2008 (11) TMI 655 - SC - FEMA

Whether the detention order dated 22.05.2008 passed against the petitioner, Deepak Gopaldas Bajaj, resident of Mumbai under Section 3(1) of the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 is correct?

Issues Involved:
1. Pre-execution challenge to a preventive detention order.
2. Exhaustiveness of grounds for pre-execution challenge as per Alka Subhash Gadia's case.
3. Non-placement of relevant materials before the Detaining Authority.
4. Impact of retractions on the legality of the detention order.
5. Continuation of detention order despite cessation of alleged illegal activities.

Issue-Wise Detailed Analysis:

1. Pre-execution challenge to a preventive detention order:
The petitioner challenged the detention order dated 22.05.2008 under Section 3(1) of the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974, at a pre-execution stage. The respondents objected, citing precedents like State of Maharashtra vs. Bhaurao Punjabrao Gawande and Alka Subhash Gadia, arguing that such petitions should not be entertained before the petitioner's arrest or surrender.

2. Exhaustiveness of grounds for pre-execution challenge as per Alka Subhash Gadia's case:
The Court examined the decision in Alka Subhash Gadia, which outlined five grounds for pre-execution challenges. The Court clarified that these grounds are illustrative, not exhaustive, emphasizing that judicial review should not be mechanically restricted. The Court stated, "It would be an altogether different thing to say that the five grounds for entertaining such a petition at a pre-execution stage mentioned in Smt. Alka Subhash Gadia's case (supra) are exhaustive. In our opinion, they are illustrative and not exhaustive."

3. Non-placement of relevant materials before the Detaining Authority:
The petitioner argued that the Detaining Authority did not consider relevant materials, including retractions by key witnesses. The Court agreed, noting that crucial documents like retractions were not placed before the Detaining Authority, which could have influenced the decision. The Court cited precedents that non-placement of such materials vitiates the detention order, stating, "Failure to place the retractions and other materials referred to in paragraph 4 of the petition before the Detaining Authority would certainly vitiate the impugned detention order."

4. Impact of retractions on the legality of the detention order:
The Court highlighted that retractions of confessions must be considered by the Detaining Authority. The failure to do so invalidates the detention order. The Court referenced multiple precedents, including Ashadevi vs. K. Shivraj, emphasizing that "it was the duty of the Customs Officer to have reported the retraction of the statements to the Detaining Authority."

5. Continuation of detention order despite cessation of alleged illegal activities:
The petitioner claimed that he ceased the alleged illegal activities in 2006, making the detention order redundant. The Court noted that this argument was unnecessary to address, as the petition was already allowed on the grounds of non-placement of relevant materials. However, the Court acknowledged the argument by referring to Maqsood Yusuf Merchant vs. Union of India, where it was held that continuing a detention order after cessation of activities would be futile.

Conclusion:
The Court quashed the detention order, emphasizing the importance of liberty under Article 21 of the Constitution and the necessity for Detaining Authorities to consider all relevant materials, including retractions. The judgment underscored that the grounds for pre-execution challenges are not limited to those listed in Alka Subhash Gadia and that judicial review should be flexible to ensure justice. The writ petition was allowed, and the detention order dated 22.05.2008 was quashed.

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