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ATTORNEY GENERAL FOR INDIA ETC. ETC.  v.  

AMRRATLAL PRAJIVANDAS AND ORS. ETC. ETC.  

MAY 12, 1~4  

(AM. AHMADI, P.B. SAWANT, K. RAMAS~AMY,  K. JAYACHANDRA REDDY, S.C. AGRAWAL, S. MOHAN,  

B.P. JEEVAN REDDY, G.N. RAY AND N. VENKATACHALA, JJ.]  

Constitution of lndi~Articles 22 (4) to (7), Schedules VII and IX,  Entry 3 List Ill-Conservation of Foreign Exchange and Prevention of Smug- gling Activities Act, 1974-Smugglers and Foreign Exchange Manipulators  (Forfeiture of Property) Act, 1976-Constitutional validity of-whether Par- liament competent to enact COFEPOSA and SAFEMA-He~d, yes-Both  enactments being placed in IX Schedule, they enjoy immunity confe"ed by  Article 31(B).  

Co>tservation of Foreign Exchange and Prevention of Smuggling Ac- tivities Act, 1974-Section 3 read with section 12 A-Order of detention under  section 3 read with section 12 A made during period of emergency-Whether  

A  

B  

c  

D  

can form f ouneation for taking action under section 6 of Smugglers and E  Foreign Exchange. Manipulators (Forfeiture of Property) Ac~ 1976-Held,  Yes-whether the validity of such order of detention be challenged when  proceedings are taken against detenue under SAFEMA, even though said  order has ceased to be operative and was not challenged during its opera- tion-Held, No.-Validity of order to be tested with reference to position of  law obtaining at the time said order was made and during period of operation. F  

Smugglers and Foreign Exchange Manipulators (Forfeiture of Property)  Act, 1976-Section 3(1)(c)-lllegally acquired properties-Definition  of-Validity-Whether definition of "illegally acquired property" is violative of  fundamental rights of detenue-Held, No.  

Smugglers and Foreign Exchange Manipulators (Forfeiture of Property)  Act, 1976-Section 2(2)(a)&(b}-Forfeiture of 'illegally acquired properties'  of a person falling under clause (a) or clause (b) of Section 2(2)-JYltether  application of Act to relatives and associates of detenues is violative of  Articles 14, 19 and 21 of Constitution of lndit:t-Held, No.  

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2 SUPREME COURT REPORTS [1994] SUPP. 1 S.C.R.  

A Conservation of Foreign Exchange and Prevention of Smuggling Ac- tivities A ct, 1974-Section 5-A-Validity of-Whether Section 5-A is violative  of clause (5) of Article 22 of Constitution of India-Held, No.  

Constitution of India-Article 22(5)-Validity of Section 5-A of  B COFEPOSA-Whethersection 5-A is violative of Article 22(5)-Held, No.  

During the period of emergency in the year 1976, several orders of  

detention. were made under section 3 of the Conservation of Foreign  Exchange and Prevention of Smuggling Activities Act, 1974. In view of the  provisions of section 12-A, the detenues were neither supplied with the  

C grounds of detenuetion nor were their cases referred to the Advisory  Board. Because of the order under Article 359(1) and the operation of  Article 358 of the Constitution of India, they had no remedy and couid not  approach the High Court or the Supreme Court for relief. The detenues  were released wh.en the emergency was revoked. Notices were issued under  

D section 6 of the Smugglers and Foreign Exchange Manipulators (Forfei- ture of Property) Act, 1976, to those detenues, their relati~es and as- sociates calling upon them to show cause why the properties mentioned in  the notices be not declared as illegally acquired properties and forfeited.  The orders of detention made against the detenues under COFEPOSA  during the emergency were the foundation for the ach"bn being taken  

E against them under SAFEMA. The detenues filed writ petitions in the High  Courts for quashing the said notices while challenging the constitutional  validity of the COFEPOSA, SAFEMA and the 39th, 40th and 42nd Amend- ments to the Constitution of India placing COFEPOSA and SAFEMA in  

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the IX Schedule. The writ petitions filed in various High Courts were ,,.,..  F transferred to the Supreme Court in view of the important constitutional  

questions raised therein.  

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 infringe the basic structure of the  

G Constitution, no effort was made to establish in what manner the said  Amendment Acts violated Authority. The petitioners argued that  COFEPOSA was not relatable to Entry 9 of List-1 of the Seventh Schedule  to pie Constitution in as much as the preventive detention provided  therefor was not for reasons connected with defence, foreign affairs or  

H security of India. Even Entry 3 of list m, it was submitted, did not warrant

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ATTORNEY GENL. FOR INDIA v. A. PRAJIV ANDAS 3  

the said enactment. So far as SAFEMA was concerned, it was argued, it A  was not relatable to any of the Entries in List I or in List Ill .  

The petitioners submitted that since the order of detention under  COFEPOSA was made the basis for action under SAFEMA against the  ;letenues, their relatives and their associates, they were entitled to chal- lenge the validity of the order of detention. They argued that by virtue of B  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. The detention .order made  against them were invalid and illegal for violation of clauses (4) and (5)  of Article 22 and, therefore, could not serve as the basis of action under C  SAFEMA. The petitioners submitted that the detention orders governed  by Section 12-A of COFEPOSA were inherently arbitrary and unjust.  

The petitioners then attacked the dermition of illegally acquired  properties "in clause (c) of Section 3(1) of SAFEMA on grounds of un- reasonableness, arbitrariness or as violative of Articles 14, 19 and 21. D  Alternatively, it was submitted that if the said definition was unassailable  on account of its inclusion in the IX Schedule, the definition should be  read down so as to confine it only to the properties acquired by violating  the prohibitio!s contained in the Acts mentioned in section 2(9) of  SAFEMA. It was contended that extending the provisions of SAFEMA to E  the relatives, associates and other'holders' was a case of excessive regula- tion. It was pointed out that the definitions of 'relative' in Explanation (2)  

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and of 'Associates' in Explanation (3) were so wide as to bring in a person  even distantly related or associated with the convict/detenue, within the net  ofSAFEMA.  

The petitioners also challenged the validity of Section 5-A of  COFEPOSA on the ground of it being violative of the safeguards provided  by clause (5) of Article 22.  

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Relaying upon the provisions of clause (lA) of Acticle 359, it was  submitted by the Additional Solicitor GeJieral that the validity of the G  detention orders had to be judged with reference to the law then obtaining  

. ....., on the date of issuance of notice under section 6 of SAFEMA. He submitted  that clause (lA) of Article 359 saved all such orders. It was stated that  suspension of remedy amounted to suspension of the right itself and there  was no distinction, according to him, between Article 358 and an order H

4 SUPREME COURT REPORTS (1994] SUPP. 1 S.C.R.  

A under Article 359 (1). It was argued that the detention orders passed  during the emergency to which section 12-A of COFEPOSA applied could  

not be said to be void ab initio or non-est. The orders were good and valid  when they were made, though they ceased to be operative with the cessation  

of the Presidential order. The questions raised for determination were :  

B (1) Whether the parliament was not competent to enact COFEPOSA  and SAFEMA?  

(2) Whether an order of detention under Section 3 read with section  

U-A of COFEPOSA made during the period of emergency proclaimed  C 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 from the foundation for taking action under Section 6 of  SAFE MA against the detenue, his relatives and associates? And if it does,  can the validity of such order of detention be challenged by the detenue  

D and/or his relatives and associates, when proceedings are taken against  him/them under SAFEMA, even though the said order of detention has  ceased to be operative and was not either challenged • or not successfully  

challenged - during its operation?  

E (3) _If the answer to the Question No. 1 is in affirm';tive, 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 or with reference to the position of law obtaining on the date  of issuance of the show cause notice under Section 6_ of SAFEMA?  

F ( 4) Whether the definition of "illegally acquired property" in clause  

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(c) of Section 3(1) of SAFEMA is violative of the fundamental rights of the  petitioners guara •• teed by Articles 14, 19 and 21 and whether the inclusion  of SAFEMA in the IX Schedule to the Constitution cures such violation,  if any?  

(5) Whether the application of SAFEMA to the relatives and as- sociates of detenues is violative of Articles 14, 19 and 21? Whether the  inclusion of the said Act in the IX Schedule cures such violation, if any.  

(6) Whether Section 5-A of COFEPOSA is violative of clause (5) of  H Article 22?  

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AITORNEY GENL. FOR INDIA v. A PRAJIVANDAS 5  

Disposing of the matter, this Court A  

HELD : 1.1. Parliament was perfectly competent to enact both the  

Conservation of Foreign Exchange and Prevention of Smuggling Activities "  Act, 1974 and the Smugglers and Foreign Exchange Manipulators (Forfei- ture of Property) Act, 1976. The COFEPOSA is relatable to Entry 3 of List  Ill inasmuch as it provides for preventive detention for reasons connected B  with the security of the State as well as the maintenance of supplies and  services essential to the community. (22-H, 23-A, 53-C]  

Unio11 of India v. H.E.S. Dhillon, (1972] 2 SCR 33, relied on.  

1.2. COFEPOSA was placed in the IX Schedule by the Constitution  

39th (Amendment) Act, 1975 while the SAFEMA and the COFEPOSA  (Amendment) Acts, 1976 were placed in the IX Schedule by the Constitu- tion 40th (Amendment) Act, 1976. Both the enactments being placed in the  

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IX Schedule, they enjoy the immunity conferred by Article 31 (B). The  petitioners have not been able to sustain their submission that the 39th D  (Amendment) Act and 40th (Amendment) Act, placing the said enactments  in the IX Schedule were unconstitutional, They are assumed to be good  and valid. (11-D, 21-C]  

13. An order of detention made under Section 3 of COFEPOSA, E  which was governed by Sectio'1 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 (lA) of Article 359 to enact Section 12-A of COFEPOSA for the  duration of and limited to th~ period for which the Presidential Order was F  in force. It was meant to achieve the purposes of emergency. Once Section  12-A is held to be a competent piece oflegislation, 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 th~ meaning of section 2(2)(b) of SAFEMA, particularly in G  view of the express language of Section 2(2)(b) (including proviso (iii)  thereto) ·and the protection enjoyed by both the enactments by virtue of  their inclusion in the IX Schedule to the Constitution. (53-E·G]  

1.4. 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 H

6 SUPREME COURT REPORTS 11994] SUPP. 1 S.C.R.  

A as the foundation, as the basis, for applying SAFEMA to such detenue 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  detenue 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  

B  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 of applying SAFEMA to him or to his relatives or associates.  

[53-H, 54-A-B]  

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  

C 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. [40-D]  

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Union of India, v. Haji Mastan Mirza, [1984] 3 SCR 1, overruled.  

Union of India v. Manohar Lal Narang, [1987] 2 sec· 241, distin- guished.  

1.5. The definition of' 'illegally acquired properties in clause (c) of  

Section 3 of SAFEMA is not invalid or ineffective. The definition is quite  E wide. It takes in not only the property acquired after the Act but also the  

property acquired before the Act, whatever be the length of time. It takes  in property which may have been acquired partly from · but of illegal  

activity. [40-F-G]  

F  Both enactments being placed in the IX Schedule they enjoy the  

immunity conferred by the Article 31 (B) and therefore, the validity of the  

said definition on grounds of unreasona~less, arbitrariness or any of the  

grounds relatable to part-JU, cannot be challenged. Further, in view of  clear and unambiguous language employed in clause (c) of Section 3, it is  not permissible to resort to the device of reading down. Therefore, neither  

G the constitutional validity of the said definition can be questioned nor is  there any warrant for reading down the clear and unambiguous words in  

the clause when the justification for such a provision is enough and more.  

[41-D-H & 42-A-i>]  

Attorney General for Ho!lg Kong v. Reid, [1993] 3 WLR 1143, relied  H on.  

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ATTORNEY GENL. FOR INDIA 1'. A PRAJIYANDAS . 7  

1.6. SAFEMA is directed towards forfeiture of "illegally acquired A  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 detenue,  

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 rela-

tives and associates. Sometimes they transfer such properties to them, may  be, with an intent to transfer the ownership and title. In fact, it is im- material how such relative or associate holds the properties of con- vict/detenue whether as a benami or as a mere name-lender or as a bona  

B  

fide transferee for value or in any other manner. He cannot claim those C  properties and must surrender them to the State under the Act. Since he  is 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 detenue  - whether in his own name or in the name of his relatives and associates.  

It is to counter-act the several devices that are or may be adopted by D  persons mentioned in clauses (a) and (b) of Section 2(2) that their rela- tives and associates mentioned in clauses (c) and (d) of the said sub-sec- tion are also brought within the purview of the Act. The fact of their  holding or possessing the properties of convict/detenue furnishes the link  between the convict/detenue and his relatives and associates. Only the  properties of the convict/detenue are sought to.be forfeited, wherever they E  are. The idea is to reach his properties in whomsoever's name they are  kept or by whomsoever they are held. The independent properties of  relatives and friends, which are not traceable to the convict/detenue, are  not sought to be forfeited nor are they within the purview of SAFEMA.  

[44-B-G) F  

There ought to be the connecting link between those properties and  the convict/detenue, the burden of disproving which, is upon the rela- tive/associate. The bringing in of the relatives and associates or of the  persons mentioned in clause (e) of Section 2(2) is thus neither dis- criminatory nor incompetent apart from the protection of Article 31-B. G  

[46-G-H & 47-A)  

1.7. Section 5-A of COFEPOSA is not invalid or void. It is not  violative of clause (5) of Article 22. [54-E)  

1.8. An order of detention can be based upon one single ground. It H

8 SUPREME COU RT REPORTS [19941 SUPP. 1 S.C.R.  

A is not necessary that there should be multiplicity of grounds for making  or sustaining an order of detention. Where the order of detention is made  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. It is  

' B difficult to conceive any inconsistency or conflict between Article 22(5) and  Section 5-A. The 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. [ 48-G, 49-D-E]  

C Debu Mahato v. State of West Bengal, (1974] 4 SCC 135; Ani/ Day v.  State of West Bengal, (1974] 4 SCC 514; Israi/ Sk v. District Magistrate of  West Dinagpur & Ors., (1975] 3 SCC 292; Dharua Kanu v. State of West  Bengal, (1975] 3 SCC 527; Saraswathi Seshagiri v. Sta~e of Kera/a & Ors.,  (1982] 2 sec, relied on.  

D K Yadigiri Reddy v. Commissioner of Police, ILR (1972) AP 1025,  

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distinguished.  

CIVIL APPELLATE JURISDICTION : Transfer Petition No. 17 of  1978 Etc. Etc.  

(Under Article 139A of the Constitution of India.)  

Altaf Ahmad, Addi. Solicitor General, Venugopal Reddy, Dr. N.M.  Ghatate, A.K. Srivastava, Ms. A. Subhashini, Ms. Sushma Suri, P.H.  

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Parekh, Ms. Prerna Kohli, A.S. Bhasme, D.P. Mukherjee, R.S. Suri, K.C. <"" •  F Dua, S.K. Agnihotri, Harjinder Singh, R.A. Shroff, Sarva Mitter for M/s  

Mitter & Co., S. Ganesh, K.J. John, G.S. Phale, Pramod Swarup, Ms. J .  Sarla, M.N. Shroff, Nand Kumar, E.C. Agarwala, Pradeep Kumar; G.S.  Chatterjee, Shrinath Singh, Vineet Kumar, Anip Sachthey, S.V.  Tambwekar, P. Parmeswaran, P.K. Pillai, ATM Sampath, M. Veerappa,  

G K.R. Nambiar, Ambrish Kumar, T.S. Arora, CVS Rao, S. Fazal, U. Sagar,  Ms. Sarda Devi, Yashank, Mukul Mudgal, D. Goburdhan, S.M. Jadhav,  Sakesh Kumar , R.N. Joshi, Ms. Janki Ramachandran, U.A. Rana, Anand  Prasad, Rajiv Tyagi for M/s Gagret & Co., P.R. Seetharaman, M.T. " -:  George, S.K. Gambhir and R.S. Sodhi for the appearing parties.  

H The Judgment of the Court was delivered by

-1.Tl'ORNEY GENL. FOR INDIA v. A PRAJIVANDAS [JEEVf\NREDDY,J.J 9  

B.P. JEEVAN REDDY, J. Till the wind of liberalisation started A  blowing across the Indian economic landscape over the last year or two,  the Indian economy was a sheltered one. At the time of independe:uce,  India did not have an industrial base wor.th 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 w~rldwar-11 were B  fast dissipating. Foreign exchange had to be conserved, which meant  prohibition import of several unessen~ial 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, how- ever, an unfortunate fall-out. They gave rise to a class of smugglers and  foreign exchange manipulators who were out to frustrate the regulations C  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 import on a surer footing. In the D .  year 1%2, a new Customs Act replaced the antiquated Sea Customs Act,  

..._ 1878. The menace of smuggling and foreign exchange violations, however,  continued to rise unabated. The Parliament then came forward with the  conservation of Foreign Exchange and Prevention of Smuggling Act, 1974  (COFEPOSA). It provided for preventive detention of these anti-social  elements. E  

On June 25, 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 December 3, 1971 issued under Article 352(1) on the F  ground that "the security of India is threatened by external aggression" was  already in force. These declarations had the ~ffect of 'suspending' - to use  a popular though not strictly accurate expression - Article 19 as provided  by Article 358 of the Constitution. On 27th June, 1975 the President of  India made an order under Article 359(1) of the Constitution declaring  "that the right of any person (including a·foreigner) to move any court for G  the enforcement of the rights conferred by Article 14, Article 21 and  Article 22 of the Constitution and all proceedings pending in any C<?urt for  

- the enforcement of the above-mentioned rights shall remain suspending for  the period during which the proclamation of emergency ma<4e under clause  (1) of Article 352 of the Cons~.tution on 3rd December, 1971 and on the H

10 SUPREME COURT REPORTS (1994] SUPP. 1 S.C.R.  

A 25th June, 1975 are both in force".  

B  

With effect from 1st July, 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.  

ln the year 1976, no doubt, during the continuance of emergency, the  

Parliament enacted the Smugglers and Foreign Exchange Manipulators  

(Forfeiture of property) Act, 1976 (SAFEMA). If replaced an Ordinance  C to the same effect and was brought into force from the date of the  

Ordinance, viz., 5th November, 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.  

D 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 whomsoever's name they may have been kept.  

During the period the Emergency proclaimed on 25th June, 1975 was  E in force, several orders of detention were made under Section 3 of  

COFEPOSA. ln view of the provisions of Section 12-A, the said detenues  were neither supplied with the grounds of detention nor were their cases  referred to the Advisory Board. The detenues, however, had no remedy.  Because of the order under Article 359(1) and the operation of Article 358  

F - as interpretated by this Court in A.D.M. Jabalpur v. Shivkant Shukla,  [1976] 2 S.C.C. 521 - they could not approach the High Court or this Court  for relief. The emergency was revoked on March 21, 1977 and the detenues  released. Subsequently notices were issued under Section 6 of the  SAFEMA to the said detenues, their relatives and associates calling upon  them to show cause why the properties mentioned in the notices be not  

G declared as illegally acquired properties and f<?rfeited. SAFEMA was being  invoked against them because of the orders of detention made against the  

detenues under COFEPOSA during the period of emergency. The said  orders of detentions were the connecting link, the foundation for the action  being taken against the detenues, their friends and relatives under  

H SAFEMA. (The orders of detention, it is not in dispute, were not revoked  

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.ATIORNEY GENL. FOR INDIA v. A. PRAJIVANDAS [JEEVAN REDDY, J.J 11  

or set aside as contemplated by clause (b) of sub-sectio.n (2) of Section 2 A  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 B  orders were also passed-but that circumstance does not make any dif- ference to the principle involved herein). In most of the cases further  proceedings were stayed .  

...,  The Attorney General of India applied for transfer of the writ  

petitions pending in various High Courts to this Court to be heard c  alongwith 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 S.L.P.  

It may be mentioned that COFEPOSA was placed in the IXQi  D Schedule at Sl. 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 IXth  Schedule at Serial Nos. 127 and 129 by the Constitution 40th (Amendment)  Act, 1976.  

The counsel appearing for the petitioners urged several contentions  E  

all of which have been contested by 3rd 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 :  F  

(1) Whether the 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  

G under Article 352(1) of the Constitution of India - with the consequent  

\ 'suspension' of Article 19 and during which pe.riod 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 detenue, his relatives and associates? And if it does,  can the validity of such order of detention be challenged by the detenue H

12 SUPREME COURT REPORTS (1994] SUPP. 1 S.C.R.  

A and/or hrs relatives and associates, when proceedings are taken against  him/them under SAFEMA even though the said order of detention has  ceased to be operative and was not either challenged - or not successfully  chalJenged - during its operation?  

(3) If the answer to the Question No. 1 is in affirmative, should the  B 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 or ¥fith reference to the position of law obtaining on the date  of issuance of the show cause notice under Section 6 of SAFEMA?  

C ( 4) Whether the definition of "illegalJy acquired property'' in clause  (c) of Section 3(1) of SAFEMA is violative of the fundamental rights of  the petitioners guaranteed by Articles 14, 19 and 21 and whether the  inclusion of SAFEMA in the IXth Schedule to the Constitution cures such  violation, if any?  

D (5) Whether the application of SAFEMA to the relatives and as-

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sociates of detenues is violative of Articles 14, 19 and 21? Whether the  inclusion of the said Act in the IXth 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 bri.efly refer to the relevant provisions of both the enactments.  

COFEPOSA :- The Preamble to the Act explains the reasons for  

F which and the objectives to achieve which the Act was made. It reads : <"  

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"An Act to provide for preventive detention in certain cases for  the purposes of conservation and argumentation of foreign ex- change and prevention of smuggling activities and for matters ~  connected therewith.  

Whereas violations of foreign exchange regulations and smug- gling 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  

f

ATIORNEY GENL. FOR INDIA v. A. PRAJIVANDAS [JEEVAN REDDY, J.J 13  

manner in which such activities or violations are organised and A  carried on, and having regard to the fact that in certain areas which  are highly vulnerable to smuggling, smuggling activities of a con- siderable 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  

B  manner therewith;  

Be it enacted by Parliament in the Twenty-fifth year of the -.,.- Republic of India as follows :- "  

The expression "smuggling" is defined in Clause ( e) of Section 2. It c  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.  

Clause (39) of Section 2 of the Customs Act defines "smuggling" in  the following words: "smuggling in relation to any goods, means any act or D -· omission which will render such goods liable to confiscation under Section  111 or Sedion 113."  

Section 3 provides that where the Central Government, the State  Government or any officer empowered in that behalf is satisfied with E  respect to any person including a foreigner, that (1) with a view to prevent- ing 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 goo<;ls, or (iv)  dealing in smuggled goods otherwise than by engaging in transporting or F  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  

·I of detention within five days of the detention. (In "exceptional circumstan- ces and for reasons to be recorded in writing", the grounds of detention G  are allowed to be served within fifteen days) .  

-. Section 5-A which was inserted by the Amendment A~t 35 of 1975  reads thus :  

"5-A. Grounds of detention severable - Where a person has been H

14  

A  

B  

c  

D  

SUPREME COURT REPORTS 11994) SUPP. 1 S.C.R.  

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 inopera- tive 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 provided  in sub-section (1) of Section 3 with reference to the remaining  ground or grounds and made the order of detention;  

E (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."  

F  More about this section later.  

Section 8 provides for constitution of an Advisory Board as required  by clause ( 4) of Article 22 and for reference of each detenue's case to it.  The opinion of the Advisory Board is binding upon the Government.  Section 9 provides certain classes of cases, where the reference to Advisory  

G Board can be made within aµ 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 ~y ·  be set out in full. It reads :  

H "12-A. Special provisions for dealing with emergency.- (1) Not-

~·

ATfORNEY GENL. FOR INDIA 1·. A. PRNIVA:"JDAS [JEEVAi\ REDDY. J.J 15  

withstanding anything contained in this Act or any rules of natural A  justice, the provisions of this section shall have effect during the  period of operation of the proclamation of Emergency issued  under clause (i) 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  

B  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) c  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  

D  issued (hereafter 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 E  person concerned :  

Provided that where such declaration is made by an officer, it  ·~ shali be reviewed by the appropriate Government within fifteen days  

from the .date of making of the declaration and such declaration F  shall cease to have effect unless it is confirmed by that Govern- ment, 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)  

G continues to be necessary for effectively dealing with the emergen- cy shall be reconsidered by the appropriate Governnient ~ithin four  

.... months from the date of such declaration .and thereafter af' inter- vals 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 H

16 SUPREME COURT REPORTS (1994] SUPP. 1 S.C.R.  \{  

A 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 to do otherwise, act on the basis of the information and  

B 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  

c 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.  

D (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 C?mputing -

E  (i) the period specified in clauses (b) and (c) of Section 8;  

(ii) the period of "one year" and "five weeks" specified in  sub-section (1), the period of "one year" specified in sub-sec- tion (2)(i) and the period of "six months" specified in sub-sec- ~·  

F tion (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  

~  

G  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  

H with in the sense that they need not be complied with; the several time-

ATIORNEY GENL. FOR INDIA v. A. PRAJIVANDAS (JEEVAN REDDY, J.] 17  

limits prescribed in Sections 8 and 9 stand extended by the period of A  emergency.  

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 proper- B  ties of smugglers and foreign exchange manipulators and for mat·  ters connected therewith or incidental thereto;  

Whereas for the effective prevention · of smuggling activities  and foreign exchange manipulations which are having a deleterious C  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 D  means and have thereby been increasing their resources for operat.  ing in a clandestine manner;  

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; E  

Be it enacted by Parliament in the Twenty-sixth Year of the  Republic of India as follows :"  

· Section 2 specifies the persons to whom the Act applies. Sub- section  (1) declares that the provisiop.s of the Act shall apply "only to the persons F  specified in sub-section (2}". Sub-section (2) mentions five categories of  persons to whom the provisions of the Act apply. The first category men- tioned 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 of rupees. The requirement of value exceeding G  Rupees one lakh does not ·apply in case of second or subsequent convic- tion. 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 H

18 SUPREME COURT REPORTS [1994) SUPP. 1 S.C.R.  

A detention has been made under COFEPOSA, but which order was not  revoked or set aside in any of the situations set out in the four sub-clauses  of the proviso. It 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  

B Prevention of Smuggling Activities Act, 1974 (52 of 1974):  

c  

D  

E  

F  

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 Ad- visory Board; or  

(ii) such order of detention, being an ordtn to which the  provisions of Section 9 of the said Act apply, bas not been revoked  before the expiry of the time for, or 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; " ·•  

The third category to whom the act applies [mentioned in clause (c)]  .G 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) com- prises 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  

. H . he is a transferee in gocd faith for valuable consideration. Explanation (1)  

-

,_

AITORNEY GENL. FOR INDIA v. A. PRAJIVANDAS [JEEVANREDDY.J.J 19  

specifies the manner in which the value mentioned in clause (a) has to be A  computed. Explanation (2) specifies the relatives covered by clause (c),  while Explanation (3) specifies the associates included under clause ( d).  

Section 3 defines certain expressions occurring in the Act, including  the expression "illegally acquired property". It reads as follows:  

"(c) "illegally acquired property", in relation to any persons to  whom this Act applies means -

B  

(i) any property acquired by such persons, 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 C  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  

D  (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 E  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  

F  

ref erred to in sub-clauses (i) to (iii) or the income or earnings G  from such property;  

and includes-

(A) any property held by such person which would have been  in ~elation to any previous holder thereof, illegally acquired H

A  

B  

c  

20 SUPREME COURT REPORTS [1994J SUPP.1 S.C.R.  

properly 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 means, wholly or partly traceable to any property  falling under item (A), or the income or earnings therefrom;"  

More of this definition later.  

Section 4 declares that after commencement of the said Act, it shall  not 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  

D behalf. Any property so held is liable to be forf e'ited to Central Government  in accordance with the provisions of the Act. Section 6 p~ovides 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  

E 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  

F  time being in force.  

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, 4-0th and . 42nd Amendments to the  Constitution was levelled in the writ petitions on the ground that the said  

G Amendments - eff ecteci after t}le decision in Keshavananda Bharati v. State  of Kera/a, [1973] Suppl. S.C.R. 1 - 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 vioia- tive of Article 14 is equally vio~ative of the basic structure. This simplistic  

H argument overlooks the reason d'etre of Article 31-B - at any rate, its  

-~-

>  ATIORNEY GENL FOR INDIA 11. A. PRAJIV AND AS [JEEV AN_ REDDY, J.) 21  

continuance and relevance after Bharati - and of the 39th and 40th Amend- A  ments placing the said enactments in the IXth Schedule. Acceptance of the  petitioners' argument would mean that in case of post-Bharati constitution- al amendments placing Acts in the IXth Schequle, 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, B  in the absence of any effort to substantiate the said challenge, we do not  wish to e~ress any opinion on the constitutional vali!iity 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 C  Article 14.  

COFEPOSA is a law relating to preventive detention. It has, there- fore, 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 the very same objective by D  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 E  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 india, (1982) 1  S.C.R. 947 at 970 :  

"The court must always remember that "legislation is directed to  practical problems, that the economic mechanism is highly sensi- tive and complex, that many probl~ms are singular and contingent,  

F  

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 G  that " judgment is largely a prophecy based on meagre and  uninterpreted experience". Every legislation particular!y in  economic matters is essentially empiric and it is based on ex- perimentation or what one may call trial and error method and  therefore it cannot provide for all possible situations or anticipate H

A  

B  

c  

D  

E  

F  

22 SUPREME COURT REPORTS [1994] SUPP. 1 S.C.R.  

all possible abuses. There may be crudities and inequities in com- plicated experimental economic legislation but on that account alone  it cannot be struck down as invalid. The court cannot, as pointed  obt by the United States Supreme Court in Secretary of Agriculture  v. Central Reig Refining Company (94 lawyers Edn. 381), be con- verted 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 legislation 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 or. 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)  

To the same effect are the observations (at page 663) in Federation  ·of Hotel and Restaurant Association v. Union of India, [1989] 3 S.C.C. 634,  a decision of the Constitution Bench.  

It is not necessary to multiply the authorities.  

Question No. 1 :  

It is argued for the petitioners that COFEPOSA is not relatable to  G Entry-9 of List-I of the Seventh Schedule to the Constitution inasmuch as  

the preventive detention provided therefor 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  

H agree. COFEPOSA is clearly relatable to Entry 3 of List-III i~asmuch as

>  A TIORNEY GENL FOR INDIA v. A PRAJIV ANDAS (JEEV AN REDDY, J.) 23  

it provides for preventive detention for reasons connected with the security A  of the State as well as the maintenance of supplies and services essential  to the community. While Entry 3 of List-Ill 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 B  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 multi-nationals 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 C  do so in the interest of powerful countries who contribute substantially to  their fund or in the interest of their loan. In the modem 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, the Parliament states D  that the violations of foreign exchange regulations and smuggling activities  are having an increasing 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.E.S. Dhil- E  /on,[1972) 2 S.C.R. 33 - 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 the 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 relate to any of the Entries in F  list-II, no further inquiry is necessary. It must .be held that 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 G  and enquire -to which Entry or Entries do these Acts relate. It should be  held that the Parliament did have the competence to enact them.  

Question Nos. 2 and 3 : 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 H

24 SUPREME COURT REPORTS (1994) SU:t>i'. ~  

A them are, what may be called, 'normal' orders of detention. For that reason,  the detenues 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 ref erred 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  

B 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  detenues, their relatives and their associates. SAFEMA is made. applicable  to them by virtue of Section 2(2)(b) r~ad with clauses (c), (d) and (e) of  

C 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  

D 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  

E 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 fun~amental 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  

F 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  

G hand, the learned Additional Solicitor General relies upon the provisions  of clause {lA) 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 of  notice under Section 6 of SAFEMA. At any rate, he submits, clause {lA)  of Article 359 saves all such orders. Suspension of remedy, he says is  

H tantamount to suspension of the right itself since one cannot conceive of a

>  

;.  

A TIORNEY GENL. FOR INDIA v. A. PRAIIV AND AS (JEEV AN REDDY, J .) 25  

right without a remedy. There is no distinction, he says, between Article A  358 and an order under Article 359(1) in this regard. He places strong  reliance upon the observations at page 312 of the decision in Makhan Singh  v. State of Punjab, (1964) 4 S.C.R. 797.  

Article 352 of the Constitution empowers the President, if he is  B  

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 C  exists. One of the consequences of such declaratio_n 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 D  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 i;iiade shall, to the extent of the E  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."  

(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.)  

F  

Clause (1) of Article 359, as if stood prior to the 44th Amendment, G  provided that "Where a Proclamation of Emergency is in operation, ·the  Pres~dent 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 men- tioned in the order and all -proceedings pending in any court for the H  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."  

The purport' and effect of Articles 358 and 359(1) and the distinction  between them fell for consideration of this court in Makhan Singh. A  Special-Bench of Seven Judges stated the effect of Article _358 in the  following words:  

By the 44th Amendment Act, the words "armed rebellion" were substituted for the  words "internal disturbance".

A  

B  

c  

D  

E  

F  

G  

H  

26 SUPREME COURT REPORTS (1994) SUPP. 1 S.C.R.  

"It would be noticed that as soon as a Proclamation of Emergency  has been issued under Art. 352 and so long as it lasts, Art. 19 is  suspended and the power of the legislatures as well as the executive  is to that extent made wider. The suspension of Art. 19 during the  pendency of the Proclamation of emergency removes the fetters  created on the legislative and executive powers by Art.19 and if  the legislatures make laws or the executive commits acts which are  inconsistent with the rights guaranteed by Art.19, their validity is  not open to challenge either during the continuance of the emer- gency or even thereafter. As soon as the Proclamation ceases to  operate, the legislative enactments passed and the executive ac- tions taken during the course of the said emergency shall be  inoperative to the extent to which they conflict with the rights  guaranteed under Art.19 because as soon as the emergency is  lifted, Art. 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 Art.19 is complete · during the  period in question and legislative and executive action which  contravenes Art.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. Pro<'.lamation 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 Art359(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 b.etween the provisions of Art.358 and Art.  359(1)".

~·  

AT fORJ\"EY GEl\"L. FOR INDIA 1·. A. PRAJIVA:--:DAS IJEEVA:\ REDDY. J.j 27  

It was urged by the learned Allorney General that suspension of the A  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 B  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 C  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 enact- ment or by executive action can perhaps be challenged by a citizen  in a court of law and the same may have to be tried on the merits  on the basis that the rights alleged to have been infringed were in D  operation even during the pendency of 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 E  have to be carefully scrutinised.  

Since the objection of Art. 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  

F  

a citizen after the order has been issued, because the Order takes  away the r~ght to move any court and during the operation of the  Order, the said right cannot be exercised by instituting a fresh G  proceeding contrary to the Order. If a fresh proceeding falling  within the mischief of Art.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, Art. 359(1)  and the Presidential Order issued under it may constitute a sort  of moratorium or a blanket ban against the institution or con- H

A  

B  

c  

D  

E  

28 SUPREME COURT r ''.PORTS [1994) SUPP. 1 S.C.R.  

tinuance 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 condi- tion 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.  

After the said decision, however; clause (lA) was introduced in  Article 359 by the Constitution 38th (Amendment) Act, 1975. The clause  was introduced with restrospective effect from the date of the Constitution.  Clause (lA), as introduced by the said Amendment Act read as follows :  

"lA. 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 laws 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 order aforesaid ceases to operate, except as respects  things done or omitted to be done before the law so cease to have  effect:"  

A proviso was added to this clause by the 42nd Amendment Act, ,.  F 1976, to the following effect :  

"Provided that where a proclamation of Emergency is in oper:ation  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  

G part of ',Vhich the Proclamation of Emergency is not in operation,  if and in so far 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."  

H (By the 44th Amendment Act, 1978, the words "except Articles 20

,. ATIORNEYGENL FOR INDIA v. APRAJIVANDAS (JEEVANREDDY,J.) 29  and 21" were added after the words "the rights conferred by Part III" in A  clause (lA) besides adding clause (lB) 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 emergen-

cy.)  

It is obvious that clause (lA) was put in with a view to bring the B  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 riglits is concerned. Article 359(1A) 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 c  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 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 ceases to have effect". Clause D  (lA} of Article 359 says similarly that while the Presidential Order made  under Article 359(1) is in operation "nothing in. that Part (Part-III) confer- ring 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  

E take but any law so made to the extent of incompetency shall 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".  Of course, while Article 358 is confined only to Article 19, clause (lA)  extends to those rights whose enforcement may have been suspended .by  

·- an Order under Article 359(1). The other distinction is that while the F  "suspension"• of Article 19 under Article 358 is co-extensive with the  duration of the proclamation of emergency, clause (lA) is confined to the  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 (lA) of Article 359 read together provide G  for suspension (by means of a Presidential Order) of the enforcement of  the fundamental rights specified in the Order and simultaneously enable  

~"  lt should be noticed that only the heading of Article 358 spc~ of "suspension of  provisions of Article 19;" in the body of the Article, there is n~ reference to suspension  of the Article. H

30 SUPREME COURT REPORTS [1994] SUPP. 1 S.C.R.  

A 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 Singh  with respect to Article 358 (competence of the State to make a Jaw or to  take executive action inconsistent with Article 19) does apply equally to  Article 359 by virtue of the introduction of clause (lA) with retrospective  

B  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  

C 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 justifica- tion 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  

D 352(1). As soon as_ emergency ceases, the law so made shall to the extent  of inconsistency with Article 19 ceases 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  

I .  

or omitted to be do[le by virtue of the said Article during the period of  emergency cannot be; q.uestioned either during or after the emergency on the  

E ground of inconsistency ~th Article 19. Neither the law nor the executive  action (to the extent of its inconsistency with Article 19) can continue even  f~f:,~ day b1Y,ond the cessation of emergency. Their validity and/or the  comnhtencedS- the State to make or take them during the period of emer- . 10~ 1 • J h c l d b d . f ill . 1 gfn9) 1s L owever, p ace eyon questton. By way o ustratton a aw  

F mi vi..have b~eh made or an executive action may have been taken unduly VfJ' lJ:JQLl ~u1 .,  re~ff1~~g th.e freedom of. speech and the freedom of press during the  

q eiA1r~ncy .. ~ch restriction insofar a_s 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 takes any other proceedi.ng  

G against the State for imposing such unreasona~le restriction during the  period of emergency. This is because of the protection provided to the  State by Art\cle 358. It should be remembered that Article 358 sanctions  suc\li,~'..l c?,~se ,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  

H

AlTORNEY GENL. FOR INDIA v. A. PRNIVANDAS [JEEVAN REDDY, J.) 31  

make such law or to take such executive action as is necessary to safeguard A  security of the country unfettered by the provisions in Article 19. This  subordination of Article 19, however, is only for the period the proclama- tion of emergency under Article 352 is in operation.  

Now coming to clauses (1) and (lA) of Article 359 the position is B  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 C  enforcement of the rights in Part-Ill and not suspending the rights them- selves. 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. Inder.d, they have stated what they meant. D  in explicit language. In view of the fact that the fundamental rights in  Part-ill 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  Singh [as well as by Bhagwati, J. in A .D.M Jabalpur v. Shivkant Shukla,  (1976] 2 S.C.C. 521 at 719. Paras 479 and 480] and we agree with them E  respectfully. Then came clause (lA), 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 F  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 incom- petency, 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 A rticle 358 G  (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 enforce-

.- ment. and it is equally true that those fundamental rights (whose enforce- ment is suspended) continue in theory to be alive, yet we must also give H

32 SUPREME COURT REPORTS (1994) SUPP. 1 S.C.R.  

A effect to clause (lA), 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 26th  

January, 1950. The conclusion is, therefore, inescapable that during the  

period the Presidential Order under Article 359(1) suspending enforce-

ment of certain rights conferred by Part-III is in operation, the State is  

B 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 power. What is warranted is what is necessary  for effective implementation of emergency.  

c  

D  

E  

F  

G  

It may be appropriate at this juncture to refer to a few decisions of  

this court relevant in this behalf. In Jaichand Lal v. State of West Bengal,  (1966) Sup!. S.C.R. 464, 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 Art. 358, or the Presidential  Order issued under Art. 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  groun'ds 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 bas in view. It may be stated in  this context that a ma/a 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 seek to  remedy."  

To the same effect is the decision of another Constitution Bench in  Ananda11 Nambiar v. Chief Secretary, Government of Madras, (1966) 2  S.C.R.406. The majority opinion in A.D.M., Jabalpur, however, appears to  

H take a view contrary to the one expressed in Jaicltand Lal and Anandan

A'ITORNEYGENLFORINDIA v. APRAJIVANDAS{JEEVANREDDY,J.) 33  

Nambiar but for the purposes of this case, it is not necessary to go into the A  correctness of the reasoning in A.D.M. Jabalpur, since it has not been  debated before us. Indeed, a Three-Judge Bench in Union of India v.  Bhanudas Krishna Gawde,· (1977] 2 S.C.C. 719 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 B  order under Article 359(1) is in operation!  

The next issue that arises is whether it can be said in the case of  detention orders passed during the emergency (i.e., orders of detention to  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 C  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 iiiade 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 D  continued beyond the said cessation, . but they were certainly competent,  legal 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.  

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  

E  

said Article does not amount to suspension of the right. The orders of F  detention were, therefore, void and they remained in operation only be- cause the detenues were barred from questioning the validity of the said  orders on account of 1he 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 detenue of the G  grounds of his detention and without giving him an opportunity lo make a  representation. Even the protection of consideration of his case .by an  ¥i.dependent body (Advisory Board) is taken away. The detenue 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 H  

..•

' .  

34 SUPREME COURT REPORTS (1994] SUPP. 1 S.C.R.  

A fairness, civilized 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 oppor- tunism, the e.xpediency of the passing hour, the erosion of the small  

B encroachments, and the scorn and derision of those who have no patience  with general principles."  

The contending view points aforesaid give rise to two strands of  thought. One line of thought runs thus : By virtue of clause (lA) of Article  359, inserted by the Constitution 38th (Amendment) Act with retrospective  

C 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  

D 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 undoub- tedly represent an order of detention within the meaning and contempla- tion 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  

E 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.  

F Section 2(1) of SAFEMA says, "the provisions of this Act shall apply only  to the persons specified in sub-section (2)" and sub-section (2) speaks inter  a/ia of a person "in respect of whom an order of detention has been made  under the COFEPOSA, 1974". Indeed, provisos (i), (ii) and (iii) to clause  (b) of sub-section (2) of Section 2 of SAFEMA expressly refer to the order  

G 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 5th November, 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  

H 12-A of COFEPOSA must, therefore, be held to be an order of detention

~TIORNEYGENLFORINDIA v. APRAJNANDAS IJEEVANREDDY,J.j 35  

for the purpose of and within the meaning of Section 2(2)(b) of SAFEMA. A  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 exist - ence, 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 B  cannot furnish the foundation, the connecting link, or the basis for applying  SAFEMA. A normal order of preventive detention is itself an uncivilized  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 C  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 o( detention beyond and outside D  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.  

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 E  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 IXth 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 F  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) : G  

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 H

36  

A  

B  

c  

D  

SUPREME COURT REPORTS [1994) SUPP. 1 S.C.R.  

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."  

Proviso (iii) expressly treats "an order (of detention) to which the  E 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  

F the fact that SAFEMA as well as COFEPOSA are included in the IXth  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'  

G 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.  

H At this juncture, it would be appropriate to deal with two decisions

,_  ATIORNEY GENL. FOR INDIA v. A. PRAJIVANDAS (JEEVANREDDY,J.) 37  

of this Court brought to our notice. The first one is in Union of India v. A  Haji Mastan Mirza , (1984J 3 S.C.R. 1 rendered by a Bench of three Judges.  The respondent therein was first detained under Maintenance of Internal  Security Act (M.l.S.A.) under an order dated September 17, 1974. On  December 19, 1974 the said order was revoked but simultaneously an order  of detention was made under Section 3(1) of COFEPOSA. The grounds B  of detention were served on him on December 23, 1974. On June 25, 1975,  emergency was proclaimed under Article 352(1) on the ground of internal  disturbance, which continued in force upto March 21, 1977. The respo.n- dent was released on March 23, 1977. Notice . under Section 6(1) of  SAFEMA was issued to him, his relatives and associates where upon he  filed a writ petition in the Bombay High Court challenging the validity of c  the order of detention dated December 19, 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 D  India appealed to this Court. V ardarajan, J. speaking for the Bench  referred to the provisions of Sections 2, 6 and 7 of SAFEMA and observed  thus:  

. "Therefore, a valid order of detention under COFEPOSA is a  condition precedent to proceedings being taken under ss. 6 and 7 E  of SAFEMA. If the impugned order of de~ention dated 10.12.1974  is set aside for any reason, the proceedings taken under ss. 6 and  7 of SAFEMA cannot stand. Therefore, we have to consider  whether the impugned ~>rder of detention dated 19.12.1974 under  COFEPOSA is void and has to be quashed." F  

From the facts stated above, it is clear that the order of detention  was made long prior to the proclamation of emergency on June 25, 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  

G under Section U-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 upto March 23, 1977. In the above circumstance~, this Court  ' said that it was open to the respondent-detenue 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 H

38 SUPREME COURT REPORTS l1994J SUPP. I S.C.R.  

A 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 detenue does not challenge it when he was deprived of his liberty, or  challenges it unsuccessfully, there is no reason why he should be allowed  

B  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) suspend- ing Article 22), it perhaps could still be challenged even during the period  of emergency on grounds not barred by the said provisions. Secondly, even  

C if such an order is allowed to be challenged when action under S~FEMA  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(1A). Hence, we say that a person who did not choose to challenge such  

D an order of detention during the emergency when he was detained, or  challenged it unsuccessfully, cannot 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  

E would be the same. Failure to challenge the detention directly when he was  detained, precludes him from challenging it after the cessation of deten- tion, where it is made the basis for initiating action under SAFEMA.  

The other case brought to our notice is in Union of India v. Manohar  F Lal Narang, [1987) 2 S.C.C. 241, a decision rendered by a Bench comprising  

Khalid and Oza, JJ. The facts of this case are r~ther involved. Respondent,  Manohar Lal Narang and one· Ram Lai Narang were brothers. An order  of detention under Section 3(1) of COFEPOSA was ma~e against Ram Lal  Narang on December 19, 1974. He challenged the same before the Delhi  

G High Court in Writ Petition No. 10 of 1975 which was allowed on April 30,  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 alongwith  an application for stay. On May 1, 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  

H of emergency on the ground ~f internal disturbance on June 25, 1975, a

AlTORNEYGENL. FOR INDIA v. A. PRAJIVANDAS(JEEVAN REDDY.J .j 39  

fresh order of detention was made on July 1, 1975 against Ram Lal on the A  very same facts and grounds on which he was detained earlier. The said  order of detention was challenged in Delhi High Court in Writ Petition  No. 115 of 1975 filed by a relative of Ram Lal but was dismissed on  November 25, 1975. An appeal was preferred against the said order to this  

Court being Appeal No. 399 of 1977. At this stage, notice under Sections B  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 C  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 S.L.P.  No. 9361 of 1982 wherein leave was granted and the appeal was numbered  as C.A.2790 of 1985 which was said to be pending on the date of the said D  judgment. An order of detention under Section 3 of COFEPOSA was  made against the respondent, Manohar Lal Narang, as well on January 31,  1975. He was then in England. He was brought to India and detained. He  challenged the same by way of W.P.2752 of 1975 in the Bombay High Court  which was allowed and the detention quashed on July 8, 1980. An appeal E  preferred to this Court against the said order was . also dismissed. There- after, a show cause notice was issued to Manohar Lal Narang on the  ground that he is the brother (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 July F  1, 1975 (evidently, an order of detention to which Section 12(A) of  COFEPOSA applied) was dismissed by the Delhi High Court (W.P. 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 G  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 ques- H

40 SUPREME COURT REPORTS (1994j SUPP. 1 S.C.R.  

A tioned by the detenue or his relative, as and wh~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-applica- tion of mind to certain highly relevant and material circumstances. We  

B 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  

C 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  

D 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  

E 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 4: The definition of illegally acquired properties" in clause  F (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 oj any  income, earnings or assets derived of 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 law" [vide  

G sub-clause (i)J. 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  

H course, the provision in Section 9 would be attracted. Illegal activity is not

AITORNEY GENL. FOR INDIA v. A. PRAJIVANDAS (JEEVANREDDY,J.J 41  

confined to violation of the laws mentioned in Sect.ion 2 but all laws which A  the 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, decoity, mis-appropriation or any other illegal activity prohibited  

by the Indian Penal Code or any other law in force (which the Parliament  

has the power to make) all that would be liable to be forfeited. It is B  submitted by the petitioners that this is a case of excessive and dispropor- tionate response by the 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 C  on account of its inclusion in the IXth 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 o( these submissions. Both  the enactments being placed in the IXth Schedule, they enjoy the immunity  conferred by Article 31(B). We have observed hereinbefore that the D  petitioners have not been able to substantiate their submission that the 39th  (Amendment) Act and 40th (Amendment) Act, placing the said enact- ments in the IXth 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 E  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  

F  

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. G  fadeed, 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 H

42 SUPREME COURT REPORTS (1994) SUPP. 1 S.C.R.  

A or which portions of them are attributable to smuggling and foreign ex- change violations and which properties or which portions thereof are  attributable to violation of other laws (which the Parliament has the power  to make). It is probably for this reason that the burden of proving that the  properties specified in the show cause notice are not illegally acquired  

B properties is placed upon the person concerned. May be this is a case  where a dangerous disease required 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  

C yaid device is usually resorted to save a provision from being declared  unconstitutional, incompetent and ultra vires. We are, therefore, of the  opinion that neither the constitutional validity of the said definition can be  questioned nor is there any warrant for reading down the clear and  unambiguous words in the clause. So far as justification of such a provision  

D is concerned, there is enough and more. After all, all these illegally ac- quired 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.  

E Witness the facts and ratio of a recent decision of the Privy Council in  Attorney General for Hong Kong v. Reid (1993) 3 W.L.R. 1143. The Respon- dent, 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  

F  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 Zeal~d 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 over-ruling the New Zealand Court of Appeals.  

G 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  

H fiduciary, in equity he not only became a debtor for the amount of the bribe

P"-

AITORNEY GENL. FOR INDIA v. A. PRAJIVANDAS [JEEVANREDDY, J.) 43  

to the person to whom the duty was owned but he also held the bribe and A  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 a~ount of the bribe, and if the property  

increased in value the fiduciary was not entitled to retain. the excess since B  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, th~ 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 available, the .properties C  "can be sold and the proceeds whisked away to some Shangri La which  bides 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 under-

stand the amorality of the Governments and their laws which sanction such D  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 Reid is not present. It may be seen that the concept employed E  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 F  the future as it has been of the past." (Lewi.S Henry Morgan: Ancient  Society).  

Question No. 5 : 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 over-reaching or of over-breadth, as it G  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 pfoperties of their myn, 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 H

44 SUPREME COURT REPORTS (1994) SUPP. 1 S.C.R.  

A detenue or convict, as the case may be. It is pointed out that the definition  of the 'relative' in Explanation (2) and of 'Associates' in Explanation (3) is  so wide as to bring in a person even distantly related or associated with  the convict/detenue, within the net of SAFEMA, and once he comes within  the net, all his illegally acquired properties can be forfeited under the Act.  

B  In our opinion, the said contention is based upon a mis-conception.  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 detenue, acquired or kept  in their names, do not escape the net of the Act. It is a well-known fact  

C 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/detenue - whether as a benami  

D 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 detenue - whether in his own name or in the  name of his relatives and associates. It is to counter-act the several devices  

E 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 con- vict/detenue furnishes the link between the convict/detenue a.ad his rela-

F tives and associates. Only the properties of the convict/detenue are sought  to be forfeited, wherever they are. The idea is to reacli his properties in  whosoever's name they ate kept or by whosoever they are held. The  independent properties of relatives and friends, which are not traceable to  the convict/dctcnue, are not sought to be forfoitt:d nor are they within the  puniew of SAFEMA•. We may proceed to explain what we say. Clause  

G  

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 though such gains in the names of their relatives, associates and confidants".  We are not saying that the Preamble can be utilised or restricting the scope of the Act,  we arc only referring to it to ascertain the object of the enactment and to re-assure  

H ourselves that the construction placed by us accords with the said object.

-- ATIORNEY GENL FOR INDIA v. A. PRAJlV ANDAS (JEEV AN REDDY, J.j 45  (c) speaks of a relative of a person referred to in clause (a) or clause (b) A  (which speak of a convict or a detenue). Similarly, clause (d) speaks of  associates of such convict or detenue. 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 B  ('such person' refers to the convict or detenue, 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/detenue; (iii)  any association of persons, body of individuals, partnership firm or private  company of which such convict/detenue had been or is a member, partner  or director; (iv) any individual who had been or is a member, partner or C  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 D  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/detenue; or (b) the  value of the assets contributed by such convict/detenue to the trust  amounts, on the date of contribution, not less than 20% of the value of the E  assets of the trusts on that date; and (vii) where the competent authority,  for reasons to be recorded in writing, considers that any properties of such  convict/detenue 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/detenue  or traceable to such detenue/convict. Section 4 is equally relevant in this  context. It declares that "as from the commencement of this Act, it shall  

F  

not be lawful for any person to whom this Act applies to hold 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 G  2(2) and the Explanations (2) and (3) occurring therein shall have lo 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/detenue 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 . H

.,  

46 SUPREME COURT REPORTS [1994) SUPP. 1 S.C.R.  

A 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  

B  

c  

· have acquired illegally but only to reach the properties of the con- vict/detenue 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/detenue 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/detenue 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  

D acquired properties of such relatives and associates will also be forfeited  even if they are in no way connected with the convict/detenue. 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  

E  

F  

person proves that he is a transferee in good faith for consideration, his  property - even though purchased from a convict/detenue - is not liable to  be forfeited. It is equally necessary to reiterate that the burden of estab- lishing 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/detenue, are not the illegally acquired properties  of the convict/detenue, lies upon such relative/associate. He must establish  that the said property has not b~en acquired with the monies or assets  provided by the detenue/convict or that they in fact did not or do not  belong to such detenue/convict. We do not think that the 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  

G relatives or associates of the convict/detenue. There ought to be the con- necting link between those properties and the convict/detenue, 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  

H bringing in of the relatives and associates or of the persons mentioned .in

A TIORNEY GENL. FOR INDIA '" A. PRAJJVANDAS !JEEV AN REDDY. J.] 47  

clause (e) of Section 2(2) is thus neither discriminatory nor incompetent A  apart from the protection of Article 31-B.  

Question No. 6: Petitioners challenge 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 detenue viz.1 (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  

B  

the order of detention - See State of Bombay v. Atma Ram Vaidya, [1951)  S.C.R. 167. It the grounds included irrelevant or non-existent grounds, it is  submitted, the first right is violated and if the grounds included vague C  grounds, the second right is violated. According to the learned counsel,  Article 22(5), as interpretated by th.is Court over the last more than four  d~cades, 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 non-existent, it is not possible or permissible D  for the court to predicate which grounds have influenced the formatio~ 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 the  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 E  the order must be held to be good with reference to and on the basis of  good grounds, ; eschewing th~ bad grounds. Such a law, it is submitted,  would be in direct conflict with Article 22(5). Let us examine this submis- sion rather closely.  

Section 5-A of COFEPOSA may be reproduced here 'for ready  reference. It reads:  

"5-A. Grounds detention severable - Where a person has been  detained in pursuance of an order of detention under sub-section  

F  

(1) of Section 3 which has been made on two or more grounds,  such order of detention shall be deemed to have been made G  separately on each of such grounds and accordingly  

(a) such order shall not be deemed to be invalid or inopera- tive merely because one or some of the grounds is or are -

(i) vague, H

A  

B  

c  

D  

E  

F  

48 SUPREME COURT REPORTS (1994) SUPP. 1 S.C.R.  

(ii) non-existent .  

(iii) non 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 deten- tion;  

(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 remaini~g grounds or  grounds."  

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  I or 'inoperative merely for the reason that one or some of the grounds are  - ei'ther vague, non-existent, irrelevant or unconnected. That the second part  

is merely a continuation of a9d 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 go~d ground or grounds, as the case  may be. Both the parts are joined by the word "and".  

Now, it is heyond dispute that an order of detention can be based  G 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 West  Bengal, [1974] 4 S.C.C. 135, it was observed that while ordinarily- speaking  one act may not be sufficient to form the requisite satisfaction, there i~ no  such invariable rule and that ~n a given case one act may suffice. That was  

H a case of wagon-breaking and having regard to the nature of the Act, it

> - ATTORNEY GENL. FOR INDIA v. A. PRAJIVANDAS (JEEVANREDDY. J .j 49  

was held that one act is sufficient. The same principle was reiterated in A  Anil Dey v. State of West Bengal, [1974J 4 SCC 514. It was a case of theft  of rai lway signal material. Here too one act was held to be sufficient.  Similarly, in Israil SK v. District Magistrate of West Dinajpur & Ors. [1975]  3 S.C.C. 292 and Dhama Kanu v. State of West Bengal, (1975] 3 S.C.C. 527,  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 B  

of detention. In Saraswathi Seshagiri v. Seate of Kera/a & Anr., [ 1982) 2  S.C.C. 310, 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 C  detention if the act is of such a nature as to indicate that it is an organised  act of 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 prejudi- cial activity. That is the reason why single acts of wagon-breaking, theft of D  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 pre-meditated manner, it was held that such single act  warrants an inference that he will repeat his activity in future and, there- fore, his detention is necessary to prevent him from indulging in such E  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 ramifica- tions. These acts are preceded by a good amount of planing and organisa- tion. 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  

F  

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  mutiplicity of grounds for making or sustaining an order detention.  

Now, take a case, where three orders of detention are made against  the same person under COFEPOSA. Each of the orders is based upon  

G  

- only one ground which is supplied to the detenue. 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 H

50 SUPREME COURT REPORTS [1994J SUPP. 1 S.C.R.  

A 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  

B  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 fust part by the word "and". In such a situation,  we are unable to see how can the section be characterised as inconsistent  

C 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. The Commissioner of  Police I.L.R. 1972 AP. 1Q25 as we shall presently indicate. It is difficult to  conceive any ins;onsistency or conflict between Article 22(5) and the first  

D - the main - part of Section 5-A. The 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  

E  brought to our notice. Be that as it may, we do not see why the 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.  

F 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 hf.ls been  applied in <;everal decisions. Three of the reported decisions are brought  to our notice, viz., State of Gujarat v. Chaman Lal Manjhibhai Soni (1981]  

G 2 S.C.C. 24, Prakash Chandra Mehta v. Commissioner and Secretary, Kera/a  [1985] Suppl. S.C. 144 and N. Meera Rani v. State of Tamil Nadu, (1989] 4  S.C.C .. 418. 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  

H said provision in a case arising under COFEPOSA.

ATIORNEY GENL FOR INDIA v. A. PRAJIV AND AS (JEEV At'.'! REDDY, J.) 51  

Now, coming to the decision of the Andhra Pradesh High Court in A  K Yadigiri Reddy, 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 B  does not or do not suffer from any such informity."  

The Andhra Pradesh provision thus contained · a provision ap- proximating to the second part of Section 5-A but did not contain any  provision corresp<'uding to or approximating to the first (the main) part of C  Section 5-A. It is the first part of Section 5-A that creates the deeming  fiction; the second pa.rt 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 4erein as explained D  

· herein above. 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. Sadanadan v. State of Kera/a, A.I.R. (1966) S.C.  1925, the learned Judge observed : E  

"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 F  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 ~uch unfettered  powers, may ultimately pose a serious threat to the basic values on G  which the democratic way of life in this country is founded."  

In matters touching .liberty, greater care is called for on the part of  the authorities exercising powers of detention.  

An Additional question : Dr. Ghatate, appearing for one of the petitioners H

52 SUPREME COURT REPORTS [1994) SUPP. 1 S.C.R.  

A raised an interesting submission to the following effect : by Constitution  44th (Amendment) Act, the 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  

B 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  

C 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, the Parliament could never have  contemplated that the Central Government would sit on them for more  

D than fourteen years. The Central Government must act in accordance with  the spirit of the A~endment Act. It must act reasonably. It cannot undo a  Constitution Amendment just by refusing to specify a date from which it  i.hall come _into operation. Even if the power given to the Central Govern- ment is characterised as a conditional legislation still shall the fact remains  

E 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 the Parliament was, in the year 1979, amending the  

• Constitution, not for that generation but for the next generation? Section  F 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 happened and cannot be allowed to happen; the Central  Government ought not to be allowed to play with a constitutional amend- ment - an amendment which, in particular, tends to strengthen the  

G safeguard contained in clause ( 4) of Article 22, says the counsel.  

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  

H detention made under Section 3 of COFEPOSA, which were governed by  

)•

AITORNEY GENL. FOR INDIA v. A. PRAJIVANDAS [JEEVAN REDDY, J.] 53  

Section U-A do yet represent orders of detention for the purpose of and A  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 Amend- ment 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 India, B  [1982) 2 S.C.R. 272, viz., whether the opinion in the said decision can be  validly applied even after a lapse of fourteen years.  

To summarise :  

(1) the Parliament was perfectly competent to enact both the C  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 38th and 40th Amendment Acts  to the Constitution of India placing COFEPOSA and SAFEMA in the IXth D  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.  

(3a) An order of detention made under Section 3 of COFEPOSA,  which was governed by Section 12-A thereof is yet an order of detention E  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 the Parliament, by virtue  of clause (lA) 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  

F 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 G  proviso (iii) thereto) - and the protection enjoyed by both the enactments  by virtue of their inclusion in the IXth 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 ~erve  as the foundation, as the basis, for applying SAFEMA to such detenue and H

54 SUPREME COURT REPORTS [1994) SUPP. 1 S.C.R.  

A 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  detenue 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  

B 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.  

C (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 detenue or convict, as the case  may be, wherever they are, howsoever they are held and by whomsoever  

D 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  E violative of clause (5) of Article 22.  

F  

G  

(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 IXth Schedule to the  Constitution.  

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.  

Civil Appeal No. 1418 of 1981 dismissed as withdrawn.  

No orders are called for on I.A. No. 1 of 1993 in T.P. (C) No. 17 of  1978.  

A.G. Matters disposed of.