9911796707
TMI Blog1987 (4) TMI 398X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. - SPECIAL LEAVE PETITION (CRL) NO. 1370 OF 1986 AND WRIT PETITION NO. 363 OF 1986 - - - Dated:- 29-4-1987 - A.P. SEN AND NATARAJAN, JJ. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y concern known as Messrs Greenland Corporation, Tolo Building, Osaka, Japan, owned by a Nepali national and was engaged in exporting yarn, fibre, fabrics, chemicals, etc., to India and Middle-East countries. Messrs J. M. Trading Corporation, 701, Tulskani Chambers, 212, Nariman Point, Bombay (of which Mohanlal Jatia is a partner), are the sole-selling agents of Messrs Greenland Corporation for yarn and fibre. He further revealed that Satyanarayan Jatia, the elder brother of Mohanlal Jatia, who is also a partner of Messrs J. M. Trading Corporation, Bombay, had been staying in Japan for some 35 years and was the sole representative of Messrs Greenland Corporation in Japan. While explaining the entries in the documents seized from his residence on June 27, 1985, Subhash Gadia admitted that the bunch marked S.G. 6 containing pages 1 to 94 are written by him in his own writing and that these contained accounts relating to his trade or business including imports and cash transactions and payments. He further confirmed that all the transactions reflected in these documents were his real business transaction dealings and some of them were not reflected in his regular account books. While ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Conservation of Foreign Exchange and Prevention of Smuggling Activites Act, 1974, ordered the detention of the aforesaid Mohanlal Jatia by an order dated December 13, 1985, on being satisfied that it was necessary to detain him "with a view to preventing him from acting in any manner prejudicial to the augmentation of foreign exchange" The petitioner thrice approached the High Court with petitions under article 226 of the Constitution seeking to challenge the impugned order of detention. Immediately after the passing of the impugned order, i.e., on December 16, 1985, she moved the first of these petitions being W.P. No. 2530 of 1985, for an appropriate writ or direction to quash the impugned order of detention and applied for stay. The writ petition was admitted but stay was refused. On appeal, a Division Bench in Writ Appeal No. 1162 of 1985 granted interim stay till the disposal of the appeal. On February 28, 1986, the Division Bench dismissed the appeal as well as the writ petition. By its subsequent order dated March 4, 1986, the Division Bench granted stay of execution up to April 4, 1986, on certain terms and conditions. The petitioner filed a petition under article 136 in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he petitioner filed the present petition under article 136 of the Constitution. On July 11, 1986, she also filed a petition under article 32 challenging the continued detention of her husband. On July 18, 1986, the court issued notice both on the special leave petition as well as the writ petition and in the meanwhile directed that the petitioner's husband be released on parole for a week. The court, by its subsequent order dated July 25, 1986, extended the period of parole till August 20, 1986. The writ petition filed in this court on July 11, 1986, is principally based on the ground that there was failure on the part of the detaining authority to consider the alleged representation dated April 11, 1986, made by the detenu against the impugned order of detention addressed to the President of India which was presented through one Ashok Jain at the President's Secretariat on April 5, 1986, and there had thus been an infraction of the constitutional safeguards enshrined in article 22(5) and section 11 of the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act which rendered the continued detention of the detenu without the due process of law and thus illegal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve produced in a sealed envelope the original dak register maintained at the Rashtrapati Bhawan in which the alleged interpolations have been made. We are informed that the matter has been handed over to the Central Bureau of Investigation for investigation. We shall deal with the application under section 340 of the Code later In support of these petitions, learned counsel has mainly advanced the following contentions, namely: (1) As is evident from the grounds of detention, the detaining authority relied upon the statements recorded by R. C. Singh on the assumption that they were valid statements under section 40 of the Act although they were in reality not so, inasmuch as R.C. Singh was not a "gazetted Officer of enforcement" within the meaning of section 40 and, therefore, there was no material on which the satisfaction of the detaining authority could be reached. (2) In a habeas corpus petition, the burden was entirely upon the respondents to produce the relevant records and to substantiate that the detention was strictly according to law. The failure on the part of the respondents to produce the relevant notification showing that R. C. Singh was a gazetted officer of enforc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idered opinion that none of the contentions can prevail. In order to deal with the rival contentions advanced, it is necessary to set out the relevant provisions of the Foreign Exchange Regulation Act, 1973. The Foreign Exchange Regulation Act, 1973, is an Act, as reflected in the long title, to consolidate and amend the law regulating certain payments, dealings in foreign exchange and securities, transactions indirectly affecting foreign exchange and the import and export of currency and bullion, for the conservation of the foreign exchange resources of the country and the proper utilisation thereof in the interests of the economic development of the country. The legislation has been brought in to implement the Government policy for conservation of foreign exchange and for removing the difficulties in implementing the same. The provisions of sections 3, 4 and 5 deal with ( i ) classes of officers of Enforcement; ( ii ) appointment and powers of officers of Enforcement; and ( iii ) entrustment of functions of Director or other Officer of Enforcement. These provisions provide as follows : "3. Classes of officers of Enforcement. There shall be the following classes of officers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of any investigation or proceeding under this Act." The main thrust of the argument of Shri G. L. Sanghi, learned counsel appearing for the petitioner, revolves around mainly three aspects : (1) R. C. Singh was not a gazetted officer of Enforcement and, therefore, statements recorded by him had no evidentiary value and thus they could not form the basis upon which the satisfaction of the detaining authority could be reached, (2) There was total non-application of mind by the detaining authority to several factual misstatements as detailed in entries "A to F" in the grounds of detention which vitiated the impugned order of detention. (3) The failure of the sponsoring authority to "forward the account books seized during the course of search at the residential premises of Subash Gadia shows that the detaining authority proceeded to make the impugned order of detention without due application of mind. According to learned counsel, if there is one principle more firmly settled than any other in this field of jurisprudence relating to preventive detention, it is that even if one of the grounds or reasons which led to the subjective satisfaction of the detaining authority is non-exi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g on the detaining authority which ordered the detention of the detenu, but the opinion of the Advisory Board in Shamsi's case was an important consideration which should and ought to have been taken into account by the detaining authority before passing the order of detention in that case. It was observed that the court could not exclude a reasonable probability that since the Advisory Board had not sustained Shamsi's detention on a ground which was common to him and the detenu, the detaining authority would have, if at all, passed the order of detention against the detenu on the three remaining grounds which had been held to be bad. The decision in Shamsi's case turned on its own facts and certainly is not an authority for the proposition contended for. So also in Ashadevi v. K. Shivraj [1979] 2 SCR 215; AIR 1979 SC 447, on which reliance was placed, there was failure on the part of the State Government to apprise the detaining authority of the fact that the detenu's request to have the presence of, and consultation with, his counsel had been refused, and that the confessional statement upon which the detaining authority had relied, had been retracted while he was in judicial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not adequate, or sufficient for the satisfaction of the detaining authority or for the making of an effective representation. Sufficiency of grounds is not for the court but for the detaining authority for the formation of his subjective satisfaction that the detention of a person under section 3(1) of the Act is necessary with a view to preventing him from acting in any manner prejudicial to the augmentation of foreign exchange. In Mangal-bhai Motiram Patel v. State of Maharashtra [1980] 4 SCC 470; AIR 1981 SC 510, 515, it was observed at page 477 of the Report : "The Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974, is enacted to serve a laudable object. It is a measure to prevent smuggling of goods into or out of India and to check diversion of foreign exchange by immobilising the persons engaged in smuggling, foreign exchange racketeering and related activities by preventive detention of such persons. Violations of foreign exchange regulations and smuggling activities are having an increasingly deleterious effect on the national economy and thereby a serious adverse effect on the security of the State. Such economic offences disrupt the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uthority as regards the factual existence of the condition on which the order of detention can be made, i.e., the grounds of detention constitutes the foundation for the exercise of the power of detention and the court cannot be invited to consider the propriety or sufficiency of the grounds on which the satisfaction of the detaining authority is based. Nor can the court, on a review of the grounds, substitute its own opinion for that of the authority. But this does not imply that the subjective satisfaction of the detaining authority is wholly immune from the power of judicial review. It inferentially follows that the subjective satisfaction being a condition precedent for the exercise of the power conferred on the executive, the court can always examine whether the requisite satisfaction was arrived at by the authority; if it is not, the condition precedent to the exercise of t exercise of the power would be bad. The simplest case is where the authority has not applied its mind at all; in such a case, the authority could not possibly be satisfied as regards the fact in respect of which it is required to be satisfied. See Khudi Ram Das v. State of West Bengal [1975] 2 SCR 83 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authority would have based his satisfaction upon such material. Learned counsel places emphasis on the word "gazetted" in section 40(1) and contends that R.C.Singh for the first time became a gazetted officer of Enforcement on January 18, 1986, when his appointment as such was notified. According to him, the detaining authority has relied upon the statements purporting to be under section 40(1) though in reality they I were not so. According to learned counsel there is a sanctity attached to statements recorded under section 40(1) of the Foreign Exchange Regulation Act. That is so, because every person summoned by a gazetted officer of Enforcement to make a statement under sub-section (1) of section 40 is under a compulsion to state the truth on the pain of facing prosecution under sub-section (3) thereof. Further, sub-section (1) provides that every such investigation or proceeding as aforesaid, shall be deemed to be a judicial proceeding within the meaning of sections 193 and 224 of the Indian Penal Code, 1860. Such being the legal position] learned counsel contends that while a statement recorded by a gazetted Enforcement Officer under section 40(1) can furnish sufficient and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an Enforcement Officer and discharging the functions attached to the post. There is, in our opinion, considerable force in these submissions. In any event, learned counsel further contends that R. C. Singh was clothed with the insignia of office and he was purporting to exercise the functions and duties of a gazetted officer of Enforcement under section 40(1) of the Foreign Exchange Regulation Act and, therefore, the de facto doctrine was attracted. He relies upon the decision of this court in Gokaraju Rangaraju v. State of Andhra Pradesh [1981] 3 SCR 474; AIR 1981 SC 1473, enunciating the de facto doctrine, born of necessity and public policy to prevent needless confusion and endless mischief. In other words, he contends that where an officer acts under the law, it matters not how the appointment of the incumbent is made so far as the validity of his acts is concerned. We are inclined to the view that in this jurisdiction there is a presumption of regularity in the acts of officials and that the evidentiary burden is upon him who asserts to the contrary. The contention that R.C. Singh was not a gazetted officer of Enforcement within the meaning of section 40(1) of the For ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons as a gazetted officer of Enforcement under section 40(1) of the Foreign Exchange Regulation Act when he recorded the statements in question. In our opinion, the expression "gazetted officer of Enforcement" appearing in section 40(1) must take its colour from the context in which it appears and it means any person appointed to be an officer of Enforcement under section 4 holding a gazetted post. There is no denying the fact that R. C. Singh answered that description. The contention that there was no material on the basis of which the detaining authority could have based his subjective satisfaction on the ground that R. C. Singh was not a gazetted officer of Enforcement within the meaning of section 40(1) of the Foreign Exchange Regulation Act cannot prevail. Even if the contention that R. C. Singh was not a gazetted officer of Enforcement within the meaning of section 40(1) of the Foreign Exchange Regulation Act were to prevail, it would be of little consequence. In this case, during the investigation, statements were recorded by B. T. Gurusawhne, Assistant Director of Enforcement, and R. C. Singh. There is no dispute regarding the competence of B. T. Gurusawhne to record stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tive of the accused's guilt, it is no part of his judicial function to exclude it for this reason" and added (at page 1231): " ...he has no discretion to refuse to admit relevant admissible evidence on the ground that it was obtained by improper or unfair means. The court is not concerned with how it was obtained." There is a long line of authority to support the opinion that the court is not concerned with how evidence is obtained. The rule is, however, subject to an exception. The judge has a discretion to exclude evidence procured, after the commencement of the alleged offence, which, although technically admissible, appears to the judge to be unfair. The classical example of such a case is where the prejudicial effect of such evidence would be out of proportion to its evidentiary value. Coming nearer home, this court in Magraj Patodia v. R. K. Birla, [1971] 2 SCR 118; AIR 1971 SC 1295, held that the fact that a document which was procured by improper or even illegal means could not bar its admissibility provided its relevance and genuineness were proved. In R. M. Malkani v. Stale of Maharashtra [1973] 2 SCR 417; AIR 1973 SC 157, the court applying this principle all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , at page 170 : "This doctrine was engrafted as a matter of policy and necessity to protect the interest of the public and individual involved in the official acts of persons exercising the duty of an officer without actually being one in strict point of law. But although these officers are not officers de jure, they are, by virtue of the particular circumstances, officers, in fact, whose acts, public policy requires, should be considered valid." The next substantive contention of learned counsel for the petitioner is that the so called factual mis-statements which occur in paragraph 44 of the grounds of detention show that there was non-application of mind on the part of the detaining authority and he relies on the observations made in Khudiram Das' case [1985] 1 Scale 964, that the subjective satisfaction of the detaining authority is not wholly immune from judicial review and the court can always examine whether the requisite satisfaction was arrived at by the authority ; if it is not, the condition precedent to the exercise of the power would be bad. According to the rule laid down in Khudiram Das' case [1985] 1 Scale 964, which proceeds on well-settled principles, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctions entered into between him and Messrs Greenland Corporation, Japan, and others abroad. It then goes on to state that the documents clearly revealed that he had been engaged in various unauthorised transactions in violation of the provisions of the Foreign Exchange Regulation Act. According to learned counsel, the mistakes which had crept in the proposal made by the initiating authority for the detention of the detenu recur in paragraph 44 of the grounds and it shows the casualness with which the grounds of detention were drawn which indicate non-application of mind. Although the argument at first blush appears to be attractive, on a deeper consideration does not stand scrutiny. We wish to enumerate the so called factual mis-statements listed as items A to F in paragraph 44 of the grounds and deal with them in seriatim. Item A at page 338 of the seized bunch, SG 6, is the trial balance-sheet of Messrs Greenland Corporation, Japan. On that page, there are various entries of ML, GN, RN and RG Jatia. It is mentioned by the detaining authority in paragraph 44 underneath item A that Gadia "admits" that they are Jatia's account. During the interrogation, Subhash Gadia stated that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount shown is 1,09,37,471.16 Yen. The said figure also finds place at page 278 of the file SG 6 which gives details of how the figure 1,09,37,471-16 yen has been arrived at. In the telex message appearing at pages 35 and 36 in the bunch of seized documents, SG 6, are given the details of the FDR account with instructions to work out the average rate of interest between the three brothers, Satya Narayan, Ganesh Narayan and Mohanlal, payable on the FDR for 1,09,37,471.16 yen. Similarly, Laxmi Ji account with Messrs Greenland Corporation, Japan, is a capital account of Satya Narayan, Ganesh Narayan and Mohanlal showing a capital investment of 48,62,96,325 Yen. We need not go into further details. The entries show the magnitude of the operation in foreign exchange carried on by the detenu. We do not see any mistake of fact in Item B which relates to purchase of a TV 27" and a VCR. There is an entry at page 338 of SG 6 showing that the detenu's account was debited with these items although the detenu in his statement asserted that they were gifted by his brother. That takes us to the effect of the mistake occurring in Item C at page 215 of the seized documents that there is an entry s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ministry of Finance. It is asserted that the aforesaid abstracts clearly indicate that the detenu, Mohanlal Jatia, and his brothers were found to be engaged in transferring funds from or to India in an unauthorised manner on a very large scale. According to the statement of Subhash Gadia, the American Dollar account is as per page 335 of SG 6, the details whereof are given at page 318 and the said amount is credited in the name of SN, GN and ML to be divided equally. The sum total of the amount shown to be divided was 10937,471.16 Yen. This figure also appears at page 278 of file SG 6 giving details as to how this figure 10937,471.16 Yen has been worked out. At page 318 of SG 6 under the "heading Laxmi Ji account", the sum total in Japanese Yen shown is 48,62,96,325 to be equally divided amongst SN, GN and ML. According to the statement of Subhash Gadia, the Laxmi Ji account was a capital account of SN, GN and ML with Messrs Greenland Corporation, Japan. The amount of 1,41,147.27 apparently shown in Item E represents the detenu's share. However, the detenu expressed his inability to explain the said two accounts American Dollar account and Laxmi Ji account and the telex messages. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der of detention. As already indicated, sufficiency of the grounds is for the detaining authority and not for the court. It cannot be said on a perusal of the grounds that there was no material on which the detaining authority could have acted. There still remains the further question whether the period of parole should be treated as part of the detention period itself. This question has been elaborately considered by this court in Smt. Poonam Lata v. M. L. Wadhawan [1987] 63 Comp Cas 50 (SC) to which one of us (Sen J.) was a party and it was held therein " that the period of parole has to be excluded in reckoning the 'period of detention under sub-section (1) of section 3 of the Act " (Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974). In addition to the reasons given therein, we may add the following by way of supplementary material. Though the element of detention is a common factor in cases of preventive detention as well as punitive detention, there is a vast difference in their objective. Punitive detention follows a sentence awarded to an. offender for proven charges in a trial by way of punishment and has in it the elements of retrib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h whomsoever he likes through telephone, telex, etc. Due to the spectacular achievements in the modern communication system, a detenu, while on parole, can sit in a room in a house or hotel and have contacts with all his relations, friends and confederates in any part of the country or even in any part of the world and thereby pursue his unlawful activities if so inclined. It will, therefore, be futile to contend that the period of parole of a detenu has all the trappings of actual detention in prison and as such both the periods should find a natural merger and they stand denuded of their distinctive characteristics. Any view to the contrary would not only be opposed to realities but would defeat the very purpose of preventive detention and would also lead to making a mockery of the preventive detention laws enacted by the Centre or the States. It will not be out of place to point out here that in spite of the Criminal Procedure Code providing for release of the convicted offenders on probation of good conduct, it expressly provides, when it comes to a question of giving set-off to a convicted person in the period of sentence, that only the actual pre-trial detention period should ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . On a careful scrutiny of the correspondence and the entries in the dak register, we are more than satisfied that no such representation was ever made by the detenu and that the attempt to assail the order of detention on the ground of violation of the constitutional safeguard enshrined in article 22(5) and the violation of section 11 of the Act by the Central Government is a well-planned and ingenious move on the part of the detenu. We are not only deeply shocked by the daring attempt of the detenu to fabricate a document styled as a representation addressed to the President of India but feel much more perturbed and even alarmed that there should have been willing hands at the President's Secretariat to lend their services to the alleged agent of the detenu to give a colour of truth and reality to the nefarious scheme. We may now set out the highlights of the disquieting features noticed by us in the case set up by the detenu about a representation being delivered at the President's Secretariat on April 15, 1986. Before enumerating the suspicious features, it has to be borne in mind that the detenu is not a rustic or an uneducated person or a man of no means. On the other han ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esentation is said to have been given in a sealed envelope. There are several other intrinsic features in the endorsement itself evoking grave suspicion. The rubber stamp seal affixed on the xerox copy does not correspond to the facsimiles of the two rubber stamps used in the President's Secretariat as, described by Shri K. C. Singh, Deputy Secretary, in his affidavit. The endorsement of acknowledgment does not contain the signature or initials of the Receiving Officer, but strangely it contains a dak number, " Dy. No. 20 dated April 15, 1986". Shri K. C. Singh has set out in his affidavit the procedure to be followed when letters and open petitions are received at the President's Secretariat, but the procedure set out therein has not been followed in this case. Over and above all these things, a scrutiny of the relevant page in the dak register kept in the President's Secretariat, which was produced before us in a sealed cover, contains tell-tale features of a startling nature revealing a planned attempt, but very clumsily executed, to somehow interpolate an entry in the dak register to make it appear that an envelope containing the alleged representation had been presented at the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. Such a situation should not come to pass because the manipulations of the detenu and his agents on the one hand and the connivance of staff in the President's Secretariat on the other cannot be treated as innocuous features or mere coincidence and cannot, therefore, be taken lightly or viewed leniently. On the contrary, they are matters which have to be taken serious note of and dealt with with a high degree of vigilance, care and concern. Consequently, while making known our opinion of the matter for action being taken under section 340 of the Code of Criminal Procedure, we defer the passing of final orders on the application under section 340 till the investigation ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
