Holding

The COFEPOSA detention order was set aside as it was passed for a wrong purpose and on vague, extraneous and irrelevant grounds.

Summary

Rajinder Arora, an export‑house industrialist, was raided by the Directorate of Revenue Intelligence on 26 May 2004 and detained, during which he alleged torture and coerced statements under Section 108 of the Customs Act. No prosecution was filed within the statutory 60‑day period, no show‑cause notice was issued, and a redemption certificate was later granted. After a prolonged, unexplained delay, a detention order under the COFEPOSA Act was issued on 31 March 2005. The Punjab and Haryana High Court dismissed his writ petition, but the Supreme Court held that the order was passed for a wrong purpose, on vague and extraneous grounds, and without considering a crucial status report, thereby violating the limited grounds on which pre‑execution detention orders may be interfered with. Consequently, the detention order was set aside.

Issues considered

Whether the COFEPOSA detention order was valid despite the long, unexplained delay.
Whether the order was passed for a wrong purpose or on vague, extraneous grounds.
Whether the failure to lodge prosecution, issue a show‑cause notice, or consider the status report renders the detention order unsustainable.

Legislation cited

Subjects

preventive detentionCOFEPOSAdelay in detention orderwrong purposeextraneous groundsstatus reportredemption certificatecustoms dutytorture allegationpre‑execution judicial review

Judgment

RAJINDER ARORA A
v.
UNION OF INDIA AND ORS.

MARCH I 0, 2006

[S.B. SINHA AND P.K. BALASUBRAMANYAN, JJ.] B

Conservation of Foreign Exchange and Prevention of Smuggling
Activities Act, 1974-Detention order-Interference with. at pre-execution
stage-Scope of-Utilization of unlawful import-Raid conducted, detention C
order passed after 10 months and no explanation for the delay-Status report
not taken into consideration by Customs Authorities-No prosecution lodged
by Statutory Authorities against the person concerned, also non-issuance of
show cause notice-Thus, detention order was passed for a wrong purpose
and was on vague, extraneous and irrelevant grounds, as such not sustainable
and set aside-Foreign Trade Development and Regulation Act, 1994. D
It is alleged that the appellant was engaged in the utilization of
unlawful import. On 26.05.2004, Directorate of Revenue Intelligence (DRI)
conducted raid in appellant's residence and he was taken in custody. He
was allegedly tortured and 'his statements were recorded under coercion.
Appellant was arrested on 28.05.2004 and was remanded to judicial E
custody where he retracted his confession. Appellant was under treatment
for 45 days out of the total period of 60 days of judicial remand.
Thereafter, appellant was enlarged on biiil since the DRI Department
failed to file complaint against the appellant within the statutory period.
In the meanwhile, his family members were forced to deposit a sum of F
Rs. 60 lakhs as customs duty. Appellant then filed a criminal complaint
against DRI alleging torture. However, on 31.3.2005, detention order was
issued against the appellant under COFEPOSA. High Court dismissed the
writ petition praying for quashing of the order of detention. Hence, the
present appeal.
G
Allowing the appeal, the Court

HELD: I.I. The authorities in terms of sections 9(4), 10 and 11 of
the Foreign Trade Development and Regulation Act, 1994 exercise a wide
jurisdictiM. Although the raid was made on 26.05.2004, till date no matter
9 H
10 SUPREME COURT REPORTS [2006) 3 S.C.R.

A has been brought on record to lodge prosecution against the appellant by
DGFT. Also the statutory authorities have not yet issued any show cause
notice on the appellant on the ground that the export commitments were
not fulfilled. Further, the respondent gave no explanation nor any reason
whatsoever as to why the order of detention had been issued after such a
B long time. The authorities did not examine the said question before issuing
the order of detention. Furthermore, the status report called for from the
Customs Department has not been taken into consideration by the
competent authorities. Also the Authorities had granted redemption
certificates. (13-F-G; 17-A, H; 18-AI

C 1.2. Having regard to the aforementioned findings, the order of
detention was passed for a wrong purpose, and was passed on vague,
extraneous and irrelevant grounds, thus, it is set aside. [14-CI
l-
Additional Secretary to the Government of India and Ors. v. Smt. Atka
Subhash Gadia and Anr., (19921 Supp 1 SCC 496; T.D. Abdul Rahman v.
D State of Kera/a and Ors.. AIR (1990) SC 225 and KS. Nagamuthu v. State
of Tamil Nadu and Ors .. (2005) 9 SCALE 534, relied on.

Naresh Kumar Goyal v. Union of India and Ors .. [20051 8 SCC 276,
referred to.

E CRIMINAL APPELLATE JURISDICTION : Criminal Appeal No. 311
of 2006.

From the final Order dated 6.9.2005 of the Punjab and Haryana High
Court in Criminal Writ Petition No. 303/2005.

F Mukul Rohtagi, Uday U. Lalit, Ms. Aprajat Singh, A. Sannad, Vikram
Choudhary and Mohanprasad Meharia for the Respondents.

The Judgment of the Court was delivered by

S.B. SINHA, J. Leave granted.
G
The Appellant is an industrialist. He manufactures acrylic yam, blankets
and shawls. The said goods are exportable items. The units of the Appellant
are recognized export houses. They were awarded the highest export
performance Awards by Wool and Woolen Export Promotion Council for
manufacture of the aforementioned goods. The Appellant imported some raw
H materials on the premise that the imported items would be utilized for
RAJINDER ARORA v. U.0.1. [SINHA, J.] 11
manufacture of the goods which were meant for export. A raid was conducted A
in his residence on 26.05.2004 by the Directorate of Revenue Intelligence
(DR!) and he was taken in custody. He allegedly was continuously tortured
for two days. During his detention statements under Section 108 of the Customs
Act were recorded allegedly under coercion, duress and threat. He was shown
arrested on 28.05.2004 and produced before a Magistrate. He was medically B
examined whereupon marks of multiple injuries on his person were found.
After he was remanded to judicial custody by the Magistrate by an order
dated 28.5.2004, he retracted his alleged confession stating that the same had
been obtained under coercion, duress and torture. He remained under treatment
for 45 days out of the total period of 60 days of his judicial remand (the
requisite statutory period for filing a complaint). Upon failure on the part of C
the DR! Department to file a complaint against the Appellant within the
statutory period of 60 days, he was enlarged on bail on 28.7.2004. In the
meanwhile, his family members were forced to deposit a sum of Rs.60 lakhs
as customs duty. Such deposit, however, was made without prejudice to the
rights and contentions of the Appellant. Several representations were made
by the Appellant stating the aforesaid facts. D
He filed a criminal complaint on 18.02.2005. The Medical Officer
concerned was examined in the said proceeding wherein he stated:

"On 28.05.2004 at 8.40 PM I examined physically Sh. Rajinder Arora
vide my emergency OPD No. 6607104. Patient was brought to me by E
Mr. R.K. Saini, Intelligence Officer, ORI, Ludhiana Regional Unit. I
found following injuries on the person of Rajinder Arora who is
present today:

I. Multiple abrasions, superficial, in an area of 4 inch x 2 inch over
mid of left upper arm, antero laterally. Patient also complaint of F
heaviness in chest. His B.P. was 150/106 mm Hg.

In my opinion, duration of injury was about 24 hours. I have seen the
certified copy of injury report which is correct according to original
report and is Ex. CW2/I, which is signed by me. When Rajinder G
Arora was brought to me he was under the custody of ORA
authorities."

In the meanwhile, a proposal was forwarded to the DRI, Delhi Zonal
Unit, Delhi for his detention under COFEPOSA. A proposal was also sent to
COFEPOSA Unit by the said authority. Allegedly, on 15.2.2005, the ORI H
12 SUPREME COURT REPORTS [2006) 3 S.C.R.

A Ludhiana opined that no case has been made out for his detention under
COFEPOSA. A proposal, however, was made by the said authorities for
determination of detention of Shital Vij, who was said to be the brain behind
utilization of the unlawful import.

Only on 31.3.2005, the order of detention was issued.

--
B
A writ petition was filed by the Appellant herein before the High Court
of Punjab and Haryana praying for quashing of the said order of detention.
By reason of the impugned order, the writ petition has been dismissed. The
Appellant is, thus, in appeal before us.

C The High Court in his impugned judgment opined:

(i) In the grounds of detention, the detaining authority had adverted
to all the evidences collected against the Appellant including his
statement under Section 108 of the Customs Act as also the
subsequent retraction.
D
(ii) The activities of the Appellant come within the purview of the
expression "smuggling" as defined in Section 2(39) of the
Customs Act read with Section 2(e) of the COFEPOSA Act.
(iii) Delay in issuing the order of detention is not fatal. Delay, per se,
cannot be a circumstance to set aside an order of detention.
E
(iv) The subjective satisfaction of the authority is based upon sufficient
material and is sufficient to warrant an order of preventive
detention.
(v) No discrimination has been committed as against the Appellant
F in not recommending Shital Vij's detention as its recommendation (

was rejected by the Screening Committee.
(vi) Only because a redemption certificate was issued by the concerned
authority, it cannot be presumed that the Appellant had discharged
his export obligations, without violation of the terms and
G conditions of his licences.
(vii) The complaint petition filed by the Appellant herein, contending
illegal detention and torture, by itself is not a ground for detracting
from the orders passed by the detaining authority as mere filing
of a criminal complaint would not lead to a conclusion that the
H order of detention was ma/a fide.
RAJ IN DER ARORA v. U.0.1. [SINHA. J.) 13
~
Mr. Uday U. Lalit, learned senior counsel appearing on behalf of the A
~~gell~r:)_l~ would. rai,~~..,t~.~ ~~!!?wing ~ontentions:

(i) Licences granted to the Appellant were allowed to be surrendered
by the competent authorities only after an objective assessment
was made in that behalf.:)
.

. (ii) The status report called for by the Customs Authorities from B
DGFT having not been considered, the detaining authority must
be held to have failed to take into consideration a relevant fact,
as therein it was opined that no case had been made out for
detention.

(iii) As the Appellant filed a complaint against the officer alleging
C·
illegal detention and torture meted out by him, the impugned
order of detention has been passed malafide.

(iv) The Appellant having deposited Rs.60 lakhs without prejudice to
his rights and contentions, and, thus, the imp~gned order of
detention having been made for unauthorized purpose, was mala D
fide. Had there been any material before the appropriate authority,
they would have lodged a complaint against the Appellant.

(v) There was absolutely no reason as to why such a Jong time was
taken for passing the order of detention.
E
Mr. K. Radhakrishnan, learned senior counsel appearing on behalf of
the Respondent, on the other hand, relying on or on the basis of the findings
of the High Court, as noticed supra, would support the order of detention.

It is not in dispute that the authorities in terms of Sections 9(4), IO and
I I of the Foreign Trade Development and Regulation Act, 1994 exercise a F
wide jurisdiction. Although the raid was made on 26.05.2004, admittedly, till
date, no prosecution has been lodged as against the Appellant by DGFT. It
is also not in dispute that the statutory authorities has not yet issued any show
cause notice on the Appellant on the ground that the export commitments
were not fulfilled. It is furthermore not in dispute that the authorities had G
granted redemption certificates.

A pre-detention order can be quashed only on a limited ground. This
C~ in Additional Secretary to the Government of India and Ors. v. Smt.
Alka Subhash Gadia and Anr.. [1992] Supp I SCC 496 laid down the criterias
therefor upon a detailed consideration of the provisions of the Preventive H
14 SUPREME COURT REPORTS [2006] 3 S.C.R.

A Detention Laws and the right of individual to assail an order of detention
without surrendering in the following tenns:

" ... Thirdly, and this is more important, it is not correct to say that the
courts have no power to entertain grievances against any detention
order prior to its execution. The courts have the necessary power and
B they have used it in proper cases as has been pointed out above,
although such cases have been few and the grounds on which the
courts have interfered with them at the pre-execution sta..:_e are
necessarily very limited in scope and number, viz., where the courts
are prima facie satisfied (i) that the impugned order is not passed
under the Act under which it is purpo~ed to have been passed, (ii)
c that it is sought to be executed against a wrong person, (iii) that it is
passed for a wrong purpose, (iv) that it is passed on vague, extraneous
and irrelevant grounds or (v) that the authority which passed it had
no authority to do so. The refusal by the courts to use their
extraordinary powers of judicial review to interfere with the detention
-
D orders prior to their execution on any other ground does not amount
to the abandonment of the said power or to their denial to the proposed
detenu, but prevents their abuse and the perversion of the law in
question."

Recently a 3-Judge Bench of this Court in Naresh Kumar Goyal v.
E Union of India and Ors., (2005] 8 SCC 276 (in which one of us P.K.
Balasubramanyan, J. was a member), opined:

"'It is trite law that an order of detention is not a curative or refonnative
or punitive action, but a preventive action, avowed object of which
being to prevent the anti-social and subversive elements from
F imperiling the welfare of the country or the security of the nation or '
from disturbing the public tranquility or from indulging in smuggling
activities or from engaging in illicit traffic in narcotic drugs and
psychotropic substances etc. Preventive detention is devised to afford
protection to society. The authorities on the subject have consistently
G taken the view that preventive detention is devised to afford protection
to society. The object is not to punish a man for having done something
but to intercept before he does it, and to prevent him from doing s~ - T
It, therefore, becomes imperative on the part of the detaining aut~ity
as well as the executing authority to be very vigilant and keep their
---
eyes skinned but not to tum a blind eye in securing the detenue and
H executing the detention order because any indifferent attitude on the
RAJINDER ARORA v. U.0.1. [SINHA. J.] 15
part of the detaining authority or executing authority will defeat the A
very purpose of preventive action and turn the detention order as a
dead letter and frustrate the erttire proceedings. Inordinate delay, for
which no adequate explanation is furnished, led to the assumption
that the live and proximate link between the grounds of detention and
the purpose of detention is snapped. (See : P. U Iqbal v. Union of B
India and Ors.,; Ashok Kumar v. Delhi Administration, and Bhawarlal
Ganeshmalji v. State of Tamilnadu)"

In that case, however, the order of detention had not been implemented
for a long time and having considered Atka Subhash Gadia (supra) and
several other decisions, it was held:
c
"Coming to the facts of this case, at the highest the case of the
appellant is that the order of detention was belatedly passed and the
State of Bihar thereafter took no steps whatsoever to implement the
order of detention. Counsel for the appellant sought to bring this case
under the third exception enumerated in Alka Subhash Gadia (supra), D
namely, that the order was passed for a wrong purpose. In the facts
and circumstances of this case, it is not possible to accept the
submission that the order was passed for a wrong purpose. Apparently
the order has been passed with a view to prevent the appellant from
smuggling goods or abetting the smuggling thereof etc. The facts of
the present case are no different from the facts in Muneesh Suneja E
(supra). We do not find that the case falls within any of the exceptions
enumerated in Atka Subhash Gadia (supra). The High Court was,
therefore, justified in refusing to exercise jurisdiction under Article
226 of the Constitution of India to quash the order of detention at the
pre-arrest stage. This appeal is, therefore, devoid of merit and is p
dismissed."

Mr. Lalit, however, is not correct in his submissions that only because
a redemption certificate had been granted by DGFT, the same would itself be
sufficient for quashing an order of detention as the activities of smuggling on
the part of the importer may come to their notice at a later part of time. G
We may, however, notice that the Appellant has categorically stated
\
that a status report was submitted by the Respondent No. 3 to the DRJ, Delhi
on their request but the same had not been placed befote the detaining
authority.
H
16 SUPREME COUR I REPORTS [2006] 3 S.C.R.

A In Ground •U' of the SLP filed by the Appellant, herein, it is stated:

"Because the High Court has failed to appreciate that, as per the
knowledge of the petitioner, the respondent No. 3 submitted the status
report of the present case vide its letter dated 15.02.2005 to the DRI
Delhi on their request which was not placed before the detaining
B authority the respondent No. 2 herein. As per the knowledge of the
petitioner, the status report had negated the passing of the order of
detention. This status report/ letter has been deliberately withheld
with a malafide intention. It is a settled law that the non-production
of relevant and vital documents before the detaining authority renders
the detention order invalid."
c
The said pleas raised by the Appellant has been traversed by the
Respondent in the following terms:

"'In reply to the contents of Para U, it is submitted that the status
report dated 15.2.2005 is an internal correspondence of the department
D and has not been relied upon in the detention orders dated 31.03.2005
and hence are not required to be served upon the petitioner."

It is, however, not in dispute that although the raid was conducted on
26.05.2004, no material had been brought on record for even launching a
E prosecution as against the Appellant as yet. When the aforementioned question
was raised by the Appellant, herein before the High Court, the Respondent
contended that the prosecution would be launched soon. But, when the same
point was raised before us, the Respondents in their counter affidavit merely
stated:

F "(00) In reply to the contents of para 00, it is submitted that the
Show Cause Notice in the matter has been drafted and is being issued
shortly. Complaint in the matter will be filed only after adjudication.
However, detention under the COFEPOSA Act 1974 is not a punitive
action and is preventive in nature. Prevention detention under
COFEPOSA Act 1s independent of adjudication and prosecution
G proceedings."

The said counter affidavit has been affirmed in November, 2005. It is f

beyond anybody's comprehension as to why despite a long passage of time,
the Respondents huve not been able to gather any material to lodge a complaint
against the Appellant. It has furthermore not in dispute that even the DGFT
H authorities have not issued any show cause notice in exercise of their power
RAJINDER ARORA v. U.O.l. [SINHA, J.] 17
under Foreign Trade Development and Regulation Act, 1994. A
Furthermore no explanation whatsoever has been offered by the
Respondent as to why the order of detention has been issued after such a long
time. The said question has also not been examined by the authorities before
issuing the order of detention.
B

- The question as regard delay in issuing the order of detention has been
held to be a valid ground for quashing an order of detention by this Court
in T.D. Abdul Rahman v. State of Kera/a and Ors., AIR (1990) SC 225
stating:

"The conspectus of the above decisions can be summarised thus: The C
question whether the prejudicial activities of a person necessitating to
pass an order of detention is proximate to the time when the order is
made or the live-link between the prejudicial activities and the purpose
of detention is snapped depends on the facts and circumstances of
each case. No hard and fast rule can be precisely formulated that D
would be applicable under all circumstances and no exhaustive
guidelines can be laid down in that behalf. It follows that the test of
proximity is not a rigid or mechanical test by merely counting number
of months between the offending acts and the order of detention.
However, when there is undue and long delay between the prejudicial
activities and the passing of detention order, the court has to scrutinise E
whether the detaining authority has satisfactorily examined such a
delay and afforded a tenable and reasonable explanation as to why
such a delay has occasioned, when called upon to answer and further
the court has to investigate whether the causal connection has been
broken in the circumstances of each case. Similarly when there is F
unsatisfactory and unexplained delay between the date of order of
detention and the date of securing the arrest of the detenu, such a
delay would throw considerable doubt on the genuineness of the
subjective satisfaction of the detaining authority leading to a legitimate
inference that the detaining authority was not really and genuinely
satisfied as regards the necessity for detaining the detenu with a view G
to preventing him from acting in a prejudicial manner."

_, The delay caused in this case in issuing the order of detention has not
been explained. In fact, no reason in that behalf whatsoever has been assigned
at all.
H
18 SUPREME COURT REPORTS (2006] 3 S.C.R.

A Admittedly, furthennore, the status report called for from the Customs
Department has not been taken into consideration by the competent authorities.

A Division Bench of this Court in K.S. Ni:zgamuthu v. State of Tamil
-
Nadu & Ors., (2005) 9 SCALE 534 struck down an order of detention on the
ground that the relevant material had been withheld from the detaining
B authority; which in that case was a letter of the detenu retracting from
confession made by him.

Having regard to the findings aforementioned, we are of the opinion
that grounds (iii) and (iv) of the decision of this Court in Alka Subhash Gadia
C (supra) are attracted in the instant case.

For the reasons aforementioned, the impugned order of detention cannot
be sustained, which is set aside accordingly. The appeal is allowed.

N.J. Appeal allowed.

--

f._