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Kanhaiyalal Agarwala and anr. Vs. Union of India (Uoi) and ors. - Court Judgment

LegalCrystal Citation
SubjectCriminal
CourtKolkata High Court
Decided On
Judge
Reported in1976CriLJ1586
AppellantKanhaiyalal Agarwala and anr.
RespondentUnion of India (Uoi) and ors.
Cases ReferredIn D.A. V. College v. State of Punjab
Excerpt:
- .....the petitioners were smuggling goods or abetting persons to smuggle goods or dealing in smuggled goods. detention sought to be made as threatened on that basis would thus be void and illegal violating also the articles 14, 19, 21 and 22.10. mr. deb further submitted that there was no denial that there was a threat of detention of the petitioners under cofeposa and detention in the attending circumstances would be mala fide and for collateral purpose. the petitioners accordingly are entitled in law to interim orders restraining the respondents from detaining them under the said act even if the order of detention was yet to be passed. in support of the contention reliance was placed on the decision in roop chand v. state of punjab : air1963sc1503 , in this case, the court found that the.....
Judgment:

Salil Kumar Datta, J.

1. This is an application in an appeal from an order dated January 19, 1976 passed by P. K. Banerjee, J. in the connected rule vacating the interim order obtained by the petitioners along with the issuance of rule. The petitioners appellants stated in their petition that in pursuance of a search warrant, their Locker No. 1677 in the Bank of India, Vivekananda Road Branch, Calcutta was searched by the respondent No. 4 on April 8, 1975 and ornaments were seized under the Customs Act, 1962 and Gold (Control) Act, 1968. It was stated that the said respondent wrongly described gold bangles seized as gold in shape of rod diced and rounded in the seizure list. The petitioners contended that the search and seizure were mala fide and without jurisdiction as there was no reasonable belief that the goods seized were liable to confiscation or that any goods or documents were secreted. There was no recording of reasons for the search and seizure in terms of Section 105 of the Customs Act nor was any report sent to the Collector of Customs as required under Section 165 of the Code of Criminal Procedure. Prior to search on April 7, 1975, the petitioner No, 1 and his mother were taken to the Customs House under compulsion and detained there till 10-30 p.m. During the said detention the respondent No. 4 threatened them stating that the petitioners and all their family members would be put under detention unless they put answers to the questions according to his suggestions and would also be given electric shocks. The Customs Officers and police had kept constant vigilance over the petitioners who were asked not to leave Calcutta while papers were being made ready to secure their detention under the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 hereinafter referred to as COFEPOSA. It was stated that the petitioners had reason to believe that they would be detained at any time under the said Act mala fide and for a collateral purpose, it was further said that the gold ornaments were in possession with them long before about 15/20 years and some of them belonged to their relatives. The provisions of COFEFOSA, it was said, were void and ultra vires Articles 14, 19, 21 and 22. Further suspension of the right to move Court with respect to orders of detention under COFEPOSA for enforcement of rights under Articles 14, 21, 22 of the Constitution was not warranted by law.

2. On these allegations and contentions the petitioners moved this Court by an application under Article 226(1) of the Constitution on April 29, 1975 when a Rule Nisi being C. R. No. 11447-W of 1975 was issued on the Union of India and the State of West Bengal and their concerned officials, calling upon them to show cause inter alia why a writ in the nature of mandamus should not issue commanding them to act and proceed in accordance with law, and directing them to rescind, recall, cancel or withdraw the search order and the seizure made by the respondent No. 4, the Proclamation of Emergency dated December 3, 1971, order dated December 25, 1974 and also the order of detention under COFEPOSA if already passed and to forbear from taking any action thereunder against the petitioners and to return the seized goods. There were further prayers for declaring COFEPOSA and the Presidential Order of December 25, 1974 as ultra vires or violative of Articles 14, 19, 21 and 22 of the Constitution and also for production of relevant records of the case for the purpose of quahsing the proceeding by issuance of & writ in the nature of certiorari.

3. Along with the issue of Rule Nisi, the Court also issued an interim injunction in terms of prayer (g) which is to the following effect:

(g) Interim order restraining the respondents, their agents and subordinates from proceeding with and/or taking any action in pursuance of the seizure made on April 8, 1975 by the respondent No. 4 pursuant to the search order No. 34/75 dated April 4, 1975 issued by the respondent No. 3 and from handing over the said goods and or documents relating to the said goods to any other statutory bodies and/or authorities and also restraining them from arresting your petitioners under Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 and/or from passing and/or serving any order under the said Act on your petitioners till the disposal of the Rule.

4. On August 8, 1975, the Collector of Customs, West Bengal and others, the respondents Nos. 2 to 4 in the Rule, moved an application for vacating the interim order. It was stated that in pursuance of a search order issued by the Assistant Collector, Customs, on the basis of some information, the joint residence of the petitioners and their family at 8, Jadulal Mullick Road, was searched. At the search foreign metal (pure Arode) and keys of bank lockers were found while another locker No. 1677 was disclosed but the keys were not available and were reported lost. In the said lockers primary gold as also diamonds were found along with money receipts. In respect of locker No. 1677 operated by the petitioners, which was drilled opened by Godrej company, primary gold of 59 tolas as also new ornaments and ornaments not commonly used for personal adornment, diamond rings-all valued at about 2.10 lakhs- were found. The petitioners were called upon to appear before the Customs authorities for evaluating the seized goods on different dates but it was of no avail. It was said that the searches were lawfully made and further that no detention order under COFEPOSA was passed against the petitioners. It was prayed that the respondents should be given leave to proceed with follow-up actions, enquiries, investigations and adjudications of the cases in connection with the search and seizure effected on April 8, 1975.

5. This application which was opposed was allowed by Banerjee, J. by the impugned order dated Jan. 19, 1976. It was held following decision of Union of India v. Dhirubhai Gokuldas Vora 1976-1 Cal LJ 148, that in view of the inclusion of COFEPOSA in the Ninth Schedule of the Constitution, the vires of the Act as offending rights guaranteed by Part III of the Constitution could no longer be challenged. The interim order restraining the respondents from making the order of detention was vacated and the respondents were given liberty to issue notices under Section 124 of the Customs Act and Section 79 of the Gold Control Act in respect of the seized goods. It was further directed that no final order was to be passed pending the hearing of the connected Rule. The present appeal is against this order.

6. The petitioners appellants have filed the present application in the appeal for stay of operation of the said order pending its disposal on the same allegations as those in the petition of motion. The respondents have contested the application and prayed for its dismissal.

7. Mr. R. C. Deb, learned Advocate for the petitioners appellants contended that under Section 105 of the Customs Act, the Assistant Collector of Customs must have reason to believe that any goods liable to confiscation or relevant or incriminating documents or things are secreted in any place before he himself proceeds to search or authorise any officer to search for such goods, documents or things. In this case, there was no such belief as there was no material before the authority to order for search nor was any material disclosed in the authorisation order or the affidavits which, it was said, was essential as was held in Gopikisan Agarwal v. R.N. Sen, Assistant Collector of Customs and Central Excise Raipur : 1967CriLJ1194 . In para 10, page 1301 in dealing with contention that the provisions for 'reason to believe' is purely subjective and may be arbitrary, the Court observed:

Though under the section the Assistant Collector of Customs need not give the reasons, if the existence of belief is questioned in any collateral proceedings, he has to produce relevant evidence to sustain his belief.

8. On our requisition, Mr. N. C. Chakravarti, learned Advocate for the Union of India and Customs Officials, produced before us the relevant record. It appears therefrom that there is on record a report relating to the petitioner's father Rameswarlal and others and their activities. As the legality of the actions of the Assistant Collector and his authorised officers are the subject-matter of the connected Rule we need not probe this question further except that we are prima facie satisfied that the Assistant Collector did not proceed in the matter without any material to sustain his belief.

9. Mr. Deb next submitted that the respondents did not deny any of the material allegations in respect of the seized articles made by the petitioners in their main petition reiterated in the petition for stay before us now under consideration. The respondent No. 4 wrongfully described gold ornaments bangles as gold in shape of rod diced and rounded. The respondents did not deny the allegations about the threat and intimidation held out by the respondent No. 4, an Inspector to put the family members in detention under COFEPOSA unless the petitioner No. 1 wrote out answers to his questions according to his suggestions. Excepting the seized ornaments some of which were manufactured 15/20 years back and some others belonged to relatives, there were no materials upon which the detaining authority could be satisfied that the petitioners were smuggling goods or abetting persons to smuggle goods or dealing in smuggled goods. Detention sought to be made as threatened on that basis would thus be void and illegal violating also the Articles 14, 19, 21 and 22.

10. Mr. Deb further submitted that there was no denial that there was a threat of detention of the petitioners under COFEPOSA and detention in the attending circumstances would be mala fide and for collateral purpose. The petitioners accordingly are entitled in law to Interim orders restraining the respondents from detaining them under the said Act even if the order of detention was yet to be passed. In support of the contention reliance was placed on the decision in Roop Chand v. State of Punjab : AIR1963SC1503 , In this case, the Court found that the impugned order depriving the petitioner of his right to certain plots under East Punjab Holdings (Consolidation and Prevention of Fragmentation) Act, 1948 was illegal and when there was serious threat to give effect to the same, the petitioner could come to Court on the face of such threat end it was not necessary for him to wait till his right was in fact affected. The Court observed:.... Therefore it seems to us that the inevitable result of the order is to affect the petitioner's right to property illegally. It may be that just now the right has not been affected and there is only a threat that it will be affected. But we think that the threat is sufficiently serious and the petitioner is not bound to wait till his right has actually been affected more particularly as it is not disputed that it would inevitably be affected.

Reliance was also pieced on the decision in State of Madhya Pradesh v. Bhailal Bhai : [1964]6SCR261 in which the Court found, in agreement with the High Court, that assessment of tax under impugned notifications of Madhya Bharat Sales Tax Act, 1950 was invalid in law and directed refund of taxes paid under invalid assessment. The Court observed:

Where there has been only a threat to infringe the right, an order commanding the Government or other statutory authority not to take the action contemplated would be sufficient. It has been held by this Court that where there has been a threat only and the right has not been actually infringed an application under Article 226 would lie and the Court would give necessary relief by making en order in the nature of injunction. It will hardly be reasonable to say that while the Court will grant relief by such command in the nature of an order of injunction where the invasion of a right has been merely threatened the Court must still refuse where the right has been actually invaded, to give the consequential relief and content itself with merely a declaration that the right exists and has been invaded or with merely quashing the illegal order made.

In D.A. V. College v. State of Punjab : AIR1971SC1731 , which was also cited, the Court observed that applications under Article 32 of the Constitution would not be maintainable in the Supreme Court unless the petitioners made out a case that their fundamental rights are violated or threatened.

11. The principles of law laid down in the above decisions appear to be as follows:

(a) The Court will grant appropriate relief by way of injunctions or restraint order whenever the fundamental rights or statutory or legal rights of persons are invaded or threatened.

(b) Before such relief is granted, the Court must find or declare the existence of such right and such right is being illegally invaded or threatened.

We shall proceed to examine the position in the light of the above propositions.

12. The Emergency declared on December 3, 1971 under Article 351(1) of the Constitution on threat of India's security by external aggression is continuing. The COFEPOSA came into force on December 19. 1974. On December 23, 1974 the President in exercise of the powers under Article 359(1), declared that the right to move any court with respect to orders made or to be made under COFEPOSA or to any action thereunder for enforcement of rights under Articles 14, 21, 22(4), (5), (6) and (7) and all pending proceedings in connection therewith shall remain suspended for six months (since substituted by twelve months). On June 26, 1975 by proclamation made under Article 352(1) of the Constitution, emergency was declared as the security of India was threatened by internal disturbance. On the following day, on June 27, 1975, the right of any person to move any Court for the enforcement of the rights conferred by Articles 14, 21 and 22 and all pending proceedings in connection therewith during continuance of the emergency declared as above for enforcement of above rights was suspended by the President in exercise of powers conferred by Clause (1) of Article 359. Parliament by the Constitution (Thirty-ninth Amendment) Act, 1975, which received the assent of the President on August 10, 1975, inserted the COFEPOSA in the Ninth Schedule of the Constitution (being item No. 104). Lastly on January 8, 1976 the President in exercise of the power conferred by Art 359(1) suspended the right of any person to move Court for enforcement of the right conferred by Article 19 of the Constitution as also all pending proceedings for enforcement of such right during the emergency declared on the two dates mentioned above.

13. In the connected rule the petitioners have challenged the vires of the COFEPOSA as infringing the provisions of Articles 14, 19, 21 and 22 of the Constitution. Whatever may be the position at the time of issuance of the Rule, in view of the amendment to the Constitution noted above, the challenge to the vires of COFEPOSA on grounds of violation of rights under Part III as noted above is not now available in law. Accordingly there is no scope for holding that the authorities are threatening invasion of the fundamental rights of the petitioners by illegal exercise of power. The petitioners have taken grounds that the COFEPOSA is ultra vires Article 246 of the Constitution. No argument has been advanced before us at the hearing on that ground and in view of the serious adverse effect on the security of the India caused by violation of foreign exchange regulations and smuggling activities which matter is covered by item 9 of List I of Schedule VII and of Article 248 of the Constitution, we do not think such attack is sustainable. Even if there had been such challenge, before the Court is in a position to issue injunction on threatened invasion of right, according to the above decisions, it can only proceed on the basis that the intended action has no legal warrant, which is not the case here.

14. Mr. Deb has contended with great force that the threatened action is mala fide and for collateral purpose. He drew our attention to the allegations of threats of detention of the petitioners held by the respondent No. 4 as alleged in the petition of motion which it is said have not been controverted by the respondents. We have carefully considered the contention so raised but it appears to us that such threats by the respondent No. 4 even If true are of no consequence though they are liable to severest condemnation. The detention order under Section 3 of COFEPOSA can only be passed by the Central or State Government or any officer of the Central Government not below the rank of a Joint Secretary of the said Government or any officer of the State Government not below the rank of Secretary of such Government, specially empowered for the purpose. It is only reasonable) to hold that the Government concerned or its officer of such high status himself will consider the materials as enjoined by law and on satisfaction that it is necessary to prevent a person from acting in any manner prejudicial to the conservation of augmentation of foreign exchange or from smuggling goods or abetting the smuggling or concealing or keeping such goods, he will pass an order for detaining such person. It is said that officers like the respondent No. 4 will process the papers, even so the order is to be passed on satisfaction of the authority concerned, who without doubt will consider all materials on record.

15. As has been held in Gokuldas-Vora's case 1976-1 Cal LJ 148 'it may be that an order of detention passed under COFEPOSA, in spite of its inclusion in the Ninth Schedule, may be challenged on the ground that the conditions laid down in the Act have not been complied with or on gorund of mala fides'. Such challenge would be available as is obvious only after the order of detention comes into existence and not before. The preamble to the Act provides as follows:

An Act to provide for preventive detention in certain cases for the purposes of conservation and augmentation of foreign exchange and prevention of smuggling activities and for matters connected therewith.

Whereas violations of foreign exchange regulations and smuggling activities are having an increasingly deleterious effect on the national economy and thereby a serious adverse effect on the security of the State.

And whereas having regard to the persons by whom and the manner in which such activities or violations are organised and carried on, and having regard to the fact that in certain areas which are highly vulnerable to smuggling, smuggling activities of a considerable magnitude are clandestinely organised and carried on, it is necessary for the effective prevention of such activities and violations to provide for detention of persons concerned in any manner therewith.

Section 3 provides for making the order of detention upon satisfaction of the appropriate authority that it is necessary to pass an order of detention to prevent a person from smuggling goods or abetting the smuggling of goods, or engaging in transporting or concealing or keeping such goods or dealing with the same or harbouring persons engaged in such works. The materials which will be before the appropriate authority in connection with the detention obviously will not be available to the persons affected, so that any challenge to the decision on allegations of mala fides or the order not being in accordance with law or without materials cannot but be in the nature of fishing or roving inquiry with the aid of court. In these circumstances an interim injunction restraining the Government from following up their investigation in respect of such clandestine activities and passing appropriate order on such investigation and materials, in the nature of things is not warranted in law. There may be cases of mala fides or excesses by executive authority which may transgress legal requirements but such acts will be open to judicial scrutiny as and when the order of detention is challenged on grounds of mala fides or being not in accordance with law. As has been held in Gopikisan's case 1967 Cri LJ 1194 (SC) cited above, the appropriate authority will have to produce relevant materials to sustain his order of detention when the legality of the order is challenged and such judicial scrutiny has not been expressly or by implication excluded. We are conscious that there is a possibility of an innocent person being detained in custody for the time being on the basis of ex parte decision, but, in the nature of things and of the crimes which have shaken our national economy such unfortunate event cannot be avoided and care has been taken by Parliament to entrust the responsibility of passing the order of detention on officers of very high rank in the Government ensuring the passing of appropriate order. Further there are provisions for constituting the Advisory Board which Is to consider the sufficiency of the grounds of detention on the basis whereof the order of detention is to be continued or revoked, thereby operating as an effective check to any arbitrary or invalid action.

16. In the instant case, it was said that there was no material other than the seized articles for consideration of the appropriate authority and the seized articles would indicate that they were not smuggled or primary gold but family ornaments which had been with them over years while some of them belonged to other relatives. Pursuant to our direction, the articles seized from Locker No. 1667 were produced and it appears that certain gold articles were there which could not be said to be gold ornaments but Irregularly shaped bangles of gold unfit for human adornment. We however refrain from expressing our opinion on them except that in view of the report referred to above and in the circumstances it cannot prima facie be said that there were no materials to be placed before the appropriate authority for considering the necessity of passing an order of detention against the petitioners,

17. Mr. Chakraborty has further submitted that in view of the orders issued by the President suspending enforcement of the rights under Articles 14, 19, 21 and 22, the impugned orders of ad interim injunction must be vacated. It is well known that the interim orders are given in aid of the main relief sought for in the action. If therefore, it is not permissible to have enforcement of the rights under the said Articles during the period of emergency in any action it is obvious that such right also cannot be enforced temporarily within the period of emergency which will be the effect of interim injunction. Accordingly, we are of opinion that such injunction, which amounts to enforcement of the aforesaid rights though during the pendency of the proceedings though temporarily, is not available during the period of emergency. There has been an argument that, as the proceedings for enforcement of such rights are suspended, if there has been an interim injunction enforcing such rights at the time of the notification of the orders suspending such rights, the proceedings cannot go on during the period of emergency with the result that the interim relief enforcing the rights under the said articles would be and continue to be available to the claimants in the proceedings in spite of their suspension. The order suspending proceedings for enforcement of fundamental rights does not amount or imply suspension of the proceeding in respect of other rights which may also be sought to be enforced along with the rights suspended. Such proceedings and any injunction in respect thereof may continue if other rights are sought to be asserted. But it cannot be said that by reason of the interim order, such suspended rights will continue to be enforced con-tray to the provisions of the orders which suspend their enforcement. Accordingly, interim orders which enforce such rights during the period of emergency must necessarily be suspended. There is, therefore, ample substance in Mr. Chakraborty's contention that the interim order which purports to enforce the fundamental rights as aforesaid cannot be allowed to continue and the interim order in aid of securing such fundamental rights during emergency has got to be vacated.

18. Mr. Deb further submitted that since the application has been filed only by the Customs Officials, the order under appeal vacating the interim order should not affect the other respondents. Reliance was placed on the principle of law that injunction once granted should not be vacated in respect of the respondents who do not challenge the same. Similar contention was raised in Vora's case 1976-1 Cal LJ 148 and was repelled as there was in fact no detention order and as such there was complete absence of any cause of action when the petitioners sought for injunction restraining the respondents from giving effect to the detention order. In the case before us, we have seen that the petitioners are not entitled in law to the injunction granted at the time of issuance of the Rule and accordingly the question of the other respondents not challenging the order becomes immaterial.

19. We put on record that Mr. Chakravarty's statement in Court to the effect that the Government does not intend to proceed against the lady petitioner appellant No. 2 unless she puts her claim to the articles seized.

20. In the view we have taken, the application filed by the petitioners appellants is dismissed. There will be no order for costs in the circumstances.

21. The prayer made for stay of operation of this order is refused.

Shankar Prasad Mitra, C.J.

22. I agree.


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