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PETITIONER: PUSHPADEVI M. JATIA

       Vs.

RESPONDENT: M.L. WADHAVAN, ADDL. SECRETARY GOVERNMENTOF INDIA & ORS.

DATE OF JUDGMENT29/04/1987

BENCH: SEN, A.P. (J) BENCH: SEN, A.P. (J) NATRAJAN, S. (J)

CITATION:  1987 AIR 1748            1987 SCR  (3)  46  1987 SCC  (3) 367        JT 1987 (2)   296  1987 SCALE  (1)896  CITATOR INFO :  D          1988 SC 227  (11)  *          1989 SC1529  (1)

ACT:      Conservation  Of  Foreign  Exchange  and  Prevention  of Smuggling  Activities Act, 1974  s. 3(1)--Subjective  satis- faction  of the detaining authority--Court  cannot  consider propriety or sufficiency of grounds of detention--Court  can examine whether requisite satisfaction was arrived at by the authority.     Conservation  of  Foreign  Exchange  and  Prevention  of Smuggling  Activities Act, 1974  s. 5A--The  principle  that even  if  one  of the grounds which led  to  the  subjective satisfaction  of  the detaining authority  is  non-existent, etc.,  the  order of detention would be  invalid  no  longer holds good.     Conservation  of  Foreign  Exchange  and  Prevention  of Smuggling Activities Act, 1974  s. 3(1)--Power of  detention being  subject to the limitations imposed by  the  Constitu- tion,  Government  must ensure that safeguards  provided  in Art. 22(5) read with s. 3(1) are fully complied with.     Conservation  of  Foreign  Exchange  and  Prevention  of Smuggling  Activities Act, 1974--S. 3(1)--Period  of  parole has to be excluded in reckoning the period of detention.     Foreign     Exchange    Regulation     Act,     1973--s. 40(1)-’Gazetted  Officer  of Enforcement’ means  any  person appointed  to  be an officer of Enforcement  under  s.4  and holding a gazetted post.     Law  of Evidence--If evidence is relevant, the Court  is not concerned with the method by which it was obtained.     De facto Doctrine--Where an office exists under law,  so far as validity of its acts are concerned it matters not how the appointment is made.

HEADNOTE: The  Petitioner’s husband, Mohan Lal Jatia, was detained  by an 47 order passed under sub-s. (1) of s. 3 of the Conservation of Foreign Exchange  and  Prevention  of  Smuggling  Activities Act,   1974  (COFEPOSA) by the Additional Secretary  to  the

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Government of India, Ministry of Finance on being  satisfied that it was necessary to detain him ’with a view to prevent- ing him from acting in any manner prejudicial to the augmen- tation of foreign exchange’.     The  residential premises of one Subhash Gadia,  a  very rich  and prosperous businessman of Bombay, the  brother-in- law  of the detenu, were searched on the basis  of  intelli- gence  gathered by the Directorate of  Revenue  Intelligence that  he was under-invoicing imports of yarn from Japan  and it  resulted in seizure of certain documents. As the  seized documents  not only revealed violation of the provisions  of the  Customs  Act but also indicated  certain  payments  and transactions in violation of the Foreign Exchange Regulation Act, 1973 (FERA), the matter was referred to the Enforcement Directorate Investigation from the FERA angle. Subhash Gadia was  summoned under s. 40 of the FERA and his statement  was recorded by Shri R .C. Singh, an officer of the  Enforcement Directorate.  The  incriminating documents seized  from  the residential  premises of Subhash Gadia and  the  revelations made by him during his examination in relation to the  docu- ments seized which revealed that the detenu Mohan Lal  Jatia was engaged in foreign exchange racketeering to the tune  of several  crores of rupees formed the basis of the  aforesaid order of detention.     The petitioner approached the High Court with  petitions under Art. 226 of the Constitution seeking to challenge  the impugned order of detention. Upon the dismissal of the first of  these  petitions by the High Court, the  petitioner  had approached this Court under Art. 136, and, the Court,  while declining  to  grant special leave to appeal,  had  directed that  the  detenu should appear before the  Commissioner  of Police  and,  upon his doing so, he  should  immediately  be released on parole for a period of ten days. Thereafter, the petitioner filed the second petition under Art. 226 with  an application  for  extending the period of parole  which  was rejected  by the High Court. The petition filed  under  Art. 136 against refusal of interim relief by the High Court  was also  rejected  by this Court. Thereafter,  the  High  Court dismissed  the writ petition, against which, the  petitioner sought  special  leave to appeal and also filed  a  petition under  Art.  32 challenging the order  of  detention.  While issuing  notice  on the petitioner, the Court  directed  the release  of the detenu on parole for a week and by a  subse- quent order further extended the period of parole. Both  the special  leave  petition and the writ  petition  were  heard together. 48     In  the writ petition filed before the High  Court  from which  the  petition for special leave petition  arose,  the petitioner  had  challenged the order of  detention  on  two grounds:  that there was no material on which the  satisfac- tion  of the detaining authority could be reached  that  the detention  of the detenu was necessary; and, that there  was total  non-application of mind on the part of the  detaining authority  to the material on record, and in particular,  to the factual mis-statements contained in paragraph 44 of  the grounds of detention as detailed in entries ’A’ to ’F’.  The writ petition filed before this Court was principally  based on  the ground that there was information of  the  Constitu- tional Safeguard Contained in Art. 22(5) of the Constitution inasmuch  as there was failure on the part of the  detaining authority to consider an alleged representation made by  the detenu  under  s.  8(b) read with s.  11  01’  the  COFEPOSA against the order of detention addressed to the President of India  which  was presented through one Ashok  Jain  at  the

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President’s  Secretariat.  The  other  substantial  question raised  was  that R.C. Singh was not a gazetted  officer  of Enforcement  within  the meaning of s. 40 of  the  FERA  and therefore  the statements recorded by him could not  be  re- garded  as  valid statements under the aforesaid s.  40  and thus could not form the basis upon which the satisfaction of the detaining authority could be reached. Alternatively,  it was contended that the statements recorded by him could  not be treated as statements recorded under s. 39.     The  respondents  not only denied that  the  detenu  had addressed  any representation to the President of India  but made  an application under s. 340, Cr. P.C. for  prosecution of persons responsible for forgoing the document  purporting to be the alleged representation made by the detenu and  for making  certain interpolations in the Dak Register  kept  at the President’s Secretariat. The respondents also placed  on record  an order showing that R.C. Singh had been  appointed an officer of enforcement on ad hoc basis three years before he had summoned Subhash Gadia for examination. Dismissing both the petitions,     HELD: 1. (a) The expression ’officers of Enforcement’ as defined  in  s. 3 of the Foreign  Exchange  Regulation  Act, 1973,  embraces  within itself not only (a) a  Director  (b) Additional  Director (c) Deputy Director and  (d)  Assistant Director  of  Enforcement but also (e) such other  class  of officers of Enforcement as may be appointed for the  purpose or’  the  Act. Obviously, R.C. Singh who was  Assistant  En- forcement  Officer  having been appointed as an  officer  of Enforcement on an ad-hoc basis 49 in 1982 tell within the category ’such other class of  offi- cers’  covered by s. 3(e). Sub-s. (1) of s. 4 provides  that the  Central  Government  may appoint such  persons,  as  it thinks fit, to be officers of Enforcement. Sub-s. (2) there- of  provides for delegation of such power of appointment  by the  Central Government to a Director of Enforcement  or  an Additional Director of Enforcement etc., to appoint officers of  Enforcement below the rank of an Assistant  Director  of Enforcement.  Sub-s.  (3) of s. 4 provides that  subject  to such  conditions and limitations as the  Central  Government may  impose,  an  officer of Enforcement  may  exercise  the powers and discharge the duties conferred or imposed on  him under  the Act. Undoubtedly R.C. Singh was  discharging  his duties  and functions as a gazetted officer  of  Enforcement under s. 40(1) when he recorded the statements in  question. The  expression ’gazetted officer of Enforcement’  appearing in  s. 40(1) must take its colour from the context in  which it appears and it means any person appointed to be an  offi- cer of Enforcement under s. 4 holding a gazetted post. There is  no  denying the fact that R.C. Singh answered  that  de- scription. [69G-H; 70A-D]     (b)  Even  if the contention that R.C. Singh was  not  a gazetted  officer  of Enforcement within the meaning  of  s. 40(1) were to prevail, it would be of little consequence. If evidence  is  relevant the Court is not concerned  with  the method  by  which it was obtained. There is a long  line  of authority  to  support  the opinion that the  Court  is  not concerned with how evidence is obtained. The rule is however subject  to  an  exception. The Judge has  a  discretion  to exclude  evidence  procured, after the commencement  of  the alleged  offence,  which  although  technically   admissible appears  to the Judge to be unfair. This being the  substan- tive law, it follows that the detaining authority was  enti- tled  to  rely upon the statements recorded  by  R.C.  Singh under  s.  40(1). Even if R.C. Singh was  not  competent  to

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record  such statements under s. 40(1), the statements  were clearly  relatable to s. 39(b) of the Act. It cannot  there- fore be said that there was no material on which the detain- ing authority could have based his subjective  satisfaction. [70E-H]     Barindra Kumar Ghose v. Emperor, ILR (1910) 37 Cal. 467; Kuruma v. Reginam, [1955] 1 All E.R. 236; R.V. Sang,  [1979] 2  All  E.R. 1222; Magruder Patodia v. R.K.  Birla  &  Ors., [1971]  2 S.C.R. 118; R.M. Malkani v. State of  Maharashtra, [1973]  2  S.C.R. 417; and Pooran Mal, etc. v.  Director  of Inspection, [1974] 2 S.C.R. 704; referred to. (c) Where an office exists under the jaw, it matters not how the appointment of the incumbent is made, do far as validity of its acts are 50 concerned. It is enough that he is clothed with the insignia of  the office, and exercises its powers and functions.  The official acts of such persons are recognised as valid  under the  de facto doctrine, born of necessity and public  policy to prevent needless contusion and endless mischief. [69B-C]     Gokaraju Rangaraju v. State of Andhra Pradesh, [1981]  3 S.C.R. 474; Pulin Behari v. King Emperor, [1912] 15 Cal.  ZJ 517;  and P.S. Menon v. State of Kerala & Ors.,  AIR  (1970) Kerala 165; referred to.     2. (a) It has long been established that the  subjective satisfaction  of  the  detaining authority  as  regards  the factual  existence  of the condition on which the  order  of detention  can be made, i.e., the grounds of detention  con- stitutes  the  foundation for the exercise of the  power  of detention  and the Court cannot be invited to  consider  the propriety or sufficiency of the grounds on which the  satis- faction  of  the detaining authority is based. Nor  can  the Court, on a review of the grounds, substitute its own  opin- ion for that of the authority. But this does not imply  that the  subjective satisfaction of the detaining  authority  is wholly immune from the power of judicial review. It inferen- tially  follows  that the subjective  satisfaction  being  a condition precedent for the exercise of the power  conferred on  the executive, the Court can always examine whether  the requisite  satisfaction was arrived at by the authority;  if it  is not, the condition precedent to the exercise  of  the power  would not be fulfilled and the exercise of the  power would  be bad. The simplest case is where the authority  has not  applied its mind at all; in such a case, the  authority could  not  possibly  be satisfied as regards  the  tact  in respect of which it is required to be satisfied. [66E-H]     Emperor  v. Shibnath Banerjee & Ors., AIR (1943)  FC  75 and  Khudi Ram Das v. State of West Bengal & Ors., [1975]  2 SCR 832, referred to.     In  this case, it is quite apparent that  the  so-called factual  mis-statements listed as items ’A’ to ’F’ in  para- graph 44 of the grounds of detention are not  mis-statements at  all. The High Court rightly held that the  alleged  mis- takes  or  infirmities pointed out were not so  material  or serious in nature as to vitiate the impugned order of deten- tion and rightly observed that the facts stated in paragraph 44  of  the  grounds cannot be read  in  isolation  and  the grounds  of  detention have to be read as a whole  with  the accompanying  documents and material. The grounds of  deten- tion was only one, viz., that the detenu was engaged 51 in  activities  prejudicial to the augmentation  of  foreign exchange  and  therefore it became necessary in  the  public interest to place him under detention. It cannot be said  on a perusal of the grounds that there was no material on which

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the detaining authority could have acted. [74E; 78A-B]     (b)  The contention that, even if one of the grounds  or reasons  which  led to the subjective  satisfaction  of  the detaining  authority  is  non-existent  or  misconceived  or irrelevant, the order of detention would be invalid since it is  not  possible to predicate as to whether  the  detaining authority would have made an order for detention even in the absence  of  non-existent or irrelevant  ground,  cannot  be accepted.  That principle was enunciated by this Court  some 30  years ago. With the change in law brought about  by  the introduction of s. 5A of the COFEPOSA Act that though one or more  of  the grounds of detention were found to  be  vague, non-existent,  not  relevant, not connected,  irrational  or invalid for any other reason whatsoever, the detention could be  sustained  on the remaining grounds, that  principle  no longer holds goods. [63A-C]     Shibban  Lal  Saxena v. State of Uttar Pradesh  &  Ors., [1954] S.C.R. 418; Dr. Ram Manohar Lohia v. State of Bihar & Ors.,  [1966] 1 S.C.R. 709 and Pushkar Mukherjee &  Ors.  v. State of West Bengal, [1969] 2 S.C.R. 635; referred to.     Mohd.  Shakeel  Wahid Ahmed v. State  of  Maharashtra  & Ors.,  [1983] 2 S.C.R. 614; Asha Devi v. K.  Shivraj,  Addi- tional  Chief Secretary, [1979] 2 S.C.R. 215  and  Kurjibhai Dhanjibhai  Patel v. State of Gujarat, [1985] 1  Scale  964; distinguished.     (c) Sufficiency of grounds is not for the Court but  for the detaining authority for the formation of his  subjective satisfaction that the detention of a person under s. 3(1) of the COFEPOSA Act is necessary with a view to preventing  him from acting in any manner prejudicial to the augmentation of foreign  exchange. The Act is a law relating  to  preventive detention. That being so, the power of detention exercisable under sub-s. (1) of s. 3 of the Act is subject to the  limi- tations imposed by the Constitution. When the liberty of the subject is involved, it is the bounden duty of the court  to satisfy itself that all the sate guards provided by the  law have been scrupulously observed and that the subject is  not deprived  of his personal liberty otherwise than in  accord- ance  with  law.  Nevertheless, the community  has  a  vital interest in the proper enforcement of its laws, particularly in  an  area such as conservation of  foreign  exchange  and prevention  of smuggling activities in  dealing  effectively with persons engaged in such smuggling and foreign exchange 52 rackteering  by ordering their preventive detention  and  at the  same time, in assuring that the law is not  used  arbi- trarily  t9  suppress the citizen of his right to  life  and liberty.  The  Government  must therefore  ensure  that  the constitutional safeguards of Art. 22(5) read with subs.  (1) of s. 3 of the Act are fully complied with. [65A-B]     Mangalbhai Motiram Patel v. State of Maharashtra, [1980] 4  S.C.C. 470 and Narendra Purshotam Umrao v.  B.B.  Gujral, [1979] 2 S.C.R. 315; relied on.     In the instant case there was no failure on the part  of the Government to discharge its obligation under Art. 22(5). The  relevant records of the Enforcement Directorate  placed before  us clearly show that there was  sufficient  material for  the  formation of the subjective  satisfaction  of  the detaining authority under sub-s.(1) of s. 3 of the Act. They also show that the detenu was afforded a reasonable opportu- nity  for  making an effective  representation  against  his detention. [66C-D]     3. (a) Preventive detention is an extraordinary  measure resorted  to by the State on account of  compulsive  factors pertaining to maintenance of public order, safety of  public

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life and the welfare of the economy of the country. The need for this extraordinary measure was realised by the  founding fathers  of the Constitution as an inevitable necessity  and hence a specific provision has been made in cl. (3) of  Art. 22 providing for preventive detention. Placing the interests of  the  nation above the individual liberty  of  the  anti- social and dangerous elements who constitute a grave  menace to society by their unlawful acts, the preventive  detention laws have been made for effectively keeping out of  circula- tion  the  detenus during a prescribed period  by  means  of preventive  detention.  The  underlying  object  cannot   be achieved if the detenu is granted parole and brought out  of detention. Even if any conditions are imposed with a view to restrict  the movements of the detenu while on  parole,  the observance of those conditions can never lead to an equation of the period of parole with the period of detention. Due to the spectacular achievements in modern communication system, a  detenu, while on parole, can sit in a room in a house  or hotel and have contracts with all his relations, friends and confederates in any part of the country or even any part  of the  world and thereby pursue his unlawful activities if  so inclined. It will, therefore, be futile to contend that  the period of parole of a detenu has all the trappings of actual detention in prison and as such both the periods should find a natural merger and they stand denuded of their distinctive characteristics.  It will not be out of place to  point  out here that inspite of the Criminal Procedure Code providing 53 for release of the convicted offenders on probation of  good conduct, it expressly provides, when it comes to a  question of  giving  set-off to a convicted person in the  period  of sentence,  that only the actual pre-trial  detention  period should count for set-off and not the period of bail even  if bail  had been granted subject to stringent  conditions.  In contrast.  in  so  far as preventive  detentions  under  the COFEPOSA  Act are concerned. it has been  specifically  laid down  in  s. 12(6) that a person against whom  an  order  of detention  has been passed shall not be released on bail  or bail bond or otherwise and that any revocation or  modifica- tion of the order of detention can be made by the Government in exercise of its power under s. 11. [78E-H; 79G]     (b) The question whether the period of parole should  be treated  as part of the detention period itself  was  elabo- rately considered by this Court in Smt. Poonam Lata v.  M.L. Wadhawan & Ors., and it was held therein that the period  of parole has to be excluded in reckoning the period of  deten- tion under sub-s. (1) of s. 3 of the COFEPOSA Act. [78C]     Smt. Poonam Lata v. M.L. Wadhawan & Ors. J.T., [1987]  2 S.C. 204, relied on.     4.  The  respondents  have  placed  sufficient  material before  the  Court to show that the  alleged  representation addressed to the President of India was neither filed by the detenu  nor was it received at the President’s  Secretariat. The  attempt to assail the order of detention on the  ground of  violation of the constitutional sate guard enshrined  in Art.  22(5)  and the violation of s. 11 of the  Act  by  the Central  Government is a well planned and ingenuous move  on the part of the detenu. The facts revealed not only  warrant an inference that the detenu and his associates have gone to deplorable  lengths  to create evidence  favourable  to  the detenu but arouse convulsive thoughts in our minds about the efficiency  and integrity of the concerned sections  of  the President’s Secretariat. The case with which and the fascile manner in which the detenu’s agent Ashok Jain claims to have entered  the President’s Secretariat and delivered  the  Dak

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and obtained an endorsement of acknowledgement in a copy  of the  representation  and the length to which  the  concerned Secretariat staff have gone to give credence to the  version of  Ashok Jain not only reveals the deep fall  in  standards but  also  lack  of security and vigilance.  We  feel  fully persuaded  to  hold  that this is a fit case  in  which  the detenu,  the  petitioner, Ashok Jain and all  other  persons responsible for the fabrication of false evidence should  be prosecuted lot the offences committed by them. We defer  the passing of 54 final orders on the application filed under s. 340, Cr. P.C. till  the investigation by the Central Bureau of  Investiga- tion is completed. [80E-F; 82F-H; 83A-B]

JUDGMENT:     APPELLATE/ORIGINAL   JURISDICTION: Special  Leave  Peti- tion (CRL.) No. 1370 of 1986.     From  the  Judgment and Order dated 23.5.  1986  of  the Bombay High Court in Crl. W.P. No. 385 of 1986. AND WRIT PETITION NO. 363 OF 1986. (Under Article 32 of the Constitution of India).     G.L. Sanghi, D. Canteenwala, V.B. Agarwala, B.R. Agarwa- la and Miss Vijay Lakshmi Mannen for the Petitioner.     K.  Parasaran, Attorney General, C.V. Subba Rao  and  A. Subba Rao for the Respondent. The following Judgment of the Court was delivered:     This  petition  for special leave directed  against  the judgment  and  order of the Bombay High Court dated  May  3, 1986,  and the connected petition under Art. 32 of the  Con- stitution  raise  common questions and  therefore  they  are disposed of by this common order. The petitioner by a  peti- tion  under Art. 226 filed before the High Court prayed  for the  issuance of a writ of habeas corpus which is  also  the prayer  before us, for the release of her  husband  Mohanlal Jatia,  who has been detained by an order of the  Additional Secretary  to the Government of India, Ministry of  Finance, Department  of Revenue dated December 13, 1985 under  sub-s. (1)  of s. 3 of the Conservation of Foreign Exchange &  Pre- vention of Smuggling Activities Act, 1974 on being satisfied that it was necessary to detain him with a view to  prevent- ing him from acting in any manner prejudicial to the augmen- tation of foreign exchange.     Intelligence  gathered  by the  Directorate  of  Revenue Intelligence, Bombay was that one Subhash Gadia, the  broth- er-in-law  of  the detenu Mohanlal Jatia, a  very  rich  and prosperous  businessman of Bombay, was  under-invoicing  the imports of yarn from Japan. On the 55 basis of the said information the officers of the  Director- ate of Revenue Intelligence and officers the Customs, Bombay searched his residential premises at A- 121, Sea Lord  Cuffe Parade,  Colaba, Bombay under the Customs Act, 1962 on  June 27, 1985 which resulted in seizure of certain documents.  As the  seized  documents not only revealed  violation  of  the provisions  of  the Customs Act but also  indicated  certain payments  and transactions in violation of the  Foreign  Ex- change Regulation Act, 1973, the matter was referred to  the office of the Enforcement Directorate for purposes of inves- tigation  from the angle of the Foreign Exchange  Regulation Act  on  October 24, 1985. The aforesaid Subhash  Gadia  was summoned under s. 40 of the Foreign Exchange Regulation  Act

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and his statement was recorded by R.C. Singh, an officer  of the Enforcement Directorate, Bombay on November 5, 1985.  In his  statement  of even date, Subhash Gadia stated  that  he went to Japan in 1970 seeking employment with a  proprietory concern  known as Messrs Greenland Corporation, Tolo  Build- ing, Osaka, Japan owned by a Nepali national and was engaged in  exporting yarn, fibre, fabrics, chemicals etc. to  India and Middle-East countries. Messrs J.M. Trading  Corporation, 701, Tulsiani Chambers, 212 Nariman Point, Bombay (of  which Mohanlal Jatia is a partner). are the sole-selling agents of Messrs Greenland Corporation for yarn and fibre. He  further revealed  that  Satyanarayan  Jatia, the  eider  brother  of Mohanlal  Jatia  who is the partner of Messrs  J.M.  Trading Corporation,  Bombay had been staying in Japan for  some  35 years  and was the sole representative of  Messrs  Greenland Corporation  in Japan. While explaining the entries  in  the seized  documents from his residence on June 27, 1985,  Sub- hash Gadia admitted that the bunch marked S.G. 6  containing pages 1 to 94 are written by him in his own writing and that these  contained accounts relating to his trade or  business including  imports  and cash transactions and  payments.  He further  confirmed  that all the transactions  reflected  in these documents were his real business transaction  dealings and some of which were not reflected in his regular  account books. While explaining page 94 of the seized bunch S.G.  4. he  stated that this page contained coded account in  Indian rupees of his firm Messrs Piyush Corporation and that on the left  side of this page credit entries were shown in  Indian rupees  with two zeros (00) missing and that  while  writing his  account he had deleted two zeros in the credit side  as well as debit side (right side) of the page. While  decoding the  codes he stated that the figure 8582/38 written on  the right hand side was actually Rs.8,58,238 and this amount had been  debited  against A/S investment.  Further,  that  A/S’ investment  was his private investment abroad in US  dollars which had been utilised by him for under-invoicing of sever- al imports etc. 56     Paragraph 44 of the grounds of detention revealed trans- actions  relating  to the detenu Mohanlal Jatia  and  it  is extracted: "44. When confronted with the documents seized from  Subhash Gadia’s residence even though you have denied any connection in respect of various unauthorised transactions between you, Greenland  Corporation.  Japan and others  abroad,  but  the following  documents  clearly revealed that  you  have  been indulging in various unauthorised transactions in violations of provisions of Foreign Exchange Regulation Act. 1973.       A. Page338  Trial Balance of Greenland        S.G. 6      Corporation    entries    of                    ML, GN, RN, R.G.T. and             Gadia  admits  before  that                            they are Jatia’s account.       B.     "   M.L. Jatia’s i.e. your account                  maintained in Japan, how-                  ever. you admit receipt of                  Gifts by your children such                  as T.V., Video and M.V.Parts.       C. Page215  Keeping U.S. $ 2 lakhs in       S.G. 6      fixed deposit on 2.6.83 in                   Kamal Account, also inclu-                   ding 20 lakhs $ (dollars).       D. Page335  American dollar account as       S.G. 6       on 31.1. 1984.       E. Page318  Account  in  Japanese Yen  Final posi-

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     S.G. 6      total of 141147.27.        tion of                                              Bombay.                  F.D.R. amount of Japanese                  Yen 1093 1471.16 to be                  equally  divided  between                  Yen. GN, SN and Laxmiji                  account/ Capital account. 57      F. Page 214-15  U.S.  $ 78000/-     converted      S.G. 6            into  Rs.9, 16,500/-  commiss-                        ion of."     The  Additional  Secretary to the Government  of  India, Ministry of Finance, in exercise of his powers conferred  by sub-s.  (1) of s. 3 of the Conservation of Foreign  Exchange and  Prevention of Smuggling Activities Act,  1974  (’COFEP- OSA’) ordered the detention of the aforesaid Mohanlal  Jatia by an order dated December 13, 1985 on being’ satisfied that it  was necessary to  detain him "with a view to  preventing him  from acting in any manner prejudicial to the  augmenta- tion of foreign exchange". The petitioner thrice  approached the High Court with petitions under Art. 226 of the  Consti- tution seeking to challenge the impugned order of detention. Immediately after the passing of the impugned order i.e.  on December  16, 1985, she moved the first of  these  petitions being W.P. No. 2530/85 for an appropriate writ or  direction to  quash  the impugned order of detention and  applied  for stay.  The Writ Petition was admitted but stay was  refused. On  appeal,  a  Division Bench in Writ  Appeal  No.  1162/85 granted  interim  stay till the disposal of the  appeal.  On February 28, 1986 the Division Bench dismissed the appeal as well  as  the Writ Petition. By its subsequent  order  dated March  4, 1986 the Division Bench granted stay of  execution upto  April  4, 1986 on certain terms  and  conditions.  The petitioner filed a petition under Art. 136 in this Court for grant  of special leave being SLP No. 3742/86. The Court  by its  order  dated April 3, 1986 dismissed the  petition  and ordered  the  detenu to appear before  the  Commissioner  of Police,  Bombay on the next day i.e. on April 4,  1986  when the  impugned order of detention was to be served  upon  him and  directed that the impugned order was to  become  effec- tive. The further direction made by this Court was that  the detenu should immediately be released on parole for a period of 10 days subject to certain terms and conditions. On April 4,  1986  the  detenu appeared before  the  Commissioner  of Police, Bombay when he was served with the impugned order of detention  together  with the grounds of detention  and  the relevant documents. In compliance with the direction of this Court.  the detenu was released on parole. On April 7,  1986 the  petitioner filed second petition under Art. 226 of  the Constitution  being WP No. 385/86 for quashing the  impugned order  of detention along with an application for  extending the  period  of parole. On April,14,1986 the  parole  period having expired, the detenu was taken into custody and lodged in the Central Prison, Bombay. The Writ Petition came up for hearing before the High Court on April 18, 1986 and admitted but the application for extending the period of parole was 58 rejected.  Aggrieved by the refusal of interim  relief,  the petitioner  again  moved this Court under Art.  136  of  the Constitution which was dismissed as withdrawn.     It  appears  that the impugned order  of  detention  was mainly  challenged on two grounds, namely: (1) There was  no material on which the satisfaction of the detaining authori- ty  could  be reached that the detention of the  detenu  was necessary  under  s.  3(1) of the COFEPOSA with  a  view  to

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preventing him from acting in any manner prejudicial to  the augmentation  of foreign exchange. And (2) There  was  total non-application of mind on the part of the detaining author- ity  to  the material on record, and in  particular  to  the factual  misstatements  contained  in paragraph  44  of  the grounds  of detention as detailed in entries ’A to  F’.  The Division Bench of the High Court did not feel impressed with any of these submissions and by its judgment and order dated May  2/3, 1986 dismissed the Writ Petition.  Thereafter,  on May 6, 1986 the petitioner filed the present petition  under Art.  136  of the Constitution. On July 11,  1986  she  also filed  a  petition under Art. 32 challenging  the  continued detention of her husband. On July 18, 1986 the Court  issued notice  both  on the Special Leave Petition as well  as  the Writ  Petition and in the meanwhile directed that the  peti- tioner’s husband be released on parole for a week. The Court by  its  subsequent order dated July 25, 1986  extended  the period of parole till August 20, 1986.     The  Writ Petition filed in this Court on July 11,  1986 is principally based on the ground that there was failure on the part of the detaining authority to consider the  alleged representation  dated  April  11, 1986 made  by  the  detenu against  the  impugned order of detention addressed  to  the President  of  India which was presented through  one  Ashok Jain  at the President’s Secretariat on April 15,  1986  and there  had  thus been an infraction  of  the  constitutional safeguards enshrined in Art. 22(5) and s. 11 of the COFEPOSA which rendered the continued detention of the detenu without the  due process of law and thus  illegal,  unconstitutional and void. The other substantial question raised is that R.C. Singh  was not a gazetted officer of Enforcement within  the meaning  of  s. 40 of the Act and therefore  the  statements recorded  by him could not be regarded as  valid  statements under  s. 40 and thus did not form the basis upon which  the satisfaction of the detaining authority could be reached.     The respondents have filed a counter-affidavit sworn  by S.K. Chaudhary, Under Secretary to the Government of  India, Ministry of 59 Finance, Department of Revenue controverting the  allegation that  the  detenu addressed any such representation  to  the President  of India or that the alleged  representation  was received at the President’s Secretariat. It has been averred that  the President’s Secretariat has informed the  Ministry of  Finance, Department of Revenue that no such  representa- tion  was received from the detenu. Along with the  counter- affidavit,  the respondents have filed copies of the  letter of the Under Secretary to the Government of India,  Ministry of  Finance,  Department  of Revenue dated  August  4,  1986 addressed  to the Under Secretary,  President’s  Secretariat and  of the reply of even date sent by the Under  Secretary, President’s  Secretariat  to him which shows  that  no  such representation  had been received in the President’s  Secre- tariat,  as alleged. They have also filed a note  explaining the  manner in which the dak is acknowledged at  the  Presi- dent’s  Secretariat. There is a further affidavit  filed  by K.C.  Singh,  Deputy  Secretary to the  President  of  India explaining the manner of handling the dak at the Rashtrapati Bhawan. The petitioner has filed an affidavit of Ashok  Jain claiming  to be a friend of the Jatia family supporting  the assertion  that he handed over the representation in  person at the Rashtrapati Bhawan on April 15, 1986.     During  the pendency of the proceedings, the Union  Gov- ernment has made an application under s. 340 of the Code  of Criminal  Procedure,  1973 for prosecution  of  the  persons

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responsible  for forging the document purporting to  be  the alleged  representation made by the detenu under s. 8(b)  of the  COFEPOSA on April 15, 1986 as, in fact, no such  repre- sentation  was ever made, and for making certain  interpola- tions in the dak register kept at the President’s Secretari- at. They have produced in a sealed envelope the original dak register  maintained at the Rashtrapati Bhawan in which  the alleged interpolations have been made. We are informed  that the  matter  has been handed over to the Central  Bureau  of Investigation  for  investigation. We shall  deal  with  the application under s. 340 of the Code later.     In  support  of  these petitions,  learned  counsel  has mainly advanced the following contentions, namely: (1) As is evident from the grounds of detention, the detaining author- ity relied upon the statements recorded by R.C. Singh on the assumption  that they were valid statements under s.  40  of the  Act although they were in reality not so,  inasmuch  as R.C.  Singh  was  not a ’gazetted  officer  of  Enforcement’ within  the  meaning  of s. 40 and therefore  there  was  no material on which the satisfaction of the detaining authori- ty  could be reached. (2) In a habeas corpus  petition,  the burden was entirely upon the respon- 60 dents  to produce the relevant records and  to  substantiate that the detention was strictly according to law. The  fail- ure  on the part of the respondents to produce the  relevant notification showing that R.C. Singh was a gazetted  officer of Enforcement within s. 40 of the FERA when he recorded the statements  in question must necessarily lead to the  infer- ence that he was not a gazetted officer of Enforcement.  (3) The  impugned order of detention was void ab initio  and  it could not be sustained by recourse to the de facto  doctrine or  any  assumption  that R.C. Singh was  acting  under  the colour o[ his office as a gazetted officer of Enforcement or in treating the statements to be valid being relatable to s. 39(b)  of the FERA. (4) It is not possible to  predicate  to what  extent, and in what manner, the mind of the  detaining authority was influenced by his wrongful assumption that the statements  recorded  by R.C. Singh who was not  a  gazetted officer of Enforcement, were statements made under s. 40  of the FERA, and even assuming that the statements recorded  by R.C. Singh could be treated to be statements relatable to s. 39(b)  of  the FERA, it is not possible to say  whether  the detaining  authority would have based his satisfaction  upon such material. (5) There was non-application of mind on  the part of the detaining authority as the grounds of  detention are based on several factual misstatements. According to the learned counsel, the factual errors were self-evident as the entries relied upon in paragraph 4 of the grounds of  deten- tion,  do  not  find place in the account  books  of  Messrs Greenland Corporation. The failure of the Central Government to  place before the detaining authority, the  original  ac- count  books of Messrs Greenland Corporation,  deprived  the detaining authority to apply his mind to the correctness  or otherwise of the facts stated therein. (6) There was infrac- tion  of  the constitutional safeguards  enshrined  in  Art. 22(5)  inasmuch  as  there was failure on the  part  of  the detaining authority to consider the representation filed  by the  detenu under s. 8(b) of the COFEPOSA through one  Ashok Jain  and received at the President’s Secretariat  on  April 15,  1986 and therefore the impugned order of detention  was vitiated  and  the  continued detention of  the  detenu  was rendered  illegal and void. Other subsidiary questions  were also raised. Having given the matter our anxious  considera- tion,  we  are of the considered opinion that  none  of  the

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contentions can prevail.     In order to deal with the rival contentions advanced, it is  necessary  to  set out the relevant  provisions  of  the Foreign Exchange Regulation Act, 1973. The Foreign  Exchange Regulation  Act,  1973 is an Act, as reflected in  the  long title. to consolidate and amend economic development of  the country. The legislation has been brought in to           61 implement the Government policy for conservation of  foreign exchange  and for removing the difficulties in  implementing the  same.  The provisions of ss. 3, 4 and 5 deal  with  (i) classes  of  officers of Enforcement; (ii)  appointment  and powers  of officers of Enforcement and (iii) entrustment  of functions of Director or other officer of Enforcement. These provisions provide as follows:               "3. Classes of officers of  Enforcement--There               shall be the following classes of officers  of               Enforcement, namely:-               (a) Directors of Enforcement;               (b) Additional Directors of Enforcement;               (c) Deputy Directors of Enforcement;               (d) Assistant Directors of Enforcement; and                       (e)  Such other class of  officers  of               Enforcement  as may be appointed for the  pur-               poses of this Act."               "4.  Appointment  and powers  of  officers  of               Enforcement.:--(1)The  Central Government  may               appoint  such persons as it thinks fit  to  be               officers of Enforcement.               (2)  Without  prejudice to the  provisions  of               sub-section  (1), the Central  Government  may               authorise  a  Director of  Enforcement  or  an               Additional Director of Enforcement or a Deputy               Director of Enforcement or an Assistant Direc-               tor  of  Enforcement to  appoint  officers  of               Enforcement  below  the rank of  an  Assistant               Director of Enforcement.               (3) Subject to such conditions and limitations               as  the  Central  Government  may  impose,  an               officer of Enforcement may exercise the powers               and discharge the duties conferred or  imposed               on him under this Act."               "5.  Entrustment of functions of  Director  of               other  officer  of Enforcement:-  The  Central               Government  may, by order and subject to  such               conditions and limitations as it thinks fit to               impose,  authorise any officer of  customs  or               any  Central  Excise  Officer  or  any  police               officer  or any other officer of  the  Central               Government  or a State Government to  exercise               such  of the powers and discharge such of  the               duties  of the Director of Enforcement or  any               other officer of Enforce-               62               ment under this Act as may be specified in the               order.               S. 39 deals with the power of the Director  of               any  other officer of Enforcement  to  examine               persons and provides:               "39. Power to examine persons--The Director of               Enforcement  or any other officer of  Enforce-               ment authorised in this behalf by the  Central               Government, by general or special order,  may,               during the course of any investigation or pro-               ceeding under this Act ,--

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             (a)  require any person to produce or  deliver               any document relevant to the investigation  or               proceeding;               (b)  examine  any person acquainted  with  the               facts and circumstances of the case."               Sub-s. (1) ors’. 40 reads as follows:               "40. Power to summon persons to give  evidence               and produce documents--(1) Any gazetted  offi-               cer of Enforcement shall have power to  summon               any  person  whose  attendance  he   considers               necessary  either to give evidence or to  pro-               duce  a  document  during the  course  of  any               investigation or proceeding under this Act."     The  main  thrust of the argument of Shri  G.L.  Sanghi, learned counsel appearing for the petitioner revolves around mainly  three  aspects: (1) R.C. Singh was  not  a  Gazetted Officer of Enforcement and therefore statements recorded  by him  had no evidentiary value and thus they could  not  form the  basis  upon  which the satisfaction  of  the  detaining authority could be reached. (2) There was total  nonapplica- tion  of mind by the detaining authority to several  factual misstatements as detailed in entries ’A to F’ in the grounds of detention which vitiated the impugned order of detention. And  (3) The failure of the Sponsoring authority to  forward the account books seized during the course of search at  the residential premises of Subhash Gadia shows that the detain- ing authority proceeded to make the impugned order of deten- tion  without  due  application of mind.  According  to  the learned  counsel,  if  there is one  principle  more  firmly settled than any other in this field of jurisprudence relat- ing  to preventive detention, it is that even if one of  the grounds or reasons which led to the subjective  satisfaction of the detaining authority is non-existent or misconceived 63 or irrelevant, the order of detention would be invalid since it is not possible to predicate as to whether the  detaining authority  would have made all order for detention  even  in the  absence of non-existent or irrelevant ground. His  con- tention is that the principle enunciated by this Court  some 30  years ago in Shibban Lal Saksena v. The State  of  Uttar Pradesh & Ors., [1954] SCR 418 and in Dr. Ram Manonar  Lohia v. State of Bihar & Ors., [1966] 1 SCR 709 which it  reiter- ated  later m Pushkar Mukherjee & Ors. v. The State of  West Bengal, [1969] 2 SCR 635 still holds good despite the change in the law brought about by the introduction of s. 5A of the Act that though one or more of the grounds of detention were found to be vague, non-existent, not relevant, not  connect- ed,  irrational or invalid for any other reason  whatsoever, the  detention could be sustained on the remaining  grounds. He seeks to draw sustenance from the decision of the Consti- tution  Bench of this Court in Mohd. Shakeel Wahid Ahmed  v. State  of  Maharashtra  & Ors., [1983] 2  SCR  614.  We  are afraid, the contention cannot prevail. The decision in Mohd. Shakeel’s case is clearly distinguishable. In Mohd. Shakeel’s case, three of the four grounds of deten- tion  on which the appellant was detained were held  by  the High  Court to be bad for one reason or another but it  held that the remaining ground did not suffer from any defect and was  enough  to sustain the order of detention.  On  appeal, Shri  Jethmalani, learned counsel for the detenu, sought  to challenge  the constitutional validity of s. 5A of  the  Act and the case was therefore referred to a Constitution Bench. At  the hearing, Shri Jethmalani confined his submission  to an  altogether different point which  ultimately  prevailed, namely, that the remaining ground of detention was also  bad

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for  the  reason that there was failure on the part  of  the State Government to place before the detaining authority the opinion  which the Advisory Board had recorded in favour  of another detenu Shamsi who was also detained for his involve- ment in the same transaction on an identical ground based on similar’and  identical facts. It was held that although  the opinion  of the Advisory Board that there was no  sufficient cause  for Shamsi’s detention may not have been  binding  on the  detaining authority which ordered the detention of  the detenu, but the opinion of the Advisory Board in Shamsi case was  an  important consideration which should and  ought  to have  been  taken into account by  the  detaining  authority before  passing the order of detention in that case. It  was observed  that  the  Court could not  exclude  a  reasonable probability that since the Advisory Board had not  sustained Shamsi’s  detention on a ground which was common to him  and the  detenu, the detaining authority would have. if at  all, passed the order of detention against the detenu 64 on  the  three remaining grounds which had been held  to  be bad.  The decision is Shamsi’s case turned on its own  facts and  certainly is not an authority for the proposition  con- tended  for. So also in Ashadevi v.K. Shiveraj, Addl.  Chief Secretary to the Government of Gujarat & Anr., [1979] 2  SCR 2  15 on which reliance was placed there was failure on  the part  of the State Government to apprise the  detaining  au- thority  of the fact that the detenu’s request to  have  the presence  of  and  consultation with his  counsel  had  been refused, and that the confessional statement upon which  the detaining authority had relied, had been retracted while  he was  in  judicial custody, rendered the  impugned  order  of detention  invalid  and illegal because there  was  complete non-application  of mind by the detaining authority  to  the most material and vital facts. The other decision in Kurjib- hai,Dhanjibhai  Patel v. State of Gujarat & Ors.,  [1985]  1 Scale  964 is also distinguishable. In that case, there  was failure  on  the  part of the sponsoring  authority  in  not furnishing the relevant material to the detaining authority, namely,  the  reply of the detenu to the show  cause  notice issued  in  the adjudication proceedings undertaken  by  the Customs  authorities which was held to be the most  relevant material  which ought to have been placed before it. It  was held  that the question was not whether the  material  which was withheld from the detaining authority formed part of any separate  or independent proceedings like  the  adjudication proceedings as held by the High Court, but the real question was whether the material was relevant and would have  influ- enced  the mind of the detaining authority. In the  counter- affidavit filed by the Under Secretary to the Government  of India,  Ministry  of Finance it had been  averred  that  the representation  of  the detenu along with his reply  to  the show  cause  had been considered by the Advisory  Board  and after  considering all the facts it was of the opinion  that there  was sufficient cause for detention. It was held  that such  ex post facto consideration of the detenu’s  reply  to the show cause could not fill up the lacuna of non-consider- ation thereof by the detaining authority before passing  the order  of  detention. Both these decisions  proceed  on  the well-settled  principle  that if material  and  vital  facts which  would influence the mind of the  detaining  authority one way or the other on the question whether or not to  make the  detention  order are not placed, it would  vitiate  its subjective satisfaction rendering the detention order  ille- gal. We fail to see the relevance of these decisions to  the present case.

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   Before  touching upon the merits, we wish to make a  few observations.  It  is  not suggested at  the  bar  that  the grounds  for detention do not set out the facts with  suffi- cient  degree of particularity or that they do  not  furnish sufficient nexus for forming the subjective satisfaction 65 of the detaining authority. ]he impugned order of  detention was therefore not challenged on the ground that the  grounds furnished were not adequate or sufficient for the  satisfac- tion  of  the detaining authority or for the  making  of  an effective representation. Sufficiency of grounds is not  for the Court but for the detaining authority for the  formation of  his  subjective  satisfaction that the  detention  of  a person under s. 3(1) of the Act is necessary with a view  to preventing him from acting in any manner prejudicial to  the augmentation  of  foreign exchange.  In  Mangalbhai  Motiram Patel  v. State of Maharashtra & Ors., [1980] 4 SCC 470,  it was observed at p. 477 of the Report:               "The  Conservation  of  Foreign  Exchange  and               prevention  of Smuggling Activities Act,  1974               is enacted to serve a laudable object. It is a               measure to prevent smuggling of goods into  or               out of India and to check diversion of foreign               exchange  by immobilising the persons  engaged               in  smuggling, foreign  exchange  racketeering               and related activities by preventive detention               of  such  persons. Violations of  foreign  ex-               change  regulations and  smuggling  activities               are having an increasingly deleterious  effect               on the national economy and thereby a  serious               adverse  effect on the security of the  State.               Such  economic offences disrupt  the  economic               life of the community as a whole. It is neces-               sary  to protect the basic economic  order  of               the  nation.  Nevertheless, the Act is  a  law               relating  to preventive detention. That  being               so,  the power of detention exercisable  under               sub-s.  (1) of s. 3 of the Act is  subject  to               the  limitations imposed by the  Constitution.               As observed by this Court in Narendra  Pursho-               tam  Umrao v. B.B. Gujral, [1979] 2 SCR 3  15,               when  the liberty of the subject is  involved,               whether  it is under the Preventive  Detention               Act  or the Maintenance of  Internal  Security               Act  or the Conservation of  Foreign  Exchange               and prevention of Smuggling Activities Act  or               any other law providing for preventive  deten-               tion,"               "it is the bounden duty of the court to satis-               fy itself that all the safeguards provided  by               the  law have been scrupulously  observed  and               that  the subject is deprived of his  personal               liberty  otherwise  than  in  accordance  with               law." Nevertheless, as observed by the Court in Mangalbhai Motiram Patel’s case: 66               "The  community  has a vital interest  in  the               proper  enforcement of its laws,  particularly               in  an  area such as conservation  of  foreign               exchange  and prevention of smuggling  activi-               ties  in  dealing  effectively  with   persons               engaged in such smuggling and foreign exchange               rackteering   by  ordering  their   preventive               detention and at the same time, assuring  that

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             the  law is not used arbitrarily  to  suppress               the citizen of his right to life and liberty." The Government must therefore ensure that the constitutional safeguards of Art. 22(5) read with sub-s. (1) of s. 3 of the Act  are fully complied with. In the instant case,  however, there  was  no infraction of the  constitutional  safeguards contained in Art. 22(5). We are satisfied that there was  no failure  on  the  part of the Government  to  discharge  its obligation  under  Art. 22(5). The relevant records  of  the Enforcement  Directorate  have been placed before  us.  They clearly  show  that there was sufficient  material  for  the formation  of the subjective satisfaction of  the  detaining authority  under  sub-s. (1) of s. 3 of the Act.  They  also show  that the detenu was afforded a reasonable  opportunity for  making an effective representation against  his  deten- tion.     It has long been established that the subjective  satis- faction  of the detaining authority as regards  the  factual existence  of the condition on which the order of  detention can  be made i.e. the grounds of detention  constitutes  the foundation  for the exercise of the power of  detention  and the  Court  cannot be invited to consider the  propriety  or sufficiency of the grounds on which the satisfaction of  the detaining authority is based. Nor can the Court, on a review of  the grounds substitute its own opinion for that  of  the authority.  But  this  does not imply  that  the  subjective satisfaction  of  the detaining authority is  wholly  immune from the power of judicial review. It inferentially  follows that the subjective satisfaction being a condition precedent for  the exercise of the power conferred on  the  executive, the Court can always examine whether the requisite satisfac- tion  was  arrived at by the authority; if it  is  not,  the condition  precedent to the exercise of the power would  not be fulfilled and the exercise of the power would be bad. The simplest  case  is where the authority has not  applied  its mind at all; in such a case, the authority could not  possi- bly be satisfied as regards the fact in respect of which  it is required to be satisfied. See: Khudi Ram Das v. State  of West Bengal & Ors., [1975] 2 SCR 832, following the case  of Emperor v. Shibnath Banerjee & Ors., AIR (1943) FC 75. 67     The  substantive contention of learned counsel  for  the petitioner has therefore been that there was non-application of  mind  on  the part of the  detaining  authority  to  the grounds  of  detention and that there was violation  of  the constitutional  safeguards contained in Art. 22(5).  In  es- sence,  three questions arise, namely: (1) Whether  the  im- pugned order of detention was based on no material  inasmuch as R.C. Singh was not a gazetted officer of Enforcement  and therefore the statements recorded by him had no  evidentiary value  and  thus  could not form the basis  upon  which  his subjective satisfaction could be reached; and if not, wheth- er  the  statements recorded by him could be treated  to  be statements relatable to s. 39(b) of the FERA and could still form the basis for such satisfaction. (2) Whether there  was non-application of mind on the part of the detaining author- ity and therefore the impugned order of detention was bad as there  were factual mis-statements detailed in items A to  F of the grounds of the grounds of detention. And (3)  Whether there  was infraction of the constitutional safeguards  con- tained  in Art. 22(5) due to the failure on the part of  the Central  Government to consider the representation filed  by the detenu under s. 8(b) read with s. 11 of the Act, alleged to  have been presented through one Ashok Jain and  received at the President’s Secretariat on April 15, 1986 and  there-

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fore the continued detention of the petitioner was  rendered invalid  and  unconstitutional. We wish to deal  with  these contentions in seriatim in the order in which they have been advanced.     On  the first of these questions, we have no  hesitation in  repelling the contention that there was no  material  on which  the detaining authority could have based the  subjec- tive  satisfaction under sub-s. (1) of s. 3 of the Act.  The argument  of the learned counsel stems from  the  hypothesis that  R.C. Singh was not a gazetted officer  of  Enforcement within  the  meaning  of s. 40 of the FERA  when  he  issued summons  and recorded the statements and that even  assuming that the statements recorded by R.C. Singh could be  treated to  be statements failing under s. 39(b) of the Act,  it  is not  possible to say whether the detaining  authority  would have based his satisfaction upon such material. The  learned counsel  places emphasis on the word ’gazetted’ in s.  40(1) and  contends  that R.C. Singh for the first time  became  a gazetted officer of Enforcement on January 13, 1986 when his appointment  as  such was notified. According  to  him,  the detaining authority has relied upon the statements  purport- ing to be under s. 40(1) though in reality they were not so. According  to the learned counsel, there is a  sanctity  at- tached  to statements recorded under s. 40(1) of  the  FERA. That  is  so, because every person summoned  by  a  gazetted officer of Enforcement to make a statement under sub-s.  (1) of s. 40 is under a compulsion to state the  68 truth  on  the pain of facing prosecution under  sub-s.  (3) thereof. Further, sub-s. (4) provides that every such inves- tigation  or proceeding as aforesaid, shall be deemed to  be judicial proceeding within the meaning of ss. 193 and 224 of the Indian Penal Code, 1860. Such being the legal  position, the learned counsel contends that while a statement recorded by  a  gazetted  Enforcement Officer under s. 40(  1  )  can furnish  sufficient  and adequate material on the  basis  of which  the detaining authority can form his opinion, it  may not  be so with regard to statements recorded by an  officer of  Enforcement authorised in that behalf under s. 39(b)  of the FERA.     On  the other hand, learned counsel for the  respondents contends that there is no basis for the assertion that there was no material on which the detaining authority could  have formed the subjective satisfaction under sub-s. (1) of s.  3 of  the Act or that there was any factual  mis-statement  in the  grounds which showed that there was non-application  of mind  on his part. We may briefly summarise his  submission. Factually,  the  statements  were there  and  the  detaining authority  was  entitled  to act upon  the  statements.  The question  whether the statements could be acted upon or  not is not for the Court. A person summoned to make a  statement under  s.  40(1) has the right to object to  the  power  and authority of the officer issuing the summons. It must there- fore  logically follow that when the persons  summoned  like Subhash Gadia and Mohanlal Jatia were examined by R.C. Singh it was not open to others to raise objection that R.C. Singh was  competent to record the statements under s. 40(1).  The statements  made by them were not hit by s. 25 of  the  Evi- dence Act, 1872 and could be used against the detenu.  There is no substance in the contention that R.C. Singh was not  a gazetted  officer of Enforcement. The word  ’gazetted’  does not  imply  that the appointment of such officer  should  be published  in the official Gazette. All that is required  by s. 40(1) of the FERA that such officer recording the  state- ment  must be holding a gazetted post of an officer  of  En-

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forcement,  in  contradistinction to that  of  an  Assistant Officer  of  Enforcement  which is a  nongazetted  post.  It cannot  be  disputed that R.C. Singh had been  appointed  as Enforcement Officer on an ad hoc basis on November 24,  1982 and  he  continued to function as such at the time  when  he recorded the statement under s. 40(1). The subsequent  noti- fication  issued by the Enforcement Directorate  on  January 13, 1986 was for his appointment on a regular basis. What is of  significance, it is said. is that at the time when  R.C. Singh  recorded the statements he was holding  the  gazetted post of an Enforcement Officer and discharging             69 the  functions attached to the post. There is, in our  opin- ion, consideration force in these submissions.     In any event, the learned counsel further contends  that R.C.  Singh was clothed with the insignia of office  and  he was  purporting  to exercise the functions and duties  of  a gazetted  officer of Enforcement under s. 40(1) of the  FERA and therefore the de facto doctrine was attracted. He relies upon  the  decision of this Court in Gokaraju  Rangaraju  v. State of Andhra Pradesh, [1981] 3 SCR 474 enunciating the de facto  doctrine,  born  of necessity and  public  policy  to prevent  needless confusion and endless mischief.  In  other words, he contends that where an officer acts under the law, it matters not how the appointment of the incumbent is  made so far as the validity of his acts are concerned.     We  are inclined to the view that in  this  jurisdiction there  is a presumption of regularity in the acts  of  offi- cials and that the evidential burden is upon him who asserts to  the contrary. The contention that R.C. Singh was  not  a gazetted  officer  of Enforcement within the meaning  of  s. 40(1) of the FERA appears to be wholly misconceived  besides being  an afterthought. The validity of appointment of  R.C. Singh to be an officer of Enforcement under this Act  cannot be  questioned.  The Directorate of Enforcement  have  along with  the counter-affidavit placed on  record  Establishment Order  No.  87/82 dated November 24, 1982 which  shows  that R.C. Singh along with 25 others was appointed by the  Direc- tor  to  be  an officer of Enforcement on  an  ad-hoc  basis against 30 per cent deputation quota. The subsequent  Estab- lishment Order No. 84/86 dated January 13, 1986 relied  upon by the petitioner shows that R.C. Singh along with 29 others was appointed as an officer of Enforcement on an officiating basis.  It  is not suggested that these  officers  were  not authorised by the Central Government to discharge the  func- tions  and  duties of an officer of Enforcement.  Under  the scheme of the Foreign Exchange Regulation Act, the Director- ate  of  Enforcement is primarily charged with the  duty  of administering  the  Act. S. 3 defines different  classes  of officers  of  Enforcement. The expression ’officers  of  En- forcement’  as  defined in s. 3 embraces within  itself  not only  (a)  a  Director (b) Additional  Director  (c)  Deputy Director and (d) Assistant Director of Enforcement but  also (e)  such other class of officers of Enforcement as  may  be appointed for the purpose of the Act. Obviously, R.C.  Singh who was Assistant Enforcement Officer having been  appointed as an officer of Enforcement on an ad-hoc basis in 1982 fell within  the category ’such other class of officers’  covered by s. 3(e). Sub-S.(1) of s. 4 provides that the 70 Central  Government may appoint such persons, as  it  thinks fit,  to  be  officers of Enforcement.  Sub-s.  (2)  thereof provides for delegation of such power of appointment by  the Central Government to a Director of Enforcement or an  Addi- tional  Director of Enforcement etc. to appoint officers  of

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Enforcement  below  the  rank of an  Assistant  Director  of Enforcement.  Sub-s. (3) of s. 4 of the FERA  provides  that subject  to such conditions and limitations as  the  Central Government  may impose, an officer of Enforcement may  exer- cise  the powers and discharge the duties conferred  or  im- posed  on  him  under the Act. Undoubtedly  R.C.  Singh  was discharging  his duties and functions as a gazetted  officer of  Enforcement under s. 40(1) of the FERA when he  recorded the  statements in question. In our opinion, the  expression ’gazetted officer of Enforcement’ appearing in s. 40(1) must take its colour from the context in which it appears-and  it means  any person appointed to be an officer of  Enforcement under s. 4 holding a gazetted post. There is no denying  the fact that R.C. Singh answered that description. The  conten- tion  that there was no material on the basis of  which  the detaining  authority could have based his subjective  satis- faction  on  the ground that R.C. Singh was not  a  gazetted officer of Enforcement within the meaning of s. 40(1) of the FERA cannot prevail.     Even if the contention that R.C. Singh was not a  gazet- ted officer of Enforcement within the meaning of s. 40(1) of the FERA were to prevail, it would be of little consequence. In  this case during the investigation statements  were  re- corded by B .T. Gurnsawhney, Assistant Director of  Enforce- ment  and  R.C.  Singh. There is no  dispute  regarding  the competence  of B.T. Gurusawhney to record  statements  under s. 40(1) of the FERA and the only question is as to  whether the  statements recorded by R.C. Singh under s. 40(1)  could be  acted  upon. If evidence is relevant the  Court  is  not concerned  with  the  method by which it  was  obtained.  In Barindra  Kumar Ghose & Ors. v. Emperor, ILR (1910) 37  Cal. 467  Sir Lawrence Jenkins repelling the contention that  the Court  must exclude relevant evidence on the ground that  it was obtained by illegal search or seizure, said at p. 500 of the Report: "Mr. Das has attacked the searches and has urged that, even if there was jurisdiction to direct the issue  of search  warrants, as I hold there was, still the  provisions of  the Criminal Procedure Code have been completely  disre- garded. On the assumption he has contended that the evidence discovered  by the searches is not admissible, but  to  this view  I cannot accede. For without in any way  countenancing disregard  of the provisions prescribed by the Code, I  hold that what would otherwise be relevant does not become irrel- evant because it was discovered 71 in  the  course of a search in which those  provisions  were disregarded". The question arose before the Judicial Commit- tee of the Privy Council in the well-known case of Kuruma v. Reginam,  [1955] 1 All ER 236. In dealing with the  question Lord  Goddard,  CJ.  delivering the judgment  of  the  Privy Council said:               "The test to be applied. both in civil and  in               criminal  cases, in considering  whether  evi-               dence is admissible, is whether it is relevant               to  the  matters  in issue. If it  is,  it  is               admissible and the Court is not concerned with               how it was obtained."               The learned CJ. further observed:                         "In  their Lordships’ opinion,  when               it is a question of the admission of  evidence               strictly it is not whether the method by which               it was obtained is tortuous but excusable, but               whether what has been obtained is relevant  to               the issue being tried." Again, the House of Lords in R.V. Sang, [1979] 2 All ER 1222

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reiterated the same principle that if evidence was  admissi- ble it matters not, how it was obtained. Lord Diplock  after considering  various  decisions on the point  observed  that however  much the judge may dislike the way in which a  par- ticular  piece of evidence was obtained  before  proceedings were  commenced, if it is admissible evidence  probative  of the accused’s guilt ’it is no part of his judicial  function to exclude it for this reason’ and added:               "He  has  no  discretion to  refuse  to  admit               relevant  admissible  evidence on  the  ground               that  it  was obtained by improper  or  unfair               means. The court is not concerned with how  it               was obtained. There  is  a long line of authority to support  the  opinion that  the  Court is not concerned with how evidence  is  ob- tained.  The  rule is however subject to an  exception.  The Judge  has a discretion to exclude evidence procured.  after the  commencement  of the alleged  offence,  which  although technically  admissible appears to the Judge to  be  unfair. The  classical example of such a case is where the  prejudi- cial  effect of such evidence would be out of proportion  to its  evidential  value. Coming nearer home.  this  Court  in Magraj  Patodia v.R.K. Birla & Ors., [1971] 2 SCR  118  held that the fact that a document which was procured by improper or even illegal means could not bar its admissibility 72 provided its relevance and genuineness were proved. In  R.M. Malkani v. State of Maharashtra, [1973] 2 SCR 417 the  Court applying  this principle allowed the tape-recorded conversa- tion  to be used as evidence in proof of a criminal  charge. In Pooran Mal etc. v. Director of Inspection (Investigation) of  Income-Tax Mayur Bhavan, New Delhi & Ors., [1974] 2  SCR 704  the Court held that the income-tax authorities can  use as  evidence  any information gathered from the  search  and seizure of documents and accounts and articles seized.  This being  the  substantive law, it follows that  the  detaining authority was entitled to rely upon the statements  recorded by R.C. Singh under s. 40(1) of the FERA. Even if R.C. Singh was  not competent to record such statements under s.  40(1) of  the  FERA, the statements were clearly relatable  to  s. 39(b) of the Act. It cannot therefore be said that there was no  material  on which the detaining  authority  could  have based  his subjective satisfaction under sub-s. (1) of s.  3 of the Act.     We  are unable to accept the submission of  the  learned counsel for another reason. Where an office exists under the law, it matters not how the appointment of the incumbent  is made,  so far as validity of its acts are concerned.  It  is enough  that he is clothed with the insignia of the  office, and exercises its powers and functions. The official acts of such  persons  are recognised as valid under  the  de  facto doctrine,  born  of necessity and public policy  to  prevent needless confusion and endless mischief. In Gokaraju  Ranga- raju’s case, supra, Chinnappa Reddy, J. explained that  this doctrine  was engrafted as a matter of policy and  necessity to protect the interest of the public. He quoted the follow- ing passage from the judgment of Sir Ashutosh Mukerjee J. in Pulin  Behari v. King Emperor, [1912] 15 Cal. LJ 5 17 at  p. 574:               "The  substance of the matter is that  the  de               facto doctrine was introduced into the law  as               a  matter of policy and necessity, to  protect               the interest of the public and the  individual               where  these  interests were involved  in  the               official acts of persons exercising the duties

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             of  an office without being  lawful  officers.               The doctrine in fact is necessary to  maintain               the supremacy of the law and to preserve peace               and order in the community at large." The  learned  Judge also relied upon the  following  passage from  the judgment of P. Govindan Nair, J. in P.S. Menon  v. State of Kerala & Ors., AIR (1970) Kerala 165 at p. 170;               "This  doctrine was engrafted as a  matter  of               policy and                           73               necessity  to  protect  the  interest  of  the               public and individual involved in the official               acts  of  persons exercising the  duty  of  an               officer  without actually being one in  strict               point of law. But although these officers  are               not officers de jure they are by virtue of the               particular  circumstances,  officers,  infact,               whose  acts, public policy requires should  be               considered valid."     The  next substantive contention of learned counsel  for the petitioner is that the so-called factual  mis-statements which occur in paragraph 44 of the grounds of detention show that  there  was nonapplication of mind on the part  of  the detaining  authority and he relies on the observations  made in  Khudiram Das’ case that the subjective  satisfaction  of the detaining authority is not wholly immune from the  judi- cial  review  and the Court can always examine  whether  the requisite  satisfaction was arrived at by the authority;  if it  is not, the condition precedent to the exercise  of  the power  would  be  bad. According to the rule  laid  down  in Khudiram  Das’ case which proceeds on well  settled  princi- ples,  the  simplest case is whether the authority  has  not applied its mind and that is sufficient to vitiate the order of  detention. It is submitted that this was a case of  mis- taken identity and there was no material before the  detain- ing authority to show that the initials ’ML’ in the  various entries  in  the accounts of Messrs  Greenland  Corporation, Japan and the relative telex messages related to the  detenu Mohanlal Jatia and not to the other ML meaning ML Kedia, the brother-in-law  of Subhash Gadia. We are afraid,  we  cannot accept  this line of argument. There is no warrant  for  the submission that the initials ’ML’ refer to ML Kedia and  not the  detenu Mohanlal Jatia or that a wrong person  has  been placed  under detention. There is no dispute  whatever  that the  initials ’ML’ refer to the detenu Mohanlal Jatia.  When confronted  during the interrogation with the initials  ’ML’ in  the books of Messrs Greenland Corporation and the  telex messages,  the  detenu admitted that the  initials  ’ML’  or ’MLJi’ in the various entries as well as the telex  messages stand for himself i.e. Mohanlal Jatia.         As  to  the co-called  factual  mis-statements,  the argument  proceeds    on the wrongful  assumption  that  the facts stated in paragraph 44 of the grounds of detention are the ’grounds’ when they are in reality nothing but  ’facts’. The High Court has rightly observed that the facts stated in paragraph 44 of the grounds cannot be read in isolation  and the grounds of detention have to be read as a whole with the accompanying  documents and material. As is quite  apparent, the ground of deten- 74 tion was only one viz. that the detenu was engaged in activ- ities  prejudicial to the augmentation of  foreign  exchange and therefore it became necessary in the public interest  to place him under detention. Sufficiency of grounds is not for the  Court but for the detaining authority for the  perform-

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ance  of his subjective satisfaction that the  detention  of the  detenu  Mohanlal  Jatia under s. 3(1) of  the  Act  was necessary.  It was a matter of legal inference to  be  drawn from several facts which appear in the grounds and the facts are not merely in paragraph 44 but also in other paragraphs. It  will be seen that paragraph 44 merely recites that  when the detenu was confronted with the documents recovered  from a  search of Subhash Gadia’s residential premises and  else- where,  he  denied  the various  transactions  entered  into between  him  and Messrs Greenland  Corporation,  Japan  and others  abroad. It then goes on to state that the  documents clearly  revealed that he had been engaged in various  unau- thorised transactions in violation of the provisions of  the Foreign Exchange Regulation Act.     According  to  the learned counsel, the  mistakes  which crept  in the proposal made by the initiating authority  for the  detention  of the detenu recur in paragraph 44  of  the grounds  and it shows the casualness with which the  grounds of  detention  were drawn which indicate  nonapplication  of mind.  Although  the argument at first blush appears  to  be attractive,  but on deeper consideration does not  stand  to scrutiny.  We wish to enumerate the so-called  factual  mis- statements  listed  as Items A to F in paragraph 44  of  the grounds and deal with them in seriatim. Item A at p. 338  of the  seized bunch SG 6 is the trial balance-sheet of  Messrs Greenland  Corporation, Japan. On that page, there are  var- ious entries of ML, GN, RN and RG Jatia. It is mentioned  by the  detaining authority in paragraph 44 underneath  Item  A that  Gadia ’admits’ that they are Jatia’s  account.  During interrogation  Subhash Gadia stated that bunch of  documents SG 6 relates to Messrs Greenland Corporation, Japan and that these  entries  ’may be related to the  Jatia  family’.  The detaining authority was not wrong in treating the words ’may be’  in the context in which they appear as being an  admis- sion of fact made by the detenu. The detaining authority was entitled  to  make use of the decoding formula  revealed  by Subhash Gadia to connect the detenu Mohanlal Jatia with  the initials  ’ML’  appearing in various transactions,  more  so because the relative telex messages sent by Messrs Greenland Corporation  were seized from the office premises of  Messrs J.M.  Trading Corporation, J.M. Textile Pvt. Ltd.,  Ramgopal Textile  Pvt. Ltd., Ram Gopal & Sons, Ram  Gopal  Synthetics Pvt. Ltd., Kamal Trading Corporation. Kalpana Trading Corpo- ratoin,  Sudhir  Trading Corporation, all  situate  at  701, Tulsiani cham- 75 bers,  212, Nariman Point, Bombay and the detenu  admittedly is  closely connected with these concerns being Director  or shareholder  or a partner. The said documents disclose  that the  detenu  Mohanlal Jatia with the initials ’ML’  and  his brothers GN, SN and RN, namely. Ganesh Narayan Jatia,  Satya Narayan Jatia and Ram Niranjan Jatia are maintaining  secret accounts with Messrs Greenland Corporation, Japan. They also clearly indicate that the detenu and his brothers were found to  be engaged in transferring funds from or to India in  an unauthorised manner on a very large scale. Subhash Gadia  in his  statement  revealed that pp. 316, 317 and  318  of  the seized document SG 6 are written in his handwriting and  the account  is  in Yen. He further revealed that the  said  ac- counts  relate to Satya Narayan Jatia, Ganesh Narayan  Jatia and  Mohanlal Jatia. The detenu was furnished a copy of  the statement made by Subhash Gadia. As hereinbefore adumbrated, the  detenu when confronted denied to have entered into  the transaction.  However.  when  confronted  with  the  various entries  appearing  in the seized document SG 6  the  detenu

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admitted  that  the initials ’MI.’ or ’MLJi’ relate  to  him both  in the accounts as well as in the telex messages.  The various entries show transactions involving foreign exchange to the tune of several crores of rupees. For instance, at p. 318  of SG 6appear the  details of FDR account  standing  in the name of Satya Narayan, Ganesh Narayna and Mohanlal Jatia to be divided equally and the sum total of the amount  shown is  1,09,37,471.16 Yen. The said figure also finds place  at p.  278 of the file SG 6 which gives details how the  figure 1,09,37,471.16  has  been arrived at. In the  telex  message appearing  at pp. 35 and 36 in the bunch of seized  document SG 6 arc given the details of the FDR account with  instruc- tions  to work out the average rate of interest between  the three  brothers Satya Narayan, Ganesh Naryana  and  Mohanlal payable on the FDR for 1,09,37,471.16 Yen. Similarly,  Laxmi Ji  account  with Messrs Greenland Corporation, Japan  is  a capital account of Satya Narayan, Ganesh Narayan and  Mohan- lal  showing  a capital investment of 48,62,96,325  Yen.  We need  not  go  into further details. The  entries  show  the magnitude of the operation in foreign exchange carried on by the detenu.     We  do not see any mistake of fact in Item B  which  re- lates  to purchase of a TV 27" and a VCR. There is an  entry at  p.  338 of SG 6 showing that the  detenu’s  account  was debited  with these items although the detenu in his  state- ment  asserted  that they were gifted by his  brother.  That takes us to the effect of the mistake occurring in Item C at p.215 of the seized documents that there is an entry showing that  the  detenu had a fixed deposit of US $ 2  lakhs.  The entry reads: "ML 2 76 lakhs  A/S 11.75 dated 2.6.83". Even assuming that it was  a mistake  to  have introduced the words  "also  including  20 lakhs $ (dollars)" in paragraph 44 of the grounds that would not  by itself without more, vitiate the impugned  order  of detention  or necessarily show nonapplication of mind.  Even so,  the  detaining authority was entitled to act  upon  the entry.  relating  to US $ 2 lakhs for the formation  of  his subjective satisfaction. Significance of these entries shows that  the detenu was maintaining the secret account and  had large sums of money in fixed deposits abroad. The  detaining authority  has charged the detenu with keeping US $ 2  lakhs in  fixed  deposit  in Kamal Account which  is  the  capital account  of  the detenu and his  brothers  Messrs  Greenland Corporation,  Japan.  The words "also including 20  lakhs  $ (dollars)"  are no doubt not there in the books of  accounts but  they crept in the proposal and have been reproduced  in paragraph  44  of the grounds. It is somewhat  strange  that these words should be introduced when they were not there in the  books of accounts but the fact remains that there is  a typographical error. The High Court rightly observes that  a single typographical mistake about making a reference to  US $ 20 lakhs would not necessarily show the non-application of mind  when the entry of US $ 2 lakhs (dollars) is  reflected in various places in the account such as ML Ji Khata P.  175 and Kamal Account P. 226, copies of which were furnished  to the detenu. Even assuming that the words "also including  20 lakhs  $ (dollars)" were introduced in paragraph 44  of  the grounds  that would not be a factor vitiating  the  impugned order of detention. The detaining authority was still  enti- tled to act upon the entry relating to fixed deposit of US $ 2 lakhs (dollars) for the formation of his subjective satis- faction.     As  regards Items D and E, the contention of  the  peti- tioner  is that reference to American Dollar account  as  on

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January  31,  1984 as per p. 335 of SG 6  and  Japanese  Yen account: Final position at Bombay of 141147.27 set out at p. 318  thereof was totally unintelligible and was  unconnected with  the detenu nor had any relevance The respondents  have controverted  this in the counter-affidavit filed  by  M.I,. Wadhawan,  Additional Secretary to the Government of  India, Ministry  of  Finance.  It is asserted  that  the  aforesaid abstracts  clearly indicate that the detenu  Mohanlal  Jatia and  his brothers were found to be engaged  in  transferring funds  from or to India in an unauthorised manner on a  very large scale. According to the statement of Subhash Gadia the American  Dollar account is as per p. 335 of SG 6,  the  de- tails  whereof are given at p. 3 18 and the said  amount  is credited in the name of SN. GN and ML to be divided equally. The  sum  total  of  the amount  shown  to  be  divided  was 10937,471.16 Yen. This figure also appears at p. 278 77 of  file  SG  6  giving  details  as  to  how  this   figure 10937,471.16  Yen  has been worked out. At p. 318  of  SG  6 under  the heading Laxmi Ji account. the sum total in  Japa- nese Yen shown is 48,62,96,325 to be equally divided amongst SN, GN and ML. According to the statement of Subhash  Gadia, the Laxmi Ji account was a capital account of SN, GN and  ML with  Messrs  Greenland Corporation, Japan.  The  amount  of 141147.27 apparently shown in Item E represents the detenu’s share.  However, the detenu expressed his inability  to  ex- plain  the  said two accounts--American Dollar  account  and Laxmi  Ji  account and the telex messages. It  appears  that imports of yarn in India from Messrs Greenland  Corporation, Japan  were effected through Messrs J.M. Trading Company  of which  the  detenu is a partner and there was  either  over- pricing  of  the goods in the invoices or  some  portion  of commission was secretly kept with Messrs Greenland  Corpora- tion  and was being utilised for differential treatment.  It can hardly be asserted in view of the facts revealed in  the counter-affidavit  of the Additional Secretary, Ministry  of Finance  that the detenu was transferring funds either  from or to India in a clandastine manner on a very large scale.     The remaining Item F at p. 315 of the bunch of documents marked  SG  6 is a coded account maintained  by  the  detenu under  the name Kamal Account representing the  capital  in- vestment of SN, GN and ML with Messrs Greenland Corporation. It  relates  to  the  entry  "US  $  78,000  converted  into Rs.9,16,500  commission of". At every place in the bunch  of seized document SG 6 such as on the reverse of p. 215  there is  an entry to the effect that US $ 78,000  were  converted into  Indian rupees @ Rs. 11.75 equivalent to 9, 16,500  and that  the said amount was capitalised on 19.7. 1983  in  the name  of GN. Paragraph 33 of the grounds involves  the  com- plicity  of the detenu by making reference to a  secret  ac- count  maintained by SN, GN and ML to the effect: was  found that all of you are engaged in transferring funds from or to India  on  a very large scale." In this coded  account,  the modus operandi adopted at every place is to delete two zeros from the converted Indian currency.     Learned counsel for the petitioner tried to spell out an argument that the use of the word ’or’ shows that the ground was  vague or indefinite. According to the learned  counsel, it  is quite apparent that the detaining authority  was  not definite  as to the nature of payment i.e. whether the  con- version of foreign exchange into rupees represented payments made or amounts received. Nothing really turns on this.  The fact  remains that the detneu had been admittedly keeping  a secret  account of foreign currency abroad without the  per- mission of the Reserve Bank of India.

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78     It  is  quite apparent that the so-called  factual  mis- statements  are  not mis-statements at all. The  High  Court rightly held that the alleged mistakes or infirmities point- ed  out  were  not so material or serious in  nature  as  to vitiate the impugned order of detention. As already indicat- ed, sufficiency of the grounds is for the detaining authori- ty and not for the Court. It cannot be said on a perusal  of the grounds that there was no material on which the  detain- ing authority could have acted.     There  still  remains the further question  whether  the period of parole should be treated as part of the  detention period itself. This question has been elaborately considered by  this Court in Smt. Poonam Lata v. M.L. Wadhawan &  Ors., (J.T.  1987 (2) SC 204) to which one of us (Sen, J.)  was  a party and it was held therein "that the period of parole has to  be excluded in reckoning the period of  detention  under sub-section  (1) of Section 3 of the Act"  (Conservation  of Foreign Exchange and Prevention of Smuggling Activities Act, 1974).     In. addition to the reasons given therein we may add the following  by  way  of supplementary  material.  Though  the element of detention is a common factor in cases of  preven- tive  detention  as well as punitive detention, there  is  a vast  difference  in  their  objective.  Punitive  detention follows a sentence awarded to an offender for proven charges in  a trial by way of punishment and has in it the  elements of retribution, deferrence, correctional factor and institu- tional treatment in varying degrees. On the contrary preven- tive  detention is an extraordinary measure resorted  to  by the  State  on account of compulsive factors  pertaining  to maintenance  of public order, safety of public life and  the welfare  of  the economy of the country. The need  for  this extraordinary  measure  i.e.  detention  without  trial  was realised  by the rounding fathers of the Constitution as  an inevitable  necessity for safeguarding the interests of  the public  and the country and hence a specific  provision  has been made in clause (3) of Article 22 providing for  preven- tive  detention being imposed in appropriate cases  notwith- standing  the fundamental right of freedom and liberty  gua- ranteed  to  the citizens by the  Constitution.  The  entire scheme of preventive detention is based on the bounden  duty of  the State to safeguard the interests of the country  and the  welfare of the people from the canker of  anti-national activities by anti-social elements affecting the maintenance of  public  order or the economic welfare  of  the  country. Placing  the  interests of the nation above  the  individual liberty  of the anti-social and dangerous elements who  con- stitute  a grave menace to society by their  unlawful  acts, the preventive detention laws have been made for effectively keeping out of circulation the detenus during a prescribed 79 period  by  means  of preventive  detention.  The  objective underlying  preventive detention cannot be achieved or  ful- filled  if the detenu is granted parole and brought  out  of detention. Even if any conditions are imposed with a view to restrict  the movements of the detenu while on  parole,  the observance of those conditions can never lead to an equation of  the period of parole with the period of  detention.  One need not look far off to see the reason because the  observ- ance of the conditions of parole, wherever imposed, such  as reporting daily or periodically before a designated authori- ty, residing in a particular town or city, traveling  within prescribed  limits alone and not going beyond etc. will  not prevent  the detenu from moving and acting as a  free  agent

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during  the  rest of the time or  within  the  circumscribed limits  of travel and having full scope and  opportunity  to meet  people of his choice and have dealings with  them,  to correspond  with one and all and to have easy and  effective communication  with whomsoever he likes  through  telephone, telex  etc.  Due to the spectacular achievements  in  modern communication system, a detenu, while on parole, can sit  in a  room in a house or hotel and have contacts with  all  his relations,  friends  and  confederates in any  part  of  the country or even any part of the world and thereby pursue his unlawful  activities if so inclined. It will, therefore,  be futile to contend that the period of parole of a detenu  has all the trappings of actual detention in prison and as  such both the periods should find a natural merger and they stand denuded  of their distinctive characteristics. Any  view  to the  contrary  would not only be opposed  to  realities  but would  defeat  the very purpose of preventive detention  and would also lead to making a mockery of the preventive deten- tion  laws enacted by the Centre or the States. It will  not be  out  of  place to point out here that in  spite  of  the Criminal  Procedure Code providing for release of  the  con- victed offenders on probation of good conduct, it  expressly provides, when it comes to a question of giving set-off to a convicted  person in the period of sentence, that  only  the actual  pre-trial detention period should count for  set-off and  not  the period of bail even if bail had  been  granted subject  to stringent conditions. In contrast, in so far  as preventive  detentions  under the  Conservation  of  Foreign Exchange  and Prevention of Smuggling Activities Act,  1974, are concerned, the Act, specifically lays down that a person against whom an order of detention has been passed shall not be released on bail or bail bond or otherwise (vide  Section 12  (6) of the Act) and that any revocation or  modification of the order of detention can be made only by the Government in exercise of its powers under Section 11. Incidentally. it may  be pointed out that by reason of sub-s. (6) of  section 12  of the Act placing an embargo on the grant of bail to  a detenu there was no 80 necessity for the Legislature to make a provision similar to sub-section  (4)  of  Section 389 of the  Code  of  Criminal Procedure, 1973 (corresponding to sub-section (3) of Section 426  of the old Code) for excluding the period of bail  from the term of detention period. For these reasons the plea for treating  the  period  of parole as part  of  the  detention period has to necessarily fail.     One last point remains. Besides refuting the  contention of the petitioner that the detenu had made a written  repre- sentation  addressed to the President of India on April  15, 1986 and that there has been an infraction of the  Constitu- tional safeguard embodied in Article 22(5" of the  Constitu- tion  and  Section 11 of the Act due to the failure  of  the Central Government to consider the said Representation,  the respondents have preferred an application under Section  340 of  the Code of Criminal Procedure, 1973 for prosecution  of the persons responsible for forging the document  purporting to  be the alleged Representation made by the  detenu  under Section  8(4" of the Act and for making  certain  interpola- tions  in the Dak Register kept at the  Rashtrapati  Bhavan. The  respondents have placed sufficient material before  the Court  to show that the alleged Representation addressed  to the  President of India was neither filed by the detenu  nor was it received at the President’s Secretariat on April, 15, 1986.  The respondent have placed on record the  correspond- ence that passed between the Ministry of Finance, Department

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of  Revenue and the President’s Secretariat. They have  also produced  for our perusal the original Dak Register kept  at the Rashtrapati Bhawan. On a careful scrutiny of the  corre- spondence  and the entries in the Dak Register we  are  more than satisfied that no such Representation was ever made  by the  detenu  and  that the attempt to assail  the  order  of detention  on the ground of violation of the  constitutional safeguard  enshrined in Article 22(5) and the  violation  of Section  11 of the Act by the Central Government is  a  well planned and ingenuous move on the part of the detenu. We are not only deeply shocked by the daring attempt of the  detenu to fabricate a document styled as a representation addressed to  the President of India but feel much more perturbed  and even  alarmed that there should have been willing  hands  at the  President’s Secretariat to lend their services  to  the alleged  agent of the detenu to give a colour of  truth  and reality to the nefarious scheme.     We  may  now set out the highlights of  the  disquieting features  noticed  by us in the case set up  by  the  detenu about  a representation being delivered at  the  President’s Secretariat on 15.4. 1986. Before enumerating the suspicious features it has to be borne in mind that the  81 detenu  is not a rustic or an uneducated person or a man  of no means. On the other hand he is a man of great  affluence, having  dealings  in this country as well  as  in  countries overseas  and,  therefore, having the means  to  secure  the services  of astute and enlightened counsel in the  country. He  cannot,  therefore,  take umbrage  for  his  actions  on grounds such as lack of knowledge or want of funds or  igno- rance of law. Now coming to the details. The  representation said  to have been made was not addressed to the  Government of India which is the authority to consider the  representa- tion but to the President. Be that as it may, the  represen- tation  signed in Bombay could have been sent by  registered post/acknowledgement due to the President’s Secretariat  but instead it is said to have been brought by a messenger  from Bombay to New Delhi. The said messenger does not present the representation at the President’s Secretariat but he is said to have handed it over to one Ashok Jain and the said  Ashok Jain  is  said to have delivered the representation  at  the President’s Secretariat. As per the affidavit filed by  Shri K.C.  Singh, Deputy Secretary to the President,  President’s Secretariat,  a visitor coming with a petition to the  Rash- trapati Bhavan has first to approach the Reception and  then he  is given a printed pass and sent with an escort  to  the Central Registry and after he delivers the letter he will be escorted  back to the Reception to return his pass and  then leave the building. Ashok Jain in his affidavit has categor- ically  stated  that he went to the  Rashtrapati  Bhavan  at "roughly  about  6.00 P.M." and a person  at  the  Reception directed  a peon to show him the Central Registry,  that  no one  enquired him about his name or issued him any pass  and that  he went to the Central Registry as pointed out by  the peon  and  delivered a sealed envelope and obtained  an  en- dorsement of acknowledgement on the Xerox copy of the repre- sentation.  In view of the conflicting affidavit,  there  is room for inference that either Ashok Jain did not personally go and deliver the sealed envelope at the President’s Secre- tariat  or  that he was able to wield influence to  such  an extent  as to be taken to the Central Registry  without  the procedural requirement of every visitor being issued a  pass being observed in his case. It also surpasses our comprehen- sion  how an endorsement of acknowledgement could have  been made on a Xerox copy of the alleged representation when  the

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original of the representation is said to have been given in a  sealed envelope. There are several other  intrinsic  fea- tures in the endorsement itself evoking grave suspicion. The rubber stamp seal affixed on the Xerox copy does not  corre- spond to the facsimiles of the two rubber stamps used in the President’s  Secretariat  as described by Shri  K.C.  Singh, Deputy  Secretary  in his affidavit. ’I  he  endorsement  of acknowledgement does not contain the signature or 82 initials of the Receiving Officer. but strangely it contains a  Dak Number, "Dy. No. 20 date 15.4.1986". Shri K.C.  Singh has  set out in his affidavit the procedure to  be  followed when  letters and open petitions are received at the  Presi- dent’s Secretariat but the procedure set out therein has not been followed in this case. Over and above all these things, a scrutiny of the relevant page in the Dak Register kept  in the President’s Secretariat, which was produced before us in a  sealed cover, contains tell-tale features of a  startling nature  revealing a planned attempt, but very clumsily  exe- cuted,  to somehow interpolate an entry in the Dak  Register to  make it appear that an envelope containing  the  alleged representation had been presented at the President’s  Secre- tariat.  For  our present purposes, it is not  necessary  to give  a  graphic account of the manipulations  made  in  the Register  and it will suffice if we refer only to the  broad features. The bottom portion of the page has been torn  off, obviously with a view to obliterate some entry made therein. The  entry  relating to the alleged  representation  of  the detenu  has been interpolated between one entry  dated  15.4 and  another  entry dated 16.4. but in order to fit  in  the serial number, the entry relating to the representation  has first  been  noted  as 20(A), then the  letter  A  has  been smudged and the entry dated 16.4 has been made 20(A) instead of  20.  The entry pertaining to the  representation  is  in different handwriting and ink. Shri K.C.Singh in his affida- vit  has  stated  that "this office is  enquiring  into  the circumstances  under which the entry came to be inserted  in the  Dak Register meant only for unopened letters  addressed to the President by name."     All these things not only warrant an inference that  the detenu and his associates have gone to deplorable lengths to create evidence favourable to the detenu but arouse  convul- sive thoughts in our minds about the efficiency and integri- ty of the concerned sections of the President’s Secretariat. We  are  constrained to give expression to our  feelings  of anguish by means of these observations because at the  level of  the President’s Secretariat every section of the  Secre- tariat  is  expected  to observe the  highest  standards  of morality, integrity and efficiency. The ease with which  and the  facile  manner in which the detenu’s agent  Ashok  Jain claims  to  have  entered the  President’s  Secretariat  and delivered  the Dak and obtained an endorsement  of  acknowl- edgement  in a copy of the representation and the length  to which  the  concerned Secretariat staff have  gone  to  give credence  to the version of Ashok Jain not only reveals  the deep  fall  in standards but also the lack of  security  and vigilance. We  feel fully persuaded to hold that this is a fit case  in which the 83 detenu,  his  wife (petitioner herein), Ashok Jain  and  all other  persons  responsible  for the  fabrication  of  false evidence should be prosecuted for the offences committed  by them.  Nevertheless  we wish to defer the passing  of  final orders on the.application made under Section 340 of the Code

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of  Criminal Procedure, 1973 by the Union of India  at  this stage  because of the fact the Central Bureau of  Investiga- tion  is said to be engaged in making a thorough  investiga- tion  of the matter so that suitable action could  be  taken against all the perpetrators of the fraudulent acts and  the offences. As such the launching of any. prosecution  against the detenu and his set of people at this stage forthwith may lead  to a premature closure of the investigation  resulting in  the  Central  Bureau of Investigation  being  unable  to unearth the full extent of the conspiracy. Such a  situation should  not  come to pass because the manipulations  of  the detenu and his agents on the one hand and the connivance  of staff in the President’s Secretariat on the other cannot  be treated  as  innocuous  features’ or  mere  coincidence  and cannot  therefore, be taken lightly or viewed leniently.  On the contrary they are matters which have to be taken serious note of and dealt with a high degree of vigilance, cate  and concern: Consequently, while making known our opinion of the matter for action being taken under Section 340 of the  Code of  the  Criminal Procedure we defer the  passing  of  final orders on the application under Section 340 till the  inves- tigation by the Central Bureau Of Investigation is  complet- ed.  The  respondents are permitted to move  the  Court  for final orders in accordance with our directions.     Accordingly,  the  special leave petition and  the  writ petition are dismissed with costs. H.L.C.                                      Petitions   dis- missed. 84