2020 (9) TMI 697 - HC - FEMA

Detention Orders at the pre-execution stage - Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (COFEPOSA Act) - HELD THAT - Proposals for invoking the provisions of the COFEPOSA Act were mooted in the second week of October 2019 - overseas evidence was received from SPA Dubai in the first week of November 2019. The proposal to detain the petitioners was further analysed keeping in view the strong tendency to indulge in smuggling activities in future. The proposal for preventive detention of the petitioners was sent to the Detaining Authority on 02.01.2020. The proposal was placed before the Central Screening Committee on 13.01.2020, and the recommendations of the Central Screening Committee (CSC) were submitted to the Detaining Authority on 14.01.2020. The proposals were examined by the Detaining Authority, and after arriving at his subjective satisfaction, the Detaining Authority passed the Detention Orders dated 21.01.2020. Aforesaid satisfactorily explains and justifies the time consumed in mooting the proposal for detention of the petitioners under the COFEPOSA Act and for consideration of the said proposal, firstly, by the Central Screening Committee, and thereafter, by the Detaining Authority. The time lapse, in our view, is not such as to lead to the inference that the live-link between the prejudicial activity of the petitioners, which was discovered in April 2019, and the object of detention, namely, to prevent them from indulging in such prejudicial activity, stood snapped. Pertinently, it is not the case of either of these petitioners that they have discontinued their ostensible business of dealing in gold and gold jewellery - observations in Muneesh Suneja 2001 (1) TMI 903 - SUPREME COURT is attracted in the facts of these cases. We also agree with the submission of Mr. Mahajan that petitioners reliance on Rajinder Arora 2006 (3) TMI 173 - SUPREME COURT is misplaced for the reasons advanced by Mr. Mahajan and recorded hereinabove. Therefore, we reject this submission of Mr. Chaudhri. Whether the petitioners absconded and, if so, whether they are precluded from assailing the Detention Orders in respect of each of them on that account? - We are of the view that there is no merit in the petitioners submissions that neither of the three petitioners was not absconding. Abscondence is not only a matter of physical disappearance, but also carries with it the intent to hide, disappear, or evade the concerned person, or authority. A Detention Order would lose its force and object, if it were to be served upon the representative, or counsel, as the element of surprise would be lost which is crucial to be able to detain a person, as there is every likelihood of the person absconding, or evading execution of the Detention Order the moment he learns that such an order had been passed. The respondents are not obliged to serve the Detention Order, the Grounds of Detention, or the Relied Upon Documents on a third party. If this submission of the petitioner MNK were to be accepted, it would render the law of preventive detention completely ineffective and not workable. The petitioner MNK, however, failed to provide his actual address where he could be served the Detention Order. If the petitioner MNK was not to be found at his ancestral address, there was no point of furnishing the same. Thus, we are satisfied that the petitioner MNK deliberately absconded to evade the service of the Detention Order. So far as the petitioner APS is concerned, we find that the position is no different. The reason given by the petitioner APS for his not being found at his given address is completely belied by the reports submitted by the DCP, West District, New Delhi. We find it very hard to believe that neither the petitioner APS s wife, nor his father was aware of his whereabouts. Clearly, APS was in hiding and his wife and his father also feigned ignorance, which would be the case only if the petitioner APS were to instruct them not to disclose his whereabouts. We are, therefore, of the view that the petitioner APS is equally guilty of abscondence. Petitioner Gopal Gupta - he was not found at his given address. His wife/ Smita was found at the said address who stated that the petitioner Gopal Gupta had gone somewhere in South India for his medical treatment and she did not have any knowledge about the exact whereabouts, and the date of arrival of her husband. This again, we find to be rather unusual that a wife would not know where her husband has gone and would not even know when he would arrive. In today s day and age when mobile communication is common place, we find the statement made by the petitioner Gopal Gupta s wife Smt. Smita to be unacceptable and clearly the idea was to suppress the information with regard to the whereabouts of Gopal Gupta. The stand now taken by the petitioner Gopal Gupta that he was at his father s residence, is completely contradicted with the statement of his wife Smita. We find that, firstly, the petitioners are not entitled to maintain these petitions in view of their conduct of abscondence and in view of the decision of the Supreme Court in Subhash Popatlal Dave 2013 (8) TMI 8 - SUPREME COURT and even otherwise, we do not find any merit in any of the grounds taken by the petitioners to assail the Detention Orders issued in respect of each of them under Section 3 of the COFEPOSA Act at the pre-execution/ detention stage.

Summary

Issues Involved:
1. Maintainability of writ petitions challenging Detention Orders at the pre-execution stage.
2. Alleged mala fides in the issuance of Detention Orders.
3. Delay in passing the Detention Orders.
4. Non-placement of vital documents before the Detaining Authority.
5. Justification for issuance of notifications under Section 7(1)(b) of the COFEPOSA Act.
6. Alleged abscondence of the petitioners.

Issue-wise Detailed Analysis:

1. Maintainability of Writ Petitions:
The petitioners sought to quash Detention Orders issued under Section 3(1) of the COFEPOSA Act at the pre-execution stage. The court acknowledged that such petitions are maintainable as held in *Alka Subhash Gadia* but emphasized that interference at the pre-execution stage should be an exception rather than a rule, requiring exceptional circumstances.

2. Alleged Mala Fides:
The petitioners argued that the Detention Orders were issued out of malice, citing various adverse orders against the respondents and subsequent contempt proceedings. The court found no evidence of malice either in fact or in law against the Detaining Authority or the Central Screening Committee, noting that the Detention Orders were based on the subjective satisfaction of the Detaining Authority, independent of the actions of the Customs or DRI officers.

3. Delay in Passing the Detention Orders:
The petitioners contended that there was an inordinate delay in passing the Detention Orders, which snapped the live-link between the prejudicial activities and the purpose of detention. The court was satisfied with the respondents' explanation that the delay was due to ongoing investigations and procedural requirements, including the involvement of the Central Screening Committee and the Detaining Authority's subjective satisfaction.

4. Non-placement of Vital Documents:
The petitioners claimed that vital documents were not placed before the Detaining Authority. The court found this plea premature as the Detention Orders, Grounds of Detention, and Relied Upon Documents had not yet been served on the petitioners, making it impossible to substantiate this claim at this stage.

5. Justification for Issuance of Notifications under Section 7(1)(b):
The petitioners argued that the notifications under Section 7(1)(b) were issued without exhausting the steps under Section 7(1)(a). The court held that Section 7 allows the Government to take steps under either or both clauses and found the issuance of notifications justified based on the petitioners' abscondence.

6. Alleged Abscondence:
The court examined reports from local authorities and found that each petitioner had deliberately absconded to evade the service of the Detention Orders. The petitioners' claims of not being absconders were rejected based on the evidence that they had not provided accurate addresses or had feigned ignorance of their whereabouts.

Conclusion:
The court dismissed the petitions, finding no merit in the grounds raised by the petitioners. It upheld the Detention Orders and the notifications under Section 7(1)(b) of the COFEPOSA Act, emphasizing the need for preventive detention to prevent future prejudicial activities. The interim orders were vacated, and the parties were left to bear their respective costs.