Mohanlal Jatia vs The Competent Authority Under The … on 5 March, 1992

Bombay High Court
Mohanlal Jatia vs The Competent Authority Under The … on 5 March, 1992
Equivalent citations: (1992) 94 BOMLR 216, 1993 CriLJ 1477
Author: M Manohar
Bench: S V Manohar, V Tipnis


JUDGMENT

Mrs. Manohar, J.

1. The petitioner has challenged in this writ petition notices dated 24-3-1987 and 27-10-1987 issued under section 6(1) of the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 (hereinafter referred to as the ‘SAFEMA’). The relevant facts are as follows :

The petitioner, Mohanlal Jatia, was detained under an order of detention dated 13-12-1985 under the provisions of the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (hereinafter referred to as the ‘COFEPOSA’). The petitioner was served with this order of detention of 4-4-1986.

2. The order of detention against the petitioner was challenged by his wife in Criminal Writ Petition No. 385 of 1986 filed in this Court. The petition, however, was dismissed by this Court by its order dated 2/3-5-1986. The petitioner’s wife preferred an appeal to the Supreme Court which was also dismissed by the Supreme Court by its order dated 19-12-1986. Thereafter, the petitioner was served with a notice under section 6(1) of the SAFEMA which is dated 24-3-1987.

3. On 7-2-1986 an order of detention was passed against Ganesh, the brother of the petitioner, under the provisions of the COFEPOSA. Ganesh, however, did not surrender to the detention order. On 29-6-1987 a notice under the SAFEMA was served on the nephew of the petitioner and Ganesh. This notice was challenged by the nephew in Criminal Writ Petition No. 173 of 1987. In this writ petition, the nephew also challenged the order of detention of 13-12-1985 against the present petitioner Mohanlal on grounds other than those urged in the earlier Writ Petition No. 385 of 1986 by the petitioner’s wife. The second Writ Petition No. 173 of 1987 was allowed by this Court by its order dated 7-7-1987 and the detention order against the petitioner was thereby set aside.

4. On 27-10-1987, a notice under section 6(1) of the SAFEMA was once again served on the petitioner. In the reasons accompanying this notice, it was stated that the petitioner was the brother of Ganesh who was also ordered to be detained under section 3(1) of the COFEPOSA under the order of detention dated 7-2-1986. This order of detention of Ganesh had not been set aside by any Court of competent jurisdiction and hence, the petitioner was a person covered by the provisions of Section 2(2)(c) of the SAFEMA.

5. This notice was challenged by the nephew of the petitioner in Writ Petition No. 590 of 1988. This writ petition also challenged inter alia the order of detention against the petitioner’s brother Ganesh dated 7-2-1986. The writ petition was allowed by this Court by its judgment and order dated 22-12-1988 and the detention order in respect of Ganesh was quashed.

6. The petitioner has filed the present writ petition to challenge the two SAFEMA notices against him which are dated 24-3-1987 and 27-10-1987. It is the contention of the petitioner that since the orders of detention against him as well as his brother Ganesh have been set aside, there is no jurisdiction in the respondents to issue the two notices under the SAFEMA.

7. On the other hand, it is the contention of the respondents that although the “continued” detention of the petitioner may have been set aside, the original order of detention is still valid and hence, the notice under section 6(1) of the SAFEMA has been properly issued against the petitioner.

8. In order to appreciate these contentions, it is necessary to look at Section 2(2)(b)(iv) of the SAFEMA. It is as follows :-

“2(1) The provisions of this Act shall apply only to the persons specified in sub-section (2).

(2) The persons referred to in sub-sections (1) are the following, namely :-

(a) …………………………………………………….

(b) every person in respect of whom on order of detention has been made under the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 :

Provided that –

(i) such order of detention, being an order to which the provisions of Section 9 or Section 12A 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 12A of the said Act apply, has not 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 12A, of that Act; or

(iv) such order of detention has not been set aside by a Court of competent jurisdiction.”

Therefore, the provisions of this Act apply to every person against whom an order of detention has been made under the COFEPOSA, provided inter alia that such order of detention has not been set aside by a Court of competent jurisdiction. In the case of the petitioner, this order of detention was originally challenged by his wife in Writ Petition No. 385 of 1986. However, the order as not set aside both by the High Court as well as by the Supreme Court. Thereafter, there was a second challenge to this order of detention on a different ground in Writ Petition No. 173 of 1987. The judgment in this writ petition is annexed as Exh. ‘C’ hereto. It is pointed out by the learned Advocates for the respondents that the only ground of challenge to the order of detention in this writ petition was to the following effect :

The detention was based upon a confession of one Subhash R. Gadia. Gadia retracted the confession on 8th of July, 1985. Gadia had also made a second confession which was retracted by him on 16th December, 1985, a few days after the passing of the order of detention against the petitioner which was dated 13-12-1985. In the writ petition, it was contended that the second retraction of Gadia which was subsequent to the order of detention was not conveyed to the Advisory Board and the Central Government. As a result, the relevant material was not before the Advisory Board when it came to the conclusion that it was necessary to uphold the order of detention against the petitioner. The Central Government which confirmed the order of detention on 20-6-1986 pursuant to the opinion of the Advisory Board under Section 8(f) of the COFEPOSA, was also not aware of the retraction of Gadia dated 16-12-1985. Hence, the order of the Central Government confirming the detention was also bad in law. The Court, therefore observed as follows :-

“However, the continued detention cannot be sustained.”

The Court made the rule absolute and directed that the detenu be released forthwith unless otherwise wanted. In the writ which was issued pursuant to the judgment and order, it is stated as follows :-

“For the reasons recorded in the accompanying judgment, the Court sets aside the order of detention passed against the detenu by the Secretary to the Government of India dated 13-12-1985 and makes the rule absolute.

Detenu be released forthwith unless wanted in connection with other case.”

It is contended by the respondents that what is set aside is the continued detention of the detenu and not the original order of detention and hence, the provisions of Section 2(2)(b)(iv) of the SAFEMA are not attracted. This contention, in our view, is without any merit.

9. Under Section 2(b) of the COFEPOSA, a “detention order” is defined to mean an order made under section 3. Under Section 3(1), the Central Government or the State Government or the officers referred to therein may, if satisfied, with respect to any person that, with a view to preventing him from acting in any manner prejudicial to the conservation or augmentation of foreign exchange or with a view to preventing him from smuggling goods, or abetting the smuggling of goods, or engaging in transporting or concealing or keeping smuggled goods, or dealing in smuggled goods otherwise than by engaging in transporting or concealing or keeping smuggled goods, or harbouring persons engaged in smuggling of goods, or in abetting the smuggling goods, it is necessary so to do, make an order directing that such person be detained.

10. Under Section 8, the Central Government and each State Government is required to constitute an Advisory Board. Under Section 8(c), the Advisory Board after considering the reference and the materials placed before it and hearing the detenu in person, if he so desires, is required to make its report giving its opinion as to whether or not there is sufficient cause for the detention of the person concerned. This report is required to be submitted within 11 weeks of the date of detention.

11. Under Section 8(f), in every case where the Advisory Board has reported that there is, in its opinion, sufficient cause for the detention of a person, the appropriate Government may confirm the detention order and “continue the detention of the person concerned for such period as it thinks fit”, and in every case where the Advisory Board has reported that there is, in its opinion, no sufficient cause for the detention of the person concerned, the appropriate Government shall revoke the detention order. Therefore, the confirmation or revocation is of the detention order passed under Section 3(1).

12. Under Section 9, there is a power in the Central Government or any officer of the Central Government, not below the rank of an Additional Secretary, specially empowered for that purpose, to make a declaration that he is satisfied that the person who has been detained smuggles or is likely to smuggle goods into, out of or through any area highly vulnerable to smuggling, or that he abets or is likely to abet the smuggling of goods into, out of or through any area highly vulnerable to smuggling, or that he engages or is likely to engage in transporting or concealing or keeping smuggled goods in any area highly vulnerable to smuggling of goods. If such a declaration is made, then under section 9, the person can be detained for longer periods than those originally specified under section 8. The modifications in the various periods under Section 8 are expressly specified in Section 9(2). There is also a modification in Section 8(c) under which the Advisory Board has, in such a case, to record its opinion whether there is sufficient cause for “the continued detention of the person concerned”. Mr. Agarwal and Mrs. Desai, learned Advocates for respondents Nos. 1 and 2 and 3, respectively, have strongly relied upon certain decisions of the Supreme Court relating to the interpretation of Section 9(1) of the COFEPOSA. In the case of Rekhaben v. State of Gujarat, a declaration was made under Section 9(1). This declaration was set aside by the Supreme Court. The Supreme Court said that in the absence of Section 9(1), the period of detention permissible under section 3 is only one year. As the order under section 9(1) had not been validly made and as the detenu had been in detention for more than one year, his continuance in detention was not sustainable. “Continued detention” in this context, i.e. under the declaration made under section 9, coupled with the altered Section 8 was set aside. This has no application to a detention order made under Section 3(1) and confirmed under section 8.

13. Similarly, in the case of Satar Habib v. K. S. Dilip Sinhji, , the Supreme Court was again required to consider a case where a declaration had been made under section 9(1) of the COFEPOSA. The Court said that reading Section 9(2) along with Section 8(f) of the COFEPOSA, the Advisory Board was required to consider whether in its opinion, there was sufficient cause for the continued detention of the detenu. The Advisory Board, however, merely opined that in its opinion, there was sufficient cause for the detention of the detenu. The Court said that the Advisory Board had not properly applied its mind to the question of continued detention of the detenu in view of the declaration which was made under section 9(1). The omission of the words “continued detention”, in the opinion of the Advisory Board makes the detention for a period exceeding one year without any legal sanction. As the detenus were under detention for more than one year, they were directed to be set at liberty.

14. Similarly, in the case of Bhavna Chandrakant v. Union of India, reported in 1986 Cri LJ 1888 : (AIR 1986 Guj 90 (FB)), a Full Bench of the Gujarat High Court considered the provisions of Sections 3, 8 and 9 of the COFEPOSA. The Court held :-

“A conjoint reading of Sections 3, 8, 9 and 10 shows that once declaration under S. 9(1) is found to be inoperative and invalid for any reason, no question of resorting to S. 9(2) would ever survive and S. 8 will have to be read as unamended and unmodified qua such detention. Thus, S. 8 as originally framed and S. 8 as modified operate in different fields. S. 9 does not repeal S. 8. In case where S. 9(1) notification cases to cover a given detention order at any stage, S. 8 in its original form would again start operating qua the detention order at that stage.”

15. Relying upon these judgments, the respondents urged that once a declaration under section 9(1) is set aside, the order of detention does not automatically become bad in law. Only the continued detention of the detenu becomes bad in law. Hence, the original order of detention in such a situation would continue to operate along with the unaltered Section 8. The detenu can, therefore, be detained up to one year even though the declaration under section 9(1) may be bad in law. There is no difficulty in accepting this submission. But the respondents desire to extend the same analogy to an order of confirmation made by the appropriate Government on the advice of the Advisory Board under section 8(f) even in cases where there is no declaration under section 9(1). It is submitted that the original order of detention under section 3(1) requires to be confirmed by the appropriate Government under section 8(f). Only on such confirmation the detention can be continued beyond the period of three months. In the present case, what is set aside is this “continued detention” beyond the period of three months by the Central Government on the basis of the opinion of the Advisory Board. Hence, looking to the facts of the present case, the original order of detention is not set aside. Only the continued detention beyond three months is set aside. We are unable to accept this submission. Under the scheme of the COFEPOSA, there is only one order of detention and that is the order which is passed under section 3(1). This order is required to be confirmed or revoked by the appropriate Government after obtaining the opinion of the Advisory Board as provided in Section 8. There are no two orders of detention one prior to the obtaining of the Advisory Board’s opinion and the other subsequent to it.

16. An order of detention may be set aside on various grounds. There may be an inherent defect in the detention order which can make it void ab initio. For example, there may be gross unexplained delay in making the order of detention which may sever the link between the activities concerned and the subjective satisfaction of the detaining authority. Or the detention order may be set aside because relevant material was not placed before the detaining authority when the detaining authority made the order. There may, however, be other reasons why an order of detention may be set aside and such reasons may arise after an order of detention is made. In other words, the order of detention may be required to be set aside on account of events which may happen subsequently. For example, if a representation made by the detenu to either the State or the Central Government is not considered expeditiously, or for example, if the order of detention is not served for a very long period of time and there is no satisfactory explanation for such delay, or in a case like the present one where the relevant material is not placed before the Advisory Board. But in such cases also, what is set aside is the order of detention.

17. We do not find any provision in the SAFEMA which makes a distinction between orders of detention which are void ab initio and which are, therefore, set aside and orders of detention which become bad in law on account of certain subsequent happenings and are, therefore, set aside. There is a common clause which covers both such cases and that is Section 2(2)(b)(iv) which requires that before the provisions of the Act are attracted, the order of detention in respect of a person who has been detained under the COFEPOSA should not have been set aside by a Court of competent jurisdiction. The grounds on which the order of detention is set aside are therefore immaterial. All that is required is that the order of detention should have been set aside by a Court of competent jurisdiction.

18. This interpretation is fortified by sub-clauses (i), (ii) and (iii) of clause (b) of sub-section (2). Sub-clause (i) requires that an order of detention should not have been revoked on the report of the Advisory Board under section 8 or otherwise. Hence, even if a valid order of detention is subsequently revoked for any reason, SAFEMA would not apply. Similarly, under sub-clause (ii), where a declaration has been made under section 9, the order of detention should not have been revoked within the extended period. Under sub-clause (iii) where the provisions of Section 12A apply, the order of detention should not have been revoked before the expiry of the time as affected by that section. All these contingencies deal with a valid order of detention which has been subsequently revoked. The last contingency (sub-clause (iv)) deals with the order of detention which is set aside by a Court of competent jurisdiction. In all these cases, the provisions of SAFEMA are not attracted. The Act, therefore, clearly does not make any distinction between an order of detention which is ab initio void and an order of detention which is subsequently set aside.

19. In this context, the phrase “continued detention” used by the respondents is some-what misleading. Normally, this phrase is used in connection with detention orders where the period of detention is extended by reason of a declaration made under section 9. In such cases, Section 9, sub-section (2) expressly provides that in Section 8(c), the words “the continued detention of the person concerned” shall be substituted. This phrase really is inappropriate in case of orders which are passed under section 8(f), in respect of orders of detention under section 3(1). Undoubtedly, in Section 8(f), it is stated inter alia that “the appropriate Government may confirm the detention order and continue the detention of the person concerned …………………….” But this refers to the continuation of detention under the original order of detention made under Section 3(1). It has no relevance to the continued detention referred to in Section 9. The reason why the Supreme Court and the Full Bench of the Gujarat High Court have made a distinction between the continued detention under Section 9 and the original order of detention is that under Section 9, a separate declaration is required to be made by the Central Government or an officer of the Central Government specified therein relating to certain special circumstances in which the illegal activity is carried on, viz., that such activity should be within an area highly vulnerable to smuggling. The declaration, therefore, has to take into account different facts. The effect of such a declaration is set out in Section 9(2). Hence, when such a declaration is set aside, the effect of such a declaration under Section 9(2) also disappears along with the declaration. This has no effect on the original order of detention. Such is not the case in the case of confirmation of an order of detention under Section 8(f). The Advisory Board applies its mind to all relevant material for the purpose of satisfying itself that the original order of detention is to be sustained or not. The confirmation of the detention order under section 8, therefore, is directly related to the order of detention and, hence, when the order of detention which is so confirmed is set aside for any reason, the entire order of detention has to be set aside and not any part thereof. The submission, therefore, of the respondents that although the order of detention is set aside, it must be considered as subsisting, and only its confirmation under section 8(f) is set aside, must be rejected. In fact, in the case where the order of detention is set aside, the writ mentions the date of the original detention order which is set aside. In this situation, the provisions of Section 2(2)(b)(iv) of the SAFEMA are directly attracted.

20. Mr. Kotwal, learned Advocate for the petitioner, has drawn our attention to a decision of the Supreme Court in the case of Union of India v. Haji Mastan, . In that case, non-supply of copies of documents relied on in the grounds of detention was considered as vitiating the order of detention. Consequently, the Court held that no action could be taken under the SAFEMA. The Court, in that connection, has observed at page 612 (of Cri LJ) :-

“……………. 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.”

The same reason will apply to the facts of the present case.

21. It is also urged by Mrs. Desai who appears for respondent No. 3 that there is delay in challenging the notices issued under the SAFEMA which are of the year 1987. The detention order, however, in the case of Ganesh was set aside on 22-12-1988. The Advocate for the petitioner, thereafter, made an application dated 30th May, 1990 for setting aside the proceedings initiated by the issue of notices dated 24-3-1987 and 27-10-1987 under section 6(1) of the SAFEMA. The authorities declined to do so by their letter of 27th July, 1990. Thereafter, the present petition has been filed on 29-10-1990. In our view, the delay in the present case is not such as would disentitle the petitioner to relief particularly in view of the fact that there is no jurisdiction left in the respondents now to take action under the SAFEMA.

22. In the premises, the petition is allowed. The notices dated 24-3-1987 (Exh. ‘A’ to the petition) and 27-10-1987 (Exh. ‘D’ to the petition) are set aside. The prohibitory order dated 25-3-1987 (Exh. ‘B’ to the petition) issued by respondent No. 1 to M/s. Khatau Makanji Spg. Wvg. Co. Ltd. is also set aside. The rule is made absolute accordingly. No order as to costs.

23. Petition allowed.

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