Supreme Court of India
UNION OF INDIA AND ORS.versusMOHAN LAL LIKUMAL PUNJABI AND ORS.
- Citation
- 2004 INSC 116
- Decided
- 17 February 2004
- Disposal
- Case Partly allowed
- Bench
- DORAISWAMY RAJU
Holding
The first proviso of SAFEMA does not apply because the COFEPOSA detention order was revoked under Section 11(l)(b) and not on the Advisory Board's report, and a subsequent writ petition challenging the detention order is maintainable.
Summary
The Union of India appealed against a Bombay High Court order that set aside a forfeiture order under the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 (SAFEMA) on the ground that the first proviso of Section 2(2)(b) rendered the proceedings non est after the detention order under the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (COFEPOSA) was revoked. The Supreme Court held that the proviso applies only when revocation is effected on the report of the Advisory Board under Section 8 of COFEPOSA, which was not the case here as the revocation was under Section 11(l)(b). Consequently, the proviso did not apply and the forfeiture proceedings remained valid. The Court also ruled that a subsequent writ petition challenging the detention order is maintainable despite the earlier petition becoming infructuous, rejecting the contention of estoppel by counsel’s concession. The High Court judgment was set aside and the matter remitted for fresh adjudication on the legality of the detention order. The appeal was partly allowed.
Issues considered
- The applicability of the first proviso to clause (b) of sub‑section (2) of Section 2 of SAFEMA when a COFEPOSA detention order is revoked under Section 11(l)(b) and not on the Advisory Board's report.
- Whether a writ petition challenging the legality of a detention order can be filed after an earlier petition has become infructuous.
- Whether the High Court's finding that the forfeiture proceedings were non est is legally sustainable.
Legislation cited
- Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974s. 11(l)(b), s. 12A, s. 3, s. 8, s. 9
- General Clauses Act, 1897s. 21
- Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976s. 2(2)(b) proviso (i), s. 6(1), s. 7
Subjects
SAFEMACOFEPOSAforfeiture of propertydetention orderAdvisory Boardrevocationwrit petitionestoppelstatutory interpretation
Judgment
A UNION OF INDIA AND ORS.
v.
--
MOHAN LAL LIKUMAL PUNJABI AND ORS.
FEBRUARY 17, 2004
B [DORAISWAMY RAJU AND ARIJIT PASAYAT, JJ.]
...........
Smugglers and Foreign Exchange Manipulators (Forfeiture ofProperty)
Act, 1976-Section 2(2)(b) proviso (i)-Applicability of-Would not apply
where any of the three conditions mentioned in.first proviso are not satisfied-
c Detention order passed on 24. 5.1994-Revocation order of detention passed
by Central Government not on the basis of report of the Advisory Board-
Held, proviso (i) not attracted-Forfeiture of property not illegal on that
basis.
D Conservation of F<?reign Exchange and Prevention of Smuggling
Activities Act, 1974-Sections 3 and I I-Detention order-Challenge t~
Detenue challenging order of detention-Central Government revoking order
of detention-Consequential action taken against detenue under other Act-
Detenue challenging the order ofdetention on merit again-Held, permissible.
E Orders of detention of the respondents were passed on 24.5.1994
under the provisions of Section 3(1) of the Conservation of Foreign
Exchange and Prevention of Smuggling Activities Act, 1974 (COFEPOSA).
Subsequently, proceedings were initiated on 12.10.1994 for forfeiture of
- )<
the property of the respondents under Section 6(1) of the Smugglers and
Foreign Exchange ManipuJators (Forfeiture of Property) Act, 1976
F (SAFEMA). The respondents challenged the orders of detentions under
COFEPOSA by filing writ petitions. Ultimately, on 19.12.1994, the Central
Government, in exercise of its powers under Section ll(l)(b) of
COFEPOSA, revoked the orders of detention of the respondents. On
revocation of the detention orders, the writ petitions filed by the
G respondents were disposed of as having become infructuous.
On 31.8.1995, the Competent Authority under SAFEMA directed
that the properties of the respondents should be forfeited under Section 7
H
of SAFEMA. The respondents challenged the order of forfeiture before
the Tribunal constituted under SAFEMA. Thereafter, the respondents filed
468
-
- UNION OF INDIA v. MOHANLAL L!KUMAL PUNJABI
writ petitions challenging both the orders of drtention as also the order
of forfeiture. The High Court, relying upon the order revoking detention
469
A
of the respondents under COFEPOSA, allowed the writ petitions filed by
the respondents .. The High Court held that in view of the first proviso to
Section 2 (2) (b) of SAFEMA, the proceedings initiated under SAFEMA
had become non est after the revocation of the orders of detention.
- The appellant filed appeal before the Court against the order of the
High Court and contended, inter alia, that the first proviso to Section 2
(2) (b) of SAFEMA had no application in the facts of the case as there
B
was no revocation under COFEPOSA before the receipt of the report of
the Advisory Board or before making reference to the Advisory Board. C
The appellant also contented that it was not open to the respondents to
challenge the legality of the orders ~f detention after the first writ petitions
filed by them had been disposed of as having become infructuous. The
respondents contended, inter alia, that the counsel for the appellant had
conceded before the High Court that the first proviso to Section 2 (2) (b)
of SAFEMA was applicable in the present case and therefore, it was not D
open to the appellant to contend otherwise before the Court.
Partly allowing the appeal, the Court
HELD: 1.1. The concession, if any, made by the counsel for the
appellant before the High Court is really of no consequence, because the E
wrong concession made by the counsel cannot bind the parties when
statutory provisions clearly provided otherwise. The courts are not to act
on the basis of concession but with reference to applicable provisions. The
applicability of the statute or otherwise to a given situation or the question
of statutory liability of person/institution under any provision of law would F
invariably depend upon the scope and meaning of the provisions concerned
and has got to be adjudged not on any concession made. Any such
concession would have no acceptability or relevance while determining
rights and liabilities incurred or acquired in view of the axiomatic
principle, without exception, that there can be no estoppel against statute.
[473-D-E; 474-C-D) 'G
- Sanjeev Coke Manufacturing Company v. Mis Bharat Coking Coal
Limited, (1983] 1 SCC 147; Central Council for Research in Ayurveda &
Siddha and Anr. v. Dr. K. Santhakumari, [2001] 5 SCC 60 and Uptron (India)
Ltd. v. Shammi Bhan and Anr., [1998] 6 SCC 538, referred to.
H
A
470 SUPREME COURT REPORTS [2004] 2 S.C.R.
2.1. The first proviso to clause (b) of sub-section (2) of Section 2 deals
with three situations, when the exception provided by the proviso can
--
operate. The situations are (1) when orders of revocation is on the report
of the Advisory Board under Section 8, or (2) before the receipt of the
report of the Advisory Board, or (3) before making a reference to the
B Advisory Board. (475-G)
2.2. As the factual position goes to show, the revocation was only in
terms of Section 1l(l)(b) of COFEPOSA. Such revocation when is done
by the Central Government as in this case is really unrelated to_ a report
of the Advisory Board. The revocation under Sectio~ 8 was not done before
c the receipt of the report of the Advisory Board and was also not revoked
before making a reference to the Advisory Board. On the factual position,
none of the three situations indicated in the first sub-clause of the said
proviso are applicable. (476-G)
2.3. The inevitable position is, therefore, crystal clear that the first
D proviso to clause (b) of sub-section (2) of Section 2 of SAFEMA had no
application to the facts of the case as held by the High Court. To that extent
the judgement of the High Court is indefensible and is set aside. (477-A)
3. The submission that the order of detention could not be challenged
subsequent to the disposal of the earlier writ petition on the ground that
E it had become infructuous, is one made in disregard of the view taken by
the Court and does not call for any further or fresh look or consideration.
The view taken by the Court is not only just and reasonable but quite in
conformity with the basic tenets of Rule of Law. It has been held by the
Court that the subsequent writ petition is maintainable. Otherwise it would
F amount to the government concerned being allowed/enabled to by their
action disable and denude the person aggrieved from questioning the very
applicability of SAFEMA to him or his properties de hors his other rights
to challenge the same otherwise on merits as well. In any event, this aspect
as to the legality and validity of the order of detention does not appear to
have been considered and decided on merits by the High Court. The matter
G is therefore remitted back to the High Court for fresh adjudication on
merits as to the legality and validity of the orders of detention, for the
purpose of applying the provisions of SAFEMA against the respondents
or the properties concerned. [477-B-F]
Competent Authority, Ahmedabad v. Amritlal Chandmal Jain, (1998) 1
H SCC 615; Karimben K. Bagad v. State of Gujarat and Ors., [1998) 6 SCC
-- UNION .OF INDIA v. MOHANLAL LIKUMAL PUNJABI [PASAYAT,J.)
264 and Attorney General for India and Ors. v. Amratlal Prajivandas and
Ors., (1994) 5 SCC 54, referred to.
471
A
CRIMINAL APPELLATE JURISDICTION : Criminal Appeal No.
l 024-1025 of 1997.
From the Judgment and Order dated 13.6.96 of the Bombay High Court B
in Cr!. W.P.No. 1267 and 1268 of 1995.
M.L.Verma, Preetesh Kumar and B.V. Balramdas for the Appellant.
Huzefa Ahmadi, M.N. Shroff and Nakul Dewan for the Respondents.
c
S.S. Sinde for Ravi K. Adsure for State of Maharashtra.
The Judgment of the Court was delivered by
ARIJIT PASA YAT, J. Since the points involved in the criminal appeals
are identical, they are taken up together for disposal. D
Union of India questions legality of the judgments rendered by the
Division Bench of the Bombay High Court holding that order dated 31.8.199 5
passed· by the Competent Authority under Section 7 of the Smugglers and
Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 (in short
'the SAFEMA') against respondent nos. I and 2 was not sustainable in law. E
For coming to such conclusion, reference was made to orders dated J9th
December, 1994 passed under Section 1 l(l)(b) of the Conservation of Foreign
Exchange and Prevention of Smuggling Activities Act (in short 'the
COFEPOSA') revoking the order of detention and order dated ll.l.1995
passed in earlier writ petitions filed by 1espondent nos. l and 2. Reference F
was made to first proviso to Clause (b) of sub-·section (2) of Section 2 of
SAFEMA for holding that proceedings initiated under the said statute became
non est.
According to learned counsel for the appellant-Union the view taken by
the High Court is clearly untenable. On the facts of the case, first proviso to G
clause (b) of sub-section (2) had no application to the facts of the case. The
revocation of the order of detention was in exercise of power conferred under
Section l l(l)(b) of the COFEPOSA and not under Section 8 as stipulated in
the said provision. It is further submitted that the proceedings were initiated
by issuance of notice under Section 6(1) of the SAFEMA for forfeiture of
property on 12.10.1994. The orders of detention under Section 3(1) of H
472 SUPREME COURT REPORTS [2004] 2 S.C.R.
A COFEPOSA were passed on 24.5.1994. The orders of detention were
challenged by the respondents I and 2 in Writ petition nos. I 071 and I 072
of 1994. After the show-cause notice was issued in exercise of power under
Section 11 (l)(b) of the COFEPOSA, the Central Government revoked the
orders of detention on 19.12.1994 as indicated above. In view of the revocation ..
B of the orders of detention, the writ petitions were disposed ofon 11.01.1995.
By order dated 31.8.95, properties mentioned in the show-cause notice were
directed to be forfeited under Section 7 of SAFEMA. The order directing
forfeiture was challenged on merits before the Tribunal constituted under the
SAFEMA. Thereafter writ petitions were filed on 23.11.1995 cltallenging the
orders of detention and also challenging the order of forfeiture. The latter
C additional challenge was by way of amendment. By the impugned judgment
dated 13.6.1996 the High Court passed the impugned order in each case.
Learned senior counsel, for the Union of India further submitted that
the Tribunal did not consider that first proviso has no application to the facts
of the case. The order of detention was not revoked under Section 8 of
D SAFEMA but on the contrary under Section 1 l(l)(b) thereof. 'fhere was no
revocation before rec'!ipt of the report of the Advisory Board or before making
reference to the Advisory Board. Since the proceedings were initiated when
the order of detention was in force, and were brought to the logical end by
passing the order under Section 7 of SAFEMA, no illegality existed.
E It is further submitted that it was not open to the respondents to question
legality of the order of detention in the subsequent writ petition after the first
writ petition was disposed of as having been rendered infructuous. Reliance
was placed on Constitution Bench judgment of this Court in Attorney General
for India and Ors. v. Amratlal Prajivandas and Ors., [1994] 5 SCC 54, more
p particularly in paras 40, 41, 42 and 56 of the judgment.
In response, Mr. Huzefa Ahmadi, learned counsel for respondent nos.
I and 2, submitted that it is not open to the appellants to question correctness
of the judgment after there was concession before the High Court about
applicability of the proviso, and the absence of any scope for passing of any
G order under Section 7 of SAFEMA.
It was further submitted that even otherwise order under Section 11 ( 1)(b)
is clearly relatable to the report of the Advisory Board under Section 8 of
SAFEMA. Therefore, the proviso has application to the facts of the case. It,
however, could not be disputed by the learned counsel that in case the
H revocation is not under Section 8 of SAFEMA, the proviso would not have
UNION OF INDIA v. MOHANLAL LIKUMAL PUNJABI [PASAYAT,J.] 473
any application. It is submitted that when the earlier writ petition is rendered A
infructuous there is no bar on filing a fresh writ petition on merits to avert
the prejudice and damage caused on account of initiating proceedings under
SAFEMA. Strong reliance is placed on Competent Authority, Ahmedabad v.
Amritlal Chandmal Jain and Ors., [1998] 5 SCC 615 and Karimaben K.
Bagad v. State of Gujarat and Ors., [1998] 6 SCC 264.
B
We shall first deal with the effect of concession, if any, made by learned
counsel appearing for the present appellants before the High Court. Closer
reading of the High Court's order shows that the High Court took the view
- that in view of the revocation of the order on 19th December, 1994 and the
order passed by the High Court on 11th ·January, 1995, no further order could
have been passed under Section 7 of SAFEMA. After having expressed this
view, the so-called concession is recorded. In our view the concession, if
C
any, is really of no consequence, because the wrong concession made by a
counsel cannot bind the parties when statutory provisions clearly provided
otherwise. It was observed by Constitution Bench of this Court Sanjeev Coke
Manufacturing Company v. Mis Bharat Coking Coal Limited and Anr., [1983] D
I SCC 147 that courts are not to act on the basis of concession but with
reference to the applicable provisions. The view has been reiterated in [ 1988]
6 SCC 538 and Central Council for Research in Ayurveda & Siddha and Anr.
v. Dr. K. Santhakumari, [2001] 5 SCC 60. In para 12 of Central Council's
case (supra) it as observed as follows:
E
"In the instant case, the selection was made by the Departmental
Promotion Committee. The Committee must have considered all
relevant facts including the inter se merit and ability of the candidates
and prepared the select list on that basis. The respondent, though
senior in comparison to other candidates, secured a lower place in the F
select list, evidently because the principle of "merit-cum-seniority"
had been applied by the Departmental Promotion Committee. The
respondent has no grievance that there were any ma/a fides on the
part of the Departmental Promotion Committee. The only contention
urged by the respondent .is that the Departmental Promotion Committee
did not follow the principle of "seniority-cum-fitness". In the High G
Court, the appellants herein failed to point out that the promotion is
in respect of a "selection post" and the principle to be applied is
"merit-cum-seniority". Had the appellants pointed out the true position,
the learned Single Judge would not have granted relief in favour of
the respondent. If the learned counsel has made an admission or H
1'
474 SUPREME COURT REPORTS [2004) 2 S.C.R.
A concession inadvertently or under a mistaken impression of law, it is
not binding on his client and the same cannot enure to the benefit of
any party."
(Emphasis supplied)
B In Uptron (India) Ltd V. Shammi Bhan and Anr., [1998] 6 sec 538,
it was held that a case decided on the basis of wrong concession of a counsel
has no precedent value. That apart, the applicability of the statute or otherwise
to a given situation or the question of statutory liability of a person/institution
under any provision of law would invariably depend upon the scope and
meaning of the provisions concerned and has got to be adjudged not on any
C concession .made. Any such concessions would have no acceptability or
relevance whik determining rights and liabilities incurred or acquired in
view of the axiomatic principle, without exception, that there can be no
estoppel against statute.
D The respective stands on merits need careful consideration. Section
2(2) of SAFEMA, so far as relevant reads as follows:
"Application- (1) The provisions of this Act shall apply only to the
persons specified in sub-section (2).
(2) The persons referred to in sub-section (1) are the following
E namely:-
(a) every person -
(i) who has been convicted under the Sea Customs Act, 1878 (8 of
1878), or the Customs Act, 1962 (52 of 1962), of an offence in
F relation to goods of a value exceeding one lakh of rupees; or
(ii) wlio has been convicted under the Foreign Exchange Regulation
Act, 1947 (7 of 1947), or the Foreign Exchange Regulation Act,
1973 (46 of 1973), of an offence, the amount or value involved
in which exceeds one Iakh of rupees; or
G (iii) who having been convicted under the Sea Customs Act, 1878 (8
of 1878), or the Customs Act, 1962 (52 of 1962), has been
convicted subsequently under either of those Acts; or
(iv) who having been convicted under the Foreign Exchange
Regulation Act, 1947 (7 of 1947), or the Foreign Exchange
H Regulation Act, 1973 ( 46 of 1973), has been convicted
UNION OF INDIA v. MOHANLAL LIKUMAL PUNJABI [PASAYAT,J.] 475
subsequently under either of those Acts; A
(b) every person in respect of whom an order of detention has been
made under the Conservation of Foreign Exchange and Prevention
of Smuggling Activities Act, 1974 (52 of 1974):
Provided that -
B
(i) such order of detention, being an order to which the provisions
of Section 9 or section l 2A of the said Act do not apply, has not
been revoked on the report of the Advisory Board under Section
8 of the said Act or before the receipt of the report of the Advisory
Board or before making a reference to the Advisory Board; or C
(ii) such order of detention, being an order to which the provisions
of Section 9 or section l 2A of the said Act do not apply, has not
been revoked before the expiry of time for, or on the basis of the
review under sub-section (3) of Section 9, or on the report of the
Advisory Board under Section 8, read with sub-section (2) of D
Section 9, of the said Act; or
(iii) such order of detention, being an order to which the provisions
of Section 9 or section l 2A of the said Act do not apply, has not
been revoked before the expiry of time for, or on the basis of,
the first review under sub-section (3) of that Section, or on the E
basis of the report of the Advisory Board under Section 8, read
with sub-section (6) of Section 12A, of that Act; or
(iv) such order. of detention has not been set aside by a court of
competent jurisdiction.:
F
The first sub-clause of proviso to clause (b) of sub-section (2) of Section
2 deals with three situations, when the exceptions provided by the proviso
can operate. When the order of detention is one to which provisions of
Section 9 or Section l2(A) of the COFEPOSA do not apply, the situations
are (I) when orders ofrevocations on the report of the Advisory Board under
Section 8, or (2) before the receipt of the report of the Advisory Board, or G
(3) before making a reference to the Advisory Board.
The appellants have relied on a letter dated 22.2.1995 issued by the
Government of India, Ministry of Finance, Department of Revenue addressed
to the Competent Authority of SAFEMA indicating as follows: H
476 SUPREME COURT REPORTS [2004] 2 S.C.R.
A xxx xxx xxx
"The orders of detention were not revoked on the report of the
Advisory Board under Section 8 of the said Act or before the receipt
of the report of the Advisory Board or before making a reference to
the Advisory Board.
B
The representations of the detenus were considered by the Advisory
Board which did not accept them."
Additionally, in the counter affidavit filed before the High Court it was
cate'gorically stated that the revocation under Section 8 was not done before
C receipt of the report of the Advisory Board, and was not also revoked before
making a reference to the Advisory Board. The further contingencies which
arise when the situations envisaged in relation to the orders to which also
provisions of Section 9 of Section 12(A) of COFEPOSA do not apply, are
not relevant for the purpose of this case and are dealt with in sub clauses (ii)
D and (iii) of the proviso. The order of detention was also not quashed in any
judicial proceedings by a court of competent jurisdiction to attract sub-clause
(iv). Section I 1(1) of COFEPOSA reads as follows:
"11. Revocation of detention orders - ( l) Without prejudice to the
provisions of Section 21 of the General Clauses Act, 1897, a detention
E order may, at any time, be revoked or modified -
(a) notwithstanding that the order has been made by an officer of a
State Government, by that State Government or by the Central
Government;
(b) notwithstanding that the order has been made by an officer of
F
the Central Government, or by a State Government, by the Central
Government."
The first situation envisaged in sub-clause (i) of the proviso to clause
(b) of sub-section (2) of Section 2. SAFEMA applies when the revocation is
G based on the report of the Advisory Board. As the factual position noted
above goes to show, the revocation was only in terms of Section 11 (l )(b) of
COFEPOSA. Such revocation when is done by the Central Government as in
this case is really unrelated to a report of the Advisory Board. On the factual
position, none of the three situations indicated in the first sub-clause of the
H said proviso are applicable.
- UNION OF INDIA v. MOHANLAL LIKUMAL PUNJABI (PASAYAT,.1.] 477
The inevitable position is, therefore, crystal clear that the proviso to
clause (b) of sub-section (2) of Section 2 SAFEMA had no application to the
A
facts of the case as held by the High Court. To that extent the judgment of
the High Court is indefensible and is set aside.
That brings us to the residual question as to whether the order of
--- detention could be challenged subsequent to the disposal of the earlier writ
petition on the ground that it had become unfructuous. According to learned
counsel for appellants position has been settled beyond doubt that it is
B
impermissible in view of what has been stated in Attorney General's case.
...,... This submission deserves no serious consideration, being one made in disregard
of the view taken already by this Court. We find that the effect of said
decision was considered in the two decisions relied upon by learned counsel
c
~\ for respondent nos. 1 and 2. The view taken in Amritlal Chandmal Jain's
case (supra) and Karimaben K. Bagad's case (supra) does not call for any
~
further or fresh look or consideration - the same being not only just and
reasonable but quite in conformity with the basic tenets of Rule of Law but
commends for our respectful acceptance, as well. D
In both these cases, it was held that the subsequent writ petition is
maintainable and it should rightly be so having regard to the consequential
action taken at any rate under SAFEMA. Otherwise it would amount to the
Government concerned being allowed/enabled to by their action disable and
denude the person aggrieved from questioning the very applicability of E
SAFEMA to him or his properties de hors his other rights to challenge the
same otherwise on merits as well. In any event, this aspect as to the legality
and validity of the order of detention does not appear to have been considered
and decided on merits by the High Court. We, therefore, remit the matter
back to the High Court for fresh adjudication on merits as to the legality and F
validity of the orders of detention, for the purpose of applying the provisions
of SAFEMA against the respondents or the properties concerned.
Since the matter is pending for a long time, it would be appropriate and
in the interests of both parties as well, if the writ petitions are disposed of
accordi_ng to law after hearing parties within a period of six months from the G
date of judgment.
- Parties are directed to maintain status quo in respect of the properties
covered by the order under Section 7 of SAFEMA. The respondents 1 and
2 shall not transfer or in. any manner encumber the properties till the disposal
H
478 SUPREME COURT REPORTS [2004] 2 S.C.R.
A of the writ petitions. Similarly, the order under Section 7 of SAFEMA shall
not be given effect till the disposal of the writ petitions and its implementation
and enforcement would abide by the outcome of decision in the writ petition.
We make it clear that we are not expressing any opinion on of any of the
contentions regarding the respective stands taken by the parties by way of
B challenge made to the legality and validity of order of detention or proceedings/
orders passed on merits, except to the extent undertaken for setting aside the ·
order of the High Court and the reasons assigned therefor. -
The appeals are allowed to the extent indicated.
B.K.M. Appeals partly allowed.
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