Supreme Court of India
PUSHPADEVI M. JATIAversusM.L. WADHAVAN, ADDL. SECRETARY GOVERNMENT OF INDIA & ORS.
- Citation
- 1987 INSC 141
- Decided
- 29 April 1987
- Disposal
- Dismissed
- Bench
- A P SENS NATARAJAN
Holding
The order of detention under COFEPOSA is valid; the detaining authority’s subjective satisfaction was based on sufficient material, the statements of R.C. Singh are admissible, no constitutional safeguard was breached, and parole periods are excluded from the detention term.
Summary
Mohanlal Jatia was detained under the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (COFEPOSA) on the basis of documents seized from his brother‑in‑law and statements recorded by R.C. Singh of the Enforcement Directorate. His wife, Pushpadevi Jatia, challenged the detention before the High Court and the Supreme Court, alleging (i) no material existed for the detaining authority’s subjective satisfaction, (ii) the authority did not apply its mind to the factual mis‑statements in the grounds of detention, (iii) a representation made to the President was ignored violating Art.22(5) of the Constitution, and (iv) Singh was not a gazetted officer under the Foreign Exchange Regulation Act (FERA) s.40, rendering his statements inadmissible. The Supreme Court held that Singh was a gazetted officer of Enforcement, that his statements were admissible (or at least relatable to s.39(b) of FERA), that sufficient material existed for the authority’s satisfaction and that the alleged representation was never made, so no breach of Art.22(5) occurred. The Court also reiterated that parole periods are excluded from the calculation of detention under COFEPOSA and applied the de facto doctrine to validate Singh’s acts. Consequently, the order of detention was upheld and the petitions were dismissed.
Issues considered
- The admissibility of statements recorded by R.C. Singh and whether he qualified as a gazetted officer of Enforcement under FERA s.40.
- Whether the detaining authority had sufficient material and applied its mind to the grounds of detention, satisfying the requirement of subjective satisfaction under COFEPOSA s.3(1).
- Whether the failure to consider a representation addressed to the President violated the constitutional safeguard of Art.22(5) and s.11 of COFEPOSA.
- Whether the period of parole should be counted as part of the detention period under COFEPOSA s.3(1).
- The applicability of the de facto doctrine to the appointment and acts of an officer of Enforcement.
Legislation cited
- Code of Criminal Procedure, 1973s. 340
- Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974s. 11, s. 12(6), s. 3(1), s. 5A
- Constitution of Indias. Art.12(3), s. Art.22(5)
- Foreign Exchange Regulation Act, 1973s. 3, s. 39, s. 4, s. 40
- Indian Evidence Act, 1872
Subjects
preventive detentionsubjective satisfactionCOFEPOSAforeign exchange regulationgazetted officerde facto doctrineparole exclusionArt.22(5) constitutional safeguardevidentiary admissibilityrepresentation to President
Judgment
A PUSHPADEVI M. JATIA
v.
M.L. WADHAVAN, ADDL. SECRETARY GOVERNMENT
OF INDIA & ORS.
APRIL 29, 1987
B
[A.P. SEN AND S. NATARAJAN, JJ.)
Conservation of Foreign Exchange and Prevention of Smuggling
Activities Act, 1974-s. 3( 1)-Subjective satisfaction of the detaining
authority-Court cannot consider propriety or sufficiency of grounds of
c detention-Court can examine whether requisite satisfaction was arrived
at by the authority.
Conservation of Foreign Exchange and Prevention of Smuggling
Activities Act, 1974-s. 5A-The principle that even if one of the
grounds which led to the subjective satisfaction of the detaining autho-
D rity is non-existent, etc., the order of detention would be invalid no
longer holds good.
Conservation of Foreign Exchange and Prevention of Smuggling
Activities Act, 1974-s. 3( 1)-Power of detention being subject to the
/imitations imposed by the Constitution, Government must ensure that
E safeguards provided in Art. 22(5) read withs. 3( 1) are fully complied
with.
Conservation of Foreign Exchange and Prevention of Smuggling
Activities Act, 1974-S. 3(1)-Period of parole has to be excluded in
reckoning the period of detention.
F
Foreign Exchange Regulation Act, 1973-s. 40( 1)-
'y
'Gazetted Officer of Enforcement' means any person appointed to be an
officer of Enforcement under s. 4 and holding a gazetted post.
Law of Evidence-If evidence is relevant, the Court is not con-
G cerned with the method by which it was obtained.
De facto Doctrine-Where an office exists under law, so far as
validity of its acts are concerned it matters not how the appointment is '<:I
made.
H The Petitioner's husband, Mohan i.al Jatia, was detained by an
46
...
PUSHPADEVI v. M.L WADHAVAN 47
order passed under sub·s. (I) of s. 3 of the Conservation of Foreign A
J Exchange and Prevention of Smuggling Activities Act, 1974
(COFEPOSA) by the Addditional Secretary to the Government of
India, Ministry of Finance 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'.
B
The residential premises of one Subhash Gadia, a very rich and
'
.L prosperous businessman of Bombay, the brother-in-law of the detenu,
were searched on the basis of intelligence gathered by the Directorate of
!I Revenue Intelligence that he was under-invoicing imports of yarn from
Japan and it resulted in seizure of certain documents. As the seized
- documents not only revealed violation of the provisions of the Customs C
Act but also indicated certain payments and transactions in violation of
the Foreign Exchange Regulation Act, 1973 (FERA), the matter was
.
.i. referred to the Enforcement Directorate Investigation from the FERA
angle. Subhash Gadia was summoned under s. 40 of the FERA and his
statement was recorded by Shri R.C. Singh, an otlicer of the Enforce·
ment Directorate. The incriminating documents seized from the resi· D
dential premises of Subhash Gadia and the revelations made by him
during his examination in relation to the documents seized which
y revealed that the detenu Mohan i,al Jatia was engaged in foreign
exchange racketeering to the tune of several crores of rupees formed the
basis ot' the aforesaid order of detention.
E
The petitioner approached the High Court with petitions under
Art. 226 of the Constitution seeking to challenge the impugned order of
f
detention. Upon the dismissal of the first of these petitions by the High
Court, the petitioner had approached this Court under Art. 136, and,
the Court, while declining to grant special leave to appeal, had directed
• that the detenu should appear before the Commissioner of Police and, F
upon his doing so, he should immediately be released on parole for a
period of ten days. Thereafter, the petitioner tiled the second petition
under Art. 226 with an application for extending the period of parole
which was rejected by the High Court. The petition tiled under Art. 136
against refusal of interim relief by the High Court was also rejected by
this Court. Thereafter, the High Court dismissed the writ petition, G
against which, the petitioner sought special leave to appeal and also
tiled a petition under Art. 32 challenging the order of detention. While
issuing notice on the petitioner, ·the Court directed the release of the
detenu on parole for a week and by a subsequent order further exten·
ded the period of parole. Both the special leave petition and the writ
petition were heard together. \ H
•
48 SUPREME COURT REPORTS [1987] 3 S.C.R.
A In the writ petition tiled before the High Court from which the
petition for special leave petition arose, the petitioner had challenged
the order of detention on two grounds: that there was no material on
which the satisfaction of the detaining authority could be reached that
the detention of the detenu was necessary; and, that ther.o was total
non-application of mind on the part of the detaining authority to the
B material on record, and in particular, to the !'actual mi•-statements
contained in paragraph 44 of the grounds of detention as detailed in
entries •A' to 'F'. The writ petition filed before this Court was princi-
pally based on the ground that there was information of the Constitu-
tional Safeguard Contained in Art. 22(5) of the Constitution inasmuch ·
as there was failure on the part of the detaining authority to consider an
C alleged representation made by the detenu under s. 8(b) read wi!h s. 11
of the COFEPOSA against the order of detention addressed to the
President of India which was presented throu11h one Ashok Jain at the
President's Secretariat. The other substantial question raised was that
R.C. Singh was not a gazetted officer of Enforcement within the mean-
ing of s. 40 of the FER A and therefore the statements recorded by him
D could not be regarded as valid statements under the aforesaid s. 40 and
thus could not form the basis upon which the satisfaction of the detain-
ing authority could be reached. Alternatively, it was contended that the
statements recorded by him could not be treated as statements recorded
under s. 39.
E The respondents not only denied that the detenu had addressed
any respresentation to the President of India but made an application
under s. 340, Cr. P.C. for prosecution of persons responsible for for-
going the document purporting to be the alle!!ed representation made by
the detenn and for making certain interpolations in the Dak Register
1
kept at the President's Secretariat. The respondents also placed on ,
F record an order showing that R .C. Singh had been appointed an ofticer /
of enforcement on ad hoc basis three years before he had summoned
Subhash Gadia for examination.
Dismissing both the petitions,
G HELD: I. (a) The expression 'otlicers of Enforcement' as defined
in s. 3 of the Foreign Exchange Regulation Act, 1973, embraces within
itself not only (a) a Director (b) Additional Director (c) Deputy Director
and (d) Assistant Director of Enforcement but also (e) such other class
of otlicers of Enforcement as may be appointed for the purpose of the
Act. Obviously, R .C. Singh who was Assistant Enforcement Ofticer
H having been appointed as an otlicer of Enforcement on an ad-hoc basis
PUSllPADEVI v. M.L. WADllAVAN 49
in 1932 !'ell within the category 'such other class of ot)icers' covered by A
s. 3(e). Sub-s. (1) of s. 4 provides that the Central Government may
appoint such persons, as it thinks tit, to be o!licers of Enforcement.
Sub-s. (2) thereof provides for delegation of such power of appointment
by the Central Govern.men! to a Director of Enforcement er an Addi-
tional Director of Enforcement etc., to appoint ot)icers of Enforcement
below the rank of an Assistant Director of Enforcement. Sub-s. (3) of s. B
4 provides that subject to snch conditions and limitations as the Central
Government may impose, an o!licer of Enforcement may exercise the
powers and discha-ge the duties conferred or imposed on him under the
Act. Undoubtedly R.C. Singh was discharging bis duties and functions
as a gazetted ot)icer of Enforcement under s. 40(1) when he recorded
the statements in question. The expressiou 'gazetted o!licer of Enforce- C
ment' appearing in s. 40(1) must take its colour from the context In
which it appears and it means any pers~n appointed to be an o!licer of
Enforcement under s. 4 holding a gazetted post, There is no denying the ·
fact that R.C. Singh answered that description. [69G-H; 70A-D]
I
(b) Even if the contention that R.C. Singh was not a gazetted D
o!licer of Enforcement within the meaning of s. 40(1) were to prevail, it
would be of little consequence. If evidence Is relevant the Court is not
concerned with the method by which 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 excep-
tbn. The Judge has a discretion to exclude evidence procured, a!ler the E
commencement of the alleged offence, which although technically
admissible appears to the Judge to be unfair. This being the substantive•
law, it follows that the detaining authority was entitled to rely upon the
statements recorded by R.C. Singh under s. 40(1), Even if R.C. Singh
was not competent to record such statements under s. 40(1), the state-
ments were clearly relatable to s. 39(b) of the Act. It cannot therefore be F
said that there was no material on which the detaining authority could
-~ have based his subjective satisfaction. [70E-H] ·
Barindra Kumar Ghose v, Emperor, ILR (1910) 37 Cal. 467;
Kuruma v, Reginam, [1955] 1 All E.R: 236; R. V. Sang, (1979] 2 All
E.R. 1222; Magraj Patadia v. R.K. Bir/a & Ors., [1971] 2 S.C.R. 118; G
R.M. Malkani v. State of Maharashtra, (1973] 2 S.C.ll. 417; and
Pooran Mal, etc. v. Director of Inspection, [1974] 2 S.C.R. 704; refer-
red to. '
(c) Where an o!lice exists under the law, it matters not how the
appointment of the incumbent is made, so t'ar as validity of its acts are H
50 SUPREME COURT REPORTS [ 1987] 3 S.C.R.
A concerned. It is enough that he'is clothed with the insignia of the onice,
and exercises its powers and functions. The onicial acts of such per-
sons are recognised as valid under the de facto doctrine, born of neces-
sity and public policy to prevent needless confusion and endless
mischief. [69B-C J
B Gokaraju Rangaraju v. State of Andhra Pradesh, [1981) 3 S.C.R.
474; Pu/in Behari v. King Emperor, [1912] 15 Cal. ZJ 517; and P.S.
Menon v. State of Kera/a & Ors., AIR (1970) Kerala 165; referred to.
2. (a) It has long been established that the subjective satisfaction
of the' detaining authority as regards the factual existence of the condi-
tion on which the order of detention can be made, i.e., the grounds of
c detention constitutes the foundation for the exercise of the power of
detention and the Court cannot be invited to consider the propriety or
sutnciency 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
D 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 the
E power would not be fullilled and the 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 satis-
fied. [66E-H]
F Emperor v. Shibnath Banerjee & Ors., AIR (1943) FC 75 and
Khudi Ram Das v. State of West Bengal & Ors., [1975] 2 SCR 832,
referred to.
In this case, it is quite apparent that the so-called factual mis-state-
ments listed as items 'A' to 'F' in paragraph 44 of the grounds>)llf
G detention are not mis-statements at all. The High Court rightly held that ~-
the alleged mistakes or infirmities pointed out were not so material or
serious in nature as to vitiate the impugned order of detention and
rightly observed that the facts stated in paragraph 44 of the grounds
cannot be read in isolation and the grounds of detention have to be read
as a whole with the accompanying documents and material. The
H grounds of dentention was only one, viz., that the detenu was engaged
,.
PUSHPADEVI v. M.L. WADHAVAN 51
r-l in activities prejudicial to the augmentation of foreign exchange and A
therefore it became necessary in the public interest to place him under
detention. It cannot be said on a perusal of the grounds that there was no
material on which the detaining authority could have acted. [74E; 78A-B]
(b) The contention that, even if one of the gronnds or reasons which
led to the subjective satisfaction of the detaining authority is non-existent B
.l
, or mis-conceived or irrelevant, the order of detention would be invalid
since it is not possible to predicate as to whether the detaining authority
would have made an order for detention even in the absence of non-existent
or irrelevant ground, cannot be accepted. That principle was ennnciated
by this Court some 30 years ago. With the change in law brought about
by the introduction of s. SA of the COFEPOSA Act that though one or
more of the grounds of detention were found to be vague, non-existent,
c
not relevant, not connected, irrational or invalid for any other reason
,.-l. whatsoever, the detention could be sustained on the remaining grounds,
that principle no longer holds goods. [63A-C]
Shibban Lal Saxena v. State of Uttar Pradesh & Ors., [1954] D
S.C.F. 418; Dr. Ram Manohar Lohia v. State of Bihar & Ors., [1966] I
y S.C.F. 709 and Pushkar Mukherjee & Ors. v. State of West Bengal,
[!969] 2 S.C.R. 635; referred to.
Mohd. Shakeel Wahid Ahmed v. State of Maharashtra & Ors.,
[!983] 2 S.C.F. 614; Asha Devi v. K. Shivraj, Additional Chief Secret- E
ary, [1979j 2 S.C.F. 215 and Kurjibhai Dhanjibhai Patel v. State of
ll Gujarat, [1985] I Scale 964; distinguished.
(c) Sutnciency of grounds is not for the Court but for the detain-
1' ing authority for the formation of his subjective satisfaction that the
detention of a person under s. 3(1) of the COFEPOSA Act is necessary F
with a view to preventing him from acting in any manner prejudicial to
the augmentation of foreign exchange. The Act is a law relating to
preventive detention. That being so, the power of detention exercisable
under sub-s. (I) of s. 3 of the Act is subject to the limitations imposed by
the Constitution. When the liberty of the subject is involved, it is the
bounden duty of the court to satisfy itself that all the safeguards pro- G
ll.- vided by the law have been scrupulously observed and that the subject
is not deprived of his personal liberty otherwise than in accordance with
law. Nevertheless, the community has a vital interest in the proper
enforcement of its laws, particularly in an area such as conservation of
foreign exchange and prevention of smuggling activities in dealing effec-
lively with persons engaged in such smuggling and foreign exchange H
~-
..
52 SUPREME COURT REPORTS [1987] 3 S.C.R.
rackteering by orderina their preventive detention and at the same
A
time, in assurin& that the law is not used arbitrarily to suppress the
citizen of his right to life and liberty. The Guvemment must therefore
ensure that the constitutional safeguards of Art. 22(5) read with sub-
s. (I) of s. 3 of the Act are fully complied with. [65A-B]
B Mangalbhai Motiram Patel v. State of Maharashtra, [1980] 4 !
S.C.C. 470 and Narendra Parshotam Umrao v. B.B. Gujral, [1979] 2 A_
S.C.F. 315; relied on.
In the instant case there was no failure on the part of the Gilvem-
ment to discharge its obligation under Art. 22(5). The relevant records
ot' the Enforcement Directorate placed before us clearly show that there
c was sutlicient material for the formation of the subjective satisfaction of
the detaining authority under sub-s.(l) ot' s. 3 ot' the Act. They also
show that the detenu was afforded a reasonable opportunity for making
an effective representation against his detention. [66C-D]
D 3. (a) Preventive detention Is an extraordinary measure resorted
to by the State on account of compulsive factors pertaining to mainte-
nance of public order, safety ot' public life and the welfare or the
economy of the country. The need for this extraordinary measure was
realised by the founding fathers ot' the Constitution as an inevitable
necessity and hence a specitlc provision has been made in cl. (3) of Art.
E 12 providing for preventive detention. Placing the interests ot'the nation
above the individual liberty of the anti-social and dangerous elements
who constitute a grave menace to society by their unlawful acts, the
preventive detention laws have been made for effectively keeping out of
circulation the detenus during a prescribed period by means of preven-
tive detention. The underlying object cannot be achieved if the detenu is
'
F granted parole and brought out ot' detention. Even it' any conditions are
imposed with a view to restrict the movements of the detenu while on
parole, the ubservance of those conditions can never lead to an equation
of the period of parole with the period of detention. Due to the spec-
tacular achievements in modem communication system, a detenu, while
on parole, can sit in a room in a house or hotel and have contracts with
G all his relations, friends and confederates in any part of the country
or even any part ot'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 !ind a natural merger and they stand
denuded of their distinctive characteristics. It will not be out of place to
i-1 point out here that inspite of the Criminal Procedure Code providing
PIJSHPADEV! '· M.L WADHAVAN 53
for release of the convicted offenders on probation of good conduct, it A
expressly provides, when it comes to a question of giving set-oil' to a
convicted person in the period of sentence, that only the actual pre-trial
detention period should count for set-otl and not the period of bail even
if bail had been granted subject to stringent conditions. In contrast, in
so far as preventive detentions under the COFEPOSA Act are con-
cerned, it has been specitically laid down in s. 12(6) that a person B
against whom an order of detention has been passed shall not be re-
leased on bail or bail bond or otherwise and that any revocation or
modilication of the order of detention can be made by the Government
in exercise of its power under s. 11. [78E-H; 79G]
lb) The question whether the period of parole should be treated
as part of the detention period itself was elaborately considered by this
c
Court in Smt. Poonam Lata v. M.L. Wadhawan & Ors., and it was
:'· held therein that the period of parole has to he excluded in reckon-
ing the period of detention under sub-s. (1) of s. 3 of the COFEPOSA
Act. [78C]
D
Smt. Poonam Lata v. M.L. Wadhawan & Ors. J. T., [1987] 2 S.C.
204, relied on.
4. The respondents have placed sutl1cient material before the
Court to show that the alleged representation addressed to the Presi-
dent of India was neither filed by the detenu nor was it received at the E
President's Secretariat. The attempt to assail the order of detention on
the ground of violation of the constitutional safeguard enshrined in Art.
22(5) and the violation of s. 11 of the Act by the Central Government is
a well planned and ingenuous move on the part of the detenu. The facts
__ ,,, revealed not only warrant an inference that the detenu and his asso-
' ciates have gone to deplorable lengths to create evidence favourable to F
the detenu but arouse convulsive thoughts in our minds about the
efficiency and integrity of the concerned sections of the President's
Secretariat. The case with which and the fascile manner in which the
detenu's agent Ashok Jain claims to have entered the President's
Secretariat and delivered the Dak and obtained an endorsement of
acknowledgement in a copy of the representation and the length to G
which the concerned Secretariat staff have gone to give credence to the
version of Ashok Jain not only reveals the deep fall in standards but also
lack of security and vigilance. We feel fully persuaded to hold that this
is a fit case in which the detenu, the petitioner, Ashok Jain and all other
persons responsible for the fabrication of false evidence should be
pnllleCuted for tile offences committed by them. We defer the pam• of H
..
54 SUPREME COURT REPORTS [1987} 3 S.C.R.
A final orders on the application tiled under s. 340, Cr. P.C. till }.__
the investigation by the Central Bureau of Investigation is comp·
leted. (SOE·F; 82F·H; 83A·B}
APPELLATE/ORIGINAL JURISDICTION: Special Leave
Petition (CRL.) No. 1370 of 1986.
B
From the Judgment and Order dated 23.5.1986 of the Bombay
High Court in Crl. W.P. No. 385 of 1986.
AND
WRIT PETITION NO. 363 OF 1986.
c
(Under Article 32 of the Constitution of India).
G.L. Sanghi, D. Canteenwala, V.B. Agarwala, B.R. Agarwala
and Miss Vi jay Lakshmi Mannen for the Petitioner.
D
K. Parasaran, Attorney General, C. V. Subba Rao and A. Subba
Rao for the Respondent. ·-.(
The following Judgment of the Court was delivered:
E This petition for special leave directed against the judgment and
order of the Bombay High Court dated May 3, 1986, and the con·
nected petition under Art. 32 of the Constitution raise common
questions and therefore they are disposed of by this common order.
The petitioner by a petition under Art. 226 filed before the High Court
prayed for the issuance of a writ of habeas corpus which is also the
F prayer before us, for the release of her husband Mohanlal Jatia, who
has been detained by an order of the Additional Secretary to the
Government of India, Ministry of Finance, Department of Revenue
dated December 13, 1985 under sub-s. (I) of s. 3 of the Conservation of
Foreign Exchange & Prevention of Smuggling Activities Act, 1974 on
being satisfied that it was necessary to detain him with a view to
preventing him from acting in any manner prejudicial to the augmenta-
G
tion of foreign exchange.
Intelligence gathered by the Directorate of Revenue Intelli-
gence, Bombay was that one Subhash Gadia, the brother-in-law of the
detenu Mohanlal Jatia, a very rich and prosperous businessman of
H Bombay, was under-invoicing the imports of yarn from Japan. On the
PUSHPADEVI v. M.L. WADHAVAN 55
basis of the said information the officers of the Directorate of Revenue A
Intelligence and officers the Customs, Bombay searched his residential
premises at A-121, Sea Lord Cuffe Parade, Colaba, Bombay under the
Customs Act, 1962 on June 27, 1985 which resulted in seizure of cer-
tain documents. As the seized documents not only revealed violation
of the provisions of the Customs Act but also indicated certain pay-
ments and transactions in violation of the Foreign Exchange Regula- B
ti on Act, 1973, the matter was referred to the office of the Enforce-
ment Directorate for purposes of investigation from the angle of the
Foreign Exchange Regulation Act on October 24, 1985. The aforesaid
Subhash Gadia was summoned under s. 40 of the Foreign Exchange
Regulation Act and his statement was recorded by R.C. Singh, an
officer of the Enforcement Directorate, Bombay on November 5, C
1985. In his statement of even date, Subhash Gadia stated that he went
to Japan in 1970 seeking employment with a proprietary concern
known as Messrs Greenland Corporation, Tolo Building, Osaka,
Japan owned by a Nepali national and was engaged in exporting yam,
fibre, fabrics, chemicals etc. to India and Middle-East countries.
Messrs J.M. Trading Corporation, 701, Tulsiani Chambers, 212 D
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 the partner of Messrs J.M. Trading Corpora-
tion, Bombay had been staying in Japan for some 35 years and was the
sole representative of Messrs Greenland Corporation in Japan. While E
explaining the entries in the seized documents 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
-•-.I
imports and cash transactions and payments. He further confirmed
' that all the transactions reflected in these documents were his real F
business transaction dealings and some of which were not reflected in
his regular account books. While explaining page 94 of the seized
bunch S.G. 4, he stated that this page contained coded account in
Indian rupees of his firm Messrs Piyush Corporation and that on the
left side of this page credit entries were shown in Indian rupees with
two zeros (00) missing and that while writing his account he had G
deleted two zeros in the credit side as well as debit side (right side) of
the page. While decoding the codes he stated that the figure 8582/38
written on the right hand side was actually Rs.8,58,238 and this
amount had been debited against A/S investment. Further, that A/S
investment was his private investment abroad in US dollars which had
been utilised by him for under-invoicing of several imports etc. H
56 SUPREME COURT REPORTS [1987] 3 S.C.R.
A Paragraph 44 of the grounds of detention revealed transactions J_
relating to the detenu Mohanlal Jatia and it is extracted:
"44. When confronted with the documents seized from
Subhash Gadia's residence even though you have denied
any connection in respect of various unauthorised trans-
B actions between you, Greenland Corporation. Japan and
others abroad, but the following documents clearly re- 1.
vealed that you have been indulging in various unautho-
rised transactions in violations of provisions of Foreign -.
Exchange Regulation Act. 1973.
A. Page338 Trial Balance of Greenland
c S.G.6 Corporation entries of
ML. GN. RN. R.G.T. and )..
Gadia admits before that
they are Jatia's account.
D B. M.L. Jatia's i.e. your account
maintained m Japan, how-
ever. you admit receipt of
Gifts by your children such
as T.V., Video and M.V.
Parts.
E
C. Page215 Keeping U.S. $ 2 lakhs in
S.G.6 fixed deposit on 2.6.83 in
Kamal Account, also inclu-
ding 20 lakhs ${dollars).
F D. Page335 American dollar account as
S.G.6 on 31. 1. 1984.
E. Page318 Account in Japanese Yen Final posi-
S.G.6 total of 141147 .27. tion of
Bombay.
G
F.D.R. amount of Japanese
Yen 1093147 l. 16 to be equa-
lly divided between Yen,
GN, SN and Laxmiji account!
Capital account.
H
PUSHPADEVI "· M.L. WADHAVAN 57
F. Page2J4.J5 U.S. $ 780001- converted
A
S.G. 6 into Rs.9,16,5001- commi·
ssion of."
The Additional Secretary to the Government of India, Ministry
of Finance, in exercise of his powers conferred by sub-s. (1) of s. 3 of
the Conservation of Foreign Exchange and Prevention of Smuggling B
1 Activities Act, !974 ('COFEPOSA') ordered the detention of the
aforesaid Mohanlal Jatia by an order dated December 13, 1985 on
y being satisfied that it was necessary to detain him "with a view to
preventing him from acting in any manner prejudicial to the augmrnta-
- tion of foreign exchange". The petitioner thrice approached the High
Court with petitions under Art. 226 of the Constitution seeking to c
challenge the impugned order of detention. Immediately after the pas-
sing of the impugned order i.e. on December 16, 1985, she moved the
J.._
first of these petitions being W.P. No. 2530/85 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. 1162/85 granted interim stay till 0
the disposal of the appeal. On February 28, 1986 the Division Bench
y dismissed the appeal as well as the Writ Petition. By its subsequent
order dated March 4, !986 the Division Bench granted stay of e11Cecu-
tion upto April 4, 1986 on certain terms and conditions. The petitioner
filed a petition under Art. 136 in this Court for grant of special leave
being SLP No. 3742/86. The Court by its order dated April 3, 1986 E
...- dismissed the petition and ordered the detenu to appear before the
Commissioner of Police, Bombay on the next day i.e. on April 4, 1986
t' when the impugned order of detention was to be served upon him and
directed that the impugned order was to become effective. The further
direction made by this Court was that the detenu should immediately
~
be released on parole for a period of IO days subject to certain term~ F
and conditions. On April 4, 1986 the detenu appeared before the
Commissioner of Police, Bombay when he was served with the
impugned order of detention together with the grounds of detention
and the relevant documents. In compliance with the direction of this
Court, the detenu was released on parole. On April 7, 1986 the
petitioner filed second petition under Art. 226 of the Constitution G
--.,.. being WP No. 385/86 for quashing the impugned order of detention
along with an application for extending the period ?f parole. On April
14, 1986 the parole period having eKpired, the detenu was taken into
custody and lodged in the Central Prison, Bombay. The Writ Petition
came up for hearing before the High Court on April 18, 1986 and
admitted but the application for extending the period of parole was H
..
58 SUPREME COURT REPORTS [1987] 3 S.C.K.
A rejected. Aggrieved by the refusal of interim relief, the petitioner
again moved this Court under Art. 136 of the Constitution which was
dismissed as withdrawn.
It appears that the impugned order of detention was mainly chal-
lenged on two grounds, namely: (1) There was no matenal on which
B the satisfaction of the detaining authority could be reached that the
detention of the detenu was necessary under s. 3(1) of the
COFEPOSA with a view to preventing him from acting in any manner
prejudicial to the augmentation of foreign exchange. And (2) There
was total non-application of mind on the part of the detaining autho-
rity to the material on record, and in particular to the factual mis-
statements contained in paragraph 44 of the grounds of detention as
c detailed in entries 'A to F'. The Division Bench of the High Court did
--
not feel impressed with any of these submissions and by its judgment
and order <Jated May 2/3, 1986 dismissed the Writ Petition. Thereaf-
ter, on May 6, 1986 the petitioner filed the present petition under Art.
136 of the Consitution. On July 11, 1986 she also filed a petition under
D Art. 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 y
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.
E
The Writ Petition filed in this Court on July 11, 1986 is princi-
pally 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
F Ashok Jain at the P.resident's Secretariat on April 15, 1986 and there
had thus been an infraction of the constitutional safeguards enshrined
in Art. 22(5) and s. 11 of the COFEPOSA which rendered the con-
tinued detention of the detenu without the due process of law and thus
illegal, unconstitutional and void. The other substantial question
raised is that R. C. Singh was not a gazetted officer of Enforcement
G within the meaning of s. 40 of the Act and therefore the statements
recorded by him could not be regarded as valid statements under s. 40
and thus did not form the basis upon which the satisfaction of the
detaining authority could be reached.
The respondents have filed a counter-affidavit sworn by S.K.
H Chaudhary, Under Secretary to the Government of India, Ministry of
PUSHPADEVI v. M.L. WADHAVAN 59
Finance, Department of Revenue controverting the allegation that the A
detenu addressed any such representation to the President of India or
that the alleged representation was received at the President's
Secretariat. It has been averred that the President's Secretariat has
informed the Ministry of Finance, Department of Revenue that no
such representation was received from the detenu. Along with the
counter-affidavit, the respondents have filed copies of the letter of the B
Under Secretary to the Government of India, Ministry of Finance,
Department of Revenue dated August 4, 1986 addressed to the Under
Secretary, President's Secretariat and of the reply of even date sent by
the Under Secretary, President's Secretariat to him which shows that
- no such representation had been received in the President's Secre-
tariat, as alleged. They have also filed a note explaining the manner in
which the dak is acknowledged at the President's Secretariat. There is
C
a further affidavit filed by K. C. Singh, Deputy Secretary to the Presi-
dent of India explaining the manner of handling the dak at the
Rashtrapati Bhawan. The petitioner has filed an affidavit of Ashok
Jain claiming to be a friend of the Jatia family supporting the assertion
that he handed over the representation in person at the Rashtrapati D
Bhawan on April 15, 1986.
y
During the pendency of the proceedings, the Union Government
has made an application under s. 340 of the Code of Criminal Proce-
dure, 1973 for prosecution of the persons responsible for forging the
document purporting to be the alleged representation made by the E
detenu under s. 8(b) of the COFEPOSA on April 15, 1986 as, in fact.
no such representation was ever made, and for making certain interpo-
lations in the dak register kept at the President's Secretariat. They
have produced in a sealed envelope the original dak register main-
tained at the Rashtrapati Bhawan in which the alleged interpolations
have been made. We are informed that the matter has been handed F
over to the Central Bureau of Investigation for investigation. We shall
deal with the application under s. 340 of the Code later.
In support of these petitions, learned colmsel has mainly
advanced the following contentions, namely: (1) As is evident from
the grounds of detention, the detaining authority relied upon the state- G
ments recorded by R.C. Singh on the assumption that they were valid
statements under s. 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 s. 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 respon- H
..
60 SUPREME COURT REPORTS [1987] 3 S.C.R.
A dents 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 Enforcement within s. 40 of the FERA
when he recorded the statements in question must necessarily lead to
the inference that he was not a gazetted officer of Enforcement. (3)
B The impugned order of detention was void ab i11itio and it could not be
I
sustained by recourse to the de facto doctrine or any assumption that -'..,
R.C. Singh was acting under the colour ot his office as a gazetted
officer of Enforcement or in treating the statements to be valid being
relatable to s. 39(b) of the FERA. (4) It is not possible to predicate to
what extent, and in what manner, the mind of the detaining authority
C was influenced by his wrongful assumption that the statements recor-
ded by R. C. Singh who was not a gazetted officer of Enforcement,
-
were statements made under s. 40 of the FERA, and even assuming
that the statements recorded by R.C. Singh could be treated to be
statements relatalJle to s. 39(b) of the FERA, it is not possible to say
whether the detaining authority would have based his satisfaction
D upon such material. (5) There was non-application of mind on the part
of the detaining authonty as the grounds of detention are based on
several factual misstatements. According to the learned counsel, the
factual errors were self-evident as the entries relied upon in paragraph
4 of the grounds of detention, do not find place in the account books of
Messrs Greenland Corporation. The failure of the Central Govern-
£ ment to place before the detaining authority, the original account
books of Messrs Greenland Corporation, deprived the detaining
authority to apply his mind to the correctness or otherwise of the facts
stated therein. (6) There was infraction of the constitutional safe-
guards enshrined in Art. 22(5) inasmuch as there was failure on the
part of the detaining authority to consider the representation filed by
F the detenu under s. S(b) of the COFEPOSA through one Asliok Jain
and received at the President's Secretariat on April 15, 1986 and there-
fore the impugned order of detention was vitiated and the continued
detention of the detenu was rendered illegal and void. Other subsi-
diary questions were also raised. Having given the matter our anxious
consideration, we are of the considered opinion that none of the con-
G tentions can prevail.
In order to deal with the rival contentions advanced, it is neces-
sary to set out the relevant provisions of the Foreign Exchange Regu-
lation Act, 1973. The Foreign Exchange Regulation Act, 1973 is an
Act, as reflected in the long title, to consolidate and amend economic
H development of the country. The legislation has been brought in to
PUSHPADEVI v. M.L WADHAVAN 61
implement the Government policy for conservation of foreign
A
exchange and for removing the difficulties in implementing the same.
The provisions of ss. 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:
B
.L "3. Classes of officers of Enforcement-There shall be the
following classes of officers of Enforcement, namely:-
(a) Directors of Enforcement;
(b) Additional Directors of Enforcement;
(c) Deputy Directors of Enforcement;
c
( d) Assistant Directors of Enforcement; and
(e) Such other class of officers of Enforcement as may
be appointed for the purposes of this Act."
D
"4. Appointment and powers of officers of Enforce-
y ment. :-(l)The Central Government may appoint such
persons as it thinks fit to be officers of Enforcement.
(2) Without prejudice to the provisions of sub-section(!),
the Central Government may authorise a Director of E
Enforcement or an Additional Director of Enforcement or
t
--- ~.
a Deputy Director of Enforcement or an Assistant Director
of Enforcement to appoint officers of Enforcement below
the rank of an Assistant Director of Enforcement.
(3) Subject to such conditions and limitations as the Cent- F
ral Government may impose, an officer of Enforcement
may exercise the powers and discharge the duties conferred
or imposed on him under this Act."
"5. Entrustment of functions of Director of other officer of
Enforcement:- The Central Government may, by order G
and subject to such conditions and limitations as it thinks fit
to impose, authorise any officer of customs or any Central
Excise Officer or any police officer or any other officer of
the Central Government or a State Government to exercise
such of the powers and discharge such of the duties of the
Director of Enforcement or any other officer of Enforce- H
62 SUPREME COURT REPORTS [1987] 3 S.C.R.
ment under this Act as may be specified in the order."
A
S. 39 deals with the power of the Director of any other officer of
Enforcement to examine persons and provides:
"39. Power to examine persons-The Director of Enforce-
B ment or any other officer of Enforcement authorised in this
behalf by the Central Government, by general or special
order, may, during the course of any investigation or pro-
ceeding under this Act,-
(a) require any person to produce or deliver any document
relevant to the investigation or proceeding;
c
(b) examine any person acquainted with the facts and cir-
cumstances of the case."
Sub-s. ( 1) of s: 40 reads as follows:
D
"40. Power to summon persons to give evidence and pro-
duce documents-(1) Any gazetted officer of Enforcement
shall have power to summon any person whose attendance
he considers necessary either to give evidence or to pro-
duce a document during the course of any investigation or
E 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
F 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 mis-
statements as detailed in entries 'A to F' in the grounds of detention
which vitiated the impugned order of detention. And (3) The failure of
the sponsoring authority to forward the account books seized during
G the course of search at the residential premises of Subhash Gadia
shows that the detaining autliority proceeded to make the impugned
order of detention without due l\]Jplication of mind. According to the
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
H satisfaction of the detaining authority is non-existent or misconceived
PUSHPADEVI >. M.L. WADHAVAN 63
' or irrelevant, the order of detention would be invalid since it is not A
-f
possible to predicate as to whether the detaining authority would have
made an order for detention even in the absence of non-existent or
irrelevant ground. His contention is that the principle enunciated by
this Court some 30 years ago in Shibban Lal Saksena v. The State of
Uttar Pradesh & Ors., (1954] SCR 418 and in Dr. Ram Manonar Lohia
v. State of Bihar & Ors., (1966] 1 SCR 709 which it reiterated later in B
Pushkar Mukherjee & Ors. v. The State of West Bengal, [!969] 2 SCR
635 still holds good despite the change in the law brought about by the
introduction of s. 5A of the Act that though one or more of the
grounds of detention were found to be vague, non-existent, not rele-
vant, not connected, irrational or invalid for any other reason what-
soever, the detention could be sustained on the remaining grounds. He C
seeks to draw sustenance from the decision of the Constitution Bench
J..__
of this Court in Mohd. Shakeel Wahid Ahmed v. State of Maharashtra
& Ors., (1983] 2 SCR 614. We are afraid, the contention cannot pre-
vail. The decision in Mohd. Shakee/'s case is clearly distinguishable.
In Mohd. Shakeel's case, three of the four grounds of detention D
on which the appellant was detained were held by the High Court to be
bad for one reason or another but it held that the remaining ground did
not suffer from any defect and was enough to sustain the order of
detention. On appeal, Shri Jethmalani, learned counsel for the
detenu, sought to challenge the constitutional validity of s. 5A of the
Act and the case was therefore referred to a Constitution Bench. At E
the hearing, Shri Jethmalani confined his submission to an altogether
different point which ultimately prevailed, namely, that the remaining
ground of detention was also bad for the reason that there was failure
on the part of the State Government to place before the detaining
~- authority the opinion which the Advisory Board had recorded in
favour of another detenu Shamsi who was also detained for his F
involvement in the same transaction on an identical ground based on
similar and identical facts. It was held that although the opinion of the
Advisory Board that !here was no sufficient cause for Shamsi's deten-
tion may not have been binding on the detaining authority which
ordered the detention of the detenu, but the opinion of the Advisory
Board in Shamsi case was an important consideration which should G
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 bad not sustained Sbamsi'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 H
SUPREME COURT REPORTS [1987] 3 S.C.R.
on the three remaining grounds which had been held to be bad. The
A
decision is 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.
Shiveraj, Addi. Chief Secretary to the Government of Gujarat & Anr.,
[ 1979] 2 SCR 215 on which rehance was placed, there was failure on the
part of the State Government to apprise the detaining authority of the
B 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 custody, rendered the impugned order of
detention invalid and illegal because there was complete non-appli-
cation of mind by the detaining authority to the most material and vital
facts. The other decision in Kurjibhai Dhanjibhai Patel v. State of
c Gujarat & Ors., (1985] I Scale 964 is also distinguishable. In that case,
there was failure on the part of the sponsoring authority in not furnish-
ing the relevant material to the detaining authority, namely, the reply
of the detenu to the show cause notice issued in the adjudication
proceedings undertaken by the Customs authorities which was held to
D be the most relevant material which ought to have been placed before
it. It was held that the question was not whether the material which
was withheld from the detaining authority formed part of any separate
or independent proceedings like the adjudication proceedings as held
by the High Court, but the real question was whether the material was
relevant and would have influenced the mind of the detaining autho-
E rity. In the counter-affidavit filed by the Under Secretary to the
Government of India, Ministry of Finance it had been averred that the
representation of the detenu along with his reply to the show cause had
been considered by the Advisory Board and after considering all the
facts it was of the opinion that there was sufficient cause for detention.
It was held that such ex post facto consideration of the detenu's reply
F to the show cause could not fill up the lacuna of non-consideration
thereof by the detaining authority before passing the order of deten-
tion. Both these decisions proceed on the well-settled principle that if
material and vital facts which would influence the mind of the detain-
ing authority one way or the other on the question whether or not to
make the detention order are not placed, it would vitiate its subjective
G satisfaction rendering the detention order illegal. We fail to see the
relevance of these decisions to the present case.
Before touching upon the merits, we wish to make a few observa-
tions. It is not suggested at the bar that the grounds for detention do
not set out the facts with sufficient de~ree of particularity or that they
H do not furnish sufficient nexus for forming the subjective satisfaction
PIJSHPADEVI r. M.L. WADHAVAN 65
of the detaining authority. The impufllled order of detention was A
therefore not challengned on the ground that the grounds furnished
were 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 s. 3(1) of the Act is necessary with a view to preventing him B
'
)- from acting in any manner prejudicial to the augmentation of foreign
exchange. In Mangalbhai Motiram Patel v. State of Maharashtra &
Ors., [1980] 4 SCC 470, it was observed at p. 477 of the Report:
"The Conservation of Foreign Exchange and Prevention of
Smuggling Activities Act, 1974 is enacted to serve a laud- C
able object. It is a measure to prevent smuggling of goods
into or out of India and to check diversion of foreign ex-
change by immobilising the persons engaged in smuggling,
foreign exchange racketeering and related activities by pre-
ventive detention of such persons. Violations of foreign
exchange regulations and smuggling activities are having an D
increasingly deleterious effect on the national economy and
y thereby a serious adverse effect on the security of the State.
Such economic offences disrupt the economic life of the
community as a whole. It is necessary to protect the basic
economic order of the nation. Nevertheless, the Act is a
law relating to preventive detention. That being so, the E
power of detention exercisable under sub-s. (I) of s. 3 of
the Act is subject to the limitations imposed by the
Constitution. As observed by this Court in Narendra
Purshotam Umrao v. B.B. Gujra/, (1979] 2 SCR 315, when
the liberty of the subject is involved, whether it is under the
Preventive Detention Act or the Maintenance of Internal F
Security Act or the Conservation of Foreign Exchange and
Prevention of Smuggling Activities Act or any other law
providing for preventive detention,"
"it is the bounden duty of the court to satisfy itself
that all the safeguards provided by the law have been G
scrupulously observed and that the subject is not
deprived of his personal liberty otherwise than in
accordance with law."
Nevertheless, as observed by the Court in Mangalbhai Motiram Patel's
case: H
66 SUPREME COURT REPORTS [1987] 3 S.C.R.
A "The community has a vital interest in the proper enforce-
ment of its laws, particularly in an area such as conserva-
tion of foreign exchange and prevention of smuggling
activities in dealing effectively with persons engaged in
such smuggling and foreign exchange rackteering by order-
ing their preventive detention and at the same time, in
B
assuring that the law is not used arbitrarily to suppress the
citizen of his right to life and liberty." j
The Government must therefore ensure that the constitutional safe-
guards of Art. 22(5) read with sub-s. (1) of s. 3 of the Act are fully
complied with. In the instant case, however, there was no infraction of
C the constitutional safeguards contained in Art. 22(5). We are satisfied
that there was no failure on the part of the Government to discharge its
obligation under Art. 22(5). The relevant records of the Enforcement
Directorate have been placed before us. They clearly show that there
was sufficient material for the formatioi;i of the subjective satisfaction
D of the detaining authority under sub-s. (1) of s. 3 of the Act. They also
show that the detenu was afforded a reasonable opportunity for mak-
ing an effective representation against his detention.
It has long been established that the subjective satisfaction of the
detaining authority as regards the factual existence of the condition on
E 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 suffi-
ciency of the grounds on which the satisfaction of the detaining autho-
rity is based. Nor can the Court, on a review of the grounds, substi-
tute its own opinion for that of the authority. But this does not imply
that the subjective satisfaction of the detaining authority is wholly
F
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
the power would not be fulfilled and the exercise of the power would
G 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 & Ors., [1975]
2 SCR 832, following the case of Emperor v. Shibnath Banerjee &
Ors., AIR (1943) FC 75.
H
PUSHPADEVI v. M.L. WADHAVAN 67
The substantive contention of learned counsel for the petitioner A
has therefore been that there was non-application of mind on the part of
the detaining authority to the grounds of detention and that there w~s
violation of the constitutional safeguards contained in Art. 22(.5). In
essence, three questions arise, namely: (1) Whether the impugned
order of detention was based on no material inasmuch as R.C. Singh
was not a gazetted officer of Enforcement and therefore the state- B
.L ments recorded by him had no evidentiary value and thus could not
form the basis upon which his subjective satisfaction could be reached;
and if not, whether the statements recorded by him could be treated to
be statements relatable to s. 39(b) of the FERA and could still form
the basis for such satisfaction. (2) Whether there was non-application
of mind on the part of the detaining authority and therefore the C
impugned order of detention was bad as there were factual mis-state-
ments detailed in items A to F of the grounds of the grounds of deten-
tion. And (3) Whether there was infraction of the constitutional safe-
guards contained in Art. 22(5) due to the failure on the part of the
Central Government to consider the representation filed by the detenu
under s. 8(b) read with s. 11 of the Act, alleged to have been presented D
through one Ashok Jain and received at the President's Secretariat on
y April 1.5, 1986 and therefore the continued detention of the petitioner
was rendered invalid and unconstitutional. We wish to deal with these
contentions in seriatim in the order in which they have been advanced.
On the first of these questions, we have no hesitation in repelling E
the contention that there was no material on which the detaining
authority could have based the subjective satisfaction under sub-s. (1)
of s. 3 of the Act. The argument of the learned counsel stems from the
hypothesis that R.C. Singh was not a gazetted officer of Enforcement
within the meaning of s. 40 of the FERA when he issued summons and
recorded the statements and that even assuming that the statements F
recorded by R.C. Singh could be treated to be statements falling under
s. 39(b) of the Act, it is not possible to say whether the detaining
authority would have based his satisfaction upon such material. The
learned counsel places emphasis on the word 'gazetted' ins. 40(1) and
contends that R.C. Singh for the first time became a gazetted officer of
Enforcement on January 13, 1986 when his appointment as such was G
notified. According to him, the detaining authority has relied upon the
statements purporting to be under s. 40(1) though in reality they were
not so. According to the learned counsel, there is a sanctity attached to
statements recorded under s. 40(1) of the FERA. That is so, because
every person summoned by a gazetted officer of Enforcement to make
a statement under sub-s. (1) of s. 40 is under a compulsion to state the H
•
68 SUPREME COURT REPORTS [1987) 3 S.C.R.
A truth on the pain of facing prosecution under sub-s. (3) thereof.
Further, sub-s. (4) provides that every such investigation or proceed-
ing as aforesaid, shall be deemed to be judicial proceeding within the
meaning of ss. 193 and 224 of the Indian Penal Code, 1860. Such being
the legal position, the learned counsel contends that while a statement
recorded by a gazetted Enforcement Officer under s. 40(1) can furnish
B
sufficient and adequate material on the basis of which the detaining
authority can form his opinion, it may not be so with regard to state- j
ments recorded by an officer of Enforcement authorised in that behalf
under s. 39(b) of the FERA.
On the other hand, learned counsel for the respondents contends
C that there is no basis for the assertion that· there was no material on
which the detaining authority could have formed the subjective satis-
faction under sub-s. (1) of s. 3 of the Act or that there was any factual
mis-statement in the grounds which showed that there was non-appli-
cation of mind on his part. We may briefly summarise his submission.
D Factually, the statements were there and the detaining authority was
entitled to act upon the statements. The question whether the state-
ments could be acted upon or not is not for the Court. A person
summoned to make a statement under s. 40(1) has the right to object
to the power and authority of the officer issuing the summons. It must
therefore logically follow that when the persons summoned like
E Subhash Gadia and Mohanlal Jatia were examined by R.C. Singh it
was not open to others to raise objection that R.C. Singh was not
competent to record the statements under s. 40(1). The statements
made by them were not hit by s. 25 of the Evidence Act, 1872 and
could be used against the detenu. There is no substance in the conten-
tion that R.C. Singh was not a gazetted officer of Enforcement. The
F word 'gazetted' does not imply that the appointment of such officer
should be published in the official Gazette. All that is required by s.
40(1) of the FERA that such officer recording the statement must be
holding a gazetted post of an officer of Enforcement, in contradistinc-
tion to that of an Assistant Officer of Enforcement which is a non-
gazetted post. It cannot be disputed that R.C. Singh had been
G appointed as Enforcement Officer on an ad hoc basis on November
24, 1982 and he continued to function as such at the time when he
recorded the statement under s. 40(1). The subsequent notification
issued by the Enforcement Directorate on January 13, 1986 was for his
appointment on a regular basis. What is of significance, it is said, is
that at the time when R.C. Singh recorded the statements he was
H holding the gazetted post of an Enforcement Officer and discharging
PUSHPADEVI v. M.L WADHAVAN 69
~ the functions attached to the post. There is, in our opinion, considera· A
tion force in these submissions.
In any event, the learned counsel furth~r 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 s. 40(1) of the FERA and therefore the de facto doctrine was B
'
..J- attracted. He relies upon the decision of this Court in Gokaraju
Rangaraju v. State of Andhra Pradesh, [1981] 3 SCR 474 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
are concerned.
c
We are inclined to the view that in this jurisdiction there is a
presumption of regularity in the acts of officials and thai the evidential
burden is upon him who asserts to the contrary .. The contention that
R. C. Singh was not a gazetted officer of Enforcement within the mean· D
ing of s. 40(1) of the FERA appears to be wholly misconceived besides
( being an afterthought. The validity of appointment of R.C. Singh to be
an officer of Enforcement under this Act cannot be questioned. The
Directorate of Enforcement have along with the counter-affidavit
placed on record Establishment Order No. 87 /82 dated November 24,
1982 which shows that R.C. Singh along with 25 others was appointed E
by the Director to be an officer of Enforcement on an ad-hoc basis
against 30 per cent dep1.1tation quota. The subsequent Establishment
Order No. 84/86 dated January 13, 1986 relied upon by the petitioner
shows that R. C. Singh along with 29 others was appointed as an officer
--( of Enforcement on an officiating basis. It is not suggested that these
officers were not authorised by the Central Government to discharge F
the functions and duties of an officer of Enforcement. Under the
scheme of the Foreign Exchange Regulation Act, the Directorate of
Enforcement is primarily charged with the duty of administering the
Act. S. 3 defines different classes of officers of Enforcement. The
expression 'officers of Enforcement' as defined ins. 3 embraces within
itself not only (a) a Director (b) Additional Director (c) Deputy G
Director and (d) Assistant Director of Enforcement but also (e) such
other class of officers of Enforcement as may be appointed for the
purpose of the Act. Obviously, R.C. Singh who was Assistant
Enforcement Officer having been appointed as an officer of Enforce·
ment on an ad-hoc basis in 1982 fell within the category 'such other
class of officers' covered bys. 3(e). Sub·S.(1) of s. 4 provides that the H
70 SUPREME COURT REPORTS [1987) 3 S.C.R.
Central Government may appoint such persons, as it thinks fit, to be
A
officers of Enforcement. Sub-s. (2) thereof provides for delegation of
such power of appointment by the Central Government to a Director
of Enforcement or an Additional Director of Enforcement etc. to
appoint officers of Enforcement below the rank of an Assistant
Director of Enforcement. Sub-s. (3) of s. 4 of the FERA provides that
B subject to such conditions and limitations as the Central Government
may impose, an officer of Enforcement may exercise the powers and
discharge the duties conferred or imposed on him under the Act.
Undoubtedly R.C. Singh was discharging his duties and functions as a
gazetted officer of Enforcement under s. 40( 1) of the FERA when he
recorded the statements in question. In our opinion, the expression .....
'gazetted officer of Enforcement' appearing in s. 40(1) must take its
c colour from the context in which it appears and it means any person
appointed to be an officer of Enfo,cement under s. 4 holding a gazet-
ted post. There is no denying the fact that R.C. Singh answered that
de_scription. The c9ntention that there was no material on the basis of
which the detaining authority could have based his subjective satis-
D faction on the ground that R.C. Singh was not a gazetted officer of
Enforcement within the meaning of s. 40( 1) of the FFRA cannot
prevail.
Even if the contention that R.C. Singh was not a gazetted officer
of Enforcement within the meaning of s. 40(1) of the FERA were to
E prevail, it would be of little consequence. In this case during the in-
vestigation statements were recorded by B. T. Gurusawhney, Assistant
Director of Enforcement and R.C. Singh. There is no dispute regard-
ing the competence of B.T. Gurusawhney to record statements under
s. 40(1) of the FERA and the only question is as to whether the
statements recorded by R.C. Singh under s. 40( 1) could be acted upon.
F If evidence is relevant the Court is not concerned with the method by
which it was obtained. In Barindra Kumar Ghose & Ors. v. Emperor,
!LR (1910) 37 Cal. 467 Sir Lawrence Jenkins repelling the contention
that the Court must exclude relevant evidence on the ground that it
was obtained by illegal search or seizure, said at p. 500 of the Report:
"Mr. Das has attacked the searches and has urged that, even if there
G was jurisdiction to direct the issue of search warrants, as I hold there -.,.j···
was, still the provisions of the Criminal Procedure Code have been
completely disregarded. On the assumption he has contended that the
evidence discovered by the searches is not admissible, but to this view
I cannot accede. For without in any way countenancing disregard of
the provisions prescribed by the Code, I hold that what would other-
H wise be relevant does not become irrelevant because it was discovered
PUSHPADEVI v. M.L. WADHAVAN 71
in the course of a search in which those provisions were disregarded". A
The question arose before the Judicial Committee of the Privy Council
in the well-known case of Kuruma v. Reginam, [1955] l All ER 236. In
dealing with the question Lord Goddard, CJ. delivering the judgment
of the Privy Council said:
"The test to be applied, both in civil and in criminal cases, B
in considering whether evidence is admissible, is whether it
is relevant to the matters in issue. If it is, it is admissible
and the Court is not concerned with how it was obtained."
The learned CJ. further observed:
c
"In their Lordships' opinion, when it is a question of the
admission of evidence strictly it is not whether the method
by which it was obtained is tortious but excusable, but
whether what has been obtained is relevant to the issue
being tried." ·
D
Y Again, the House of Lords in R. V. Sang, (1979] 2 All ER 1222
< reiterated the same principle that if evidence was admissible it matters
not, how it was obtained. Lord Diplock after considering various deci-
sions on the point observed that however much the judge may dislike
the way in which a particular piece of evidence was obtained before
proceedings were commenced, if it is admissible evidence probative of E
__... the accused's guilt 'it is no part of his judicial function to exclude it for
!..- this reason' and added:
"He has no discretion to refuse to admit relevant admissi-
ble evidence on the ground that it was obtained by impro-
per or unfair means. The court is not concerned with how it F
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 evi-
-~,dence procured, aft~r the commencement of the alleged offence, G
which although techmcally adm1ss1ble 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 evidential value. Com-
ing nearer home, this Court in Magraj Patadia v. R.K. Bir/a & Ors.,
[1971] 2 SCR 118 held that the fact that a document which was pro-
cured by improper or even illegal means could not bar its admissibility H
72 SUPREME COURT REPORTS [1987] 3 S.C.R.
A provided its relevance and genuineness were proved. In R.M. Malkani
v. State of Maharashtra, [1973] 2 SCR 417 the Court applying this
principle allowed the tape-recorded conversation to be used as evi-
dence in proof of a criminal charge. In Pooran Mal etc. v. Director of
Inspection (Investigation) of Income-Tax Mayur Bhavan, New Delhi &
Ors., [1974] 2 SCR 704 the Court held that the income-tax authorities
13 can use as evidence any information gathered from the search and
seizure of documents and accounts and articles seized. This being the
substantive law, it follows that the detaining authority was entitled to \.
rely upon the statements recorded by R.C. Singh under s. 40(1) of the 1-
FERA. Even if R. C. Singh was not competent to record such state-
ments under s. 40(1) of the FERA, the statements were clearly relat-
c able to s. 39(b) of the Act. It cannot therefore be said that there was no -
material on which the detaining authority could have based his subjec-
tive satisfaction under sub-s. (1) of s. 3 of the Act.
We are unable to accept the submission of the learned counsel
for another reason. Where an office exists under the law, it matters not
D how the appointment of the incumbent is made, so far as validity of its
acts are concerned. It is enough that he is clothed with the insignia of
the office, and exercises its powers and functions. The official acts of "<
such persons are recognised as valid under the de facto doctrine, born
of necessity and public policy to prevent needless confusion and end-
less mischief. In Gokaraju Rangaraju's case, supra, Chinnappa Reddy,
E J. explained that this doctrine was engrafted as a matter of policy and
necessity to protect the interest of the public. He quoted the following . ....__
passage from the judgment of Sir Ashutosh Mukerjee J. in Pu/in 4
Behariv.KingEmperor, [1912] !5Cal.LJ517atp.574: '
"The substance of the matter is that the de facto doctrine y-
F was introduced into the law as a matter of policy and neces-
sity, to protect the interest of the public and the individual
where these interests were involved in the official acts of
persons exercising the duties of an office without being
lawful officers. The doctrine in fact is necessary to maintain
the supremacy of the law and to preserve peace and order
G in the community at large."
The learned Judge also relied upon the following passage from the
judgment of P. Govindan Nair, J. in P.S. Menon v. State of Kerala &
Ors., AIR (1970) Kerala 165 at p. 170;
H
"This doctrine was engrafted as a matter of policy and
PUSHPADEVI v. M.L. WADHAVAN 73
necessity to protect the interest of the public and individual A
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, m fact,
whose acts, public policy requires should be considered
. valid." B
+,..
The next substantive contention of learned counsel for the
.':I petitioner is that the so-called factual mis-statements which occur in
paragrah 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 that the subjective
satisfaction of the detaining authority is not wholly immune from the
c
,l_ judicial review and the Court can always examine whether the requi-
site satisfaction was arrived at by the authority; if it is not, the condi-
tion precedent to the exercise of the power would be bad. According
to the rule laid down in Khudiram Das' case which proceeds on well-
settled principles, the simplest case is whether the authority has not D
y applied its mind and that is sufficient to vitiate the order of detention.
' It is submitted that this was a case of mistaken identity and there was
no material before the detaining authority to show that the initials
'ML' in the various entries in the accounts of Messrs Green!!!rid Cor-
poration, Japan and the relative telex messages related to the detenu
Mohanlal Jatia and not to the other ML meaning ML Kedia, the E
,.- ) brother-in-law of Subhash Gadia. We are afraid, we cannot accept this
1-- line of argument. There is no warrant for the submission that the
initials 'ML' refer to ML Kedia and not the detenu Mohanlal Jatia or
that a wrong person has been placed under detention. There is no
--·( dispute whatever that the initials 'ML' refer to the detenu Mohanlal
Jatia. When confronted during the interrogation with the initials 'ML' F
in the books of Messrs Greenland Corporation and the telex messages,
the detenu admitted that the initials 'ML' or 'MLJi' in the various
entries as well as the telex messages stand for himself i.e. Mohanlal
Jatia.
-} As to the co-called factual mis-statements, the argument proceeds G
on the wrongful assumption that the facts stated in paragraph 44 of the
grounds of detention are the 'grounds' when they are in reality nothing
but 'facts'. The High Court has rightly observed that the facts stated in
paragraph 44 of the grounds cannot be read in isolation and the
grounds of detention have to be read as a whole with the accompany-
ing documents and material. As is quite apparent, the ground of deten- H
74 SUPREME COURT REPORT!) ( 1987] 3 S.C.R.
A tion was only one viz. that the detenu was engaged in activities preju- +-
dicial to the augmentation of foreign exchange and therefore it became
necessary in the public interest to place him under detention. Suffi-
ciency of grounds is not for the Court but for the detaining authority
for the performance of his subjective satisfaction that the detention of
the detenu Mohanlal Jatia under s. 3(1) of the Act was necessary. It
B was a matter of legal inference to be drawn from several facts which
appear in the grounds and the facts arc not merely in paragraph 44 hut .-l,
also in other paragraphs. lt will he seen that paragraph 44 merely
recites that when the ~etenu was confronted with the documents re- ~
covered from a searcn of Subhash Gadia's residential premises and
c
elsewhere, he denied the various transactions 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 the learned counsel, the mistakes which crept in the
D proposal made by the initiating authority for the detention of the
detenu recur in paragrah 44 of the grounds and it shows the casualness J
with which the grounds of detention were drawn which indicate non- 'f
application of mind. Although the argument at first blush appears to
be attractive, but on deeper consideration does not stand to scrutiny.
We wish to enumerate the so-called factual mis-statements listed as
E Items A to F in paragraph 44 of the grounds and deal with them in
seriatim. Item A at p. 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
'adrnits' that they are Jatia 's account. During interrogation Subhash 'y-
F Gadia stated that bunch of documents SG 6 relates to Messrs Green-
land Corporation, Japan and that these entries 'may be related to the
Jatia family'. The detaining authority was not wrong in treating the
words 'may be' in the context in which they appear as being an admis-
sion of fact made by the detenu. The detaining authority was entitled
to make use of the decoding £ormula revealed by Subhash Gadia to
G connect the detenu Mohanlal Jatia with the initials 'ML' appearing in
various transactions, more so because the relative telex messages seni:-~
by Messrs Greenland Corporation were seized from the office pre-
mises of Messrs J.M. Trading Corporation, J.M. Textile Pvt. Ltd.,
Ramgopal Textile Pvt. Ltd., Ram Clopal & Sons, Ram Gopal Synthet-
ics Pvt. Ltd., Kamal Trading Corporation, Kalpana Trading Corpora-
H tion, Sudhir Trading Corporation, all situate at 701, Tulsiani Cham-
PUSHPADEV! v. M.L. WADHAVAN 75
bers, 212, Nariman Point, Bombay and the detenu admittedly is A
closely connected with these concerns being Director or shareholder
or a partner. The said documents disclose that the detenu Mohanlal
Jatia with the initials 'ML' and his brothers GN, SN and RN, namely,
Ganesh Narayan Jatia, Satya Narayan Jatia and Ram Niranjan Jatia
are maintaining secret accounts with Messrs Greenland Corporation,
Japan. They also clearly indicate that the detenu and his brothers were B
found to be engaged in transferring funds from or to India in an un-
.F authorised manner on a very large scale. Subhash Gadia in his state-
ment revealed that pp. 316, 317 and 318 of the seized document SG 6
are written in his handwriting and the account is in Yen. He further
revealed that the said accounts relate to Satya Narayan Jatia, Ganesh
Narayan Jatia and Mohanlal Jatia. The detenu was furnished a copy of C
the statement made by Sub hash Gadia. As herein before adumbrated,
the detenu when confronted denied to have entered into the trans-
action. However, when confronted with the various entries appearing
in the seized document SG 6 the detenu admitted that the initials 'ML'
or 'MLJi' relate to him both in the accounts as well as in the telex
messages. The various entries show transactions involving foreign ex- D
change to the tune of several crores of rupees. For instance, at p. 318
of SG 6 appear the details of FDR account standing in the name of
y
Satya Narayan, Ganesh Narayna and Mohanlal Jatia to be divided
equally and the sum total of the amount shown is 1,09,37,471.16 Yen.
The said figure also finds place at p. 278 of the file SG 6 which gives
details how the figure 1,09,37,471.16 has been arrived al. In the telex E
message appearing at pp. 35 and 36 in the bunch of seized document
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 Naryana and Mohanlal payable on the FDR for
1,09,37,471.16 Yen. Similarly, Laxmi Ji account with Messrs Green-
land Corporation, Japan is a capital account of Satya Narayan, Ganesh F
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 G
purchase of a TV 27" and a VCR. There is an entry at p. 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 p. 215 of the seized documents that there is an entry showing that
the detenu had a fixed deposit of US $ 2 lakhs. The entry reads: "ML 2 H
76 SUPREME COURT REPORTS [1987] 3 S.C.R.
A lakhs A/S 11.75 dated 2.6.83". Even assuming that it was a mistake to
have introduced the words "also including• 20 lakhs $ (dollars)" in
paragraph 44 of the grounds that would not by itself without more
vitiate the impugned ordi:r of detention or necessarily show non-
application of mind. Even so, the detaining authority was entitled to
act upon the entry relating to US $ 2 lakhs for the formation of his
B subjective satisfaction. Significance of these entries shows that the
detenu was maintaining the secret account and had large sums of
money in fixed deposits abroad. The detaining authority has charged
the detenu with keeping US $ 2 lakhs in fixed deposit in Kamal
Account which is the capital account of the detenu and his brothers in
Messrs Greenland Corporation, Japan. The words "also including 20
C lakhs $(dollars)" are no doubt not there in the books of accounts but
they crept in the proposal and have been reproduced in paragraph
44 of the grounds. It is somewhat strange that these words should be
introduced when they were not ther.e in the books of accounts but the
fact remains that there is a typographical error. The High Court rightly
observes that a single typographical mistake about making a reference
D to US $ 20 lakhs would not necessarily show the non-applicatin of mind
when the entry of US $ 2lakhs (dollars) is reflected in various places in
the account such as ML Ji Khata P. 175 and Kamal Account P. 226,
copies of which were furnished to the detenu. Even assuming that the
words "also including 20 lakhs $ (dollars)" were introduced in para-
graph 44 of the grounds that would not be a factor vitiating the im-
E pugned order of detention. The detaining authority was still entitled to
act upon the entry relating to fixed deposit of US $ 2 lakhs (dollars) for
the formation of his subjective satisfaction.
As regards Items D and E, the contention of the petitioner is that
reference to American Dollar account as on January 31, 1984 as per p.
F 335 of SG 6 and Japanese Yen account: Final position at Bombay of
141147.27 set out at p. 318 thereof was totally unintelligible and was
unconnected with the detenu nor had any relevance. The respondents
have controverted this in the counter-affidavit filed by M.L. Wadha-
wan, Additional Secretary to the Government of India, Ministry of
Finance. It is asserted that the aforesaid abstracts clearly indicate that
G 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 p. 335 of SG 6, the details whereof
are given at p. 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
H to be divided was 10937,471.16 Yen. This figure also appears at p. 278
PUSHPADEV! v. M.L. WADHAVAN 77
of file SG 6 giving details as to how this figure 10937 ,471.16 Yen has A
been worked out. At p. 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 141147.27 apparently shown in Item E represents the detenu's B
share. However, the detenu expressed his inability to explain the said
two accounts-American Dollar account and Laxmi Ji account and the
telex messages. It appears that imports of yam in India from Messrs
Greenland Corporation, Japan were effected through Messrs J.M.
Trading Company of which the detenu is a partn'er and there was
either over-pricing of the goods in the invoices or some portion of C
commission was secretly kept with Messrs Greenland Corporation and
was being utilised for differential treatment. It can hardly be asserted
.C in view of the facts revealed in the counter-affidavit of the Additional
Secretary, Ministry of Finance that the detenu was transferring funds
either from or to India in a clandastine manner on a very large scale.
D
The remaining Item F at p. 315 of the bunch of documents
marked SG 6 is a coded account maintained by the detenu under the
name Kamal Account representing the capital investment of SN, GN
and ML with Messrs Greenland Corporation. It relates to the entry
"l1S $ 78.000 converted into Rs.9,16,500 commission of''. At every
place in the bunch of seized document SG 6 such as on the reverse of E
p. 215 there is an entry to the effect that US $ 78,000 were con-<erted
into Indian rupees @ Rs. I I. 75 equivalent to 9, 16,500 and that the said
amount was capitalised on 19.7.1983 in the name of GN. Paragraph 33
of the grounds involves the complicity of the detenu by making refer-
ence to a secret account maintained by SN, GN and ML to the effect:
---(
"It was found that all of you are engaged in transferring funds from or F
to India on a very large scale." In this coded account, the modus
operandi adopted at every place is to delete two zeros from the con-
verted Indian currency.
Learned counsel for the petitioner tried to spell out an argument
that the use of the word 'or' shows that the ground was vague or G
indefinite. According to the learned counsel, it is quite apparent that
the detaining authority was not definite as to the nature of payment
i.e. whether the conversion of foreign exchange into rupees represen-
ted payments made or amounts received. Nothing really turns on this.
The fact remains that the detneu had been admittedly keeping a secret
account of foreign currency abroad without the permission of the H
Reserve Bank oflndia.
78 SUPREME COURT REPORTS [ 19871 3 S.C.R.
A It is quite apparent that the so-called factual mis-statements are
not mis-statements at all. The High Court rightly held that the alleged +-
mistakes or infirmities pointed out were not so material or serious in
nature as to vitiate the impugned order of detention. As already indi-
cated, 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
B 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 & Ors., (J.T. 1987 (2) SC 204) to
C 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 deten-
tion under sub-section (!) 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 follow-
D ing by way of supplementary material. Though the element of det.:n-
tion is a common factor in cases of preventive detention as well as
punitive detention, there is a vast difference in their objective. Puni-
tive 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
retribution, deterrence, correctional factor and institutional treatment
E in varying degrees. On the contrary preventive detention is an extra-
ordinary measure resorted to by the State on account of compulsive
factors pertaining to maintenance of public order, safety of public life
and the welfare of the economy of the country. TI1e need for this
extraordinary measure i.e. detention without trial was realised by the
founding fathers of the Constitution as an inevitable necessity for safe-
F guarding the interests of the public and the country and hence a
specific provision has been made in clause (3) of Article 22 providing
for preventive detention being imposed in appropr.iate cases notwith-
standing the fundamental right of freedom and liberty guaranteed to
the citizens by the Constitution. The entire scheme of preventive
detention is based on the bounden duty of the State to safeguard the
G interests of the country and the welfare of the people from the canker
of anti-national activities by anti-social elements affecting the mainte-
nance of public order or the economic welfare of the country. Placing
the interests of the nation above the individual liberty of the anti-social
and dangerous elements who constitute a grave menace to society by
their unlawful acts, the preventive detention laws have been made for
H effectively keeping out of circulation the detenus during a prescribed
PUSHPADEVI v. M.L. WADHAVAN 79
penod by means of preventive detention. The objective underlying A
preventive detention cannot be achieved or fulfilled if the detenu is
granted parole and brought out of detention. Even if any conditions
are imposed with a view to restrict the movements of the detenu while
on parole. the observance of those conditions can never lead to an
equation of the period of parole with the period of detention. One
need not look far off to see the reason because the observance of the B
conditions of parole, wherever imposed, such as reporting daily or
periodically before a designated authority, residing in a particular
town or city, travelling within prescribed limits alone and not going
beyond etc. will not prevent the detenu from moving and acting as a
free agent during the rest of the time or within the circumscribed limits
of travel and having full scope and opportunity to meet people of his C
choice and have dealings with them, to correspond with one and all
and to have easy and effective communication with whomsoever he
likes through telephone, telex etc. Due to the spectacular achieve-
ments in modem communication system, a detcnu, 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 D
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 E
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 F
period of sentence, that only the actual pre-trial detention period
should count for set-off and not the period of bail even if hail had been
granted subject to stringent conditions. In contrast, in so far as preven-
tive detentions under the Conservation of Foreign Exchange and Pre-
vention of Smuggling Activities Act, 1974, are concerned, the Act
I specifically lays down that a person against whom an order of deten- G
-j.. tion has been passed shall not be released on bail or bail bond or
otherwise (vi de Section 12 ( 61 of the Act) and that any revocation or
modification of the order of detention can be made only by the
Government in exercise of its powers under Section l l. Incidentally, it
may be pointed out that by reason of sub-s. (6) of section 12 of the Act
placing an embargo on the grant of bail to a detenu there was no H
80 SUPREME COURT REPORTS I 1987] 3 S.C.R.
A necessity for the Legislature to make a provision similar to sub-section
(4) of Section 389 of the Code of Criminal Procedure, 1973 (corres-
ponding to sub-section (3) of Section 426 of the old Code) for excluding
the period of bail from the term of detention period. For these reasons
the plea for treating the period of parole as part of the detention
period has to necessarily fail.
B
One last point remains. Besides refuting the contention of the
petitioner that the detenu had made a written representation addres-
sed to the President of India on April 15, 1986 and that there has been
an infraction of the Constitutional safeguard embodied in Article
22(5" of the Constitution and Section 11 of the Act due to the failure
C of the Central Government to consider the said Representation, the
respondents have preferred an application under Section 340 of the
-
Code of Criminal Procedure, 1973 for prosecution of the persons
responsible for forging the document purporting to be the alleged
Representation made by the detenu under Section 8( 4" of the Act and
for making certain interpolations in the Dak Register kept at the
D Rashtrapati Bhavan. The respondents have placed sufficient material
before the Court to show that the alleged Representation addressed to
the President of India was neither filed by the detenu nor was it re-
ceived at the President's Secretariat on April, 15, 1986. The respon-
dent have placed on record the correspondence that passed between
the Ministry of Finance, Department of Revenue and the President's
E Secretariat. They have also produced for our perusal the original Dak
Register kept at the Rashtrapati Bhawan. 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 'y
F the violation of Section 11 of the Act by the Central Government is a
well planned and ingenuous move on the part of the detenu. We are
not only deeply shocked by the daring attempt of the detenu to fabri-
cate 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
G 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 15 .4.1986. Before
H enumerating the suspicious features it has to be borne in mind that the
PUSHPADEVI v. M.L. WADHAVAN 81
-f. detenu is not a rustic or an uneducated person or a man of no means. A
On the other hand he is a man of great affluence, having dealings in
this country as well as in countries overseas and, therefore, having the
means to secure the services of astute and enlightened counsel in the
country. He cannot, therefore, take umbrage for his actions on
grounds such as lack of knowledge or want of funds or ignorance of
law. Now coming to the details. The representation said to have been B
made was not addressed to the Government of India which is the
authority to consider the representation but to the President. Be that
as it may, the representation signed in Bombay could have been sent
by registered post/acknowledgement due to the President's Secretariat
- but instead it is said to have been brought by a messenger from
Bombay to New Delhi. The said messenger does not present the re-
presentation at the President's Secretariat but he is said to have
C
handed it over to one Ashok Jain and the said Ashok Jain is said to
have delivered the representation at the President's Secretariat. As
per the affidavit filed by Shri K.C. Singh, Deputy Secretary to the
President, President's Secretariat, a visitor coming with a petition to
the Rashtrapati Bhavan has first to approach the Reception and then D
he is given a printed pass and sent with an escort to the Central
y Registry and after he delivers the letter he will be escorted back to the
Reception to return his pass and then leave the building. Ashok Jain in
his affidavit has categorically stated that he went to the Rashtrapati
Bhavan at "roughly about 6.00 P.M." and a person at the Reception
- directed a peon to show him the Central Registry, that no one
enquired him about his name or issued him any pass and that he went
to the Central Registry as pointed out by the peon and delivered a
sealed envelope and obtained an endorsement of acknowledgement on
the xerox copy of the representation. In view of the conflicting
E
affidavit, there is room for inference that either Ashok Jain did not
personally go and deliver the sealed envelope at the President's F
Secretariat or that he was able to wield influence to such an extent as
to be taken to the Central Registry without the procedural require-
ment of every visitor being issued a pass being observed in his case. It
also surpasses our comprehension how an endorsement of acknow-
ledgement could have been made on a xerox copy of the alleged
representation when the original of the representation is said to have G
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 acknowledgement does not contain the signature or H
82 SUPREME COURT REPORTS [1987] 3 S.C.R.
A
initials of the Receiving Officer, but strangely it contains a Dak
Number, "Dy. No. 20 date 15.4.1986". Shri K.C. Singh has set out in
+
his affidavit the procedure to be followed when letters and open peti-
tions 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
B President's Secretariat, which was produced before us in a sealed
cover, contains tell-tale features of a startling nature revealing a plan-
ned attempt, but very clumsily executed, to somehow interpolate an
entry in the Dak Register to make it appear that an envelope contain-
ing the alleged representation had been presented at the President's
Secretariat. For our present purposes, it is not necessary to give a
graphic account of the manipulations made in the Register and it will
c suffice if we refer only to the broad features. The bottom portion of
the page has been torn off, obviously with a view to obliterate some
entry made therein. The entry relating to the alleged representation of
the detenu has been interpolated between one entry dated 15.4 and
another entry dated 16.4. but in order to fit in the serial number, the
D entry relating to the representation has first been noted as 20(A), then
the letter A has been smudged and the entry dated 16.4 has been made
20( A) instead of 20. The entry pertaining to the representation is in
different handwriting and ink. Shri K.C. Singh in his affidavit has
stated that "this office is enquiring into the circumstances under which
f-
the entry came to be inserted in the Oak Register meant only for
E unopened letters addressed to the President by name."
All these things not only warrant an inference that the detenu ·-...1(
and his associates have gone to deplorable lengths to create evidence
favourable to the detenu but arouse convulsive thoughts in our minds
about the efficiency and integrity of the concerned sections of the
F President's Secretariat. We are constrained to give expression to our
feelings of anguish by means of these observations because at the level
of the President's Secretariat every section of the Secretariat is
expected to observe the highest standards of morality, integrity and
efficiency. The ease with which and the fascile manner in which the
detenu 's agent Ashok Jain claims to have entered the President's
G Secretariat and delivered the Oak and obtained an endorsement of
acknowledgement in a copy of the representation and the length to
which the concerned Secretariat staff have gone to give credence to the
version of Ashok Jain not only reveals the deep fall in standards but
also the lack of security and vigilance.
H We feel fully persuaded to hold that this is a fit case in which the
PUSHPADEVJ v. M.L. WADHAVAN 83
detenu, his wife (petitioner herein), Ashok Jain and all other persons A
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 Procedure, 1973 by the Union of India at this
stage because of the fact the Central Bureau of Investigation is said to
be engaged in making a thorough investigation of the matter so that B
)..
suitable action could be taken against all the perpetrators of the
fraudulent acts and the offences. As such the launching of any pro-
secution 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 C
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 a
high degree of vigilance, care and concern. Consequently, while mak- D
ing known our opinion of the matter for action being taken under
r Section 340 of the Code of the Criminal Procedure we defer the pas-
sing of final orders on the application under Section 340 till the investi·
gation by the Central Bureau of Investigation is completed. The
respondents are permitted to move the Court for final orders in
- ~
accordance with our directions.
Accordingly, the special leave petition and the writ petition are
dismissed with costs.
E
H.L.C. Petitions dismissed.
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