2002 (12) TMI 490 - HC - Companies Law

Summary

Issues Involved:
1. Legality of the detention order under section 3(1)(i) of the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974.
2. Consideration of the retention of the detenu's passport in judicial custody.
3. Application of mind by the detaining authority regarding the detenu's ability to engage in smuggling activities without a passport.

Detailed Analysis:

1. Legality of the detention order under section 3(1)(i) of the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974:
The petitioner challenged the detention order dated 24-1-2002, which was issued to prevent the detenu from engaging in smuggling activities. The detenu was intercepted at Chennai Airport with 1630 grams of gold concealed in umbrellas, which led to his detention under the said Act. The detenu admitted to smuggling activities and his connection with a person named Noor Mohammed. The State Government justified the detention by stating the likelihood of the detenu indulging in smuggling activities if released on bail, thus necessitating preventive detention.

2. Consideration of the retention of the detenu's passport in judicial custody:
The petitioner's counsel argued that the detaining authority failed to consider the retention of the detenu's passport, which was crucial since it would prevent him from traveling and engaging in smuggling activities. The counsel emphasized that the detaining authority noted the passport's retention but did not assess its impact on the detenu's ability to smuggle. The Supreme Court's decision in Rajesh Gulati v. Government of NCT of Delhi was cited, highlighting that the retention of a passport is a relevant circumstance that should be considered to avoid speculative conclusions about the detenu's future smuggling activities.

3. Application of mind by the detaining authority regarding the detenu's ability to engage in smuggling activities without a passport:
The court observed that the detaining authority did not adequately address the impact of the passport's retention on the detenu's smuggling activities. The pattern of smuggling described in the grounds relied heavily on the detenu's travel in and out of India. The court noted that the detaining authority should have explicitly considered how the retention of the passport would prevent the detenu from continuing his smuggling activities. The failure to do so indicated a lack of application of mind, rendering the detention order invalid.

Conclusion:
The court concluded that the detaining authority failed to consider the critical fact of the passport's retention, which was paramount given the pattern of smuggling activities involving international travel. This omission amounted to non-application of mind, vitiating the detention order. Consequently, the petition was allowed, and the detenu was ordered to be released forthwith, unless required in any other matter.