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Judgment
Judgement Pronounced by V.S. Sirpurkar, J.—The petitioner herein challenged the order dated 14th July, 1999, passed by the 1st
respondent, under the provisions of Section 3(1) of the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974, (for
short ""the COFEPOSA ACT""), directing the detention of her husband K.N. Thiagarajan, son of K.V. Nagendran, resident of Salem, Tamil Nadu.
The grounds, in support of the order, suggest that on a tip-off, the officers of the Customs Central Intelligence Unit conducted vehicular check
on 28.1.1999 at night at Thoppur Check Post, Kottu Road, Thoppur and stopped a white colour Contessa Car, bearing Registration No.TN-72-
A-3004, coming from Dharmapuri to Salem. The detenu and his driver Madhavan were the only occupants. There was no luggage. When
questioned, the detenu gave contradictory replies. Since there was no sufficient light and safety, the car was brought to the Customs Office at
Salem for a detailed scrutiny. The officers enquired from both the occupants as to whether they had any concealed gold bars. The occupants
replied in negative. Thereafter, the car was searched thoroughly and it was found that inside the air-filter of the car four packets were placed,
which were covered by a newspaper and a nylon rope. Each packet was found containing ten gold bars. On enquiry, the occupants stated that
they were not having any customs duty paid document or any valid document for licit transportation/possession/transportation of gold bars in
question. The total weight of the gold was 4665.600 gms and it was valued at Rs.20,60,000. The gold bars were seized on the reasonable belief
that the gold bars, which were of foreign origin, were smuggled into India without payment of custom duty. The white colour contessa car was also
seized.
It is further suggested in the grounds that a statement of B.C. Madhavan was recorded on 28.1.1999 u/s 108 of the Customs Act, 1962 in
which, he stated that he was the driver of the car belonging to the detenu and the detenu was having a silver refinery shop at Salem, that the detenu
used to buy smuggled gold from Bangalore and bring it to Salem by concealing the same in the car and used to sell it at higher price; that on
27.1.1999, the driver and the detenu left for Bangalore at about 12 Noon and went to the house of one Parasmal Sait as usual and where the
detenu gave Rs.20,00,000 which he had brought from Salem to Parasmal and the Parasmal had given four packets containing ten gold bars each
and that the detenu concealed the same in the air-filter of the car.
The grounds make further reference to the statement dated 28.1.1999 of the detenu, recorded u/s 108 of the Customs Act, wherein the detenu
admitted that he was a broker in purchasing and selling of foreign made gold bars and that he used to go to Bangalore once in a week to buy
foreign made gold bars from one Parasmal and Ramesh. It was revealed that the detenu did not know the address of the two persons but knew
their residences and telephone numbers which were given. It was also admitted that the said Parasmal was known to the detenu through a broker
for three months and that the detenu used to get a profit of Rs.150 per gold bar. It was also further suggested that the detenu had gone to
Bangalore on 27.1.1999 In the same white colour Contessa Car along with Madhavan and reached the house of Parasmal at 5.00 PM and after
waiting for about two hours purchased 40 gold bars of foreign origin at the rate of Rs.50,700 by paying Rs.20,28,000, which amount the detenu
carried with him from Salem and that the Parasmal did not give any duty paid receipt or document. It was also further revealed that the detenu
concealed the gold, bars in the air-filter of the car and while returning he was intercepted by the Customs Officers and, on enquiry, the detenu had
replied that he did not have any foreign made gold bar and, therefore, the car was searched and the gold bars were seized which were found
concealed in the air-filter of the car.
The grounds further reveal that the Assistant Commissioner of Customs, Trichy had requested his counterpart in Bangalore to cause enquiries
with Parasmal about the sale of gold bars to the detenu and the said counterpart had informed by his letter dated 2.2.1999 that the stock position
of gold with Parasmal as on 25.1.1999 was nil and that the Parasmal, in his statement dated 29.1.1999, had stated that he was a gold bullion
dealer and that on 27.1.1999, the detenu had come to him at 6.00 P.M. and asked for gold bars but, since the detenu was told that Parasammal
would not be in a position to deliver 40 gold biscuits, he left the place and that the Parasmal did not know as to where the detenu went therefrom.
The grounds then make a reference to the telegram sent by the wife of the detenu and the petitioner herein dated 29.1.1999 in which, she
claimed that the bills were available for the gold bars seized. There is also a reference to her subsequent letter dated 30.1.1999 that the gold bars
were purchased through Parasmal from a shop, viz. Maruthi Bullion and that the gold bars were hidden in the air-filter of the car for security sake
and that when the detenu had asked for two bills, he was told that they would be given later. Since the detenu was a regular customer in business,
he accepted the gold bars with a request to give the bills later and that the statement of the detenu was not a voluntary statement.
The grounds thereafter referred to the four bills (cash memos) sent by Rajeswari, wife of the detenu. All the four bills were issued by Maruthi
Bullion Associates, Krishna Market Chickpet, Bangalore. They being in the name of (i) Rajendra Vilas, Gandhi Square, Mysore; (ii) Kaveri and
Co., Bazaar Street, Mandya; (iii) Prabha Jewellery, Devangir and (iv) Dinesh & Co., T.N.Pur. All the bills were dated 27.1.1999 for ten gold
biscuits each.
The grounds further make a reference to the statement of Suseela Madhavan, wife of the driver Madhavan, that the gold bars were purchased
by the detenu from Maruthi Bullion and that the statement made by Madhavan was not voluntary.
It is further found in the grounds that the ACCE, Trichy denied that any force or threat was used for recording the statements of the detenu and
Madhavan and that on enquiry being made, it was revealed by the Assistant Commissioner, Bangalore, by his letter dated 23.2.1999 that M/s.
Maruthi Bullion had not sold any gold bars of foreign origin to the detenu on 27.1.1999. There is also a reference to the statement of one B.
Suresh Babu, Partner of Maruthi Bullion Associates who, in his statement, claimed that he had not sold any gold bars to the detenu and the details
of the sales made on 27.1.1999 were however revealed in that statement.
In paragraph 8 of the grounds, there is a reference that on enquiry by the Deputy Commissioner (Customs), Trichy, the Assistant
Commissioner, Preventive, Bangalore vide his letter dated 4.3.1999 informed that M/s. Maruthi Bullion Associates, Bangalore had sold ten gold
bars to Dinesh & Co., T.N.Pur. The statement of Suresh Babu was alone enclosed by him. In that statement dated 3.3.1999, is stated that he has
sold ten gold bars to a person stating his address as Dinesh & Co., T.N.Pur, but he did not know whether the address given by that person was
correct or not. There is a further reference in the grounds that the Deputy Commissioner, Trichy sent an enquiry to Assistant Commissioner,
Mysore to verify the sale of gold bars by Maruthi Bullion Associates to Rajendra Vilas, Mysore and Cauvery & Co.. Mandya and the Assistant
Commissioner, Mysore, by his letter dated 2.3.1999, intimated that no such addresses were found. There was also a further reference to the letter
dated 4.3.1999 by Assistant Commissioner, Devangere suggesting that there was no jewellery shop under the name and style of M/s. Prabha
Jewellery, Main Road, Devangere.
It is then pointed out that the detenu and Madhavan were arrested on 28.1.1999 and were produced before the Judicial Magistrate-1, Salem
and were sent to judicial custody, which was extended ultimately upto 8.4.1999. A bail application was also filed but the same was dismissed. The
petition for return of the car was also dismissed. The bail petitions made to the Chief Judicial Magistrate, Salem and the High Court were also
dismissed on 10.2.1999 and 19.3.1999 respectively. Lastly, it is suggested that the conditional bail was granted to the detenu on 30.3.1999 and
the conditions of the bail were modified by order dated 19.5.1999.
In paragraph 10 of the grounds It is stated:
Gold is a notified item u/s 123 of the Customs Act, 1962. Since, on demand, you have not been able to produce valid document for licit import or
possession of the gold under seizure and thus failed to discharge the burden of proof as required u/s 123 of the Customs Act, 1962, the said goods
(gold) were rendered liable to confiscate and the act of omission on your part in this regard amounts to smuggling.
It is on the basis of these grounds that the order of detention seems to have been passed.
The learned senior counsel, Mr. B. Kumar, has urged the following contentions in support of the petition:
(i) The first contention of the learned senior counsel is that though the incident has taken place on 28.1.1999, the impugned order came to be
passed only on 14.7.1999, that is practically after five and a half months. The learned senior counsel contends that there was no reason for such a
long delay and this delay in passing the order has vitiated the order.
(ii) The second contention raised by the learned counsel is that after that detention order was passed, a show case notice was issued u/s 124 of the
Customs Act to the detenu on 22.7.1999 to which the detenu had given a reply on 3.8.1999. The reply to the show cause notice issued to the
driver Madhavan was given on 28.8.1999. While the Advisory Board meeting was held on 16.9.1999 but, these documents were not placed
before the Advisory Board, though they were extremely relevant and material documents and were bound to be considered by the Advi sory
Board. Their non-placement before the Advisory Board and the consequent non-consideration by ''the Advisory Board has vitiated the further
detention of the detenu.
(iii) Lastly the learned counsel raised a contention that the detention has been made as a result of an error of law and that the detention order could
not have been passed on the basis of the legal provision of Section 123 of the, Customs Act pertaining to the burden of proof particularly when no
stage had come for the detenu to discharge that burden. According to the learned counsel the said burden could be discharged only in the adjudi-
cation proceedings or in the subsequent prosecution of the detenu.
The learned Additional Central Government Standing Counsel has urged before us that:
(i) Firstly, there is no delay worth the name as the last document relied upon by the detaining authority was the order dated 19.5.1999, modifying
the bail conditions of the detenu. According to the, learned counsel, even otherwise, the delay stood well explained for the reasons stated in the
grounds.
(ii) As regards the second contention, the learned counsel admits that the said papers were not placed before the Advisory Board. However, he
relies on the Apex Court judgment and suggests that there was, in reality, no prejudice caused as the detenu is a qualified person and had been
given a full opportunity to explain his stand before the Advisory Board.
(iii) Lastly, he contends that it is a misnomer to say that the order has been passed on the erroneous notion of law. He pointed out that the
detention order could well be passed on the basis of the legal provision such as Section 123 of the Customs Act.
In support of his first contention Mr.B. Kumar, learned senior counsel pointed out that in this case, the incident had taken place on 28.1.1999
when the gold bars were seized. He urges that all the investigation was over as the grounds revealed that there, is nothing which was being done by
the Department after they came to know about the sale transaction and also about the fact that the bills which were issued by M/s. Maruthi Bullion
Associates were in the name of non-existent persons. Mr. Kumar taken us through the grounds again and again in order to show that all the
statements stood recorded upto 4.3.1999, that is barely within the time span of one month and a week. He points out that even if it was true that
the detenu was behind the bars and was released on 30.3.1999, nothing had prevented the Department from passing the order. The learned senior
counsel argues that the reference to the order dated 19.5.1999, modifying the bail conditions, is a mere eye-wash because nothing depended upon
the conditions for bail ordered on 30.3.1999, whereunder the detenu was to report at 10.00 AM to the concerned authorities every day. He
points out that his requirement of daily attendance could prevent the detenu from smuggling again considering the distance between Salem and
Bangalore being negotiable within four to five hours only. The learned counsel, therefore, argues that there was no reason for the respondent to
wait. He argues therefore that the delay is fatal to the order. As against this Mr. K.Kumar, learned Additional Central Government Standing
Counsel suggests that there is a valid explanation and that the delay in each and every case cannot be termed as fatal if there is a reasonable
explanation.
In Smt. Hemlata Kantilal Shah Vs. State of Maharashtra and another, . the Apex Court held that a mere delay in passing an order of detention
after an incident is not fatal to the detention of a person as, in certain cases, the delay may be unavoidable and reasonable. The Supreme Court, for
the first time, struck a different note in Rajendrakumar Natvarlal Shah Vs. State of Gujarat and Others, and held that considering the nature of
investigation and the complications involved in the detentions under COFEPOSA Act, the question of delay takes the backseat. The learned
counsel for the petitioner, however, invites the attention of the Court to the two judgments of the Supreme Court, which are relatively recent, they
being Issac Babu v. Union of India, 1990 MLJ (Crl.) 689 and Anand Prakash Vs. The State of Uttar Pardesh and others, . The other judgments
which are referred by both the sides are H. Ahmed Kutty v. Union of India, 1990 SCC (Crl.) 258 and Abdul Salam alias Thiyyan Vs. Union of
India and others, .
In Abdul Rahmam v. State of Kerala, 1989 SCC 741, the Supreme Court took the stock of practically all the earlier judgments including that
of Rajendrakumar Natvarlal Shah Vs. State of Gujarat and Others, and came to the conclusion in the following words:
The 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 is depends on the facts and circumstances of each
case. No hard and fast rule can be precisely formulated that 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 the
detention order, the court has to scrutinise 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
casual connection has been broken in the circumstances of each case.
In Anand Prakash Vs. The State of Uttar Pardesh and others, the delay of even three months was held to be fatal. However, the learned
Standing Counsel for the Central Government argues that that was a case based on a single incident and more particularly the detention has been
passed under the National Security Act, 1980. In paragraph 12 in Anand Prakash Vs. The State of Uttar Pardesh and others, the Apex Court
took note of the fact that though the recovery statement was, made on 3rd March, 1989, no action was taken till 3rd May and nothing was stated
in the detention order and the delay was not satisfactorily explained even in the counter statement of the respondent. It, therefore, came to the
conclusion that the grounds mentioned in the detention order could not be a proximate cause for a, sudden decision to take action under the
National Security Act.
From these rulings, the position which is obtained is that though the delay by itself is not fatal, where there is unreasonable delay and the same
remains unexplained then, the Court has to examine the matter as to whether the live link between the prejudicial activities and the order is snapped
or not. The Supreme Court has also held further that that question would depend upon the facts and circumstances of each case.
Turning now to the present case, it will be seen that the incident in this case took place on 28.1.1999. This was the date on which the gold-
bars were seized because, probably, the authorities had a prior inkling that the petitioner was carrying the foreign made gold-bars. On the basis of
this seizure, the investigation began and the whole investigation including the collection of information about the source of gold-bars was over in
about a month''s time. The letter dated 4.3.1999 from the Assistant Commissioner of Customs, Devangere to the Deputy Commissioner Trichy
appears to be the last document in so far as the investigation is concerned. Mr.K. Kumar, learned counsel appearing on behalf of the Central
Government could not show any document worth the name concerning the investigation. The other material appears to be only the remand
extension applications on 11.3.1999 and 25.3.1999 by which the remand was extended till 8.4.1999. However, u/s 167(2), Cr.P.C. conditional
bail was granted on 30.3.1999 and the condition imposed was that the detenu should appear every day at Salem at 10.00 A.M. The bail
conditions also came to be modified ultimately on 19.5.1999. The learned Standing Counsel for the respondents therefore says that till the month
of May, 1999 the period can be explained. In the counter, white explaining the delay, the stand is taken that the seizure was effected on 28.1.1999
and the investigation was carried out which resulted in collection of further documents and the further developments of remand extension petitions,
bail petitions and the petition for relaxation of bail conditions took place and the last of the document was dated 19.5.1999. The stand is taken that
the proposal was sent by the sponsoring authority to the Ministry on 3.6.1999 and the Screening Committee had approved the proposal in a
meeting held on 17.6.1999. It, is then suggested that the minutes of the approval of the Screening Committee were received on 5.7.1999 and
eventually the detention order came to be passed on 14.7.1999. Thus the only plea which is taken is that of investigation.
Now, it has already been seen from the facts above that there is absolutely no investigation after 4.3.1999. Even if the time is stretched, it can
be stretched upto 30.3.1999 when the detenu was ordered to be released on bail but, in our opinion, even that period would be of no
consequence and merely because the bail was granted on 30.3.1999, it could not be by itself a reasonable explanation as to why the authorities did
not act. After all, the authorities could always have this expectation that the detenu would certainly apply for bail, as he did. That apart, the so
called investigation was not completed till the bail was granted on 30.3.1999 under the provisions of Section 167, Cr.P.C. Under such
circumstances, it is difficult to see as to what the authorities were doing from 4.3.1999. Except asking for the remand extension on 11.3.1999,
nothing more happened. There is absolutely no explanation as to why the authorities chose to wait after 4.3.1999. and, at any rate, after 30.3.1999
for a full period of two months because it is only on 19.5.1999 that the conditions of bail were modified. In fact, these conditions had nothing to do
with the decision to clamp a preventive detention order and in deed, there is nothing in the detention order and the grounds beyond making a stray
reference to the fact of modification of the bail conditions vide order dated 19.5.1999, there is nothing by way of, explanation. Thus, on both the
grounds viz., firstly in the grounds and secondly in the counter there is really no explanation for the delay. In fact, the detention order was passed
on the seizure effected on 27.1.1999 and that alone appears to be the basis incident. Thereafter also the investigation process practically has come
to an end on 4.3.1999 with the statement dated 4.3.1999. There is again nothing to show that there is any effort on the part of the investigating
agency to do any thing. It was tried to be suggested that the authorities were trying to apprehend one Ramesh who was not traceable.
Unfortunately, there is nothing in the order to suggest that such a search for Ramesh was going on. Even in the counter, there appears to be no
explanation. From all these, it is clear that the authorities have not been able to explain the delay of about five months and twenty-one days. There
is absolutely no explanation for any period after 4.3.1999 or, at any rate, after 30.3.1999. We are of the clear opinion that the delay remains
unexplained. We all the more convinced that the delay remains unexplained because this detention order is based on a single Incident of the seizure
of the gold-bars. The order, therefore, suffers from the illegality and we are of the clear opinion that the live link between the incident and the
detention order is snapped.
As if this is not sufficient, the learned counsel for the petitioner points out that in this case, the Advisory Board held its meetings on 16.9.1999.
He also points out that a show cause notice u/s 124 of the Customs Act was served on the detenu on 22.7.1999 and that show cause notice was
replied to by the detenu on 3.8.1999. In this show cause notice a clear allegation was made that the gold-bars which were carried by the detenu
were smuggled gold-bars and that the detenu had engaged himself in smuggling activities. The learned counsel points out that a detailed reply was
given to this show cause notice by the detenu on 3.8.1999. Even driver Madhavan also gave a reply to this notice on 26.8.1999. The learned
counsel points out that these replies were never put before the Advisory Board by the concerned authorities. A ground to that effect has been
raised by way of an amendment.
In their counter-affidavit, the respondent Central Government points out that such a show cause notice was, in fact, served on 24.7.1999 while
the detenu was in jail but before that itself, the detention order was already passed on 14.7.1999 and, therefore, there was no question of the said
show cause notice being considered by the detaining authority so far there can be no complaint. The counter makes a reference to the reply by the
detenu dated 3.8.1999 wherein the detenu had stated about the liberalized policy for importation of gold and had also offered some explanation for
licit import or acquisition/possession of the seized gold-bars While it is the admitted position that the said documents were not placed before the
Advisory Board, it is tried to be suggested that the document which originated after the passing of the detention order and which could not be
within the knowledge of the detaining authority need not be produced before the Advisory Board. This is how the contention goes:
The role of the Hon''ble Advisory Board is clearly stipulated in Section 8(c) of the COFEPOSA Act, 1974. It is far too much to stretch an
argument/contention to the effect that the documents accrued after the passing of the Detention Order which could not therefore be within the
knowledge of the Detaining Authority while passing the Detention Order must also be placed before the Advisory Board by the Department. As
per this provisions of Section 8(b) of the COFEPOSA Act a reference is required to be made by the appropriate Government to the Advisory
Board within the prescribed period in respect of a Detention Order and to place before the Advisory Board, the Detention Order, the Grounds of
detention and the relied upon materials. Thereafter, the role of the Advisory Board is clearly stipulated in Section 8(b) of the Act, including the
opportunity to be given to the detenu for hearing. It is respectfully submitted that these provisions were strictly complied with in this case. In this
case the Hon''ble Advisory Board heard the detenu through his counsel Shri B. Kumar and thereafter only expressed its opinion. It was for the
detenu to put forward his case and submit whatever documents he deemed fit in his interest during the hearing before the Advisory Board. It is
incorrect on the part of the petitioner to suggest that the Detaining Authority should have placed the said documents which came into existence
after passing the order of detention but before the date of hearing by the Hon''ble Advisory Board.
Very significantly, the counter does not say that the above referred documents were neither relevant nor material. In the counter, the authorities
take a; bald stand that the show cause notice and the replies thereto need not have been placed before the Advisory Board. In this behalf, the
learned counsel for the petitioner took a very clear stand that these documents were extremely relevant and material documents. He points out that
the said documents clarified the stand on facts as also on law by the detenu regarding the possession of the. gold-bars and, therefore, these
documents were extremely relevant documents and could have helped the Advisory Board to come to the conclusion whether there was in fact any
justification for passing the order of detention or not. Unfortunately, this aspect has not been countered by the respondents and then it is a tacit
admission that the documents were relevant and material documents. In this behalf, our attention was invited to the decisions of this Court in K. V.
Jesudasan v. State of Tamil Nadu, 1989 Cri. L.J. 637. H.C.P. No.1459 of 1999, decided on 23.4.1996 as also the H.C.P. Ho.1672 of 1998,
decided on 17.3.1999, to the last judgment one of us (V.S. Sirpurkar, J.) was a party. In all these cases, the principle is accepted that even in spite
of the documents coming into being after the passing of the order of detention, if such documents are relevant and material to the subject of
detention, the detaining Authority is under a duty to put those documents before the Advisory Board. In coming to this conclusion initially the
Division Bench in Jesudasan''s case, 1989 Cri. L.J. 637, had relied upon the celebrated judgment of this Court in Vellanai Pandian v. Collector &
District, Magistrate, Tiruhklvkli, 1984 Cri. L.J. 68. The two judgments of the Division Bench of this Court are binding on us and, therefore, it
would have to be held that in not placing these relevant and material documents before the Advisory Board there is a breach of duty on the part of
the detaining authority and the subsequent detention has thus become illegal.
Mr. K. Kumar, learned Standing Counsel for the Central Government, however, tried to argue that as, of course, the detenus under the
COFEPOSA Act are given the chance to appear through the counsel before the Advisory Board and in this case also such an opportunity was
given to the petitioner and it was only after hearing the counsel for the petitioner, the Advisory Board has expressed its opinion. The learned
counsel, therefore, says that there was no prejudice and the petitioner himself could have put those documents before the Advisory Board. We are
afraid in view of the aforementioned Division Bench judgments of this Court, we cannot accept this defence by the respondents. If there is a breach
of duty in putting proper document before the Advisory Board, it would reflect against the rights of the detenu under Article 22(5) of Constitution
of India to make an effective and quick representation before the authorities against the detention order. It is the task of the Advisory Board itself
to see the justification of the detention order. Therefore, if the relevant and material documents like the show cause notice u/s 124 of the Customs
Act and the reply thereto by the detenu are not put before the Advisory Board, we are afraid the necessary consequence must follow and the
detention would then be liable to be vitiated.
The learned counsel for the petitioner has also raised a further interesting question that the basis for the detention order is inability on the part of
the detenu to discharge the onus u/s 123 of the Customs Act. According to the learned counsel, the detention order must depend upon the tangible
material. available to the detaining authority and not on the legal principle fixing the onus on the detenu. Ordinarily, we would have gone into this
question. However, since on the earlier two questions we have already expressed our opinion, we do not deem it necessary to go into this question
and we leave that contention open. In that view, the petition must succeed.
The impugned of detention is quashed and the detenu is directed to be released forthwith unless he is required in any other matter by any other
authority.