Usha Agarwal case, service law India, Supreme Court
0  02 Nov, 2006
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Usha Agarwal Vs. Union of India and Ors.

  Supreme Court Of India Criminal Appeal /1114/2006
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Case Background

The preventive detention of one sandip agarwal is under challenge in two matters namely criminal appeal by special leave against judgement in writ petition of the Calcutta High Court and ...

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CASE NO.:

Appeal (crl.) 1114 of 2006

PETITIONER:

Usha Agarwal

RESPONDENT:

Union of India & Ors.

DATE OF JUDGMENT: 02/11/2006

BENCH:

S. H. Kapadia & R. V. Raveendran

JUDGMENT:

J U D G M E N T

(Arising out of Special Leave Petition (Crl.) No. 3012/2006)

(With W.P. (Crl.) No. 191 of 2006 (D-14072/2006)

R.V. RAVEENDRAN, J.

Leave granted in SLP (Crl.) No.3012/2006.

The preventive detention of one Sandip Agarwal ('detenu' for short)

under section 3(1) of the Conservation of Foreign Exchange and Prevention

of Smuggling Activities Act, 1974 ('COFEPOSA Act' for short) is under

challenge in these two matters, namely, criminal appeal by special leave

against the judgment dated 21.4.2006 in Writ Petition No.23908/2005 of the

Calcutta High Court and a petition seeking a writ of habeas corpus under

Article 32 of the Constitution of India. Both have been filed by the mother of

the detenu.

2. The facts, in brief, leading to the preventive detention of the detenu,

as gathered from the grounds of detention, are as follows - Sandip Agarwal,

the detenu, was the Director in-charge of the management of M/s Sandip

Exports Ltd., the other Directors being his family members. On receipt of

information about irregularities committed by the detenu, a search of the

premises of Sandip Exports Ltd. was conducted by the Directorate of

Revenue Intelligence on 7.11.2003. The search and the investigations

disclosed that M/s. Sandip Exports Ltd. had obtained two Annual Advance

Licences dated 28.3.2001 and 22.3.2002 on actual user conditions from the

Director General of Foreign Trade, Kolkata, as manufacturer-exporter. The

said Annual Advance Licences issued under the Duty Exemption

Entitlement Certificate Scheme ('DEEC Scheme' for short) enabled the

Licensee to import goods free of duty subject to the condition that the

Licensee shall manufacture and export products (by utilizing the imported

goods) within 18 months, the quantity and value being as specified in the

licences in terms of Customs Notification No. 48/99 dated 29.4.1999 as

amended from time to time. The detenu imported different types of polyester

and silk yarn/fabric, duty free, under the scheme by using the said licences

of Sandip Exports Ltd. The duty foregone on importations made under the

said two Advance Licences was Rs.14 crores. Instead of utilizing such

imported materials in the manufacture of products for exports, he diverted

and disposed of the imported goods in the domestic market, and did not

fulfil the export obligation. He falsely claimed that the goods for export

were manufactured from out of the imported goods through a non-existing

manufacturing unit, and through alleged job-workers; and he also falsely

claimed that the products so manufactured out of goods imported by Sandip

Exports Ltd. were exported through M/s Karan Exports (India) Ltd., another

company owned and controlled by detenu's family. In this manner, the

detenu indulged in a systematic and organized import-export fraud by

importing goods duty-free, under the 'DEEC Scheme' and diverting them to

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domestic market.

3. At the instance of the Directorate of Revenue Intelligence (the

Sponsoring Authority), the Detaining Authority (Government of India,

Ministry of Finance, Department of Revenue, represented by its Joint

Secretary) passed an order of detention dated 19.8.2004 under Section 3(1)

of the COFEPOSA Act. In the grounds in support of the detention order, the

detaining authority stated that the action of the detenu in diverting duty free

imported goods into the domestic market in violation of the DEEC Scheme

Licences, amounted to "smuggling" of goods. The detaining authority also

stated that the nature and gravity of the offence and the dubious and

fraudulent modus operandi employed by the detenu showed his propensity

and potentiality to indulge in such illegal activities in future, necessitating

detention to prevent him from continuing such activities.

4. The detention order could not be executed as the detenu absconded.

As a consequence, an order dated 29.3.2004 was issued under Section 7(1)

of the Act. On the basis of a situation report filed under Section 7(1)(a) of

the Act on 26.10.2004, the Chief Metropolitan Magistrate, Calcutta, passed

an order dated 18.11.2004 for proclamation by proceeding under Section 82

Cr.P.C. The detenu filed a writ petition challenging the order of detention.

The said pre-execution challenge was rejected by the High Court on

10.6.2005. Ultimately, on 11.11.2005, the detenu was taken into custody and

the detention order and the grounds in support of the detention were served

on him. The copies of the documents relied upon by the detaining authority

in making the order of detention, were furnished to the detenu on

14.11.2005. As the detenu claimed that he had no working knowledge of

Hindi, English translations were furnished to him on 16.11.2005.

5. The detenu made a representation against his detention to the

detaining authority on 25.11.2005. The said representation was rejected by

the Detaining Authority on 7.12.2005 and the same was communicated to

the detenu on 13.12.2005. On 14.12.2005, the detenu's mother filed W.P.

No.23908/2005 in the High Court of Calcutta, seeking quashing of the

detention order dated 19.8.2004 and release of the detenu.

6. The detenu made a representation to the Advisory Board constituted

under the COFEPOSA Act on 16.1.2006. The Advisory Board gave a

hearing on 19.1.2006 and recommended confirmation of the detention. On

receiving a copy of the representation to the Advisory Board along with the

report of the Advisory Board on 27.1.2006, the Central Government

confirmed the detention on 1.2.2006. The representation dated 16.1.2006,

copies of which were furnished to the detaining authority and Central

Government, was also independently considered by them. The Detaining

Authority by order dated 10.2.2006 rejected the representation of the detenu

dated 16.1.2006. The Central Government (Special Secretary and Director

General, Central Economic Intelligence Bureau) also rejected the said

representation of the detenu by order dated 13.2.2006. These orders of

rejection were served on the detenu on 17.2.2006. The detenu made another

representation dated 7.2.2006 against his detention to the Central

Government. By order dated 22.2.2006 the Central Government rejected the

said representation and a copy thereof was served on the detenu on

18.3.2006.

7. The events subsequent to filing of the writ petition were placed on

record in the pending writ petition and the order of detention was challenged

on the following grounds :

a) Relevant materials were withheld by the sponsoring authority

from the Detaining Authority.

b) The Detaining Authority had considered and relied on non-

existent and irrelevant material in making the order of

detention.

c) The translations of Hindi documents were belatedly supplied.

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d) Copies of the documents which were relied upon by the

Detaining Authority furnished to the detenu, contained several

sheets which were illegible thereby preventing the detenu from

making an effective representation.

e) There was inordinate delay in considering the representation

made by the detenu to the Central Government and serving the

same on the detenu.

f) The order of detention was based on a solitary incident. There

was no material to show that there was any possibility of the

detenu indulging in smuggling activities in future.

g) The allegations against the detenu did not amount to

'smuggling' and therefore the order of detention was not

justified.

A Division Bench of the Calcutta High Court rejected all these contentions

and consequently, dismissed the writ petition by judgment dated 21.4.2006.

The said judgment of the Calcutta High Court is challenged in this appeal by

special leave. Simultaneously, the petition under Article 32 has also been

filed before this Court, challenging the detention.

8. Though several contentions were raised in the special leave petition

and the writ petition, during arguments the challenge to the detention was

restricted to the following three grounds:

(i) The sponsoring authority had withheld from the detaining

authority a relevant material (Order dated 15/20.4.2004

stopping EXIM benefits to Sandip Exports Ltd made under

Rule 7 of the Foreign Trade (Regulations) Rules, 1993). The

detaining authority could not therefore apply his mind to all

relevant material before making the order of detention.

(ii) Several sheets among the copies of the documents supplied to

the detenu, were illegible and this came in the way of the

detenu making an effective representation for his release.

(iii) There was inordinate delay in considering the representation

dated 7.2.2006 by the detenu submitted to the Central

Government and communicating the decision to the detenu.

Re : Point No. (i)

9. A detention under COFEPOSA Act is anticipatory and preventive. It

is neither punitive nor curative. Preventive detention being one of the two

exceptions to the constitutional protection under Article 22 against arrest and

detention, certain procedural safeguards are provided in respect of exercise

of the power to direct preventive detention. The procedural safeguards under

the Constitution have been interpreted, to require every material which is

relevant, having a bearing on the question as to whether a person should be

detained under the Act, to be placed before the detaining authority, as the

decision to detain a person is rendered by a detaining authority on his

subjective satisfaction as to the existence of the grounds for such detention.

The sponsoring authority should not undertake any exercise of examination

and interpretation of the available material with a view to place the

documents selectively before the detaining authority. It is not for the

sponsoring authority to decide as to which of the relevant documents should

be placed before the detaining authority, or which of the documents are

likely to help, or not help, the prospective detenu. Consequently, the

sponsoring authority cannot exclude any particular document from the

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material to be placed before the detaining authority. If the relevant facts or

documents which may influence the subjective satisfaction of the detaining

authority on the question whether or not to make the detention order, are not

placed before the detaining authority, or are not considered by the detaining

authority, it may vitiate the detention order itself. It is no answer to say that

the exclusion of a relevant document did not affect the decision to detain a

person, in view of the other documents that were placed before the detaining

authority or that the detaining authority would have come to the same

conclusion even if he had considered the said document \026 vide Attorney

General of India vs. Amratlal Prajivandas [1994 (5) SCC 54], Ashadevi vs.

K. Shivraj, Addl. Chief Secretary to the Govt. of Gujarat [1979 (1) SCC

222], Sita Ram Somani vs. State of Rajasthan [1986 (2) SCC 86]; Ayya alias

Ayub vs. State of U.P. [1989 (1) SCC 374] and Ahamed Nassar vs. State of

Tamil Nadu [1999 (8) SCC 473].

10. Let us examine the facts, keeping in view the said principles. In this

case, the detention order was made on the ground that the detenu had

diverted the goods, imported duty free for manufacture of goods for export,

into domestic market and thereby indulged in 'smuggling' as defined in

section 2(39) of the Customs Act, 1962 and the facts and circumstances

showed the propensity and potentiality on the part of the detenu to continue

such prejudicial activities in future. The grievance of the detenu is that the

sponsoring authority did not place the order dated 15/20.4.2004 of the Joint

Director-General of Foreign Trade, Kolkata (made under Rule 7 of Foreign

Trade Regulation Rules 1993, stopping the grant of all EXIM benefits to M/s

Sandip Exports Limited till finalization of the proposed action against the

said company), before the detaining authority. According to him, it was a

relevant document and the non-consideration of the said document vitiated

the order of detention. The fact that the said document was available in the

records of the sponsoring authority, but was not placed before the detaining

authority, is not disputed by the respondents. Though the High Court has

referred to the contention relating to the said document (order dated

15/20.4.2004), it did not specifically deal with it.

11. A document is relevant for considering the case of a person for

preventive detention if it relates to or has a bearing on either of the following

two issues : (a) Whether the detenu had indulged in smuggling or other

activities prejudicial to the State, which the COFEPOSA Act is designed to

prevent; and (b) Whether the nature of the illegal and prejudicial activity and

the manner in which the detenu had indulged in such activity, gave a

reasonable indication that he would continue to indulge in such activity. In

other words, whether he had the propensity and potentiality to continue the

prejudicial activity necessitating an order of detention.

12. The document in question did not prove any smuggling/prejudicial

activity on the part of the detenu. It only shows that the Department of

Foreign Trade had stopped all EXIM benefits to Sandip Exports Ltd.,

pending further action, as certain illegal activities of that company had come

to its notice. The said document was, therefore, neither relevant nor

necessary to decide whether the detenu had indulged in smuggling or other

prejudicial activity. The detaining authority obtained satisfaction in regard to

that aspect from the material that was placed by the sponsoring authority to

show illegal activities which amounted to smuggling.

13. The said document was also not relevant to establish propensity or

potentiality of the detenu to continue his illegal activities. The export-import

violations, which amount to smuggling, involve considerable planning,

organization and establishing a network. The propensity is deducible from

the modus operandi adopted by the violator, the inclination of the violator to

indulge in such activities and the further opportunity to commit such illegal

activities. Persons indulging in such prejudicial activities routinely create

'front' companies and firms. The fact that a particular 'front' company is

denied the EXIM benefits will not deter a violator from continuing such

activities, as he can always operate through other 'front' companies/firms.

The contention of the detenu that as the said order dated 15/20.4.2004,

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stopped the EXIM benefits to Sandip Exports Ltd., he could not have

continued the alleged illegal activity, and therefore, the detention order was

not warranted, is untenable. The EXIM benefits were stopped with reference

to only one company namely, Sandip Exports Ltd., and that too till

finalization of further action. The investigation and search by the Directorate

of Revenue Intelligence, had disclosed that the detenu had other 'front'

companies. In fact the detention order makes reference to a similar violation

by the detenu by using M/s. Scandia Investments (P) Ltd. which was another

'front' company controlled by him and his family. When the benefits of

illegal activity are stopped to a particular company, the brain behind the

violation, would merely shift the operations to another 'front' company or

start the activities through a new company. It should also to be noted that

whenever any irregularities/violations in regard to export/ import comes to

the attention of the department, the benefits are stopped in the normal

course, pending finalization of further action.

Therefore, it cannot be said that the document whereby EXIM benefits to

one of the companies controlled by the detenu was stopped, was a 'relevant'

document, non-consideration of which would vitiate the detention order. The

first contention is therefore rejected.

Re : Point No. (ii)

14. It is contended on behalf of the detenu that several sheets in the copies

of documents furnished to him, were illegible and that prevented him from

making an effective representation. It is submitted that the procedural

safeguard under clause (5) of Article 22 requires the grounds of detention to

be communicated to the detenu and this would mean not only the grounds

but also the documents on which reliance was placed to formulate the

grounds that led to the detention. It is further submitted that the documents

required to be furnished, should be legible and in a language known to the

detenu so as to enable the detenu to give an effective representation against

the detention; that if the documents are not legible or in a language not

known to the detenu, then it is as bad as not furnishing the documents; and

that furnishing of copies of documents is not a mere formality but an integral

part of the right of the detenu assured under the Constitution. It is contended

that the order of detention is vitiated on account of the following pages of

the documents furnished to the detenu being not legible :-

Page Nos. 124-128, 160-178, 186, 254, 255, 257, 350, 352, 357, 358, 360,

362, 368-371. 371A, 371B, 493, 497, 500, 508, 510, 515, 516, 523, 534,

538, 543, 550, 551, 608, 611, 616-21, 623-37, 682-701, 745, 750, 755,

760, 765, 769-70, 777, 780, 821, 841-43, 857-65, 872, 874, 882, 884, 887

and the last page.

15. In Dharmishta Bhagat vs. State of Karnataka [1989 Supp.(2) SCC

15], this Court has held that 'refusal' on the part of the detaining authority to

supply legible copies of 'relevant' documents to the detenu for making an

effective representation infringes the detenu's right under Article 22(5) of

the Constitution. This Court observed :

"Therefore, it is imperative that the detaining authority has to serve the

grounds of detention which include also all the relevant documents which

had been considered in forming the subjective satisfaction by the detaining

authority before making the order of detention and referred to in the list of

documents accompanying the grounds of detention in order to enable the

detenu to make an effective representation to the Advisory Board as well

as to the detaining authority. Therefore, the non-supply of legible copy of

this vital document i.e. panchnama dated February 12, 1988 in spite of the

request made by the detenu to supply the same renders the order of

detention illegal and bad."

In Manjit Singh Garewal @ Gogi vs. Union of India [1990 Supp. SCC 59],

this Court has held that where copies supplied at the request of the detenu

were illegible, the constitutional safeguards were violated and the order of

detention is liable to be quashed.

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16. The High Court has examined the copies that were furnished to the

detenu. In regard to the grievance relating to illegible copies occurring

between pages 493 and 887 and the last page, the High Court found that

these were copies of the documents which were supplied by the detenu

himself, and the department could do no better than to furnish the copies

thereof. If the documents furnished by the detenu to the department

contained some portions or pages which were illegible, obviously the copies

thereof furnished by the detaining authority to the detenu will also contain

such illegible portions. The learned counsel for the appellant contented that

if really any document furnished by the detenu was illegible, it could not

have been used against the detenu.. But this contention overlooks the fact

that a document may contain several sheets and illegibility of some sheets or

parts of some sheets will not come in the way of the authorities making use

of the legible portions of the documents furnished by the detenu,

supplemented by other documents secured during investigation. There is

nothing strange in the department making use of partially legible documents

furnished by detenu. Therefore, illegibility of portions of documents which

are copies of documents furnished by the detenu, cannot be a ground for

grievance by the detenu. Insofar as the allegation that some of the sheets

between pages 124 to 371B were illegible, the High Court after having gone

through the copies of documents furnished to the detenu, has found no

substance in the contention. In fact, while acknowledging the copies of

documents, the detenu has made an endorsement that they were legible.

17. The entire issue of furnishing of illegible copies is with reference to

the question whether detenu's right to make an effective representation

against his detention is hampered by non-supply of legible copies. The High

Court after an examination of the copies of documents found that the detenu

was not so hampered. Having gone through the representations made by the

detenu against his detention, we also find that he was in no way hampered

by the fact that a few of the sheets/copies of documents were partly illegible.

We therefore find no merit in the second condition, nor any reason to

interfere with the finding of the High Court in this behalf.

Re : Point No. (iii)

18. The scope of Clause (5) of Article 22 which provides that when any

person is detained in pursuance of an order made under any law providing

for preventive detention, the authority making the order shall, as soon as

may be, communicate to such person the grounds on which the order has

been made and shall afford him the earliest opportunity of making a

representation against such order, has been examined in several decisions.

Interpreting the said provision, this Court in Sk. Abdul Karim vs. the State of

West Bengal [AIR 1969 SC 1028], held as follows :-

"Apart from these enabling and. disabling provisions certain procedural

rights have been expressly safeguarded by Clause (5) of Article 22. A

person detained under a law of preventive detention has a right to obtain

information as to the grounds of detention and has also the right to make a

representation protesting against an order of preventive detention. Article

22(5) does not expressly say to whom the representation is to be made and

how the detaining authority is to deal with the representation. But it is

necessarily implicit in the language of Article 22(5) that the State

Government to whom the representation is made should properly consider

the representation as expeditiously as possible. The constitution of an

Advisory Board-under Section 8 of the Act does not relieve the State

Government from the legal obligation to consider the representation of the

detenu as soon as it is received by it. On behalf of the respondent It was

said' that there was no express language in Article 22(5) requiring the

State Government to consider the representation of the detenu. But it is a

necessary implication of the language of Article 22(5) that the State

Government should consider the representation made by the detenu as

soon as it is made, apply its mind to It and, if necessary, take appropriate

action. In our opinion, the constitutional right to make a representation

guaranteed by Article 22(5) must be taken to include by necessary

implication the constitutional right to a proper consideration of the

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representation by the authority to whom it is made. The right of

representation under Article 22(5) is a valuable constitutional right and is

not a mere formality."

In Sk. Rashid vs. State of West Bengal [AIR 1973 SC 824], this Court

interpreting the words 'as soon as may be' occurring in clause (5) of Article

22, held as follows :

"The use of the Words "as soon as may be" is important. It reflects the

anxiety on the part of the framers of the Constitution to enable the detenu

to know the grounds on which the order of detention has been made so

that he can make an effective representation against it at the earliest. The

ultimate objective of this provision can only be the most speedy

consideration of his representation by the authorities concerned, for,

without its expenditious consideration with a sense of urgency the basic

purpose of affording earliest opportunity of making the representation is

likely to be defeated. This right to represent and to have the representation

considered at the earliest flows from the constitutional guarantee of the

right to personal liberty - the right which is highly cherished in our

Republic and its protection against arbitrary and unlawful invasion.

Now, whether or not the State Government has in a given case considered

the representation made by the detenu as soon as possible, in other words,

with reasonable dispatch, must necessarily depend on the facts and

circumstances of that case, it being neither possible nor advisable to lay

down any rigid period of time uniformly applicable to all cases. The Court

has in each case to consider judicially on the available material if the gap

between the receipt of the representation and its consideration by the State

Government is so unreasonably long and the explanation for the delay

offered by the State Government so unsatisfactory as to render the

detention order thereafter illegal"

In Kamleshkumar Ishwardas Patel vs. Union of India [1995 (4) SCC 51],

this Court observed thus :-

"Construing the provisions of Article 22(5) we have explained that the

right of the person detained to make a representation against the order of

detention comprehends the right to make such a representation to the

authority which can grant such relief, i.e., the authority which can revoke

the order of detention and set him at liberty and since the officer who has

made the order of detention is competent to revoke it, the person detained

has the right to make a representation to the officer who made the order of

detention. The first premises that such right does not flow from Article

22(5) cannot, therefore, be accepted."

This Court has also repeatedly held that though there can be no specific or

mechanical test for determining whether there has been undue delay, where

there is an unexplained delay in either making the order or serving the order,

it would vitiate the order of detention.

19. The order of detention states that detenu can make representations to

(i) Detaining Authority, (ii) Central Government, and (iii) Advisory Board,

in regard to the detention. The detenu has a constitutional as also statutory

right to make a representation against detention not only to the Detaining

Authority but to any authority which can revoke the order of detention. He

can also represent to the Advisory Board constituted under section 8 of

COFEPOSA Act. Such representations no doubt should be disposed of by

the concerned authority as early as possible. The fact that the Detaining

Authority or the Advisory Board have rejected the representation of the

detenu does not discharge the Central Government from its responsibility to

consider and dispose of the representation expeditiously.

20. The grievance of the detenu is in respect of the representation to the

Central Government on 7.2.2006 which was rejected by the Central

Government and the detaining authority, by two separate orders dated

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22.2.2006. The Central Government in its counter-affidavit has satisfactorily

explained how the time between 7.2.2006 and 22.2.2006 was spent. But the

said orders dated 22.2.2006 rejecting the representation was served on the

detenu only on 18.3.2006. The reason why the rejection orders dated

22.2.2006 were not served till 18.3.2006 on the detenu remains unexplained.

In fact the respondents have admitted this unexplained delay in their counter

filed in this Court. We extract below the relevant portion :-

"In this connection, it is submitted that the Superintendent, Presidency

Correctional Home, Kolkata was requested to serve the original of the said

two memorandums on the detenu and obtain signature thereon which he

did on 18th March, 2006. IG (Prisons) and Chief Secretary, Government of

West Bengal, have been asked to look into the circumstances leading to

delayed submission of rejection memos to the detenu."

21. The grievance of the detenu is in regard to the delay in

communicating the decision dated 22.2.2006 of the Central Government till

18.3.2006. The learned counsel for the respondent however relied on the

decision of this Court in Abdul Razak Dawood Dhanani vs. Union of India

[2003 (9) SCC 652], to contend that delay on the part of the Central

Government in considering the detenu's representation or the delay in

communication of such decision on the detenu will not be material, where

the Central Government has already considered the representation of the

detenu and rejected it and what is delayed is the decision on the second

representation. In that case, the representation dated 12.4.2002 given by the

detenu to the three authorities namely, Advisory Board, Detaining Authority

and Central Government were rejected respectively by orders dated

19.4.2002, 06.5.2002 and 08.5.2002. In addition to the first representation

dated 12.4.2002, the detenu had submitted a further representation dated

19.4.2002 to the Central Government and the grievance was that the second

representation had not been disposed of by the Central Government by a

separate order. This Court rejected the contention on the ground that the

second representation dated 19.4.2002 contained the same grounds and same

material as contained in the first representation dated 12.4.2002 and in the

absence of any fresh ground or material or subsequent event justifying the

consideration of the second representation, the Central Government was not

bound to pass separate order disposing of the second representation. The

ratio of that decision squarely applies to this case.

22. In this case we find that the first representation dated 16.1.2006 was

disposed of by the Advisory Board, Detaining Authority and Central

Government on 27.1.2006, 10.2.2006 and 13.2.2006. The second

representation dated 7.2.2006 given to the Central Government is nothing

but a reiteration of the representation that was given to the Advisory Board

on 16.1.2006 copies of which were given to detaining authority and Central

Government. The representation dated 16.1.2006 had already been

considered and rejected by the Central Government by order dated

13.2.2006. Therefore applying the principle in Abdul Razak Dawood

Dhanani (supra), any delay in disposing of the subsequent representation

dated 7.2.2006 or any delay in communicating the decision on such

representation will not vitiate the order of detention. The third contention is

also therefore rejected.

23. As a result, we dismiss the appeal as also the writ petition as having

no merit.

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