever has been
assigned at all." Delay, as is well known, at both stages has to be
explained. The court is required to consider the question having regard to the
overall picture. We may notice that in Sk. Serajul v. State of West Bengal [(1975) 2 SCC 78], this Court
was thus delay at both stages and this delay, unless satisfactorily explained,
would throw considerable doubt on the genuineness of the subjective
satisfaction of the District Magistrate, Burdwan recited in the order of
detention. It would be reasonable to assume that if the District Magistrate of Burdwan
was really and genuinely satisfied after proper application of mind to the
materials before him that it was necessary to detain the petitioner with a view
to preventing him from acting in a prejudicial manner, he would have acted with
greater promptitude both in making the order of detention as also in securing
the arrest of the petitioner, and the petitioner would not have been allowed to
remain at large for such a long period of time to carry on his nefarious
activities..." In Abdul Salam Alias Thiyyan S/o Thiyyan Mohammad, Detenu
No. 962, General Prison, Trivandrum v. Union of India and Others [(1990) 3 SCC
15] whereupon the learned Additional Solicitor General has placed strong
reliance, this Court found that there had been potentiality or likelihood of
prejudicial activities and, thus, or mere delay, as long as, it is explained,
the court may not strike down the detention.
instant case, we have noticed hereinbefore that the authorities of DRI
themselves categorically stated that the activities of Appellant after
11.10.2003 were not in question and in fact all the bank accounts were defreezed.
learned Additional Solicitor General may be correct in his submissions that
ordinarily we should not exercise our discretionary jurisdiction under Article
136 of the Constitution of India by allowing Appellant to raise new grounds
but, in our opinion, we may have to do so as an order of detention may have to
be considered from a different angle. It may be true that the period of
detention is over. It may further be true that Appellant had remained in
detention for the entire period but it is one thing to say that the writ of
Habeas Corpus in this circumstances cannot issue but it is another thing to say
that an order of detention is required to be quashed so as to enable the
detainee to avoid his civil liabilities under SAFEMA as also protect his own
case of this nature, we do not think, in view of the admitted facts, that we
would not permit Appellant to raise the said questions.
as the question of non-placement of material documents before the detaining
authority is concerned, we may notice the following dates:
a letter dated 5.7.2002, the authorities of DRI stated that Appellant stood
exonerated for earlier years after detailed examination.
By a letter dated 20.12.2004, the authorities of DRI stated that transactions
after 11.10.2003 were not under scrutiny and by letters dated 28.2.2005 and
7.3.2005, the bank accounts of Appellant were defreezed.
By reason of the Civil
Court by orders dated
7.5.2004 and 31.5.2004, the bank accounts of M/s. Girnar and Shri Amar were defreezed.
By an order dated 13.8.2004, the Tribunal ordered release of goods.
orders dated 31.8.2004 and 28.10.2004, the Civil Judge directed release of
documents to Appellant.
By an order dated 18.11.2004, the Civil Court issued contempt notice to the
authorities of DRI for non-release of documents and the authorities of DRI made
a statement before the court that the documents are being returned.
have noticed hereinbefore that learned Additional Solicitor General contended
that Appellant obstructed the proceedings by initiating various civil
litigations. But, indisputably, those documents involving the civil court
proceedings were not placed before the detaining authority. If the same had not
been done, not only the delay, in issuing the order of detention stood
unexplained but also thereby the order itself would become vitiated.
the civil court proceedings were over on 19.11.2004.
the detaining authority did not take immediate steps to detain Appellant. Why
the documents pertaining to the proceedings of the Civil Court had not been placed before the
detaining authority has not been explained. On their own showing, Respondents
admit that they were relevant documents.
question has been considered by this Court in Rajinder Arora (supra) stating:
furthermore, the status report called for from the Customs Department has not
been taken into consideration by the competent authorities.
Division Bench of this Court in K.S. Nagamuthu v. State of Tamil Nadu & Ors. [2005 (9) SCALE
534] struck down an order of detention on the ground that the relevant material
had been withheld from the detaining authority; which in that case was a letter
of the detenu retracting from confession made by him." In P. Saravanan v.
State of T.N. and Others [(2001) 10 SCC 212], it
we went through the grounds of detention enumerated by the detaining authority
we noticed that there is no escape from the conclusion that the subjective
satisfaction arrived at by the detaining authority was the cumulative result of
all the grounds mentioned therein. It is difficult for us to say that the
detaining authority would have come to the subjective satisfaction solely on
the strength of the confession attributed to the petitioner dated 7-11-1999, particularly because it was retracted by him. It is
possible to presume that the confession made by the co-accused Sowkath Ali
would also have contributed to the final opinion that the confession made by
the petitioner on 7-11-1999 can safely be relied on. What would
have been the position if the detaining authority was apprised of the fact that
Sowkath Ali had retracted his confession, is not for us to make a retrospective
judgment at this distance of time." In Ahamed Nassar v. State of Tamil Nadu and Others [(1999) 8 SCC 473], this
question is not whether the second part of the contents of those letters was
relevant or not but whether they were placed before the detaining authority for
his consideration. There could be no two opinions on it. It contains the very
stand of the detenu of whatever worth. What else would be relevant if not this?
It may be that the detaining authority might have come to the same conclusion
as the sponsoring authority but its contents are relevant which could not be
withheld by the sponsoring authority. The letter dated 19-4-1999 reached the sponsoring authority and reached well
within time for it being placed before the detaining authority. There is an
obligation cast on the sponsoring authority to place it before the detaining
authority, which has not been done. Even the letter dated 23-4-1999 which reached the Secretary concerned at 3.00 p.m. on 26-4-1999 was
much before the formal detention order dated 28-4-1999. The Secretary concerned was obliged to place the same
before the detaining authority.
respondent authority was not right in not placing it as it contains not only
what is already referred to in the bail application dated 1-4-1999 but something more.
statements of Appellant and Prabhjot Singh were noticed by the detaining
authority. It had specifically been referred to in extenso in the order of
detention. It is, however, stated that the records were tampered with at the
instance of Appellant. The self-inculpatory statements of Appellant and that of
Prabhjot Singh were said to have been taken off the file.
contended that on first information report was registered against Appellant as also
one sepoy Narender Singh. But the said information report was registered only
on 6.4.2005 and not prior to the date of order of detention.
paragraph 36 of the order of detention, the detaining authority stated:
view of the facts mentioned above, I have no hesitation in arriving at the
conclusion that you have through your acts of omission and commission indulged
in prejudicial activities as narrated above. Considering the nature and gravity
of the offence, the well planned manner in which you have engaged yourself in
such prejudicial activities and your role therein as brought out above, all of
which reflect your high potentiality and propensity to indulge in such
prejudicial activities in future, I am satisfied that there is a need to prevent
you from indulging in such prejudicial activities in future by detention under
COFEPOSA Act, 1974 with a view to preventing you from smuggling goods in
future." We have been taken through the order of detention. The statements
of Appellant and the said Prabhjot Singh were recorded therein in extenso.
of such statement must have been made from the xeroxed copies of such documents
which were available with the detaining authority. The self-inculpatory
statements of Appellant as also Prabhjot Singh purported to have been made in
terms of Section 108 of the Customs Act were required to be considered before
the order of detention could be passed. The same was not done. The original of
such documents might not been available with the detaining authority but
admittedly the xeroxed copies were. It has not been denied or disputed that
even the xeroxed copies of the said documents had not been supplied to the detenue.
It may be true that Appellant in his representation dated 14.06.2005 requested
for showing him the original documents referred to or mentioned in the grounds
of detention but then at least the xeroxed copies thereof should have been made
available to him.
Additional Solicitor General submitted that due to non- supply of documents
which were not vital or have merely been referred to as incidental, the order
of detention may not become vitiated as was been held by this Court in Kamarunnissa
v. Union of India and Another [(1991) 1 SCC 128]. The said decision was
rendered in a different fact situation. In the said decision, this Court stated
the law, thus:
merely an incidental reference is made to some part of the investigation
concerning a co- accused in the grounds of detention which has no relevance to
the case set up against the detenus it is difficult to understand how the detenus
could contend that they were denied the right to make an effective
representation. It is not sufficient to say that the detenus were not supplied
the copies of the documents in time on demand but it must further be shown that
the non-supply has impaired the detenu's right to make an effective and
purposeful representation. Demand of any or every document, however irrelevant
it may be for the concerned detenu, merely on the ground that there is a
reference thereto in the grounds of detention, cannot vitiate an otherwise
legal detention order.
hard and fast rule can be laid down in this behalf but what is essential is
that the detenu must show that the failure to supply the documents before the
meeting of the Advisory Board had impaired or prejudiced his right, however
slight or insignificant it may be. In the present case, except stating that the
documents were not supplied before the meeting of the Advisory Board, there is
no pleading that it had resulted in the impairment of his right nor could
counsel for the petitioners point out any such prejudice. We are, therefore, of
the opinion that the view taken by the Bombay High Court in this behalf is
unassailable." (Emphasis supplied) What is, therefore, relevant was as to
whether the documents were material. If the documents were material so as to
enable the detenue to make an effective representation which is his
constitutional as also statutory right, non-supply thereof would vitiate the
order of detention.
a trite law that all documents which are not material are not necessary to be
supplied. What is necessary to be supplied is the relevant and the material
documents, but, thus, all relevant documents must be supplied so as to enable
the detenue to make an effective representation which is his fundamental right
under Article 22(5) of the Constitution of India. Right to make an effective
representation is also a statutory right.
Jain v. Union of India and Another [(2006) 3 SCC 321] In this case, the
statements of Appellant and Prabhjot Singh, in our opinion, were material. They
could not have been withheld. If original of the said documents were not
available, xeroxed copies thereof could have been made available to him.
detaining authority moreover while relying on the said documents in one part of
the order of detention could not have stated in another part that he was not
relying thereupon. The very fact that he had referred to the said statements in
ex tenso is itself a pointer to the fact that he had relied upon the said
documents. Even in the earlier part of the impugned order of detention, i.e.
detaining authority appears to have drawn his own conclusions.
view of our findings aforementioned, it is not necessary to consider the
contention raised by Mr. Mukul Rohtagi that order of detention suffers from
non-application of mind. The judgment of the High Court, therefore, cannot be
sustained. It is set aside accordingly and the order of detention passed
against Appellant is quashed. The appeal is allowed. No costs.