Holding

The detention order is valid because the alleged documents were not vital or material for the detaining authority’s subjective satisfaction.

Summary

The Enforcement Directorate searched the appellant's house and seized currency, bank drafts, bank pass books and loose sheets. The appellant was arrested, gave a statement, later retracted it, and was released on bail with a condition to attend the Enforcement Department daily, which was subsequently varied. A detention order under Section 3 of the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 was later issued. The appellant challenged the order, alleging that the detaining authority had not been shown vital documents such as the bail‑condition variation, the retraction of his statement, and copies of the seized bank pass books, thereby vitiating the authority's subjective satisfaction. The Supreme Court held that these documents were not material or vital for the detaining authority’s satisfaction and that the bank pass books were not essential for the appellant to make an effective representation. Consequently, the detention order was upheld and the appeal dismissed.

Issues considered

Whether the failure to place before the detaining authority the application for variation of bail, the retraction of the statement, and copies of bank pass books vitiates a detention order under Section 3 of the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974.
Whether bank pass books and the seized loose sheets constitute "vital and material" documents required for the detaining authority's subjective satisfaction.
Whether the non‑supply of such documents infringes the appellant's right to make an effective representation.

Legislation cited

Subjects

detention ordersubjective satisfactionvital documentsbank pass booksbail variationforeign exchangesmugglingSection 3Conservation Actfundamental right to representation

Judgment

\
HARIDAS AMARCHAND SHAH OF BOMBAY
A
v.
K.L. VERMA & ORS.

DECEMBER 9, 1988

[B.C. RAY AND K. JAGANNATHA SHETTY, JJ.) B

Conservation of Foreign Exchange and Prevention of Smuggling
Activities Act, 1974: Section 3-Detenticm order.;._Detenu contending
that failure to furnish bank pass books vitiated the detention order-
Held that bank pass books were not vital and material documems in
reaching subjective satisfaction of detaining authority-Detention order C
held valid.

The house of the appellant-detenu was searched and currency
notes, hank drafts, bank pass-books and loose sheets seized. The
detenu's statement was recorded and he was arrested. Later, he made
an application retracting his statement and the Magistrate made an D
order thereon: "Taken on record". He was subsequently released on
bail with a condition that he would attend Enforcement Department
Office every day. On his moving another application, the condition was '>
varied.

Thereafter, an order of detention was made by respondent No. I E
against the appellant under s. 3 of the Conservation of Foreign
Exchange and Prevention of Smuggling Activities Act, 1974. The
detenu thereupon filed a writ In the High Court challenging the order,
which was dismissed.

Before this Court, it was contended on behalf of the detenu that (I) F
his application for variation of the condition of bail and the order
'\ thereon as well as his application retracting his statement and the order
thereon were not placed before the Detaining Authority, and non·
consideration of these vital documents vitiated the detention order; and
(ii) copies of bank statements and loose sheets were not supplied to the
detenu and this infringed his right to make an effective representation. G

Dismissing the appeal, it was, ,

HELD: I. The application for variation of condition of ball and
the order .passed thereon were not material or relevant documents and
failure to produce the same before the Detaining Authority before H
1031
1032 SUPREME COURT REPORTS [1988] Supp. 3 S.C.R.
!
A arriving at his subjective satisfaction had not vitiated the detention
order. [1035A]

Asha Devi wife of Copa/ Sherwal Mehta (detenu) v. Shiveraj,
Addi. Chief Secretary to the Government of Gujarat & Anr., [1979] 2
S.C.R. 215, referred to.
B
Arvindbhai Purshottambhai Patel v. R.O. Iyer and Ors., Writ
Petition No. 1304 of 1987 dated 25.2.1988, Bombay High Court,
distinguished.

2. Though the detenu's application retracting his statement and
C the Magistrate's order thereon was not placed before the Detaining
Authority; his retraction Jetter and the reply of the Directorate of
Enforcement had been placed before the Detaining Authority, and as
such ihe Authority knew about these facts. [103SG; 10~6A]

3. There was no dispute that all the documents which were con-
0 sidered by the Detaining Authority in reaching his subjective satisfac-
tion and referred to in the grounds of detention had been furnished to
the detenu. It was not necessary to furnish copies of all the documents
including the bank pass hooks which were not material and relevant for
reaching the subjective satisfaction of the detaining authority merely
because they were mentioned in the panchnama. ll036F-G]
E
4. The bank pass books were not vital and material documents in
reaching subjective satisfaction of the detaining authority and as such
the failure to furnish the bank pass books to the detenu had not
infringed any right of the appellant and the order of detention could not
be questioned as illegal or vitiated on that account. [10378-C]
f'
. Ashok Kumar v. Union of India, [1988] 1Scale194,_referred to. J

CRIMINAL APPELLATE JURISDICTION: Criminal Appeal
No. 627 of 1988.
G From the Judgment and Order dated 10.6.1988 of the Bombay
High Court in Criininal Writ Petition No. 257 of 1988.

R.K. Garg and P.N. Gupta for the Appellant.

Kuldip Singh, Additional Solicitor General, Arnn Madan and P.
H Parmeshwaran for the Respondents.
,.;;: -- -

H.A. SHAH v. K.L. VERMA [RAY, J.] )033

The Judgment of the Court was delivered by
A
RAY, J. Special leave granted. Arguments heard.

This appeal on special leave is against the judgment dated 10th
June, 1988 made by High Court of Allahabad dismissing Criminal Writ
Petition No. 257 of 1988 instituted by the detenu. B

The facts giving rise to this appeal are that on August 25, 1987
the house of the appellant was searched by the officers of the Enforce-
ment Directorate under Section 37 of Foreign Exchange Regulation
Act, 1973 and they seized currency notes of Re.1 lakh and four bank
drafts amounting to Rs.30,000, bank pass book and loose sheets Nos. 1 C
to 44 as per item No. 2 in panchnama dated August 25, 1987. The
statement of detenu was recorded and he was arrested on the same
day. On August 26, 1987 the detenu made an application in the Court
of Addi. Chief Metropolitan Magistrate, 8th Court at Esplanade
retracting his statement. The Magistrate made an order thereon that
"Taken on record". An application for bail was moved on September D
15, 1987 and an order had been made on that day releasing him on bail
of Re. l lakh with a condition imposed that he would attend Enforce-
ment Department Office every day between 11 a.m. to 2 p.m. until
further order. The detenu filed an application on September 22, 1987
for variation of the said conditional order and the condition was varied
by the Magistrate by directing that the detenu may attend the Enforce- E
ment Department as and when required. The Enforcement Directo-
rate sent a letter directing the detenu to collect his passport deposited
during the time of questioning. The passport however, remained with
the Enforcement Department. Thereafter, on February 9, 1988 the
impugned order of detention of the detenu in Central Prison, Bombay
was made by the respondent No. l, the Joint Secretary, Government F
of India. The order of detention was served on the detenu on February
19, 1988 and the grounds of detention were furnished to him.

A Criminal Writ Petition No. 257 of 1980 was filed before High
Court, Bombay for quashing the said detention order on the grounds
inter alia that certain vital documents such as the application dated G
September 21, 1987 for variation of the condition of bail as well as the
order passed by the Chief Metropolitan Magistrate varying the condi-
tion, the application dated August 26, 1987 retracting the statement by
the detenu filed before the Magistrate and non-consideration of the
same, as well as the non-supply of the copies of Bank pass books and
loose papers seized from the residence of detenu and mentioned in H
1034 SUPREME COURT REPORTS [1988] Supp. 3 S.C.R.
/
panchnama dated August 25, 1987 which were placed before the
·A
detaining authority etc. vitiated the subjective satisfaction of the
detaining authority on consequently the order of detention is illegal
and bad. A Rule Nisi was issued.

A return was filed by the respondent No. 1 wherein the detaining
B authority denied the allegations and stated that all vital and material
documents which had been considered in forming his subjective
satisfaction and mentioned in the grounds have been supplied to him
and as such the impugned order of detention is not illegal and bad. The
criminal writ petition was, therefore, dismissed.

Aggrieved by the judgment of the High Court, the instant appeal
c on special leave.has been filed.

It was firstly contended on behalf of the appellant that the appli-
cation .for bail and the order dated September 15, 1987 by the
Metropolitan Magistrate granting conditional bail of Re .1 lakh with
D one surety of like amount though placed before the detaining autho-
rity, the application for variation of the condition and the order made
thereon by the Magistrate on September 21, 1987 was not produced
before the detaining authority. This is a vital document and non-
consideration of the same by the detaining authority results in the
order being illegal. The decision in Ashadevi wife of Gopal Ghermal
B Mehta (detenu) v. K. Shiveraj, Addi. Chief Secretary to the Govern-
menrof Gujarat & Anr.,. [1979] 2 SCR 215 was cited at the bar. In this
case it has been observed by this Court that documents which are vital
and' necessary for formation of subjective satisfaction which is the
pre-requisite for making an order of detention having not been placed
before the detaining authority before making the detention order,. the
F order of detention will get vitiated. The detention was to prevent the
detenu from indulging in Hawala business i.e. making various pay-
ments to various persons in this country on receiving instructions from
Rafiq from Dubai. The application for variation of condition of bail
and the order passed by the Metropolitan Magistrate varying the con-
dition of bail is, in our opinion, not a vital and material documents in
G as much as the granting of bail by the Magistrate enabled the detenu to
come out aild carry on his business activities as before. Condition
imposed by the Magistrate directing the detenu to appear before the
office of the Enforcement Department every day between 11 a.m. to 2
p.m. has been varied to the extent that "the accused to attend
Enforcement Department as and when required". The condition
H imposed by the Magistrate has no relation to the activities carried on I.
H.A. SHAH v. K.L. VERMA [RAY, J.) 1035

by the detenu and as such the High Court after considering all the
A
circumstances held that the order varying the condition of bail was not
a relevant document and failure to produce the document before the
detaining authority before arriving at his subjective satisfaction had
not vitiated the order. We .agree with the same.

The judgment defr;ered by the High Court, Bombay in Criminal B
Writ Petition No. 1304 of 1987 entitled Arvindbhai Purshottambhai
Patel v. R. C. Iyer and Ors., on February 25, 1988 was referred to us. In
this case the detenu was arrested for smuggling prohibited articles and
the detenu was prosecuted for smuggling. He was granted bail by
Magistrate on certain condition. Subsequently that order was varied.
The initial order granting bail was placed before the detaining autho-
rity, but the subsequent order of variation was not placed. It was held
c
by the Division Bench of the High Court that the order of modification
might have influenced the detaining authority in forming his subjective
satisfaction and as such the non-placement of the same would vitiate
the order. That was a case of smuggling of prohibited articles and the
condition in the bail was that he would not leave the shores of the D
country and so he could not have indulged in smuggling activities
pending decision of the case. This condition was relaxed by the subse-
quent order. In that context it was observed by the Court that the
order of variation is a material document which might affect the for-
mation of subjective satisfaction before passing the order of detention
and the failure to place that document vitiated the detention order. E
This observation was made in the facts of that case. This case has no
relevance in the facts of this case as we have held that in the present
case the order of variation is not a relevant and vital document.

It has been submitted that the detenu made an application on
August 26, 1987 in the Court of Addi. Chief Metropolitan Magistrate, F
8th Court, Esplanade retracting his statement whereon an order was
made that "taken on record". This application was not placed before
the detaining authority and this has vitiated the detention order as this
vital document was not considered before arriving at the subjective
satisfaction by the detaining authority. It may be convenient to men-
tion that in the counter-affidavit to the writ petition the respondent G
No. 1 has stated in para 5 that the application dated August 26, 1987
and the order passed thereon was not placed before him as the
Sponsoring Authority did not know about the said application dated
August 26, 1987 and the order thereon. The Enforcement Directorate
was not aware of the said application and the order thereon. In any
' case, the respondent No. 1 has already stated that the retraction letter H
1036 SUPREME COURT REPORTS [1988] Supp. 3 S.C.R. I

A. of detenu dated September 20, 1987 and the reply of the Directorate of
Enforcement to the said letter of the detenu dated August 26, 1987 was
placed before the detaining authority. This submission, therefore, has
no merit as the detaining authority knew about the retraction state-
ment and the order made thereon before making the order of
detention.
B
It has been contended that the Enforcement Department in
course of search of the house of detenu on August 25, 1987 attached
bank drafts and cheques, bank pass books of State Bank of India,
Kandivali Branch, New India Co-operative Bank and Bank of Baroda,
Dahisar, !dose sheets bunched together and marked 'C' containing
C pages I.to 44 and seized under panchnama but did not place before the
detaining authority and if placed copies of those documents were not
given to the detenu. It has been submitted that the failure to supply
these documents infringed his fundamental right to make an effective
representation and so the impugned order is required to be quashed.
In repiy to this submission the detaining authority filed a return stating
D that. all documents mentioned in panchnama were placed before him.
But only relevant and vital documents were taken .into consideration
for reaching subjective satisfaction. These documents have been refer-
red to in the grounds of detention and copies of all the said documents
have been furnished to the detenu. It has been strenuously contended
on behalf of the appellant that Bank pass books and some pages out of 1
E to 44 of the loose sheets bunched together and referred to in the
panchnama were not given to him and so he. could not make an effec-
tive representation. This has infringed his right. In support of his sub-
mission the decision of this Court in Ashok Kumar v. Union of India
and Ors., [1988] 1 Scale 194 (to which one of us is a party) has been
cited at the bar. There is no dispute that all the documents which were
F considered by the detaining authority in reaching his subjective
satisfaction and referred to in the grounds of detention have been
furnished to the detenu. It is not necessary to furnish copies of all the
documents including the bank pass books which are not material and
relevant for reaching the subjective satisfaction of the detaining
authority merely because they were mentioned in the panchnama.
G Moreover, no application had been made before the detaining autho-
rity for giving the detenu the copies of the bank pass books necessary
for making an effective representation against the order of detention.
In Ashok Kumar's case (supra) wherein this Court held that the order
of detention had b.e.en vitiated due to non-supply of bank pass books of
the detenu and his wife seized in course of search of some houses r
H wherefrom foreign currency as well as primary gold with foreign mak-
H.A. SHAH v. K.L. VERMA [RAY, J.I 1037

ings were recovered, as. it was held that these documents were vital and A
material documents. The detenu in that case made an application for
furnishing him the bank pass books in order to enable him to make an
effective representation against the order of detention stating that the
houses from which the alleged foreign currency as well as primary gold
with foreign markings had been recovered did n,ot belong to or owned
B
by the detenu. In that background this Court h~ld that non-supply of
the bank pass books infringed the detenu's right to make an effective
representation. In the in<tant case as we have said hereinbefore that
the bank pass books are not vital and material documents in reaching
subjective satisfaction of the detaining authority and as such the failure
to furnish the bank pass books to the detenu has not infring~d any right
of the appellant and the order of detention cannot be questioned as c
illegal or vitiated on that score.

No other points have been urged before us.

For the reasons aforesaid we dismiss the appeal. There will be no
order as to costs. D

R.S.S. Appeal dismissed.

\

.,