~

•

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~

ATTORNEY GENERAL FOR INDIA ETC. ETC.

v.

AMRRATLAL PRAJIVANDAS AND ORS. ETC. ETC.

MAY 12, 1~4

(AM. AHMADI, P.B. SAWANT, K. RAMAS~AMY,

K. JAYACHANDRA REDDY, S.C. AGRAWAL, S. MOHAN,

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

Constitution of lndi~Articles 22 (4) to (7), Schedules VII and IX,

Entry 3 List Ill-Conservation of Foreign Exchange and Prevention of Smug-

gling Activities Act, 1974-Smugglers and Foreign Exchange Manipulators

(Forfeiture of Property) Act, 1976-Constitutional validity of-whether Par-

liament competent to enact COFEPOSA and SAFEMA-He~d, yes-Both

enactments

being placed in

IX Schedule, they enjoy immunity confe"ed by

Article 31(B).

Co>tservation of Foreign Exchange and Prevention of Smuggling Ac­

tivities Act, 1974-Section 3 read with section 12 A-Order of detention under

section 3 read with section 12 A made during period of emergency-Whether

A

B

c

D

can form f ouneation for taking action under section 6 of Smugglers and E

Foreign Exchange. Manipulators (Forfeiture of Property) Ac~ 1976-Held,

Yes-whether the validity of such order of detention be challenged when

proceedings are taken against detenue under SAFEMA, even though said

order has ceased to be operative and was not challenged during its opera­

tion-Held, No.-Validity of order to be tested with reference to position of

law obtaining at the time said order was made and during period of operation. F

Smugglers and Foreign Exchange Manipulators (Forfeiture of Property)

Act, 1976-Section 3(1)(c)-lllegally acquired properties-Definition

of-Validity-Whether

definition of "illegally acquired property" is violative of

fundamental rights of detenue-Held, No.

Smugglers and Foreign Exchange Manipulators (Forfeiture of Property)

Act, 1976-Section 2(2)(a)&(b}-Forfeiture of 'illegally acquired properties'

of a person falling under clause (a) or clause (b) of Section

2(2)-JYltether

application of Act to relatives and associates of detenues is violative of

Articles 14, 19 and 21 of Constitution of lndit:t-Held, No.

1

G

H

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

A Conservation of For eign Exchange and Prevention of Smuggling Ac-

tivities Act, 1974-Section 5-A-Validity of-Whether Section 5-A is violative

of clause (5) of Article 22 of Constitution of India-Held, No.

Constitution

of India-Article 22(5)-Validity of Section 5-A of

B

COFEPOSA-Whethersection 5-A is violative of Article 22(5)-Held, No.

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

detention. were made under section 3 of the Conservation of Foreign

Exchange

and

Prevention of Smuggling Activities Act, 1974. In view of the

provisions

of section 12-A, the detenues were neither supplied with the C grounds of detenuetion nor were their cases referred to the Advisory

Board. Because

of the order under Article 359(1) and the operation of

Article 358 of the

Constitution of India, they had no remedy and couid not

approach the High Court or the Supreme Court for relief. The detenues

were released wh.en the emergency was revoked. Notices were issued under

D section 6 of the Smugglers and Foreign Exchange Manipulators (Forfei­

ture of Property) Act, 1976, to those detenues, their relati~es and as­

sociates calling upon them to show cause why the properties mentioned in

the notices be

not declared as illegally acquired properties and forfeited.

The orders of detention made

against the detenues under

COFEPOSA

during the emergency were the foundation for the ach"bn being taken

E against them under SAFEMA. The detenues filed writ petitions in the High

Courts for quashing the said notices while challenging the constitutional

validity

of the

COFEPOSA, SAFEMA and the 39th, 40th and 42nd Amend­

ments to the Constitution of India placing COFEPOSA and SAFEMA in

l

the IX Schedule. The writ petitions filed in various High Courts were ,,.,..

F transferred to the Supreme Court in view of the important constitutional

questions raised therein.

Though a challenge to the constitutional validity of 39th, 40th and

42nd Amendments to the Constitution was levelled in the writ petitions on

the ground

that the said Amendments infringe the basic structure of the

G Constitution, no effort was made to establish in what manner the said

Amendment Acts violated Authority. The petitioners argued that COFEPOSA was not relatable to Entry 9 of List-1 of the Seventh Schedule

to pie Constitution in as much as the preventive detention provided

therefor was not for reasons connected with defence, foreign affairs

or

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

....

I

I

I

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

the said enactment. So far as SAFEMA was concerned, it was argued, it A

was not relatable to any of the Entries in List I or in List Ill .

The petitioners submitted

that since the order of detention under

COFEPOSA was made the basis for action under SAFEMA against the

;letenues, their relatives

and their associates, they were entitled to

chal­

lenge the validity of the order of detention. They argued that by virtue of B

the order made under Article 359(1), the fundamental rights guaranteed

to them

by

Articles, 14, 21 and 22 were not suspended, but only the right

to

move for their enforcement was suspended. The detention

.order made

against them were invalid

and illegal for violation of clauses (4) and (5)

of

Article 22 and, therefore, could not serve as the basis of action under C

SAFEMA. The petitioners submitted that the detention orders governed

by Section 12-A of COFEPOSA were inherently arbitrary and unjust.

The petitioners then attacked the dermition of illegally acquired

properties

"in clause (c) of

Section 3(1) of SAFEMA on grounds of un­

reasonableness, arbitrariness or as violative of Articles 14, 19 and 21. D

Alternatively, it was submitted that if the said definition was unassailable

on account of its inclusion

in the IX

Schedule, the definition should be

read

down so as to confine it only to the properties acquired by violating

the

prohibitio!s contained in the Acts mentioned in section 2(9) of

SAFEMA. It was contended that extending the provisions of SAFEMA to E

the relatives, associates and other'holders' was a case of excessive regula­

tion. It was pointed out that the definitions of 'relative' in Explanation (2)

I

and of 'Associates' in Explanation (3) were so wide as to bring in a person

even distantly related or associated with the convict/detenue, within the net

ofSAFEMA.

The petitioners also challenged the validity

of

Section 5-A of

COFEPOSA on the ground of it being violative of the safeguards provided

by clause (5) of Article 22.

F

Relaying upon the provisions of clause (lA) of Acticle 359, it was

submitted

by the Additional Solicitor

GeJieral that the validity of the G

detention orders had to be judged with reference to the law then obtaining

. ....., on the date of issuance of notice under section 6 of SAFEMA. He submitted

that clause (lA) of Article 359 saved all such orders. It was stated that

suspension of remedy amounted to suspension of the right itself and there

was no distinction, according to him, between Article

358 and an order H

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

A under Article 359 (1). It was argued that the detention orders passed

during the emergency to which section 12-A of COFEPOSA applied could

not

be said to be void ab initio or non-est. The orders were good and valid

when

they were made, though they ceased to be operative with the ces sation

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

B

(1) Whether the parliament was not competent to enact COFEPOSA

and SAFEMA?

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

U-A of COFEPOSA made during the period of emergency proclaimed

C under Article 352(1) of the Constitution of India, • with the consequent

'suspension' of Article 19 and during which period the right to move the

Court to enforce the rights conferred by Articles 14, 21 and 22 was

suspended -can from the foundation for taking action under Section 6 of

SAFE MA against the detenue, his relatives and associates? And if it does,

can the validity of such

order of detention be challenged by the detenue

D and/or his relatives and associates, when proceedings are taken against

him/them under

SAFEMA, even though the said order of detention has

ceased to be operative and was not either challenged • or not successfully

challenged -during its operation?

E

(3) _If the answer to the Question No. 1 is in affirm';tive, should the

validity

of the order of detention be tested with reference to the position

of law obtaining at the time of making the said order and during its period

of operation or with reference to the position of law obtaining on the date

of issuance of the show cause notice under Section

6_ of SAFEMA?

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

G

(c) of Section 3(1) of SAFEMA is violative of the fundamental rights of the

petitioners

guara

•• teed by Articles 14, 19 and 21 and whether the inclusion

of SAFEMA in the IX Schedule to the Constitution cures such violation,

if any?

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

sociates of detenues is violative of Articles 14, 19 and 21? Whether the

inclusion of the said Act in the

IX Schedule cures such violation, if any.

(6) Whether Section

5-A of COFEPOSA is violative of clause (5) of

H Article 22?

I

I

r

I

t

......

AITORNEY GENL. FOR INDIA v. A PRAJIVANDAS 5

Disposing of the matter, this Court A

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

Conservation of Foreign Exchange

and Prevention of Smuggling Activities

"

Act, 1974 and the Smugglers and Foreign Exchange Manipulators (Forfei­

ture of Property) Act, 1976. The COFEPOSA is relatable to Entry 3 of List

Ill inasmuch as it provides for preventive detention for reasons connected B

with the security of the State as well as the maintenance of supplies and

services essential to the community. (22-H, 23-A, 53-C]

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

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

39th (Amendment) Act,

1975 while the SAFEMA and the

COFEPOSA

(Amendment) Acts, 1976 were placed in the IX Schedule by the Constitu-

tion 40th (Amendment) Act, 1976. Both the enactments being placed in the

c

IX Schedule, they enjoy the immunity conferred by Article 31 (B). The

petitioners have not been able

to sustain their submission that the 39th D

(Amendment) Act and

40th (Amendment) Act, placing the said enactments

in the IX Schedule were unconstitutional, They

are assumed to be good

and valid. (11-D, 21-C]

13. An order of detention made under Section 3 of COFEPOSA, E

which was governed by Sectio'1 12-A thereof, is yet an order of detention

for the purpose

of and within the meaning of

Section 2(2) (b) of SAFEMA.

Since the President had issued an order under Article 359 (1) suspending

Articles

14, 21 and 22, it became competent for Parliament, by virtue of

clause (lA)

of Article 359 to

enact Section 12-A of COFEPOSA for the

duration

of and limited to

th~ period for which the Presidential Order was F

in force. It was meant to achieve the purposes of emergency. Once Section

12-A is held to be a competent piece oflegislation, orders of detention made

thereunder (i.e. orders

of detention to which the said provision applied)

cannot be held

to be not amounting to orders of detention for the purpose

of and within

th~ meaning of section 2(2)(b) of SAFEMA, particularly in G

view of the express language of Section 2(2)(b) (including proviso (iii)

thereto) ·and the protection enjoyed by both the enactments by virtue of

their inclusion in the IX Schedule to the Constitution. (53-E·G]

1.4. An order of detention to which Section 12-A is applicable as well

as an order of detention to which Section 12-A was not applicable can serve H

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

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

to his relatives and associates provided such order of detention does not

attract any of the sub-clauses in the proviso to Section 2(2) (b). If such

detenue did not choose to question the said detention (either by himself or

through his next friend) before the court during the period when such order

B

of detention was in force, - or is unsuccessful in his attack thereon - he, or

his relatives and associates cannot attack or question its validity when it is

made the basis of applying SAFEMA to him or to his relatives or associates.

[53-H, 54-A-B]

This is for the reason that even if he is allowed to challenge the said

order when he is served with the notice under section 6 of SAFEMA, the

C challenge has to be examined with reference to the position of law as was

obtaining at the time the said order was made and the law in force during

the period the said order of detention was in operation. [40-D]

D

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

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

guished.

1.5.

The definition

of' 'illegally acquired properties in clause (c) of

Section 3 of SAFEMA is not invalid or ineffective. The definition is quite

E wide. It takes in not only the property acquired after the Act but also the

property acquired before the Act, whatever be the length of time. It takes

in property which may have been acquired partly from· but of illegal

activity. [40-F-G]

F

Both enactments being placed in the IX Schedule they enjoy the

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

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

grounds relatable to part-JU, cannot be challenged. Further, in view of

clear and unambiguous language employed in clause (c) of Section 3, it is

not permissible to resort to the device of reading down. Therefore, neither

G the constitutional validity of the said definition can be questioned nor is

there any warrant for reading down the clear and unambiguous words in

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

[41-D-H & 42-A-i>]

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

H on.

--

,

·-

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

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

properties" of a person falling under clause (a) or clause (b) of Section

2(2). The relatives

and associates are brought in only for the purpose of

ensuring

that the illegally acquired properties of the convict or detenue,

acquired

or kept in their na mes, do not escape the net of the Act. It is a

well known fact that persons indulging in illegal activities screen the

properties acquired from such illegal activity in the names

of their

rela­

tives and associates. Sometimes they transfer such properties to them, may

be, with an intent to transfer the ownership and title. In fact, it is im­

material how such relative or associate holds the properties of con­

vict/detenue whether as a benami or as a mere name-lender or as a bona

B

fide transferee for value or in any other manner. He cannot claim those C

properties and must surrender them to the State under the Act. Since he

is relative

or associate, as defined by the Act, he cannot put forward any

defence once

it is proved that, that property was acquired by the detenue

-whether in his own name or in the name of his relatives and associates.

It is to counter-act the several devices that are or may be adopted by D

persons mentioned in clauses (a) and (b) of Section 2(2) that their rela­

tives and associates mentioned in clauses (c) and (d) of the said sub-sec-

tion

are also brought within the purview of the Act.

The fact of their

holding

or possessing the properties of convict/detenue furnishes the link

between the convict/detenue

and his relatives and associates.

Only the

properties of the convict/detenue are sought to.be forfeited, wherever they

E

are. The idea is to reach his properties in whomsoever's name they are

kept or by whomsoever they are held. The independent properties of

relatives and friends, which are not traceable to the convict/detenue, are

not sought to be forfeited nor are they within the purview of SAFEMA.

[44-B-G) F

There ought to be the connecting link between those properties and

the convict/detenue, the burden of disproving which, is upon the

rela­

tive/associate. The bringing in of the relatives and associates or of the

persons mentioned in clause

(e) of

Section 2(2) is thus neither dis-

criminatory

nor incompetent apart from the protection of Article 31-B. G

[46-G-H & 47-A)

1.7.

Section 5-A of COFEPOSA is not invalid or void. It is not

violative of clause (5) of Article 22. [54-E)

1.8.

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

8 SUPREME COURT REPORTS [19941 SUPP. 1 S.C.R.

A is not necessary that there should be multiplicity of grounds for making

or sustaining an order of detention. Where the order of detention is made

on more than one ground, the section creates a legal fiction, viz., it must

be deemed that there are as many orders of detention as there are grounds

which means

that each of such orders is an independent order. It is

'B

difficult to conceive any inconsistency or conflict between Article 22(5) and

Section

5-A. The

Parliament is competent to create a legal fiction and it

did so in this case. Article 22 (5) does not in terms or otherwise prohibit

making of more

than one order simultaneously against the same person,

on different grounds. [ 48-G, 49-D-E]

C Debu Mahato v. State of West Bengal, (1974] 4

SCC 135; Ani/ Day v.

State of West Bengal, (1974] 4 SCC 514; Israi/ Sk v. District Magistrate of

West Dinagpur & Ors., (1975] 3 SCC 292; Dharua Kanu v. State of West

Bengal, (1975] 3 SCC 527; Saraswathi Seshagiri v. Sta~e of Kera/a & Ors.,

(1982] 2 sec, relied on.

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

E

distinguished.

CIVIL APPELLATE JURISDICTION: Transfer Petition No. 17 of

1978 Etc. Etc.

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

Altaf Ahmad, Addi. Solicitor General, Venugopal Reddy, Dr. N.M.

Ghatate, A.K. Srivastava, Ms. A. Subhashini, Ms. Sushma Suri, P.H.

-

--

Parekh, Ms. Prerna Kohli, A.S. Bhasme, D.P. Mukherjee, R.S. Suri, K.C. <"" •

F Dua, S.K. Agnihotri, Harjinder Singh, R.A. Shroff, Sarva Mitter for M/s

Mitter

& Co.,

S. Ganesh, K.J. John, G.S. Phale, Pramod Swarup, Ms. J.

Sarla, M.N. Shroff, Nand Kumar, E.C. Agarwala, Pradeep Kumar; G.S.

Chatterjee, Shrinath Singh, Vineet Kumar, Anip Sachthey, S.V.

Tambwekar, P. Parmeswaran, P.K. Pillai, ATM Sampath, M. Veerappa,

G K.R. Nambiar, Ambrish Kumar, T.S. Arora, CVS Rao, S. Fazal, U. Sagar,

Ms. Sarda Devi, Yashank, Mukul Mudgal, D. Goburdhan, S.M. Jadhav,

Sakesh Kumar, R.N. Joshi, Ms. Janki Ramachandran, U.A. Rana, Anand

Prasad, Rajiv Tyagi for M/s Gagret & Co., P.R. Seetharaman, M.T. "-:

George, S.K. Gambhir and R.S. Sodhi for the appearing parties.

H The Judgment of the Court was delivered by

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

B.P. JEEVAN REDDY, J. Till the wind of liberalisation started A

blowing across the Indian economic landscape over the last year or two,

the Indian economy was a sheltered one. At the time of independ e:uce,

India did not have an industrial base wor.th the name. A firm industrial

base had

to be laid. Heavy industry was the crying need. All this required

foreign exchange. The sterling balances built up during

w~rldwar-11 were B

fast dissipating. Foreign exchange had to be conserved, which meant

prohibition import of

several

unessen~ial items and close regulation of

other import

s. It was also found necessary to raise .protective walls to

nurture and encourage the

nascent· industries. These controls had, how-

ever, an unfortunate fall-out. Th ey gave rise to a class of smugglers and

foreign exchange manipulators who were out to frustrate the regulations C

and restrictions -profit being their sole motive, and success in life the sole

earthly judge of right and wrong. As early as 1947, the Central Legislature

found it necessary to enact the Foreign Exchange Regulation Act, 1947 and

imports and Exports (Control) Act, 19

47. Then came the import (Control)

Order,

1955 to place the policy regarding import on a surer footing. In the D .

year 1%2, a n ew Customs Act replaced the antiquated Sea Customs Act,

..._ 1878. The menace of smuggling and foreign exchange violations, however,

continued

to rise unabated. The Parliament then came forward with the

conservation of Foreign

Exchange and Prevention of Smuggling Act, 1974

(COFEPOSA). It provided for preventive detention of these anti-social

e

lements. E

On June 25, 1975, the President of India proclaimed an emergency

under Article 352(1) of the Constitution of India on the ground that "the

sec

urity of India is threatened by internal disturbance." A proclamation of

'

~ emergency dated December 3, 1971 issued under Article 352(1) on the F

ground that "the security of India is threatened by external aggression" was

already in force. These declarations had the ~ffect of 'suspending' - to use

a popular though not strictly accurate expression -Article

19 as provided

by Article 358 of the Constitution.

On 27th June, 1975 the President of

India made

an order under Article 359(1) of the Constitution declaring

"that the right of

any person (including

a·foreigner) to move any court for G

the enforcement of the rights conferred by Article 14, Article 21 and

Article

22 of the Constitution and all proceedings pe nding in any

C<?urt for

- the enforcement of the above-mentioned rights shall remain suspending for

the period during which the proclamation of emergen cy ma<4e under clause

(1)

of Article 352 of the

Cons~.t ution on 3rd December, 1971 and on the H

10 SUPRE ME COURT REPOR TS (1994] SUPP. 1 S.C.R.

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

B

With effect from 1st July, 1975, COFEPOSA was amended in certain

respect

s. inter alia, it introduced

Section 12-A containing special provisions

for dea

ling with emergenc y. By virtue of

Section 12-A, the requirements of

supply

of grounds [section 3(3)] and consultation

with· Advisory Board

(Section 8) were practically done away with.

ln the year 1976, no doubt, during the continuance of emergenc y, the

Parliament enacted the Smugglers and Fore

ign Exchange Manipulators

(Fo

rfeiture of property) Act, 1976 (SAFEMA). If replaced an Ordinance

C to the same e ffect and was brought into force from the date of the

Ordinance,

viz., 5th November, 19 75. This Act applies to persons convicted

under the

Sea Customs Act, 1878/Customs Act, 1962/FERA, 1947 /FERA,

1973 and to those detained under the COFEPOSA, whose detention order

was neither set aside nor revoked in the circumstances mentioned therein.

D Besides the persons so convicted/detained, the Act applies to their relatives

and associates as well. The main purpose

of the Act is to forfeit the illegally

acquired properties

of such smugglers and foreign exchange manipulators

in whomsoever's name they may have been

kept.

During the period the Emergency proclaimed on 25th June, 1975 was

E in force, several orders of detention were made under Section 3 of

COFEPOSA. ln view of the provisions of Section 12-A, the said detenues

were neither supplied with the grounds

of detention nor were their cases

refe

rred to the Advisory Board. The detenues, however, had no remedy.

Becau

se of the order under Article 359(1) and the operation of Article 358

F - as interpretated by this Court in A.D.M. Jabalpur v. Shivkant Shukla,

[1976] 2

S.C.C. 521 -they could not approach the High Court or this Court

for relief. The emergency was revoked on March

21, 1977 and the detenues

released. Subsequently notices were iss

ued under

Section 6 of the

SAFEMA to the said detenues, their relatives and associates calling upon

them to show cause why the properties mentioned in the notices be not

G declared as illegally acquired properties a nd f<?rfeited. SAFEMA was being

invoked against them because

of the orders of detention made against the

dete

nues under

COFEPOSA during the period of emergency. The said

orders of detentions were

the connect ing

link, the foundation for the action

being taken against the dete

nues, their friends and relatives under

H

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

-

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

or set aside as contemplated by clause (b) of sub-sect io.n (2) of Section 2 A

of SAFEMA). It is then that the said persons approached the High Courts

under Article

226 and this Court under Article 32 for quashing the said

notices. In these writ petitions, the Constitutional validity

of the

COFEPOSA, SAFEMA and of the 39th, 40th and 42nd Amendments to

the Constitution of India were questioned. (In a few cases, it appears, final

B

orders were also passed-but that circumstance does not make any dif-

ference to the principle involved herein). In most of the cases further

proceedings were s

tayed . ...,

The Attorney General of India applied for transfer of the writ

petitions pending

in various High

Courts to this Court to be heard c

alongwith the petitions preferred directly in this Court in view of the .

important constitutional questions raised therein. The prayer for transfer

is granted in all the transfer petitions. Leave granted in the

S.L.P.

It may be mentioned that COFEPOSA was placed in the IXQi

D

Schedule at Sl. No. 104 by the Constitution 39th (Amendment) Act, 1 975

while the SAFEMA and the COFEPOSA (Amendment) Act s, 1976

(Central Acts 13 and 20 of 1976 respectively) were placed in the IXth

Schedule at Serial Nos. 127 and 129 by the Constitution 40th (Amendment)

Act,

1976.

The counsel appearing for the petitioners urged several contentions

E

all of which have been contested by 3rd Altaf Ahmed, Learned Additional

Solicitor General. The issues arising from the rival contentions urged at the

bar may be formulated in the shape of questions. They are to the following ..,..

effect :

F

(1) Whether the Parliament was not competent to enact COFEPOSA

and SAFEMA?

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

12-A of COFEPOSA made during the period of emergency proclaimed

G

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

'suspen sion' of Article 19 and during which pe.riod the right to move the

' Court to enforce the rights conferred by Articles 14, 21 and 22 was

-,

suspended -can form the foundation for taking ac tion under Section 6 of

SAFEMA against the detenue, his relatives and associates? And if it does,

can the

validity of such order of detention be

challenged by the detenue H

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

A and/or hrs relatives and associates, when proceedings are taken against

him/them under SAFEMA even though the said order of detention has

ceased to be operative and

was not either challenged - or not successfully

chalJenged -during its operation?

(3)

If the answer to the Question No. 1 is in affirmative, should the

B validity of the order of detention be tested

with reference to the position

of law obtaining at the time

of making the said order and during its period

of operation

or

¥fith reference to the position of law obtaining on the date

of issuance of the show cause notice under Section 6

of SAFEMA?

C ( 4) Whether the definition of

"illegalJy acquired property'' in clause

(c) of Section 3(1)

of SAFEMA is violative of the fundamental rights of

the petitioners guaranteed by Articles 14, 19 and 21 and whether the

inclusion

of SAFEMA in the IXth Schedule to the Constitution cures such

violation,

if any?

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

E

sociates of detenues is violative of Articles 14, 19 and 21? Whether the

inclusion

of the said Act in the IXth

Schedule cures such violation, if any?

(6) Whether Section

5-A of

COFEPOSA is violative of clause (5) of

Article 22?

For a proper appreciation of the aforesaid questions, it is necessary

to bri.efly refer to the relevant provisions

of both the enactments.

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

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

G

H

"An Act to provide for preventive detention in certain cases for

the purposes of conservation and argumentation of foreign

ex-

change and prevention of smuggling activities and for matters

~

connected therewith.

Whereas violations

of foreign exchange regulations and smug­

gling activities are having an increasingly deleterious e

ffect on the

national economy and thereby a serious adverse effect on the

security

of the

State ;

And whereas having rega

rd to the persons by whom

and the

f

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

manner in which such activities or violations are organised and A

carried on, and having regard to the fact that in certain areas which

are highly vulnerable to smuggling, smuggling activities of a con-

siderable magnitude are clandestinely organised and carried on, it

is neces

sary for the effective prevention of such activities and

violations to provide for detention of persons concerned in any

B

manner therewith;

Be it enacted by Parliament in the Twenty-fifth year of the

-.,.-

Republic of India as follows :-"

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

c

says that the said expression shall have the same meaning as in clause (39)

of Section 2 of the Customs Act, 1962 and that all its grammatical variations

and cognate expressions shall be construed accordingly.

Clause

(39) of Section 2 of the Customs Act defines "smuggling" in

the following words: "smuggling in relation to any goods, means any act or D

-· omission which will render such goods liable to confiscation under Section

111 or Sedion 113."

Section 3 provides that where the Central Government, the State

Government or any officer empowered in that behalf is satisfied with

E

respect to any person including a foreigner, that (1) with a view to prevent-

ing him from acting in any manner prejudicial to the conservation or

augmentation of foreign exchange

or (2) with a view to preventing him from

(i) smuggling goods, or (ii) abetting the smuggling of goods, or (iii)

~ engaging in transporting or concealing or keeping smuggled goo<;ls, or (iv)

dealing in smuggled goods otherwise than by engaging in transporting or F

concealing or keeping smuggled goods, or (v) harbouring persons engaged

in

smuggling goods or in abetting the smuggling of goods, it is necessary

to detain

him, he can do so. Sub-section (3) provides for service of grounds

·I of detention within five days of the detention. (In "exceptional circumstan-

ces and for reasons to be recorded in writing", the grounds of detention

G

are allowed to be served within fifteen days).

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

reads thus :

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

14

A

B

c

D

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

detained in pursuance of an order of detention under sub-section

(1) of Section 3 which has been made on

two or more grounds, such order of detention shall be deemed to have been made

separately on each of such grounds and accordingly -

(a) such order shall not be deemed to be invalid or inopera­

tive merely because one or some of the grounds is or are -

(i) vague,

(ii) non-existent,

(iii) not relevant,

(iv) not connected or not proximately connected with such

person, or

(v) invalid for any other reason whatsoever,

and

it is not therefore possible to hold that the Government or

officer making such order would have been satisfied provided

in sub-section

(1) of Section 3 with reference to the remaining

ground or grounds and made the

order of detention;

E (b) the Government or officer making the order of detention shall

be deemed to have made the order of detention under the said

sub-section (1) after being satisfied as provided in that sub-section

with reference to the remaining ground or grounds

."

F

More about this section later.

Section

8 provides for constitution of an Advisory Board as required

by clause ( 4) of Article 22 and for reference of each detenue's case to it.

The opinion of the Advisory Board is binding

upon the Government.

Section 9 provides certain classes of cases, where the reference to Advisory

G Board can be made within aµ extended period. This section is relatable to

clause (7) of Article

22. Section 12-A containing special provisions for

dealing with emergency

was introduced by

COFEPOSA (Amendment)

Act,

1976 (Act 19 of 1976). In view of its crucial relevance, the section

~y ·

be set out in full. It reads :

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

~ ·

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

withstanding anything co ntained in this Act or any rules of natur al A

justice, the provisions of this section shall have effect during the

period

of operation of the pro clamation of Emergency issued

under clause (i)

of Article 352 of the Constitution on the 3rd day

of December, 1 971, or the Proclamation of Emergen cy issued

under that clause on the

25th day of June, 1975, or a period of

B

twenty-four months from the 25th day of June, 1975, whichever

period

is the shortes t.

....

(2) When making an order of detention under this Act against any

person after the commencement

of the Conservation of Foreign

Exchange and Prevention

of Smuggling Activities (Amendment) c

Act, 1975, the Central Government or the State Government or,

as the case may be, the officer making the order of detention shall

consider whether the detention of such

person under this Act is

necessary for dealing effectively with the emergency in respect of

which the proclamations referred to in sub-section (1) have been

D

issued (hereafter in this section referred to as the emergency) and

if, on such consideration, the Central Government or the State

Government or, as the case

may be, the officer is satisfied that it

is

necessary to detain such person for effectively dealing with the

emergency, that Government or officer may make a declaration to

that effect and communicate a copy

of the declaration to the E

person concerned :

Provided that where such declaration is made by an officer, it

·~ shali be reviewed by the appropriate Government within fifteen days

from the .date of making

of the declaration and such declaration

F

shall cease to have effect unless it is confirmed by that Govern-

ment, after such review, within the said period of fifteen

days.

(3) The question whether

the detention of a ny person in respect

of whom a declaration has been made under sub-sec tion (2)

G

continues to be necessary for effectively dealing with the emergen-

cy shall

be reconsidered by the appropriate Governnient

~ithin four

.... months from the date of such declaration.a nd thereafter af'inter-

vals not exceeding four months, and if, on such reconsideration, it

appears to the appropriate Government that the detention

of the

person is no longer necessary for effectively d ealing with the H

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

\{

A emergency, that Government may revoke the declaration.

( 4) In making any consideration, review or reconsideration under

sub-section (2) or (3), the appropriate Government or officer may,

if such Government

or officer considers it to be against the public

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

B materials in its or his possession without disclosing the facts or

giving an opportunity of making a representation to the person

concerned.

-.

(5) It shall not be necessary to disclose to any person detained under

c

a detention order to which the provisions of sub-section (2) apply,

the grounds on which the order has been made during the period the

declaration made in respect of such person under that sub-section

is in force and, accordingly, such period shall not be taken into

account for the purposes

of sub-section (3) of Section 3.

D (6) In the case of every person detained under a detention order

to which the provisions of sub-section (2) appl

y, being a person in

respect

of whom a declaration has been made thereunder, the

period during which such declaration

is in force shall not be taken

into account for the purpose

of

C?mputing -

E

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

(ii) the period

of "one year" and "five weeks" specified in

sub-section (1), the period of "one year" specified in

sub-sec-

tion (2)(i) and the period of "six months" specified in sub-sec-~ ·

F tion (3) of Section 9."

This provision was made during the period of emergency ·and is

confined to the duration of emergency or such shorter period as may be

specified. It contemplates making a declaration that the detention

of

~

G

person is necessary for dealing effectively with the emergency and if such

a declaration

is made, his case shall be governed by this Section. The only

safeguards

-if they can be called that -are the provisions for review and

reconsideration by the appropriate Government mentioned in the Section

itself. The constitutional safeguards in clauses (4) and (5) of Article 22 and

....

the provisions in the Act incorporating the said safeguards are dispensed

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

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

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

emergency.

SAFEMA : -The preamble to the Act sets out the reasons and

objects behind the enactment. It reads :

"An Act to provide for the forfeiture of illegally acquired proper- B

ties of smugglers and foreign exchange manipulators and for mat·

ters connected therewith or incidental thereto;

Whereas for the effective prevention · of smuggling activities

and foreign exchange manipulations which are having a deleterious

C

effect on the national economy it is necessary to deprive persons

engaged in such activities and manipulations of their ill-gotten

gains;

And whereas such persons have been augmenting such gains

by violations of wealth-tax, income-tax or other laws or by other

D

means and have thereby been increasing their resources for operat.

ing in a clandestine manner;

And whereas such persons have in many cases been holding

the properties acquired by them through such gains in the names

of their relatives, associates and confidants;

E

Be it enacted by

Parliament in the Twenty-sixth Year of the

Republic of India

as follows

:"

· Section 2 specifies the persons to whom the Act applies. Sub-section

(1) declares that the provisiop.s of the Act shall apply "only to the persons F

specified in sub-section (2}". Sub-section (2) mentions five categories of

persons to whom the provisions of the Act apply. The first category men­

tioned under clause (a) comprises persons convicted under Sea Customs

Act,

1878 or the Customs Act, 1962 of an offence in relation to goods of

a value exceeding one lakh of rupees.

The requirement of value exceeding G

Rupees one lakh does not

·apply in case of second or subsequent convic­

tion. Persons convicted under FERA, 1947/1973 of an offence, the amount

and value involved

in which exceeds one lakh rupees are

also included

under clause (a). The requirement of value (above one lakh}, however,

does not apply in the case of second or subsequent conviction. The second

category [clause (b)] comprises of persons in respect of whom an order of H

18 SUPREME C OURT REPO RTS [1994) SUPP. 1 S.C.R.

A detention has been made under COFEPOSA, but which order was not

revoked or set aside

in any of the situations set out in the four sub-clauses

of the proviso. It would be appropriate to. set out clause (b) in full. It reads:

''(b) every person

in respect of whom an order of detention has

been made under the Conservation

of Foreign Exchange and

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

c

D

E

F

Provided that -

(i) such order of detention, being an order to which the

provisions of Section 9 or Section 12-A of the said Act do not

apply, has not been revoked on the report

of the Advisory Board

under

Section 8 of the said Act or before the recei pt of the report

of the Advisory Board

or before making a reference to the

Ad­

visory Board; or

(ii) such order of detention, being an ordtn to which the

provisions

of

Section 9 of the said Act apply, bas not been revoked

before the expiry of the time for,

or the basis of, the review under

sub-section (3)

of Section 9, or on the report of the Advisory Board

under

Section 8, read with sub-section (2) of Section 9, of the said

Act, or

(iii) such order of detention, being an order to which the

provisions of Section 12-A of the said Act apply, has not been

revoked before the expiry

of the time for , or on the basis of, the

first review under sub-section (3) of that

section,· or on the basis

of the report

of the Advisory Board under

Section 8, read with

sub-section (6)

of

Section 12-A, of that Act, or

(iv) such order of detention has not been set aside by a court

of competent jurisdiction; " ·•

The third category to whom the act applies [mentioned in clause (c)]

.G are the relatives· of persons referred to in clauses (a) and (b). Fourth

category [clause ( d)] consists of the associates of the persons referred to in

clauses (a) and (b). The fifth category mentioned under clause (e) com­

prises of holders of any property, which was at any time previous ly held by

a person referred to

in clauses (a) or (b) unless such holder proves that

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

-

,_

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

specifies the manner in which the value mentioned in clause (a) has to be A

computed. Explanation (2) specifies the relatives covered by clause (c),

while Explanation (3) specifies the associates included under clause ( d).

Section 3 defines certain expressions occurring in the Act, including

the expression "illegally acquired property". It reads as follows:

"(c) "illegally acquired property", in relation to any persons to

whom this Act applies means -

B

(i) any property acquired by such persons, whether before or

after the commencement of this Act, wholly or partly out of

or by means of any income, earnings or assets derived or C

obtained from or attributable to any activity prohibited by or

under

any law for the time being in force relating to any

matter in respect of which Parliament has power to make

laws; or

D

(ii) any property acquired by such person, whether before or

after the commencement of this Act, wholly or partly out of

or

by means of any income, earnings or assets in respect of

which any such law has been contravened; or

(iii) any property acquired by such person, whether before or E

after the commencement of this Act, wholly or partly out of

or

by means of any income, earnings or assets the source of

which cannot be proved and which cannot be shown to be

attributable

to any act or thing done in respect of any matter

in relation

to which Parliament has no power to make laws;

or

(iv) any property acquired by such person, whether before or

after the commencement

of this Act, for a consideration, or

by any means, wholly or partly

traceable to any property

F

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

from such property;

and includes-

(A) any property held by such person which would have been

in ~elation to any previous holder thereof, ille gally acquired H

A

B

c

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

properly under this

clause if such previous holder had not

ceased to hold it, unless such person

or any other person who

held

the property at any time after such previous holder or,

where there are two or more such previous holder s, the last

of such previous holders

is or

was a transferee in good faith

for adequate consideration;

(

B) any property acquired by such person, whether before or

after the commencement of this Act, for a consideration, or

by any means, wholly or partly traceable to any property

falling under item (A),

or the income or earnings therefrom;"

More

of this definition later.

Section 4 declares that after commencement

of the said Act, it shall

not be lawful for any person to whom the act applies to hold any illegally

acquired property either by himself

or through any other person on his

D behalf. Any property so held is liable to be forf e'ited to Central Government

in accordance with the provisions of the Act. Section 6 p~ovides for

issuance

of show-cause notice of forfeiture, while Section 7 provides for

passing of final orders in that behalf. Section 8

says that in proceedings

under the act, the burden

of proving that any· property specified in the

notice served under Section 6

is not illegally acquired property shall be on

E the person affected. Section 11 declares transfers of properties specified

in the notice issued under Section 6, effected after the issuance of the

notice, null and void. Section

12 provides for constitution of the Appellate

Tribunal for hearing the appeals against the orders made under Section 7.

Section

24 gives an overriding effect to the Act over any other law for the

F

time being in force.

Before entering upon discussion

of the issues arising herein, it is

necessary to make a few clarificatory

observations. Though a challenge to

the constitutional validity of 39th, 4-0th and . 42nd Amendments to the

Constitution was levelled in the writ petitions on the ground that the said

G Amendments -eff e cteci after

t}le decision in Keshavananda Bharati v. State

of Kera/a, [1973] Suppl. S.C.R. 1 -infringe the basic structure of the

Constitution, no serious attempt

was made during the course of arguments

to substantiate it.

It was generally argued that Article 14 is one of the basic

features of the Constitution and hence any constitutional amendment

vioia­

tive of Article 14 is equally vio~ative of the basic structure. This simplistic

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

-~ -

>

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

continuance and relevance after Bharati -and of the 39th and 40th Amend-A

ments placing the said enactments in the IXth Schedule. Acceptance of the

petitioners' argument would mean that in case of

post-Bharati constitution-

al amendments placing Acts in the IXth

Schequle, the protection of Article

31-B would not be available against Article 14. Indeed, it was suggested

that Articles

21 and 19 also represent

the basic features of the Constitution.

If so,-it would mean a further enervation of Article 31-B. Be that as it may, B

in the absence of any effort to substantiate the said challenge, we do not

wish to e~ress any opinion on the constitutional vali!iity of the said

Amendments. We take them as they are, i.e., we assume them to be good

and valid. We must also say that no effort has also been made by the

counsel to establish in what manner the said Amendment Acts violate

C

Article 14.

COFEPOSA is a law relating to preventive detention. It has, there­

fore, to conform to the provisions in clauses ( 4) to (7) of Article

22. Insofar

as SAFEMA is concerned, it is, of course, not a law relating to preventive

detention though it

is designed to achieve the very same objective by D

different means. While one seeks to deter them

by means of preventive

detention, the other seeks to punish them by depriving them of their

ill-gotten gains. SAFEMA

is thus a measure

·designed to protect the

economy of the country as also a measure to discourage law-breaking -in

particular, economic violations. The principles relevant in judging the

validity and relevant in the matter

of interpreting the provisions of such E

economic measures are fairly well

settled. It is held that in case of such

enactments the legislature must be permitted a greater play

in the joints.

As pointed out by Bhagwati,

J. in

R.K Garg v. Union of india, (1982) 1

S.C.R.

947 at

970 :

"The court must always remember that "legislation is directed to

practical problems, that the economic mechanism

is highly sensi-

tive and complex, that many

probl~ms are singular and contingent,

F

that laws are not abstract propositions and do not relate to abstract

units and are not to

be measured by abstract symmetry'' that exact

wisdom and nice adaptation of remedy are not

always possible and G

that

" judgment is largely a prophecy based on meagre and

uninterpreted experience". Every legislation particular!y in

economic matters is essentially empiric and it is based on ex­

perimentation or what one may call trial and error method and

therefore it cannot provide for

all possible situations or anticipate H

A

B

c

D

E

F

22

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

all possible abuses. There may be crudities and inequities in com­

plicated experimental economic legislation but on that account alone

it cannot be struck down as invalid. The court cannot, as pointed

obt by the United States Supreme Court in Secretary of Agriculture

v. Central Reig Refining Company (94 lawyers Edn. 381), be con­

verted into tribunals for relief from such crudities and inequities.

There may even be possibilities of abuse, but that too cannot of itself

be a ground for invalidating the legislation, because it is not possible

for any legislation to anticipate as if by some divine prescience,

distortions and abuses of its legislation which may be made by those

subject to its provisions and to provide against such distortions and

abuses. Indeed, howsoever great may be the care bestowed on its

framing, it is difficult to conceive of a legislation which is not

capable of

being abused by perverted human ingenuity.

The Court

must therefore adjudge the constitutionality of such legislation by the

generality of its provisions and not by its crudities or inequities or by

the possibilities of abuse of any of its provisions. If any crudities,

inequities

or. possibilities of abuse come

to light, the legislature can

always step in and enact suitable amendatory legislation. That is

the essence of pragmatic approach which must guide and inspire

the

legislature in dealing with complex economic issues."

(Emphasis added)

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

a decision of the Constitution Bench.

It is not necessary to multiply the authorities.

Question No. 1 :

It is argued for the petitioners that COFEPOSA is not relatable to

G Entry-9 of List-I of the Seventh Schedule to the Constitution inasmuch as

the preventive detention provided therefor is not for reasons connected

with defence, foreign affairs or security of India. Even Entry-3 of List-III,

it

is submitted, does not warrant the said enactment.

So far as SAFEMA

is concerned, it is argued, it is not relatable to any of the Entries (1) to

(96) in List-I or to any of the Entries in List-III. We are not prepared to

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

>

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

it provides for preventive detention for reasons connected with the security A

of the State as well as the maintenance of supplies and services essential

to the community. While Entry 3 of List-Ill speaks of "Security of a State",

Entry 9 of

List-I speaks of "security of India". Evidently, they are two

distinct and different expressions. "Security of a State" is a much wider

expression. A State with a weak and vulnerable economy cannot guard its B

security well. It will be an easy prey to economic colonisers. We know of

countries

where the economic policies are not dictated by the interest of

that State but

by the interest of multi-nationals and/or other powerful

countries. A country with a weak economy is very often obliged to borrow

from International Financial Institutions who in turn seek to dictate the

economic priorities of the borrowing State -it is immaterial whether they C

do so in the interest of powerful countries who contribute substantially to

their

fund or in the interest of their loan. In the modem world, the security

of a State

is ensured not so much by physical might but by economic

strength -at any rate, by economic strength as much as by armed might. It

is, therefore, idle to contend that

COFEPOSA is unrelated to the security

of the State. Indeed in the very Preamble to the Act, the Parliament states D

that the violations of foreign exchange regulations and smuggling activities

are having an increasing deleterious effect on the national economy thereby

casting serious adverse effect on the security of the State. Be that as it may,

it is not necessary to pursue this line of reasoning since we are in total

.

agreement with the approach evolved in

Union of India v. H.E.S. Dhil-E

/on,[1972) 2 S.C.R. 33 -a decision by a Constitution Bench of Seven Judges.

The test

evolved in the said decision is this in short: where the legislative

competence of the

Parliament to enact a particular statute is. questioned,

one must look at the several entries in list-II to find out (applying the

well-known principles in this behalf) whether the said statute is relatable

to any of those Entries. If the statute does relate to any of the Entries in F

list-II, no further inquiry is necessary. It must .be held that Parliament is

competent to enact that Statute whether by virtue of the Entries in list-I

and list-III or by virtue of Article 248 read with Entry 97 of list-I. In this

case, it is not even suggested that either of the two enactments in question

are relatable to any of the Entries in list-II. If so, we need not go further G

and enquire -to which Entry or Entries do these Acts relate. It should be

held that

the

Parliament did have the competence to enact them.

Question Nos. 2 and 3 : These questions arise this way. The orders

of detention concerned herein were

made on or after the date of the

proclamation of emergency to which Section 12-A was applicable. None of H

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

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

the detenues were neither supplied with the grounds of detention, nor were

they given an opportunity to make a representation against their detention

.

nor does it appear that their cases were ref erred to the Advisory Board -

not at any rate within the period prescribed by Section 8, or for that matter,

Section 9.

They were released on or within a day or two of the date on

B which the emergency was lifted. In this sense, the order of detention has

worked itself out. But that order of detention is now being made the

foundation, the basis

for taking action under

SAFEMA against the

detenues, their relatives and their associates. SAFEMA is made. applicable

to them by virtue of Section 2(2)(b) r~ad with clauses (c), (d) and (e) of

C sub-section (2). The petitioners say that since the order of detention under

COFEPOSA is made the basis for action under SAFEMA against them,

they are entitled to challenge the validity of the order of detention. They

may not have been able to question the validity of detention during their

detention

by virtue of

Section 12-A of COFEPOSA (non-supply of grounds

and non-reference to advisory board) and also because their right to move

D the court for enforcement of the rights guaranteed to them by Articles 14,

21 and 22 was suspended during the period of emergency by an order made

by the President of India under Article 359(1) of the Constitution - even

Article .19 did not avail them by virtue of Article 358 -but when the said

orders of detention are

sought to be made the basis of action under

E

SAFEMA, after the lifting of emergency, they are now entitled to question

them. They point out that by virtue of the order made under Article 359(1),

the fun~amental rights guaranteed to them by Articles 14, 21 and 22 were

not suspended, but only the right to move for their enforcement was

suspended. If so, they say, the detention orders made against them are

invalid and illegal for violation of clauses ( 4) and (5) of Article 22. They

F may have been barred from enforcing their rights under Articles 22, 21 and

19 because of the said order of the President, but that did not render the

orders of detention valid. Such invalid, indeed void orders, they say, cannot

serve as the basis or as the foundation of action under SAFEMA. They

also stress the drastic nature of the provisions of SAFEMA. On the other

G hand, the learned Additional Solicitor General relies upon the provisions

of

clause {lA) of Article 359 and submits that the validity of the said

detention orders has to be judged with reference to the law then obtaining

and not with reference to the law obtaining on the date of issuance of

notice under

Section 6 of SAFEMA. At any rate, he submits, clause {lA)

of Article

359 saves all such orders. Suspension of remedy, he says is

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

>

;.

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

right without a remedy. There is no distinction, he says, between Article A

358 and an order under Article 359(1) in this regard. He places strong

reliance upon the observations at page

312 of the decision in Makhan Singh

v. State of Punjab, (1964) 4

S.C.R. 797.

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

B

satisfied that a grave emergency exists whereby the security of India or of

any part thereof is threatened, whether

by war or external aggression or

internal, disturban

ce•, to declare by a proclamation that an emergency C

exists.

One of the consequences of such declaratio_n is provided in Article

358. Article 358, as it stood prior to 44th Amendment, read thus :

"

358. While a Proclamation of Emergency is in operation, nothing

in Article

19 shall restrict the power of the

State as defined in Part D

III to make any law or to take any executive action. which the State

would, but for the provisions contained in that Part be competent

to make or to take, but

any law so

i;iiade shall, to the extent of the E

incompetency, cease to have effect as soon as the Proclamation

ceases to operate, _except as respects things done or omitted to be

done before the law so ceases to have effect."

(By the Constitution 42nd Amendment Act, a proviso was added and

by the 44th Amendment Act, some further amendments were made but it

is not necessary to notice them for the purposes of these cases.)

F

Clause (1) of Article 359, as if stood prior to the 44th Amendment, G

provided that "Where a

Proclamation of Emergency is in operation, ·the

Pres~dent may by order declare· that the right to move any court for the

enforcement of such of the rights conferred by Part-III

as may be

men­

tioned in the order and all -proceedings pending in any court for the H

enforcement of the rights so mentioned shall remain suspended for the

period during which the Proclamation

is in force or for such shorter period

as may be specified in the order."

The

purport' and effect of Articles 358 and 359(1) and the distinction

between them fell for consideration of this court

in Makhan Singh. A

Special-Bench of

Seven Judges stated the effect of Article _358 in the

following words:

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

words "internal

disturbance".

A

B

c

D

E

F

G

H

26

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

"It would be noticed that as soon as a Proclamation of Emergency

has been

issued under Art. 352 and so long as it lasts, Art. 19 is

suspended and the power of the legislatures as well as the executive

is to that extent made wider. The suspension of Art.

19 during the

pendency of the Proclamation of emergency removes the fetters

created on the legislati

ve and executive powers by Art.19 and if

the legislatures make

laws or the executive commits acts which are

inconsistent with the rights guaranteed

by Art.19, their validity is

not open to challenge either during the continuance of the emer­

gency or even thereafter. As soon

as the

Proclamation ceases to

operate, the legislative enactments passed and the executive ac­

tions taken during the course of the said emergency shall

be

inoperative to the extent to which they conflict with the rights

guaranteed under Art.19 because as soon as the emergency

is

lifted, Art. 19 which was suspended during the emergency is

automatically revived and begins to operate. Article 358, however,

makes it clear that things done

or omitted to be done during the

emergency cannot

be challenged even after the emergency is over.

In other words, the suspension of Art.19

is

complete· during the

period in question and legislative and executive action which

contravenes Art.19 cannot be questioned even after the emergency

is over."

Next the Bench took up the meaning and purport of Article

359(1}

and held:

"Article 359, on the other hand, does not purport expressly to

suspend any of the fundamental rights. It authorises the President

to i

ssue an order declaring that the right to move any court for

enforcement of such of the rights in

Part III as may be mentioned

in the order and

all proceedings pending in any court for the

enforcement of the rights so mentioned shall remain suspended

for the period during which the.

Pro<'.lamation is in force or for

such shorter period as may be specified in the order. What the

Presidential Order purports to do by virtue of the power conferred

on the President by Art359(1) is to bar the remedy of the citizens

to move any court for the enforcement of the specified right s. The

rights are not express

ly suspended, but

the· citizen is deprived of

his right to move any court

for their enforcement. That is

one

important distinction b.etween the provisions of Art.358 and Art.

359(1)".

~ ·

ATfORJ\"EY GEl\"L. FOR INDIA 1·. A. PRAJIVA:--:DAS IJEEV A: REDDY. J.j 27

It was urged by the learned Allorn ey General that suspension of the A

citizens' right to move any court for the enforceme nt of a particular

fundamental right amounts in law to suspension of the

said right itself for

the said period. The Bench, however, declined to

go into the said question

and proceeded on the assumption "that the said rights are

in theory alive ''

even during the pe riod of the Presidential Order. The Special Bench B

pointed out further :

"It would be noticed that the Presidential

Order cannot widen the

authority

of the legislatures or the executive; it mere ly suspends

the rights to move any court to obtain a relief on the ground that

the rights conferred by

Part III have been contravened if the said C

rights are specified in the Order. The inevitable consequence of

this position is that as soon as the Order ceases to be operative,

the infringement

of the rights made either by the legislative enact­

ment

or by executive action can perhaps be challenged by a citizen

in a court

of law and the same may have to be tried on the merits

on the basis that the rights alleged to have been infringed were in D

operation even during the pendency of the Presidential Order. If

at the expiration of the

Presidential Order, Parliament passes any

legislation to protect executive action taken during the pendency

of the Presidential

Order and afford indemnity to the executive in

that behalf, the validity and the effect

of such legislative action may E

have to be carefully scrutinised.

Since the objection of Art. 359( 1) is to suspend the rights of the

citizens to

move any court, the consequence of the Presidential Order may be that any proceeding which may be pending at the

date

of the

Order remains suspended during the time that the

Order is in operation and may be revived when the said order

ceases to

be operative; and fresh proceedings cannot be taken by

F

a citizen after the order has been issued, because the

Order takes

away the r~ght to move any court and during the operation of the

Order, the said right cannot be exercised by instituting a fresh G

proceeding contrary to the Order. If a fresh proceeding falling

within the mischief

of Art.359(1) and the Presidential

Order issued

under it is instituted after the Order has been issued, it will have

to be dismissed as being incompetent.

In other words, Art. 359(1)

and the Presidential

Order issued under it may constitute a sort

of moratorium or a blanket ban against the institution

or con-H

A

B

c

D

E

28

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

tinuance of any legal action subject to two important conditions.

The first condition relates to the character of the legal action and

requires that the said action

must seek to obtain a relief on the

ground that the claimant's fundamental rights specified

in the

Presidential Order have been contravened, and the second condi­

tion relates to the period during which this ban

is to operate. The

ban operates either for the period of the proclamation or for such

shorter period

as may be specified in the Order ."

The law enunciated by the Special Bench is clear and explicit.

It

requires no elaboration at our hands.

After the said decision, however; clause

(lA) was introduced in

Article 359 by the Constitution 38th (Amendment) Act, 1975. The clause

was introduced with restrospective effect from the date of the Constitution.

Clause (lA), as introduced by the said Amendment Act read

as follows :

"

lA. While an order made under clause (1) mentioning any of the

rights conferred by

Part III is in operation, nothing in that Part

conferring those rights shall restrict the power of the State as

defined in the said Part to make any laws or to take any executive

action which the State would but for the provisions contained in

that Part be competent to make or to take, but any law so made

shall, to the extent of the incompetency, cease to have effect

as

soon as the order aforesaid ceases to operate, except as respects

things

done or omitted to be done before the law so cease to have

effect:"

A proviso

was added to this clause by the 42nd Amendment Act,

,.

F 1976, to the following effect :

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

only in any part ·of the territory of India, any such law may be

made, or any such executive action

may be taken, under this article

in relation to or in any State or

Union territory in which or in any

G part of ',Vhich the Proclamation of Emergency is not in operation,

if and in so far as the security of India or any part of the territory

thereof

is threatened by activities in or in relation to the part of

the territory of

India in which the Proclamation of Emergency is . ~

in operation."

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

,. ATIORNEYGENL FOR INDIA v. APRAJIVANDAS (JEEVANREDDY,J.) 29

and 21" were added after the words "the rights conferred by Part III" in A

clause (lA) besides adding clause (lB) but these amendments, not being

retrospective in operation, are not relevant in the case

of detentions

governed by Section 12-A

of

COFEPOSA during the period of emergen-

cy.)

It is obvious that clause (lA) was

put in with a view to bring the B

effect of the Presidential Order under Article 359(1) on par with Article

358(1) insofar as the competence

of the State to make.a law inconsistent

with the specified fundamental riglits

is concerned. Article 359(1A) is

broadly in the same terms as Article 358. Article 358 says that while a

proclamation

of emergency under Article 352 is in operation "nothing in

c

Article 19 shall restrict the power of the State as defined in Part-III to

make any law

or to take any executive action which the

State would but for

the provisions contained in that Part be competent to make or .to take, but

any law so made shall to the extent of incompetency cease to have effect

as soon as the proclamation ceases to operate except as respects things

done

or omitted to be done before the law ceases to have effect". Clause D

(lA} of Article 359 says similarly that while the Presidential

Order made

under Article 359(1) is in operation "nothing in. that Part (Part-III) confer-

ring those rights shall restrict the power

of the State as defined in the said Part to make any law or to take any executive action which the State would

but for the provisions contained in that Part be competent to make or to

E

take but any law so made to the extent of incompetency shall cease to have

effect as soon as the order aforesaid ceases to operate except as respects

things done

or omitted to be done before the law so ceases to have effect ".

Of course, while Article 358 is confined only to Article 19, clause (lA)

extends to those rights whose enforcement may have been suspended .by

·- an Order under Article 359(1). The other distinction is that while the

F

"suspension"• of Article 19 under Article 358 is co-extensive with the

duration

of the proclamation of emergency, clause (lA) is confined to the

period for which the Presidential

Order remains in force. Yet another

distinction

is that while Article

358 enables the State to make any law or

to take any executive action inconsistent with Article 19 during the period

of emergency, clauses (1) and

(lA) of Article 359 read together provide G

for suspension (by means of a Presidential

Order) of the enforcement of

the fundamental rights specified in the Order and simultaneously enable

~ "

lt should be noticed that only the heading of Article 358 spc~ of "suspension of

provisions of Article 19;" in the body of the Article, there is n~ reference to suspension

of the Article.

H

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

A the State to make any law or to take any executive action inconsistent with

such fundamental rights.

It is evident that what is said in

Makhan Singh

with respect to Article 358 (competence of the State to make a Jaw or to

take executive action inconsistent with Article

19) does apply equally to

Article 359 by virtue of the introduction of clause (lA) with retrospective

B

effect. In other words, during the period the

Presidential Order under

Article

359(1) is in force, the

State is competent to make any law or take

any executive action which it could not have taken but for the suspension

of enforcement of the fundamental rights specified in the Presidential

Order. In our opinion, the position under Article 358 is this : Article 358

enables the State -it empowers the State -to make any law or to take any

C executive action inconsistent with Article 19. This exceptional power is,

however, confined to the period of emergency and is intended to facilitate

the effective implementation of the objectives

of emergency. The justifica­

tion of this extraordinary provision is that individual liberties may have to

be kept in abeyance temporarily

if found necessary to meet the threat to

the security of India or

any part thereof within the meaning of Article

D 352(1). As soon

as_ emergency ceases, the law so made shall to the extent

of inconsistency with Article

19 ceases to have effect, except with respect

,

to things done or omitted to be done before the law so ceases to have

effect. What it means, is that the validity of the law made or the things done

I .

or omitted to be do[le by virtue of the said Article during the period of

emergency cannot be; q.uestioned either during or after the emergency on the

E ground of inconsistency ~th Article 19. Neither the law nor the executive

action (to the extent of its inconsistency with Article

19) can continue even f~f:,~ day b1Y,ond the cessation of emergency. Their validity and/or the

comnhtencedS-the State to make or take them during the period of emer-

.

10

~

1

• J h c l d b d . f ill . 1

gfn9) 1s L owever, p ace eyon questton. By way o ustratton a aw

F

mivi..have b~eh made or an executive action may have been taken unduly

VfJ' lJ:JQLl ~u1 .,

re~ff1~~g th.e freedom of. speech and the freedom of press during the

q eiA1r~ncy .. ~ch restriction insofar a_s it is not warranted by Article 19(2)

ceases, to operate or to have effect with the cessation of emergency. But

the citizen whose right has been unreasonably curtailed cannot sue the

State for damages or other relief nor can he takes any other proceedi.ng

G against the State for imposing such unreasona~le restriction during the

period of emergency. This is because

of the protection provided to the State by Art\cle 358. It should be remembered that Article 358 sanctions

suc\li,~ '..l c?,~se ,because the Founding Fathers thought -and not without

justification -that when the security of India or any part thereof is

threatened as contemplated by Article 352, the State should be left free to

H

AlTORNEYGENL. FOR INDIA v. A.PRNIVANDAS [JEEVAN RED DY,J.) 31

make such law

or to take such executive action as is necessary to safeguard A

security of the country unfettered by the provisions in Article 1 9. This

subordination of Article 19, however, is only for the period the pro clama-

tion of emergen cy under Article 352 is in opera tion.

Now coming to clauses (1) a

nd (lA) of Article 3 59 the position is B

this: while clause (1) empowers the President to suspend the enforcement

of the fundamental rights named in such notification (and any and a

ll

proceedings in that behalf in any court), it does not empower the

President

to suspe nd the fundamental rights. E vidently, the founding fathers did not

think it necessary to

clothe the

President with such a power. The words in

clause (1) are clear and unambiguous. They only speak of suspending the C

enforcement of the rights in Part-Ill and not suspending the rights them­

sel

ves. We see no warrant, no justification and no basis for holding that the

suspension of enforcement of the rig

hts means in effect the sus pension of

the rights themsel ves. If that were the intention of the Founding Fathers,

they would have said so expressl y.

Inder.d, they ha ve stated what they mean t. D

in explicit languag e. In view of the fact that the fundamental rights in

Part-ill are allowed to be a ffected by a Presidential Order, we think, we

ought not to read anything more than what the clause expressly says -and

its language lea ves no room for any doubt. This is the view taken in Makhan

Singh [as well as by Bhagwati, J. in A.D.M Jabalpur v. Shivkant Shukla,

(1976] 2 S.C.C. 521 at 719. Paras 479 and 480] and we agree with them E

respectfully. Then came clause (lA), introduced by the 38th Amendme nt

Act with retrospective effect from the date of the Constitution. It says th at

while a Presidential Order suspending particular fund amental rights is in

operation, the State shall be entitled to make any law or to take any

executi

ve action which it would not have been entitled to make or to take F

but for the suspension of the e nforcement of the s aid rights. At the same

time, the clause s

ays that any law so made sh all, to the extent of incom­

peten

cy, cease to have effect as soon as the

Presidential Order ceases to

op

erate

"except as respects things done or omitted to be done before the

law so ceases to have effect". The effect of these words ("except as

respects ....... effect") is evidently the same as that obtain ing under Article 358 G

(which too employs ide ntical wo rds) which we have e xplained hereinbefore

at some length .. It is true that clause (1) of Article 359 does not provide

for the suspension of any of the fund amental rights but only their en force-

.- ment. and it is equally true that those fundamen tal rights (whose e nforce­

ment is suspe

nded) continue in theory to be alive, yet we must also give H

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

A effect to clause (lA), which is equally a part of Article 359 now - and must

be deemed to

be such a part at all points of time commencing from 26th

January,

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

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

ment

of certain rights conferred by

Part-III is in operation, the State is

B empowered to make any law or to take any executive action inconsistent

with such rights. All this is so because

the emergency proclaimed to meet

the threat to the security of India has to

be effectively implemented. The

requirements of emergency constitute both the foundation as well as an

implied limitation upon the power. What is warranted is what is necessary

for effective implementation of emergency.

c

D

E

F

G

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

this court relevant in this behalf. In Jaichand Lal v.

State of West Bengal,

(1966) Sup!. S.C.R. 464, it is held by a Constitution Bench :

"But the appellant

can challenge the validity of the order on a

ground other than those covered by Art. 358,

or the

Presidential

Order issued under Art. 359(1). Such a challenge is outside the

purview of the Presidential Order. For instance, a citizen will not

be deprived

of the right to move an appropriate court for a writ

of habeas

corpus on the ground that his detention has been

ordered

mala fide. Similarly, it will be open to the citizen to

challenge the

order of detention on the ground that any of the

groun'ds given in the order of detention is irrelevant and there is

no real and proximate connection between the ground given

and

the object which the legislature bas in view. It may be stated in

this context that a ma/a fide exercise of power does not necessar ily

imply any moral turpitude as a matter of law. It only means that

the st

atutory power is exercised for purposes foreign to those for

which it is in law intended.

In other words, the power conferred

by the statute has been utilised for some indirect purpo se not

connected with the object

of the statute or the mischief it seek to

remedy."

To the same effect is the decision of another Constitution Bench in

Ananda11 Nambiar v. Chief Secretary, Government of Madras, (1966) 2

S.C.R.406. The majority opinion in A.D.M., Jabalpur, however, appears to

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

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

Nambiar but for the purposes of this case, it is not necessary to go into the A

correctness of the reasoning in A.D.M. Jabalpur, since it has not been

debated before

us. Indeed, a Three-Judge Bench in Union of India v.

Bhanudas

Krishna Gawde,· (1977] 2 S.C.C. 719 has taken the extreme view,

purporting to follow

A.D.M., Jabalpur

1 that even the restrictions placed and

facilities denied cannot be questioned

in a Court during. the period the B

order under Article 359(1) is in operation! The next issue that arises is whether it can be said in the case of

detention orders passed during the emergency (i.e., orders of detention to

which Section 12-A

of

COFEPOSA applies) that they are void or non-est,

so that they cannot

be treated as orders of detention within the meaning C

of Section 2(2) (b) of

SAFEMA? It is submitted by the learned Additional

Solicitor General that the said orders cannot

be said to be void ab initio

or non-est. The orders were good and valid when they were

iiiade under

Section 3 of COFEPOSA. May be, he says, the said orders ceased to be

operative with the cessation of the Presidential Order and cannot be D

continued beyond the said cessation, . but they were certainly competent,

legal and effective when they were made and continued to

be so until the

cessation of the Presidential

Order. They can, therefore, certainly be

treated as orders of detention under COFEPOSA for the purpose of and

within the meaning of Section 2(2) (b) of SAFEMA.

On the other hand, the learned counsel for the petitioners contend

that the order of detention made under Section 3 read with Section 12-A

of COFEPOSA is void for being inconsistent with the provisions in Article

22 which were not suspended. The mere suspension of enforcement of the

E

said Article does not amount to suspension of the right. The orders of F

detention were, therefore, void and they remained in operation only

be­

cause the detenues were barred from questioning the validity of the said

orders on account of 1he ban imposed by the Presidential Order under

Article 359(1). They submit that the detention orders governed

by

Section

12-A of COFEPOSA are inherently arbitrary and unjust. An order of

preventive detention

is made without

even telling the detenue of the G

grounds of his detention and without giving him an opportunity lo make a

representation. Even the protection of consideration of

his case .by an ¥i.dependent body (Advisory Board) is taken away. The detenue is

rendered totally helpless. He is left with no remedy. He cannot prove

his

innocence.

Such an order of detention is opposed to all concepts of H

..•

' .

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

A fairness, civilized conduct and democratic norms. They submit that such

orders cannot form

the foundation or the basis for applying

SAFEMA to

them. Their argument

is evocative of what Justice Cardozo once said: 'We

must always take care to safegua rd the law against the assaults of oppor­tunism, the e.xpediency of the passing hour, the erosion of the small

B encroachments, and the scorn and derision of those who have no patience

with general principle

s."

The contending view points aforesaid give rise to two strands of

thought.

One line of thought runs thus : By virtue of clause (lA) of Article

359, inserted by the Constitution 38th (Amendment) Act with retrospective

C effect. Section 12-A must be deemed to have been competently enacted,

no doubt

for the duration of and limited to the p eriod of the Presidential Order. If so, the detention thereunder cannot be said to be invalid. While

the order of detention cannot certainly subsist beyond the cessation of the

Presidential Order because Section 12-A cannot itself s ubsist beyond each

D cessation, neither Section 12-A nor the order of detention governed by it

can be characterised as illegal or invalid during the period the Presidential

Order was in force. Once this is so, such order of detention does undoub­

tedly represent an order of detention within the meaning and contempla­

tion of Section 2(2)(b) of SAFEMA. That it was not open to challenge

during the period of the Presidential Order, or that it was not subject to

E the constitutional safeguards provided by Article 22 does not affect its

validity or legality. It was a valid order of detention when made. It is not

being enforced or acted upon beyond the pe

riod of Presidential

Order.

Since it is an existing fac t, it is merely being taken notice of -and that is

enough to attract SAFEMA to such detenu, his relatives and associates.

F Section 2(1) of SAFEMA says, "the provisions of this Act shall apply only

to the persons specified in sub-section (2)" and sub-section

(2) speaks inter

a/ia of a person "in respect of whom an order of detention h as been made

under the

COFEPOSA, 1974". Indeed, provisos (i), (ii) and (iii) to clause

(b) of sub-secti on (2) of Section 2 of SAFEMA expressly refer to the order

G of detention made under Section 12-A a nd expressly affirm that such an

order of detention

is an order of detention for the purposes of the said

clause.

The fact remains that pro visions of

SAFEMA were enacted in the

first instance as an Ordinance issued on 5th No vember, 1975, i.e., during

the period of emerge ncy and later enacted into an Act and given effect

from

the date of

the Ordinance. An order of detention govern ed by Section

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

~TIORNEYGENLFORINDIA v. APRAJNANDAS IJEEVANREDDY,J.j 35

for the purpose of and within the meaning of Section 2(2)(b) of SAFEMA. A

The other line of reasoning goes along the following lines : an order of

detention governed by Section 12-A is a special type of order made for the

limited purpose

of dealing effectively with the emergency. It has no exist

-

ence, relevance or effect except for the said limited purpose. Outside such

purpose, it

is non-est. It does not exist. If so, such an order of detention B

cannot furnish the foundation, the connecting link, or the basis for applying

SAFEMA. A normal order

of preventive detention is itself an uncivilized

action.

An order of detention governed by Section 12-A of

COFEPOSA -

denying as it does even the minimum safeguards provided by clauses ( 4)

and (5)

of Article 22

-is an abhorrent action. It may be tolerated as a cruel

necessity when the very life

of the Nation is threatened but it cannot C

certainly be recognised or taken note of for any other purpose

-much less

made the basis of applying an extremely drastic enactment like SAFEMA.

Treating such order of detention as an order of detention for the purpose

of and within the meaning

of

Section 2(2)(b) of SAFEMA amounts to

enforcing or giving effect to the said order o( detention beyond and outside D

the period of emergency and for purposes foreign to emergency. This is

totally impermissible. Section 12-A does not sanction this -though it

sanctions a lot many things.

While we are attracted by the logic as well as the emotional appeal

of the second line of thought

-it would appeal to any lover of liberty - we E

find ourselves constrained to reject it in the light of the language of Section

2(2)(b) of SAFEMA coupled with the fact that SAFEMA is armed with

the protective umbrella

of Article 31-B read with IXth

Schedule. We

proceed to elaborate. Section 2(2){b) of SAFEMA expressly includes an

order of detention to which the provisions of Section 12-A apply within the F

purview of an order of detention under COFEPOSA. For the sake of

facility of reference, we may reproduce the clause. It reads :

"(b) every person in

respect of whom an order of detention has

been made under the Conservation

of Foreign Exchange and

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

Provided that -

(i) such order of detention, being an order to which the.

provisions

of

Section 9 or Section 12-A of the said Act do

not apply, has not been re voked on the report of the Adviso ry H

36

A

B

c

D

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

Board under Section 8 of the said Act or before the receipt

of the report of the Advisory Board or before making a

reference to the Advisory Board ; or

(ii) such order of detention, being an order to which the

provisions of

Section (9) of the said Act apply, has not been

revoked before. the expiry of the time for, or on the basis of,

the review under sub-section

{3) of

Section 9, or on the

report of the Advisory Board under Section 8, read with

sub-section

(2) of

Section 9, of the said Act; or

(iii) such order of detention, being an order to which the

provisions of Section 12-A of the said Act apply, has not been

revoked before the expiry of the time for, or

on the basis of,

the first review under sub-section

{3) of that section, or on

the basis of the report of the Advisory Board under

Section

8, read with sub-section (6) of Section 12-A, of that Act; or

(iv) such order of detention has not been set aside by a court

of competent jurisdiction

."

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

E provisions of Section 12-A of the said Act apply" and which "has not been

revoked before the expiry of time for, or on the basis of, the first review

under sub-section (3)

of that

Section (Section 12-A) or on the basis of the

report of the Advisory Board under Section 8, read with sub-section ( 6) of

Section 12-A, of that Act", as an order of detention for the purpose of and

within the meaning of clause

(b) of

Section 2(2) of SAFEMA. In view of

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

Schedule by the 39th and 40th (Amendment) Acts to the Constitution,

clause

(b) of

Section 2(2) of SAFEMA (including proviso {iii) appended

to it) are beyond constitutional reproach. One has to take the said

provisions

as they stand

-and they stand solidly against the petitioners'

G contentions. On this single ground, we hold, as we must, that an order of

detention made under COFEPOSA, to which the provisions in Section

12-A applied, is an order of detention within the meaning of and for the

purposes of Section 2(2)(b) of SAFEMA and can, therefore, constitute the

basis for applying SAFEMA to such person.

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

,_

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

of this Court brought to our notice. The first one is in Union of India v. A

Haji Mastan Mirza, (1984J 3 S.C.R. 1 rendered by a Bench of three Judges.

The respondent therein was first detained under Maintenance of Internal

Security Act (M.l.S.A.) under an order dated September 17, 1974. On

December 19, 1974 the said order was revoked but simultaneously an order

of detention was made under Section 3(1) of COFEPOSA. The grounds

B

of detention were served on him on December 23, 1974. On June 25, 1975,

emergency was proclaimed under Article 352(1) on the ground of internal

disturbance, which continued in force upto March

21, 1977. The respo. n-

dent was released on March 23, 1977. Notice. under

Section 6(1) of

SAFEMA was issued to him, his relatives and associates where upon he

filed a writ petition in the Bombay High Court challenging the validity of c

the order of detention dated December 19, 1974 on the ground inter alia

that he was not supplied with the documents clearly and unmistakably

relied upon for arriving

at the requisite satisfaction and which documents

were also referred to in the grounds of detention served upon

him. The

Bombay High Court allowed the writ petition, against which the

Union of

D

India appealed to this Court. V ardarajan, J. speaking for the Bench

referred to the provisions of Sections 2, 6 and 7 of SAFEMA and observed

thus:

. "Therefore, a valid order of detention under COFEPOSA is a

condition precedent to proceedings being taken under

ss. 6 and 7 E

of

SAFEMA. If the impugned order of de~ention dated 10.12.1974

is set aside for any reason, the proceedings taken under ss. 6 and

7 of SAFEMA cannot stand. Therefore, we have to consider

whether the impugned ~>rder of detention dated 19.12.1974 under

COFEPOSA is void and has to be quashed."

F

From the facts stated above, it is clear that the order of detention

was made long prior to the proclamation of emergency on June 25, 1975.

He was served with the grounds of detention but not the documents relied

upon therein. It does not appear from the judgment whether a declaration

G

under

Section U-A of COFEPOSA was made with respect to the said

respondent, though it can be so presumed from the fact that

his detention ...____ was continued upto March 23, 1977. In the above circumstance~, this Court

'

said that it was open to the respondent-detenue to question the validity of

the order of detention when proceedings are taken against him under

Sections 6 and 7 of SAFEMA. It is not possible to agree with the reasoning H

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

A of the decision. There are two ways of looking at the i ssue. If it is a normal

order of detention (not governed

by

Section 12-A nor protected by an

order under Article 359(1) suspending the enforcement of Art icle 22] and

if the detenue does not challenge

it when he was deprived of his liberty, or

challenges it

unsuccessfully, there is no reason why he should be allowed

B

to challenge it when action under SAFEMA is taken against him -for

action under SAFEMA is not automatic upon the fact of detention but only

the starting point.

On the other hand, if it is an order of detention governed

by Section 12-A (or by a Presidential Order under Article 359(1) suspend­

ing Article 22), it perhaps could still be challenged even during the period

of emergency on grounds

not barred by the said provisions. Secondly, even

C if such an order is allowed to be challenged when action under

S~FEMA

is taken, the challenge must be confined to grounds which were open or

available during the period of

emergency; otherwise there would be no

meaning behind the concluding words in Article

358(1) and Article

359(1A). Hence,

we say that a person who did not choose to challenge such

D an order of detention during the emergency when he

was detained, or

challenged it

unsuccessfully, cannot be allowed to challenge it when it is

sought to be made the basis for applying

SAFEMA to him. In either of the

two situations mentioned above, i.e., whether the challenge is made during

the period of detention or later when proceedings under SAFEMA are .

taken against

him, the grounds of challenge and scope of judicial scrutiny

E would be the same. Failure to challenge the detention directly when he was

detained, precludes him from challenging it after the cessation of deten­

tion, where it

is made the basis for initiating action under SAFEMA.

The other case brought to our notice

is in Union of India v. Manohar

F Lal Narang, [1987) 2 S.C.C. 241, a decision rendered by a Bench comprising

Khalid and

Oza, JJ. The facts of this case are r~ther involved. Respondent,

Manohar Lal Narang and one· Ram Lai Narang were brothers. An order

of detention under Section 3(1) of COFEPOSA was ma~e against Ram Lal

Narang on December

19, 1974. He challenged the same before the Delhi

G High Court in Writ

Petition No. 10 of 1975 which was allowed on April 30,

1975 and the order of detention quashed. The Union of India preferred an

appeal against the said Order of the High Court to this Court alongwith

an application

for stay.

On May 1, 1975, this Court declined stay but ""'

imposed certain conditions on the movement of Ram Lal Narang (Later,

the said appeal was dismissed for non-prosecution). After the proclamation

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

AlTORNEYGENL. FOR INDIA v. A. PRAJIVANDAS(JEEVANREDDY.J.j 39

fresh order of detention was made on July 1,

1975 against Ram Lal on the A

very same facts and grounds on which he was detained earlier. The said

order

of detention was challenged in Delhi High Court in Writ Petition

No.

115 of 1975 filed by a relative of Ram Lal but was dismissed on

November

25, 1975. An appeal was preferred against the said order to this

Court being Appeal

No. 399 of 1977. At this stage, notice under Sections B

6 and 7 of SAFEMA was issued against Ram Lal which he questioned in

Delhi High Court in Writ Petition No.

720 of 1975. While the said writ

petition

was pending in Delhi High Court, Appeal No. 399 of 1975 pending

in this Court came up for hearing and was disposed of saying that it would

be open to Ram Lal to raise all such contentions as are available to

him

in Writ Petition No. 720 of 1975, notwithstanding the fact that those C

grounds were raised in Writ Petition No. 115 of 1975 (from which the said

appeal No. 399 of

1975 arose). Writ Petition No.

720 of 1975 was heard

and dismissed

by the Delhi High Court against which Ram Lal filed S.L.P.

No. 9361

of 1982 wherein leave was granted and the appeal was numbered

as

C.A.2790 of 1985 which was said to be pending on the date of the said D

judgment. An order of detention under Section 3 of COFEPOSA was

made against the respondent, Manohar Lal Narang, as well on January 31,

1975. He was then in England. He was brought to India and detained. He

challenged the same by way of W.P.2752 of 1975 in the Bombay High Court

which

was allowed and the detention quashed on July 8,

1980. An appeal E

preferred to this Court against the said order was. also dismissed. There­

after, a show cause notice was issued to Manohar Lal Narang on the

ground that he

is the brother (relative) of Ram Lal Narang, who was

detained under

Section 3(1) of COFEPOSA. It may be remembered that

a writ petition questioning Ram Lal's detention under the order dated July

F

1, 1975 (evidently, an order of detention to which Section 12(A) of COFEPOSA applied) was dismissed by the Delhi High Court (W.P. No.

115 of 1975) and even Writ Petition No. 720 of 1975 (in which he was

allowed to raise all the available grounds against his detention) was also

dismissed. From the facts stated above, it is clear that the basis

of action

under SAFEMA against Manohar Lal Narang

was his brother Ram Lal's G

detention during the period of emergency, which detention was governed

by Section 12(A)

of

COFEPOSA. According to our opinion indicated

hereinbefore, such an order can constitute a basis for taking action under

SAFEMA. So far as the reasoning of the said decision is concerned, it is

to the effect that the validity of such an order of detention can be ques- H

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

A tioned by the detenue or his relative, as and wh~s uch an order is sought

to

be made the foundation for taking acti on against them under SAFEMA. On that basis, the court proceeded to e xamine the validity of the order of

detention

of Ram Lal and found that the s aid order is bad for non-applica­

tion of mind to certain highly releva nt and mate rial circumstances. We

B must, however, say that the validity of an order of detention to which

Section 12-A of

COFEPOSA applied, could yet be examined even during

the emergency

on the touchstone of the l aw as it obtained during the

operation

of the Presidential

Order under Article 359(1) -s ay on the

ground that the

provisions of Section 12-A were not complied with, or on

other grounds, as

may.not have barred during the said period. But a person

C who could have so challenged the order of detention and yet chose not to

do, cannot be allowed to do so when su ch an order of detenti on is made

the basis

for applying SAFEMA to him -this is for the reason that even if

he is allowed to challenge the said order when he is served with the notice

under Section 6 of SAFEMA, the challenge has

to be examined with

D reference to the position of law as was obtaining at the time the said order

was made and the law in force during the period the said order of detention

was in operation. Same would be the position in the case of a person who

challenged the order but failed in his challenge. Even in the case of a

normal order of detention under

COFEPOSA, the position would be the

same. A person who did not challenge, (either by himself or through his

E next friend) the order of detention or challenged it but failed, cannot be

allowed to challenge the order of detention

when action is taken against

him under SAFEMA.

Question 4: The definition of illegally acquired propertie s" in clause

F (c) of Section 3(1) of SAFEMA is undoubtedly quite wide. It means and

includes

any property acquired by such person, whether before or after the

commencement of this

Act, wholly or partly out of or by means oj any

income, earnings or assets derived of obtained from or attributable to any

activity prohibited by or under any law for the time being in force relating to

any matter in respect of which Parliament has power to make law" [vide

G sub-clause (i)J. Sub-clauses (ii), (iii) and (iv) of clause ( c) further widen

and elaborate its ambit. The definition thus tak es in not only the property

acquired after the Act but also the property acquired b efore the Act,

whatever be

the length of time. Secondly, it takes in property which may

have been acquired partly from out of illegal activity -in which case, of

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

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

confined to violation of the laws mentioned in Sect.ion 2 but all laws which A

the Parliament has power to make. To give an illustration, if a smuggler

has acquired some properties

by evading tax laws or by committing theft,

robbery, decoity, mis-appropriation or any other illegal activity prohibited

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

has the

power to make) all that would be liable to be forfeited. It is B

submitted by the petitioners that this is a case of excessive and dispropor­

tionate response

by the Parliament. The argument is that the Act is penal

in nature and spreading its net as wide as is done by the definition of "illegally acquired properties" brings it in conflict with Articles 14, 19 and

21. Alternatively, it is submitted that if the said definition is unassailable C

on account of its inclusion in the IXth Schedule, the definition may be read

down so as to confine it only to the properties acquired by violating the

prohibitions contained in

the Acts mentioned in Section 2(a) of SAFEMA.

We do not find it possible to give effect

to either o( these submissions. Both

the enactments being placed in the IXth Schedule, they enjoy the immunity

conferred by Article 31(B).

We have observed hereinbefore that the D

petitioners have not been able to substantiate their submission that the 39th

(Amendment)

Act and

40th (Amendment) Act, placing the said enact­

ments in

the IXth Schedule are unconstitutional. It is not necessary to

repeat the reasons for the said opinion here over again. In this .view of the

matter, the attack upon the validity

of the said definition on grounds of E

unreasonableness, arbitrariness or for that matter on any of the grounds

relatable to Part-III is

of no avail. Even apart from the protection of Article

31(B),

we see no substance in the submission that the definition is arbitrary

or discriminatory nor do we see any reason for reading down the said

definition to confine it to the violation

of the acts referred to in Section

2(2)(a)

of SAFEMA. We can take note of the fact that persons engaged

F

in smuggling and foreign exchange manipulations do not keep regular

and·

proper accounts with respect to such activity or its income or of the assets

acquired therefrom.

If such person indulges in other illegal activity, the

position would

be no different. The violation of foreign exchange laws and

laws relating to export and import necessarily involves violation of tax laws. G

fadeed, it is a well-known fact that over the last few decades, smuggling,

foreign exchange violations, tax evasion, drugs

and crime have all got

mixed-up. Evasion of taxes

is integral to such

activity., It would be difficult

for any authority to say, in the absence of any accounts or other relevant

material that among the properti

es acquired by a smuggler, which of them H

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

A or which portions of them are attributable to smuggling and foreign ex­

change violations and which properties

or which portions thereof are

attributable to violation of other

laws (which the

Parliament has the power

to make).

It is probably for this reason that the burden of proving that the

properties specified in the show cause notice are not

illegally acquired

B properties is placed upon the person concerned. May be this is a case

where a dangerous disease required a radical treatment. Bitter medicine

is

not bad medicine. In law it is not possible to say that the definition is

arbitrary or is couched in unreasonably wide term s. Further, in view of

clear and unambiguous language employed in clause (c) of

Section 3, it is

not possible or permissible to resort to the device of reading down. The

C yaid device is usually resorted to save a provision from being declared

unconstitutional, incompetent and ultra vires.

We are, therefore, of the

opinion that neither the constitutional validity of the said definition can be

questioned nor

is there any warrant for reading down the clear and

unambiguous words in the clause.

So far as justification of such a provision

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

quired properties

are earned and acquired in ways illegal

and corrupt - at

the cost of the people and the State. The State is deprived of its legitimate

revenue

to that extent. These properties must justly go back where they

belong -to the

State. What we are saying is nothing new or heretical.

E Witness the facts and ratio of a recent decision of the Privy Council in

Attorney General for Hong Kong v. Reid (1993) 3 W.L.R. 1143. The Respo n­

dent, Reid, was a crown-prosecutor in Hong Kong. He took bribes as an

inducement to suppress certain criminal prosecutions and with those

monies, acquired properties in New Zealand, two

of which were held in

F

the name of himself and his wife and the third in the name of his solicitor.

He was found guilty of the offence of bribe-taking and sentenced by a

criminal court. The Administration

of Hong Kong claimed that the said

properties in

New Zeal~d were held by the owners thereof as constructive

trustees for the Crown and must be made over to the Crown. The privy

Council upheld this claim over-ruling the New Zealand Court of Appeal

s.

G Lord Templeman, delivering the opinion of the Judicial Committee, based

his conclusion on the simple ground that any benefit obtained by a fiduciary

through a breach

of duty belongs in equity to the beneficiary. It is held that

a gift accepted by a

person in a fiduciary position as an incentive for his

breach

of duty constituted a bribe and, although in law it belong ed to the

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

P"-

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

to the person to whom the duty was owned but he also held the bribe and A

any property acquired therewith on constructive trust for that person. It is

held further that if the value of the property representing the bribe

depreciated the fiduciary had

to pay to the injured person the difference

between

that value and the initial

a~ount of the bribe, and if the property

increas

ed in value the fiduciary was not entitled to retain. the excess since B

equity would not allow him to make any profit from his breach of duty.

Accordingly, it is held that

to the extent that they represented bribes

received by the first respondent,

th~ New Zealand properties were held in

trust for the Crown, and the Crown had an equitable interest therein. The

learned Law Lord observed further that if the theory of constructive trust

is

not applied and properties interdicted when available, the .properties C "can be sold and the proceeds whisked away to some Shangri La which

bides bribes

and other corrupt moneys in numbered bank accounts" - to

which we are tempted to add: one can understand the immorality of the

Bankers who maintained

numbered accounts but it is difficult to under­

stand

the amorality of the Governments and their laws which sanction such D

practices - in effect encouraging them. The ratio of this decision applies

equally where a person acquires properties

by violating the law and at the

expense

of and to the detriment of the

State and its revenues where an

enactment provides for such a course, even if the fiduciary relationship

referred to in Reid is not present. It may be seen that the concept employed E

in Reid was a common law concept, whereas here is a case of an express

statutory provision providing for such forfeiture. May we say

in conclusion

that

"the interests of society are paramount to individual interests and the

two must be brought into just and harmonious relation. A mere property

career is

not the final destiny of mankind, if progress is to be the law of F

the future as it has been of the

past." (Lewi.S Henry Morgan: Ancient

Society).

Question No. 5 : It is contended by the counsel for the petitioners

that extending the provisions of

SAFEMA to the relatives, associates and

other 'holders' is again a case of over-reaching or of over-breadth, as it G

may be called -a case of excessive regulation. It is submitted that the

relatives or associates of a person falling under clause (a) or clause (b) of

Section 2(2) of SAFEMA may have acquired pfoperties of their myn, may

be by illegal means

but there is no reason why those properties be forfeited

under

SAFEMA just because they are related to or are associates of the H

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

A detenue or convict, as the case may be. It is pointed out that the definition

of the 'relative' in Explanation (2) and of 'Associates' in Explanation (3) is

so wide as to bring

in a person even distantly related or associated with

the convict/detenue, within the net of SAFEMA, and once he comes

within

the net, all his illegally acquired properties can be forfeited under the Act.

B

In our opinion, the said contention is based upon a mis-conception.

SAFEMA

is directed towards forfeiture of "illegally acquired properties"

of a person

falling under clause (a) or clause (b) of Section 2(2). The

relatives and associates are brought in only for the purpose of ensuring that

the illegally acquired properties of the convict or detenue, acquired or kept

in their names, do not escape the net of the Act. It is a well-known fact

C that persons indulging in illegal activities screen the properties acquired

from such illegal activity in the names of their relatives and associates.

Sometimes they transfer such properties to them, may be, with an intent to

transfer the ownership and title.

In fact, it is immaterial how such relative

or associate holds the properties of convict/detenue -whether as a benami

D or as a mere name-lender or as a bona fide transferee for value or in any

other manner. He cannot claim those properties and must surrender them

to the State under the Act.

Since he is a relative or associate, as defined

by the Act,

he cannot put forward any defence once it is proved that that

property

was acquired by the detenue -whether in his own name or in the

name of his relatives and associates. It is to counter-act the several devices

E that are or may be adopted by persons mentioned in clauses (a) and (b)

of Section 2(2) that their relatives and associates mentioned in clauses ( c)

and ( d) of

the said sub-section are also brought

within the purview of the

Act.

The fact of their holding or possessing the properties of con­

vict/detenue furnishes the link between the convict/detenue

a.ad his rela-

F tives and associates.

Only the properties of the convict/detenue are sought

to be forfeited, wherever they are. The idea is to reacli

his properties in

whosoever's name they

ate kept or by whosoever they are held. The

independent properties of relatives and friends, which are not traceable to

the convict/dctcnue, are not sought to

be

forfoitt:d nor are they within the

puniew of SAFEMA•. We may proceed to explain what we say. Clause

G

That this was the object of the Act is evident from para 4 of the Preamble which states:

"And whereas such persons have in many cases been holding the properties acquired

by them though such gains in the names of their relatives, associates and confidants ".

We are not saying that the

Preamble can be utilised or restricting the scope of the Act,

we arc only referring to it to ascertain the object of the enactment and to re-assure

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

--

ATIORNEY GENL FOR INDIA v. A. PRAJlV ANDAS (JEEV AN REDDY, J.j 45

(c) speaks of a relative of a person referred to in clause (a) or clause (b) A

(which speak of a convict or a detenue). Similarly, clause (d) spe aks of

associates of such convict or detenue.

If we look to Explanation (3) which

specifies who the associates referred to in clause ( d) are, the matter

becomes clearer. "Associates" means: (i)

any individual who had been or

is residing in the residential premises (including outhouses) of such person B

('such person' refers to the convict or detenue, as the case may be, referred

to

in clause (a) or clause (b)); (ii) any individual who had been or is

managing the affairs or keeping the accounts of such c

onvict/detenue; (iii)

any association of persons, body of individual

s, partnership firm or private

company of which such convict/ detenue had been or

is a membe r, partner

or director; (iv) any individual who had been or is a me mber, partner or

C

director of an association of persons, body of individuals, partnership firm

or private company referred to in clause (iii) at any time when such person

had been or

is a member, partner or director of such association of

persons, body of individuals, partnership firm or private company;

(v) any

person who had been or

is managing the affairs or keeping the accounts D

of any association of persons, body of individuals, partnership firm or

private company referred to in clause (iii); (vi) the trustee of any trust

where (a) the trust has been created

by such convict/detenue; or (b) the

value of the assets contributed by such convict/detenue to the trust

amounts, on the date of contribution, not less than

20% of the value of the E

assets of the trusts on that date; and (vii) where the competent authority,

for reasons to be reco

rded in writing, considers that any properties of such

convict/detenue are held on his behalf

by any other person, such other

person. It would thus be clear that the connecting link or the ne

xus, as it

may be called, is the holding of property or assets of the convict/detenue

or traceable to such detenue/convict.

Section 4 is equally relevant in this

context. It declares that "as from the commencement of this Act, it shall

F

not be lawful for any person to whom this Act applies to hold any illegally

acquired property either

by himself or through any other person on his

behalf

'. All such property is liable to be forfeited. The language of this

section is indicative of the ambit of the Act. Clauses (

c) and ( d) in

Section G

2(2) and the Explanations (2) and (3) occurring therein shall have lo be

construed and understood in the light of the overall scheme and purpose

of the enactment. The idea is to forfeit the illegally acquired properties of

the

,convict/detenue irrespective of the fact that such properties are held

by

or kept in the name of or screened in the name of any relati ve or . H

.,

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

A associate as defined in the said two Explanations. The idea is not to forfeit

the independent properties of such relatives or associates which they may

B

c

· have acquired illegally but only to reach the properties of the con­

vict/detenue or properties traceable to

him, wherever they are, ignoring

all the transactions with respect to those properties.

By way of illustration,

take a case where a convict/detenue purchases a property

in

the name of

his relative or associate -it does not matter whether he intends such a

person to be a mere name-lender or whether he really intends that such

person shall be the real owner and/or possessor thereof -or gifts

away or

otherwise transfers

his properties in favour of any of his relatives or

associates, or purports to sell them to any of his relatives

or associates -in

all such cases, all the said transactions

will be ignored and the properties

forfeited unless the convict/detenue or his relative/ associate,

as the case

may be, establishes that such property or properties are not "illegally

acquired properties" within the meaning of

Section 3( c). In this view of the

matter, there

is no basis for the apprehension that the independently

D acquired properties of such relatives and associates will also be forfeited

even

if they are in no way connected with the convict/detenue.

So far as

the holders (not being relatives and associates) mentioned in Section

2(2)(e) are concerned, they are dealt with on a separate footing. If such

E

F

person proves that he is a transferee in good faith for consideration, his

property -even though purchased from a convict/detenue -

is not liable to

be forfeited. It

is equally necessary to reiterate that the burden of estab-

lishing that the properties mentioned

in the show cause notice issued

under

Section 6, and which are held on that date by a relative or an

associate of the convict/detenue, are not the illegally acquired properties

of the convict/detenue, lies upon such relative/ associate. He must establish

that the said property has not

b~en acquired with the monies or assets

provided

by the detenue/convict or that they in fact did not or do not

belong to such detenue/convict.

We do not think that the Parliament ever

intended to say that the properties of all the relatives

and associates, may

be illegally acquired,

will be forfeited just because they happen to be the

G relatives or associates of the convict/detenue. There ought to be the con­

necting

link between those properties and the convict/detenue, the burden

of disproving which, as mentioned above, is upon the relative/ associate. In

this

view of the matter, the apprehension and contention of the petitioners

in this behalf must be held to be

based upon a mistaken premise. The

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

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

clause (e) of Section 2(2) is thus neither discriminatory nor incompetent A

apart from the protection of Article 31-B.

Question

No. 6: Petitioners challenge the validity of

Section 5-A of

COFEPOSA on the ground of it being violative of the twin safeguards

provided by Clause (5) of Article

22. It is submitted that the said clause

gives two rights to the detenue

viz.

1

(i) to have the grounds· on which the

order

of detention is based communicated to him as soon as possible and

(ii) to be afforded the earliest opportunity

of making representation against

B

the order of detention -

See State of Bombay v. Atma Ram Vaidya, [1951)

S.C.R. 167. It the grounds included irrelevant o r non-existent grounds, it is

submitted, the first right is violated and if the grounds includ

ed vague C

grounds, the second right is violated. According to the learned counsel,

Article 22(5), as interpretated

by

th.is Court over the last more than four

d~cade s, means this: an order of preventive detention is based upon the

subjective satisfaction of the authority and where such satisfaction has been

arrived at on grounds some of which are relevant a

nd definite grounds and

some irrelevant, vague and non-existent, it is not possible

or permissible D

for the court to predicate which grounds have influenced the

formatio~ of

his satisfaction -which means that the order of detention must fall to the

ground; if this

is what Article 22(5) means and says, it is not open to the

Parliament to make a law saying that

where the grounds upon which the

requisite satisfaction has been formed a

re partly good and partly bad, yet E

the order must be held to be good with reference to and on the basis of

good grounds,; eschewing

th~ bad grounds. Such a law, it is submitted,

would be in direct conflict with Article 22(5). Let us examine this submis-

sion rather close

ly.

Section 5-A

of

COFEPOSA may be reproduced he re 'for ready

referenc

e. It reads:

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

detained in pursuance of an order of detention under s

ub-section

F

(1) of Section 3 which h as been made on two or more grounds,

such order

of detention shall be deemed to have been made G

separately on each of such grounds and accordingly

(a) such order shall not be deemed to be invalid or inopera­

tive merely because

one or some of the grounds is or are -

(i) vague,

H

A

B

c

D

E

F

48

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

(ii) non-existe nt .

(iii) non relevant,

(iv) not connected or not proximately connected with such

person,

or

(v) invalid for a ny other reason whatsoeve r,

and it is not therefore possible to hold that the Government

or o

fficer making such order wo uld have been sa tisfied as

provided in sub-sec

tion (1) of Section 3 with reference to the

remaining ground or grounds and made the order

·of deten­

tion;

(b) the Government or officer making the order of detention

shall be deemed to have made the order

of detention under

the said sub-section (1) after being satisfied as provided in

that sub-section with reference to the

remaini~g grounds or

grounds."

The Section •is in two parts. The first part s ays that where an order

of detention is made on two or more grounds, "such order of detention

shall be deemed to have been made separately on each

of such grounds ",

. while the second part s ays that such order shall not be deemed to be invalid I or 'inoperative merely for the reason that one or some of the grounds are

-ei'ther vague, non-existent, irrelevant or unconnect ed. That the second part

is merely a continua

tion of

a9d consequential to the first part is evident

from the connecting words "and accordingly". The second part goes further

and

says that the order of detention must be deemed to have been made

on being satis

fied with the remaining

go~d ground or ground s, as the case

m

ay be. Both the parts are joined by the word

"and".

Now, it is heyond dispute that an order of detention can be based

G upon one single ground. Several decisions of this Court ha ve held that even

one prejudicial act can be treated as sufficient for forming the requisite

sa

tisfaction for detaining the person. In Debu Mahato v. State of West

Bengal,

[1974] 4

S.C.C. 135, it was observed that while ordinarily-speaking

one act m

ay not be sufficient to form the requi site satisfaction, there

i~ no

such invariable rule and that ~n a given case one act may suffice. That was

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

> -

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

was held that one act is sufficient. The same principle was reiterated in A

Anil D ey v. State of West Bengal, [1974J 4 SCC 514. It was a case of theft

of r

ailway signal material. Here too one act was held to be sufficient.

Similarly, in Israil SK v. District Magistrate of W est Dinajpur &

Ors. [1975]

3 S.C.C. 292 and Dhama Kanu v. State of West Bengal, (1975] 3 S.C.C. 527,

s

ingle act of theft of telegraph copper wires in huge quantity and rem oval

of railway fish plates r espectively was held sufficient to susta in the order

B

of detenti on. In Saraswathi Seshagiri v. Seate of Kera/a & Anr., [ 1982) 2 S.C.C. 310, a case arising under COFEP OSA, a single act, viz., attempt to

export a

huge amount of Indian curre ncy was held s ufficient. In short, the

princ

iple appears to be this; though ordinarily one act m ay not be held

sufficient to sustain an order of detention, one act m ay sustain an order of C

detention if the act is of s uch a nature as to indicate that it is an organised

act of a manif estation of organised ac tivity. The gravity and nature of the

act is also re levant. The t est is whether the act is such that it gives rise to

an inferen

ce that the pers on would continue to indulge in similar prejudi-

c

ial activity. That is the reason why single acts of wagon-br eaking, theft of D

signal material, theft of telegraph copper wires in huge quantity a nd

removal of ra ilway fish plates were he ld sufficient. Similarly, where the

person tried to export

huge amount of Indian currency to a foreign country

in a planned and pre-meditated ma nner, it was held that such s ingle act

warrants an inference that he

will repeat his activity in future and, there­

fore, his detention is necessary to prevent him from indulging in such E

prejudicial activity. If one looks at the acts the COFEPOSA is designed to

prevent, th

ey are all either acts of s muggling or of forei gn exchange

manipulation. These acts are indul

ged in by person s, who act in concert

with other persons and quite often such activity has international

ramifica­

tions. These acts are preceded by a good amount of planing and organis a­

tion. They are not like ordinary law and order c rimes. If, however, in any

given case a single act is found to be not s ufficient to sustain the order of

dete

ntion that m ay well be quashed but it cannot be stated as a principle

F

that one single act cannot constit ute the basis for detention.

On the

contrary, it does. In other words, it is not necessary that there sho uld be

mutiplicity of grounds

for making or sustaining an order detention.

Now, take a case, where three o rders of dete ntion are made aga inst

the same person under

COFEPOSA. Each of the orders is based upon

G

- only one ground which is supplied to the dete nue. It is found that the

ground of detention in support of two of such orders is either vague or

irrel

evant. But the ground in support of the third order is rel evant, definite H

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

A and proximate. In such a case, while the first two orders would be quashed,

the third order would stand. This is precise ly what the first part (the main

part) of Section 5 -A seeks to do. Where the order of detention is b ased on

more th

an one ground, the Section creates a l egal fiction, viz., it must be

deemed

that there are as many orders of detention as there a re grounds

B

which means that each of such orders is an independent order. The r esult

is the same as the one in the illustration given by us hereinabove. The

seco

nd part of it is merely clarificatory and explanatory, which is evident

from the fact that it begins with the word "accordingly" -apart from the

fact that it is joined to the

fust part by the word "and". In such a situation,

we are unable to see how can the section be characterised as inconsistent

C with Article 22(5). Had there been no first part, and had the section

consisted only of the second part, one can understand the contention that

the section is in the teeth of Article 22(5) as interpreted by this Court -

this was indeed the situation in K. Yadigiri Reddy v. The Commissioner of

Police I.L.R. 1972 AP. 1Q25 as we shall presently indicate. It is difficult to

conceive any ins;onsistency or conflict between Article 22(5) and the first

D -the main -part of Section 5-A. The Parliament is competent to create a

l

egal fiction and it did so in this

case. Article 22(5) does not in terms or

oth

erwise prohibit m aking of more than one order simultan eously against

the

same person, on dif ferent grounds. No decision saying so has been

E

brought to our n otice. Be that as it may, we do not see why the Parliament

is

not competent to sa y, by creating a legal fiction, that where an order of

detention is made on more than one ground, it must be dee med that there

are

as many orders of detention as there are ground s. If this creation of a

l

egal fiction is competent, then no question of any inconsistency between

the sec

tion and Article 22(5) can arise.

F It is true that validity of Section 5-A - or for that matter, of Section

5

-A of National

Security Act, 1980, which is in identical terms -d oes not

appear to h

ave been questioned in this Court so far, though it

hf.ls been

applied

in

<;everal decisions. Three of the reported decis ions are brought

to our notice, vi z., State of Gujarat v. Chaman Lal Manjhibhai Soni (1981]

G 2 S.C.C. 24, Prakash Chandra Mehta v. Commissioner and Secretary, Kera/a

[1985] Suppl. S.C. 144 and N. Meera Rani v. State of Tamil Nadu, (1989] 4

S.C.C .. 418. Actually, in the last-mentioned decision, the re are observations

affirming its validity, though no final opinion h as been expressed on the

question because

it was not canvassed in that case. It is also brought to our

~

notice that a Bench of Gujarat High Court has affirmed and applied the

H said provision in a case arising under COFEPOSA.

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

Now, coming to the decision of the Andhra Pradesh High Court in A

K Yadigiri Reddy, Section 6(a) of the A.P. Detention Act, 1970 read as

follows:

"No detention order shall be invalid or inoperative merely by

reason that one or more of the grounds on which the order is made

is or are vague or irrelevant, when the other ground or grounds B

does not or do not suffer from any such informity."

The Andhra Pradesh provision thus contained· a provision ap­

proximating to the second part of Section 5-A but did not contain any

provision corresp<'uding to or approximating to the first (the main) part of C

Section 5-A. It is the first part of Section 5-A that creates the deeming

fiction; the second pa.rt merely elaborates the effect and consequence of

the legal fiction.

in the first part. The second part, had it stood alone, could

perhaps have been characterised

as being in the teeth of

Article 22(5), as

understood and construed

by this Court -and that is what the Andhra Pradesh High Court says -but that is not the situation 4erein as explained D

· herein above. The said decision, therefore, does not advance the case of

the petitioners in

any manner herein. Having said this, we must reiterate

the admonition of Gajendragadkar,

J. regarding the exercise of the power

of detention under the various detention laws in force. Speaking for the

Constitution Bench in

G. Sadanadan v.

State of Kera/a, A.I.R. (1966) S.C.

1925, the learned Judge observed : E

"We feel rudely disturbed by the thought that continuous exercise

of the very wide powers conferred by the Rules on the several

authorities is likely to make the conscience of the said authorities •

insensitive,

if not blunt, to the paramount requirement of the

Constitution that even during Emergency, the freedom of Indian

F

citizens cannot be taken away without the existence of the justifying

necessity specified

by the Rules themselves. The tendency to treat

these matters

in a somewhat casual and cavalier manner which may

conceivably result from the continuous use of

~uch unfettered

powers,

may ultimately pose a serious threat to the basic values on G

which the democratic way of life

in this country is founded."

In matters touching .liberty, greater care is called for on the part of

the authorities exercising powers of detention.

An Additional

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

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

A raised an interesting submission to the following effect : by Constitution

44th (Amendment) Act, the Parliament, acting in its constituent power, has

substituted clause ( 4) as well as clause (7)

of Article 22 leaving it to the

Central Government to specify the date from which the said amendment

shall come into force. Sub-section (2)

of

Section 1 of the (Amendment)

Act empowers the Central Government to fix different dates for coming

B into force of different provisions of the said Act. Though the Central

Government has spec

ified the date of coming into force in respect of several other provisions of the Amendment Act, it has not chosen to specify

the date from which the Amendments to -substitution

of -clauses (4) and

(7) of Article 22 shall come into force. The 44th (Amendment) Act was

C enacted as far back as April, 1979 and even though more than fourteen

years h

ave passed by, the

Central Government has not thought it fit to

enforce the said Amendments. This failure on the part

of the

Central

Government has the effect of virtually nullifying the said Amendments.

While enac

ting the said Amendments, the

Parliament could never have

contemplated

that the

Central Government would sit on them for more

D than fourteen year s. The Central Government must act in accordance with

the spirit of the A~endment Act. It must act reasonably. It cannot undo a

Constitution Amendment just by refusing to specify a date from which it

i.hall come _into operation. Even if the power given to the Central Govern­

ment is characterised as a conditional legislation still shall the fact remains

E that such power too must have to be exercised reasonably and within

reasonable tim

e. Can the

Central Government wait for few more years and

would the Court be powerless to command the Central Government to

· bring into force the said Amendment? If no such command can be given,

would it not mean that the Parliament was, in the year 1979, amending the

• Constitution, not for that generation but for the next generation? Section

F 1(2) of the 44th (Amendment) Act is indeed an instance of abdication of

or delegation of essential constituent power and, therefore, bad. Such a

thing has n

ever happened and cannot be allowed to happen; the

Central

Government ought not to be allowed to play with a constitutional amend­

ment -an amendment which, in particular, tends to strengthen the

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

We do not, however, think it necessa

ry for the purposes of these

cases to express any opinion on

Dr. Ghatate's submission, for the reason

that acceptance of

his contention -assuming we do -makes no differen ce

to the result of these petitions. We ha ve already held that the orders of

H

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

)•

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

Section U-A do yet repre sent orders of detention for the purpose of and A

within the meaning of Section 2(2)(b) read with Section 2(1) of SAFEMA.

Even if we assume that the amendments to clauses ( 4) and (7) effected by

the 44th (Amendment) Act have come into force on the day the Amend­

ment Act received assent

of the

President, the result would be no different.

In this view of the matter, it

is also not necessary to express any opinion

on the

respondent's submission based upon A.K Roy v. Union of India, B

[1982) 2

S.C.R. 272, viz., whether the opinion in the said decision can be

validly applied even after a lapse

of fourteen years.

To summarise :

(1) the

Parliament was perfectly competent to enact both the C

COFEPOSA and the SAFEMA.

(2) for the reasons given in the body of this judgment, we do not

express any opinion on the validity

of the 38th and

40th Amendment Acts

to the Constitution

of India placing

COFEPOSA and SAFEMA in the IXth D

Schedule. We assume them to be good and valid. No arguments ha ve also

been addressed with respect to the validity

of 42nd Amendment Act to the

Constitution

either.

(3a) An order

of detention made under Section 3 of

COFEPOSA,

which was governed by Section 12-A thereof is yet an order of detention E

for the purpose of and within the meaning of Section 2(2)(b) of SAFEMA.

Since the President had issued an order under Article 359(1) suspending

Articles

14, 21 and 22, it became competent for the Parliament, by virtue

of clause

(lA) of Article 359 to enact

Section 12-A of COFEPOSA for the

duration

of and limited to the period for which the

Presidential Order was

F

in force. It was meant to achieve the purposes of emergency. Once Section

12-A is held to be a competent piece

of legislation, orders of detention

made thereunder (i.e

., orders of detention to which the said provision

applied) cannot be held to be not amounting to orders

of detention for the

purpose

of and within the meaning of

Section 2(2) (b) of SAFEMA,

particularly in view of the express language of Section 2(2)(b) (including G

proviso (iii) thereto) -and the protec tion enjoyed by both the enactments

by virtue of their inclusion in the IXth Schedule to the Constitution.

(b)

An order of detention to w hich Section 12-A is app licable as we ll

as an

order of detention to which Section 12-A was not applicable can ~erve

as the foundation, as the bas is, for applying SAFEMA to such detenue and H

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

A to his relatives and associates provided such order of detention does not

attract any of the sub-clauses in the proviso to Section 2(2)(b). If such

detenue did not choose to question the said detention (either by himself

or through

his next friend) before the

Court during the period when such

order of detention

was in force, - or is unsuccessful in his attack thereon -

he, or his relatives and associates cannot attack

or question its validity when

B it is made the basis for applying SAFEMA to him or to his relatives or

associates.

(

4) The definition of

"illegally acquired properties" in clause ( c) of

Section 3 of SAFEMA is not invalid or ineffective.

C (5) The application of SAFEMA to the relatives and associates [in

clauses (c) and (d)

of

Section 2(2)) is equally valid and effective inasmuch

as the purpose and object

of bringing such persons within the net of

SAFEMA is

.to reach the properties of the detenue or convict, as the case

may be, wherever they are, howsoever they are held and by whomsoever

D they are held. They are not conceived with a view to forfeit the independent

properties of such relatives and associates as explained in this judgment.

The position

of 'holders' dealt with by clause (e) of Section 2(2) is different

as explained

in the body of the judgment.

(6)

Section 5-A of COFEPOSA is not invalid or void. It is not

E violative of clause (5) of Article 22.

F

G

(7)

Petitioners have failed to establish that any of the provisions of

SAFEMA are violative of Articles 14, 19 or 21 -apart from the protection

they enjoy by virtue

of the inclusion of the Act in the IXth

Schedule to the

Constitution.

All the Writ Petitions, Transferred Cases and Appeals are disposed

of accordingly.

The court and authorities before whom proceedings are

pending under

SAFEMA shall proceed to dispose them of in accordance

with law and

in the light of this judgment. It is in the interest of all

concerned that the proceedings are concluded with all deliberate speed.

Civil Appeal No. 1418 of 1981 dismissed as withdrawn.

No orders are called for on I.A. No. 1 of

1993 in

T.P. (C) No. 17 of

1978.

A.G. Matters disposed of.