1987 (4) TMI 398 - SC - FEMA

Whether the impugned order of detention was based on no material inasmuch as R.C. Singh was not a gazetted officer of enforcement and, therefore, the statements recorded by him had no evidentiary value whether the statements recorded by him could be treated to be statements relatable to section 39(b) of the Foreign Exchange Regulation Act and could still from the basis for such satisfaction? Whether there was non-application of mind on the part of the detaining authority and, therefore, the impugned order of detention was bad as there were factual mis-statements detailed in items A to F of the gorunds of detention? Whether there was infraction of the constitutional safeguards contained in article 22(5) due to the failure on the part of the Central Government to consider the representation filed by the detenu under section 8(b) read with section 11 of the Act, alleged to have been presented through one Ashok Jain and received at the President s Secretariat on April 15, 1986, and, therefore, the continued detention of the petitioner was rendered invalid and unconstitutional? Held that - Appeal dismissed.this is a fit case in which the detenu, his wife (petitioner herein), Ashok Jain and all other persons responsible for the fabrication of false evidence should be prosecuted for the offences committed by them. Nevertheless we wish to defer the passing of final orders on the application made under section 340 of the Code of Criminal Proceedure, 1973, by the Union of India at this stage because of the fact that the Central Bureau of Investigation is said to be engaged in making a thorough investigation of the matter so that suitable action could be taken against all the perpetrators of the fraudulent acts and the offences. As such, the launching of any prosecution against the detenu and his set of people at this stage forthwith may lead to a premature closure of the investigation resulting in the Central Bureau of Investigation being unable to unearth the full extent of the conspiracy.

Issues Involved:
1. Validity of the detention order under Section 3(1) of the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974.
2. Non-application of mind by the detaining authority.
3. Failure to consider the representation allegedly made by the detenu.
4. Whether the period of parole should be treated as part of the detention period.
5. Allegations of forgery and fabrication of documents.

Detailed Analysis:

1. Validity of the Detention Order under Section 3(1) of the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974:
The petitioner challenged the detention order on the grounds that there was no material to justify the satisfaction of the detaining authority under Section 3(1) of the Act. The court found that there was sufficient material for the formation of the subjective satisfaction of the detaining authority. The statements recorded by R.C. Singh, although contested for being recorded by a non-gazetted officer, were deemed valid under the de facto doctrine. The court held that the detaining authority was entitled to rely on these statements as they were relevant and admissible, irrespective of how they were obtained.

2. Non-application of Mind by the Detaining Authority:
The petitioner argued that there were factual misstatements in paragraph 44 of the grounds of detention, which indicated non-application of mind by the detaining authority. The court examined the alleged factual misstatements in items A to F and found that they were not material or serious enough to vitiate the detention order. The court observed that the grounds of detention should be read as a whole and not in isolation. The detaining authority's subjective satisfaction was based on sufficient material, and the alleged mistakes did not indicate non-application of mind.

3. Failure to Consider the Representation Allegedly Made by the Detenu:
The petitioner claimed that the detenu had made a representation to the President of India, which was not considered, thereby violating Article 22(5) of the Constitution and Section 11 of the Act. The respondents denied receiving any such representation. The court scrutinized the evidence, including the dak register, and found tell-tale signs of forgery and fabrication. The court concluded that no such representation was made, and the attempt to challenge the detention on this ground was a well-planned move by the detenu.

4. Whether the Period of Parole Should Be Treated as Part of the Detention Period:
The court held that the period of parole should not be treated as part of the detention period. The court emphasized that preventive detention is an extraordinary measure to safeguard public order and the welfare of the economy. The conditions of parole do not equate to actual detention, as the detenu can still engage in activities contrary to the objectives of preventive detention. The court reiterated its stance from Smt. Poonam Lata v. M.L. Wadhawan that the period of parole must be excluded from the detention period.

5. Allegations of Forgery and Fabrication of Documents:
The respondents filed an application under Section 340 of the Code of Criminal Procedure for prosecuting those responsible for forging the alleged representation made by the detenu. The court found sufficient material indicating that the representation was fabricated and that there were manipulations in the dak register. The court deferred passing final orders on the application under Section 340, pending the completion of the Central Bureau of Investigation's thorough investigation.

Conclusion:
The special leave petition and the writ petition were dismissed with costs. The court found no merit in the contentions regarding the validity of the detention order, non-application of mind, and failure to consider the representation. The period of parole was excluded from the detention period, and the allegations of forgery and fabrication were taken seriously, with further investigation by the Central Bureau of Investigation.

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