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CASE NO.: Appeal (crl.)  1024-1025 of 1997

PETITIONER: Union of India and Ors.          

RESPONDENT: Mohanlal Likumal Punjabi & Ors.          

DATE OF JUDGMENT: 17/02/2004

BENCH: DORAISWAMY RAJU & ARIJIT PASAYAT.

JUDGMENT: JUDGMENT

ARIJIT PASAYAT, J.

                 Since the points involved in the criminal appeals are  identical, they are taken up together for disposal.

       Union of India questions legality of the judgments  rendered by the Division Bench of the Bombay High Court  holding that order dated 31.8.1995 passed by the Competent  Authority under Section 7 of the Smugglers and Foreign  Exchange Manipulators (Forfeiture of Property) Act, 1976 (in  short ’the SAFEMA’) against respondent nos. 1 and 2 was not  sustainable in law.  For coming to such conclusion,  reference was made to orders dated 19th December, 1994  passed under Section 11(1)(b) of the Conservation of Foreign  Exchange and Prevention of Smuggling Activities Act (in  short ’the COFEPOSA’) revoking the order of detention and   order dated 11.1.1995 passed in earlier writ petitions filed  by respondent nos. 1 and 2.  Reference was made to first  proviso to Clause (b) of sub-section (2) of Section 2 of  SAFEMA for holding that proceedings initiated under the said  statute became non est.  

       According to learned counsel for the appellant-Union  the view taken by the High Court is clearly untenable.  On  the facts of the case, first proviso to clause (b) of sub- section (2) had no application to the facts of the case.   The revocation of the order of detention was in exercise of  power conferred under Section 11(1)(b) of the COFEPOSA and  not under Section 8 as stipulated in the said provision.  It  is further submitted that the proceedings were initiated by  issuance of notice under Section 6(1) of the SAFEMA for  forfeiture of property on 12.10.1994. The orders of  detention under Section 3(1) of COFEPOSA were passed on  24.5.1994. The orders of detention were challenged by the  respondents 1 and 2 in Writ petition nos. 1071 and 1072 of  1994.  After the show-cause notice was issued in exercise of  power under Section 11 (1)(b) of the COFEPOSA, the Central  Government revoked the orders of detention on 19.12.1994 as  indicated above.  In view of the revocation of the orders of  detention, the writ petitions were disposed of on  11.01.1995.  By order dated 31.8.95, properties mentioned in  the show-cause notice were directed to be forfeited under  Section 7 of SAFEMA. The order directing forfeiture was  challenged on merits before the Tribunal constituted under

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the SAFEMA. Thereafter writ petitions were filed on  23.11.1995 challenging the orders of detention and also  challenging the order of forfeiture. The latter additional  challenge was by way of amendment. By the impugned judgment  dated 13.6.1996 the High Court passed the impugned order in  each case.

       Learned senior counsel, for the Union of India further  submitted that the Tribunal did not consider that first  proviso has no application to the facts of the case.  The  order of detention was not revoked under Section 8 of SAFEMA  but on the contrary under Section 11(1)(b) thereof.  There  was no revocation before receipt of the report of the  Advisory Board or before making reference to the Advisory  Board. Since the proceedings were initiated when the order  of detention was in force, and were brought to the logical  end by passing the order under Section 7 of SAFEMA, no  illegality existed.

It is further submitted that it was not open to the  respondents to question legality of the order of detention  in the subsequent writ petition after the first writ  petition was disposed of as having been rendered  infructuous.  Reliance was placed on Constitution Bench  judgment of this Court in Attorney General for India and  Ors. v. Amratlal Prajivandas and Ors. (1994 (5) SCC 54),  more particularly in paras 40, 41, 42 and 56 of the  judgment.

       In response, Mr. Huzefa Ahmadi, learned counsel for  respondent nos. 1 and 2, submitted that it is not open to  the appellants to question correctness of the judgment after  there was concession before the High Court about  applicability of the proviso, and the absence of any scope  for passing of any order under Section 7 of SAFEMA.   

       It was further submitted that even otherwise order  under Section 11(1)(b) is clearly relatable to the report of  the Advisory Board under Section 8 of SAFEMA.  Therefore,  the proviso has application to the facts of the case.  It,  however, could not be disputed by the learned counsel that  in case the revocation is not under Section 8 of SAFEMA, the  proviso would not have any application.  It is submitted  that when the earlier writ petition is rendered infructuous  there is no bar on filing a fresh writ petition on merits to  avert the prejudice and damage caused on account of  initiating proceedings under SAFEMA. Strong reliance is  placed on Competent Authority, Ahmedabad v. Amritlal  Chandmal Jain and Ors. (1998 (5) SCC 615) and Karimaben K.  Bagad v. State of Gujarat and Ors. (1998 (6) SCC 264).

       We shall first deal with the effect of concession, if  any, made by learned counsel appearing for the present  appellants before the High Court. Closer reading of the High  Court’s order shows that the High Court took the view that  in view of the revocation of the order on 19th December,  1994 and the order passed by the High Court on 11th  January, 1995, no further order could have been passed under  Section 7 of SAFEMA.  After having expressed this view, the  so-called concession is recorded.  In our view the  concession, if any, is really of no consequence, because the  wrong concession made by a counsel cannot bind the parties  when statutory provisions clearly provided otherwise.  It  was observed by Constitution Bench of this Court Sanjeev  Coke Manufacturing Company v. M/s Bharat Coking Coal Limited

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and Anr. (1983 (1) SCC 147) that courts are not to act on  the basis of concession but with reference to the applicable  provisions.  The view has been reiterated in  (1988 (6) SCC  538) and Central Council for Research in Ayurveda & Siddha  and Another v. Dr. K. Santhakumari (2001 (5) SCC 60). In  para 12 of Central Council’s case (supra) it as observed as  follows: "In the instant case, the selection was  made by the Departmental Promotion  Committee. The Committee must have  considered all relevant facts including the  inter se merit and ability of the candidates  and prepared the select list on that basis.  The respondent, though senior in comparison  to other candidates, secured a lower place  in the select list, evidently because the  principle of "merit-cum-seniority" had been  applied by the Departmental Promotion  Committee. The respondent has no grievance  that there were any mala fides on the part  of the Departmental Promotion Committee. The  only contention urged by the respondent is  that the Departmental Promotion Committee  did not follow the principle of "seniority- cum-fitness". In the High Court, the  appellants herein failed to point out that  the promotion is in respect of a "selection  post" and the principle to be applied is  "merit-cum-seniority". Had the appellants  pointed out the true position, the learned  Single Judge would not have granted relief  in favour of the respondent. If the learned  counsel has made an admission or concession  inadvertently or under a mistaken impression  of law, it is not binding on his client and  the same cannot enure to the benefit of any  party."                                          (underlined for emphasis)

       In   Uptron (India) Ltd. V. Shammi Bhan and Anr. (1998  (6) SCC 538), it was held that a case decided on the basis  of wrong concession of a counsel has no precedent value.   That apart, the applicability of the statute or otherwise to  a given situation or the question of statutory liability of  a person/institution under any provision of law would  invariably depend upon the scope and meaning of the  provisions concerned and has got to be adjudged not on any  concession made.  Any such concessions would have no  acceptability or relevance while determining rights and  liabilities incurred or acquired in view of the axiomatic  principle, without exception, that there can be no estoppel  against statute.      

       The respective stands on merits need careful  consideration. Section 2(2) of SAFEMA, so far as relevant  reads as follows:      "Application- (1) The provisions of this  Act shall apply only to the persons  specified in sub-section (2).

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

(a)     every person -

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(i)     who has been convicted under the  Sea Customs Act, 1878 (8 of 1878),  or the Customs Act, 1962 (52 of  1962), of an offence in relation  to goods of a value exceeding one  lakh of rupees; or

(ii)    who has been convicted under the  Foreign Exchange Regulation Act,  1947 (7 of 1947), or the Foreign  Exchange Regulation Act, 1973 (46  of 1973), of an offence, the  amount or value involved in which  exceeds one lakh of rupees; or  

(iii)   who having been convicted under  the Sea Customs Act, 1878 (8 of  1878), or the Customs Act, 1962  (52 of 1962), has been convicted  subsequently under either of those  Acts; or  

(iv)    who having been convicted under  the Foreign Exchange Regulation  Act, 1947 (7 of 1947), or the  Foreign Exchange Regulation Act,  1973 (46 of 1973), has been  convicted subsequently under  either of those Acts;

(b)     every person in respect of whom an  order of detention has been made under  the Conservation of Foreign Exchange  and Prevention of Smuggling Activities  Act, 1974 (52 of 1974):

Provided that -

(i)     such order of detention, being an  order to which the provisions of  Section 9 or section 12A of the said  Act do not apply, has not been revoked  on the report of the Advisory Board  under Section 8 of the said Act or  before the receipt of the report of  the Advisory Board or before making a  reference to the Advisory Board; or

(ii)    such order of detention, being an  order to which the provisions of  Section 9 or section 12A of the said  Act do not apply, has not been revoked  before the expiry of time for, or on  the basis of the review under sub- section (3) of Section 9, or on the      report of the Advisory Board under  Section 8, read with sub-section (2)  of Section 9, of the said Act; or  

(iii)   such order of detention, being an  order to which the provisions of  Section 9 or section 12A of the said  Act do not apply, has not been revoked  before the expiry of time for, or on

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the basis of, the first review under  sub-section (3) of that Section,  or  on the basis of the report of the  Advisory Board under Section 8, read  with sub-section (6) of Section 12A,  of that Act; or  

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

       The first sub-clause of proviso to clause (b) of sub- section (2) of Section 2 deals with three situations, when  the exceptions provided by the proviso can operate. When the  order of detention is one to which provisions of Section 9  or Section 12(A) of the COFEPOSA do not apply, the  situations are (1) when orders of revocations on the report  of the Advisory Board under Section 8, or (2) before the  receipt of the report of the Advisory Board, or (3) before  making a reference to the Advisory Board.

       The appellants have relied on a letter dated 22.2.1995  issued by the Government of India, Ministry of Finance,  Department of Revenue addressed to the Competent Authority  of SAFEMA indicating as follows:

xxx                     xxx                     xxx "The orders of detention were not revoked  on the report of the Advisory Board under  Section 8 of the said Act or before the  receipt of the report of the Advisory Board  or before making a reference to the Advisory  Board.

       The representations of the detenus were  considered by the Advisory Board which did  not accept them."

Additionally, in the counter affidavit filed before  the High Court it was categorically stated that the  revocation under Section 8 was not done before receipt of  the report of the Advisory Board, and was not also revoked  before making a reference to the Advisory Board. The  further contingencies which arise when the situations  envisaged in relation to the orders to which also  provisions of Section 9 of Section 12(A) of COFEPOSA do not  apply, are not relevant for the purpose of this case and  are dealt with in sub clauses (ii) and (iii) of the  proviso. The order of detention was also not quashed in any  judicial proceedings by a court of competent jurisdiction    to attract sub-clause (iv). Section 11(1) of COFEPOSA reads  as follows:

"11. Revocation of detention orders - (1)  Without prejudice to the provisions of  Section 21 of the General Clauses Act, 1897,  a detention order may, at any time, be  revoked or modified -  

(a)     notwithstanding that the order has  been made by an officer of a State  Government, by that State Government

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or by the Central Government;   

(b)     notwithstanding that the order has  been made by an officer of the Central   Government, or by a State Government  by the Central Government."     

The first situation envisaged in sub-clause (i) of the  proviso to clause (b) of sub-section (2) of Section 2.  SAFEMA applies when the revocation is based on the report  of the Advisory Board.  As the factual position noted above  goes to show, the revocation was only in terms of Section  11(1)(b) of COFEPOSA. Such revocation when is done by the  Central Government as in this case is really unrelated to a  report of the Advisory Board. On the factual position, none  of the three situations indicated in the first sub-clause  of the said proviso are applicable.          

The inevitable position is, therefore, crystal clear  that the proviso to clause (b) of sub-section (2) of  Section 2 SAFEMA had no application to the facts of the  case as held by the High Court. To that extent the judgment  of the High Court is indefensible and is set aside.  

That brings us to the residual question as to whether  the order of detention could be challenged subsequent to  the disposal of the earlier writ petition on the ground  that it had become unfructuous.  According to learned  counsel for appellants position has been settled beyond  doubt that it is impermissible in view of what has been  stated in Attorney General’s case.  This submission  deserves no serious consideration, being one made in  disregard of the view taken already by this Court. We find  that the effect of said decision was considered in the two  decisions relied upon by learned counsel for respondent  nos. 1 and 2. The view taken in Amritlal Chandmal Jain’s  case (supra) and Karimaben K. Bagad’s case (supra) does not  call for any further or fresh look or consideration - the  same being not only just and reasonable but quite in  conformity with the basic tenets of Rule of Law but  commends for our respectful acceptance, as well.   

In both these cases, it was held that the subsequent  writ petition is maintainable and it should rightly be so  having regard to the consequential action taken at any rate  under SAFEMA. Otherwise it would amount to the Government  concerned being allowed/enabled to by their action disable  and denude the person aggrieved from questioning the very  applicability of SAFEMA to him or his properties de hors  his other rights to challenge the same otherwise on merits  as well. In any event, this aspect as to the legality and  validity of the order of detention does not appear to have  been considered and decided on merits by the High Court.   We, therefore, remit the matter back to the High Court for  fresh adjudication on merits as to the legality and  validity of the orders of detention, for the purpose of  applying the provisions of SAFEMA against the respondents  or the properties concerned.  

Since the matter is pending for a long time, it would  be appropriate and in the interests of both parties as  well, if the writ petitions are disposed of according to  law after hearing parties within a period of six months  from the date of judgment.  

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Parties are directed to maintain status quo in respect  of the properties covered by the order under Section 7 of  SAFEMA. The respondents 1 and 2 shall not transfer or in  any manner encumber the properties till the disposal of the  writ petitions. Similarly, the order under Section 7 of  SAFEMA shall not be given effect till the disposal of the  writ petitions and its implementation and enforcement would  abide by the outcome of decision in the writ petition. We  make it clear that we are not expressing any opinion on of  any of the contentions regarding the respective stands  taken by the parties by way of challenge made to the  legality and validity of order of detention or  proceedings/orders passed on merits, except to the extent  undertaken for setting aside the order of the High Court  and the reasons assigned therefor.   

The appeals are allowed to the extent indicated.