Attorney
General for India Vs. Amratlal Prajivandas [1994] INSC316
(12 May 1994)
Jeevan
Reddy, B.P. (J) Jeevan Reddy, B.P. (J) Mohan, S. (J) Agrawal, S.C. (J) Ray, G.N. (J) Ahmadi, A.M. (J) Sawant,
P.B. Ramaswamy, K. Reddy, K. Jayachandra (J) Venkatachala N. (J)
CITATION:
1994 AIR 2179 1994 SCC (5) 54 JT 1994 (3) 583 1994 SCALE (2)925
ACT:
HEAD NOTE:
The
Judgment of the Court was delivered by B.P. JEEVAN REDDY, J.- Till the wind of liberalisation
started blowing across the Indian economic landscape over the last year or two,
the Indian economy was a sheltered one. At the time of Independence, India did not have an industrial base worth the name. A firm
industrial base had to be laid. Heavy industry was the crying need. All this
required foreign exchange. The sterling balances built up during World War 11
were fast dissipating. Foreign exchange had to be conserved, which meant
prohibition of import of several unessential items and close regulation of
other imports. It was also found necessary to raise protective walls to nurture
and encourage the nascent industries.
These
controls had, however, an unfortunate fall-out. They gave rise to a class of
smugglers and foreign exchange manipulators who were out to frustrate the
regulations and restrictions profit being their sole motive, and success in
life the sole earthly judge of right and wrong. As early as 1947, the Central
Legislature found it necessary to enact the Foreign Exchange Regulation Act,
1947 and Imports and Exports (Control) Act, 1947. Then came the Import
(Control) Order, 1955 to place the policy regarding imports on a surer footing.
In the year 1962, a new Customs Act replaced the antiquated Sea Customs Act,
1878. The menace of smuggling and foreign exchange violations, however,
continued to rise unabated.
63
Parliament then came forward with the Conservation of Foreign Exchange and
Prevention of Smuggling Activities Act, 1974 (COFEPOSA). It provided for
preventive detention of these antisocial elements.
2. On 25-6-1975, the President of India proclaimed an emergency
under Article 352(1) of the Constitution of India on the ground that "the
security of India is threatened by internal
disturbance". A proclamation of emergency dated 3- 12-1971 issued under Article 352(1) on the ground that
"the security of India is threatened by external
aggression" was already in force. These declarations had the effect of
'suspending' to use a popular though not strictly accurate expression Article
19 as provided by Article 358 of the Constitution. On 27-6-1975 the President
of India made an order under Article 359(1) of the Constitution declaring
"[T]hat the right of any person (including a foreigner) to move any court
for the enforcement of the rights conferred by Article 14, Article 21 and
Article 22 of the Constitution and all proceedings pending in any court for the
enforcement of the above mentioned rights shall remain suspended for the period
during which the proclamation of emergency made under clause (1) of Article 352
of the Constitution on 3-12-1971 and on 25-6- 1975 are both in force."
3.
With effect from 1-7-1975, COFEPOSA was amended in certain
respects. Inter alia, it introduced Section 12-A containing special provisions
for dealing with emergency.
By
virtue of Section 12-A, the requirements of supply of grounds [Section 3(3)]
and consultation with Advisory Board (Section 8) were practically done away
with.
4. In
the year 1976, no doubt, during the continuance of emergency, Parliament
enacted the Smugglers and Foreign Exchange Manipulators (Forfeiture of
Property) Act, 1976 (SAFEMA). It replaced an Ordinance to the same effect and
was brought into force from the date of the Ordinance, viz., 5-11-1975. This Act applies to persons convicted under the Sea
Customs Act, 1878/Customs Act, 1962/FERA, 1947/FERA, 1973 and to those detained
under the COFEPOSA, whose detention order was neither set aside nor revoked in
the circumstances mentioned therein. Besides the persons so convicted/detained,
the Act applies to their relatives and associates as well. The main purpose of
the Act is to forfeit the illegally acquired properties of such smugglers and
foreign exchange manipulators in whosoever's name they may have been kept.
5.
During the period the emergency proclaimed on 25-6-1975 was in force, several
orders of detention were made under Section 3 of COFEPOSA. In view of the
provisions of Section 12-A, the said detenus were neither supplied with the
grounds of detention nor were their cases refer-red to the Advisory Board. The detenus,
however, had no remedy.
Because
of the order under Article 359(1) and the operation of Article 358 as
interpreted by this Court in A.D.M., Jabalpur v. Shivakant Shuklal they could
not approach the High Court or this Court for relief. The 1 (1976) 2 SCC 521 64
emergency was revoked on 21-3-1977 and the detenus released.
Subsequently
notices were issued under Section 6 of the SAFEMA to the said detenus, their
relatives and associates calling upon them to show cause why the properties
mentioned in the notices be not declared as illegally acquired properties and
forfeited. SAFEMA was being invoked against them because of the orders of
detention made against the detenus under COFEPOSA during the period of
emergency. The said orders of detention were the connecting link, the
foundation for the action being taken against the detenus, their friends and
relatives under SAFEMA. .[The orders of detention, it is not in dispute, were
not revoked or set aside as contemplated by clause (b) of sub-section (2) of
Section 2 of SAFEMA]. It is then that the said persons approached the High
Courts under Article 226 and this Court under Article 32 for quashing the said
notices. In these writ petitions, the constitutional validity of the COFEPOSA,
SAFEMA and of the 39th, 40th and 42nd Amendments to the Constitution of India
were questioned. (In a few cases, it appears, final orders were also passed but
that circumstance does not make any difference to the principle involved
herein). In most of the cases further proceedings were stayed.
6. The
Attorney General of India applied for transfer of the writ petitions pending in
various High Courts to this Court to be heard along with the petitions
preferred directly in this Court in view of the important constitutional
questions raised therein. The prayer for transfer is granted in all the
transfer petitions. Leave granted in the SLP.
7. It
may be mentioned that COFEPOSA was placed in the Ninth Schedule at SI. No. 104
by the Constitution (39th Amendment) Act, 1975 while the SAFEMA and the
COFEPOSA (Amendment) Acts, 1976 (Central Acts 13 and 20 of 1976 respectively)
were placed in the Ninth Schedule at Serial Nos. 127 and 129 by the
Constitution (40th Amendment) Act, 1976.
8. The
counsel appearing for the petitioners urged several contentions all of which
have been contested by Shri Altaf Ahmed, learned Additional Solicitor General.
The issues arising from the rival contentions urged at the bar may be
formulated in the shape of questions. They are to the following effect:
(1)
Whether Parliament was not competent to enact COFEPOSA and SAFEMA?
(2)
Whether an order of detention under Section 3 read with Section 12-A of
COFEPOSA made during the period of emergency proclaimed under Article 352(1) of
the Constitution of India, with the consequent ,suspension' of Article 19 and
during which period the right to move the court to enforce the rights conferred
by Articles 14, 21 and 22 was suspended can form the foundation for taking
action under Section 6 of SAFEMA against the detenu, his relatives and
associates? And if it does can the validity of such order of detention be
challenged by the detenu and/or his relatives and associates, when proceedings
are taken against him/them under SAFEMA, even though the said order of 65 detention
has ceased to be operative and was not either challenged or not successfully
challenged during its operation?
(3) If
the answer to Question 1 is in the affirmative, should the validity of the
order of detention be tested with reference to the position of law obtaining at
the time of making the said order and during its period of operation o r with
reference to the position of law obtaining on the date of issuance of the show-
cause notice under Section 6 of SAFEMA?
(4)
Whether the definition of "illegally acquired property" in clause (c)
of Section 3(1) of SAFEMA is violative of the fundamental in rights of the
petitioners guaranteed by Articles 14, 19 and 21 and whether the inclusion of
SAFEMA in the Ninth Schedule to the Constitution cures such violation, if any?
(5)
Whether the application of SAFEMA to the relatives and associates of detenus is
violative of Articles 14, 19 and 21? Whether the inclusion of the said Act in
the Ninth Schedule cures such violation, if any?
(6)
Whether Section 5-A of COFEPOSA is violative of clause (5) of Article 22? For a
proper appreciation of the aforesaid questions, it is necessary to briefly
refer to the relevant provisions of both the enactments.
9.
COFEPOSA: The preamble to the Act explains the reasons for which and the
objectives to achieve which the Act was made. It reads:
"An
Act to provide for preventive detention in certain cases for the purposes of
conservation and augmentation of foreign exchange and prevention of smuggling
activities and for matters connected therewith.
Whereas
violations of foreign exchange regulations and smuggling activities are having
an increasingly deleterious effect on the national economy and thereby a
serious adverse effect on the security of the State;
And
whereas having regard to the persons by whom and the manner in which such
activities or violations are organised and carried on, and having regard to the
fact that in certain areas which are highly vulnerable to smuggling, smuggling
activities of a considerable magnitude are clandestinely organised and carried
on, it is necessary for the effective prevention of such activities and
violations to provide for detention of persons concerned in any manner
therewith;
Be it
enacted by Parliament in the Twenty- fifth Year of the Republic of India as follows:"
10.
The expression "smuggling" is defined in clause (e) of Section 2. It
says that the said expression shall have the same meaning as in clause (39) of
Section 2 of the Customs Act, 1962 and that all its grammatical variations and
cognate expressions shall be construed accordingly.
11.
Clause (39) of Section 2 of the Customs Act defines "smuggling" in
the following words- 66 "smuggling in relation to any goods, means any act
or omission which will render such goods liable to confiscation under Section
111 or Section 113."
12.
Section 3 provides that where the Central Government, the State Government or
any officer empowered in that behalf is satisfied with respect to any person
including a foreigner, that (1) with a view to preventing him from acting in
any manner prejudicial to the conservation or augmentation of foreign exchange
or (2) with a view to preventing him from
(i) smuggling
goods, or
(ii) abetting
the smuggling of goods, or
(iii) engaging
in transporting or concealing or keeping smuggled goods, or
(iv) dealing
in smuggled goods otherwise than by engaging in transporting or concealing or
keeping smuggled goods, or
(v) harbouring
persons engaged in smuggling goods or in abetting the smuggling of goods, it is
necessary to detain him, he can do so. Sub-section (3) provides for service of
grounds of detention within five days of the detention. (In "exceptional
circumstances and for reasons to be recorded in writing", the grounds of
detention are allowed to be served within fifteen days).
13.
Section 5-A which was inserted by the Amendment Act 35 of 1975 reads thus:
"5-A.
Grounds of detention severable.- Where a person has been detained in pursuance
of an order of detention under sub-section (1) of Section 3 which has been made
on two or more grounds, such order of detention shall be deemed to have been
made separately on each of such grounds and accordingly- (a) such order shall
not be deemed to be invalid or inoperative merely because one or some of the
grounds is or are-
(i) vague,
(ii) non-existent,
(iii) not
relevant,
(iv) not
connected or not proximately connected with such person, or
(v)
invalid for any other reason whatsoever, and it is not therefore possible to
hold that the Government or officer making such order would have been satisfied
as provided in sub- section (1) of Section 3 with reference to the remaining
ground or grounds and made the order of detention;
(b)
the Government or officer making the order of detention shall be deemed to have
made the order of detention under the said sub-section (1) after being
satisfied as provided in that sub-section with reference to the remaining
ground or grounds." More about this section later.
14.
Section 8 provides for constitution of an Advisory Board as- required by clause
(4) of Article 22 and for reference of each detenu's case to it. The opinion of
the Advisory Board is binding upon the Government. Section 9 67 provides
certain classes of cases, where the reference to Advisory Board can be made
within an extended period. This section is relatable to clause (7) of Article
22. Section 12-A containing special provisions for dealing with emergency was
introduced by COFEPOSA (Amendment) Act, 1976 (Act 19 of 1976). In view of its
crucial relevance, the section may be set out in full. It reads:
"
12-A. Special provisions for dealing with emergency.- (1) Notwithstanding
anything contained in this Act or any rules for natural justice, the provisions
of this section shall have effect during the period of operation of the
proclamation of emergency issued under clause (1) of Article 352 of the
Constitution on the 3rd day of December, 1971, or the proclamation of emergency
issued under that clause on the 25th day of June, 1975, or a period of
twenty-four months from the 25th day of June, 1975, whichever period is the shortest.
(2)
When making an order of detention under this Act against any person after the
commencement of the Conservation of Foreign Exchange and Prevention of
Smuggling Activities (Amendment) Act, 1975, the Central Government or the State
Government or, as the case may be, the officer making the order of detention
shall consider whether the detention of such person under this Act is necessary
for dealing effectively with the emergency in respect of which the
proclamations referred to in sub-section (1) have been issued (hereinafter in
this section referred to as the emergency) and if, on such consideration, the
Central Government or the State Government or, as the case may be, the officer
is satisfied that it is necessary to detain such person for effectively dealing
with the emergency, that Government or officer may make a declaration to that
effect and communicate a copy of the declaration to the person concerned:
Provided
that where such declaration is made by an officer, it shall be reviewed by the appropriate
Government within fifteen days from the date of making of the declaration and
such declaration shall cease to have effect unless it is confirmed by that
Government, after such review, within the said period of fifteen days.
(3)
The question whether the detention of any person in respect of whom a
declaration has been made under sub-section (2) continues to be necessary for
effectively dealing with the emergency shall be reconsidered by the appropriate
Government within four months from the date of such declaration and thereafter
at intervals not exceeding four months, and if, on such reconsideration, it
appears to the appropriate Government that the detention of the person is no
longer necessary for effectively dealing with the emergency, that Government
may revoke the declaration.
(4) In
making any consideration, review or reconsideration under sub-section (2) or
(3):
the
appropriate Government or officer may, if such Government or officer considers
it to be against the public interest 68 to do otherwise, act on the basis of
the information and materials in its or his possession without disclosing the
facts or giving an opportunity of making a representation to the person
concerned.
(5) It
shall not be necessary to disclose to any person detained under a detention
order to which the provisions of sub-section (2) apply, the grounds on which
the order has been made during the period the declaration made in respect of
such person under that sub-section is in force and, accordingly, such period shall
not be taken into account for the purposes of sub-section (3) of Section 3.
(6) In
the case of every person detained under a detention order to which the
provisions of sub-section (2) apply, being a person in respect of whom a
declaration has been made thereunder, the period during which such declaration
is in force shall not be taken into account for the purpose of computing- (i)
the period specified in clauses (b) and (c) of Section 8;
(ii) the
period of 'one year' and 'five weeks' specified in subsection (1), the period
of 'one year' specified in sub-section (2)(i) and the period of 'six months'
specified in sub-section (3) of Section 9." This provision was made during
the period of emergency and is confined to the duration of emergency or such
shorter period as may be specified. It contemplates making a declaration that
the detention of person is necessary for dealing effectively with the emergency
and if such a declaration is made, his case shall be governed by this section.
The only safeguards if they can be called that are the provisions for review
and reconsideration by the appropriate Government mentioned in the section
itself. The constitutional safeguards in clauses (4) and (5) of Article 22 and
the provisions in the Act incorporating the said safeguards are dispensed with
in the sense that they need not be complied with; the several time-limits
prescribed in Sections 8 and 9 stand extended by the period of emergency.
15.
SAFEMA: The preamble to the Act sets out the reasons and objects behind the
enactment.
It
reads:
"An
Act to provide for the forfeiture of illegally acquired properties of smugglers
and foreign exchange manipulators and for matters connected therewith or
incidental thereto.
Whereas
for the effective prevention of smuggling activities and foreign exchange
manipulations which are having a deleterious effect on the national economy it
is necessary to deprive persons engaged in such activities and manipulations of
their ill-gotten gains;
And
whereas such persons have been augmenting such gains by violations of wealth
tax, income tax or other laws or by other means and have thereby been
increasing their resources for operating in a clandestine manner;
69 And
whereas such persons have in many cases been holding the properties acquired by
them through such gains in the names of their relatives, associates and
confidants;
Be it
enacted by Parliament in the Twenty- sixth Year of the Republic of India as follows:"
16.
Section 2 specifies the persons to whom the Act applies. Sub-section (1)
declares that the provisions of the Act shall apply "only to the persons
specified in sub-section (2)". Sub- section (2) mentions five categories
of persons to whom the provisions of the Act apply. The first category
mentioned under clause (a) comprises persons convicted under Sea Customs Act,
1878 or the Customs Act, 1962 of an offence in relation to goods of a value
exceeding one lakh rupees. The requirement of value exceeding Rupees one lakh
does not apply in case of second or subsequent conviction. Persons convicted
under FERA, 1947/1973 of an offence, the amount and value involved in which
exceeds one lakh rupees are also included under clause (a). The requirement of
value (above one lakh), however, does not apply in the case of second or
subsequent conviction. The second category [clause (b)] comprises of persons in
respect of whom an order of detention has been made under COFEPOSA, but which
order was not revoked or set 'de in any of the situations set out in the four
sub-clauses of the proviso. It as would be appropriate to set out clause (b) in
full. It reads:
"(b)
every person in respect of whom an order of detention has been made under the
Conservation of Foreign Exchange and Prevention of Smuggling Activities Act,
1974 (52 of 1974):
Provided
that-
(i)
such order of detention, being an order to which the provisions of Section 9 or
Section 12-A of the said Act do not apply, has not been revoked on the report
of the Advisory Board under Section 8 of the said Act or before the receipt of
the report of the Advisory Board or before making a reference to the Advisory
Board; or
(ii)
such order of detention, being an order to which the provisions of Section 9 of
the said Act apply, has not been revoked before the expiry of the time for, or
on the basis of, the review under sub-section (3) of Section 9, or on the
report of the Advisory Board under Section 8, read with sub-section (2) of
Section 9, of the said Act, or
(iii)
such order of detention, being an order to which the provisions of Section 12-A
of the said Act apply, has not been revoked before the expiry of the time for,
or on the basis of, the first review under sub-section (3) of that section, or
on the basis of the report of the Advisory Board under Section 8, read with
sub-section (6) of Section 12-A, of that Act, or
(iv) such
order of detention has not been set aside by a court of competent
jurisdiction;" 70
17.
The third category to whom the act applies [mentioned in clause (c)] are the
relatives of persons referred to in clauses (a) and (b). Fourth category
[clause (d)] consists of the associates of the persons referred to in clauses
(a) and (b). The fifth category mentioned under clause (e) comprises of holders
of any property, which was at any time previously held by a person referred to
in clauses (a) or (b) unless such holder proves that he is a transferee in good
faith for valuable consideration. Explanation (1) specifies the manner in which
the value mentioned in clause (a) has to be computed. Explanation (2) specifies
the relatives covered by clause (c), while Explanation (3) specifies the
associates included under clause (d).
18.
Section 3 defines certain expressions occurring in the Act, including the
expression " legally acquire property. It reads as follows:
"(c)
'illegally acquired property', in relation to any person to whom this Act
applies means- (i) any property acquired by such person, whether before or
after the commencement of this Act, wholly or partly out of or by means of any
income, earnings or assets derived or obtained from or attributable to any
activity prohibited by or under any law for the time being in force relating to
any matter in respect of which Parliament has power to make laws; or (ii) any
property acquired by such person, whether before or after the commencement of
this Act, wholly or partly out of or by means of any income, earnings or assets
in respect of which any such law has been contravened; or (iii) any property
acquired by such person, whether before or after the commencement of this Act,
wholly or partly out of or by means of any income, earnings or assets the
source of which cannot be proved and which cannot be shown to be attributable
to any act or thing done in respect of any matter in relation to which
Parliament has no power to make laws; or (iv) any property acquired by such
person, whether before or after the commencement of this Act, for a
consideration, or by any means, wholly or partly traceable to any property
referred to in subclauses (i) to (iii) or the income or earnings from such property;
and includes- (A) any property held by such person which would have been, in
relation to any previous holder thereof, illegally acquired property under this
clause if such previous holder had not ceased to hold it, unless such person or
any other person who held the property at any time after such previous holder
or, where there are two or more such previous holders, the last of such
previous holders is or was a transferee in good faith for adequate
consideration;
(B)
any property acquired by such person, whether before or after the commencement
of this Act, for a consideration, or by any 71 means, wholly or partly
traceable to any property falling under item (A), or the income or earnings therefrom;"
More of this definition later.
19.
Section 4 declares that after commencement of the said Act, it shall of be
lawful for any person to whom the Act applies to hold any illegally acquired
property either by himself or through any other person on his behalf. Any
property so held is liable to be forfeited to Central Government in accordance
with the provisions of the Act.
Section
6 provides for issuance of show-cause notice of forfeiture, while Section 7
provides for passing of final orders in that behalf. Section 8 says that in
proceedings under the Act, the burden of proving that any property specified in
the notice served under Section 6 is not illegally acquired property shall be
on the person affected.
Section
11 declares transfers of properties specified in the notice issued under
Section 6, effected after the issuance of the notice, null and void. Section 12
provides for constitution of the Appellate Tribunal for hearing the appeals
against the orders made under Section 7. Section 24 gives an overriding effect
to the Act over any other law for the time being in force.
20.
Before entering upon discussion of the issues arising herein, it is necessary
to make a few clarificatory observations. Though a challenge to the
constitutional validity of 39th, 40th and 42nd Amendments to the Constitution
was levelled in the writ petitions on the ground that the said Amendments
effected after the decision in Kesavananda Bharati v. State of Kerala2 infringe
the basic structure of the Constitution, no serious attempt was made during the
course of arguments to substantiate it. It was generally argued that Article 14
is one of the basic features of the Constitution and hence any constitutional
amendment violative of Article 14 is equally violative of the basic structure.
This simplistic argument overlooks the raison d'etre of Article 31-B at any
rate, its continuance and relevance after Bharati2 and of the 39th and 40th
Amendments placing the said enactments in the Ninth Schedule. Acceptance of the
petitioners' argument would mean that in case of post-Bharati2 constitutional
amendments placing Acts in the Ninth Schedule, the protection of Article 31-B
would not be available against Article 14.
Indeed,
it was suggested that Articles 21 and 19 also represent the basic features of
the Constitution. If so, it would mean a further enervation of Article 31-B. Be
that as it may, in the absence of any effort to substantiate the said
challenge, we do not wish to express any opinion on the constitutional validity
of the said Amendments. We take them as they are, i.e., we assume them to be
good and valid.
We
must also say that no effort has also been made by the counsel to establish in
what manner the said Amendment Acts violate Article 14.
21.
COFEPOSA is a law relating to preventive detention. It has, therefore, to
conform to the provisions in clauses (4) to (7) of Article 22. Insofar as SAFEMA is concerned, it is, of course, not a
law relating to preventive detention though it is designed to achieve tile very
same objective 2 (1973) 4 SCC 225 : 1973 Supp 1 SCR 1 72 by different means.
While one seeks to deter them by means of preventive detention, the other seeks
to punish them by depriving them of their ill-gotten gains. SAFEMA is thus a
measure designed to protect the economy of the country as also a measure to
discourage law-breaking in particular, economic violations. The principles
relevant in judging the validity and relevant in the matter of interpreting the
provisions of such economic measures are fairly well settled. It is held that
in case of such enactments the legislature must be permitted a greater play in
the joints.
As
pointed out by Bhagwati, J. in R. K. Garg v. Union of India3: (SCR p. 970: SCC-
p. 69 1, para 8) "The court must always remember that 'legislation is
directed to practical problems, that the economic mechanism is highly sensitive
and complex, that many problems are singular and contingent, that laws are not
abstract propositions and do not relate to abstract units and are not to be
measured by abstract symmetry'; 'that exact wisdom and nice adaptation of
remedy are not always possible' and that judgment is largely a prophecy based
on meagre and uninterpreted experience'. Every legislation particularly in
economic matters is essentially empiric and it is based on experimentation or
what one may call trial and error method and therefore it cannot provide for
all possible situations or anticipate all possible abuses. There may be
crudities and inequities in complicated experimental economic legislation but
on that account alone it cannot be struck down as invalid. The courts cannot,
as pointed out by the United States Supreme Court in Secretary of Agriculture
v. Central Roig Refining Co.4 be converted into tribunals for relief from such
crudities and inequities. There may even be possibilities of abuse, but that
too cannot of itself be a ground for invalidating the legislation, because it
is not possible for any legislature to anticipate as if by some divine
prescience, distortions and abuses of its legislation which may be made by
those subject to its provisions and to provide against such distortions and
abuses. Indeed, howsoever great may be the care bestowed on its framing, it is
difficult to conceive of a legislation which is not capable of being abused by
perverted human ingenuity. The Court must therefore adjudge the
constitutionality of such legislation by the generality of its provisions and
not by its crudities or inequities or by the possibilities of abuse of any of
its provisions. If any crudities, inequities o r possibilities of abuse come to
light, the legislature can always step in and enact suitable amendatory
legislation. That is the essence of pragmatic approach which must guide and
inspire the legislature in dealing with complex economic issues."
(emphasis added) 3 (1981) 4 SCC 675 : 1982 SCC (Tax) 30: (1982) 1 SCR 947 4 94
L Ed 381 : 338 US 604 (1950) 73 To the same effect are the observations (SCC at
p. 663) in Federation of Hotel and Restaurant Assn. of India v. Union of India
5, a decision of the Constitution Bench.
22. It
is not necessary to multiply the authorities.
Question
No. 1
23. It
is argued for the petitioners that COFEPOSA is not relatable to Entry 9 of List
I of the Seventh Schedule to the Constitution inasmuch as the preventive
detention provided therefore is not for reasons connected with defence, foreign
affairs or security of India. Even Entry 3 of List III, it is submitted, does
not warrant the said enactment. So far as SAFEMA is concerned, it is argued, it
is not relatable to any of the Entries 1 to 96 in List I or to any of the
Entries in List III. We are not prepared to agree. COFEPOSA is clearly
relatable to Entry 3 of List III inasmuch as it provides for preventive
detention for reasons connected with the security of the State as well as the
maintenance of supplies and services essential to the community besides Entry 9
of List I. While Entry 3 of List III speaks of "security of a State",
Entry 9 of List I speaks of "security of India". Evidently, they are two distinct and different
expressions. "Security of a State" is a much wider expression. A
State with a weak and vulnerable economy cannot guard its security well. It
will be an easy prey to economic colonisers. We know of countries where the
economic policies are not dictated by the interest of that State but by the
interest of multinationals and/or other powerful countries. A country with a
weak economy is very often obliged to borrow from International Financial
Institutions who in turn seek to dictate the economic priorities of the
borrowing State it is immaterial whether they do so in the interest of powerful
countries who contribute substantially to their fund or in the interest of
their loan. In the modern world, the security of a State is ensured not so much
by physical might but by economic strength at any rate, by economic strength as
much as by armed might. It is, therefore, idle to contend that COFEPOSA is
unrelated to the security of the State. Indeed in the very preamble to the Act,
Parliament states that the violations of foreign exchange regulations and smuggling
activities are having an increasingly deleterious effect on the national
economy thereby casting serious adverse effect on the security of the State. Be
that as it may, it is not necessary to pursue this line of reasoning since we
are in total agreement with the approach evolved in Union of India v. H.S.
Dhillon6 a decision by a Constitution Bench of seven Judges. The test evolved
in the said decision is this in short: Where the legislative competence of
Parliament to enact a particular statute is questioned, one must look at the
several entries in List II to find out (applying the well-known principles in
this behalf) whether the said statute is relatable to any of those entries. If
the statute does not relate to any of the entries in List II, no further
inquiry is necessary. It must be held that 5 (1989) 3 SCC 634 6 (1971) 2 SCC
779 :(1972) 2 SCR 33 74 Parliament is competent to enact that statute whether
by virtue of the entries in List I and List III or by virtue of Article 248
read with Entry 97 of List I. In this case, it is not even suggested that
either of the two enactments in question are relatable to any of the entries in
List II. If so, we need not go further and enquire to which entry or entries do
these Acts relate. It should be held that Parliament did have the competence to
enact them.
Question
Nos. 2 and 3
24.
These questions arise this way. The orders of detention concerned herein were
made on or after the date of the proclamation of emergency to which Section
12-A was applicable. None of them are, what may be called, ,normal' orders of
detention. For that reason, the detenus were neither supplied with the grounds
of detention, nor were they given an opportunity to make a representation
against their detention nor does it appear that their cases were referred to
the Advisory Board not at any rate within the period prescribed by Section 8,
or for that matter, Section
9.
They were released on or within a day or two of the date on which the emergency
was lifted. In this sense, the order of detention has worked itself out. But
that order of detention is now being made the foundation, the basis for taking
action under SAFEMA against the detenus, their relatives and their associates.
SAFEMA is made applicable to them by virtue of Section 2(2)(b) read with
clauses (c), (d) and (e) of sub-section (2). The petitioners say that since the
order of detention under COFEPOSA is made the basis for action under SAFEMA
against them, they are entitled to challenge the validity of the order of
detention. They may not have been able to question the validity of detention
during their detention by virtue of Section 12-A of COFEPOSA (non-supply of
grounds and non- reference to Advisory Board) and also because their right to
move the court for enforcement of the rights guaranteed to them by Articles 14,
21 and 22 was suspended during the period of emergency by an order made by the
President of India under Article 359.(1) of the Constitution even Article 19
did not avail them by virtue of Article 358 but when the said orders of
detention are sought to be made the basis of action under SAFEMA, after the
lifting of emergency, they are now entitled to question them. They point out
that by virtue of the order made under Article 359(1), the fundamental rights
guaranteed to them by Articles 14, 21 and 22 were not suspended, but only the
right to move for their enforcement was suspended. If so, they say, the
detention orders made against them are invalid and illegal for violation of
clauses (4) and (5) of Article
22. They
may have been barred from enforcing their rights under Articles 22, 21 and 19
because of the said order of the President, but that did not render the orders
of detention valid. Such invalid, indeed void orders, they say, cannot serve as
the basis or as the foundation of action under SAFEMA. They also stress the
drastic nature of the provisions of SAFEMA. On the other hand, the. learned
Additional Solicitor General relies upon the provisions of clause (1-A) of
Article 359 and submits that the validity of the said detention orders has to
be judged with reference to the law then obtaining and not with reference to
the law obtaining on the date of issuance 75 of notice under Section 6 of
SAFEMA. At any rate, he submits, clause (1-A) of Article 359 saves all such
orders.
Suspension
of remedy, he says, is tantamount to suspension of the right itself since one
cannot conceive of a right without a remedy. There is no distinction, he says,
between Article 358 and an order under Article 359(1) in this regard. He places
strong reliance upon the observations (SCR at p. 812) of the decision in Makhan
Singh v. State of Punjab 7 .
25.
Article 352 of the Constitution empowers the President, if he is satisfied that
a grave emergency exists whereby the security of India or of any part thereof is threatened, whether by war or
external aggression or internal disturbance*, to declare by a proclamation that
an emergency exists. One of the consequences of such declaration is provided in
Article 358. Article 358, as it stood prior to 44th Amendment, read thus:
"358.
While a Proclamation of Emergency is in operation, nothing in Article 19 shall
restrict the power of the State as defined in Part III to make any law or to
take any executive action which the State would, but for the provisions
contained in that Part be competent to make or to take, but any law so made
shall, to the extent of the in competency, cease to have effect as soon as the
Proclamation ceases to operate, except as respects things done or omitted to be
done before the law so ceases to have effect." (By the Constitution 42nd
Amendment Act, a proviso was added and by the 44th Amendment Act, some further
amendments were made but it is not necessary to notice them for the purposes of
these cases.)
26.
Clause (1) of Article 359, as it stood prior to the 44th Amendment, provided
that:
"Where
a Proclamation of Emergency is in operation, the President may by order declare
that the right to move any court for the enforcement of such of the rights
conferred by Part III as may be mentioned in the order and all proceedings
pending in any court for the enforcement of the rights so mentioned shall
remain suspended for the period during which the Proclamation is in force or
for such shorter period as may be specified in the order."
27.
The purport and effect of Articles 358 and 359(1) and the distinction between
them fell for consideration of this Court in Makhan Singh7. A Special Bench of
seven Judges stated the effect of Article 358 in the following words:
"It
would be noticed that as soon as a Proclamation of Emergency has been issued
under Article 352 and so long as it lasts, Article 19 is suspended and the
power of the legislatures as well as the executive is to that extent made
wider. The suspension of Article 19 during the pendency of the Proclamation of
emergency removes the fetters created 7 (1964) 4 SCR 797 : AIR 1964 SC 381 :
1964 (1) Cri LJ 269 By the 44th Amendment Act, the words "armed
rebellion" were substituted for the words "internal
disturbance".
76 on
the legislative and executive powers by Article 19 and if the legislatures made
laws or the executive commits acts which are inconsistent with the rights
guaranteed by Article 19, their validity is not open to challenge either during
the continuance of the emergency or even thereafter. As soon as the
Proclamation ceases to operate, the legislative enactments passed and the
executive actions taken during the course of the said emergency shall be
inoperative to the extent to which they conflict with the rights guaranteed
under Article 19 because as soon as the emergency is lifted, Article 19 which
was suspended during the emergency is automatically revived and begins to,
operate.
Article
358, however, makes it clear that things done or omitted to be done during the emergency
cannot be challenged even after the emergency is over. In other words, the
suspension of Article 19 is complete during the period in question and
legislative an d executive action which contravenes Article 19 cannot be
questioned even after the emergency is over." Next the Bench took up the
meaning and purport of Article 359(1) and held:
"Article
359, on the other hand, does not purport expressly to suspend any of the
fundamental rights. It authorises the President to issue an order declaring that
the right to move any court for enforcement of such of the rights in Part III
as may be mentioned in the order and all proceedings pending in any court for
the enforcement of the rights so mentioned shall remain suspended for the
period during which the Proclamation is in force or for such shorter period as
may be specified in the order. What the Presidential Order purports to do by
virtue of the power conferred on the President by Article 359(1) is to bar the
remedy of the citizens to move any court for the enforcement of the specified
rights. The rights are not expressly suspended, but the citizen is deprived of
his right to move any court for their enforcement. That is one important
distinction between the provisions of Article 358 and Article 359(1)."
28. It
was urged by the learned Attorney General that suspension of the citizens'
right to move any court for the enforcement of a particular fundamental right
amounts in law to suspension of the said right itself for the said period. The
Bench, however, declined to go into the said question and proceeded on the
assumption "that the said rights are in theory alive" even during the
period of the Presidential Order. The Special Bench pointed out further:
"
It would be noticed that the Presidential Order cannot widen the authority of
the legislatures or the executive; it merely suspends the rights to move any
court to obtain a relief on the ground that the rights conferred by Part III
have been contravened if the said rights are specified in the Order.
The inevitable
consequence of this position is that as soon as the Order ceases to be
operative, the infringement of the rights made either by the legislative
enactment or by executive action can perhaps be challenged by a citizen in a
court of law and the same may 77 have to be tried on the merits on the basis
that the rights alleged to have been infringed were in operation even during
the pendency o f the Presidential Order. If at the expiration of the
Presidential Order, Parliament passes any legislation to protect executive
action taken during the pendency of the Presidential Order and afford indemnity
to the executive in that behalf, the validity and the effect of such
legislative action may have to be carefully scrutinised.
Since
the object of Article 359(1) is to suspend the rights of the citizens to move
any court, the consequence of the Presidential Order may be that any proceeding
which may be pending at the date of the Order remains suspended during the time
that the Order is in operation and may be revived when the said Order ceases to
be operative; and fresh proceedings cannot be taken by a citizen after the
Order has been issued, because the Order takes away the right to move any court
and during the operation of the Order, the said right cannot be exercised by
instituting a fresh proceeding contrary to the Order. If a fresh proceeding
falling within the mischief of Article 359(1) and the Presidential Order issued
under it is instituted after the Order has been issued, it will have to be
dismissed as being incompetent. In other words, Article 359(1) and the
Presidential Order issued under it may constitute a sort of moratorium or a
blanket ban against the institution or continuance of any legal action subject
to two important conditions. The first condition relates to the character of
the legal action and requires that the said action must seek to obtain a relief
on the ground that the claimant's fundamental rights specified in the
Presidential Order have been contravened, and the second condition relates to
the period during which this ban is to operate. The ban operates either for the
period of the Proclamation or for such shorter period as may be specified in
the Order." The law enunciated by the Special Bench is clear and explicit.
It requires no elaboration at our hands.
29.
After the said decision, however, clause (1-A) was introduced in Article 359 by
the Constitution 38th (Amendment) Act, 1975. The clause was introduced with
retrospective effect from the date of the Constitution.
Clause
(1-A), as introduced by the said Amendment Act read as follows:
"1-A.
While an order made under clause (1) mentioning any of the rights conferred by
Part III is in operation, nothing in that Part conferring those rights shall
restrict the power of the State as defined in the said Part to make any law or
to take any executive action which the State would but for the provisions
contained in that Part be competen t to make or to take, but any law so made
shall, to the extent of the incompetency, cease to have effect as soon as the
order aforesaid ceases to operate, except as respects things done or omitted to
be done before the law so ceases to have effect:" 78 30.A proviso was
added to this clause by the 42nd Amendment Act, 1976, to the following effect:
"Provided
that where a Proclamation of Emergency is in operation only in any part of the
territory of India, any such law may be made, or any such executive action may
be taken, under this article in relation to or in any State or Union Territory
in which or in any part of which the Proclamation of Emergency is not in
operation, if and insofar as the security of India or any part of the territory
thereof is threatened by activities in or in relation to the part of the
territory of India in which the Proclamation of Emergency is in
operation." [By the 44th Amendment Act, 1978, the words "except
Articles 20 and 21" were added after the words "the rights conferred
by Part 111" in clause (1-A) besides adding clause (1-B) but these
amendments, not being retrospective in operation, are not relevant in the case
of detentions governed by Section 12-A of COFEPOSA during the period of
emergency.]
31. It
is obvious that clause (1-A) was put in with a view to bring the effect of the
Presidential Order under Article 359(1) on par with Article 358(1) insofar as
the competence of the State to make a law inconsistent with the specified
fundamental rights is concerned. Article 359(1-A) is broadly in the same terms
as Article 358. Article 358 says that while a proclamation of emergency under
Article 352 is in operation:
"...
nothing in Article 19 shall restrict the power of the State as defined in Part
III to make any law or to take any executive action which the State would but
for the provisions contained in that Part be competent to make or to take, but
any law so made shall, to the extent of the incompetency, cease to have effect
as soon as the Proclamation ceases to operate, except as respects things done
or. omitted to be done before the law so ceases to have effect." Clause
(1-A) of Article 359 says similarly that while the Presidential Order made
under Article 359(1) is in operation "... nothing in that Part (Part III)
conferring those rights shall restrict the power of the State as defined in the
said Part to make any law or to take any executive action which the State would
but for the provisions contained in that Part be competent to make or to take,
but any law so made shall, to the extent of incompetency, cease to hav e effect
as soon as the order aforesaid ceases to operate, except as respects things
done or omitted to be done before the law so ceases to have effect." Of
course, while Article 358 is confined only to Article 19, clause (1-A) extends
to those rights whose enforcement may have been suspended by an order under
Article 359(1). The other distinction is that while the "
suspension"* of Article 19 under Article 358 is co-extensive with the
duration of the proclamation of emergency, clause (1-A) is confined to the It
should be noticed that only the heading of Article 358 speaks of
"suspension of provisions of Article 19"; in the body of the article,
there is no reference to suspension of the article.
79 period
for which the Presidential Order remains in force.
Yet
another distinction is that while Article 358 enables the State to make any law
or to take any executive action inconsistent with Article 19 during the period
of emergency, clauses (1) and (1-A) of Article 359 read together provide for
suspension (by means of a Presidential Order) of the enforcement of the fundamental
rights specified in the order and simultaneously enable the State to make any
law or to take any executive action inconsistent with such fundamental rights.
It is evident that what is said in Makhan Singh7 with respect to Article 358
(competence of the State to make a law or to take executive action inconsistent
with Article 19) does apply equally to Article 359 by virtue of the
introduction of clause (1-A) with retrospective effect. In other words, during
the period the Presidential Order under Article 359(1) is in force, the State
is competent to make any law or take any executive action which it could not
have taken but for the suspension of enforcement of the fundamental rights
specified in the Presidential Order. In our opinion, the position under Article
358 is this: Article 358 enables the State it empowers the State to make any
law or to take any executive action inconsistent with Article 19. This
exceptional power is, however, confined to the period of emergency and is
intended to facilitate the effective implementation of the objectives of
emergency.
The
justification of this extraordinary provision is that individual liberties may
have to be kept in abeyance temporarily if found necessary to meet the threat
to the security of India or any part thereof within the meaning of Article
352(1). As soon as emergency ceases, the law so made shall to the extent of
inconsistency with Article 19 cease to have effect, except with respect to
things done or omitted to be done before the law so ceases to have effect.
What
it means is that the validity of the law made or the things done or omitted to
be done by virtue of the said article during the period of emergency cannot be
questioned either during or after the emergency on the ground of inconsistency
with Article 19. Neither the law nor the executive action (to the extent of its
inconsistency with Article 19) can continue even for a day beyond the cessation
of emergency. Their validity and/or the competence of the State to make or take
them during the period of emergency is, however, placed beyond question. By way
of illustration a law may have been made or an executive action may have been
taken unduly restricting the freedom of speech and the freedom of press. during
the emergency. Such restriction insofar as it is not warranted by Article 19(2)
ceases to operate or to have effect with the cessation of emergency.
But
the citizen whose right has been unreasonably curtailed cannot sue the State
for damages or other relief nor can he take any other proceeding against the
State for imposing such unreasonable restriction during the period of
emergency. This is because of the protection provided to the State by Article
358. It should be remembered that Article 358 sanctions such a course because
the Founding Fathers thought and not without justification that when the
security of India or any part thereof is threatened as contemplated by Article
352, the State should be left free to make such law or to take such executive
action as is 80 necessary to safeguard the security of the country unfettered
by the provisions in Article 19. This subordination of Article 19, however, is
only for the period the proclamation of emergency under Article 352 is in
operation.
32.
Now coming to clauses (1) and (1-A) of Article 359 the position is this:While
clause (1) empowers the President to suspend the enforcement of the fundamental
rights named in such notification (and any and all proceedings in that behalf
in any court), it does not empower the President to suspend the fundamental
rights. Evidently, the Founding Fathers did not think it necessary to clothe
the President with such a power. The words in clause (1) are clear and
unambiguous. They only speak of suspending the enforcement of the rights in
Part III and not suspending the rights themselves. We see no warrant, no
justification and no basis for holding that the suspension of enforcement of
the rights means in effect the suspension of the rights themselves. If that
were the intention of the Founding Fathers, they would have said so expressly.
Indeed, they have stated what they meant in explicit language. In view of the
fact that the fundamental rights in Part III are allowed to be affected by a
Presidential Order, we think, we ought not to read anything more than what the
clause expressly says and its language leaves no room for any doubt. This is
the view taken in Makhan Singh7 [as well as by Bhagwati, J. in A.D.M., Jabalpur
v. Shivakant Shuklal] and we agree with them respectfully. Then came clause (1-
A), introduced by the 38th Amendment Act with retrospective effect from the
date of the Constitution. It says that while a Presidential Order suspending
particular fundamental rights is in operation, the State shall be entitled to
make any law or to take any executive action which it would not have been
entitled to make or to take but for the suspension of the enforcement of the
said rights. At the same time, the clause says that any law so made shall, to
the extent of in competency, cease to have effect as soon as the Presidential
Order ceases to operate "except as respects things done or omitted to be
done before the law so ceases to have effect". The effect of these words
("except as respects "... effect") is evidently the same as that
obtaining under Article 358 (which too employs identical words) which we have
explained hereinbefore at some length.
It is
true that clause (1) of Article 359 does not provide for the suspension of any
of the fundamental rights but only their enforcement and it is equally true
that those fundamental rights (whose enforcement is suspended) continue in
theory to be alive, yet we must also give effect to clause (1-A), which is
equally a part of Article 359 now and must be deemed to be such a part at all
points of time commencing from 26-1-1950. The conclusion is, therefore,
inescapable that during the period the Presidential Order under Article 359(1)
suspending enforcement of certain rights conferred by Part III is in operation,
the State is empowered to make any law or to take any executive action
inconsistent with such rights. All this is so because the emergency proclaimed
to meet the threat to the security of India has to be effectively implemented.
The requirements of emergency constitute both the foundation as well as an
implied limitation upon the 81 power. What is warranted is what is necessary
for effective implementation of emergency.
33. It
may be appropriate at this juncture to refer to a few decisions of this Court
relevant in this behalf. In Jaichand Lall Sethia v. State of W.B.8 it is held
by a Constitution Bench:
"But
the appellant can challenge the validity of the order on a ground other than
those covered by Article 358, or the Presidential Order issued under Article
359(1). Such a challenge is outside the purview of the Presidential Order. For
instance, a citizen will not be deprived of the right to move an appropriate
court for a writ of habeas corpus on the ground that his detention has been
ordered mala fide. Similarly, it will be open to the citizen to challenge the
order of detention on the ground that any of the grounds given in the order of
detention is irrelevant and there is no real and proximate connection between
the ground given and the object which the legislature has in view. It may be
stated in this context that a mala fide exercise of power does not necessarily
imply any moral turpitude as a matter of law. It only means that the statutory
power is exercised for purposes foreign to those for which it is in law
intended. In other words, the power conferred by the statute has been utilised
for some indirect purpose not connected with the object of the statute or the
mischief it seeks to remedy."
34. To
the same effect is the decision of another Constitution Bench in K. Anandan Nambiar
v. Chief Secretary, Govt. of Madras9. The majority opinion in A.D.M.,
Jabalpur1, however, appears to take a view contrary to the one expressed in Jaichand
Lall8 and Anandan Nambiar9 but for the purposes of this case, it is not
necessary to go into the correctness of the reasoning in A.D.M., Jabalpur1,
since it has not been debated before us. Indeed, a three-Judge Bench in Union
of India v. Bhanudas Krishna Gawde10 has taken the extreme view, purporting to
follow A.D.M., Jabalpur1, that even the restrictions placed and facilities
denied cannot be questioned in a court during the period the order under
Article 359(1) is in operation!
35.
The next issue that arises is whether it can be said in the caseof detention
orders passed during the emergency (i.e. orders of detentionto which Section 12-A
of COFEPOSA applies) that they are void or non est so that they cannot be
treated as orders of detention within the meaning of Section 2(2)(b) of SAFEMA?
It is submitted by the learned Additional Solicitor General that the said
orders cannot be said to be void ab initio or non est. The orders were good and
valid when they were made under Section 3 of COFEPOSA. May be, he says, the
said orders ceased to be operative with the cessation of the Presidential Order
and cannot be continued beyond the said cessation, but they were certainly
competent, legal 8 1966 Supp SCR 464: AIR 1967 SC 483 : 1967 Cri LJ 520 9
(1966) 2 SCR 406: AIR 1966 SC 657 : 1966 Cri LJ 586 10 (1977) 1 SCC 834: 1977
SCC (Cri) 208 : (1977) 2 SCR 719 82 and effective when they were made and
continued to be so until the cessation of the Presidential Order. They can,
therefore, certainly be treated as orders of detention under COFEPOSA for the
purpose of and within the meaning of Section 2(2)(b) of SAFEMA.
36. On
the other hand, the learned counsel for the petitioners contend that the order
of detention made under Section 3 read with Section 12-A of COFEPOSA is void
for being inconsistent with the provisions in Article 22 which were not
suspended. The mere suspension of enforcement of the said article does not
amount to suspension of the right.
The
orders of detention were, therefore, void and they remained in operation only
because the detenus were barred from questioning the validity of the said
orders on account of the ban imposed by the Presidential Order under Article
359(1). They submit that the detention orders governed by Section 12-A of
COFEPOSA are inherently arbitrary and unjust. An order of preventive detention
is made without even telling the detenu of the grounds of his detention and
without giving him an opportunity to make a representation.
Even
the protection of consideration of his case by an independent body (Advisory
Board) is taken away. The detenu is rendered totally helpless. He is left with
no remedy.
He
cannot prove his innocence. Such an order of detention is opposed to all
concepts of fairness, civilised conduct and democratic norms. They submit that
such orders cannot form the foundation or the basis for applying SAFEMA to
them. Their argument is evocative of what Justice Cardozo once said:
"We
must always take care to safeguard the law against the assaults of opportunism,
the expediency of the passing hour, the erosion of the small encroachments, and
the scorn and derision of those who have no patience with general
principles."
37.
The contending viewpoints aforesaid give rise to two strands of thought. One
line of thought runs thus: By virtue of clause (1-A) of Article 359, inserted
by the Constitution 38th (Amendment) Act with retrospective effect, Section
12-A must be deemed to have been competently enacted, no doubt for the duration
of and limited to the period of the Presidential Order. If so, the detention thereunder
cannot be said to be invalid. While the order of detention cannot certainly
subsist beyond the cessation of the Presidential Order because Section 12-A
cannot itself subsist beyond each cessation, neither Section 12-A nor the order
of detention governed by it can be characterised as illegal or invalid during
the period the Presidential Order was in force. Once this is so, such order of
detention does undoubtedly represent an order of detention within the meaning
and contemplation of Section 2(2)(b) of SAFEMA.
That
it was not open to challenge during the period of the Presidential Order, or
that it was not subject to the constitutional safeguards provided by Article 22
does not affect its validity or legality. It was a valid order of detention
when made. It is not being enforced or acted upon beyond the period of
Presidential Order. Since it is an existing fact, it is merely being taken
notice of and that is enough to attract SAFEMA to such detenu, his relatives
and associates. Section 2(1) of 83 SAFEMA says, "the provisions of this
Act shall apply only to the persons specified in sub-section (2)" and
sub-section (2) speaks inter alia of a person "in respect of whom an order
of detention has been made under the COFEPOSA Act, 1974". Indeed, provisos
(i), (ii) and (iii) to clause (b) of sub-section (2) of Section 2 of SAFEMA
expressly refer to the order of detention made under Section 12-A and expressly
affirm that such an order of detention is an order of detention for the
purposes of the said clause. The fact remains that provisions of SAFEMA were
enacted in the first instance as an Ordinance issued on 5-11-1975, i.e., during the period of emergency and later
enacted into an Act and given effect from the date of the Ordinance. An order
of detention governed by Section 12-A of COFEPOSA must, therefore, be held to
be an order of detention for the purpose of and within the meaning of Section
2(2)(b) of SAFEMA. The other line of reasoning goes along the following lines:
An order of detention governed by Section 12-A is a special type of order made
for the limited purpose of dealing effectively with the emergency. It has no
existence, relevance or effect except for the said limited purpose. Outside
such purpose, it is non est. It does not exist. If so, such an order of
detention cannot furnish the foundation, the connecting link, or the basis for
applying SAFEMA. A normal order of preventive detention is itself an uncivilised
action. An order of detention governed by Section 12-A of COFEPOSA denying as
it does even the minimum safeguards provided by clauses (4) and (5) of Article
22 is an abhorrent action. It may be tolerated as a cruel necessity when the
very life of the Nation is threatened but it cannot certainly be recognised or
taken note of for any other purpose much less made the basis of applying an
extremely drastic enactment like SAFEMA.
Treating
such order of detention as an order of detention for the purpose of and within
the meaning of Section 2(2)(b) of SAFEMA amounts to enforcing or giving effect
to the said order of detention beyond and outside the period of emergency and
for purposes foreign to emergency. This is totally impermissible. Section 12-A
does not sanction this though it sanctions a lot many things.
38.
While we are attracted by the logic as well as the emotional appeal of the
second line of thought it would appeal to any lover of liberty we find
ourselves constrained to reject it in the light of the language of Section 2(2)(b)
of SAFEMA coupled with the fact that SAFEMA is armed with the protective
umbrella of Article 31-B read with Ninth Schedule. We proceed to elaborate.
Section 2(2)(b) of SAFEMA expressly includes an order of detention to which the
provisions of Section 12-A apply within the purview of an order of detention
under COFEPOSA. For the sake of facility of reference, we may reproduce the
clause.
It
reads:
"(b)
every person in respect of whom an order of detention has been made under the
Conservation of Foreign Exchange and Prevention of Smuggling Activities Act,
1974 (52 of 1974):
Provided
that- 84
(i)
such order of detention, being an order to which the provisions of Section 9 or
Section 12-A of the said Act do not apply, has not been revoked on the report
of the Advisory Board under Section 8 of the said Act or before the receipt of
the report of the Advisory Board or before making a reference to the Advisory
Board; or
(ii)
such order of detention, being an order to which the provisions of Section 9 of
the said Act apply, has not been revoked before the expiry of the time for, or
on the basis of, the review under sub-section (3) of Sectio n 9, or on the
report of the Advisory Board under Section 8, read with sub-section (2) of
Section 9, of the said Act; or
(iii)
such order of detention, being an order to which the provision of Section 12-A
of the said Act apply, has not been revoked before the expiry of the time for,
or on the basis of, the first review under sub-section (3) of that section, or
on the basis of the report of the Advisory Board under Section 8, read with
sub-section(6) of Section 12-A, of that Act; or
(iv) such
order of detention has not been set aside by a court of competent
jurisdiction."
39.
Proviso (iii) expressly treats "an order (of detention) to which the
provisions of Section 12-A of the said Act apply" and which "has not
been revoked before the expiry of time for, or on the basis of, the first review
under sub- section (3) of that section (Section 12-A) or on the basis of the
report of the Advisory Board under Section 8, read with sub-section (6) of
Section 12-A, of that Act", as an order of detention for the purpose of
and within the meaning of clause (b) of Section 2(2) of SAFEMA. In view of the
fact that SAFEMA as well as COFEPOSA are included in the Ninth Schedule by the
39th and 40th (Amendment) Acts to the Constitution, clause (b) of Section 2(2)
of SAFEMA [including proviso (iii) appended to it] are beyond constitutional
reproach. One has to take the said provisions as they stand and they stand
solidly against the petitioners' contentions. On this single ground, we hold,
as we must, that an order of detention made under COFEPOSA, to which the
provisions in Section 12-A applied, is an order of detention within the meaning
of and for the purposes of Section 2(2)(b) of SAFEMA and can, therefore,
constitute the basis for applying SAFEMA to such person.
40. At
this juncture, it would be appropriate to deal with two decisions of this Court
brought to our notice. The first one is in Union of India v. Haji Mastan
Mirza11 rendered by a Bench of three Judges. The respondent therein was first
detained under Maintenance of Internal Security Act (MISA) under an order dated
17-9-1974. On 19-12-1974 the said order was revoked but simultaneously an order of
detention was made under Section 3(1) of COFEPOSA. The grounds of detention
were served on him on 23-12-1974.
11
(1984) 2 SCC 427 : 1984 SCC (Cri) 271 : (1984) 3 SCR 1 85 On 25-6-1975, emergency was proclaimed under Article 352(1) on
the ground of internal disturbance, which continued to be in force up to 21-3-1977. The respondent was released on 23-3-1977. Notice under Section 6(1) of SAFEMA was issued to
him, his relatives and associates whereupon he filed a writ petition in the
Bombay High Court challenging the validity of the order of detention dated
19-12-1974 on the ground inter alia that he was not supplied with the documents
clearly and unmistakably relied upon for arriving at the requisite satisfaction
and which documents were also referred to in the grounds of detention served
upon him.
The
Bombay High Court allowed the writ petition, against which the Union of India
appealed to this Court.
Varadarajan,
J. speaking for the Bench referred to the provisions of Sections 2, 6 and 7 of
SAFEMA and observed thus: (SCC p. 432, para 10) "Therefore, a valid order
of detention under COFEPOSA is a condition precedent to proceedings being taken
under Sections 6 and 7 of SAFEMA. If the impugned order of detention dated 19-12-1974 is set aside for any reason, the proceedings taken
under Sections 6 and 7 of SAFEMA cannot stand. Therefore, we have to consider
whether the impugned order of detention dated 19-12-1974 under COFEPOSA is void and has to be quashed."
41.
From the facts stated above, it is clear that the order of detention was made
long prior to the proclamation of emergency on 25-6-1975. He was served with the grounds of detention but not the
documents relied upon therein. It does not appear from the judgment whether a
declaration under Section 12-A of COFEPOSA was made with respect to the said
respondent, though it can be so presumed from the fact that his detention was
continued up to 23-3-1977. In the above circumstances, this
Court said that it was open to the respondent-detenu to question the validity
of the order of detention when proceedings are taken against him under Sections
6 and 7 of SAFEMA. It is not possible to agree with the reasoning of the
decision. There are two ways of looking at the issue. If it is a normal order
of detention [not governed by Section 12-A nor protected by an order under
Article 359(1) suspending the enforcement of Article 22] and if the detenu does
not challenge it when he was deprived of his liberty, or challenges it
unsuccessfully, there is no reason why he should be allowed to challenge it
when action under SAFEMA is taken against him for action under SAFEMA is not
automatic upon the fact of detention but only the starting point. On the other
hand, if it is an order of detention governed by Section 12-A [or by a
Presidential Order under Article 359(1) suspending Article 22], it perhaps
could still be challenged even during the period of emergency on grounds not
barred by the said provisions. Secondly, even if such an order is allowed to be
challenged when action under SAFEMA is taken, the challenge must be confined to
grounds which were open or available during the period of emergency; otherwise
there would be no meaning behind the concluding words in Article 358(1) and
Article 359(1 A). Hence, we say that a person who did not choose to challenge
such an order of detention during the emergency when he was detained, or
challenged it unsuccessfully, cannot 86 be allowed to challenge it when it is
sought to be made the basis for applying SAFEMA to him. In either of the two
situations mentioned above, i.e., whether the challenge is made during the
period of detention or later when proceedings under SAFEMA are taken against him,
the grounds of challenge and scope of judicial scrutiny would be the same.
Failure to challenge the detention directly when he was detained, precludes him
from challenging it after the cessation of detention, where it is made the
basis for initiating action under SAFEMA.
42.
The other case brought to our notice is in Union of India v. Manoharlal
Narang12, a decision rendered by a Bench comprising Khalid and Oza, JJ. The
facts of this case are rather involved. Respondent, Manohar Lal Narang and one
Ram Lal Narang were brothers. An order of detention under Section 3(1) of
COFEPOSA was made against Ram Lat Narang on 19-12-1974. He challenged the same before the Delhi High Court in Writ
Petition No. 10 of 1975 which was allowed on 30-4-1975 and the order of detention quashed. The Union of India
preferred an appeal against the said order of the High Court to this Court
along with an application for stay. On 1-5-1975, this Court declined stay but
imposed certain conditions on the movement of Ram Lal Narang (later, the said
appeal was dismissed for non-prosecution). After the proclamation of emergency
on the ground of internal disturbance on 25-6-1975, a fresh order of detention was
made on 1-7-1975 against Ram Lal on the very same
facts and grounds on which he was detained earlier. The said order of detention
was challenged in Delhi
Court in Writ
Petition No. 115 of 1975 filed by a relative of Ram Lal but was dismissed on
25-11-1975. An appeal was preferred against the said order to this Court being
Appeal No. 399 of 1977. At this stage, notice under Sections 6 and 7 of SAFEMA
was issued against Ram Lal which he questioned in Delhi High Court in Writ
Petition No. 720 of 1975. While the said writ petition was pending in Delhi
High Court, Appeal No. 399 of 1975 pending in this Court came up for hearing
and was disposed of saying that it would be open to Ram Lal to raise all such
contentions as are available to him in Writ Petition No. 720 of 1975,
notwithstanding the fact that those grounds were raised in Writ Petition No.
115 of 1975 (from which the said appeal No. 399 of 1975 arose). Writ Petition
No. 720 of 1975 was heard and dismissed by the Delhi High Court against which
Ram Lal filed SLP No. 9361 of 1982 wherein leave was granted and the appeal was
numbered as CA No. 2790 of 1985 which was said to be pending on the date of the
said judgment. An order of detention under Section 3 of COFEPOSA was made
against the respondent, Manohar Lal Narang, as well on 31-1-1975. He was then in England. He was brought to India and
detained. He challenged the same by way of WP No. 2752 of 1975 in the Bombay
High Court which was allowed and the detention quashed on 8-7-1980. An appeal preferred to this Court against the said
order was also dismissed. Thereafter, a show-cause notice was issued to Manohar
Lal Narang on the ground that he is the brother 12 (1987) 2 SCC 241 1987 SCC (Cri)
311 87 relative) of Ram Lal Narang, who was detained under Section 3(1) of
COFEPOSA. It may be remembered that a writ petition questioning Ram Lal's detention
under the order dated 1-7- 1975 [evidently, an order of detention to which
Section 12-A of COFEPOSA applied] was dismissed by the Delhi High Court (WP No.
115 of 1975) and even Writ Petition No. 720 of 1975 (in which he was allowed to
raise all the available grounds against his detention) was also dismissed. From
the facts stated above, it is clear that the basis of action under SAFEMA
against Manohar Lal Narang was his brother Ram Lal's detention during the
period of emergency, which detention was governed by Section 12-A of COFEPOSA.
According to our opinion indicated hereinbefore, such an order can constitute a
basis for taking action under SAFEMA. So far as the reasoning of the said
decision is concerned, it is to the effect that the validity of such an order
of detention can be questioned by the detenu or his relative, as and when such
an order is sought to be made the foundation for taking action against them
under SAFEMA. On that basis, the Court proceeded to examine the validity of the
order of detention of Ram Lal and found that the said order is bad for non-
application of mind to certain highly relevant and material circumstances. We
must, however, say that the validity of an order of detention to which Section
12-A of COFEPOSA applied, could yet be examined even during the emergency on
the touchstone of the law as it obtained during the operation of the
Presidential Order under Article 359(1) say on the ground that the provisions
of Section 12-A were not complied with, or on other grounds, as may not have
barred during the said period. But a person who could have so challenged the
order of detention and yet chose not to do, cannot be allowed to do so when
such an order of detention is made the basis for applying SAFEMA to him this is
for the reason that even if he is allowed to challenge the said order when he
is served with the notice under Section 6 of SAFEMA, the challenge has to be
examined with reference to the position of law as was obtaining at the time the
said order was made and the law in force during the period the said order of
detention was in operation. Same would be the position in the case of a person
who challenged the order but failed in his challenge. Even in the case of a
normal order of detention under COFEPOSA, the position would be the same, A
person who did not challenge, (either by himself or through his next friend)
the order of detention or challenged it but failed, cannot be allowed to
challenge the order of detention when action is taken against him under SAFEMA.
Question
No. 4
43.
The definition of "illegally acquired properties" in clause (c) of
Section 3(1) of SAFEMA is undoubtedly quite wide. It means and includes any
property acquired by such person, whether before or after the commencement of
this Act, wholly or partly out of or by means of any income, earnings or assets
derived or obtained from or attributable to any activity prohibited by or under
any law for the time being in force relating to any matter in respect of which
Parliament has power to make laws" [vide 88 sub-clause (i)]. Sub-clauses
(ii), (iii) and (iv) of clause (c) further widen and elaborate its ambit. The
definition thus takes in not only the property acquired after the Act but also
the property acquired before the Act, whatever. be the length of time.
Secondly, it takes in property which may have been acquired partly from out of
illegal activity in which case, of course, the provision in Section 9 would be
attracted. Illegal activity is not confined to violation of the laws mentioned
in Section 2 but all laws which Parliament has power to make. To give an
illustration, if a smuggler has acquired some properties by evading tax laws or
by committing theft, robbery, dacoity, misappropriation or any other illegal
activity prohibited by the Indian Penal Code or any other law in force (which
Parliament has the power to make) all that would be liable to be forfeited. It
is submitted by the petitioners that this is a case of excessive and
disproportionate response by Parliament. The argument is that the Act is penal
in nature and spreading its net as wide as is done by the definition of
"illegally acquired properties" brings it in conflict with Articles
14, 19 and 21. Alternatively, it is submitted that if the said definition is
unassailable on account of its inclusion in the Ninth Schedule, the definition
may be read down so as to confine it only to the properties acquired by
violating the prohibitions contained in the Acts mentioned in Section 2(a) of
SAFEMA. We do not find it possible to give effect to either of these
submissions. Both the enactments being placed in the Ninth Schedule, they enjoy
the immunity conferred by Article 31-B. We have observed hereinbefore that the
petitioners have not been able to substantiate their submission that the 39th (Amendment)
Act and 40th (Amendment) Act, placing the said enactments in the Ninth Schedule
are unconstitutional. It is not necessary to repeat the reasons for the said
opinion here over again. In this view of the matter, the attack upon the
validity of the said definition on grounds of unreasonableness, arbitrariness
or for that matter on any of the grounds relatable to Part III is of no avail.
Even apart from the protection of Article 31-B, we see no substance in the
submission that the definition is arbitrary or discriminatory nor do we see any
reason for reading down the said definition to confine it to the violation of
the acts referred to in Section 2(2)(a) of SAFEMA. We can take note of the fact
that persons engaged in smuggling and foreign exchange manipulations do not
keep regular and proper accounts with respect to such activity or its income or
of the assets acquired therefrom. If such person indulges in other illegal
activity, the position would be no different.
The
violation of foreign exchange laws and laws relating to export and import
necessarily involves violation of tax laws. Indeed, it is a well-known fact
that over the last few decades, smuggling, foreign exchange violations, tax
evasion, drugs and crime have all got mixed-up. Evasion of taxes is integral to
such activity. It would be difficult for any authority to say, in the absence
of any accounts or other relevant material that among the properties acquired
by a smuggler, which of them or which portions of them are attributable to smuggling
and foreign exchange violations and which properties or which portions thereof
are attributable to violation of other laws (which Parliament has the power to
make). It is 89 probably for this reason that the burden of proving that the
properties specified in the show-cause notice are not illegally acquired
properties is placed upon the person concerned. May be this is a case where a
dangerous disease requires a radical treatment. Bitter medicine is not bad
medicine. In law it is not possible to say that the definition is arbitrary or
is couched in unreasonably wide terms. Further, in view of clear and
unambiguous language employed in clause (c) of Section 3, it is not possible or
permissible to resort to the device of reading down. The said device is usually
resorted to save a provision from being declared unconstitutional, competent
and ultra vires.
We are,
therefore, of the opinion that neither the constitutional validity of the said
definition can be questioned nor is there my warrant for reading down the clear
and unambiguous words in the clause. So far as justification of such a
provision is concerned, there is enough and more. After all, all these
illegally acquired properties are earned and acquired in ways illegal and
corrupt at the cost of the people and the State. The State is deprived of its
legitimate revenue to that extent. These properties must justly go back where
they belong to the State. What we are saying is nothing new or heretical.
Witness
the facts and ratio of a recent decision of the Privy Council in Attomey
General for Hong Kong v. Reid13 The respondent, Reid, was
a Crown-prosecutor in Hong
Kong. He took bribes
as an inducement to suppress certain criminal prosecutions and with those
monies, acquired properties in New Zealand,
two of which were held in the name of himself and his wife and the third in the
name of his solicitor. He was found guilty of the offence of bribe-taking and
sentenced by a criminal court. The Administration of Hong Kong claimed that the
said properties in New Zealand were held by the owners thereof as
constructive trustees for the Crown and must be made over to the Crown. The
Privy Council upheld this claim overruling the New Zealand Court of Appeals.
Lord Templeman, delivering the opinion of the Judicial Committee, based his
conclusion on the simple ground that any benefit obtained by a fiduciary
through a breach of duty belongs in equity to the beneficiary. It is held that
a gift accepted by a person in a fiduciary position as an incentive for his
breach of duty constituted a bribe and, although in law it belonged to the
fiduciary, in equity he not only became a debtor for the amount of the bribe to
the person to whom the duty was owed but he also held the bribe and any
property acquired therewith on constructive trust for that person. It is held
further that if the value of the property representing the bribe depreciated
the fiduciary had to pay to the injured person the difference between that
value and the initial amount of the bribe, and if the property increased in
value the fiduciary was not entitled to retain the excess since equity would
not allow him to make any profit from his breach of duty. Accordingly, it is
held that to the extent that they represented bribes received by the first
respondent, the New
Zealand properties
were held in trust for the Crown, and the Crown had an equitable interest
therein. The learned Law Lord observed further that if the theory of
constructive trust is not applied and properties interdicted when 13 (1993) 3
WLR 1 143: (1994) 1 All ER 1 90 available, the properties "can be sold and
the proceeds whisked away to, some Shangri La which hides bribes and other
corrupt moneys in numbered bank accounts" to which we are tempted to add
one can understand the immorality of the Bankers who maintained numbered
accounts but it is difficult to understand the amorality of the Governments and
their laws which sanction such practices in effect encouraging them. The ratio
of this decision applies equally where a person acquires properties by violating
the law and at the expense of and to the detriment of the State and its
revenues where an enactment provides for such a course, even if the fiduciary
relationship referred to in Reid13 is not present. It may be seen that the
concept employed in Reid" was a common law concept, whereas here is a case
of an express statutory provision providing for such forfeiture.
May we
say in conclusion that "the interests of society are paramount to
individual interests and the two must be brought into just and harmonious relation.
A mere property career is not the final destiny of mankind, if progress is to
be the law of the future as it has been of the past".
(Lewis
Henry Morgan: Ancient Society).
Question
No. 5
44. It
is contended by the counsel for the petitioners that extending the provisions
of SAFEMA to the relatives, associates and other 'holders' is again a case of
overreaching or of over-breadth, as it may be called a case of excessive
regulation. It is submitted that the relatives or associates of a person
falling under clause (a) or clause (b) of Section 2(2) of SAFEMA may have
acquired properties of their own, may be by illegal means but there is no
reason why those properties be forfeited under SAFEMA just because they are
related to or are associates of the detenu or convict, as the case may be. It
is pointed out that the definition of 'relative' in Explanation (2) and of
,associates' in Explanation (3) are so wide as to bring in a person even
distantly related or associated with the convict/detenu, within the net of
SAFEMA, and once he comes within the net, all his illegally acquired properties
can be forfeited under the Act. In our opinion, the said contention is based
upon a misconception. SAFEMA is directed towards forfeiture of "illegally
acquired properties" of a person falling under clause (a) or clause (b) of
Section 2(2). The relatives and associates are brought in only for the purpose
of ensuring that the illegally acquired properties of the convict or detenu,
acquired or kept in their names, do not escape the net of the Act. It is a
well-known fact that persons indulging in illegal activities screen the
properties acquired from such illegal activity in the names of their relatives
and associates. Sometimes they transfer such properties to them, may be, with an
intent to transfer the ownership and title. In fact, it is immaterial how such
relative or associate holds the properties of convict/detenu whether as a benami
or as a mere name-lender or as a bona fide transferee for value or in any other
manner. He cannot claim those properties and must surrender them to the State
under the Act. Since he is a relative or associate, as defined by the Act, he
cannot put forward any defence once it is proved that that property was
acquired by the detenu whether in his own name or in the 91 name of his
relatives and associates. It is to counteract the several devices that are or
may be adopted by persons mentioned in clauses (a) and (b) of Section 2(2) that
their relatives and associates mentioned in clauses (c) and (d) of the said
sub-section are also brought within the purview of the Act. The fact of their
holding or possessing the properties of convict/detenu furnishes the link
between the convict/detenu and his relatives and associates. Only the properties
of the convict/detenu are sought to be forfeited, wherever they are. The idea
is to reach his properties in whosoever's name they are kept or by whosoever
they are held. The independent properties of relatives and friends, which are
not traceable to the convict/detenu, are not sought to be forfeited nor are
they within the purview of SAFEMA**. We may proceed to explain what we say.
Clause (c) speaks of a relative of a person referred to in clause (a) or clause
(b) (which speak of a convict or a detenu).
Similarly,
clause (d) speaks of associates of such convict or detenu. If we look to
Explanation (3) which specifies who the associates referred to in clause (d)
are,, the matter becomes clearer. 'Associates' means (i) any individual who had
been or is residing in the residential premises (including outhouses) of such
person [ such person' refers to the convict or detenu, as the case may be,
referred to in clause (a) or clause (b)]; (ii) any individual who had been or
is managing the affairs or keeping the accounts of such convict/detenu; (iii)
any association of persons, body of individuals, partnership firm or private
company of which such convict/detenu had been or is a member, partner or
director; (iv) any individual who had been or is a member, partner or director
of an association of persons, body of individuals, partnership firm or private
company referred to in clause (iii) at any time when such person had been or is
a member, partner or director of such association of persons, body of
individuals, partnership firm or private company;. (v) any person who had been
or is managing the affairs or keeping the accounts of any association of
persons, body of individuals, partnership firm or private company referred to
in clause (iii); (vi) the trustee of any trust where (a) the trust has been
created by such convict/detenu; or (b) the value of the assets contributed by
such convict/detenu to the trust amounts, on the date of contribution not less
than 20% of the value of the assets of the trust on that date;
and
(vii) where the competent authority, for reasons to be recorded in writing,
considers that any properties of such convict/detenu are held on his behalf by
any other person, such other person. It would thus be clear that the connecting
link or the nexus, as it may be called, is the holding of property or assets of
the convict/detenu or traceable to such detenu/convict. Section 4 is equally
relevant in this context. It declares that "as from the commencement of
this Act, it shall not be lawful for any person to whom this Act applies to
hold That this was the object of the Act is evident from para 4 of the preamble
which states: "And whereas such persons have in many cases been holding
the properties acquired by them through such gains in the names of their
relatives, associates and confidants." We are not saying that the preamble
can be utilised for restricting the scope of the Act, we are only referring to
it to ascertain the object of the enactment and to reassure ourselves that the
construction placed by us accords with the said object.
92 any
illegally acquired property either by himself or through any other person on
his behalf". All such property is liable to be forfeited. The language of
this section is indicative of the ambit of the Act. Clauses (c) and (d) in
Section 2(2) and the Explanations (2) and (3) occurring therein shall have to
be construed and understood in the light of the overall scheme and purpose of
the enactment.
The
idea is to forfeit the illegally acquired properties of the convict/detenu
irrespective of the fact that such properties are held by or kept in the name
of or screened in the name of any relative or associate as defined in the said
two Explanations. The idea is not to forfeit the independent properties of such
relatives or associates which they may have acquired illegally but only to
reach the properties of the convict/detenu or properties traceable to him,
wherever they are, ignoring all the transactions with respect to those
properties. By way of illustration, take a case where a convict/detenu
purchases a property in the name of his relative or associate it does not
matter whether he intends such a person to be a mere name lender or whether he
really intends that such person shall be the real owner and/or possessor thereof
or gifts away or otherwise transfers his properties in favour of any of his
relatives or associates, or purports to sell them to any of his relatives or
associates in all such cases, all the said transactions will be ignored and the
properties forfeited unless the convict/detenu or his relative/associate, as
the case may be, establishes that such property or properties are not
"illegally acquired properties" within the meaning of Section 3(c).
In this view of the matter, there is no basis for the apprehension that the
independently acquired properties of such relatives and associates will also be
forfeited even if they are in no way connected with the convict/detenu. So far
as the holders (not being relatives and associates) mentioned in Section 2(2)(e)
are concerned, they are dealt with on a separate footing. If such person proves
that he is a transferee in good faith for consideration, his property even
though purchased from a convict/detenu is not liable to be forfeited. It is
equally necessary to reiterate that the burden of establishing that the
properties mentioned in the show-cause notice issued under Section 6, and which
are held on that date by a relative or an associate of the convict/detenu, are
not the illegally acquired properties of the convict/detenu, lies upon such
relative/associate. He must establish that the said property has not been
acquired with the monies or assets provided by the detenu/convict or that they
in fact did not or do not belong to such detenu/convict. We do not think that Parliament
ever intended to say that the properties of all the relatives and associates,
may be illegally acquired, will be forfeited just because they happen to be the
relatives or associates of the convict/detenu. There ought to be the connecting
link between those properties and the convict/detenu, the burden of disproving
which, as mentioned above, is upon the relative/associate. In this view of the
matter, the apprehension and contention of the petitioners in this behalf must
be held to be based upon a mistaken premise.
The
bringing in of the relatives and associates or of the persons mentioned in
clause (e) of Section 2(2) is thus 93 neither discriminatory nor incompetent
apart from the protection of Article 31-B.
Question
No. 6
45.
Petitioners challenged the validity of Section 5-A of COFEPOSA on the ground of
it being violative of the twin safeguards provided by clause (5) of Article 22.
It is submitted that the said clause gives two rights to the detenu, viz., (i)
to have the grounds on which the order of detention is based communicated to
him as soon as possible and (ii) to be afforded the earliest opportunity of
making representation against the order of detention (see State of Bombay v. Atma
Ram Sridhar Vaidya14). If the grounds included irrelevant or non-existent
grounds, it is submitted, the first right is violated and if the grounds
included vague grounds, the second right is violated.
According
to the teamed counsel, Article 22(5), as interpretated by this Court over the
last more than four decades, means this: An order of preventive detention is
based upon the subjective satisfaction of the authority and where such
satisfaction has been arrived at on grounds some of which are relevant and
definite grounds and some irrelevant, vague and nonexistent, it is not possible
or permissible for the court to predicate which grounds have influenced the
formation of his satisfaction which means that the order of detention must fall
to the ground; if this is what Article 22(5) means and says, it is not open to
Parliament to make a law saying that where the grounds upon which the requisite
satisfaction has been formed are partly good and partly bad, yet the order must
be held to be good with reference to and on the basis of good grounds,
eschewing the bad grounds. Such a law, it is submitted, would be in direct
conflict with Article 22(5). Let us examine this submission rather closely.
46.
Section 5-A of COFEPOSA may be reproduced here for ready reference. It reads:
"5-A.
Grounds of detention severable.- Where a person has been detained in pursuance
of an order of detention under sub-section (1) of Section 3 which has been made
on two or more grounds, such order of detention shall b e deemed to have been
made separately on each of such grounds and accordingly- (a) such order shall
not be deemed to be invalid or inoperative merely because one or some of the
grounds is or are- (i) vague, (ii) non-existent, (iii) not relevant, (iv) not
connected or not proximately connected with such person, or (v) invalid for any
other reason whatsoever, and it is not therefore possible to hold that the
Government or officer making such order would have been satisfied as provided
in sub- section 14 1951 SCR 167 : AIR 1951 SC 157 :52 Cri LJ 373 94 (1) of
Section 3 with reference to the remaining ground or grounds and made the order
of detention;
(b)
the Government or officer making the order of detention shall be deemed to have
made the order of detention under the said sub-section (1) after being
satisfied as provided in that sub-section with reference to the remaining
ground or grounds."
47.
The section is in two parts. The first part says that where an order of
detention is made on two or more grounds, "such order of detention shall
be deemed to have been made separately on each of such grounds", while the
second part says that such order shall not be deemed to be invalid or
inoperative merely for the reason that one or some of the grounds are either
vague, non-existent, irrelevant or unconnected. That the second part is merely
a continuation of and consequential to the first part is evident from the
connecting words "and accordingly". The second part goes further and
says that the order of detention must be deemed to have been made on being
satisfied with the remaining good ground or grounds, as the case may be. Both
the parts are joined by the word "and".
48.
Now, it is beyond dispute that an order of detention can be based upon one
single ground. Several decisions of this Court have held that even one
prejudicial act can be treated as sufficient for forming the requisite
satisfaction for detaining the person. In Debu Mahato v. State of W.B.15 it was observed that while
ordinarily-speaking one act may not be sufficient to form the requisite
satisfaction, there is no such invariable rule and that in a given case one act
may suffice. That was a case of wagon-breaking and having regard to the nature
of the Act, it was held that one act is sufficient. The same principle was
reiterated in Anil Dey v. State of W. B. 16 It was a case of theft of railway
signal material. Here too one act was held to be sufficient. Similarly, in Israil
SK v. District Magistrate of West Dinajpur17 and Dharua Kanu v. State of W.B.18
single act of theft of telegraph copper wires in huge quantity and removal of
railway fish-plates respectively was held sufficient to sustain the order of
detention. In Saraswathi Seshagiri v. State of Kerala19, a case arising under
COFEPOSA, a single act, viz., attempt to export a huge amount of Indian
currency was held sufficient. In short, the principle appears to be this:
Though ordinarily one act may not be held sufficient to sustain an order of
detention, one act may sustain an order of detention if the act is of such a
nature as to indicate that it is an organised act or a manifestation of organised
activity. The gravity and nature of the act is also relevant. The test is
whether the act is such that it gives rise to an inference that the person
would continue to indulge in similar prejudicial 15 (1974) 4 SCC 1351974 SCC (Cri)
274 16 (1974) 4 SCC 5141974 SCC (Cri) 550 17 (1975) 3 SCC 292:1974 SCC (Cri)
900 18 (1975) 3 SCC 527 :1975 SCC (Cri) 117 19 (1982)2SCC310:1982 SCC (Cri) 423
95 activity. That is the reason why single acts of wagon- breaking, theft of
signal material, theft of telegraph copper wires in huge quantity and removal
of railway fish- plates were held sufficient. Similarly, where the person tried
to export huge amount of Indian currency to a foreign country in a planned and
premeditated manner, it was held that such single act warrants an inference
that he will repeat his activity in future and, therefore, his detention is
necessary to prevent him from indulging in such prejudicial activity. If one
looks at the acts the COFEPOSA is designed to prevent, they are all either acts
of smuggling or of foreign exchange manipulation. These acts are indulged in by
persons, who act in concert with other persons and quite often such activity
has international ramifications. These acts are preceded by a good amount of
planning and Organisation. They are not like ordinary law and order crimes. If,
however, in any given case a single act is found to be not sufficient to
sustain the order of detention that may well be quashed but it cannot be stated
as a principle that one single act cannot constitute the basis for detention.
On the contrary, it does. In other words, it is not necessary that there should
be multiplicity of grounds for making or sustaining an order of detention.
49.
Now, take a case, where three orders of detention are made against the same
person under COFEPOSA. Each of the orders is based upon only one ground which
is supplied to the detenu. It is found that the ground of detention in support
of two of such orders is either vague or irrelevant.
But
the ground in support of the third order is relevant, definite and proximate.
In such a case, while the first two orders would be quashed, the third order
would stand. This is precisely what the first part (the main part) of Section
5-A seeks to do. Where the order of detention is based on more than one ground,
the section creates a legal fiction, viz., it must be deemed that there are as
many orders of detention as there are grounds which means that each of such
orders is an independent order. The result is the same as the one in the
illustration given by us hereinabove. The second part of it is merely clarificatory
and explanatory, which is evident from the fact that it begins with the word
"accordingly" apart from the fact that it is joined to the first part
by the word "and". In such a situation, we are unable to see how can
the section be characterised as inconsistent with Article 22(5). Had there been
no first part, and had the section consisted only of the second part, one can
understand the contention that the section is in the teeth of Article 22(5) as
interpreted by this Court this was indeed the situation in K. Yadigiri Reddy v.
Commissioner of Police20 as we shall presently indicate. It is difficult to
conceive any inconsistency or conflict between Article 22(5) and the first the
main part of Section 5-A. Parliament is competent to create a legal fiction and
it did so in this case. Article 22(5) does not in terms or otherwise prohibit
making of more than one order simultaneously against the same person, on different
grounds. No decision saying so has been 20 ILR 1972 AP 1025 96 brought to our
notice. Be that as it may, we do not see why Parliament is not competent to
say, by creating a legal fiction, that where an order of detention is made on
more than one ground, it must be deemed that there are as many orders of
detention as there are grounds. If this creation of a legal fiction is
competent, then no question of any inconsistency between the section and
Article 22(5) can arise.
50. It
is true that validity of Section 5-A or for that matter, of Section 5-A of
National Security Act, 1980, which is in identical terms does not appear to
have been questioned in this Court so far, though it has been applied in
several decisions. Three of the reported decisions are brought to our notice,
viz., State of Gujarat v. Chaman Lal Manjibhai Soni21, Prakash Chandra Mehta v.
Commissioner and Secretary, Govt. of Kerala22 and N. Meera Rani v. Govt. of
T.N.23 Actually, in the last-mentioned decision, there are observations affirming
its validity, though no final opinion has been expressed on the question
because it was not canvassed in that case. It is also brought to our notice
that a Bench of Gujarat High Court has affirmed and applied the said provision
in a case arising under COFEPOSA.
51.
Now, coming to the decision of the Andhra Pradesh High Court in K. Yadigiri
Reddy20 Section 6(a) of the A.P. Detention Act, 1970 read as follows:
"No
detention order shall be invalid or inoperative merely by reason that one or
more of the grounds on which the order is made is or are vague or irrelevant,
when the other ground or grounds does not or do not suffer from any such
infirmity."
52.
The Andhra Pradesh provision thus contained a provision approximating to the
second part of Section 5-A but did not contain any provision corresponding to
or approximating to the first (the main) part of Section 5-A. It is the first
part of Section 5-A that creates the deeming fiction; the second part merely
elaborates the effect and consequence of the legal fiction in the first part.
The second part, had it stood alone, could perhaps have been characterised as
being in the teeth of Article 22(5), as understood and construed by this Court
and that is what the Andhra Pradesh High Court says but that is not the
situation herein as explained hereinabove. The said decision, therefore, does
not advance the case of the petitioners in any manner herein. Having said this,
we must reiterate the admonition of Gajendragadkar, J. regarding the exercise
of the power of detention under the various detention laws in force.
Speaking
for the Constitution Bench in G. Sadanandan v. State of Kerala 24, the learned
Judge observed:
21
(1981) 2 SCC 24:19.81 SCC (Cri) 311 22 1985 Supp SCC 144: 1985 SCC (Cri) 332 23
(1989) 4 SCC 418 : 1989 SCC (Cri) 732 24 AIR 1966 SC 1925 :(1966) 3 SCR 590 :
1966 Cri LJ 1533 97 "... we feel rudely disturbed by the thought that
continuous exercise of the very wide powers conferred by the Rules on the
several authorities is likely to make the conscience of the said authorities
insensitive, if not blunt, to the paramount requirement of the Constitution
that even during Emergency, the freedom of Indian citizens cannot be taken away
without the existence of the justifying necessity specified by the Rules
themselves.
The
tendency to treat these matters in a somewhat casual and cavalier manner which
may conceivably result from the continuous use of such unfettered powers, may
ultimately pose a serious threat to the basic values on which the democratic
way of life in this country is founded."
53. In
matters touching liberty, greater care is called for on the part of the
authorities exercising powers of detention.
An
additional question
54. Dr
Ghatate, appearing for one of the petitioners raised an interesting submission
to the following effect: By Constitution 44th (Amendment) Act, Parliament,
acting in its constituent power, has substituted clause (4) as well as clause
(7) of Article 22 leaving it to the Central Government to specify the date from
which the said amendment shall come into force. Sub-section (2) of Section 1 of
the (Amendment) Act empowers the Central Government to fix different dates for
coming into force of different provisions of the said Act. Though the Central
Government has specified the date of coming into force in respect of several
other provisions of the Amendment Act, it has not chosen to specify the date
from which the Amendments to substitution of clauses (4) and (7) of Article 22
shall come into force. The 44th (Amendment) Act was enacted as far back as
April 1979 and even though more than fourteen years have passed by, the Central
Government has not thought it fit to enforce the said Amendments. This failure
on the part of the Central Government has the effect of virtually nullifying
the said Amendments. While enacting the said Amendments, Parliament could never
have contemplated that the Central Government would sit on them for more than
fourteen years. The Central Government must act in accordance with the spirit
of the Amendment Act. It must act reasonably. It cannot undo a Constitution
Amendment just by refusing to specify a date from which it shall come into
operation. Even if the power given to the Central Government is characterised
as a conditional legislation still the fact remains that such power too must
have to be exercised reasonably and within reasonable time. Can the Central
Government wait for few more years and would the Court be powerless to command
the Central Government to bring into force the said Amendment? If no such
command can be given, would it not mean that Parliament was, in the year 1979,
amending the Constitution, not for that generation but for the next generation?
Section 1(2) of the 44th (Amendment) Act is indeed an instance of abdication of
or delegation of essential constituent power and, therefore, bad. Such a thing
has never 98 happened and cannot be allowed to happen; the Central Government
ought not to be allowed to play with a constitutional amendment an amendment
which, in particular, tends to strengthen the safeguard contained in clause (4)
of Article 22, says the counsel.
55. We
do not, however, think it necessary for the purposes of these cases to express
any opinion on Dr Ghatate's submission, for the reason that acceptance of his
contention assuming we do makes no difference to the result of these petitions.
We have already held that the orders of detention made under Section 3 of
COFEPOSA, which were governed by Section 12-A do yet represent orders of
detention for the purpose of and within the meaning of Section 2(2)(b) read
with Section 2(1) of SAFEMA. Even if we assume that the amendments to clauses
(4) and (7) effected by the 44th (Amendment) Act have come into force on the
day the Amendment Act received assent of the President, the result would be no
different. In this view of the matter, it is also not necessary to express any
opinion on the respondent's submission based upon A.K. Roy v. Union of India25,
Viz., whether the opinion in the said decision can be validly applied even after
a lapse of fourteen years.
56. To
summarise:
(1)
Parliament was perfectly competent to enact both the COFEPOSA and the SAFEMA.
(2)
For the reasons given in the body of this judgment, we do not express any
opinion on the validity of the 39th and 40th Amendment Acts to the Constitution
of India placing COFEPOSA and SAFEMA in the Ninth Schedule. We assume them to
be good and valid. No arguments have also been addressed with respect to the
validity of 42nd Amendment Act to the Constitution either.
(3)
(a) An order of detention made under Section 3 of COFEPOSA, which was governed
by Section 12-A thereof is yet an order of detention for the purpose of and
within the meaning of Section 2(2)(b) of SAFEMA. Since the President had issued
an order under Article 359(1) suspending Articles 14, 21 and 22, it became
competent for Parliament, by virtue of clause (]-A) of Article 359 to enact
Section 12-A of COFEPOSA for the duration of and limited to the period for
which the Presidential Order was in force. It was meant to achieve the purposes
of emergency. Once Section 12-A 'Is held to be a competent piece of
legislation, orders of detention made thereunder (i.e. orders of detention to
which the said provision applied) cannot be held to be not amounting to orders
of detention for the purpose of and within the meaning of Section 2(2)(b) of
SAFEMA, particularly In view of the express language of Section 2(2)(b)
[including proviso (iii) thereto] and the 25 (1982) 1 SCC 271 : 1982 SCC (Cri)
152: (1982) 2 SCR 272 99 protection enjoyed by both the enactments by virtue of
their inclusion in the Ninth Schedule to the Constitution.
(b) An
order of detention to which Section 12-A is applicable as well as an order of
detention to which Section 12-A was not applicable can serve as the foundation,
as the basis, for applying SAFEMA to such detenu and to his relatives and
associates provided such order of detention does not attract any of the
sub-clauses in the proviso to Section 2(2)(b).
If
such detenu did not choose to question the said detention (either by himself or
through his next friend) before the Court during the period when such order of
detention was in force, or is unsuccessful in his attack thereon he, or his
relatives and associates cannot attack or question its validity when it is made
the basis for applying SAFEMA to him or to his relatives or associates.
(4)
The definition of "illegally acquired properties" in clause (c) of
Section 3 of SAFEMA is not invalid or ineffective.
(5)
The application of SAFEMA to the relatives and associates [in clauses (c) and
(d) of Section 2(2)] is equally valid and effective inasmuch as the purpose and
object of bringing such persons within the net of SAFEMA is to reach the
properties of the detenu or convict, as the case may be, wherever they are,
howsoever they are held and by whomsoever they are held. They are not conceived
with a view to forfeit the independent properties of such relatives and
associates as explained in this judgment. The position of 'holders' dealt with
by clause (e) of Section 2(2) is different as explained in the body of the
judgment.
(6)
Section 5-A of COFEPOSA is not invalid or void. It is not violative of clause
(5) of Article 22.
(7)
Petitioners have failed to establish that any of the provisions of SAFEMA are violative
of Articles 14, 19 or 21 apart from the protection they enjoy by virtue of the
inclusion of the Act in the Ninth Schedule to the Constitution.
57.
All the writ petitions, transferred cases and appeals are disposed of
accordingly. The court and authorities before whom proceedings are pending
under SAFEMA shall proceed to dispose them of in accordance with law and in the
light of this judgment. It is in the interest of all concerned that the
proceedings are concluded with all deliberate speed.
58.
Civil Appeal No. 1418 of 1981 dismissed as withdrawn.
59. No
orders are called for on IA No. 1 of 1993 in TP (C) No. 17 of 1978.
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