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Mangilal Baid Vs. Secretary Home (Spl.) Dept., State of W.B. and ors. - Court Judgment

LegalCrystal Citation
SubjectCriminal
CourtKolkata High Court
Decided On
Judge
Reported in1975CriLJ1790
AppellantMangilal Baid
RespondentSecretary Home (Spl.) Dept., State of W.B. and ors.
Cases ReferredLakshman Khatik v. State of West Bengal
Excerpt:
- bimal chandra basak, j.1. in this application for a writ in the nature of habeas corpus, the petitioner-detenu is challenging the order of detention passed by b. mukhopadhyay, the secretary to the government of west bengal, home department (special section) on the 19th of december, 1974 (hereinafter referred to as the said order) in exercise of power conferred by section 3(1) of the conservation of foreign exchange and prevention of smuggling activities act, 1974 (hereinafter referred to as the said act) the said order was made with a view to preventing the detenu from acting in any manner prejudicial to the augmentation of foreign exchange. the incidents relied upon in the grounds of detention served on the detenu read as follows:(1) on 11th april, 1973, your office situated at 10, clive.....
Judgment:

Bimal Chandra Basak, J.

1. In this application for a writ in the nature of Habeas Corpus, the petitioner-detenu is challenging the order of detention passed by B. Mukhopadhyay, the Secretary to the Government of West Bengal, Home Department (Special Section) on the 19th of December, 1974 (hereinafter referred to as the said order) in exercise of power conferred by Section 3(1) of the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (hereinafter referred to as the said Act) The said order was made with a view to preventing the detenu from acting in any manner prejudicial to the augmentation of foreign exchange. The incidents relied upon in the grounds of detention served on the detenu read as follows:

(1) On 11th April, 1973, your office situated at 10, Clive Row, Calcutta, and your the then residence at 4, Raj Kumar Bose Lane, Calcutta were searched under the provisions of the Foreign Exchange Regulation Act and documents including statement of accounts showing your illegal transactions in foreign exchange during the period from May 1972 to April 1973 and foreign letters dated 3rd April, 1973 and 2nd March, 1973, sent from London by Mr. Dalton of 70, Grafton Way, London, W. 1. were seized. Pursuant to the aforesaid seizure and in course of investigation it was disclosed that

(a) during the period from 4-5-72 to 25-8-72 you, by arrangement with Mr. Hansraj Sethia alias Raj of London and with Mr. Dalton both of 70 Grafton Way, London, W. 1 secretly engaged in unauthorised dealings in foreign exchange for a total sum of 1,09,000. The break up of this unauthorised transaction being 58,000 at the rate of Rs. 30-6-0 and 51,000 at the rate of Rs. 25-8-9.

(b) In March, 1973, you also unautho-risedly paid a total sum of Rs. 73,98,900 from your aforesaid Calcutta Office at 10, Clive Row, Calcutta and from your the then residence at 4, Raj Kumar Bose Lane, Calcutta, to different parties in India and Bangladesh including (1) Shri Jogesh Chandra Nag, Rampur Gurudham, P, O. Maheshtalla, Govindapur, Distt. 24 Parganas, (2) Shahabuddin C/o Rasumian, Merchant, Panchuganj Bazar. Sylhet, Bangladesh, (3) Neswar Ali, Vill. Panchpara, P. S. Osmanpur. Thanabazar, Bangladesh by order or under instructions of the said Hansraj Sethia and Mr. Dalton both of 70, Crafton Way, London, W-1.

It is evident from your aforesaid activities that, unless prevented, you are likely to continue to act in similar manner prejudicial to the augmentation of foreign exchange.

2. Before we deal with the arguments advanced in support of this Rule, it is necessary to set out certain relevant facts. The Maintenance of Internal Security Act, 1971 enacted by the Parliament received the assent of the President of India on 2nd of July, 1971 (hereinafter referred to as 1971 Act). The relevant portion of Section 3 of the 1971 Act, before its amendment, provided as follows:

3. Power to make orders detaining certain persons:

(1) The Central Government or the State Government may,-

(a) if satisfied with respect to any person (including a foreigner) that with a view to preventing him from acting in any manner prejudicial to-

(i) the defence of India, the relations of India with foreign powers, or the security of India, or

(ii) the security of the State or the maintenance of public order, or

(iii) the maintenance of supplies and services essential to the community, or

(b) If satisfied with respect to any foreigner that with a view to regulating his continued presence in India or with a view to making arrangements for his expulsion from India, it is necessary so to do, make an order directing that such person be detained.

3. On 17th of September, 1974 an Ordinance was promulgated t>y the President of India known as the Maintenance of Internal Security (Amendment) Ordinance, 1974 (hereinafter referred to as the said Ordinance). The said Ordinance provided inter alia, that the 1971 Act was to have effect subject to the amendments specified in Sections 3, 4 and 5 of the said Ordinance. Section 4 of the said Ordinance provided as follows:

4. In Section 3 of the Principal Act, Sub-section (1),-

(a) In Clause (b), the word 'or' shall be inserted at the end;

(b) after Clause (b), the following clause shall be inserted, namely:

(c) If satisfied with respect to any person (including a foreigner) that with a view to preventing him from acting in any manner prejudicial to the conservation of foreign exchange or with a view to preventing him from-

(i) smuggling goods, or

(ii) abetting other persons to smuggle goods, or

(iii) dealing in smuggled goods.

4. On the 21st of October, 1974 an order of detention was passed by the Commissioner of Police, Calcutta in respect of the petitioner detenu pursuant to the said 1971 Act, as amended by the said Ordinance (hereinafter referred to as the previous order) and the petitioner was taken into custody pursuant to the same, The incidents relied upon in the grounds of detention served on the detenu in respect of the said previous order read as follows:

(1) On 11th April, 1973 your office situated at 10, Clive Row, Calcutta and your the then residence at 4, Raj Krishna Bose Lane, Calcutta were searched under the provisions of the Foreign Exchange Regulation Act and document and documents including statement of accounts showing your illegal transactions in foreign exchange during the period from May, 1972 to April, 1973, and foreign letters dated 3rd April, 1973, 2nd March, 1973 sent from London by your contact Mr. Dalton of 70, Grafton Way, London, W-1 were, seized. In pursuance to the aforesaid seizure and in course of investigation it was disclosed that-

(a) during the period from 4-5-72 to 25-8-72 you, as Calcutta agent of your principal Mr. Hansraj Sethia in London and under instruction from the said Mr. Dalton also of London secretly engaged in illegal foreign exchange for a total sum of 1,09,000 ( 58,000 (r) Rs. 30-6 annas per pound and 51,000 @ Rs. 25-8-8 per pound); and

(b) In March, 1973, you also unautho-risedly paid a total sum of Rs. 73,98,900 from your aforesaid Calcutta Office at 10, Clive Row, Calcutta, and 4, Raj Krishna Bose Lane, Calcutta to different parties in India and Bangladesh including (1) Shri Jogesh Chandra Nag, Rampur Gurudham, P. O. Mahestalla, Gobindapur, Dist. 24-Parganas, (2) Shahabuddin C/o Rasu-mian, Merchant, Penchuganj Bazar, Sylhet, Bangladesh, (3) Neswar Ali, Vill, Panchpara, P, O. Osmanpur. Thanabazar, Bangladesh by order or under instructions of your said principal Hansraj Sethia of London and intermediary Mr. Dalton both of 70, Grafton Way, London, W-1.

It is evident from your aforesaid activities, that, unless prevented, you are likely to continue to act in similar manner prejudicial to the conservation of foreign exchange.

5. On the 6th December, 1974, the petitioner herein moved a Habeas Corpus petition under Article 226 of the Constitution before this Court challenging the previous order dated 21st October, 1974 and a Rule Nisi was issued therein (Criminal Misc. Case No. 2421 of 1974).

6. On the 19th of December, 1974 the said Act, that is, Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 came into force. By the said Act, the said Ordinance was repealed and the amendments made in the 1971 Act by the said Ordinance ceased to have any effect. Section 3(1) of the said Act provides as follows:

3. (1) The Central Government or the State Government or any officer of the Central Government, not below the rank of a Joint Secretary to that Government, specially empowered for the purposes of this section by that Government, or any officer of a State Government not below the rank of a Secretary to that Government, specially empowered for the purposes of this section by that Government, may, if satisfied, with respect to any person (including a foreigner), that, with a view to preventing him from acting in any manner prejudicial to the conservation or augmentation of foreign exchange or with a view to preventing him from-

(i) smuggling goods, or

(ii) abetting the smuggling of goods, or

(iii) engaging in transporting or concealing or keeping smuggled goods, or

(iv) dealing in smuggled goods otherwise than by engaging in transporting or concealing or keeping smuggled goods, or

(v) harbouring persons engaged in smuggling goods or in abetting the smuggling of goods,

it is necessary so to do, make an order directing that such, person be detained.

7. On the same day, that is, on the 19th of December, 1974 the said impugned order of detention was passed as stated hereinabove. On that very day the said order and the grounds of detention were served on the detenu. On the 23rd of Dec., 1974, Presidential Order under Article 359(1) of the Constitution of India was published in the Gazette (c)f India which reads as follows:

G. S. R. 694 (E).- In exercise of the powers conferred by Clause (1) of Article 359 of the Constitution, the President hereby declares that-

(a) the right to move any court with respect to orders of detention which have already been made or which may hereafter be made under the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (52 of 1974) or with respect to any other action (including the making of any declaration under Section 9 of the said Act) which has already been, or may hereafter be, taken or omitted to be taken in respect of detention trader such orders, for the enforcement of the rights conferred by Article 14, Article 21 and Clause (4), Clause (5) read with Clause (6) and Clause (7) of Article 22 of the Constitution and

(b) all proceedings pending in any court for the enforcement of any of the aforesaid rights with respect to orders of detention made under the said Act or any other action (including the making of any declaration under the said Section 9) taken or omitted to be taken in respect of detention under such orders. shall remain suspended for period of six months from the date of issue of this Order or the period during which the Proclamation of Emergency issued under Clause (1) of Article 352 of the Constitution on the 3rd December, 1971, is in force, whichever period expires earlier.

8. This Habeas Corpus petition challenging the said order dated 19th of December, 1974 was moved by the petitioner on the 23rd December, 1974 and a Rule Nisi was issued by this Court,

9. Various allegations were made in the petition challenging the said order of detention, Some of these allegations were directed against the said order as such, Further, some allegations were made regarding the vires of the said Act as a whole and some of the sections of the said Act in particular. Originally the Union of India was not made a party respondent herein but at the time of the issue of the Rule Nisi on 23rd December, 1974, at the intervention of the Union of India it was made a party respondent, On the first hearing of the Rule before us Mr. Prasun Chandra Ghosh, learned advocate appearing in support of the Rule, made it clear that he would not rely on any allegation and/or make any submission on the question of the vires of the said Act. In this context, he specifically abandoned the allegations and contentions made in paragraphs 52 (a), 52 (b) 59 to 62 and 92 to 114 of the petition. Accordingly he also submitted that he was not pressing the Rule as against Union of India and prayed that the Union of India be discharged as a party-respondent in this Rule, After hearing Mr. Ghosh and also Mr. Chakravarti, learned advocate appearing on behalf of the Union of India, we passed an order deleting the name of Union of India as a party-respondent. However, we allowed Mr. Chakrabarti to make submissions on behalf of the Union of India,

9-A. Before referring to and dealing with the respective contentions of Mr. Ghose, we place on record that Mr. Chakravarti took a preliminary objection before us regarding the maintainability of this petition. According to him in view of the said Presidential order an application for a writ of and/or in the nature of Habeas Corpus under Article 226 of the Constitution is not maintainable by or at the instance of a detenu in respect of an order passed under the said Act. However, having regard to a very recent judgment of another Division Bench of this Court in Chandra Kanta Berlia v. Superintendent Presidency Jail (Cr. Misc. Case No. 2719 of 1974) Reported in (1975) 1 Cal LJ 427 we reject this contention. In that judgment it has been held, after a careful and detailed consideration of various judgments of Supreme Court and other High Courts, that in spite of the said Presidential order a writ petition by or on behalf of such a person is still maintainable. It was further held that though some points may not be entertained by Court in view of such Presidential order, it is still open to the Court to examine the validity of such order on some other grounds.

10. Mr. Prasun Chandra Ghose, learned Advocate appearing in support of the Rule, raised various contentions before us. It was firstly argued that the grounds Nos. 1 (a) and 1 (b) of the said grounds are not germane to the object of detention i.e. augmentation of foreign exchange. Secondly, it was contended that the grounds indicate non-application of mind on the part of the detaining authority. Thirdly, it was argued that the grounds are baseless and mala fide. Fourthly, it was argued that the order was passed on extraneous grounds and in colourable exercise of power. Fifthly, it was argued that the authority acted mechanically and there was non-application of mind because on the very same facts the earlier order of detention was passed under the 1971 Act, as amended, on the ground of conservation of foreign exchange whereas the impugned order has been passed on the ground of augmentation. Sixthly it was argued that the order was bad because of lack of proximity. Seventhly, it was argued that the detaining authority just put his signature to the order and the grounds without applying his mind and the order was made mechanically. Lastly, it, was argued by Mr. Ghose that there was non-compliance of the procedural requirements as envisaged by the said Act. We shall consider these submissions one by one.

11. On the first point, that is, on the question of relevancy of the ground, Mr. Ghose submitted that it has not been stated in the grounds as to how there was 'illegal transaction' in foreign exchange. In respect of ground No. 1 (a) it was submitted that it has not been stated how such dealing was 'unauthorised'. According to him it has not been staled whether by 'dealing' it was meant buying or selling. Similarly, in respect of ground No. 1 (b) Mr. Ghose submitted that it has not been stated how the payment was unauthorised specially having regard to the fact that the payment is alleged to have been made by the detenu, a resident of India, to, amongst others, different parties in India. Even in the case of alleged payment to two persons residing outside India, it has not been stated how it was unauthorised or illegal and how it was germane to the question of augmentation of foreign exchange. Mr. Ghose strongly contended that payment 'by order or under instructions' of the two persons resident abroad as stated in the ground No. 1 (b) cannot mean that the detenu acted as the agent of his principals. In this context our attention was drawn to the previous order of detention made on 21st of October, 1974 under the 1971 Act as amended. In respect of very same incident it was stated that Mr. Sethna was the principal and Mr. Dalton was the intermediary.

12. Mr. D. Gupta learned Standing Counsel appearing on behalf of the State, strongly contested each and every contention of Mr. Ghose and in particular he drew our attention to Sections 4 and 5 of the Foreign Exchange Regulation Act, 1947 and submitted before us that these provisions show that these are illegal transactions. He submitted that this is germane to the question of augmentation of foreign exchange.

13. The argument of Mr. Ghose is really based on alleged vagueness of the grounds. The admitted position is that in view of the Presidential order, the validity of an order of detention cannot be challenged on the basis of vagueness of the grounds served. What cannot be done directly cannot also be done indirectly. If it is not open to a petitioner to challenge an order of detention on the ground of vagueness, then it cannot also be challenged on the ground of relevancy merely because it is alleged to be vague. In any view of the matter, merely because some particulars have not been stated in the grounds cannot by itself make the ground irrelevant. In the present case, we find that the allegation is that the petitioner had illegal transactions in foreign exchange. According to the grounds of detention such illegal transaction comprised of unauthorised dealings in foreign exchange by arrangement with two persons residing outside India whose names have been specified and unauthorised payment to different parties in India and Bangladesh by order or under instructions of the said two persons. That certainly is germane to augmentation of foreign exchange. If a person has been involved in such illegal transaction in foreign exchange and if on the basis of the same, the detaining authority reaches has subjective satisfaction that in order to prevent the person concerned from acting in a manner prejudicial to the augmentation of foreign exchange he should be detained, it cannot be said that such satisfaction is not relevant or germane.

14. We may also refer, in this connection, to Sections 4 and 5 of the Foreign Exchange Regulation Act, 1947, the relevant portions of which are set out hereinbelow:

Section 4. Restrictions on dealing in foreign exchange : - (1) Except with the previous general or special permission of the Reserve Bank no person other than an authorised dealer shall in India, and no person resident in India other than an authorised dealer shall outside India, buy or otherwise acquire or borrow from, or sell or otherwise transfer or lend to, or exchange with, any person not being an authorised dealer, any foreign exchange.

(2) Except with the previous general or special permission of the Reserve Bank, no person whether an authorised dealer or otherwise, shall enter into any transaction which provides for the conversion of Indian currency into foreign currency or foreign currency into Indian currency at rates of exchange other than the rates for the time being authorised by the Reserve Bank.

'Section 5. Restrictions on payments. - (1) Save as may be provided in and in accordance with any general or special exemption from the provisions of this sub-section which may be granted conditionally or unconditionally by the Reserve Bank, no person in, or resident in, India shall-

(a) make any payment to or for the credit of any person resident outside India;

(aa) receive, otherwise than through an authorised dealer, any payment by order or on behalf of any person resident outside India;

(c) make any payment to or for the credit of any person by order or on behalf of any person resident outside India;

(d) place any sum to the credit of any person resident outside India.

The facts stated in grounds 1 (a) and 1 (b) are certainly within the mischief of Sections 4 and 5 respectively as quoted above. Accordingly it cannot be stated that the grounds are not relevant or germane. It is true that there is some slight difference in language between the previous order and the impugned order before us, but that cannot be the ground for holding that the impugned order was not relevant or germane. In this connection we may note that during the course of his argument in connection with his fifth submission it was conceded by Mr. Ghose that if the facts alleged in the grounds served are true and correct, then the same is germane to the object of detention i.e. augmentation of foreign exchange. Accordingly, we reject this contention of Mr. Ghose. We are satisfied that the grounds relied on have a rational relation to the subjective satisfaction regarding the prejudicial activities imputed to the petitioner.

15. On the second point Mr. Ghose submitted that there was non-application of mind on the part of the detaining authority, as shown by the vagueness of the grounds. In his usual frankness, Mr. Ghose admitted before us that in view of the Presidential order, he was not in a position to challenge the validity of the said order of detention on the ground of vagueness or on the ground of the inability of the detenu to make an effective representation. To get around this difficulty he submitted before us that relying on such vagueness of the grounds he was entitled to contend that the said order was passed without application of mind. According to him such contention is not barred by the Presidential order. He submitted that the grounds mention about certain 'statement of accounts' but it does not afford any particular as to the person in respect of whose account these statements related to. There is no allegation that they were in respect of the detenu. He further pointed out that the grounds mentioned about some 'foreign letters' but it was not stated to whom they were addressed; at least it was not alleged that it was addressed to the detenu. With particular reference to ground No. 1 (a) he drew our attention to the allegation made therein to the effect that the detenu was engaged in unauthorised dealings in foreign exchange by arrangement with Mr. Sethia and Mr. Dalton. In this context he referred to the previous order wherein in respect of the very same transaction the detenu had been described as the Calcutta agent of his principal Mr. Hansraj Sethia and it was alleged that under instructions of the said Mr. Dalton the detenu secretly engaged in illegal transaction in foreign exchange. From this alleged discrepancy in respect of the very same transaction he submitted that it would be apparent that there was non-application of mind on the part of the detaining authority.

16. There is no merit in this contention of Mr. Ghose. As already stated, as the challenge on the ground of alleged vagueness of the grounds is not available to the detenu, the detention cannot also be challenged on the ground of non-application of mind because of such alleged vagueness. It is true that in the grounds no particular has been given regarding the statement of accounts and particularly, it has not been stated that this was in respect of any account of the detenu. Similarly the connection between the detenu and the 'foreign letters' have not been specified. That, in our opinion, cannot and does not lead to the conclusion that there was non-application of mind. On the basis of certain documents including the statement of account seized and subsequent investigation made, the detaining authority has formed an opinion and reached its satisfaction. This satisfaction of the detaining authority is subjective satisfaction which cannot be tested by objective standards. Whether this statement of accounts relate to the detenu or any one else is not material for this purpose. Even assuming that they relate to the accounts of some one other than detenu, it was possible for the detaining authority on the basis of materials appearing therefrom, to reach this subjective satisfaction and if he did so it cannot be said that there has been non-application of mind. Similarly, in respect of foreign letters, it is immaterial for the present purpose whether they were addressed to the detenu or any one else. Even if they were addressed to any person other than the detenu, on the basis of materials available from the same, it was open to the detaining authority to reach his subjective satisfaction and if he did so then it cannot be said that there was non-application of mind. Regarding the alleged discrepancy in the language between the previous order and the impugned order before us. there is certainly slight difference between the two but we do not consider that there is any 'discrepancy' as such, far less a 'discrepancy' of the nature which must inevitably lead us to a conclusion that there was non-application of mind. In any event it is to be kept in mind that the first order and the impugned order have not been made by same authority. The first one was made by the Commissioner of Police, Calcutta under the 1971 Act as amended by the Ordinance, whereas the impugned order has been passed by the Secretary to the Government of West Bengal under the said Act. Therefore, merely because there is some difference in the language in the two different orders, made by two different authorities, under two different Acts, cannot lead to any inevitable conclusion that there was non-application of mind on the part of the detaining authority in respect of the order impugned before us. On the other hand, from such difference in language one might contend that not only it shows that there was no non-application of mind but it shows a definite and independent application of mind. It shows that the detaining authority, in respect of the order impugned before us, did not act mechanically and quote the earlier grounds in toto : but on the basis of materials before him, there was an independent application of mind and reaching of satisfaction independently and that is why there is some difference in language between the two orders of detention. In this context we may also mention that the detaining authority has in his affidavit affirmed on the 7th of February, 1975 stated that before he made the detention order in question, he scrutinised carefully the facts, informations and materials supplying the grounds for detention contained in his Memo No. 127 H. S. (c) dated 19-12-74 and was satisfied that those are reliable. It was further stated that he was also satisfied that the activities of the detenu as mentioned in the grounds are prejudicial to the augmentation of foreign exchange as envisaged under the said Act. It was also asserted that after a careful consideration of all the informations, facts and materials, he was personally satisfied that with a view to preventing the detenu from acting in any manner prejudicial to the augmentation of foreign exchange as envisaged under the said Act, the detention of the petitioner was necessary and he made the instant order of detention without ulterior motive or purpose. It was further stated that in exercise of his powers and in discharge of his responsibilities under the said Act, he acted in good faith. For the aforesaid reasons, we reject this contention of Mr. Ghose.

17. The third submission of Mr. Ghose was that the grounds are mala fide and baseless. On this heading, firstly it was contended that there was no material before the detaining authority on the basis of which he could reach his subjective satisfaction as he purported to do. In this context, our attention was drawn to paragraphs 6 to 19 and 28 of the petition. The sum and substance of the allegations made in the said paragraphs of the petition are as follows. The detenu carries on business as cloth merchant at Alipurduar in the District of Jalpaiguri. He has got a branch office at 210/212, Jamunalal Bazaz Street, Calcutta. He resides at 1st floor flat No. 2 of premises No. 32, Southern Avenue and that he had no other place of residence or office in Calcutta in any other point of time beside the aforesaid places. During the first week of September, 1974 the detenu was out of Calcutta and he returned on 7th of September, 1974 when he ascertained from his landlord that on 6th of September. 1974 a team of officers belonging to the Enforcement Branch came to arrest the petitioner in connection with search and seizure held at the premises No. 10 Clive Row, Calcutta. The petitioner moved an application under Section 438 of the Criminal Procedure Code before this Court which came up for hearing on 16th of September, 1974 and the said application was disposed of as the application was not maintainable because the alleged violation was under Section 5 of the Foreign Exchange Regulation Act, 1947, punishable under Section 23 of the 1947 Act and that the said offences were bailable. Thereafter the petitioner surrendered on 17th of September, 1974 before the Additional Chief Metropolitan Magistrate in the connected criminal case started therein and prayed for bail. It is stated that the petitioner was enlarged on bail and he was directed to see the investigating officer on Mondays and Fridays for three weeks only. It is stated that the said order was duly communicated to the Enforcement Directorate. On 19th September, 1974, petitioner's Advocate again sent an intimation to the Enforcement Officers requesting them to see the petitioner at his residence because of his ill health. On 23rd of September, 1974, the petitioner was admitted at the Central Nursing Home under the advice of his Doctor, It is stated that the same was communicated to the said officer by the petitioner's advocate by his letter dated 23rd of September. 1974. By letters dated 27th and 30th of September, 1974 the said Enforcement Officers were asked to examine the petitioner at the Nursing Home, The Chief Enforcement Officer informed the petitioner's advocate by his letter dated 1st of October, 1974 that the petitioner was required to be examined on the basis of the document seized and that said examination was not possible at Nursing Home. The request for examination at Nursing Home was rejected. According to petitioner he had no connection with any foreign country and he did not know any person by the name of Mr. Dalton or Mr. Hansraj Sethi a referred to in the grounds of detention On the 1st of October, 1974, Sri B. G. Sen, the Chief Enforcement Officer. Enforcement Directorate, Department of Personnel. Government of India. Calcutta, for the first time filed a report in the Court of the Additional Chief Presidency Magistrate stating that on 11th of April, 1973 certain documents were seized and searched under Foreign Exchange Regulation Act. 1947 and enquiries were made on 27th September. 17th and 31st of October. 28th of November, and 20th of December, 1.973 and 2nd July, 1974 but the petitioner could not be traced. It was further stated that on receipt of the information that the detenu was residing at 32 Southern Avenue. Calcutta, the officer went at the said address but it was found that he had with his family, left that place without any intimation to the landlord In the said report it was further mentioned as follows:

The nature of transactions found in the documents are complicated and not easily understandable and it requires clarification from the party. In view of the above Sri Baid's personal attendance in the office is required and the same cannot be spared for the sake of investigation.

It is alleged that the said Officer prayed before the Court that Sri Baid may be directed to report to his office twice a week for three weeks on his recovery and discharge from the Nursing Home for the aforesaid purpose but that no order has been passed by the Court on that petition. On 17th of October, the petitioner was released from Nursing Home, As already stated, on 21st of October, 1974, the petitioner was arrested pursuant to the order of detention passed under the 1971 Act as amended by the said Ordinance. On the 11th of November, 1974 the said B. G. Sen, filed a further report before the Additional Chief Metropolitan Magistrate, Calcutta stating that Sri Baid did not appear to the office till 20th October, 1974 and also stated as follows:

It will be necessary to interrogate Sri Baid for clarification of matters relating to the transaction found in the seized documents. The investigation could not be completed for want of clarification.

18. On the basis of the aforesaid averments it is submitted by Mr. Ghose that the alleged grounds had no basis at all and that there was no material before the detaining authority to arrive at the conclusion that the detenu has or had any illegal transaction in foreign exchange at any point of time as alleged, It is stated that upto the date of the order and as a matter of fact uptill now there has been no examination of the detenu. The investigation is not complete. It has continued even upto February, 1975. Further such reports make it clear that there was no material before the authority concerned to connect the detenu with any alleged illegal transaction. According to him such reports show that it was still in the investigation stage.

19. We have discussed, in detail, the allegations made in the petition in order to examine the basis of the contention of Mr. Ghose. In our opinion from these allegations, it is not possible to hold that the grounds are baseless and male fide. It is true that for some reason or other, the Investigating Officer concerned was not in a position to examine the detenu in connection with the charges against him. It is also true that the investigation is not yet complete. But these facts by themselves are not sufficient to hold that the grounds are baseless or mala fide. It is to be remembered that the investigation is going on in connection with some criminal case. It may be that so far as that criminal case is concerned the Investigating Officer has not yet completed his investigation the object of which is to collect sufficient evidence to prosecute the petitioner. But merely because such investigation in respect of a criminal case is not yet complete, from that it does not automatically follow that there was no material before the detaining authority on the basis of which he could have reached his subjective satisfaction to enable him to pass an order of detention. It is to be remembered that whereas in a criminal case the prosecution has to prove the charges beyond reasonable doubt, so far as an order of detention is concerned it is, what is known as, a jurisdiction of suspicion. Even if it may be assumed that sufficient materials have not yet been obtained by the Investigating Officer to prove any criminal charge beyond reasonable doubt, we cannot hold that the detaining authority had no material before him to reach his subjective satisfaction so far as the said order of detention is concerned. To reach such satisfaction, as long as there was some relevant material that is sufficient. The detaining authority does not have to wait until there are sufficient materials before him to prove the charges against the detenu beyond reasonable doubt as in a criminal proceeding. The detaining authority does not have to wait until the investigation is complete. It is also to be remembered that the authorities are different. In respect of the criminal case, the investigating officer is carrying on the investigation. According to his opinion, the investigation is not complete for the purpose of the criminal case but that does not prevent some other authority in the present case the detaining authority under the said Act to reach his subjective satisfaction on the materials Which were available to him. As pointed out in Haradhan Saha v. State of West Bengal : 1974CriLJ1479 this is not a parallel proceeding. In any event so far as the reports of the Investigating Officer are concerned, we cannot accept the interpretation sought to be put by Mr. Ghose on the same. In the first report, it was stated by the Investigating Officer that the nature of transaction found in the document was complicated and not easily understandable and that it required clarification from the party. In that view of the matter Mr. Baid's personal attendance in the office was required by the Investigating Officer. That, in our opinion, cannot lead to the conclusion that there was no material at all at that point of time on the basis of which a satisfaction could be reached in respect of the complicity of the detenu. Certain materials might have required clarification but that does not mean that there was no material at all. Sri Baid's personal attendance might have been considered necessary for clarification of some matters but it cannot be said that as Sri Baid never attended, therefore, there was no material. Similarly, the second report merely states that the investigation could not be completed for want of clarification. That does not mean that there was no material at that point of time. Further it is to be remembered that the said order of detention was made on 19th of December, 1974 whereas the said reports were made quite some time before that and meantime admittedly investigation was going on. Accordingly, even if it could be assumed that there was no material on the date of the said reports, it does not automatically follow that there was no material before the detaining authority on the date of the order of detention. In this context we may also refer to the affidavit of the detaining authority already referred to by us. The detaining authority has further stated that prior to passing of the instant order of detention he personally considered the relevant materials placed before him in that regard. He has further stated that upon such consideration he had found the materials to be bona fide and reliable. He has further stated that after such consideration, he was also satisfied that the statements contained in the grounds of detention are true, existent and well founded and that the detenu acted in the mariner as stated in the ground for detention. For the aforesaid reasons we are unable to hold that there was no material before the detaining authority to enable him to reach his subjective satisfaction as he did.

20. The second branch of Mr. Ghose's submission regarding mala fide and baselessness was directed against the allegation in the grounds that 10 Clive Row was the office of the detenu and that 4, Raj Kumar Bose Lane was his residence. These are the places which were searched and from where the documents were seized. According to Mr. Ghose apart from a bald statement in the grounds to that effect, there was no material at all in support of the same. No document was seized from the detenu. As a matter of fact, it is alleged, there was and is no document before the authority concerned to the effect that 10, Clive Row was the office of the petitioner/detenu or that 4, Raj Kumar Bose Lane was his residence. In this context Mr. Ghose placed before us the relevant paragraphs of the petition, Mr. Ghose also pointed out that the letters mentioned in the ground are not alleged to have been addressed to the petitioner and it is also not alleged that the statements were in relation to the accounts of the petitioner. Accordingly he submitted that to this extent the grounds are nonexistent, baseless and mala fide. We are unable to accept this contention of Mr. Ghose. It is stated in the grounds that 10, Clive Row was the office of the detenu and that 4, Raj Kumar Bose Lane was his residence. These are the places which were searched. Mere fact that no document was seized from the detenu or that the 'foreign letters' were not addressed to the detenu or that the statement of accounts were not stated to be in respect of the accounts of the detenu are not sufficient to hold that the statements made in the order regarding 10, Clive Row being the office of the detenu and 4, Raj Kumar Bose Lane being his residence, are baseless. In any event, detaining authority has stated in his affidavit that he was satisfied that the petitioner was using No. 10, Clive Row as his office and actually was residing at 4, Raj Kumar Bose Lane during the relevant period. It was further stated that the officers conducting the same, had information that the petitioner was occupying the premises No. 10, Clive Row, Calcutta and 4, Raj Kumar Bose Lane. Calcutta as his office and residence respectively at the material time, It was further stated that 10, Clive Row. Calcutta was described as office of M/s. Bengal Jute Co, and Sukumar Deb besides that of Sri Mungilal Baid as the telephone of the Office at 10, Clive Row, Calcutta was in the name of M/s. Bengal Jute Co. and Sukumar Deb. In view of the same we are unable to hold that any statement made in the grounds regarding the office or residence of the detenu is baseless as alleged.

21. The subjective satisfaction of; the detaining authority is not wholly immune from judicial reviewability. The Courts have by judicial decisions carved out an area, limited though it be, within which the validity of the subjective satisfaction can yet be subjected to judicial review. Khudiram Das v. State of West Bengal : [1975]2SCR832 The Courts can set aside an order if it is passed mala fide or on extraneous ground. The Court has also power to set aside an order of detention when the ground is baseless or non-existent. Khagen Sarkar v. State of West Bengal AIR 1971 SC 2051 : 1971 Cri LJ 1456; Motilal v. State of Bihar : 1969CriLJ33 : Rameshwar Lal v. State of Bihar : [1968]2SCR505 and Dwarka Prasad v. State of Bihar : 1975CriLJ221 : Borjahan Gorey v. State of West Bengal : [1973]1SCR751 and Biram Chand v. State of Uttar Pradesh : 1974CriLJ817 . In the facts and circumstances of this case and particularly having regard to the affidavit of the detaining authority, it is not possible for us to hold that the allegations made in the grounds are baseless or nonexistent or that the order has been passed mala fide. For the aforesaid reasons we reject this contention of Mr. Ghose.

22. It was next contended by Mr. Ghose, which was his fourth submission, that the order was passed on extraneous grounds, in this context, our attention was drawn to paragraphs 14, 29 and 30 of the petition and paragraph 11 of the affidavit affirmed by the detaining authority in opposition to the Rule. In paragraph 11 of the said affidavit, the detaining authority stated that the petitioner had connection with Mr. Dalton and Mr. Hansraj Sethia and other persons residing in foreign countries as stated in the ground. Mr. Ghose submitted that in the grounds it is not alleged that the detenu had acted by arrangement with or by order or under instructions of any person other than Hansraj Sethia or Mr. Dalton. Accordingly he submitted that from such statement in the affidavit of the detaining authority it is clear that he must have taken extraneous matters into consideration which was not disclosed to the detenu,

23. We are unable to accept this contention of Mr. Ghose. In our opinion, the interpretation sought to be put in respect of few words of a paragraph in the affidavit of the detaining authority is not warranted. In paragraphs 14, 29 and 30 of the petition it was alleged that the petitioner had got no connection with any foreign countries and he did not know any person by the name of Mr. Dalton or Mr. Hansraj Sethia. It was further stated that there was no arrangement between the petitioner and the said persons. Dealing with the said allegations, and in this context, it was stated by the detaining authority in his affidavit that upon consideration of the relevant materials placed before him, he was satisfied that the petitioner had got connection with Mr. Dalton and Mr. Hansraj Sethia and other persons residing in foreign countries as stated in the ground for detention. Accordingly mere use of the expression 'other persons' in this context cannot possibly indicate that the detaining authority had taken any other matter into consideration other than those stated in the grounds. Further, ground No. 1 (b) itself shows that the petitioner had connections not only with Mr. Dalton and Mr. Hansraj Sethia but also with other persons residing in foreign countries. Ground No. 1 (b) alleges that he had made unauthorised payments to different parties in India and Bangladesh including two gentlemen of Bangladesh whose names have been specifically mentioned. Therefore, even according to the said grounds the detenu had connections with not only Mr. Dalton and Mr. Sethia but also with other persons residing in foreign countries i.e. the persons to whom such payments were made. The meaning of the expression 'connection' used by the detaining authority cannot be confined to connection only with persons under whose orders or instruction or in agreement with whom the detenu was acting. As the detenu had made payments to various persons, he obviously had connection with them. Accordingly it is not correct to say that the said paragraph of the affidavit of the detaining authority mentions anything other than or in addition to what has been stated in grounds themselves. Accordingly we cannot hold that said paragraph of the affidavit of the detaining authority would show that he had taken any matter or material into consideration in reaching his subjective satisfaction other than those stated in the grounds. There is another aspect of the matter. In ordinary preventive detention cases if it is found, from the affidavit or otherwise, that the detaining authority had taken any material or fact into consideration while reaching his subjective satisfaction, but the same is not disclosed in the grounds, then the order of detention is held to be illegal. The basis of such conclusion is important-the detention is illegal because the detenu had no opportunity to make any representation regarding those materials or facts which were not disclosed in the grounds. This is based on the right of the detenu to make representation which is guaranteed by Article 22(5) of the Constitution of India. But in view of the Presidential order the right to enforce Article 22(5), amongst others, remains suspended. Accordingly it is doubtful whether it is now open to the detenu to agitate any such point. Accordingly we reject this contention of Mr. Ghose.

24. The fifth submission of Mr. Ghose was that 'augmentation' and 'conservation' are two different expressions and one is mutually exclusive of other. He further pointed out that the expression 'augmentation' was not in the said Ordinance amending the 1971 Act though the same finds place in the said Act. Therefore, according to Mr. Ghose, by the use of the said expression 'augmentation' in the said Act the legislature must have intended something else other than 'conservation' (which alone was used in the said Ordinance) when they introduced both the expressions in the said Act. Mr. Ghose submitted that the earlier order was made with a view that detention was necessary for preventing the detenu from acting in any manner prejudicial to the 'conservation' of foreign exchange, whereas in the order impugned before us on the same set of facts it was alleged that the detention was necessary with & view to preventing the detenu from acting in any manner prejudicial to the 'augmentation' of foreign exchange and not 'conservation'. According to him these two expressions cannot remain side by side. The same act cannot be germane to augmentation and conservation both. Therefore, he submitted that the detaining authority had acted mechanically and there was non-application of mind. It is to be recorded that Mr. Ghose with his usual fairness and frankness very properly conceded before us that he. cannot say that the facts disclosed in the grounds are not germane to the object of the impugned order, that is, augmentation of foreign exchange.

25. We are unabe to accept this contention of Mr. Ghose. Assuming that 'augmentation'' and 'conservation' are two completely different expressions which are mutually exclusive and that on the same set of facts it cannot be conservation and augmentation both as contended by Mr. Ghose, this by itself cannot make the impugned order before us invalid. If the facts disclosed in the grounds are germane to 'augmentation of foreign exchange', as conceded by Mr. Ghose and also held by us, that is the end of the matter. If on the basis of facts set out in the grounds an order of detention could be made on the ground of augmentation of foreign exchange, the mere fact that augmentation and conservation are exclusive of each other, would not make this order of detention bad. At the most, on that ground the previous order could have been challenged. However we make it clear that we are not holding that the earlier order was bad or that on the same set of facts no order could be passed on the ground of augmentation or conservation or augmentation and conservation both. In our opinion, even though the meaning of the expressions 'augmentation' and 'conservation' may not exactly be the same, it does not automatically follow that on the same set of facts two orders could not be passed one on the ground of augmentation and another on the ground of conservation. In our opinion these two expressions are not so mutually exclusive as sought to be contended. Some act which is prejudicial to augmentation of foreign exchange may also be prejudicial to conservation of foreign exchange. The meaning of the expression 'conservation' is preservation. The expression 'augmentation' means the act or process of increasing the size or amount. It cannot be said that these two expressions are so completely different that orders can never be passed on both the grounds on the same set of facts. Accordingly we reject this contention of Mr. Ghose.

26. The sixth contention of Mr. Ghose was that the order was bad for lack of proximity. He submitted that according to the grounds served on the detenu, the first incident took place between 4th May to 26th August, 1972 and the second incident took place in March, 1973. The search took place on 11th April, 1973. The impugned order before us was made on 19th of December, 1974. Therefore, according to Mr. Ghose, even from the last incident there was more than 20 months' delay. According to Mr. Ghose, the test of proximity is only the length of time and nothing else. According to him, the length of time is the only factor to be taken into consideration, He submitted that in the present case the incident was too remote and did not have any rational probative value. Mr. Ghose made it quite clear that it was not being contended by him that no order of detention could be passed under the said Act relying on some incident or grounds which took place before the said Act came into force.

27. The learned Standing Counsel, appearing on behalf of the State, contended that the length of time was not the only criterion. He submitted that various factors have to be taken into consideration to test the validity of an order on the question of propensity. The present condition of the country, particularly its economic situation has to be taken into consideration in respect of an order of detention passed under the said Act. In this context, he also drew our attention to the preamble of the. said Act and the statement of objects and reasons to the Bill. He also submitted that in this connection the Court was also entitled to take judicial notice of the relevant facts relating to the present economic condition of the country. According to him, one of the tests is whether the authority concerned had slept over the matter. He stated that it all depends on the facts and circumstances of each case and particularly the seriousness of the incidents. He fairly pointed out that one isolated solitary incident of a very minor nature which had taken place a fairly long time back, would not be sufficient to enable the detaining authority to reach such, satisfaction bona fide. He also drew our attention to the ground itself and submitted that the satisfaction was reached not merely on the materials obtained during the search which took place on 11th of April 1973 but also on the basis of the investigation which was carried on thereafter. The admitted position is that such investigation has not yet been completed and therefore, if during such investigation some material was found as stated in the ground, it cannot be said that, merely because the incident took place in March, or April, 1973, there has been any unusual time lag.

28. Mr. Chakrabarti, appearing on behalf of the Union of India, took an extreme stand in this connection. According to him, the principle of proximity has no application at all in the case of an order of detention passed under the said Act having regard to the object of the said Act.

29. Before we consider the merits of the respective arguments made by the learned Advocates appearing for different parties, it is necessary to refer to some recent decisions of the Supreme Court whereby their Lordships have discussed this aspect of the matter. From the said judgments we can ascertain the reason why this principle of proximity has been introduced in the case of preventive detentions and also the scope and extent, of the said principle. This would help us in ascertaining firstly whether the principle of proximity has any application in respect of detentions under the said Act and secondly, if it has such application, applying the principle in the facts of the present case, whether the grounds are proximate or remote. In the case of Malwa Shaw v. State of West Bengal reported in : 1974CriLJ778 where there was an unexplained delay of about 5 months, it was observed as follows:

The time lag between the dates of the alleged incidents and the making of the order of detention is not so large that it can be said that no reasonable person could possibly arrive at the satisfaction which the District Magistrate did on the basis of the alleged incidents. It; must be remembered that some time is abound to elapse before the investigation into the alleged incidents is completed and the matter is brought to the notice of the District Magistrate and the District Magistrate applies his mind and arrives at the requisite satisfaction culminating in the order of detention. The period of about five months which elapsed between the dates of alleged incidents and the making of the order of detention cannot be regarded as so unreasonably long as to warrant the inference that no satisfaction was really arrived at by the District Magistrate or that the satisfaction was colourable or no satisfaction at all as required by the statute. The satisfaction which the District Magistrate is required to reach in order to support the order of detention is that it is necessary to detain the petitioner with a view to preventing him from acting in a particular manner and that satisfaction can obviously be founded only on a reasonably anticipated prognosis of future behaviour of the petitioner made on the basis of past incidents. It is not possible to say that the incidents referred to in the grounds of detention were such that they could not reasonably lead to the satisfaction which the District Magistrate reached when he made the order of detention.

30. In the case of Olia Mallick v. State of West Bengal reported in : 1974CriLJ883 wherein also there was an unexplained delay of 5 months it was observed as follows:

It appears that the police filed criminal cases but without any result. Since the activity of the petitioner marked him out as a member of a gang indulging systematically in the cutting of aluminium electricity wire the District Magistrate would have been very well satisfied, even after the lapse of 5 months, that it was necessary to pass the detention order to prevent him from acting in any manner prejudicial to the maintenance of supply of electricity.

31. In the case of Golam Hussain v. Commissioner of Police, Calcutta : 1974CriLJ938 the Supreme Court observed as follows:. there must be a live link between the grounds of criminal activity alleged by the detaining authority and the purpose of detention, namely, inhibition of prejudicial activity of the species specified in the statute. This credible chain is snapped if there is too long and unexplained an interval between the offending acts and the order of detention. Such is the ratio of proximity in Lakshman Khatik. No authority acting rationally, can be satisfied, subjectively or otherwise, of future mischief merely because long ago the detenu had done something evil. To rule otherwise is to sanction a simulacrum of a statutory requirement. But, no mechanical test, by counting the months of the interval is sound. It all depends on the nature of the acts relied on. grave and determined or less serious and corrigible, on the length of the gap, short or long, on the reason for the delay in taking preventive action, like information of participation being available only in the course of an investigation.

32. In the case of Anil De v. State of West Bengal : 1974CriLJ702 it was similarly held that even if the incident attributed to the detenu has some connection with the obnoxious activities, it should not be too trivial in substance nor too stale in point of time as to snap the rational link that must exist between the vicious episode and the prejudicial activity sought to be interdicted.

33. In the case of Lakshman Kha-tik v. State of West Bengal : 1974CriLJ936 , it was stated that mere delay in passing the detention order was not conclusive but it has to be seen whether the grounds would really weigh with an officer or some seven months later in coming to the conclusion that it was necessary to detain the detenu to prevent him from acting in a manner prejudicial to the maintenance of essential supplies of food grain. It was not explained in that case why there was delay of 7 months in passing the order. It was further observed that the authorities concerned must have due regard to the object with which the order is passed and if the object was to prevent disruption of supplies of foodgrains, one should think prompt action in such matters should be taken as soon as incidents like these have taken place.

34. In the case of Sk. Abdul Munnaf v. State of West Bengal : 1974CriLJ1233 it was observed that there was no cogent explanation for the delay of 9 months between the incident and the order of detention and accordingly it was held that the detention was not in accordance with law. In that context it was observed as follows:

Tine past conduct or antecedent history of a person can appropriately be taken into account in making a detention order. It is indeed largely from prior events showing tendencies or inclinations of a person that an inference can be drawn whether he is likely in the future to act in a manner prejudicial to the maintenance of public order or to the maintenance of supplies and services essential to the community. But in order to justify such an inference it is necessary to bear in mind that such past conduct or antecedent history should ordinarily be proximate in point of time and should have a rational connection with the conclusion that the detention of the person is necessary (see Nagen Murmu v. State of West Bengal : 1973CriLJ667 . No doubt it is both inexpedient and undesirable to lay down any inflexible test as to how far distant the past conduct or the antecedent history should be for reasonably and rationally justifying the conclusion that the person concerned if not detained may indulge in prejudicial activities. If in a given case the time lag between the prejudicial activity of a detenu and the detention order made because of that activity is ex facie long, the detaining authority should explain the delay in the making of the detention order with a view to show that there was proximity between the prejudicial activity and the detention order, if the detaining authority fails to do so in spite of an opportunity having been afforded to it, a serious infirmity would creep into the detention order.

In the case of Gora v. State of West Bengal reported in : 1975CriLJ429 , it was observed as follows:

Whether the acts of the detenu forming the basis for arriving at a subjective satisfaction are too remote in point of time to induce any reasonable person to reach such subjective satisfaction must depend on the facts and circumstances of each case. The test of proximity is not a rigid or mechanical test to be blindly applied by merely counting the number of months between the 'offending acts' and the order of detention. It is a subsidiary test evolved by the court for the purpose of determining the main question whether the past activities of the detenu are such that from it a reasonable prognosis can be made as to the future conduct of the detenu and its utility, therefore, lies only in so far as it subserves that purpose and it cannot be allowed to dominate or drown it. The prejudicial act of the detenu may in a given case be of such a character as to suggest that it is a part of an organised operation of a complex of agencies collaborating to clandestinely and secretly carry on such activities and in such a case the detaining authority may reasonably feel satisfied that the prejudicial act of the detenu which has come to light cannot be a solitary or isolated act, but must be part of a course of conduct of such or similar activities clandestinely or secretly carried on by the detenu and it is, therefore, necessary to detain him with a view to preventing him from indulging in such activities in the future.

35. In the case of Kamal Pramanik v. State of West Bengal : AIR1975SC730 explanation given for a time lag of one year was accepted by Supreme Court. One of the explanations put forward was that the complicity of the detenu transpired during the investigation.

36. Having regard to the principles laid down as aforesaid, it appears to us that the respective stands taken on behalf of the petitioner and the Union of India are both extreme and cannot toe accepted. On the one hand, we cannot accept the contention of Mr. Chakrabarti that there is anything in the said Act which prevents the application of the said principles in the case of a detention under the said Act under any circumstances. Take a solitary, isolated and unorganised act of an individual involving a transaction of foreign exchange (which is illegal but very technical in nature) involving a paltry sum of Rs. 5/- which had taken place ten years back. Can a reasonable prognosis be made by the detaining authority from the same as to the future conduct of the person concerned? Can any authority acting rationally be satisfied of future mischief merely because of such solitary act? In our view the answer must be in the negative. We are of the opinion that the test of proximity has to be applied in the case of detention under the said Act also but having special regard to the object of the said Act. On the other hand, the contention of Mr. Ghose that the only important thing to be considered is the time lag cannot also be accepted because it is clear from the decisions referred to above, that even in the case of detention under the 1971 Act, mere counting the number of months cannot be considered to be the only test. A fortiori, that cannot also be the only test in the case of a detention under the said Act.

37. Applying the test of proximity as laid down by Supreme Court we have to examine the facts of the present case. While applying the said test in the case of a detention under the said Act, we shall have to keep in mind the special features of the said Act. In this context, we may refer to the title, the preamble and the Statement of Objects and Reasons of the said Act for the purpose of ascertaining the evil sought to be remedied. Accordingly we set out the same hereinbelow:

Title-

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.Preamble-

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.

Statement of Objects and Reasons:The various measures, both administrative and legal, taken by Government from time to time to prevent smuggling of goods into or out of India and to check diversion of foreign exchange from official channels have been under constant review. Unless the links which facilitate violations of foreign exchange regulations and smuggling activities ere disrupted by immobilising by detention the persons engaged in these operations, anti-smuggling measures would not have a substantial impact. Hence the President promulgated on the 17th September, 1974 the Maintenance of Internal Security (Amendment) Ordinance, 1974. In the light of experience gained and keeping in view the distinct class of persons to be covered, this Bill seeks to replace the said Ordinance by a new and self-contained Act. (As per the Bill No. 106 of 1974 introduced in Lok Sabha on 25-11-74).

38. From the aforesaid, it is clear that this Act had been enacted to meet an extraordinary situation prevailing in the country, it is true that we must remember that the liberty of a person is involved. At the same time we also have to keep in mind the interest of the country as a whole. Apart from the title, preamble and Statement of Objects and Reasons, the Court is also entitled to take judicial notice of well-known facts. Samaresh Bose v. Dist. Magistrate, Burdwan : 1973CriLJ464 ; State of West Bengal v. Ashoke De : 1972CriLJ1010 . Accordingly, we can certainly take judicial notice of the fact that augmentation and conservation of foreign exchange is a vital thing for this country, not merely for the purpose of development of this country, but also for the purpose of maintenance of a normal life. This country has still many problems. Due to reasons beyound our control we have to import various things. From time to time we have to import food stuffs for the purpose of meeting the shortage in our country caused by natural calamities. We have to import fertilisers in order to increase the production of food in our country. We have to import various other things which are essential for the development of this country in a democratic manner. All these require foreign exchange. We also require foreign exchange for suitable defence of the country. We cannot also forget the recent price rise in respect of oil and petroleum products which have to be imported by this country. All these things go to show the importance of conservation and augmentation of foreign exchange of this country and the necessity for preventing any activity prejudicial to the same. The economic offenders are a menace to the community and it is necessary in the interest of the economic well being of the society to stamp out such pernicious anti-social and highly reprehensible activities.

39. Keeping the aforesaid in mind, let us examine the facts of the case before us. As already pointed out, one of the important factors is the nature of the activity of the detenu as alleged. There cannot be any doubt that the allegations against the petitioner are very serious in nature. In one month alone, as would appear from ground No. 1 (b) itself, there was unauthorised payment to the extent of Rs. 73,98,900. Further, in course of less than four months, as would appear from ground 1 (a), there was unauthorised dealing in foreign exchange for a total sum of 1.09,000 (pounds). Another factor to be kept In mind is that this is not a stray incident in which only one single person is involved. This was well planned and done in an organised manner. There cannot be an illegal transaction of such a nature and involving such a huge sum unless it is well planned and well organised. This would also be apparent from the allegations made in the grounds from which it appears that such unauthorised dealing in foreign exchange was done by arrangement with two persons resident abroad. Similarly, unauthorised payments were made to different parties in India and Bangladesh, names of some of whom have been stated in the grounds. It is clear that it is part of an organised operation of a complex of agencies collaborating to clandestinely and secretly carry on such activities. Regarding the time factor, apart from the fact that there cannot be any mechanical test, the ground itself shows that the involvement of the detenu in such illegal transaction in foreign exchange transpired not merely from the search and seizure of the documents but also in the course of investigation regarding the same. If the facts stated in the grounds were stated to have been disclosed by and at the time of the seizure, alone, then possibly there could have been a scope for the argument, that time started to run so to say, from 11th April, 1973 when the search and seizure took place. But it is apparent from the grounds that the detaining authority did not reach his satisfaction only on the basis of seizure but also from, what transpired during the investigation This investigation is still being carried on. It is also to be remembered that the petitioner, by some means or other managed to prevent any interview by the investigation Officers for a long time. Naturally, it was reasonable on the part of the authorities concerned to wait and see what transpired from such interview. In the present case it cannot also be said that the time lag, if any, remains unexplained or that the detaining authority had slept over the matter. The said Act was passed very recently. The 1971 Act. as amended by the said Ordinance, was also in force for a short time during which the previous order was issued practically on the same grounds. Further in his affidavit the detaining authority had given some explanation regarding the time-lag, It is stated that careful and long drawn investigation had to be carried on. Enquiries had to be made at different places and quarters which was a time consuming one. Investigation had to be carried on without the assistance of the petitioner as he could not be contacted. For the aforesaid reasons we must reject the contention of Mr. Ghose. We are satisfied that no valid ground has been made out on the basis of lack of proximity between the incidents relied on and the order made.

40. The seventh submission of Mr. Ghose was made relying on some submissions made in paragraphs 48(c) of the petition to the effect that since the said Act came into operation on the 19th of December, 1974, it was not humanly possible on the part of the detaining authority to satisfy himself after looking into all the materials on record and formulate grounds of detention in respect of 60 to 64 in detention which clearly demonstrate that the detaining authority just put his signature without applying his mind and the order was made mechanically. There is no merit in this contention. There is no averment of fact on the basis of which this Court can come to the conclusion that the detaining authority acted mechanically as alleged. Merely some submissions have been made, which again have been verified as submissions. There is no specific or sufficient allegation in support of such contention. Further, even such submission has been specifically denied by the detaining authority in his affidavit. Accordingly we have no hesitation in rejecting this contention of Mr. Ghose.

41. Lastly, it was argued by Mr. Ghose that there was non-compliance of the procedural requirements as envisaged by the said Act. In this context, our attention was drawn to Section 8 of the said Act which provides, inter alia, that for the purpose of Articles 22(4)(a) and 22(7)(c) of the Constitution, the appropriate Government shall, within five weeks from the date of detention of a person under a detention order, make a reference in respect thereof to the Advisory Board constituted under Clause (a) of Section 8 of the said Act to enable the Advisory Board to make the report under Sub-clause (a) of Clause (4) of the Article 22 of the Constitution. Our attention was also drawn to Clause (c) of Section 8 of the said Act, which provides inter alia that the Advisory Board concerned was to prepare its report specifying its opinion, as to whether or not there was sufficient cause for the detention of the person concerned and submit the same within eleven weeks from the date of the detention of the person concerned. Mr. Ghosh submitted that this Court should call upon the respondents to satisfy this Court that these provisions have been duly complied with in the present case failure to do which, he submitted, would make the detention illegal.

42. This last contention of Mr. Ghose has to be rejected on the ground that we are not in a position to entertain any such submission. Section 8 of the said Act makes certain provisions but only for the purpose of Articles 22(4)(a) and 22(7)(c) of the Constitution of India. The provisions of Section 8 have got no separate existence. Articles 22(4), 22(5), 22(6) and 22(7) being suspended by the Presidential Order as stated hereinabove, in our opinion, Section 8 cannot be enforced during the period the Presidential Order is in force. We need not go into this matter in detail because a Division Bench of this Court has already decided on this point in Cri. Misc. Case No. 2719 of 1974 (Reported in (1975) 1 Cal LJ 427) (Sm. Chandra Kanta Berlia v. Superintendent, Presidency Jail) whereby they have held that such point cannot be agitated by any detenu under the said Act in view of the Presidential Order. Accordingly we cannot entertain this submission of Mr. Ghose and we reject the same.

43. All the contentions raised by Mr. Ghose fail. Accordingly, we dismiss this application and discharge the Rule.

Sudhamay Basu, J.

44. I agree but I would like to add a few words about the question of proximity. As Mr. Ghose pointed out the acts related to a period from 4-5-72 to 25-8-72 and March, 1973 but the order of detention is dated the 19th of December, 1974 involving a time-lag of twenty months. He argued that the activities were far too remote and could not form the basis of any rational satisfaction.

45. Mr. Gupta, appearing on behalf of the State of West Bengal, explained the purpose of the act which was to conserve and augment foreign exchange and prevent smuggling. To achieve the purpose of the Act it was necessary to combat organisations of smuggling who operated in a clandestine manner. It was necessary to disrupt the links between the persons who ruined the national economy and to immobilise them. Naturally the process was time consuming. The prejudicial acts could be unfolded by search and seizure and a process of investigation which would take time. Documents, prima facie, obscure might throw light in conjunction with others. Again, the detaining authority had to deal with individuals who were skilled and powerful persons operating stealthily. Keeping all these in view, the Court should consider that the live link between the prejudicial activities of such persons and an order of detention will not be snapped within a short time. The tests applied to determine the proximity in ordinary cases of Maintenance of Internal Security Act are not to be applied blindly in such cases.

46. Mr. N. Chakraborty, on behalf of the Union of India argued that there was no obligation on the part of the detaining authority to supply the detenu with grounds as Article 22 (including Clauses 4 and 5 thereof) was not operative. According to the learned advocate, as proximity had relation to grounds of detention it could not be the subject-matter of any arguments at all in a court of law. The learned advocate further argued that in the absence of Article 21 the detaining authority could detain anybody it liked. The Courts had no jurisdiction to interfere. The only thing the Court could do was to see if Section 3(1) was complied with. When asked if the Court could examine whether or not the order was legally made under the act he conceded that the Court could do that but according to him, the Court's duty ended toy examining whether the order was actually made under Section 3(1). He was, however, unable to satisfy the Court as to what was the necessity of the Act itself if, in the absence of Article 21, the detaining authority could detain anybody 'if the detaining authority did not like the face of that person' to quote him,

47. It may be stated at once that we are unable to agree with Mr. Chakraborty that the Court has no power even to examine the legality of an order of detention purported to be made under the act. The Court cannot, in our view, abdicate its power even to examine whether or not the order of detention has been passed, mala fide or in colourable exercise of the powers conferred by the Act. We are of the opinion that the court can examine the validity of an order of detention from the point of view of remoteness, The rationale behind preventive detention is that the nature of the prejudicial activity is such that according to the views of the detaining authority it warrants detention of the person concerned so that he may he prevented in future from indulging in similar prejudicial activity. If the acts complained of and the order of arrest are too far apart the long interval would cut at the root of the necessity of detention. Past conduct of a person should be proximate in point of time to the order of detention so as to make the conclusion necessary and rational that the detention of the person is necessary. The test of proximity, would vary according to me context. As has been pointed out by several Supreme Court decisions, some of which have been already referred to by my learned brother, no mechanical test by counting months of the interval should be applied. It will all depend on the nature of the acts concerned, the length of the period and the reasons for delay in taking action. In relation to the Maintenance of Internal Security Act, an unexplained delay of nine months in one case and seven months in another have been held by the Supreme Court to be fatal from the point of view of proximity. (Sk. Abdul Mannaf v. The State of West Bengal : 1974CriLJ1233 ; Lakshman Khatik v. State of West Bengal : 1974CriLJ936 . To look into the nature of the incidents involved in this case it would appear that about 74 lacs of Rupees in foreign exchange were involved in course of one month. The allegations also show that the detenu was acting on the orders of two persons, residents elsewhere. The enormity of the sums involved, and the process of investigation by means of search and seizure would require a comparatively long period before prognosis could be made by the detaining authority as to the future behaviour of the person concerned in the light of the prejudicial activity brought to light by investigation and analysis of documents, records etc. The clandestine nature of the dealings and difficulty in unearthing the link and the volume of transaction and their nature unmistakably indicate that the time gap of twenty months in the instant case could not be regarded as too remote.

48. We are, therefore, constrained to reject the contention of Mr. Ghose in this respect.


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