Special Leave Peti tion CRL No 1370 of 1986
From the Judgment and Order dated 235
1986 of the Bombay High Court in Crl
WP No 385 of 1986
AND WRIT PETITION NO
363 OF 1986
Under Article 32 of the Constitution of India
GL Sanghi D Canteenwala VB Agarwala BR Agarwa la and Miss Vijay Lakshmi Mannen for the Petitioner
K Parasaran Attorney General CV Subba Rao and A Subba Rao for the Respondent
The following Judgment of the Court was delivered This petition for special leave directed against the judgment and order of the Bombay High Court dated May 3 1986 and the connected petition under article 32 of the Con stitution raise common questions and therefore they are disposed of by this common order
The petitioner by a peti tion under article 226 filed before the High Court prayed for the issuance of a writ of habeas corpus which is also the prayer before us for the release of her husband Mohanlal Jatia who has been detained by an order of the Additional Secretary to the Government of India Ministry of Finance Department of Revenue dated December 13 1985 under sub section
1 of section 3 of the Conservation of Foreign Exchange  Pre vention of Smuggling Activities Act 1974 on being satisfied that it was necessary to detain him with a view to prevent ing him from acting in any manner prejudicial to the augmen tation of foreign exchange
Intelligence gathered by the Directorate of Revenue Intelligence Bombay was that one Subhash Gadia the broth er in law of the detenu Mohanlal Jatia a very rich and prosperous businessman of Bombay was under invoicing the imports of yarn from Japan
On the 55 basis of the said information the officers of the Director ate of Revenue Intelligence and officers the Customs Bombay searched his residential premises at A 121 Sea Lord Cuffe Parade Colaba Bombay under the on June 27 1985 which resulted in seizure of certain documents
As the seized documents not only revealed violation of the provisions of the but also indicated certain payments and transactions in violation of the Foreign Ex change Regulation Act 1973 the matter was referred to the office of the Enforcement Directorate for purposes of inves tigation from the angle of the Foreign Exchange Regulation Act on October 24 1985
The aforesaid Subhash Gadia was summoned under section 40 of the Foreign Exchange Regulation Act and his statement was recorded by RC Singh an officer of the Enforcement Directorate Bombay on November 5 1985
In his statement of even date Subhash Gadia stated that he went to Japan in 1970 seeking employment with a proprietory concern known as Messrs Greenland Corporation Tolo Build ing Osaka Japan owned by a Nepali national and was engaged in exporting yarn fibre fabrics chemicals etc
to India and Middle East countries
Messrs JM Trading Corporation 701 Tulsiani Chambers 212 Nariman Point Bombay of which Mohanlal Jatia is a partner
are the sole selling agents of Messrs Greenland Corporation for yarn and fibre
He further revealed that Satyanarayan Jatia the eider brother of Mohanlal Jatia who is the partner of Messrs JM Trading Corporation Bombay had been staying in Japan for some 35 years and was the sole representative of Messrs Greenland Corporation in Japan
While explaining the entries in the seized documents from his residence on June 27 1985 Sub hash Gadia admitted that the bunch marked SG 6 containing pages 1 to 94 are written by him in his own writing and that these contained accounts relating to his trade or business including imports and cash transactions and payments
He further confirmed that all the transactions reflected in these documents were his real business transaction dealings and some of which were not reflected in his regular account books
While explaining page 94 of the seized bunch SG 4
he stated that this page contained coded account in Indian rupees of his firm Messrs Piyush Corporation and that on the left side of this page credit entries were shown in Indian rupees with two zeros 00 missing and that while writing his account he had deleted two zeros in the credit side as well as debit side right side of the page
While decoding the codes he stated that the figure 858238 written on the right hand side was actually Rs858238 and this amount had been debited against AS investment
Further that AS  investment was his private investment abroad in US dollars which had been utilised by him for under invoicing of sever al imports etc
56 Paragraph 44 of the grounds of detention revealed trans actions relating to the detenu Mohanlal Jatia and it is extracted 44
When confronted with the documents seized from Subhash Gadia s residence even though you have denied any connection in respect of various unauthorised transactions between you Greenland Corporation
Japan and others abroad but the following documents clearly revealed that you have been indulging in various unauthorised transactions in violations of provisions of Foreign Exchange Regulation Act
A Page338 Trial Balance of Greenland SG 6 Corporation entries of ML GN RN RGT and Gadia admits before that they are Jatia s account
B  ML Jatia s ie your account maintained in Japan how ever
you admit receipt of Gifts by your children such as TV Video and MVParts
C Page215 Keeping US  2 lakhs in SG 6 fixed deposit on 2683 in Kamal Account also inclu ding 20 lakhs  dollars
D Page335 American dollar account as SG 6 on 311
E Page318 Account in Japanese Yen Final posi SG 6 total of 14114727
tion of Bombay
FDR amount of Japanese Yen 1093 147116 to be equally divided between Yen
GN SN and Laxmiji account Capital account
57 F Page 214 15 US  78000 converted SG 6 into Rs9 16500 commiss ion of The Additional Secretary to the Government of India Ministry of Finance in exercise of his powers conferred by sub section
1 of section 3 of the  COFEP OSA  ordered the detention of the aforesaid Mohanlal Jatia by an order dated December 13 1985 on being  satisfied that it was necessary to detain him with a view to preventing him from acting in any manner prejudicial to the augmenta tion of foreign exchange
The petitioner thrice approached the High Court with petitions under article 226 of the Consti tution seeking to challenge the impugned order of detention
Immediately after the passing of the impugned order ie on December 16 1985 she moved the first of these petitions being WP No 253085 for an appropriate writ or direction to quash the impugned order of detention and applied for stay
The Writ Petition was admitted but stay was refused
On appeal a Division Bench in Writ Appeal No 116285 granted interim stay till the disposal of the appeal
On February 28 1986 the Division Bench dismissed the appeal as well as the Writ Petition
By its subsequent order dated March 4 1986 the Division Bench granted stay of execution upto April 4 1986 on certain terms and conditions
The petitioner filed a petition under article 136 in this Court for grant of special leave being SLP No 374286
The Court by its order dated April 3 1986 dismissed the petition and ordered the detenu to appear before the Commissioner of Police Bombay on the next day ie on April 4 1986 when the impugned order of detention was to be served upon him and directed that the impugned order was to become effec tive
The further direction made by this Court was that the detenu should immediately be released on parole for a period of 10 days subject to certain terms and conditions
On April 4 1986 the detenu appeared before the Commissioner of Police Bombay when he was served with the impugned order of detention together with the grounds of detention and the relevant documents
In compliance with the direction of this Court
the detenu was released on parole
On April 7 1986 the petitioner filed second petition under article 226 of the Constitution being WP No 38586 for quashing the impugned order of detention along with an application for extending the period of parole
On April141986 the parole period having expired the detenu was taken into custody and lodged in the Central Prison Bombay
The Writ Petition came up for hearing before the High Court on April 18 1986 and admitted but the application for extending the period of parole was 58 rejected
Aggrieved by the refusal of interim relief the petitioner again moved this Court under article 136 of the Constitution which was dismissed as withdrawn
It appears that the impugned order of detention was mainly challenged on two grounds namely 1 There was no material on which the satisfaction of the detaining authori ty could be reached that the detention of the detenu was necessary under section 31 of the COFEPOSA with a view to preventing him from acting in any manner prejudicial to the augmentation of foreign exchange
And 2 There was total non application of mind on the part of the detaining author ity to the material on record and in particular to the factual misstatements contained in paragraph 44 of the grounds of detention as detailed in entries A to F 
The Division Bench of the High Court did not feel impressed with any of these submissions and by its judgment and order dated May 23 1986 dismissed the Writ Petition
Thereafter on May 6 1986 the petitioner filed the present petition under article 136 of the Constitution
On July 11 1986 she also filed a petition under article 32 challenging the continued detention of her husband
On July 18 1986 the Court issued notice both on the Special Leave Petition as well as the Writ Petition and in the meanwhile directed that the peti tioner s husband be released on parole for a week
The Court by its subsequent order dated July 25 1986 extended the period of parole till August 20 1986
The Writ Petition filed in this Court on July 11 1986 is principally based on the ground that there was failure on the part of the detaining authority to consider the alleged representation dated April 11 1986 made by the detenu against the impugned order of detention addressed to the President of India which was presented through one Ashok Jain at the President s Secretariat on April 15 1986 and there had thus been an infraction of the constitutional safeguards enshrined in article 225 and section 11 of the COFEPOSA which rendered the continued detention of the detenu without the due process of law and thus illegal unconstitutional and void
The other substantial question raised is that RC Singh was not a gazetted officer of Enforcement within the meaning of section 40 of the Act and therefore the statements recorded by him could not be regarded as valid statements under section 40 and thus did not form the basis upon which the satisfaction of the detaining authority could be reached
The respondents have filed a counter affidavit sworn by SK Chaudhary Under Secretary to the Government of India Ministry of 59 Finance Department of Revenue controverting the allegation that the detenu addressed any such representation to the President of India or that the alleged representation was received at the President s Secretariat
It has been averred that the President s Secretariat has informed the Ministry of Finance Department of Revenue that no such representa tion was received from the detenu
Along with the counter affidavit the respondents have filed copies of the letter of the Under Secretary to the Government of India Ministry of Finance Department of Revenue dated August 4 1986 addressed to the Under Secretary President s Secretariat and of the reply of even date sent by the Under Secretary President s Secretariat to him which shows that no such representation had been received in the President s Secre tariat as alleged
They have also filed a note explaining the manner in which the dak is acknowledged at the Presi dent s Secretariat
There is a further affidavit filed by KC Singh Deputy Secretary to the President of India explaining the manner of handling the dak at the Rashtrapati Bhawan
The petitioner has filed an affidavit of Ashok Jain claiming to be a friend of the Jatia family supporting the assertion that he handed over the representation in person at the Rashtrapati Bhawan on April 15 1986
During the pendency of the proceedings the Union Gov ernment has made an application under section 340 of the Code of Criminal Procedure 1973 for prosecution of the persons responsible for forging the document purporting to be the alleged representation made by the detenu under section 8b of the COFEPOSA on April 15 1986 as in fact no such repre sentation was ever made and for making certain interpola tions in the dak register kept at the President s Secretari at
They have produced in a sealed envelope the original dak register maintained at the Rashtrapati Bhawan in which the alleged interpolations have been made
We are informed that the matter has been handed over to the Central Bureau of Investigation for investigation
We shall deal with the application under section 340 of the Code later
In support of these petitions learned counsel has mainly advanced the following contentions namely 1 As is evident from the grounds of detention the detaining author ity relied upon the statements recorded by RC Singh on the assumption that they were valid statements under section 40 of the Act although they were in reality not so inasmuch as RC Singh was not a gazetted officer of Enforcement  within the meaning of section 40 and therefore there was no material on which the satisfaction of the detaining authori ty could be reached
2 In a habeas corpus petition the burden was entirely upon the respon 60 dents to produce the relevant records and to substantiate that the detention was strictly according to law
The fail ure on the part of the respondents to produce the relevant notification showing that RC Singh was a gazetted officer of Enforcement within section 40 of the FERA when he recorded the statements in question must necessarily lead to the infer ence that he was not a gazetted officer of Enforcement
3 The impugned order of detention was void ab initio and it could not be sustained by recourse to the de facto doctrine or any assumption that RC Singh was acting under the colour o his office as a gazetted officer of Enforcement or in treating the statements to be valid being relatable to section 39b of the FERA
4 It is not possible to predicate to what extent and in what manner the mind of the detaining authority was influenced by his wrongful assumption that the statements recorded by RC Singh who was not a gazetted officer of Enforcement were statements made under section 40 of the FERA and even assuming that the statements recorded by RC Singh could be treated to be statements relatable to section 39b of the FERA it is not possible to say whether the detaining authority would have based his satisfaction upon such material
5 There was non application of mind on the part of the detaining authority as the grounds of detention are based on several factual misstatements
According to the learned counsel the factual errors were self evident as the entries relied upon in paragraph 4 of the grounds of deten tion do not find place in the account books of Messrs Greenland Corporation
The failure of the Central Government to place before the detaining authority the original ac count books of Messrs Greenland Corporation deprived the detaining authority to apply his mind to the correctness or otherwise of the facts stated therein
6 There was infrac tion of the constitutional safeguards enshrined in article 225 inasmuch as there was failure on the part of the detaining authority to consider the representation filed by the detenu under section 8b of the COFEPOSA through one Ashok Jain and received at the President s Secretariat on April 15 1986 and therefore the impugned order of detention was vitiated and the continued detention of the detenu was rendered illegal and void
Other subsidiary questions were also raised
Having given the matter our anxious considera tion we are of the considered opinion that none of the contentions can prevail
In order to deal with the rival contentions advanced it is necessary to set out the relevant provisions of the Foreign Exchange Regulation Act 1973
The Foreign Exchange Regulation Act 1973 is an Act as reflected in the long title
to consolidate and amend economic development of the country
The legislation has been brought in to 61 implement the Government policy for conservation of foreign exchange and for removing the difficulties in implementing the same
The provisions of sections 3 4 and 5 deal with i classes of officers of Enforcement ii appointment and powers of officers of Enforcement and iii entrustment of functions of Director or other officer of Enforcement
These provisions provide as follows 3
Classes of officers of Enforcement There shall be the following classes of officers of Enforcement namely a Directors of Enforcement b Additional Directors of Enforcement c Deputy Directors of Enforcement d Assistant Directors of Enforcement and e Such other class of officers of Enforcement as may be appointed for the pur poses of this Act 4
Appointment and powers of officers of Enforcement 1The Central Government may appoint such persons as it thinks fit to be officers of Enforcement
2 Without prejudice to the provisions of sub section 1 the Central Government may authorise a Director of Enforcement or an Additional Director of Enforcement or a Deputy Director of Enforcement or an Assistant Direc tor of Enforcement to appoint officers of Enforcement below the rank of an Assistant Director of Enforcement
3 Subject to such conditions and limitations as the Central Government may impose an officer of Enforcement may exercise the powers and discharge the duties conferred or imposed on him under this Act 5
Entrustment of functions of Director of other officer of Enforcement The Central Government may by order and subject to such conditions and limitations as it thinks fit to impose authorise any officer of customs or any Central Excise Officer or any police officer or any other officer of the Central Government or a State Government to exercise such of the powers and discharge such of the duties of the Director of Enforcement or any other officer of Enforce 62 ment under this Act as may be specified in the order
section 39 deals with the power of the Director of any other officer of Enforcement to examine persons and provides 39
Power to examine persons The Director of Enforcement or any other officer of Enforce ment authorised in this behalf by the Central Government by general or special order may during the course of any investigation or pro ceeding under this Act  a require any person to produce or deliver any document relevant to the investigation or proceeding b examine any person acquainted with the facts and circumstances of the case
 Sub section
1 ors 
40 reads as follows 40
Power to summon persons to give evidence and produce documents 1 Any gazetted offi cer of Enforcement shall have power to summon any person whose attendance he considers necessary either to give evidence or to pro duce a document during the course of any investigation or proceeding under this Act
 The main thrust of the argument of Shri GL Sanghi learned counsel appearing for the petitioner revolves around mainly three aspects 1 RC Singh was not a Gazetted Officer of Enforcement and therefore statements recorded by him had no evidentiary value and thus they could not form the basis upon which the satisfaction of the detaining authority could be reached
2 There was total nonapplica tion of mind by the detaining authority to several factual misstatements as detailed in entries A to F  in the grounds of detention which vitiated the impugned order of detention
And 3 The failure of the Sponsoring authority to forward the account books seized during the course of search at the residential premises of Subhash Gadia shows that the detain ing authority proceeded to make the impugned order of deten tion without due application of mind
According to the learned counsel if there is one principle more firmly settled than any other in this field of jurisprudence relat ing to preventive detention it is that even if one of the grounds or reasons which led to the subjective satisfaction of the detaining authority is non existent or misconceived 63 or irrelevant the order of detention would be invalid since it is not possible to predicate as to whether the detaining authority would have made all order for detention even in the absence of non existent or irrelevant ground
His con tention is that the principle enunciated by this Court some 30 years ago in Shibban Lal Saksena vs The State of Uttar Pradesh  Ors  and in Dr Ram Manonar Lohia vs State of Bihar  Ors  which it reiter ated later m Pushkar Mukherjee  Ors
vs The State of West Bengal  still holds good despite the change in the law brought about by the introduction of section 5A of the Act that though one or more of the grounds of detention were found to be vague non existent not relevant not connect ed irrational or invalid for any other reason whatsoever the detention could be sustained on the remaining grounds
He seeks to draw sustenance from the decision of the Consti tution Bench of this Court in Mohd Shakeel Wahid Ahmed vs State of Maharashtra  Ors  We are afraid the contention cannot prevail
The decision in Mohd Shakeel s case is clearly distinguishable
In Mohd Shakeel s case three of the four grounds of deten tion on which the appellant was detained were held by the High Court to be bad for one reason or another but it held that the remaining ground did not suffer from any defect and was enough to sustain the order of detention
On appeal Shri Jethmalani learned counsel for the detenu sought to challenge the constitutional validity of section 5A of the Act and the case was therefore referred to a Constitution Bench
At the hearing Shri Jethmalani confined his submission to an altogether different point which ultimately prevailed namely that the remaining ground of detention was also bad for the reason that there was failure on the part of the State Government to place before the detaining authority the opinion which the Advisory Board had recorded in favour of another detenu Shamsi who was also detained for his involve ment in the same transaction on an identical ground based on similar and identical facts
It was held that although the opinion of the Advisory Board that there was no sufficient cause for Shamsi s detention may not have been binding on the detaining authority which ordered the detention of the detenu but the opinion of the Advisory Board in Shamsi case was an important consideration which should and ought to have been taken into account by the detaining authority before passing the order of detention in that case
It was observed that the Court could not exclude a reasonable probability that since the Advisory Board had not sustained Shamsi s detention on a ground which was common to him and the detenu the detaining authority would have
if at all passed the order of detention against the detenu 64 on the three remaining grounds which had been held to be bad
The decision is Shamsi s case turned on its own facts and certainly is not an authority for the proposition con tended for
So also in Ashadevi vs
K Shiveraj Addl
Chief Secretary to the Government of Gujarat  Anr 15 on which reliance was placed there was failure on the part of the State Government to apprise the detaining au thority of the fact that the detenu s request to have the presence of and consultation with his counsel had been refused and that the confessional statement upon which the detaining authority had relied had been retracted while he was in judicial custody rendered the impugned order of detention invalid and illegal because there was complete non application of mind by the detaining authority to the most material and vital facts
The other decision in Kurjib haiDhanjibhai Patel vs State of Gujarat  Ors is also distinguishable
In that case there was failure on the part of the sponsoring authority in not furnishing the relevant material to the detaining authority namely the reply of the detenu to the show cause notice issued in the adjudication proceedings undertaken by the Customs authorities which was held to be the most relevant material which ought to have been placed before it
It was held that the question was not whether the material which was withheld from the detaining authority formed part of any separate or independent proceedings like the adjudication proceedings as held by the High Court but the real question was whether the material was relevant and would have influ enced the mind of the detaining authority
In the counter affidavit filed by the Under Secretary to the Government of India Ministry of Finance it had been averred that the representation of the detenu along with his reply to the show cause had been considered by the Advisory Board and after considering all the facts it was of the opinion that there was sufficient cause for detention
It was held that such ex post facto consideration of the detenu s reply to the show cause could not fill up the lacuna of non consider ation thereof by the detaining authority before passing the order of detention
Both these decisions proceed on the well settled principle that if material and vital facts which would influence the mind of the detaining authority one way or the other on the question whether or not to make the detention order are not placed it would vitiate its subjective satisfaction rendering the detention order ille gal
We fail to see the relevance of these decisions to the present case
Before touching upon the merits we wish to make a few observations
It is not suggested at the bar that the grounds for detention do not set out the facts with suffi cient degree of particularity or that they do not furnish sufficient nexus for forming the subjective satisfaction 65 of the detaining authority he impugned order of detention was therefore not challenged on the ground that the grounds furnished were not adequate or sufficient for the satisfac tion of the detaining authority or for the making of an effective representation
Sufficiency of grounds is not for the Court but for the detaining authority for the formation of his subjective satisfaction that the detention of a person under section 31 of the Act is necessary with a view to preventing him from acting in any manner prejudicial to the augmentation of foreign exchange
In Mangalbhai Motiram Patel vs State of Maharashtra  Ors   it was observed at p 477 of the Report The Conservation of Foreign Exchange and prevention of Smuggling Activities Act 1974 is enacted to serve a laudable object
It is a measure to prevent smuggling of goods into or out of India and to check diversion of foreign exchange by immobilising the persons engaged in smuggling foreign exchange racketeering and related activities by preventive detention of such persons
Violations of foreign ex change 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
Such economic offences disrupt the economic life of the community as a whole
It is neces sary to protect the basic economic order of the nation
Nevertheless the Act is a law relating to preventive detention
That being so the power of detention exercisable under sub section
1 of section 3 of the Act is subject to the limitations imposed by the Constitution
As observed by this Court in Narendra Pursho tam Umrao vs BB Gujral 15 when the liberty of the subject is involved whether it is under the Preventive Detention Act or the Maintenance of Internal Security Act or the Conservation of Foreign Exchange and prevention of Smuggling Activities Act or any other law providing for preventive deten tion it is the bounden duty of the court to satis fy itself that all the safeguards provided by the law have been scrupulously observed and that the subject is deprived of his personal liberty otherwise than in accordance with law Nevertheless as observed by the Court in Mangalbhai Motiram Patel s case 66 The community has a vital interest in the proper enforcement of its laws particularly in an area such as conservation of foreign exchange and prevention of smuggling activi ties in dealing effectively with persons engaged in such smuggling and foreign exchange rackteering by ordering their preventive detention and at the same time assuring that the law is not used arbitrarily to suppress the citizen of his right to life and liberty
 The Government must therefore ensure that the constitutional safeguards of article 225 read with sub section
1 of section 3 of the Act are fully complied with
In the instant case however there was no infraction of the constitutional safeguards contained in article 225
We are satisfied that there was no failure on the part of the Government to discharge its obligation under article 225
The relevant records of the Enforcement Directorate have been placed before us
They clearly show that there was sufficient material for the formation of the subjective satisfaction of the detaining authority under sub section
1 of section 3 of the Act
They also show that the detenu was afforded a reasonable opportunity for making an effective representation against his deten tion
It has long been established that the subjective satis faction of the detaining authority as regards the factual existence of the condition on which the order of detention can be made ie the grounds of detention constitutes the foundation for the exercise of the power of detention and the Court cannot be invited to consider the propriety or sufficiency of the grounds on which the satisfaction of the detaining authority is based
Nor can the Court on a review of the grounds substitute its own opinion for that of the authority
But this does not imply that the subjective satisfaction of the detaining authority is wholly immune from the power of judicial review
It inferentially follows that the subjective satisfaction being a condition precedent for the exercise of the power conferred on the executive the Court can always examine whether the requisite satisfac tion was arrived at by the authority if it is not the condition precedent to the exercise of the power would not be fulfilled and the exercise of the power would be bad
The simplest case is where the authority has not applied its mind at all in such a case the authority could not possi bly be satisfied as regards the fact in respect of which it is required to be satisfied
See Khudi Ram Das vs State of West Bengal  Ors   following the case of Emperor vs Shibnath Banerjee  Ors AIR 1943 FC 75
67 The substantive contention of learned counsel for the petitioner has therefore been that there was non application of mind on the part of the detaining authority to the grounds of detention and that there was violation of the constitutional safeguards contained in article 225
In es sence three questions arise namely 1 Whether the im pugned order of detention was based on no material inasmuch as RC Singh was not a gazetted officer of Enforcement and therefore the statements recorded by him had no evidentiary value and thus could not form the basis upon which his subjective satisfaction could be reached and if not wheth er the statements recorded by him could be treated to be statements relatable to section 39b of the FERA and could still form the basis for such satisfaction
2 Whether there was non application of mind on the part of the detaining author ity and therefore the impugned order of detention was bad as there were factual mis statements detailed in items A to F of the grounds of the grounds of detention
And 3 Whether there was infraction of the constitutional safeguards con tained in article 225 due to the failure on the part of the Central Government to consider the representation filed by the detenu under section 8b read with section 11 of the Act alleged to have been presented through one Ashok Jain and received at the President s Secretariat on April 15 1986 and there fore the continued detention of the petitioner was rendered invalid and unconstitutional
We wish to deal with these contentions in seriatim in the order in which they have been advanced
On the first of these questions we have no hesitation in repelling the contention that there was no material on which the detaining authority could have based the subjec tive satisfaction under sub section
1 of section 3 of the Act
The argument of the learned counsel stems from the hypothesis that RC Singh was not a gazetted officer of Enforcement within the meaning of section 40 of the FERA when he issued summons and recorded the statements and that even assuming that the statements recorded by RC Singh could be treated to be statements failing under section 39b of the Act it is not possible to say whether the detaining authority would have based his satisfaction upon such material
The learned counsel places emphasis on the word gazetted  in section 401 and contends that RC Singh for the first time became a gazetted officer of Enforcement on January 13 1986 when his appointment as such was notified
According to him the detaining authority has relied upon the statements purport ing to be under section 401 though in reality they were not so
According to the learned counsel there is a sanctity at tached to statements recorded under section 401 of the FERA
That is so because every person summoned by a gazetted officer of Enforcement to make a statement under sub section
1 of section 40 is under a compulsion to state the 68 truth on the pain of facing prosecution under sub section
3 thereof
Further sub section
4 provides that every such inves tigation or proceeding as aforesaid shall be deemed to be judicial proceeding within the meaning of sections 193 and 224 of the Indian Penal Code 1860
Such being the legal position the learned counsel contends that while a statement recorded by a gazetted Enforcement Officer under section 40 1  can furnish sufficient and adequate material on the basis of which the detaining authority can form his opinion it may not be so with regard to statements recorded by an officer of Enforcement authorised in that behalf under section 39b of the FERA
On the other hand learned counsel for the respondents contends that there is no basis for the assertion that there was no material on which the detaining authority could have formed the subjective satisfaction under sub section
1 of section 3 of the Act or that there was any factual mis statement in the grounds which showed that there was non application of mind on his part
We may briefly summarise his submission
Factually the statements were there and the detaining authority was entitled to act upon the statements
The question whether the statements could be acted upon or not is not for the Court
A person summoned to make a statement under section 401 has the right to object to the power and authority of the officer issuing the summons
It must there fore logically follow that when the persons summoned like Subhash Gadia and Mohanlal Jatia were examined by RC Singh it was not open to others to raise objection that RC Singh was competent to record the statements under section 401
The statements made by them were not hit by section 25 of the Evi dence Act 1872 and could be used against the detenu
There is no substance in the contention that RC Singh was not a gazetted officer of Enforcement
The word gazetted  does not imply that the appointment of such officer should be published in the official Gazette
All that is required by section 401 of the FERA that such officer recording the state ment must be holding a gazetted post of an officer of En forcement in contradistinction to that of an Assistant Officer of Enforcement which is a nongazetted post
It cannot be disputed that RC Singh had been appointed as Enforcement Officer on an ad hoc basis on November 24 1982 and he continued to function as such at the time when he recorded the statement under section 401
The subsequent noti fication issued by the Enforcement Directorate on January 13 1986 was for his appointment on a regular basis
What is of significance it is said
is that at the time when RC Singh recorded the statements he was holding the gazetted post of an Enforcement Officer and discharging 69 the functions attached to the post
There is in our opin ion consideration force in these submissions
In any event the learned counsel further contends that RC Singh was clothed with the insignia of office and he was purporting to exercise the functions and duties of a gazetted officer of Enforcement under section 401 of the FERA and therefore the de facto doctrine was attracted
He relies upon the decision of this Court in Gokaraju Rangaraju vs State of Andhra Pradesh  enunciating the de facto doctrine born of necessity and public policy to prevent needless confusion and endless mischief
In other words he contends that where an officer acts under the law it matters not how the appointment of the incumbent is made so far as the validity of his acts are concerned
We are inclined to the view that in this jurisdiction there is a presumption of regularity in the acts of offi cials and that the evidential burden is upon him who asserts to the contrary
The contention that RC Singh was not a gazetted officer of Enforcement within the meaning of section 401 of the FERA appears to be wholly misconceived besides being an afterthought
The validity of appointment of RC Singh to be an officer of Enforcement under this Act cannot be questioned
The Directorate of Enforcement have along with the counter affidavit placed on record Establishment Order No 8782 dated November 24 1982 which shows that RC Singh along with 25 others was appointed by the Direc tor to be an officer of Enforcement on an ad hoc basis against 30 per cent deputation quota
The subsequent Estab lishment Order No 8486 dated January 13 1986 relied upon by the petitioner shows that RC Singh along with 29 others was appointed as an officer of Enforcement on an officiating basis
It is not suggested that these officers were not authorised by the Central Government to discharge the func tions and duties of an officer of Enforcement
Under the scheme of the Foreign Exchange Regulation Act the Director ate of Enforcement is primarily charged with the duty of administering the Act
section 3 defines different classes of officers of Enforcement
The expression officers of En forcement  as defined in section 3 embraces within itself not only a a Director b Additional Director c Deputy Director and d Assistant Director of Enforcement but also e such other class of officers of Enforcement as may be appointed for the purpose of the Act
Obviously RC Singh who was Assistant Enforcement Officer having been appointed as an officer of Enforcement on an ad hoc basis in 1982 fell within the category such other class of officers  covered by section 3e
Sub S1 of section 4 provides that the 70 Central Government may appoint such persons as it thinks fit to be officers of Enforcement
Sub section
2 thereof provides for delegation of such power of appointment by the Central Government to a Director of Enforcement or an Addi tional Director of Enforcement etc
to appoint officers of Enforcement below the rank of an Assistant Director of Enforcement
Sub section
3 of section 4 of the FERA provides that subject to such conditions and limitations as the Central Government may impose an officer of Enforcement may exer cise the powers and discharge the duties conferred or im posed on him under the Act
Undoubtedly RC Singh was discharging his duties and functions as a gazetted officer of Enforcement under section 401 of the FERA when he recorded the statements in question
In our opinion the expression gazetted officer of Enforcement  appearing in section 401 must take its colour from the context in which it appears and it means any person appointed to be an officer of Enforcement under section 4 holding a gazetted post
There is no denying the fact that RC Singh answered that description
The conten tion that there was no material on the basis of which the detaining authority could have based his subjective satis faction on the ground that RC Singh was not a gazetted officer of Enforcement within the meaning of section 401 of the FERA cannot prevail
Even if the contention that RC Singh was not a gazet ted officer of Enforcement within the meaning of section 401 of the FERA were to prevail it would be of little consequence
In this case during the investigation statements were re corded by B T Gurnsawhney Assistant Director of Enforce ment and RC Singh
There is no dispute regarding the competence of BT Gurusawhney to record statements under section 401 of the FERA and the only question is as to whether the statements recorded by RC Singh under section 401 could be acted upon
If evidence is relevant the Court is not concerned with the method by which it was obtained
In Barindra Kumar Ghose  Ors
vs Emperor ILR 1910 37 Cal
467 Sir Lawrence Jenkins repelling the contention that the Court must exclude relevant evidence on the ground that it was obtained by illegal search or seizure said at p 500 of the Report Mr Das has attacked the searches and has urged that even if there was jurisdiction to direct the issue of search warrants as I hold there was still the provisions of the Criminal Procedure Code have been completely disre garded
On the assumption he has contended that the evidence discovered by the searches is not admissible but to this view I cannot accede
For without in any way countenancing disregard of the provisions prescribed by the Code I hold that what would otherwise be relevant does not become irrel evant because it was discovered 71 in the course of a search in which those provisions were disregarded
The question arose before the Judicial Commit tee of the Privy Council in the well known case of Kuruma vs Reginam In dealing with the question Lord Goddard CJ
delivering the judgment of the Privy Council said The test to be applied
both in civil and in criminal cases in considering whether evi dence is admissible is whether it is relevant to the matters in issue
If it is it is admissible and the Court is not concerned with how it was obtained
 The learned CJ
further observed In their Lordships  opinion when it is a question of the admission of evidence strictly it is not whether the method by which it was obtained is tortuous but excusable but whether what has been obtained is relevant to the issue being tried
 Again the House of Lords in RV Sang  reiterated the same principle that if evidence was admissi ble it matters not how it was obtained
Lord Diplock after considering various decisions on the point observed that however much the judge may dislike the way in which a par ticular piece of evidence was obtained before proceedings were commenced if it is admissible evidence probative of the accused s guilt it is no part of his judicial function to exclude it for this reason  and added He has no discretion to refuse to admit relevant admissible evidence on the ground that it was obtained by improper or unfair means
The court is not concerned with how it was obtained
There is a long line of authority to support the opinion that the Court is not concerned with how evidence is ob tained
The rule is however subject to an exception
The Judge has a discretion to exclude evidence procured
after the commencement of the alleged offence which although technically admissible appears to the Judge to be unfair
The classical example of such a case is where the prejudi cial effect of such evidence would be out of proportion to its evidential value
Coming nearer home
this Court in Magraj Patodia vs
RK Birla  Ors  held that the fact that a document which was procured by improper or even illegal means could not bar its admissibility 72 provided its relevance and genuineness were proved
In RM Malkani vs State of Maharashtra  the Court applying this principle allowed the tape recorded conversa tion to be used as evidence in proof of a criminal charge
In Pooran Mal etc
vs Director of Inspection Investigation of Income Tax Mayur Bhavan New Delhi  Ors
  the Court held that the income tax authorities can use as evidence any information gathered from the search and seizure of documents and accounts and articles seized
This being the substantive law it follows that the detaining authority was entitled to rely upon the statements recorded by RC Singh under section 401 of the FERA
Even if RC Singh was not competent to record such statements under section 401 of the FERA the statements were clearly relatable to section 39b of the Act
It cannot therefore be said that there was no material on which the detaining authority could have based his subjective satisfaction under sub section
1 of section 3 of the Act
We are unable to accept the submission of the learned counsel for another reason
Where an office exists under the law it matters not how the appointment of the incumbent is made so far as validity of its acts are concerned
It is enough that he is clothed with the insignia of the office and exercises its powers and functions
The official acts of such persons are recognised as valid under the de facto doctrine born of necessity and public policy to prevent needless confusion and endless mischief
In Gokaraju Ranga raju s case supra Chinnappa Reddy J explained that this doctrine was engrafted as a matter of policy and necessity to protect the interest of the public
He quoted the follow ing passage from the judgment of Sir Ashutosh Mukerjee J in Pulin Behari vs King Emperor 17 at p 574 The substance of the matter is that the de facto doctrine was introduced into the law as a matter of policy and necessity to protect the interest of the public and the individual where these interests were involved in the official acts of persons exercising the duties of an office without being lawful officers
The doctrine in fact is necessary to maintain the supremacy of the law and to preserve peace and order in the community at large The learned Judge also relied upon the following passage from the judgment of P Govindan Nair J in PS Menon vs State of Kerala  Ors AIR 1970 Kerala 165 at p 170 This doctrine was engrafted as a matter of policy and 73 necessity to protect the interest of the public and individual involved in the official acts of persons exercising the duty of an officer without actually being one in strict point of law
But although these officers are not officers de jure they are by virtue of the particular circumstances officers infact whose acts public policy requires should be considered valid
 The next substantive contention of learned counsel for the petitioner is that the so called factual mis statements which occur in paragraph 44 of the grounds of detention show that there was nonapplication of mind on the part of the detaining authority and he relies on the observations made in Khudiram Das  case that the subjective satisfaction of the detaining authority is not wholly immune from the judi cial review and the Court can always examine whether the requisite satisfaction was arrived at by the authority if it is not the condition precedent to the exercise of the power would be bad
According to the rule laid down in Khudiram Das  case which proceeds on well settled princi ples the simplest case is whether the authority has not applied its mind and that is sufficient to vitiate the order of detention
It is submitted that this was a case of mis taken identity and there was no material before the detain ing authority to show that the initials ML  in the various entries in the accounts of Messrs Greenland Corporation Japan and the relative telex messages related to the detenu Mohanlal Jatia and not to the other ML meaning ML Kedia the brother in law of Subhash Gadia
We are afraid we cannot accept this line of argument
There is no warrant for the submission that the initials ML  refer to ML Kedia and not the detenu Mohanlal Jatia or that a wrong person has been placed under detention
There is no dispute whatever that the initials ML  refer to the detenu Mohanlal Jatia
When confronted during the interrogation with the initials ML  in the books of Messrs Greenland Corporation and the telex messages the detenu admitted that the initials ML  or MLJi  in the various entries as well as the telex messages stand for himself ie Mohanlal Jatia
As to the co called factual mis statements the argument proceeds on the wrongful assumption that the facts stated in paragraph 44 of the grounds of detention are the grounds  when they are in reality nothing but facts 
The High Court has rightly observed that the facts stated in paragraph 44 of the grounds cannot be read in isolation and the grounds of detention have to be read as a whole with the accompanying documents and material
As is quite apparent the ground of deten 74 tion was only one viz that the detenu was engaged in activ ities prejudicial to the augmentation of foreign exchange and therefore it became necessary in the public interest to place him under detention
Sufficiency of grounds is not for the Court but for the detaining authority for the perform ance of his subjective satisfaction that the detention of the detenu Mohanlal Jatia under section 31 of the Act was necessary
It was a matter of legal inference to be drawn from several facts which appear in the grounds and the facts are not merely in paragraph 44 but also in other paragraphs
It will be seen that paragraph 44 merely recites that when the detenu was confronted with the documents recovered from a search of Subhash Gadia s residential premises and else where he denied the various transactions entered into between him and Messrs Greenland Corporation Japan and others abroad
It then goes on to state that the documents clearly revealed that he had been engaged in various unau thorised transactions in violation of the provisions of the Foreign Exchange Regulation Act
According to the learned counsel the mistakes which crept in the proposal made by the initiating authority for the detention of the detenu recur in paragraph 44 of the grounds and it shows the casualness with which the grounds of detention were drawn which indicate nonapplication of mind
Although the argument at first blush appears to be attractive but on deeper consideration does not stand to scrutiny
We wish to enumerate the so called factual mis statements listed as Items A to F in paragraph 44 of the grounds and deal with them in seriatim
Item A at p 338 of the seized bunch SG 6 is the trial balance sheet of Messrs Greenland Corporation Japan
On that page there are var ious entries of ML GN RN and RG Jatia
It is mentioned by the detaining authority in paragraph 44 underneath Item A that Gadia admits  that they are Jatia s account
During interrogation Subhash Gadia stated that bunch of documents SG 6 relates to Messrs Greenland Corporation Japan and that these entries may be related to the Jatia family 
The detaining authority was not wrong in treating the words may be  in the context in which they appear as being an admis sion of fact made by the detenu
The detaining authority was entitled to make use of the decoding formula revealed by Subhash Gadia to connect the detenu Mohanlal Jatia with the initials ML  appearing in various transactions more so because the relative telex messages sent by Messrs Greenland Corporation were seized from the office premises of Messrs JM Trading Corporation JM Textile Pvt Ltd Ramgopal Textile Pvt Ltd Ram Gopal  Sons Ram Gopal Synthetics Pvt Ltd Kamal Trading Corporation
Kalpana Trading Corpo ratoin Sudhir Trading Corporation all situate at 701 Tulsiani cham 75 bers 212 Nariman Point Bombay and the detenu admittedly is closely connected with these concerns being Director or shareholder or a partner
The said documents disclose that the detenu Mohanlal Jatia with the initials ML  and his brothers GN SN and RN namely
Ganesh Narayan Jatia Satya Narayan Jatia and Ram Niranjan Jatia are maintaining secret accounts with Messrs Greenland Corporation Japan
They also clearly indicate that the detenu and his brothers were found to be engaged in transferring funds from or to India in an unauthorised manner on a very large scale
Subhash Gadia in his statement revealed that pp 316 317 and 318 of the seized document SG 6 are written in his handwriting and the account is in Yen
He further revealed that the said ac counts relate to Satya Narayan Jatia Ganesh Narayan Jatia and Mohanlal Jatia
The detenu was furnished a copy of the statement made by Subhash Gadia
As hereinbefore adumbrated the detenu when confronted denied to have entered into the transaction
However
when confronted with the various entries appearing in the seized document SG 6 the detenu admitted that the initials MI  or MLJi  relate to him both in the accounts as well as in the telex messages
The various entries show transactions involving foreign exchange to the tune of several crores of rupees
For instance at p 318 of SG 6appear the details of FDR account standing in the name of Satya Narayan Ganesh Narayna and Mohanlal Jatia to be divided equally and the sum total of the amount shown is 1093747116 Yen
The said figure also finds place at p 278 of the file SG 6 which gives details how the figure 1093747116 has been arrived at
In the telex message appearing at pp
35 and 36 in the bunch of seized document SG 6 arc given the details of the FDR account with instruc tions to work out the average rate of interest between the three brothers Satya Narayan Ganesh Naryana and Mohanlal payable on the FDR for 1093747116 Yen
Similarly Laxmi Ji account with Messrs Greenland Corporation Japan is a capital account of Satya Narayan Ganesh Narayan and Mohan lal showing a capital investment of 486296325 Yen
We need not go into further details
The entries show the magnitude of the operation in foreign exchange carried on by the detenu
We do not see any mistake of fact in Item B which re lates to purchase of a TV 27 and a VCR
There is an entry at p 338 of SG 6 showing that the detenu s account was debited with these items although the detenu in his state ment asserted that they were gifted by his brother
That takes us to the effect of the mistake occurring in Item C at p215 of the seized documents that there is an entry showing that the detenu had a fixed deposit of US  2 lakhs
The entry reads ML 2 76 lakhs AS 1175 dated 2683
Even assuming that it was a mistake to have introduced the words also including 20 lakhs  dollars in paragraph 44 of the grounds that would not by itself without more vitiate the impugned order of detention or necessarily show nonapplication of mind
Even so the detaining authority was entitled to act upon the entry
relating to US  2 lakhs for the formation of his subjective satisfaction
Significance of these entries shows that the detenu was maintaining the secret account and had large sums of money in fixed deposits abroad
The detaining authority has charged the detenu with keeping US  2 lakhs in fixed deposit in Kamal Account which is the capital account of the detenu and his brothers Messrs Greenland Corporation Japan
The words also including 20 lakhs  dollars are no doubt not there in the books of accounts but they crept in the proposal and have been reproduced in paragraph 44 of the grounds
It is somewhat strange that these words should be introduced when they were not there in the books of accounts but the fact remains that there is a typographical error
The High Court rightly observes that a single typographical mistake about making a reference to US  20 lakhs would not necessarily show the non application of mind when the entry of US  2 lakhs dollars is reflected in various places in the account such as ML Ji Khata P 175 and Kamal Account P 226 copies of which were furnished to the detenu
Even assuming that the words also including 20 lakhs  dollars were introduced in paragraph 44 of the grounds that would not be a factor vitiating the impugned order of detention
The detaining authority was still enti tled to act upon the entry relating to fixed deposit of US  2 lakhs dollars for the formation of his subjective satis faction
As regards Items D and E the contention of the peti tioner is that reference to American Dollar account as on January 31 1984 as per p 335 of SG 6 and Japanese Yen account Final position at Bombay of 14114727 set out at p 318 thereof was totally unintelligible and was unconnected with the detenu nor had any relevance The respondents have controverted this in the counter affidavit filed by MI
Wadhawan Additional Secretary to the Government of India Ministry of Finance
It is asserted that the aforesaid abstracts clearly indicate that the detenu Mohanlal Jatia and his brothers were found to be engaged in transferring funds from or to India in an unauthorised manner on a very large scale
According to the statement of Subhash Gadia the American Dollar account is as per p 335 of SG 6 the de tails whereof are given at p 3 18 and the said amount is credited in the name of SN
GN and ML to be divided equally
The sum total of the amount shown to be divided was 1093747116 Yen
This figure also appears at p 278 77 of file SG 6 giving details as to how this figure 1093747116 Yen has been worked out
At p 318 of SG 6 under the heading Laxmi Ji account
the sum total in Japa nese Yen shown is 486296325 to be equally divided amongst SN GN and ML
According to the statement of Subhash Gadia the Laxmi Ji account was a capital account of SN GN and ML with Messrs Greenland Corporation Japan
The amount of 14114727 apparently shown in Item E represents the detenu s share
However the detenu expressed his inability to ex plain the said two accounts American Dollar account and Laxmi Ji account and the telex messages
It appears that imports of yarn in India from Messrs Greenland Corporation Japan were effected through Messrs JM Trading Company of which the detenu is a partner and there was either over pricing of the goods in the invoices or some portion of commission was secretly kept with Messrs Greenland Corpora tion and was being utilised for differential treatment
It can hardly be asserted in view of the facts revealed in the counter affidavit of the Additional Secretary Ministry of Finance that the detenu was transferring funds either from or to India in a clandastine manner on a very large scale
The remaining Item F at p 315 of the bunch of documents marked SG 6 is a coded account maintained by the detenu under the name Kamal Account representing the capital in vestment of SN GN and ML with Messrs Greenland Corporation
It relates to the entry US  78000 converted into Rs916500 commission of
At every place in the bunch of seized document SG 6 such as on the reverse of p 215 there is an entry to the effect that US  78000 were converted into Indian rupees  Rs 1175 equivalent to 9 16500 and that the said amount was capitalised on 197
1983 in the name of GN
Paragraph 33 of the grounds involves the com plicity of the detenu by making reference to a secret ac count maintained by SN GN and ML to the effect was found that all of you are engaged in transferring funds from or to India on a very large scale
 In this coded account the modus operandi adopted at every place is to delete two zeros from the converted Indian currency
Learned counsel for the petitioner tried to spell out an argument that the use of the word or  shows that the ground was vague or indefinite
According to the learned counsel it is quite apparent that the detaining authority was not definite as to the nature of payment ie whether the con version of foreign exchange into rupees represented payments made or amounts received
Nothing really turns on this
The fact remains that the detneu had been admittedly keeping a secret account of foreign currency abroad without the per mission of the Reserve Bank of India
78 It is quite apparent that the so called factual mis statements are not mis statements at all
The High Court rightly held that the alleged mistakes or infirmities point ed out were not so material or serious in nature as to vitiate the impugned order of detention
As already indicat ed sufficiency of the grounds is for the detaining authori ty and not for the Court
It cannot be said on a perusal of the grounds that there was no material on which the detain ing authority could have acted
There still remains the further question whether the period of parole should be treated as part of the detention period itself
This question has been elaborately considered by this Court in Smt
Poonam Lata vs ML Wadhawan  Ors JT to which one of us Sen J was a party and it was held therein that the period of parole has to be excluded in reckoning the period of detention under sub section 1 of Section 3 of the Act Conservation of Foreign Exchange and Prevention of Smuggling Activities Act 1974
addition to the reasons given therein we may add the following by way of supplementary material
Though the element of detention is a common factor in cases of preven tive detention as well as punitive detention there is a vast difference in their objective
Punitive detention follows a sentence awarded to an offender for proven charges in a trial by way of punishment and has in it the elements of retribution deferrence correctional factor and institu tional treatment in varying degrees
On the contrary preven tive detention is an extraordinary measure resorted to by the State on account of compulsive factors pertaining to maintenance of public order safety of public life and the welfare of the economy of the country
The need for this extraordinary measure ie detention without trial was realised by the rounding fathers of the Constitution as an inevitable necessity for safeguarding the interests of the public and the country and hence a specific provision has been made in clause 3 of Article 22 providing for preven tive detention being imposed in appropriate cases notwith standing the fundamental right of freedom and liberty gua ranteed to the citizens by the Constitution
The entire scheme of preventive detention is based on the bounden duty of the State to safeguard the interests of the country and the welfare of the people from the canker of anti national activities by anti social elements affecting the maintenance of public order or the economic welfare of the country
Placing the interests of the nation above the individual liberty of the anti social and dangerous elements who con stitute a grave menace to society by their unlawful acts the preventive detention laws have been made for effectively keeping out of circulation the detenus during a prescribed 79 period by means of preventive detention
The objective underlying preventive detention cannot be achieved or ful filled if the detenu is granted parole and brought out of detention
Even if any conditions are imposed with a view to restrict the movements of the detenu while on parole the observance of those conditions can never lead to an equation of the period of parole with the period of detention
One need not look far off to see the reason because the observ ance of the conditions of parole wherever imposed such as reporting daily or periodically before a designated authori ty residing in a particular town or city traveling within prescribed limits alone and not going beyond etc
will not prevent the detenu from moving and acting as a free agent during the rest of the time or within the circumscribed limits of travel and having full scope and opportunity to meet people of his choice and have dealings with them to correspond with one and all and to have easy and effective communication with whomsoever he likes through telephone telex etc
Due to the spectacular achievements in modern communication system a detenu while on parole can sit in a room in a house or hotel and have contacts with all his relations friends and confederates in any part of the country or even any part of the world and thereby pursue his unlawful activities if so inclined
It will therefore be futile to contend that the period of parole of a detenu has all the trappings of actual detention in prison and as such both the periods should find a natural merger and they stand denuded of their distinctive characteristics
Any view to the contrary would not only be opposed to realities but would defeat the very purpose of preventive detention and would also lead to making a mockery of the preventive deten tion laws enacted by the Centre or the States
It will not be out of place to point out here that in spite of the Criminal Procedure Code providing for release of the con victed offenders on probation of good conduct it expressly provides when it comes to a question of giving set off to a convicted person in the period of sentence that only the actual pre trial detention period should count for set off and not the period of bail even if bail had been granted subject to stringent conditions
In contrast in so far as preventive detentions under the  are concerned the Act specifically lays down that a person against whom an order of detention has been passed shall not be released on bail or bail bond or otherwise vide Section 12 6 of the Act and that any revocation or modification of the order of detention can be made only by the Government in exercise of its powers under Section 11
Incidentally
it may be pointed out that by reason of sub section
6 of section 12 of the Act placing an embargo on the grant of bail to a detenu there was no 80 necessity for the Legislature to make a provision similar to sub section 4 of Section 389 of the Code of Criminal Procedure 1973 corresponding to sub section 3 of Section 426 of the old Code for excluding the period of bail from the term of detention period
For these reasons the plea for treating the period of parole as part of the detention period has to necessarily fail
One last point remains
Besides refuting the contention of the petitioner that the detenu had made a written repre sentation addressed to the President of India on April 15 1986 and that there has been an infraction of the Constitu tional safeguard embodied in Article 225 of the Constitu tion and Section 11 of the Act due to the failure of the Central Government to consider the said Representation the respondents have preferred an application under Section 340 of the Code of Criminal Procedure 1973 for prosecution of the persons responsible for forging the document purporting to be the alleged Representation made by the detenu under Section 84 of the Act and for making certain interpola tions in the Dak Register kept at the Rashtrapati Bhavan
The respondents have placed sufficient material before the Court to show that the alleged Representation addressed to the President of India was neither filed by the detenu nor was it received at the President s Secretariat on April 15 1986
The respondent have placed on record the correspond ence that passed between the Ministry of Finance Department of Revenue and the President s Secretariat
They have also produced for our perusal the original Dak Register kept at the Rashtrapati Bhawan
On a careful scrutiny of the corre spondence and the entries in the Dak Register we are more than satisfied that no such Representation was ever made by the detenu and that the attempt to assail the order of detention on the ground of violation of the constitutional safeguard enshrined in Article 225 and the violation of Section 11 of the Act by the Central Government is a well planned and ingenuous move on the part of the detenu
We are not only deeply shocked by the daring attempt of the detenu to fabricate a document styled as a representation addressed to the President of India but feel much more perturbed and even alarmed that there should have been willing hands at the President s Secretariat to lend their services to the alleged agent of the detenu to give a colour of truth and reality to the nefarious scheme
We may now set out the highlights of the disquieting features noticed by us in the case set up by the detenu about a representation being delivered at the President s Secretariat on 154
Before enumerating the suspicious features it has to be borne in mind that the 81 detenu is not a rustic or an uneducated person or a man of no means
On the other hand he is a man of great affluence having dealings in this country as well as in countries overseas and therefore having the means to secure the services of astute and enlightened counsel in the country
He cannot therefore take umbrage for his actions on grounds such as lack of knowledge or want of funds or igno rance of law
Now coming to the details
The representation said to have been made was not addressed to the Government of India which is the authority to consider the representa tion but to the President
Be that as it may the represen tation signed in Bombay could have been sent by registered postacknowledgement due to the President s Secretariat but instead it is said to have been brought by a messenger from Bombay to New Delhi
The said messenger does not present the representation at the President s Secretariat but he is said to have handed it over to one Ashok Jain and the said Ashok Jain is said to have delivered the representation at the President s Secretariat
As per the affidavit filed by Shri KC Singh Deputy Secretary to the President President s Secretariat a visitor coming with a petition to the Rash trapati Bhavan has first to approach the Reception and then he is given a printed pass and sent with an escort to the Central Registry and after he delivers the letter he will be escorted back to the Reception to return his pass and then leave the building
Ashok Jain in his affidavit has categor ically stated that he went to the Rashtrapati Bhavan at roughly about 600 PM and a person at the Reception directed a peon to show him the Central Registry that no one enquired him about his name or issued him any pass and that he went to the Central Registry as pointed out by the peon and delivered a sealed envelope and obtained an en dorsement of acknowledgement on the Xerox copy of the repre sentation
In view of the conflicting affidavit there is room for inference that either Ashok Jain did not personally go and deliver the sealed envelope at the President s Secre tariat or that he was able to wield influence to such an extent as to be taken to the Central Registry without the procedural requirement of every visitor being issued a pass being observed in his case
It also surpasses our comprehen sion how an endorsement of acknowledgement could have been made on a Xerox copy of the alleged representation when the original of the representation is said to have been given in a sealed envelope
There are several other intrinsic fea tures in the endorsement itself evoking grave suspicion
The rubber stamp seal affixed on the Xerox copy does not corre spond to the facsimiles of the two rubber stamps used in the President s Secretariat as described by Shri KC Singh Deputy Secretary in his affidavit I he endorsement of acknowledgement does not contain the signature or 82 initials of the Receiving Officer
but strangely it contains a Dak Number Dy
No 20 date 1541986
Shri KC Singh has set out in his affidavit the procedure to be followed when letters and open petitions are received at the Presi dent s Secretariat but the procedure set out therein has not been followed in this case
Over and above all these things a scrutiny of the relevant page in the Dak Register kept in the President s Secretariat which was produced before us in a sealed cover contains tell tale features of a startling nature revealing a planned attempt but very clumsily exe cuted to somehow interpolate an entry in the Dak Register to make it appear that an envelope containing the alleged representation had been presented at the President s Secre tariat
For our present purposes it is not necessary to give a graphic account of the manipulations made in the Register and it will suffice if we refer only to the broad features
The bottom portion of the page has been torn off obviously with a view to obliterate some entry made therein
The entry relating to the alleged representation of the detenu has been interpolated between one entry dated 154 and another entry dated 164
but in order to fit in the serial number the entry relating to the representation has first been noted as 20A then the letter A has been smudged and the entry dated 164 has been made 20A instead of 20
The entry pertaining to the representation is in different handwriting and ink
Shri KCSingh in his affida vit has stated that this office is enquiring into the circumstances under which the entry came to be inserted in the Dak Register meant only for unopened letters addressed to the President by name
 All these things not only warrant an inference that the detenu and his associates have gone to deplorable lengths to create evidence favourable to the detenu but arouse convul sive thoughts in our minds about the efficiency and integri ty of the concerned sections of the President s Secretariat
We are constrained to give expression to our feelings of anguish by means of these observations because at the level of the President s Secretariat every section of the Secre tariat is expected to observe the highest standards of morality integrity and efficiency
The ease with which and the facile manner in which the detenu s agent Ashok Jain claims to have entered the President s Secretariat and delivered the Dak and obtained an endorsement of acknowl edgement in a copy of the representation and the length to which the concerned Secretariat staff have gone to give credence to the version of Ashok Jain not only reveals the deep fall in standards but also the lack of security and vigilance
We feel fully persuaded to hold that this is a fit case in which the 83 detenu his wife petitioner herein Ashok Jain and all other persons responsible for the fabrication of false evidence should be prosecuted for the offences committed by them
Nevertheless we wish to defer the passing of final orders on theapplication made under Section 340 of the Code of Criminal Procedure 1973 by the Union of India at this stage because of the fact the Central Bureau of Investiga tion is said to be engaged in making a thorough investiga tion of the matter so that suitable action could be taken against all the perpetrators of the fraudulent acts and the offences
As such the launching of any
prosecution against the detenu and his set of people at this stage forthwith may lead to a premature closure of the investigation resulting in the Central Bureau of Investigation being unable to unearth the full extent of the conspiracy
Such a situation should not come to pass because the manipulations of the detenu and his agents on the one hand and the connivance of staff in the President s Secretariat on the other cannot be treated as innocuous features  or mere coincidence and cannot therefore be taken lightly or viewed leniently
On the contrary they are matters which have to be taken serious note of and dealt with a high degree of vigilance cate and concern Consequently while making known our opinion of the matter for action being taken under Section 340 of the Code of the Criminal Procedure we defer the passing of final orders on the application under Section 340 till the inves tigation by the Central Bureau Of Investigation is complet ed
The respondents are permitted to move the Court for final orders in accordance with our directions
Accordingly the special leave petition and the writ petition are dismissed with costs
HLC Petitions dis missed


Summary:
The Petitioner s husband Mohan Lal Jatia was detained by an 47 order passed under sub section
1 of section 3 of the COFEPOSA by the Additional Secretary to the Government of India Ministry of Finance on being satisfied that it was necessary to detain him with a view to prevent ing him from acting in any manner prejudicial to the augmen tation of foreign exchange 
The residential premises of one Subhash Gadia a very rich and prosperous businessman of Bombay the brother in law of the detenu were searched on the basis of intelli gence gathered by the Directorate of Revenue Intelligence that he was under invoicing imports of yarn from Japan and it resulted in seizure of certain documents
As the seized documents not only revealed violation of the provisions of the Customs Act but also indicated certain payments and transactions in violation of the Foreign Exchange Regulation Act 1973 FERA the matter was referred to the Enforcement Directorate Investigation from the FERA angle
Subhash Gadia was summoned under section 40 of the FERA and his statement was recorded by Shri R C
Singh an officer of the Enforcement Directorate
The incriminating documents seized from the residential premises of Subhash Gadia and the revelations made by him during his examination in relation to the docu ments seized which revealed that the detenu Mohan Lal Jatia was engaged in foreign exchange racketeering to the tune of several crores of rupees formed the basis of the aforesaid order of detention
The petitioner approached the High Court with petitions under article 226 of the Constitution seeking to challenge the impugned order of detention
Upon the dismissal of the first of these petitions by the High Court the petitioner had approached this Court under article 136 and the Court while declining to grant special leave to appeal had directed that the detenu should appear before the Commissioner of Police and upon his doing so he should immediately be released on parole for a period of ten days
Thereafter the petitioner filed the second petition under article 226 with an application for extending the period of parole which was rejected by the High Court
The petition filed under article 136 against refusal of interim relief by the High Court was also rejected by this Court
Thereafter the High Court dismissed the writ petition against which the petitioner sought special leave to appeal and also filed a petition under article 32 challenging the order of detention
While issuing notice on the petitioner the Court directed the release of the detenu on parole for a week and by a subse quent order further extended the period of parole
Both the special leave petition and the writ petition were heard together
48 In the writ petition filed before the High Court from which the petition for special leave petition arose the petitioner had challenged the order of detention on two grounds that there was no material on which the satisfac tion of the detaining authority could be reached that the detention of the detenu was necessary and that there was total non application of mind on the part of the detaining authority to the material on record and in particular to the factual mis statements contained in paragraph 44 of the grounds of detention as detailed in entries A  to F 
The writ petition filed before this Court was principally based on the ground that there was information of the Constitu tional Safeguard Contained in article 225 of the Constitution inasmuch as there was failure on the part of the detaining authority to consider an alleged representation made by the detenu under section 8b read with section 11 01  the COFEPOSA against the order of detention addressed to the President of India which was presented through one Ashok Jain at the President s Secretariat
The other substantial question raised was that RC Singh was not a gazetted officer of Enforcement within the meaning of section 40 of the FERA and therefore the statements recorded by him could not be re garded as valid statements under the aforesaid section 40 and thus could not form the basis upon which the satisfaction of the detaining authority could be reached
Alternatively it was contended that the statements recorded by him could not be treated as statements recorded under section 39
The respondents not only denied that the detenu had addressed any representation to the President of India but made an application under section 340 Cr
PC for prosecution of persons responsible for forgoing the document purporting to be the alleged representation made by the detenu and for making certain interpolations in the Dak Register kept at the President s Secretariat
The respondents also placed on record an order showing that RC Singh had been appointed an officer of enforcement on ad hoc basis three years before he had summoned Subhash Gadia for examination
Dismissing both the petitions HELD 1 a The expression officers of Enforcement  as defined in section 3 of the Foreign Exchange Regulation Act 1973 embraces within itself not only a a Director b Additional Director c Deputy Director and d Assistant Director of Enforcement but also e such other class of officers of Enforcement as may be appointed for the purpose or  the Act
Obviously RC Singh who was Assistant En forcement Officer having been appointed as an officer of Enforcement on an ad hoc basis 49 in 1982 tell within the category such other class of offi cers  covered by section 3e
Sub section
1 of section 4 provides that the Central Government may appoint such persons as it thinks fit to be officers of Enforcement
Sub section
2 there of provides for delegation of such power of appointment by the Central Government to a Director of Enforcement or an Additional Director of Enforcement etc to appoint officers of Enforcement below the rank of an Assistant Director of Enforcement
Sub section
3 of section 4 provides that subject to such conditions and limitations as the Central Government may impose an officer of Enforcement may exercise the powers and discharge the duties conferred or imposed on him under the Act
Undoubtedly RC Singh was discharging his duties and functions as a gazetted officer of Enforcement under section 401 when he recorded the statements in question
The expression gazetted officer of Enforcement  appearing in section 401 must take its colour from the context in which it appears and it means any person appointed to be an offi cer of Enforcement under section 4 holding a gazetted post
There is no denying the fact that RC Singh answered that de scription
69G H 70A D b Even if the contention that RC Singh was not a gazetted officer of Enforcement within the meaning of section 401 were to prevail it would be of little consequence
If evidence is relevant the Court is not concerned with the method by which it was obtained
There is a long line of authority to support the opinion that the Court is not concerned with how evidence is obtained
The rule is however subject to an exception
The Judge has a discretion to exclude evidence procured after the commencement of the alleged offence which although technically admissible appears to the Judge to be unfair
This being the substan tive law it follows that the detaining authority was enti tled to rely upon the statements recorded by RC Singh under section 401
Even if RC Singh was not competent to record such statements under section 401 the statements were clearly relatable to section 39b of the Act
It cannot there fore be said that there was no material on which the detain ing authority could have based his subjective satisfaction
70E H Barindra Kumar Ghose vs Emperor ILR  Kuruma vs Reginam  RV Sang   Magruder Patodia vs RK Birla  Ors
   RM Malkani vs State of Maharashtra   and Pooran Mal etc
vs Director of Inspection   referred to
c Where an office exists under the jaw it matters not how the appointment of the incumbent is made do far as validity of its acts are 50 concerned
It is enough that he is clothed with the insignia of the office and exercises its powers and functions
The official acts of such persons are recognised as valid under the de facto doctrine born of necessity and public policy to prevent needless contusion and endless mischief
69B C Gokaraju Rangaraju vs State of Andhra Pradesh   Pulin Behari vs King Emperor 1912 15 Cal
ZJ 517 and PS Menon vs State of Kerala  Ors AIR 1970 Kerala 165 referred to
a It has long been established that the subjective satisfaction of the detaining authority as regards the factual existence of the condition on which the order of detention can be made ie the grounds of detention con stitutes the foundation for the exercise of the power of detention and the Court cannot be invited to consider the propriety or sufficiency of the grounds on which the satis faction of the detaining authority is based
Nor can the Court on a review of the grounds substitute its own opin ion for that of the authority
But this does not imply that the subjective satisfaction of the detaining authority is wholly immune from the power of judicial review
It inferen tially follows that the subjective satisfaction being a condition precedent for the exercise of the power conferred on the executive the Court can always examine whether the requisite satisfaction was arrived at by the authority if it is not the condition precedent to the exercise of the power would not be fulfilled and the exercise of the power would be bad
The simplest case is where the authority has not applied its mind at all in such a case the authority could not possibly be satisfied as regards the tact in respect of which it is required to be satisfied
66E H Emperor vs Shibnath Banerjee  Ors AIR 1943 FC 75 and Khudi Ram Das vs State of West Bengal  Ors
   referred to
In this case it is quite apparent that the so called factual mis statements listed as items A  to F  in para graph 44 of the grounds of detention are not mis statements at all
The High Court rightly held that the alleged mis takes or infirmities pointed out were not so material or serious in nature as to vitiate the impugned order of deten tion and rightly observed that the facts stated in paragraph 44 of the grounds cannot be read in isolation and the grounds of detention have to be read as a whole with the accompanying documents and material
The grounds of deten tion was only one viz that the detenu was engaged 51 in activities prejudicial to the augmentation of foreign exchange and therefore it became necessary in the public interest to place him under detention
It cannot be said on a perusal of the grounds that there was no material on which the detaining authority could have acted
74E 78A B b The contention that even if one of the grounds or reasons which led to the subjective satisfaction of the detaining authority is non existent or misconceived or irrelevant the order of detention would be invalid since it is not possible to predicate as to whether the detaining authority would have made an order for detention even in the absence of non existent or irrelevant ground cannot be accepted
That principle was enunciated by this Court some 30 years ago
With the change in law brought about by the introduction of section 5A of the COFEPOSA Act that though one or more of the grounds of detention were found to be vague non existent not relevant not connected irrational or invalid for any other reason whatsoever the detention could be sustained on the remaining grounds that principle no longer holds goods
63A C Shibban Lal Saxena vs State of Uttar Pradesh  Ors
   Dr Ram Manohar Lohia vs State of Bihar  Ors  and Pushkar Mukherjee  Ors
vs State of West Bengal   referred to
Mohd Shakeel Wahid Ahmed vs State of Maharashtra  Ors
   Asha Devi vs K Shivraj Addi tional Chief Secretary  and Kurjibhai Dhanjibhai Patel vs State of Gujarat  distinguished
c Sufficiency of grounds is not for the Court but for the detaining authority for the formation of his subjective satisfaction that the detention of a person under section 31 of the COFEPOSA Act is necessary with a view to preventing him from acting in any manner prejudicial to the augmentation of foreign exchange
The Act is a law relating to preventive detention
That being so the power of detention exercisable under sub section
1 of section 3 of the Act is subject to the limi tations imposed by the Constitution
When the liberty of the subject is involved it is the bounden duty of the court to satisfy itself that all the sate guards provided by the law have been scrupulously observed and that the subject is not deprived of his personal liberty otherwise than in accord ance with law
Nevertheless the community has a vital interest in the proper enforcement of its laws particularly in an area such as conservation of foreign exchange and prevention of smuggling activities in dealing effectively with persons engaged in such smuggling and foreign exchange 52 rackteering by ordering their preventive detention and at the same time in assuring that the law is not used arbi trarily t9 suppress the citizen of his right to life and liberty
The Government must therefore ensure that the constitutional safeguards of article 225 read with subs
1 of section 3 of the Act are fully complied with
65A B Mangalbhai Motiram Patel vs State of Maharashtra  and Narendra Purshotam Umrao vs BB Gujral   relied on
In the instant case there was no failure on the part of the Government to discharge its obligation under article 225
The relevant records of the Enforcement Directorate placed before us clearly show that there was sufficient material for the formation of the subjective satisfaction of the detaining authority under sub s1 of section 3 of the Act
They also show that the detenu was afforded a reasonable opportu nity for making an effective representation against his detention
66C D 3
a Preventive detention is an extraordinary measure resorted to by the State on account of compulsive factors pertaining to maintenance of public order safety of public life and the welfare of the economy of the country
The need for this extraordinary measure was realised by the founding fathers of the Constitution as an inevitable necessity and hence a specific provision has been made in cl
3 of article 22 providing for preventive detention
Placing the interests of the nation above the individual liberty of the anti social and dangerous elements who constitute a grave menace to society by their unlawful acts the preventive detention laws have been made for effectively keeping out of circula tion the detenus during a prescribed period by means of preventive detention
The underlying object cannot be achieved if the detenu is granted parole and brought out of detention
Even if any conditions are imposed with a view to restrict the movements of the detenu while on parole the observance of those conditions can never lead to an equation of the period of parole with the period of detention
Due to the spectacular achievements in modern communication system a detenu while on parole can sit in a room in a house or hotel and have contracts with all his relations friends and confederates in any part of the country or even any part of the world and thereby pursue his unlawful activities if so inclined
It will therefore be futile to contend that the period of parole of a detenu has all the trappings of actual detention in prison and as such both the periods should find a natural merger and they stand denuded of their distinctive characteristics
It will not be out of place to point out here that inspite of the Criminal Procedure Code providing 53 for release of the convicted offenders on probation of good conduct it expressly provides when it comes to a question of giving set off to a convicted person in the period of sentence that only the actual pre trial detention period should count for set off and not the period of bail even if bail had been granted subject to stringent conditions
In contrast
in so far as preventive detentions under the COFEPOSA Act are concerned
it has been specifically laid down in section 126 that a person against whom an order of detention has been passed shall not be released on bail or bail bond or otherwise and that any revocation or modifica tion of the order of detention can be made by the Government in exercise of its power under section 11
78E H 79G b The question whether the period of parole should be treated as part of the detention period itself was elabo rately considered by this Court in Smt
Poonam Lata vs ML Wadhawan  Ors and it was held therein that the period of parole has to be excluded in reckoning the period of deten tion under sub section
1 of section 3 of the COFEPOSA Act
78C Smt
Poonam Lata vs ML Wadhawan  Ors
JT  relied on
The respondents have placed sufficient material before the Court to show that the alleged representation addressed to the President of India was neither filed by the detenu nor was it received at the President s Secretariat
The attempt to assail the order of detention on the ground of violation of the constitutional sate guard enshrined in article 225 and the violation of section 11 of the Act by the Central Government is a well planned and ingenuous move on the part of the detenu
The facts revealed not only warrant an inference that the detenu and his associates have gone to deplorable lengths to create evidence favourable to the detenu but arouse convulsive thoughts in our minds about the efficiency and integrity of the concerned sections of the President s Secretariat
The case with which and the fascile manner in which the detenu s agent Ashok Jain claims to have entered the President s Secretariat and delivered the Dak and obtained an endorsement of acknowledgement in a copy of the representation and the length to which the concerned Secretariat staff have gone to give credence to the version of Ashok Jain not only reveals the deep fall in standards but also lack of security and vigilance
We feel fully persuaded to hold that this is a fit case in which the detenu the petitioner Ashok Jain and all other persons responsible for the fabrication of false evidence should be prosecuted lot the offences committed by them
We defer the passing of 54 final orders on the application filed under section 340 Cr
PC till the investigation by the Central Bureau of Investiga tion is completed
80E F 82F H 83A B