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CASE NO.:

Appeal (crl.) 1126 of 2001

PETITIONER:

GURDEV SINGH

Vs.

RESPONDENT:

UNION OF INDIA & ORS.

DATE OF JUDGMENT: 05/11/2001

BENCH:

D.P. Mohapatra & Shivaraj V. Patil

JUDGMENT:

D.P.MOHAPATRA,J.

Leave is granted.

This appeal, filed by special leave, by Gurdev

Singh father of the detenu Swarn Singh Sandhu, is

directed against the judgment and order dated 1.12.2000

of the Delhi High Court in Criminal Writ Petition No.352 of

2000, Gurdev Singh vs. Union of India & Ors., dismissing

the writ petition.

At the commencement of hearing of the case Shri

V.A.Mohta, learned senior counsel appearing for the

appellant submitted that though the detenu has already

undergone the period of detention this Court may decide

the legality and validity of the Detention Order since the

appellant apprehends that certain further actions may be

taken on the basis of the order of detention which has spent

its force by afflux of time.

In pursuance of the detention order passed by the

Joint Secretary to the Govt. of India in the Ministry of

Finance (Department of Revenue) on 2nd March, 2000 in

exercise of the power under Section 3(1) of the Conservation

of Foreign Exchange and Prevention of Smuggling Activities

Act, 1974 as amended, (hereinafter referred to as the

COFEPOSA Act); Swarn Singh Sandhu was detained and

kept in custody in Central Prision, Nasik. In compliance with

the provisions of Section 3(3) of the COFEPOSA Act read

with Clause (5) of Article 22 of the Constitution of India the

grounds of detention dated 2nd March, 2000 along with the

documents mentioned and relied upon therein were

communicated to the detenu. On receipt of the detention

order and the grounds of detention, the detenu addressed

representations to the Central Government on 5.4.2000

which were rejected on 11.4.2000. This was followed by the

writ petition filed on behalf of the detenu in the Delhi High

Court which was dismissed by its judgment and order dated

1.12.2000. The said judgment/order is under challenge in

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this appeal.

In the grounds of detention covering 35 pages the

detaining authority has set out in detail the informations

received from different quarters regarding misuse of the

facilities provided under the Export Incentive Scheme

introduced by the Govt. of India, Ministry of Commerce,

called Duty Entitlement Pass Book (DEPB) scheme as a part

of the Export-Import Policy for the period 1997-2002. The

objective of the scheme was to neutralize the incidence of

basic customs duty on the import content of the export

product. The scheme provided for credit of duty calculated

by taking into account the duty payable on the deemed

import content used in the manufacture of the export

product. Under the scheme, an exporter is eligible to claim

credit at a specified percentage of FOB value of exports.

The credit is made available against the products exported

as per the rates specified in this behalf by the Director

General of Foreign Trade (DGFT). Under the scheme all

items except those appearing in the negative list of imports

are allowed to be imported without payment of customs duty

against the credit available under a DEPB. The procedure

specified for issue of DEPB scrips entails submission of an

application to the DGFT by the exporter along with the

original EP (Export Promotion) copy of the shipping bill

against which the exports have actually been effected and a

certificate of realisation of export proceeds (BRC) from the

respective banks.

In paragraph 3 of the grounds of detention it is

stated by the detaining authority that an intelligence was

received by the officers of the Directorate of Vigilance,

Mumbai, indicating that certain persons/firms are misusing

the DEPB scheme by manipulating/forging the particulars of

the shipping bills and obtaining the DEPB benefit from the

office of the Joint DGFT, Mumbai. Initially, three such firms

namely, (I) M/s.Samarth Enterprises, (ii) M/s.Sharp

Medicals, (iii) M/s.Pragati Sales Corporation were identified.

Further investigation made after search of the premises of

these firms revealed that one more company, namely

Knomo Exports Ltd. (later changed to M/s.KEL Exports Ltd.)

was also related to exports made by the said three firms.

The detenu was a Director of Knomo Exports Ltd. (renamed

as M/s.KEL Exports Ltd.). It was further stated in the

grounds of detention that investigations revealed that the

aforementioned three firms have claimed the benefit of

DEPB scheme against exports of various bulk consignments

of drugs covered by 32 shipping bills. These exports were

made from the port of Mumbai. The total FOB value of the

bulk drugs shown to have been exported under these 32

shipping bills amounted to Rs.29,14,59,690.00 and the said

amount was adjusted against the advance remittances

received by M/s.Knomo Exports Ltd. It was stated in the

grounds that all the 32 bank certificates of export realisation

show that the total foreign exchange equivalent to total FOB

value has been shown to have been received by M/s.Knomo

Exports Ltd. and the detenu had signed as Director on all

these certificates. The said certificates signed by the detenu

were submitted to the office of the Joint DGFT along with the

copies of the DEPB shipping bills and accordingly DEPB

scrips were issued in the name of exporters on record. The

papers submitted to Custom House, Mumbai for verification

and release of DEPB scrips revealed that one Prashant

D.Divekar had signed as Proprietor for all the three aforesaid

export firms, whereas the entire foreign exchange

remittance of these exports had been received by

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M/s.Knomo Exports Ltd. It was stated in paragraph 5 of the

grounds of detention that on detailed examination and

verification of the 32 shipping bills against which DEPB

scrips were obtained by the detenu revealed that the

particulars in the shipping bills had been manipulated in

respect of value, quantity and also in respect of names of the

manufacturing companies of the drugs. The values have

been inflated by forging the original entries in the shipping

bills including the signatures of the concerned officers as

evident from the documents (i) to (xi) described in the said

paragraph. The said documents included the statement

dated 30.8.1999 of the concerned appraiser Shri

M.K.Srivastava who was shown to have finally assessed the

32 shipping bills; the fax letter dated 2.11.1999 from the

Asst.Commissioner, Central Excise, Shimla; Forensic

examination report of Central Forensic Laboratories, CBI,

New Delhi dated 15.12.1999 relating to sample shipping bills

of M/s.Empire Exports and M/s.Sharp Medicals. In

paragraph 6 of the grounds of detention, the detaining

authority set out in detail various steps taken by the officers

of the Customs Department to ascertain the truth or

otherwise of the allegations of organised activities of the

detenu, Ajay Vyas and some others in taking advantage of

the benefit of neutralization of customs duty on imports by

using large number of forged and manipulated shipping bills

and altering the description of the goods and inflating its

quantity and value. In the averments made in several

paragraphs of the grounds of detention, the detaining

authority has given the results of the investigations made by

the department at different stages; statements of different

persons involved in the case recorded under Section 108 of

the Customs Act, 1962; the steps taken for prosecuting the

detenu and his associate Ajay Vyas under the provisions of

the Customs Act; the unsuccessful attempts made by the

detenu and his associate to get bail; the order of conditional

bail granted to the detenu and his attempt to leave Mumbai

for Delhi violating the condition in the bail order.

In the grounds of detention the detaining authority has

also set out in detail the organised move made by the

detenu and his associates to secure similar benefits of the

customs duty in respect of 58 forged and manipulated

shipping bills showing export of garments from Nhava Sheva

port in Gujarat. The FOB value of the 58 shipping bills was

around 30 crores and this amount was also adjusted against

the advance remittances received by M/s.Knomo Exports

Ltd. (later renamed as M/s.KEL Exports Ltd.) All the related

bank certificates of export realisation show that the total

foreign exchange equivalent of the cumulative FOB value

has been shown to have been received by erstwhile

company M/s.Knomo Exports Ltd. and the detenu has

signed as Director of M/s.KEL Exports Ltd. on these

certificates.

From the narration of facts in the grounds of detention,

it is clear that the detaining authority has not only taken note

of the allegations made against the detenu; the materials

collected by the investigating agency of the department

against him but has also taken note of the reply given by the

detenu at different stages denying the allegations and

levelling counter allegations against the officers of the

department to implicate him.

In paragraphs 40 and 41 of the grounds of detention,

the detaining authority has stated :

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40. While arriving at the subjective

satisfaction in your case I have also

taken into consideration the allegations

made and pleas taken in various

representations/replies made on your

behalf and on behalf of Shri Ajay Vyas.

However, in view of the materials placed

before me, I do not find any merit in

these representations/replies and I

accordingly reject them.

41. Out of the DEPB scrips obtained

by you against the said exports in the

name of M/s.Prism Exports A/c M/s KEL

Exports Ltd., on the basis of

manipulations and fraud as explained

above, duty credit against four DEPB

scrips have been utilised for clearance

of four consignments of imported goods

without payment of duty to the extent of

Rs.53.3 lakhs approx. These four

consignments were cleared in the name

of (i) M/s.Calyx Chem. &

Pharmaceuticals Pvt. Ltd., Mumbai (ii)

M/s.Mangalam Cement, Rajasthan,

(iii)M/s.Krishna Gargi Pvt. Ltd., Dadras

(and also Mumbai) and (iv) M/s.Enpro

Speciality Chemicals Ankaleshwar, has

directly resulted into evasion of import

duty for imports made against them.

In paragraph 43, the detaining authority has

concluded: Taking into consideration the foregoing facts

and the material on record, I am reasonably satisfied that

your activities amount to smuggling of goods as defined in

Section 2(39) of the Customs Act, 1962 and as adopted in

the COFEPOSA Act, 1974 Section 2(e) thereof since your

acts and omissions have rendered the goods involved liable

to confiscation under Section 111 and 113 of the Customs

Act, 1962 read inter alia with Rule 11 and Rule 14 of Foreign

Trade (Regulation) Rule, 1993, framed under

Foreign Trade (Development and Regulation) Act, 1992.

In para 44 of the ground of detention, the detaining

authority stated that in view of the facts mentioned in the

foregoing paragraphs, he had no hesitation in arriving at the

conclusion that the detenu had been engaged in smuggling

goods. Considering the nature and gravity of the offence and

the well organised manner in which the prejudicial activities

had been indulged in by the detenu, his role therein as well

as his dubious conduct as brought out in the statements in

the grounds, all of which reflect his high potentiality and

propensity to indulge in such prejudicial activities in future,

the authority was fully satisfied that there was need to

prevent the detenu from indulging in such prejudicial

activities in future by a detention order under the

COFEPOSA Act, 1974.

The main thrust of the arguments advanced by Shri

V..A. Mohta, learned senior counsel appearing for the

appellant was that the order of detention was vitiated by non-

consideration of relevant materials by the detaining authority

and non-application of mind and the High Court erred in

confirming such illegal and invalid order of detention.

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Elucidating his contention the learned senior counsel

submitted that the detaining authority has not verified the

copies of the shipping bills submitted to different authorities

in course of the transactions of export to ascertain whether

the allegations of forgery and manipulation of the shipping

bills levelled against the detenu were true or not. It was the

further submission of Shri V.A. Mohta that since the

detaining authority has referred to 90 shipping bills relating

to exports from the Port at Mumbai and Nhava Sheva Port

in Gujarat sending a few samples to the forensic experts and

arriving at a subjective satisfaction that the signatures of the

Asst.Commissioner of the Customs Department and other

officers borne on the shipping bills were forged suffers from

non-application of mind to the matter.

Per contra, Shri Mukul Rohtagi, learned

Additional Solicitor General appearing for the respondents

contended that in the grounds of detention communicated to

the detenu the detaining authority has described in great

detail the nature of organised activities in which the detenu

and his associates were involved; and the manner in which

they have reaped the benefit by avoiding customs duty to the

tune of lakhs of rupees by using the forged and manipulated

shipping bills. In such a case it is not necessary for the

detaining authority to send each and every shipping bill to

the forensic expert for examination for arriving at a

subjective satisfaction whether the detenu should be

detained under the provisions of COFEPOSA Act. The

further contention raised by Shri Mukul Rohtagi is that the

detaining authority has taken into consideration all the

relevant materials placed before him including the

statements made by the detenu and his associates; has

considered all the relevant materials and has arrived at a

subjective satisfaction about the necessity of detaining the

detenu under the COFEPOSA Act in a fair and proper

manner. It is the contention of Sri Mukul Rohtagi that the

order of detention warrants no interference by this Court.

In the case of A.Sowkath Ali vs. Union of India & Ors.,

(2000) 7 SCC 148, this Court considered the contention

raised on behalf of the detenu that the detention order was

vitiated as sponsoring authority placed the confessional

statements of P & I before the detaining authority but did not

place their retractions from the said confession. This Court

held :

The sponsoring authority should place

all the relevant documents before the

detaining authority. It should not

withhold any such document based on

its own opinion. All documents, which

are relevant, which have bearing on the

issue, which are likely to affect the mind

of the detaining authority should be

placed before it. Of course a document

which has no link with the issue cannot

be construed as relevant.

Considering the facts and circumstances of the case, this

Court held :

.The confessional statement and the

retraction, both constituting a composite

relevant fact should have been placed.

If any one of the two documents alone is

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placed without the other, it would affect

the subjective satisfaction of the

detaining authority. Therefore, non-

placement of the retraction affects the

subjective satisfaction of the detaining

authority.

In Union of India & Ors. Vs. Arvind Shergill &

Anr., (2000) 7 SCC 601, this Court, taking an exception to

the approach of the High Court in deciding the writ petition

filed on behalf of the detenu under Section 3 of the

COFEPOSA Act, 1974 held :

The High Court has virtually decided

the matter as if it was sitting in appeal

on the order passed by the detaining

authority. The action by way of

preventive detention is largely based on

suspicion and the court is not an

appropriate forum to investigate the

question whether the circumstances of

suspicion exist warranting the restraint

on a person. The language of Section 3

clearly indicates that the responsibility

for making a detention order rests upon

the detaining authority which alone is

entrusted with the duty in that regard

and it will be a serious derogation from

that responsibility if the court substitutes

its judgment for the satisfaction of that

authority on an investigation undertaken

regarding sufficiency of the materials on

which such satisfaction was grounded.

The court can only examine the grounds

disclosed by the Government in order to

see whether they are relevant to the

object which the legislation in view, that

is, to prevent the detenu from engaging

in smuggling activity. The said

satisfaction is subjective in nature and

such a satisfaction, if based on relevant

grounds, cannot be stated to be invalid.

The authorities concerned have to take

note of the various facts including the

fact that this was a solitary incident in

the case of the detenu and that he had

been granted bail earlier in respect of

which the application for cancellation of

the same was made but was rejected by

the Court. In this case, there has been

due application of mind by the authority

concerned to that aspect of the matter

as we have indicated in the course of

narration of facts. Therefore, the view

taken by the High Court in the

circumstances of the case cannot be

sustained.

(Emphasis supplied)

In the case of Ahmed Nassar vs. State of Tamil

Nadu & Ors., (1999) 8 SCC 473, this Court, taking a similar

view, held :

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Every conceivable material which is

relevant and vital which may have a

bearing on the issue should be placed

before the detaining authority. The

sponsoring authority should not keep it

back, based on his interpretation that it

would not be of any help to a

prospective detenu. The decision is not

to be made by the sponsoring authority.

The law on this subject is well settled; a

detention order vitiates if any relevant

document is not placed before the

detaining authority which reasonably

could affect his decision.

(Emphasis supplied)

In the case of Sanjay Kumar Aggarwal vs. Union

of India & Ors., (1990) 3 SCC 309, this Court, referring to

the grounds of detention, held:

It can therefore be seen that the

detaining authority has considered the

allegations that the detenu was

manhandled etc. At any rate, the

detaining authority has clearly noted that

the detenu has retracted from the

alleged statement, therefore it cannot be

said that there is non-application of mind

in this regard, namely, in considering the

representation

This Court repelled the contention of non-application of mind

by the detaining authority. Relying on the averments made in

the counter affidavit, this Court observed :

The next submission of the learned

counsel is that the detaining authority

has not applied his mind properly in

rejecting the representation made by the

detenu.

Xxx xxx xxx

It can therefore be seen that the

detaining authority has considered the

allegations that the detenu was

manhandled etc. At any rate, the

detaining authority has clearly noted that

the detenu has retracted from the

alleged statement, therefore it cannot be

said that there is non-application of mind

in this regard, namely, in considering the

representation. The same principles

applies to the Advisory Board also.

According to the submissions of the

learned counsel, these documents were

not placed before the Advisory Board in

its meeting on September 18, 1989.

Whatever statement was made by the

petitioners on June 22, 1989 prior to the

detention and the grounds clearly

disclose that there was retraction. It

must also be noted in this context that in

the grounds in paragraph 10 also it is

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mentioned that a telegram was received

on June 9, 1989 alleging about the

wrongful arrest and extraction of the

statements and the detaining authority

has also taken note of the allegations

made against the DRI officers which

were found to be false and baseless.

The same material was there before the

Advisory Board. Therefore there is no

force in this submission.

In the case of Ashadevi wife of Gopal Ghermal Mehta

(Detenu) v. K.Shivraj, Addl. Chief Secretary to the Govt. of

Gujarat & Anr., (1979) 1 SCC 222, this Court held that :

The principle that could be clearly

deduced from the above observations is

that If material or vital facts which would

influence the mind of the detaining

authority one way or the other on the

question whether or not to make the

detention order are not placed before or

are not considered by the detaining

authority, it would vitiate its subjective

satisfaction rendering the detention

order illegal. After all the detaining

authority must exercise due care and

caution and act fairly and justly in

exercising the power of detention and if

taking into account matters extraneous

to the scope and purpose of the statute

vitiates the subjective satisfaction and

renders the detention order invalid then

failure to take into consideration the

most material or vital facts likely to

influence the mind of the authority one

way or the other would equally vitiate

the subjective satisfaction and invalidate

the detention order.

In the case of Ayya alias Ayub v. State of U.P. & Anr., (1989)

1 SCC 374, this Court held :

What weight the contents and

assertions in the telegram should carry

is an altogether a different matter. It is

not disputed that the telegram was not

placed before and considered by the

detaining authority. There would be

vitiation of the detention on grounds of

non-application of mind if a piece of

evidence, which was relevant though

not binding, had not been considered at

all. If a piece of evidence which might

reasonably have affected the decision

whether or not to pass an order of

detention is excluded from

consideration, there would be a failure

of application of mind which, in turn,

vitiates the detention. The detaining

authority might very well have come to

the same conclusion after considering

this material; but in the facts of the case

the omission to consider the material

assumes materiality.

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(Emphasis supplied)

Testing the case at hand on the touchstone of the

principles laid down in the decisions noted above, we find

that the subjective satisfaction arrived at by the Detaining

Authority in the case is based on consideration of all the

relevant materials placed before it by the sponsoring

authority. It is not the case of the appellant that the

sponsoring authority did not place before the detaining

authority any material in its possession which is relevant

and material for the purpose and such material, if considered

by the detaining authority, might have resulted in taking a

different view in the matter. All that is contended on behalf of

the detenu is that the detaining authority should have taken

further steps before being satisfied that a case for detention

under the COFEPOSA Act has been made out against the

detenu. Whether the detention order suffers from non-

application of mind by the detaining authority is not a matter

to be examined according to any straight-jacket formula or

set principles. It depends on the facts and circumstances of

the case, the nature of the activities alleged against the

detenu, the materials collected in support of such

allegations, the propensity and potentiality of the detenu in

indulging in such activities, etc. The Act does not lay down

any set parameters for arriving at the subjective satisfaction

by the detaining authority. Keeping in view the purpose for

which the enactment is made and the purpose it is intended

to achieve, the Parliament in its wisdom, has not laid down

any set standards for the detaining authority to decide

whether an order of detention should be passed against a

person. The matter is left to the subjective satisfaction of the

competent authority.

Learned senior counsel Sri V.A.Mohta raised another

contention that the detenu had annexed to his representation

certain document written in Urdu language; the detaining

authority did not take any step for translation of the said

document into English, and therefore, the said material could

not be considered by the authority concerned while

disposing of the representation. The contention raised by Sri

Mohta can not be accepted. The judgment of the High

Court does not show that such a contention was raised

before the Court when the case was argued. Further, our

attention has not been drawn to any material to show that

the document in question was not translated into English, or

whether the authority concerned had not perused the

contents of the document. There is also no material to show

that the detenu had sought the help of the authorities to get

the document in question translated into English since that

was a piece of material which was relied upon by him in

support of the representation.

On the facts and circumstances of the case, it is our

considered view that the contention raised on behalf of the

detenu that the order of detention was vitiated due to non-

application of mind of the detaining authority, cannot be

accepted. The High Court committed no error in declining to

interfere with the detention order and in dismissing the writ

petition.

Therefore, the appeal, being devoid of merit, is

dismissed.

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J.

(D.P.Mohapatra)

J.

(Shivaraj V. Patil)

November 5, 2001