Holding

The Supreme Court held that the petition is maintainable, the pending SAFEMA appeal does not bar the proceeding, the non‑supply of material documents invalidates the COFEPOSA detention, and consequently the SAFEMA forfeiture actions are unsustainable.

Summary

Haji Mastan Mirza was first detained under the Maintenance of Internal Security Act (MISA) and subsequently under the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1973 (COFEPOSA). A show‑cause notice under the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 (SAFEMA) led to an order forfeiting his and his relatives' properties. He filed a criminal application under Article 226 of the Constitution and CrPC s. 482 challenging the COFEPOSA detention order and the SAFEMA proceedings, alleging that he was never supplied with copies of the material documents on which his detention was based. The Bombay High Court held the detention order void for non‑supply of documents and declared the SAFEMA actions unsustainable. On appeal, the Supreme Court affirmed the High Court, holding that the writ petition was maintainable despite a pending SAFEMA appeal, that the failure to provide document copies vitiated the detention, and that a valid COFEPOSA detention order is a condition precedent to SAFEMA action. Consequently, the appeal was dismissed and the SAFEMA proceedings were struck down.

Issues considered

The maintainability of a petition under Article 226 and CrPC s. 48/482 when a related appeal under SAFEMA is pending.
Whether the pendency of an appeal under SAFEMA bars the present proceeding challenging the COFEPOSA detention order.
Whether the failure to supply copies of material documents cited in the grounds of detention vitiates detention under COFEPOSA.
Whether a COFEPOSA detention order that is void renders subsequent SAFEMA proceedings unsustainable.
Whether estoppel applies due to the respondent not challenging his COFEPOSA detention before release.

Legislation cited

Code of Criminal Procedures. 48, s. 482
Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1973s. 3(1), s. 5(1)
Constitution of Indias. Article 226
Maintenance of Internal Security Acts. 3(1)(c)
Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976s. 2(1), s. 2(2), s. 6(1), s. 7

Subjects

detentionCOFEPOSASAFEMAforfeiture of propertynon‑supply of documentsmaintainability of writestoppelemergency proclamationMISA

Judgment

.
'":\ •
1 A

UNION OF INPIA & O'fHERS
y,

#
HAJI MASTAN MIRZA B
-y·
February 23, 1984
<'

(S. MURTAZA FAZAL ALI, A. VARADARAJAN AND
RANGAJ;IATH MISRA, JJJ
c
. Smutgler; and Foreign ExchanKe Manipulators (Forefeiture· of Prop,rty)
-dct, 1976, Se~tions 2, 6 and 7 read with Section 3(1) of Conservation of Foreign
and Prevention of Smuggling Activities Act, 1973 Scope of-Whether an appeal
preferred and Pending under the Provision of SAFEMA, a bar for the maintain·
., ·ability ofa writ petition unaer Article ~26 4 the Constiiution chaUenglng. the
detention under COFEPOSA and for an Incidental prayer quashing the notice •
D
issued under SAFEMA P Non Supply of copies of mat,rlal documents based on
which a de~entlon order ;is pa!sed vitiates the detentfon and the explanation for
non sripply ·cannot be ~Ub$f/tute for the copies of the docuinent. '
•
Haji Mastan Mir .. war detained under Section 3(1) (c) of the Main.
tenanc~ of Inteinal Security Act, by order dated 17·9-1974. There was a formal
release of the respondent from, deten lion under the MISA on 19·!2·1974, hut 'E
., he was-immediately detained under, Section 3(1) of COFEPOSA by an order
· 'dited 19-12-1974 passed by the Minister of Finance of the Government of
ludia on the basis of the ma teriais placed before him ... by bis Joint Secretary.
The grounds of detention. were served on the respondent on 23-12·1974. A
deCJaration under Section 5(1) of COFEPOSA was served on him on 19-1-1976.
'Emersency. wa~ procJalrned throughout the country ~Y the President on
--~"{'<:
25-6'1975 and it continued to be in force until 21-3-1977o The respondent F
• was released on 23-3-1977 •

Founded on the detention of the respondent under the order dated
..., 19-12-1974, aftc,r issuing a show cause notice u/s 6(1) of SAFBMA' to the
respondent and his relatives and alleged associates, an order u/s 7 ofSAFBMA
was, passed f!Jrfeiting the properties ·of the refoondent and his rc1atives~
Appeals preferred by all but one are ,pending be ore the Appellate Tribunal G
. comtituted under that Act. The Misce!Jiineo,1.is Petition. No. 548/7-7 filed by
these affected parties challenging the vires·of certain previsions of COFEPOSA
and SAFEMA in the Bombay fliah Court are still pending.

A crjmial Application No. 780/1977 was filed by the respondent' under H
-~ Article 226 of the Constitution and under Section 482 of the Code of Criminal
Pro~edvre in t!>e jlombay Hi$h Court in April 1981, chal!en$iD$ the validity
. .

•I
r-

2 SUPREME COURT REPORTS . [1984] 3 s.c.R.
. .
A of the impugned Order of detention dated 19·12~1974 and the dec1aratidn
dated 18-1-1975 under COFEPOSA for holding that the action taken under
SAFE~IA is unsustainable. The High Court of Bombay, aCcepted the plea ·
that non sllpply of copiC:s of the material dccuments affected the making of

- . effectivC representation and thus held that thC act!on taken under Sections 6(1)
· and 7 of SAFBMA was invalid. The J-Iig;h Court restrained -the _appellants
from taking any actidn under SAFEMA based on the said order dated
B 19-12-1974. Hence the ~ppeal by special leave;

Dis~iSsing the appeal, the_ Court

• HELD :-1.2: The respondent's petiiion under Art. 226 of the Constitu..
• tion and S. 48.i of the Code of Criminal Procedure_ is m.lintainable. [6D]

C 1.2_, The pend~ncy of the appeal filed under the provisions of SAFEMA .
against the ofder for forfeiture of the respondent's properties made under the
provisions of that Act is not a bar to the pres~nt proc<!ding. [6A]

t.3 : The fact that the respondent did not challenge his det_ention. under
COFEPOSA before his release cannot operate as estoppel against his right,
·or moving the court for having the order Or detention ·quashed when that
D order was sought to be used as a basis for taking action against him under
ss. 6 and 7 of SAFEMA. The respondent was in detention under MiSA frotll
17-9-1974 to 19-12-1974 and thereafter under COFEPOSA until 23-3-1977.
Durini thC period of. his detention under. COFEPOSA from 19.;.1z..1974 to
23-3-19n proclamation of emer8:ency in the country was in force from 25-6-1975•
to --.21-3-1977. ·: Theiefore, "for a major part ·or the respondeht's detentio·n ·
E under COFEPOSA he could not move -any court of taW for redresS agaizist
his detention anci be was released on 23-3-1977 soon after the emergency was'
lifted on 21-3-1977. [6C; BJ

2.f: A re.ading of Se~io~ 6(1) Of SAFEMA would show· that actiori
under Sections 6 and 7 can be taken against only persons to whom that Act
applies, that is as specified in section 2(1). Sub-sectiOn 2 of secti6n 2 says that •
F the Act applies to every person. ill Jespect of whom an order for detention has
·been made under COFEPOSA provided that ·such order of detention has. not
been set aside by a court of GOmpetent jufisdiction. In the present.case action
bas been taken against the respondent under Sections 6(1J ~n_d _7 read Only
with Section 2(2) of the Act._ Therefore, a· valid order ot detention under
COFEPOSA 'is a conditiol) precedent to proceedings being ~aken ··under ..
Sections. 6 and 7 of SAFEMA. If the impugned order of detention dated
G ,19-.12-1974 is set aside for any reason~ the proceedings taken under _Sections (i
and 7 of SAFEMA cannot stand. [7G-H; SA]
2.2: Th~ failure to sUi)ply copies of documents referied to and relied
upon in the grounds of detention under COFEPOSA vitiates. the detention
-itself. as the detenu could - not make any effective representation in tho .
-absence of those doclljllents. [SE] ·
H
Gurdip Singh v. Union of India & Others, [l9S!] I.S.C.C. 419, referred to. -
2.3' The explanation. offere<,I throu¥h the co11nter-affidavit by the

{ ..
UNiON v. HAii MASTAN MIIUA (Varadafajan, J.) 3
detaining Authority for the non supply of the copies of ._the material docu-
ments cannot be a substitute for the copies of the documents. without which
the detenu coufd not have made any effective representation .against his
• dete11tion. [SD]

3. In the present case also copies of do.cuments which were indisputably
material documents and were referred to in the g~ounds of det~ntion were
admittedly not supplied to th; respondent. Therefore, the detention of the . B
respondent was bad in law and the ordtr,of detention could not ..be sustained
Consequently, action taken under Sections 6 and 7 of SAFEMA is baseles~·
and unsustainable in law. [SH ;'9A-B]

CRIMINAL APPELLATE 1URISDICTION;: Criminal Appeal.No. 3~
of 1982. C
Appeal by Special leave from. the 1udgment· and Order
dated the 20th/24th/25th November, 1981 of the Bombay High
Court in Criminal Application ·No. 780 of 1981.

K. G. Bhagat, Addi. Sol. General, N. C., Tal11kdar and D
Miss A. Subhashinl for, the Appellants. ··

Ram Jethamalani, M. G. Karma!, Madhu Patel, Shri Narain
Mathur, K. V. Desai and M/38 Rani Jethamalanl for the Respondent.
lbe Judgment of the Court was deli"vered by
E·
VARADARAJAN, ]. This appeal by.special leave is directed against
the judgment of the Bombay High Court in Criminal Application
No. 780of1981 filed by the respondent Haji Mastan Mirza, allow-
ing the criminal appeal and deelaring that the order of detention
·dated 19.12.11174 passed by the Minister of Finance, Government
of India under s. 3(1) of the Conservation of Foreign Exchange P·
• and Prevention of Smu~ing Activities Act, 1973, (COFEPOSA) is
illegal, nhll and void ab initio and inoperative, and quashing that
order as well as the declaration under s. 5(1) of the COFEPO§A
made on 18.1.1975 and also consequently quashing ·the notice.
under s. 6(1) and theorder made under s. 7 of the Smugglers and
Foreign Exchange Manipulators · (Forfeiture of Property) Act,
(SAFEMA) 1976 and restraining the appellant from taking any
action whatsover ·on the· basis of the order of detention dated
19.12.1974·.and the declaration dated 18.1.1975 were quashed by the
learned Judges of the High Court is that the respondent w.as not
served with copies of documents referred to and relied npoo in H
the i:rounds of detention' served on the respondent on 19.12. 1974 .
•

••
4 SUPREME COURT REPORTS · (1984] 3 s.c.R.
A An order dated 17.9.1974 was passed for detention of the
· respondent under s. 3(1)(c) of the Maintenance of Internal
S"ecuri!y Act (MISA) and the grounds of detention were served on
· him oh 23.9 ..1974 after he surrendered on 18.9.1974.· There was •
a formal release of the respondent from detention under the M!SA
on 19.12.1974, and he \vas immediately detained' under ,s. 3(1) of
· the COFEPOSA by th,e aforesaid order dated 19.12°.1974 passed
by the Minis.ter of ·Finance of the Government of India on the 'y

basis of the materials placed before him by his Joint Secretary.
The grounds of detention were served on the respondent on
23.12.1974. ~declaration under s. 5(1) of COFEPOSA was served
c oa the respondent on 19.1.1,75. Emergency was proclaimed through-
, out the country by the President on · 25.6.1975 and.it continued
to be in force until 21.3.1977. The respondent was released on
23.3. 19°77.

A show cause notice under s. 6(1) of SAFEMA was issued
D to the respondent and bis relatives and alleged associates founded
on the respondent's detention under the aforesaid order dated
19.12.1974 made under s. 3(1) of COFEPOSA. Pursuant to that
notice an order under s. 7 of SAFEMA was · passed forfeiting the
properties of the respondent and bis relatives. The respondent
and all the other aggrieved persons except one filed appeals
E
against that order before the Appellat~ ·Tribunal constituted under
the provisions of that .. A.ct. '(hose appeals are said to be still
pending, The persons who filed those. appeals have filed Miscel-
laneous. Petition No. 548 of 1977 ·on or about 25.4.1977 in the
Bombay High Court, challepging the vires of certain provisions of
F. COFEPOSA and SAFEMA. That petition is pending even now.

., The respondent filed the criminal application No. 780 of
19~1 ~nder Art. 226 of the Constitution and s. 482 of thel Code o'f '(
Criminal Procedure in the Bqmbay High Court in April 1981,
challenging the validity of the impugned order of detention dated
G 19.12.1974 and the declaration dated 1,8.1.1975, passed and made
under s. 3(1) and &. 5(1) of COFEPOSA for showing that the
action taken under s. 6(1) and s. 7 of ~AFEMA is unsustainable.

• The learned counsel for the respondent conceded before us
B that the respondent is not challenging the vires of any of the
provisions of COFEPQSA and' Si\FEMI\ in the present appeal .

•
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'
iJNio'N v. ii:Ail MASTAN' MIRJA (Varadarajan, i.)

A
The said petition nnder. Art. 226 of the Constitu.tion and .s. 482 of
the Code of Criminal Procedure challenging the validity of the
order of detention and· deelaration passed under COFEPOSA and
the notiCe and order issnecj under s. 6(1) and· 7 of SAFEMA was
. heard by Gadgil and Kotwal, JJ constituting t.he Division llench
of the Bombay High Court. Koiwal, J consi,dered all the grounds R
urged before him and accepted most of them including two
grounds viz. non-applicatien of mind of the Detaining Authority
to the material placed before him before he passed the impugned
order of detention dated 19.12.1974 and the failure of the appel-
·lant to supply copies of th_e documents clearly and unmistakably.
relied upon. for arriving at · the subjective satisfaction that the c
respondent's detention under .COFEPOSA is necessar~ and
referred .to in the grounds of detention served upon him for holding
lhat the order of detention passed under s. 3(1). and declaration
made "under s. 5(1) of COFEPOSA is void ab inititl '- .and that the
' '
action taken under s, 6(1) and s. 7 of SAFEMA pursuant to that
J);
order of dete11tion is liable ·to be struck down while holding that
the petition under Art. 226 of the Constitution and s.. 482 of the
Code of Criminal .Procedure is maintainable. and that the effect of, ·
. the ord~r of detention dated 19.12.1974 could ·not said to be
· no longer.in force after the · respondent had been. released from
detention on 23.3.1977 inasmuch as action under s. 6(1) and s. 7 E:
· of SAFEMA has been taken only pursuant to that order of deten·
tion.

Gadgil; J while disagreeing with Kotwal, J on the question·
of t~eapplicati9n of the mind of the Detaining Authority to the
• materials placed before him b~fore he passed the impugned order F
of detention clearly agreed with Kotwal, J•that the responde11t was
not supplied with ·the. copies of the documents relied upon in
tire grounds of detention supplied to him and consequently Gadgil,
J also held that the respondent is entitled to the relief claimed by
him .before the High Court. Thus both the learned ·Judges agreed
·• in holding that the impugned order of detention dated 19.12. 1974 G
.. and the" declaration dated 18.]. 1975- NSSed ahd made under
ss. 3(1) and 5(1) respectively of COFEPOSA and the notice and
order for forfeiture of the respond$ln!'s propertips issued and made
under s. 6(1) and s. 7. respecti'.'.ely of SAFEMA are Invalid and
restrained the appellants from taking any action under· SAFEMA H
based on the said order of detention· dated 19.12.1974.
SUPREME COUJ!.T RBMRfS. [f984) 3 s.c.R..

The pendency of the appeal filed under the provisions of
SAFEMA against tbe order for forfeiture of the respondent's proper-
til)S made under the provisions of that Act is not a bar to the .
present ·proceeding. The respondent was in detention under
MISA from 17.9.1974 to 19.12.1974 and thereafter' under
COFEPOSA until 23.3.1977. During the period of his detention
B . under COFEPOSA froJD 19.12:1974 to_.?3.3.1977 proclamation
ofemergency in the country was in force from 25.6.1975 to
21.3.1977. Therefore, 'for a major part 9f the period of
the respondent's detention under COFEPOSA he could not move
• any court of law for .redress against his detention ·and he was
released on 23.3.1977 soon after the emergency was lifted on
c 21.3.1977. In these . circumstances ·the fact that the respondent
did not cqall.enge his detention under COFEPOSA before his
release cannot operate as estoppel against his right of moving the ·
court for having the order of detention quashed when that order ·
was scught to be used as a basis for taking action against him
nnder ss. 6 and 7 of SAFEMA. We therefore hold.that the res·
pondent's petition under, Art. 226 of the Constitution ands. 482
of the Code of Criminal Procedure is maiqtainable, We may
state that this question of maintainability. of the respondent's
petition was not disputed by the lear.ned counsel for the appellant
before us.
•
.\
S. 6(1) of SAFEMA providing for the issue of notice before ·
proceedings ean be taken for forefeiture of properties of the
persons govern~d by the provisions of that Act reads thus : ·

"If, having regard to the value of the properties held
r by any person to· whom this Act applies, either by hiniself
or through any other person. on his behalf, .his known ·
. sources of income, earnings or assets, and any other infor-
mation or material available to it as.a result of action taken
under section 18 or otherwise, the competent authority has
reason to believe (the.reasons for such belief to ·be recorded
in writing) that ·all or any of such properties are illegally
acquired properties, it may serve a notice upon such person
(hc;reinafter referred to as the person affected) calling upon
·him, within such time ·as may. be specified in the notice,
H which shall not be ordinarily less than thirty days, to indi-
. cate the sources of his "income, earnings or assets;_out of
which or by means of w'.1ich he has acquired such property,
UNION v. HAJI MA~TAN MIRZ~ (VaraJirajan, J.) 7
tlie evidence on which he relied. an<l other relevant inforllla· A
tion and particulars, . and to show cause why all or any of
such ·properties, as the case may be, should not be de.clared
to be illegally acquired properties and forefeited to the
Central Government under this Act,'.'
·s. 7 the. Act which empowers the competent authority to the B
Centr,al Governmentany property held by the competent authority
to have been illegally acquired reads thus :
"7(1) The competent authority may, after considering
the explanation, if any, to the show-cauie notice issued
under section 6, and the materials available before it and c
after Jlivlng to the person afected and in a case where the
person affected holds any property specified in the notice
through any other person, to such bther person also a reason-
able opportunity of being heard, by order, record a finding
·'-\ whether ail or any of the properties in question are illegally
acquired properties. ·· D
(2) Where the. competent authority is satisfied that
some of the properties refetred to in the show-ca11se notice
are illegally acquired properties- but is not able to identify
specifically such properties, then, it shall be lawful for tl)e
competent authority to specify the.properties which, fo the E
best ·of its judgment, are illegally acquired properties and
record a finding accord,ingly under sub-section (1).
(3) Where the competent authority records a finding
under this section to the effect that any property is illegally
•acquired property, it shall declare that such property shall;
subject to the provisions of this Act, stand forfeited· to the r
Central Government free froll\oall encumbrances." ·
A reading of s. 6(1) ofSAFEMA would show that action
ULder ss. 6 and 7 can he taken against only· persons to whom that
Act applies. S. 2(1) of that Act specifies the persons to whom ·the
Act arplies. Sub-section 2 of s. 2 says that the Act applies to c
every person in respect of whom at order for detention has been.
made under COFEPOSA provided that such order of detention
has not been set aside by a court of competentjnrisdiction. In
the present case action has been taken against the r~pondent
under ss. 6(1) and 7 read only with s. 2(2) of the A9t. Therefore,
a valid order ~f detention under CO FEPOSA is a com)ition
precedent to proceedings being taken under ss. 6 md. 7 of·
SUPREME COURT REPORTS · (19841 3 s.c.it

A SAFEMA. If the impugned order of detentidn dated 19.12.1974
-is set aside for any reason, the proceedings taken under ss. 6 and 7
of SAFEMA cannot stand. Therefore, we have to consider whe-
ther the impugned order of detention dated 19.12.1974 under
COFEPOSA is void and has to be quashed;:
B It is seen from para 17 of the judgment of Kotwal, J that
it was not disputed before the learned Judges of the High Court
that no copy of any of the .dbcuments was ever ·supplied to the
respondent. That fact was admitted in unmistakable ·terms not
only in• the counter-affidavit. filed on behalf of the respondents
before the High Court QUI also in the course of the arguments of
c th.eir learned counsel. Kotwal, J has held that the d~uments
referred to in the grounds and re'lied upon -for the purpose of
the respondent's detention are such that without copies thereof
belng·supplied to the respondent he could not liave been in at
position to .make any effective representation against his detention.
D There was no dispute before the le.arned Judges of the High Com
that the documents referred to. in the grounds of detention and
relied upon for the purpose of detention are material documents
and that the respondent could not ~ave made any effective repre-.
sentation without cppies of those documents. The respondents
before the High C9urt however sought by their counter-affidavit to
E justify the non-supply of the copies of the documents. The expla-
nation for the non-supply of the documents cannot be a
substitute for the copies of the· documents without which the
respondent could not have made any effective representation
against his detention. This Court has repeatedly held in. several
decisions that the failure to supply copies of documents
F referred to ana relied upon in the grounds of detention for the
purpose of detention under COFEPOSA vitiates the detention
itself. In Gurdip Sinzh v. Union. of India and Others(') the person·
detained under s. 3(1) of COFEPOSA applied for the supply of
copies of the documents forming the material on whicn.ihe order
of detention had been made but they \Vere refused _to be supplied
G
to him. Nor were the grounds supplied to the ctetenu accompa·
oied by the copies of documents forming the basis thereof. It was
held in that decision to which bne of us is a party that the deten-
tion was bad ln law.
In the present case also copies of documents which were
H indisputably material documents and were referred . to in the
(I) [1981] 1 S.C.C 419 ..
tiNION f, HAil MAStAN MIRZA (Varadarajan, J.) 9
. ' . A
grounds of deiention and relied upon for the purpose of detention
·were admittedly not supplied to the respondent. Therefore, the
detention of the respondent was bad .in law and the order of
detention could not be .sustained and js liable .to be quashed ..
Consequently. action ta!<en under ss·. 6 & 7 of SAFEMA is baseless
• and unsustainable in law. The conclusion reached by the learned B
•• Judges of the High Court based on that ground is correct.- The
appeal accordingly fails and is dismissed.

S.R. Appeal di:;pzissed

,

•

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(