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PETITIONER: COMPETENT AUTHORITY, AHMEDABAD

       Vs.

RESPONDENT: AMRITLAL CHANDMAL JAIN & ORS.

DATE OF JUDGMENT:       29/04/1998

BENCH: K.T. THOMAS, D.P. WADHWA

ACT:

HEADNOTE:

JUDGMENT:                             WITH                CIVIL APPEAL NO. 1487 OF 1994                             AND               CRIMINAL APPEAL NO. 574 OF 1994                       J U D G M E N T D.P. Wadhwa, J.      These are  three appeals.  Two appeals (Criminal Appeal Nos. 2/94  and 574/94)  are directed  against  the  judgment dated April 29, 1993 of a Division Bench of the Gujarat High Court and  have been  filed respectively  by  the  Competent Authority  and  the  State  of  Gujarat.  By  this  impugned judgment the  High Court allowed two writ petitions filed by the respondents declaring that the order of detention passed against  the   first  respondent   Amritlal  Chandmal   Jain ("Amritlal") under  the provisions  of the  Conservation  of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (for  short ‘COFEPOSA’)  was illegal and it quashed the proceeding  initiated   under  the   Smugglers  and  Foreign Exchange Manipulators  (Forfeiture of  property)  Act,  1976 (for short  ‘SAFEMA’) against  the  respondents.  The  third appeal  (Civil   Appeal  1487/94)  has  been  filed  by  the Competent Authority  and is  directed against  the  judgment dated June 23, 1993 of another Division Bench of the Gujarat High Court  by which  the  High  Court  dismissed  the  writ petition filed  by the  Competent  Authority  in  which  the Competent  Authority   had  sought   directions  restraining Commissioner of  Income-tax, Gujarat-1 from releasing seized silver to  M/s. Agra  Bullion Company  and Amritlal. In this appeal  Commissioner   of  Income-tax,   Gujarat-I  is  also respondent. The  Competent Authority  has  been  constituted under the  SAFEMA and  it means  an officer  of the  Central Government to perform the functions under SAFEMA.      By order dated July 21, 1982, passed under Section 3 of the COFEPOSA  by the State of Gujarat Amritlal was detained. He challenged  his detention  by filing  a  writ  of  habeas corpus under  Article 32  of the  Constitution in this Court (WP 1151/82).  State of  Gujarat, however, revoked the order of detention by order dated October 18, 1982 but by separate order on  the same  grounds  and  passed  on  the  same  day Amritlal was  again detained.  This led  to filing of second

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writ  of  habeas  corpus  by  Amritlal  in  this  Court  (WP 1342/82). First writ petition was disposed of on October 20, 1982 by the following order:-      "Shri   Ram   Jethmalani,   learned      counsel for  the petitioners states      that   the    impugned   order   of      detention in  each of  these  cases      has  since  been  revoked  and  the      petitioners     were     thereafter      released.   The   learned   counsel      further states  that sometime after      their  release,   on  the   day  of      release   itself,   each   of   the      petitioners, has been served with a      fresh order  of detention and taken      into custody.  He proposed  to file      fresh petitions under Article 32 of      the Constitution.  Such  petitions,      if and  when filed,  may be  listed      for preliminary hearing. Liberty to      mention.      The   petitions   are,   therefore,      dismissed as infructuous."      During the  pendency of  the second  writ petition  the detenu Amritlal  was ordered  to be  released on  parole  by order date  November 8, 1982. In the meanwhile the period of detention of Amritlal was reduced by the detaining authority up to  August 16,  1983 when he was released from detention. Second writ petition was disposed of on July 10, 1985 by the following order:-      "In  so  far  as  these  cases  are      concerned, the  period during which      the  petitioners   were  on  parole      shall be  taken into  account while      calculating  the  total  period  of      detention. The  order of  detention      was passed  more than  two and half      years ago.      The  writ   petitions  will   stand      disposed  of   in  terms   of  this      order."      On October  10, 1985  Competent Authority issued notice under Section 6 of the SAFEMA to the respondents in Crl. As. 2/94 and  574/94. That  was  challenged  by  filing  a  writ petition  in   the  Gujarat   High  Court   (SCA   5684/85). Subsequently,  however,  the  grounds  on  which  notice  of forfeiture under Section 6 of SAFEMA was issued were revised and other  notice under  Section 6  was issued.  That led to filing of  another writ  petition in  the Gujarat High Court (S. Crl.  A. 499/91).  When notice under Section 8 of SAFEMA was issued  on July  28, 1991 yet another writ petition (SCA 5900/91) was  filed. Since  the very  foundation  of  action under SAFEMA  was the  order  of  detention  passed  against Amritlal under COFEPOSA, that very orders were challenged in these writ  petitions. By  the impugned judgment dated April 29, 1993  SCA  5684/85  was  allowed  to  be  withdrawn  and S.Crl.A. 499/91  and SCA  5900/91 were  allowed. It was held that the  order of detention of Amritlal was illegal and the proceedings initiated  under SAFEMA  on the  basis  of  said illegal order were quashed.      To  understand  the  third  appeal  (CIVIL  APPEAL  NO. 1487/94) we  may refer  to some  of the  facts.  Search  and seizure  operations   were  conducted  at  the  premises  of Amritlal by  the authorities  under the Income-tax Act, 1961 on December  24, 1981, which led to seizure of 1465.201 kgs.

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of silver.  Out of  that M/s  Agra Bullion  Company  claimed ownership of 301.203 kgs. of silver. Amritlal approached the Settlement Commissioner under the Income-tax Act on December 7, 1984  and the proceedings were admitted by the Settlement Commission. The  Settlement Commissioner,  it would  appear, passed orders in favour of Amritlal and Agra Bullion Company for releasing  the seized  silver to  them. By  letter dated October 21,  1991  the  Competent  Authority  requested  the Commissioner of  Income-tax, Gujarat-I  not to  release  the silver to  Amritlal  and  Agra  Bullion  Company  until  the proceedings under  SAFEMA, which  had been  initiated in the meanwhile,  were   concluded.  Commissioner  of  Income-tax, Gujarat-I by his letter dated November 4, 1991 expressed his inability  to   accede  to  the  request  of  the  Competent Authority and  said it  was not  possible to  hold back  the silver ordered  to be  released to Amritlal and Agra Bullion Company by  the Settlement  Commission.  This  prompted  the Competent Authority  to file  writ petition  (SCA 309/92) in the Gujarat High Court challenging the order of Commissioner of Income-tax,  Gujarat-I which had been communicated to the Competent Authority  by letter  dated November 4, 1991. This SCA 309/92 subsequently came to be unconditionally withdrawn on April  8, 1991.  Having thus  withdrawn  SCA  309/92  the Competent Authority,  it is  stated that under legal advice, filed  another   writ  petition  (SCA  7623/92)  practically claiming the same reliefs which it had prayed earlier in SCA 309/92) practically  claiming the  same reliefs which it had prayed earlier in SCA 309/92. The High Court was called upon the decide  the validity and legality of the order passed by the Settlement  Commission under  the Income-tax Act as well as that  contained in  the letter  dated November 4, 1991 of the Commissioner  of Income-tax,  Gujarat-I.    By  impugned judgment dated  June 23,  1993, SCA 7623/92 was dismissed by the High  Court holding  the same infructuous as proceedings under SAFEMA  had been  quashed against Amritlal and others. High Court  also did not go into the question whether second writ petition  by the  Competent Authority  was maintainable after the first having been withdrawn when relief claimed in both the writ petitions was practically the same. High Court took notice  the decision  dated April  29, 1993  of another Division Bench  where it was held that detention of Amritlal was illegal  and since the very foundation for initiation of proceedings under  SAFEMA was  knocked out  the  proceedings under SAFEMA  had come  to an  end  and  there  was  nothing further that  was required  in SCA  7623/92 to be considered which had thus become infructuous. Aggrieved by the judgment dated June 23, 1993 (in SCA 7623/92) Competent Authority has filed appeal in this Court (CIVIL APPEAL NO. 1487/84).      We may  also note  that the  High Court in its judgment dated April 29, 1993 had held that the order of detention of Amritlal was  bad on two counts, viz., (1) that second order of detention on the same grounds could not be passed and (2) the order  of revocation  of the  first detention  order was itself null  and void. High Court, however, did not consider other challenges to the validity of detention order.      Mr.  Goswamy,   learned  counsel   appearing  for   the Competent Authority,  submitted that  the Division  Bench in SCA 7623/92  did not  go into  the merits of the controversy and had  solely relied  on a decision of this Court in union of India  vs. Haji Mastan Mirza (AIR 1984 SC 681), which was held not  to be  good law  in the 9 Judges Bench decision of this Court  in  Attorney  General  of  India  and  ors.  Vs. Amratlal Prajivandas and ors. (1994 (5) SCC 54). Mr. Goswamy did not  refer to  the decision  of the  Gujarat High  Court dated April  29, 1993  which was  the subject  matter of two

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other appeals  when all  the three  appeals were being heard together. He confined his attack to the judgment of the High Court dated  June 23,  1993. However,  whatever he said also touched upon  the validity  of the  order of  the High Court dated April  29, 1993.  Mr. Goswamy  said that  the order of detention passed  in 1982 was being challenged in 1991 which he said  could not  be done  in view of the law laid by this Court in  Amratlal Prajivandas case. His submission was that proceeding under  SAFEMA could  not  be  challenged  on  the alleged ground  of detention being illegal unless the detenu chose to  question his detention before the Court during the period when  such order  of detention  was in force or he is unsuccessful  in   his  attack   thereon.  To   support  his submission he  relied upon  detailed  observations  of  this Court in  paras 40,41  and 42  of the  judgment in  Amratlal Prajivandas case  and particularly  to para  56  where  this Court summarized  its  decision  on  various  issues  raised before it  in that case. We are concerned with sub-para 3(b) of para 56 which is as under:-      "(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."      None of the appellants questioned validity of the order of the  High Court  in the  judgment dated  April  29,  1993 holding that  second order  of detention on the same grounds could not  have been  passed and  on that  account order  of detention was  illegal. Their  only contention  was that the order  of   detention  had   not  been   challenged  at  the appropriate time and that the impugned judgment could not be sustained in  view of  decision of  this Court  in  Amritlal Prajivandas’s case.  That does  not appear to us to be quite correct. We  may at  this stage  refer to challenges made to the orders  of detention  by Amritlal  when  the  orders  of detention were in force. First order of detention was itself revoked by  the detaining authority. This, therefore, ceased to exist.  This is  apart from  the fact that High Court had held that revocation was not validity made. Nevertheless the detenu had  been released.  Second order  of  detention  was challenged on  various grounds  but this Court again did not go into  the validity of the order of detention. If Amritlal had not  challenged his order of detention during the period the orders of detention were in force Mr. Goswamy would have been right but, unfortunately, for him that is not so. There were challenges to both the orders of detention. True, it is not enough that there is a mere challenge and that challenge

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has to  be upheld  or negatived  by the Court. When there is challenge to  the legality  of detention  in writ  of habeas corpus the  challenge is  in  effect  to  the  legality  and validity of  the grounds  on which the order of detention is made. It  is not that to challenge the legality and validity of the  grounds on  which order  of detention  is passed the detenu has  to file  a separate writ petition seeking a writ of certiorari.  Once the  detenu is released during pendency of his  writ petition  has become  infructuous and  that the grounds on  which the order of detention become invalid. But then if the Court refuses corpus when detenu is released the detenu on that account cannot be made to suffer holding that he did  not successfully  challenge his  order of detention. That is  exactly  what  has  happened  in  this  case.  Writ petition 1342/92  came to  be disposed  of an July 10, 1985. This  writ  petition  along  with  others  was  being  heard together. This  Court  did  not  go  into  the  question  of validity of  the order  of detention  but  disposed  of  the matter on  account of  the fact that detenu had already been released from  his detention. We, therefore, cannot say that challenge  to   the  order  of  detention  by  Amritlal  was unsuccessful and  that he or his relatives or his associates were in  any way  debarred from  challenging  the  order  of detention subsequently when notices under SAFEMA were issued to them.      Accordingly, we do not find any merit in these appeals. These are dismissed.