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CASE NO.: Appeal (civil)  4563 of 2006

PETITIONER: Adishwar Jain

RESPONDENT: Union of India & Anr

DATE OF JUDGMENT: 19/10/2006

BENCH: S.B. Sinha & Dalveer Bhandari

JUDGMENT: J U D G M E N T [Arising out of SLP (Civil) No.6402 of 2006]

S.B. SINHA, J.   

                Leave granted.                  Appellant before us was detained under Section 3 of the Conservation  of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (for  short "COFEPOSA").  He is the Managing Director of a company,  registered and incorporated under the provisions of the Companies Act,  known as M/s. Sundesh Springs Private Limited.  It was an exporter and  held a valid licence therefor.  The company was to export products of alloy  steel.  Upon exporting of alloy steel, it was entitled to credits under the Duty  Entitlement Pass Book (DEPB) Scheme introduced by the Government of  India with an object of encouraging exports.  He allegedly misdeclared both  the value and description of goods upon procuring fake and false bills  through one Prabhjot Singh.  The said Prabhjot Singh was said to have been  operating three firms, viz. M/s. S.P. Industrial Corporation, M/s. Aaysons  (India) and M/s. P.J. Sales Corporation, Ludhiana.  It was allegedly found  that non-alloy steel, bars, rods, etc. of value ranging from Rs. 15/- to Rs. 17/-  per kg. were exported in the guise of alloy steel forgings, bars, rods, etc. by  declaring their value thereof from Rs. 110/- to Rs. 150/- per kg. and the  export proceeds over and above the actual price were being routed through  Hawala Channel.  The officers of the Directorate of Revenue Intelligence  (DRI) searched the factory as well as the residential premises of Appellant  and that of Prabhjot Singh.  Various incriminating documents were  recovered.  Appellant and the said Prabhjot Singh made statements under  Section 108 of the Customs Act.  Prabhjot Singh allegedly admitted to have  supplied fake bills to units owned and controlled by Appellant on  commission basis without actual supply of the goods.  It was also found that  Appellant had declared goods exported as "alloy steel" whereas after the  tests conducted by Central Revenue Control Laboratory, they were found to  be "other than alloy steel", i.e., non-alloy.  The Consul (Economic),  Consulate General of India at Dubai allegedly confirmed the existence of a  parallel set of export invoices.  Invoices with a higher value were presented  before the Indian Customs Authorities with a view to avail DEPB incentives  but in fact invoices with a lower value were presented for clearance.   

       On the aforementioned allegations, an order of detention was issued  on 5.4.2005.  Appellant moved for issuance of a writ of Habeas Corpus  before the High Court of Judicature of Punjab and Haryana.  The said writ  petition was dismissed by an order dated 23.11.2005 by a learned Single  Judge.  A letters patent appeal, concededly which was not maintainable, was  filed thereagainst which was dismissed by reason of the impugned judgment.

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       Although before the High Court, the principal ground urged on behalf  of Appellant in questioning the legality or validity of the order of detention  was unexplained delay in passing the order of detention which did not find  favour with the High Court.  Before us, several other grounds, viz., non  placement of vital/ material documents before the detaining authority, non- supply of documents relied on or referred to in the order of detention as also  non-application of mind on the part of the detaining authority had been  raised.  In the meantime admittedly the period of detention being over,  Appellant had been set at large.  He was released from custody on  17.5.2006.  This appeal, however, has been pressed as a proceeding under  the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property)  Act, 1976 (for short "SAFEMA"), has been initiated against Appellant.

       We may first deal with the question of unexplained delay.  In this  regard we may notice the following dates.   

       On 13.10.2003, Appellant was arrested.  He was discharged on bail on  6.1.2004.  Several inquiries were conducted both inside and outside India.  A  report in relation to overseas inquiry was received on 12.5.2004.  On  25.6.2004 proposal of detention was sent which was approved on 2.12.2004.   On 20.12.2004, the authorities of the DRI stated that transactions after  11.10.2003 were not under scrutiny.   Furthermore, the authorities of the  DRI by a letter dated 28.02.2005 requested the Bank to defreeze the bank  accounts of Appellants.  The order of detention was passed on 5.4.2005.

       The learned Additional Solicitor General, who appeared on behalf of  Respondent has drawn our attention to a long list of dates showing that  searches were conducted and statements of a large number of persons had to  be recorded.  The final order of detention was preceded not only on the basis  of raids conducted in various premises, recording of statements of a large  number of witnesses, carrying on intensive inquiries both within India and  outside India, obtaining test reports from three different laboratories but also  the fact that despite notices Appellant and his associates did not cooperate  with the investigating authorities.  They initiated various civil proceedings  from time to time, obtained various interim orders and, thus, delay in passing  the order of detention cannot be said to have not been explained.

       Learned counsel would contend that keeping in view the nature and  magnitude of an offence under COFEPOSA, a distinction must be made  between an order of detention passed under COFEPOSA vis-a-vis other Acts  as per the law laid down by this Court in Rajendrakumar Natvarlal Shah v.  State of Gujarat and Others [(1988) 3 SCC 153] and in that view of the  matter the High Court must be held to have arrived at a correct decision.   

       Indisputably, delay to some extent stands explained.  But, we fail to  understand as to why despite the fact that the proposal for detention was  made on 2.12.2004, the order of detention was passed after four months.  We  must also notice that in the meantime on 20.12.2004, the authorities of the  DRI had clearly stated that transactions after 11.10.2003 were not under the  scrutiny stating:

"\005In our letter mentioned above, your office was  requested not to issue the DEPB scripts to M/s.  Girnar Impex Limited and M/s. Siri Amar Exports,  only in respect of the pending application, if any,  filed by these parties up to the date of action i.e.  11.10.2003 as the past exports were under scrutiny  being doubtful as per the intelligence received in  this office.  This office never intended to stop the  export incentives occurring to the parties, after the  date of action i.e. 11.10.2003.  In the civil, your  office letter No. B.L.-2/Misc. Am-2003/Ldh dated  17.05.2004 is being referred, which is not received  in this office.  You are, therefore, requested to  supply photocopy of the said letter to the bearer of

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this letter as this letter is required for filing reply to  the Hon’ble Court."

       Furthermore, as noticed hereinbefore, the authorities of the DRI by a  letter dated 28.02.2005 requested the Bank to defreeze the bank accounts of  Appellant.

       The said documents, in our opinion, were material.

       It was, therefore, difficult to appreciate why order of detention could  not be passed on the basis of the materials gathered by them.  

       It is no doubt true that if the delay is sufficiently explained, the same  would not be a ground for quashing an order of detention under  COFEPOSA, but as in this case a major part of delay remains unexplained.   

       We may also place on record that Sen., J. in Rajendrakumar Natvarlal  Shah (supra), while laying down various stages of the procedures leading to  an order of detention, opined that rule as to unexplained delay in taking  action is not inflexible and a detention under COFEPOSA may be  considered from a different angle.  

       The question came up for consideration recently in Rajinder Arora v.  Union of India and Others [(2006) 4 SCC 796] wherein it has been held:

       "Furthermore no explanation whatsoever has  been offered by the Respondent as to why the  order of detention has been issued after such a long  time.  The said question has also not been  examined by the authorities before issuing the  order of detention.

       The question as regard delay in issuing the  order of detention has been held to be a valid  ground for quashing an order of detention by this  Court in T.D. Abdul Rahman v. State of Kerala  and others [AIR 1990 SC 225] stating:

"The conspectus of the above decisions can be  summarised thus: The question whether the  prejudicial activities of a person necessitating to  pass an order of detention is proximate to the time  when the order is made or the live-link between  the prejudicial activities and the purpose of  detention is snapped depends on the facts and  circumstances of each case. No hard and fast rule  can be precisely formulated that would be  applicable under all circumstances and no  exhaustive guidelines can be laid down in that  behalf. It follows that the test of proximity is not a  rigid or mechanical test by merely counting  number of months between the offending acts and  the order of detention. However, when there is  undue and long delay between the prejudicial  activities and the passing of detention order, the  court has to scrutinise whether the detaining  authority has satisfactorily examined such a delay  and afforded a tenable and reasonable explanation  as to why such a delay has occasioned, when  called upon to answer and further the court has to  investigate whether the causal connection has been  broken in the circumstances of each case. Similarly when there is unsatisfactory and

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unexplained delay between the date of order of  detention and the date of securing the arrest of the  detenu, such a delay would throw considerable  doubt on the genuineness of the subjective  satisfaction of the detaining authority leading to a  legitimate inference that the detaining authority  was not really and genuinely satisfied as regards  the necessity for detaining the detenu with a view  to preventing him from acting in a prejudicial  manner."

       The delay caused in this case in issuing the  order of detention has not been explained.  In fact,  no reason in that behalf whatsoever has been  assigned at all."

                 Delay, as is well known, at both stages has to be explained.  The court  is required to consider the question having regard to the overall picture.  We  may notice that in Sk. Serajul v. State of West Bengal [(1975) 2 SCC 78],  this Court opined:

"There was thus delay at both stages and this  delay, unless satisfactorily explained, would throw  considerable doubt on the genuineness of the  subjective satisfaction of the District Magistrate,  Burdwan recited in the order of detention. It would  be reasonable to assume that if the District  Magistrate of Burdwan was really and genuinely  satisfied after proper application of mind to the  materials before him that it was necessary to detain  the petitioner with a view to preventing him from  acting in a prejudicial manner, he would have  acted with greater promptitude both in making the  order of detention as also in securing the arrest of  the petitioner, and the petitioner would not have  been allowed to remain at large for such a long  period of time to carry on his nefarious  activities..."

       In Abdul Salam Alias Thiyyan S/o Thiyyan Mohammad, Detenu No.  962, General Prison, Trivandrum v. Union of India and Others [(1990) 3  SCC 15] whereupon the learned Additional Solicitor General has placed   strong reliance, this Court found that there had been potentiality or  likelihood of prejudicial activities and, thus, or mere delay, as long as, it is  explained, the court may not strike down the detention.   

       In the instant case, we have noticed hereinbefore that the authorities of  DRI themselves categorically stated that the activities of Appellant after  11.10.2003 were not in question and in fact all the bank accounts were  defreezed.

       Although learned Additional Solicitor General may be correct in his  submissions that ordinarily we should not exercise our discretionary  jurisdiction under Article 136 of the Constitution of India by allowing  Appellant to raise new grounds but, in our opinion, we may have to do so as  an order of detention may have to be considered from a different angle.  It  may be true that the period of detention is over.  It may further be true that  Appellant had remained in detention for the entire period but it is one thing  to say that the writ of Habeas Corpus in this circumstances cannot issue but  it is another thing to say that an order of detention is required to be quashed  so as to enable the detainee to avoid his civil liabilities under SAFEMA as

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also protect his own reputation.  

       In a case of this nature, we do not think, in view of the admitted facts,  that we  would not permit Appellant to raise the said questions.  

       So far as the question of non-placement of material documents before  the detaining authority is concerned, we may notice the following dates:

(i)     By a letter dated 5.7.2002, the authorities of DRI stated that Appellant  stood exonerated for earlier years after detailed examination. (ii)    By a letter dated 20.12.2004, the authorities of DRI stated that  transactions after 11.10.2003 were not under scrutiny and by letters  dated 28.2.2005 and 7.3.2005, the bank accounts of Appellant were  defreezed.   (iii)   By reason of the Civil Court by orders dated 7.5.2004 and 31.5.2004,  the  bank accounts of M/s. Girnar and Shri Amar were defreezed. (iv)    By an order dated 13.8.2004, the Tribunal ordered release of goods. (v)     By orders dated 31.8.2004 and 28.10.2004, the Civil Judge directed  release of documents to Appellant. (vi)    By an order dated 18.11.2004, the Civil Court issued contempt notice  to the authorities of DRI for non-release of documents and the  authorities of DRI made a statement before the court that the  documents are being returned.

       We have noticed hereinbefore that learned Additional Solicitor  General contended that Appellant obstructed the proceedings by initiating  various civil litigations.  But, indisputably, those documents involving the  civil court proceedings were not placed before the detaining authority.  If the  same had not been done, not only the delay, in issuing the order of detention  stood unexplained but also thereby the order itself would become vitiated.   Furthermore, the civil court proceedings were over on 19.11.2004.   Evidently, the detaining authority did not take immediate steps to detain  Appellant.  Why the documents pertaining to the proceedings of the Civil  Court had not been placed before the detaining authority has not been  explained.  On their own showing, Respondents admit that they were  relevant documents.

       The question has been considered by this Court in Rajinder Arora  (supra) stating:

       "Admittedly, furthermore, the status report  called for from the Customs Department has not  been taken into consideration by the competent  authorities.

       A Division Bench of this Court in K.S.  Nagamuthu v. State of Tamil Nadu & Ors. [2005  (9) SCALE 534] struck down an order of detention  on the ground that the relevant material had been  withheld from the detaining authority; which in  that case was a letter of the detenu retracting from  confession made by him."

       In P. Saravanan v. State of T.N. and Others [(2001) 10 SCC 212], it  was stated:

"When we went through the grounds of detention  enumerated by the detaining authority we noticed  that there is no escape from the conclusion that the  subjective satisfaction arrived at by the detaining  authority was the cumulative result of all the  grounds mentioned therein. It is difficult for us to  say that the detaining authority would have come

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to the subjective satisfaction solely on the strength  of the confession attributed to the petitioner dated  7-11-1999, particularly because it was retracted by  him. It is possible to presume that the confession  made by the co-accused Sowkath Ali would also  have contributed to the final opinion that the  confession made by the petitioner on 7-11-1999  can safely be relied on. What would have been the  position if the detaining authority was apprised of  the fact that Sowkath Ali had retracted his  confession, is not for us to make a retrospective  judgment at this distance of time."

       In Ahamed Nassar  v. State of Tamil Nadu and Others [(1999) 8 SCC  473], this Court opined:

"The question is not whether the second part of the  contents of those letters was relevant or not but  whether they were placed before the detaining  authority for his consideration. There could be no  two opinions on it. It contains the very stand of the  detenu of whatever worth. What else would be  relevant if not this? It may be that the detaining  authority might have come to the same conclusion  as the sponsoring authority but its contents are  relevant which could not be withheld by the  sponsoring authority. The letter dated 19-4-1999  reached the sponsoring authority and reached well  within time for it being placed before the detaining  authority. There is an obligation cast on the  sponsoring authority to place it before the  detaining authority, which has not been done. Even  the letter dated 23-4-1999 which reached the  Secretary concerned at 3.00 p.m. on 26-4-1999  was much before the formal detention order dated  28-4-1999. The Secretary concerned was obliged  to place the same before the detaining authority.  The respondent authority was not right in not  placing it as it contains not only what is already  referred to in the bail application dated 1-4-1999  but something more.

       The statements of Appellant and Prabhjot Singh were noticed by the  detaining authority.  It had specifically been referred to in extenso in the  order of detention.  It is, however, stated that the records were tampered with  at the instance of Appellant.  The self-inculpatory statements of Appellant  and that of Prabhjot Singh were said to have been taken off the file.   Respondents contended that on first information report was registered  against Appellant as also one sepoy Narender Singh. But the said  information report was registered only on 6.4.2005 and not prior to the date  of order of detention.   

       In paragraph 36 of the order of detention, the detaining authority  stated: "In view of the facts mentioned above, I have no  hesitation in arriving at the conclusion that you  have through your acts of omission and  commission indulged in prejudicial activities as  narrated above.  Considering the nature and gravity  of the offence, the well planned manner in which  you have engaged yourself in such prejudicial  activities and your role therein as brought out  above, all of which reflect your high potentiality

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and propensity to indulge in such prejudicial  activities in future, I am satisfied that there is a  need to prevent you from indulging in such  prejudicial activities in future by detention under  COFEPOSA Act, 1974 with a view to preventing  you from smuggling goods in future."

       We have been taken through the order of detention.  The statements of  Appellant and the said Prabhjot Singh were recorded therein in extenso.   Recording of such statement must have been made from the xeroxed copies  of such documents which were available with the detaining authority.  The  self-inculpatory statements of Appellant as also Prabhjot Singh purported to  have been made in terms of Section 108 of the Customs Act were required to  be considered before the order of detention could be passed.  The same was  not done.  The original of such documents might not been available with the  detaining authority but admittedly the xeroxed copies were.  It has not been  denied or disputed that even the xeroxed copies of the said documents had  not been supplied to the detenue.  It may be true that Appellant in his  representation dated 14.06.2005 requested for showing him the original  documents referred to or mentioned in the grounds of detention but then at  least the xeroxed copies thereof should have been made available to him.   

       Learned Additional Solicitor General submitted that due to non- supply of documents which were not vital or have merely been referred to as  incidental, the order of detention may not become vitiated as was been held  by this Court in Kamarunnissa v. Union of India and Another [(1991) 1 SCC  128].  The said decision was rendered in a different fact situation.  In the  said decision, this Court stated the law, thus:

"\005If, merely an incidental reference is made to  some part of the investigation concerning a co- accused in the grounds of detention which has no  relevance to the case set up against the detenus it is  difficult to understand how the detenus could  contend that they were denied the right to make an  effective representation. It is not sufficient to say  that the detenus were not supplied the copies of the  documents in time on demand but it must further  be shown that the non-supply has impaired the  detenu’s right to make an effective and purposeful  representation. Demand of any or every document,  however irrelevant it may be for the concerned  detenu, merely on the ground that there is a  reference thereto in the grounds of detention,  cannot vitiate an otherwise legal detention order.  No hard and fast rule can be laid down in this  behalf but what is essential is that the detenu must  show that the failure to supply the documents  before the meeting of the Advisory Board had  impaired or prejudiced his right, however slight or  insignificant it may be. In the present case, except  stating that the documents were not supplied  before the meeting of the Advisory Board, there is  no pleading that it had resulted in the impairment  of his right nor could counsel for the petitioners  point out any such prejudice. We are, therefore, of  the opinion that the view taken by the Bombay  High Court in this behalf is unassailable."                                                         (Emphasis supplied)   

       What is, therefore, relevant was as to whether the documents were  material.  If the documents were material so as to enable the detenue to make  an effective representation which is his constitutional as also statutory right,

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non-supply thereof would vitiate the order of detention.

       It is a trite law that all documents which are not material are not  necessary to be supplied.  What is necessary to be supplied is the relevant  and the material documents, but, thus, all relevant documents must be  supplied so as to enable the detenue to make an effective representation  which is his fundamental right under Article 22(5) of the Constitution of  India.  Right to make an effective representation is also a statutory right.   [See Sunila Jain v. Union of India and Another [(2006) 3 SCC 321]

       In this case, the statements of Appellant and Prabhjot Singh, in our  opinion, were material.  They could not have been withheld.  If original of  the said documents were not available, xeroxed copies thereof could have  been made available to him.   

       The detaining authority moreover while relying on the said documents  in one part of the order of detention could not have stated in another part that  he was not relying thereupon.  The very fact that he had referred to the said  statements in ex tenso is itself a pointer to the fact that he had relied upon  the said documents.  Even in the earlier part of the impugned order of  detention, i.e. detaining authority appears to have drawn his own  conclusions.

       In view of our findings aforementioned, it is not necessary to consider  the contention raised by Mr. Mukul Rohtagi that order of detention suffers  from non-application of mind.  The judgment of the High Court, therefore,  cannot be sustained.  It is set aside accordingly and the order of detention  passed against Appellant is quashed.  The appeal is allowed.  No costs.