SUPREME COURT OF INDIA
Usha Agarwal
Vs
Union of India and Others
Appeal (Crl.) 1114 of 2006 (Arising Out of Special Leave Petition (Crl.) No. 3012/2006) (With W.P. (Crl.) No. 191 of 2006 (D-14072/2006)
(S. H. Kapadia and R.V. Raveendran, JJ)
02.11.2006
R. V. RAVEENDRAN, J.
1. Leave granted in SLP (Crl.) No.3012/2006.
The preventive detention of one Sandip Agarwal ('detenu' for short) under
section 3(1) of the Conservation of Foreign Exchange and
Prevention of Smuggling Activities Act, 1974 ('COFEPOSA Act' for short)
is under challenge in these two matters, namely, criminal appeal by special
leave against the judgment dated 21.4.2006 in Writ Petition No.23908/2005 of
the Calcutta High Court and a petition seeking a writ of habeas corpus under
Article 32 of the Constitution of India.
Both have been filed by the mother of the detenu.
2. The facts, in brief, leading to the preventive detention of the detenu, as
gathered from the grounds of detention, are as follows - Sandip Agarwal, the
detenu, was the Director in-charge of the management of M/s Sandip Exports
Ltd., the other Directors being his family members. On receipt of information
about irregularities committed by the detenu, a search of the premises of
Sandip Exports Ltd. was conducted by the Directorate of Revenue Intelligence on
7.11.2003. The search and the investigations disclosed that M/s. Sandip Exports
Ltd. had obtained two Annual Advance Licences dated 28.3.2001 and 22.3.2002 on
actual user conditionsfrom the Director General of Foreign Trade, Kolkata, as
manufacturer-exporter. The said Annual Advance Licences issued under the Duty
Exemption Entitlement Certificate Scheme ('DEEC Scheme' for short) enabled the
Licensee to import goods free of duty subject to the condition that the
Licensee shall manufacture and export products (by utilizing the imported
goods) within 18 months, the quantity and value being as specified in the
licences in terms of Customs Notification No. 48/99 dated 29.4.1999 as amended
from time to time. The detenu imported different types of polyester and silk
yarn/fabric, duty free, under the scheme by using the said licences of Sandip
Exports Ltd. The duty foregone on importations made under the said two Advance
Licences was Rs.14 crores. Instead of utilizing such imported materials in the
manufacture of products for exports, he diverted and disposed of the imported
goods in the domestic market, and did not fulfil the export obligation. He
falsely claimed that the goods for export were manufactured from out of the
imported goods through a non-existing manufacturing unit, and through alleged
job-workers; and he also falsely claimed that the products so manufactured out
of goods imported by Sandip Exports Ltd. were exported through M/s Karan
Exports (India) Ltd., another company owned and controlled by detenu's family.
In this manner, the detenu indulged in a systematic and organized import-export
fraud by importing goods duty-free, under the 'DEEC Scheme' and diverting them
to domestic market.
3. At the instance of the Directorate of Revenue Intelligence (the Sponsoring
Authority), the Detaining Authority (Government of India, Ministry of Finance,
Department of Revenue, represented by its Joint Secretary) passed an order of
detention dated 19.8.2004 under Section 3(1) of the COFEPOSA Act. In the
grounds in support of the detention order, the detaining authority stated that
the action of the detenu in diverting duty free imported goods into the
domestic market in violation of the DEEC Scheme Licences, amounted to
"smuggling" of goods. The detaining authority also stated that the
nature and gravity of the offence and the dubious and fraudulent modus operandi
employed by the detenu showed his propensity and potentiality to indulge in
such illegal activities in future, necessitating detention to prevent him from
continuing such activities.
4. The detention order could not be executed as the detenu absconded. As a
consequence, an order dated 29.3.2004 was issued under Section 7(1) of the Act.
On the basis of a situation report filed under Section 7(1)(a) of the Act on
26.10.2004, the Chief Metropolitan Magistrate, Calcutta, passed an order dated
18.11.2004 for proclamation by proceeding under Section 82 Cr.P.C. The detenu
filed a writ petition challenging the order of detention. The said
pre-execution challenge was rejected by the High Court on 10.6.2005.
Ultimately, on 11.11.2005, the detenu was taken into custody and the detention
order and the grounds in support of the detention were served on him. The
copies of the documents relied upon by the detaining authority in making the
order of detention, were furnished to the detenu on 14.11.2005. As the detenu
claimed that he had no working knowledge of Hindi, English translations were
furnished to him on 16.11.2005.
5. The detenu made a representation against his detention to the detaining
authority on 25.11.2005. The said representation was rejected by the Detaining
Authority on 7.12.2005 and the same was communicated to the detenu on
13.12.2005. On 14.12.2005, the detenu's mother filed W.P. No.23908/2005 in the
High Court of Calcutta, seeking quashing of the detention order dated 19.8.2004
and release of the detenu.
6. The detenu made a representation to the Advisory Board constituted under the
COFEPOSA Act on 16.1.2006. The Advisory Board gave a hearing on 19.1.2006 and
recommended confirmation of the detention. On receiving a copy of the
representation to the Advisory Board along with the report of the Advisory
Board on 27.1.2006, the Central Government confirmed the detention on 1.2.2006.
The representation dated 16.1.2006, copies of which were furnished to the
detaining authority and Central Government, was also independently considered
by them. The Detaining Authority by order dated 10.2.2006 rejected the representation
of the detenu dated 16.1.2006. The Central Government (Special Secretary and
Director General, Central Economic Intelligence Bureau) also rejected the said
representation of the detenu by order dated 13.2.2006. These orders of
rejection were served on the detenu on 17.2.2006.
The detenu made another representation dated 7.2.2006 against his detention to
the Central Government. By order dated 22.2.2006 the Central Government
rejected the said representation and a copy thereof was served on the detenu on
18.3.2006.
7. The events subsequent to filing of the writ petition were placed on record
in the pending writ petition and the order of detention was challenged on the
following grounds:
a) Relevant materials were withheld by the sponsoring authority from the
Detaining Authority.
b) The Detaining Authority had considered and relied on non- existent and
irrelevant material in making the order of detention.
c) The translations of Hindi documents were belatedly supplied.
d) Copies of the documents which were relied upon by the Detaining Authority
furnished to the detenu, contained several sheets which were illegible thereby
preventing the detenu from making an effective representation.
e) There was inordinate delay in considering the representation made by the
detenu to the Central Government and serving the same on the detenu.
f) The order of detention was based on a solitary incident. There was no
material to show that there was any possibility of the detenu indulging in
smuggling activities in future.
g) The allegations against the detenu did not amount to 'smuggling' and
therefore the order of detention was not justified.
A Division Bench of the Calcutta High Court rejected all these contentions and
consequently, dismissed the writ petition by judgment dated 21.4.2006. The said
judgment of the Calcutta High Court is challenged in this appeal by special
leave. Simultaneously, the petition under Article 32 has also been filed before
this Court, challenging the detention.
8. Though several contentions were raised in the special leave petition and the
writ petition, during arguments the challenge to the detention was restricted
to the following three grounds:
(i) The sponsoring authority had withheld from the detaining authority a
relevant material (Order dated 15/20.4.2004 stopping EXIM benefits to Sandip
Exports Ltd made under Rule 7 of the Foreign Trade (Regulations) Rules, 1993).
The detaining authority could not therefore apply his mind to all relevant
material before making the order of detention.
(ii) Several sheets among the copies of the documents supplied to the detenu,
were illegible and this came in the way of the detenu making an effective
representation for his release.
(iii) There was inordinate delay in considering the representation dated
7.2.2006 by the detenu submitted to the Central Government and communicating
the decision to the detenu.
Re : Point No. (i)
9. A detention under COFEPOSA Act is anticipatory and preventive. It is neither
punitive nor curative. Preventive detention being one of the two exceptions to
the constitutional protection under Article 22 against arrest and detention,
certain procedural safeguards are provided in respect of exercise of the power
to direct preventive detention. The procedural safeguards under the
Constitution have been interpreted, to require every material which is
relevant, having a bearing on the question as to whether a person should be
detained under the Act, to be placed before the detaining authority, as the
decision to detain a person is rendered by a detaining authority on his
subjective satisfaction as to the existence of the grounds for such detention.
The sponsoring authority should not undertake any exercise of examination and
interpretation of the available material with a view to place the documents
selectively before the detaining authority. It is not for the sponsoring
authority to decide as to which of the relevant documents should be placed
before the detaining authority, or which of the documents are likely to help,
or not help, the prospective detenu. Consequently, the sponsoring authority
cannot exclude any particular document from the material to be placed before
the detaining authority. If the relevant facts or documents which may influence
the subjective satisfaction of the detaining authority on the question whether
or not to make the detention order, are not placed before the detaining
authority, or are not considered by the detaining authority, it may vitiate the
detention order itself. It is no answer to say that the exclusion of a relevant
document did not affect the decision to detain a person, in view of the other
documents that were placed before the detaining authority or that the detaining
authority would have come to the same conclusion even if he had considered the
said document vide Attorney General of India vs. Amratlal Prajivandas ,
Ashadevi vs. K. Shivraj, Addl. Chief Secretary to the Govt. of Gujarat
Sita Ram Somani vs. State of Rajasthan Ayya alias Ayub vs. State of U.P.
and Ahamed Nassar vs. State of Tamil Nadu .
10. Let us examine the facts, keeping in view the said principles. In this
case, the detention order was made on the ground that the detenu had diverted
the goods, imported duty free for manufacture of goods for export, into
domestic market and thereby indulged in 'smuggling' as defined in section 2(39)
of the Customs Act, 1962 and the facts and
circumstances showed the propensity and potentiality on the part of the detenu
to continue such prejudicial activities in future. The grievance of the detenu
is that the sponsoring authority did not place the order dated 15/20.4.2004 of
the Joint Director-General of Foreign Trade, Kolkata (made under Rule 7 of
Foreign Trade Regulation Rules 1993, stopping the grant of all EXIM benefits to
M/s Sandip Exports Limited till finalization of the proposed action against the
said company), before the detaining authority. According to him, it was a
relevant document and the non-consideration of the said document vitiated the
order of detention. The fact that the said document was available in the
records of the sponsoring authority, but was not placed before the detaining
authority, is not disputed by the respondents. Though the High Court has referred
to the contention relating to the said document (order dated 15/20.4.2004), it
did not specifically deal with it.
11. A document is relevant for considering the case of a person for preventive
detention if it relates to or has a bearing on either of the following two
issues : (a) Whether the detenu had indulged in smuggling or other activities
prejudicial to the State, which the COFEPOSA Act is designed to prevent; and
(b) Whether the nature of the illegal and prejudicial activity and the manner
in which the detenu had indulged in such activity, gave a reasonable indication
that he would continue to indulge in such activity. In other words, whether he
had the propensity and potentiality to continue the prejudicial activity
necessitating an order of detention.
12. The document in question did not prove any smuggling/prejudicial activity
on the part of the detenu. It only shows that the Department of Foreign Trade
had stopped all EXIM benefits to Sandip Exports Ltd., pending further action,
as certain illegal activities of that company had come to its notice. The said
document was, therefore, neither relevant nor necessary to decide whether the
detenu had indulged in smuggling or other prejudicial activity. The
detaining authority obtained satisfaction in regard to that aspect from the
material that was placed by the sponsoring authority to show illegal activities
which amounted to smuggling.
13. The said document was also not relevant to establish propensity or
potentiality of the detenu to continue his illegal activities. The
export-import violations, which amount to smuggling, involve considerable
planning, organization and establishing a network. The propensity is deducible
from the modus operandi adopted by the violator, the inclination of the violator
to indulge in such activities and the further opportunity to commit such
illegal activities. Persons indulging in such prejudicial activities routinely
create 'front' companies and firms. The fact that a particular 'front' company
is denied the EXIM benefits will not deter a violator from continuing such
activities, as he can always operate through other 'front' companies/firms. The
contention of the detenu that as the said order dated 15/20.4.2004, stopped the
EXIM benefits to Sandip Exports Ltd., he could not have continued the alleged
illegal activity, and therefore, the detention order was not warranted, is
untenable. The EXIM benefits were stopped with reference to only one company
namely, Sandip Exports Ltd., and that too till finalization of further action.
The investigation and search by the Directorate of Revenue Intelligence, had
disclosed that the detenu had other 'front' companies. In fact the detention
order makes reference to a similar violation by the detenu by using M/s.
Scandia Investments (P) Ltd. which was another 'front' company controlled by
him and his family. When the benefits of illegal activity are stopped to a
particular company, the brain behind the violation, would merely shift the
operations to another 'front' company or start the activities through a new
company. It should also to be noted that whenever any irregularities/violations
in regard to export/ import comes to the attention of the department, the
benefits are stopped in the normal course, pending finalization of further action.
Therefore, it cannot be said that the document whereby EXIM benefits to one of
the companies controlled by the detenu was stopped, was a 'relevant' document,
non-consideration of which would vitiate the detention order. The first
contention is therefore rejected.
Re : Point No. (ii)
14. It is contended on behalf of the detenu that several sheets in the copies
of documents furnished to him, were illegible and that prevented him from
making an effective representation. It is submitted that the procedural
safeguard under clause (5) of Article 22 requires the grounds of detention to
be communicated to the detenu and this would mean not only the grounds but also
the documents on which reliance was placed to formulate the grounds that led to
the detention. It is further submitted that the documents required to be
furnished, should be legible and in a language known to the detenu so as to
enable the detenu to give an effective representation against the detention;
that if the documents are not legible or in a language not known to the detenu,
then it is as bad as not furnishing the documents; and that furnishing of
copies of documents is not a mere formality but an integral part of the right
of the detenu assured under the Constitution. It is contended that the order of
detention is vitiated on account of the following pages of the documents
furnished to the detenu being not legible :- Page Nos. 124-128, 160-178, 186,
254, 255, 257, 350, 352, 357, 358, 360, 362, 368-371. 371A, 371B, 493, 497,
500, 508, 510, 515, 516, 523, 534, 538, 543, 550, 551, 608, 611, 616-21,
623-37, 682-701, 745, 750, 755, 760, 765, 769-70, 777, 780, 821, 841-43,
857-65, 872, 874, 882, 884, 887 and the last page.
15. In Dharmishta Bhagat vs. State of Karnataka 1989 (S2) SCC 15, this
Court has held that 'refusal' on the part of the detaining authority to supply
legible copies of 'relevant' documents to the detenu for making an effective
representation infringes the detenu's right under Article 22(5) of the
Constitution. This Court observed :
"Therefore, it is imperative that the detaining authority has to serve
the grounds of detention which include also all the relevant documents which
had been considered in forming the subjective satisfaction by the detaining
authority before making the order of detention and referred to in the list of
documents accompanying the grounds of detention in order to enable the detenu
to make an effective representation to the Advisory Board as well as to the
detaining authority. Therefore, the non-supply of legible copy of this vital
document i.e. panchnama dated February 12, 1988 in spite of the request made by
the detenu to supply the same renders the order of detention illegal and
bad."
In Manjit Singh Garewal @ Gogi vs. Union of India 1990 (S) SCC 59, this
Court has held that where copies supplied at the request of the detenu were
illegible, the constitutional safeguards were violated and the order of
detention is liable to be quashed.
16. The High Court has examined the copies that were furnished to the detenu.
In regard to the grievance relating to illegible copies occurring between pages
493 and 887 and the last page, the High Court found that these were copies of
the documents which were supplied by the detenu himself, and the department
could do no better than to furnish the copies thereof. If the documents
furnished by the detenu to the department contained some portions or pages
which were illegible, obviously the copies thereof furnished by the detaining
authority to the detenu will also contain such illegible portions. The learned
counsel for the appellant contented that if really any document furnished by
the detenu was illegible, it could not have been used against the detenu.. But
this contention overlooks the fact that a document may contain several sheets
and illegibility of some sheets or parts of some sheets will not come in the
way of the authorities making use of the legible portions of the documents
furnished by the detenu, supplemented by other documents secured during
investigation. There is nothing strange in the department making use of
partially legible documents furnished by detenu. Therefore, illegibility of
portions of documents which are copies of documents furnished by the detenu,
cannot be a ground for grievance by the detenu. Insofar as the allegation that
some of the sheets between pages 124 to 371B were illegible, the High Court
after having gone through the copies of documents furnished to the detenu, has
found no substance in the contention. In fact, while acknowledging the copies
of documents, the detenu has made an endorsement that they were legible.
17. The entire issue of furnishing of illegible copies is with reference to the
question whether detenu's right to make an effective representation against his
detention is hampered by non-supply of legible copies. The High Court after an
examination of the copies of documents found that the detenu was not so
hampered. Having gone through the representations made by the detenu against
his detention, we also find that he was in no way hampered by the fact that a
few of the sheets/copies of documents were partly illegible. We therefore
find no merit in the second condition, nor any reason to interfere with the
finding of the High Court in this behalf.
Re : Point No. (iii)
18. The scope of Clause (5) of Article 22 which provides that when any person
is detained in pursuance of an order made under any law providing for
preventive detention, the authority making the order shall, as soon as may be,
communicate to such person the grounds on which the order has been made and
shall afford him the earliest opportunity of making a representation against
such order, has been examined in several decisions. Interpreting the said
provision, this Court in Sk. Abdul Karim vs. the State of West Bengal ,
held as follows :-
"Apart from these enabling and. disabling provisions certain procedural
rights have been expressly safeguarded by Clause (5) of Article 22. A person
detained under a law of preventive detention has a right to obtain information
as to the grounds of detention and has also the right to make a representation
protesting against an order of preventive detention. Article 22(5) does not
expressly say to whom the representation is to be made and how the detaining
authority is to deal with the representation. But it is necessarily implicit in
the language of Article 22(5) that the State Government to whom the
representation is made should properly consider the representation as
expeditiously as possible. The constitution of an Advisory Board-under Section
8 of the Act does not relieve the State Government from the legal obligation to
consider the representation of the detenu as soon as it is received by it. On
behalf of the respondent It was said' that there was no express language in
Article 22(5) requiring the State Government to consider the representation of
the detenu. But it is a necessary implication of the language of Article 22(5)
that the State Government should consider the representation made by the detenu
as soon as it is made, apply its mind to It and, if necessary, take appropriate
action. In our opinion, the constitutional right to make a representation
guaranteed by Article 22(5) must be taken to include by necessary implication
the constitutional right to a proper consideration of the representation by the
authority to whom it is made. The right of representation under Article 22(5)
is a valuable constitutional right and is not a mere formality."
In Sk. Rashid vs. State of West Bengal , this Court interpreting the words
'as soon as may be' occurring in clause (5) of Article 22, held as follows :
"The use of the Words "as soon as may be" is important. It
reflects the anxiety on the part of the framers of the Constitution to enable
the detenu to know the grounds on which the order of detention has been made so
that he can make an effective representation against it at the earliest. The
ultimate objective of this provision can only be the most speedy consideration
of his representation by the authorities concerned, for, without its
expenditious consideration with a sense of urgency the basic purpose of
affording earliest opportunity of making the representation is likely to be
defeated. This right to represent and to have the representation considered at
the earliest flows from the constitutional guarantee of the right to personal
liberty - the right which is highly cherished in our Republic and its
protection against arbitrary and unlawful invasion.
Now, whether or not the State Government has in a given case considered the
representation made by the detenu as soon as possible, in other words, with
reasonable dispatch, must necessarily depend on the facts and circumstances of
that case, it being neither possible nor advisable to lay down any rigid period
of time uniformly applicable to all cases. The Court has in each case to
consider judicially on the available material if the gap between the receipt of
the representation and its consideration by the State Government is so
unreasonably long and the explanation for the delay offered by the State
Government so unsatisfactory as to render the detention order thereafter
illegal"
In Kamleshkumar Ishwardas Patel vs. Union of India 4,
this Court observed thus :-
"Construing the provisions of Article 22(5) we have explained that the
right of the person detained to make a representation against the order of
detention comprehends the right to make such a representation to the authority
which can grant such relief, i.e., the authority which can revoke the order of
detention and set him at liberty and since the officer who has made the order
of detention is competent to revoke it, the person detained has the right to
make a representation to the officer who made the order of detention. The first
premises that such right does not flow from Article 22(5) cannot, therefore, be
accepted."
This Court has also repeatedly held that though there can be no specific or
mechanical test for determining whether there has been undue delay, where there
is an unexplained delay in either making the order or serving the order, it
would vitiate the order of detention.
19. The order of detention states that detenu can make representations to (i)
Detaining Authority, (ii) Central Government, and (iii) Advisory Board, in
regard to the detention. The detenu has a constitutional as also statutory
right to make a representation against detention not only to the Detaining
Authority but to any authority which can revoke the order of detention. He can
also represent to the Advisory Board constituted under section 8 of COFEPOSA
Act. Such representations no doubt should be disposed of by the concerned
authority as early as possible. The fact that the Detaining Authority or the
Advisory Board have rejected the representation of the detenu does not
discharge the Central Government from its responsibility to consider and
dispose of the representation expeditiously.
20. The grievance of the detenu is in respect of the representation to the
Central Government on 7.2.2006 which was rejected by the Central Government and
the detaining authority, by two separate orders dated 22.2.2006. The Central
Government in its counter-affidavit has satisfactorily explained how the time
between 7.2.2006 and 22.2.2006 was spent. But the said orders dated 22.2.2006
rejecting the representation was served on the detenu only on 18.3.2006. The
reason why the rejection orders dated 22.2.2006 were not served till 18.3.2006
on the detenu remains unexplained. In fact the respondents have admitted this
unexplained delay in their counter filed in this Court. We extract below the
relevant portion :-
"In this connection, it is submitted that the Superintendent,
Presidency Correctional Home, Kolkata was requested to serve the original of
the said two memorandums on the detenu and obtain signature thereon which he
did on 18th March, 2006. IG (Prisons) and Chief Secretary, Government of West
Bengal, have been asked to look into the circumstances leading to delayed
submission of rejection memos to the detenu."
21. The grievance of the detenu is in regard to the delay in communicating the
decision dated 22.2.2006 of the Central Government till 18.3.2006. The learned
counsel for the respondent however relied on the decision of this Court in
Abdul Razak Dawood Dhanani vs. Union of India (relied on), to contend
that delay on the part of the Central Government in considering the detenu's
representation or the delay in communication of such decision on the detenu
will not be material, where the Central Government has already considered the
representation of the detenu and rejected it and what is delayed is the
decision on the second representation. In that case, the representation dated
12.4.2002 given by the detenu to the three authorities namely, Advisory Board,
Detaining Authority and Central Government were rejected respectively by orders
dated 19.4.2002, 06.5.2002 and 08.5.2002. In addition to the first
representation dated 12.4.2002, the detenu had submitted a further
representation dated 19.4.2002 to the Central Government and the grievance was
that the second representation had not been disposed of by the Central
Government by a separate order. This Court rejected the contention on the
ground that the second representation dated 19.4.2002 contained the same grounds
and same material as contained in the first representation dated 12.4.2002 and
in the absence of any fresh ground or material or subsequent event justifying
the consideration of the second representation, the Central Government was not
bound to pass separate order disposing of the second representation. The ratio
of that decision squarely applies to this case.
22. In this case we find that the first representation dated 16.1.2006 was
disposed of by the Advisory Board, Detaining Authority and Central Government
on 27.1.2006, 10.2.2006 and 13.2.2006. The second representation dated 7.2.2006
given to the Central Government is nothing but a reiteration of the
representation that was given to the Advisory Board on 16.1.2006 copies of
which were given to detaining authority and Central Government. The
representation dated 16.1.2006 had already been considered and rejected by the
Central Government by order dated 13.2.2006. Therefore applying the principle
in Abdul Razak Dawood Dhanani (supra), any delay in disposing of the subsequent
representation dated 7.2.2006 or any delay in communicating the decision on
such representation will not vitiate the order of detention. The third
contention is also therefore rejected.
23. As a result, we dismiss the appeal as also the writ petition as having no
merit.