In the High Court of Judicature at Madras Dated : 25..09..2008 C O R A M THE HONOURABLE MRS. JUSTICE PRABHA SRIDEVAN AND THE HONOURABLE MR. JUSTICE V. PERIYA KARUPPIAH Habeas Corpus Petition No.108 of 2008 Fathimathu Zohra .. Petitioner versus 1. The State of Tamil Nadu, Rep. by its Secretary to Government, Public (SC) Department, Fort St. George, Chennai-9. 2. The Union of India, Rep. by the Secretary to Government, Ministry of Finance, Department of Revenue (COFEPOSA Unit), Central Economic Intelligence Bureau, Janpath Bhavan, VI Floor, 'B' Wing, Janpath, New Delhi-110 001. 3. The Superintendent of Central Prison, Central Prison, Puzhal, Chennai. .. Respondents - - - - - PRAYER : Petition under Article 226 of the Constitution of India seeking to issue a writ of habeas corpus calling for the records relating to the detention order in G.O. SR.1/1154-8/2007, Public (SC) Department, dated 4.1.2008 passed by the first respondent, quashing the same and directing the respondents to produce the body of the person of the detenu, Moula Mohideen Sujath Ali, son of Maula Mohideen, now detained in the Central Prison, Chennai as COFEPOSA detenue before this Court and set him at liberty. - - - - - For Petitioner : Mr. B. Kumar, Senior Counsel for Mr. M.M.K. Alifudeen For Respondents : Mr. P. Kumaresan, Addl. Public Prosecutor. - - - - - https://hcservices.ecourts.gov.in/hcservices/ O R D E R Prabha Sridevan, J. The wife of the detenu Moula Mohideen Sujath Ali has filed this habeas corpus petition challenging the order of detention dated 4.1.2008 passed against her husband, detaining him under Section 3(1)(i) of the Conservation Of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (Central Act 52 of 1974). 2. The detenu came from Singapore and landed at the Chennai International Airport on 27.11.2007 with one hand baggage and four checked-in baggage. He was intercepted by the Customs Offcer at the Green Channel on a reasonable suspicion that he might be carrying contraband goods. He was asked to declare the contents of the baggage. He declared the contents of the baggage as used clothes and some gift articles totally valued at Rs.20,000/-. Not satisfied with that, the Customs Officers decided to examine his baggage. They found some gift articles and used clothes. In his laptop bag, they recovered a swiss make, brand new ladies wrist watch of 'de-GRISOGONO' brand, which appeared to be made of white gold, embedded with very small diamond stones all over the case. On a personal search in the presence of witnesses, the Customs Officer observed that he was wearing a swiss make, brand new and expensive gents wrist watch on his left hand, which was of 'ULYSSE NARDIN' brand. The Officer noted the markings, model number and other particulars engraved on the above said watches and browsed the Internet and referred to two sites, viz. www.luxurybazaar.com and www.pricegrabber.com to ascertain the sale price of the watches and arrived at a total value of an equivalent of Indian Rupees 29,29,054/-. Since the detenu had failed to declare possession of the said two watches and had attempted to go through the Green Channel, the goods were seized by the Customs Officer under a mahazar on the reasonable belief that they were smuggled into India and liable to confiscation under the provisions of the Customs Act, 1962 (hereinafter referred to as the Act). 3. The detenu gave a statement dated 28.11.2007 under Section 108 of the Act. He had said that he new it was an offence to attempt to go through the Green Channel without declaring the correct value of goods and requested pardon. In the further statement given before the Customs Officer, he had stated that the two watches were given to him by one A. Seng in Singapore as gifts. For attempting to smuggle the watches by way of misdeclaration, the detenu was alleged to have committed an offence punishable under Sections 132 and 135 of the Customs Act. He was arrested on 28.11.2007 and produced before the Additional Chief Metropolitan Magistrate, E.O.II, Egmore, Chennai on the same https://hcservices.ecourts.gov.in/hcservices/ day and was remanded to judicial custody till 12.12.2007. From the above materials, the detaining authority was satisfied that the detenu had indulged in smuggling of goods and therefore, the detention order came to be passed. 4. Learned senior counsel appearing for the petitioner firstly referred to the application filed by the detenu for compounding the offence. According to him, by the letter dated 7.12.2007 sent by the Chief Commissioner of Customs, a report was called for from the sponsoring authority, but the report of the sponsoring authority was not placed before the detaining authority at the time of passing the order of detention. This is stated in the order of detention. Next, he submitted that the value of the goods brought in by the detenu was assessed based on the internet valuation, which was not in accordance with the relevant rules, and since the price of the goods shown in the two sites mentioned does not refer to the country of origin, the valuation reflected in the two sites would not accurately refer to the actual value of the goods in the country from where they were purchased, viz. Singapore. Learned senior counsel referred to Notification No.94 of 2007 dated 13.9.2007 issued under the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007, which refers to how the price of goods shall be determined. Rule 9 of the said Rules was referred to by both the counsel. Learned Additional Public Prosecutor submitted that Rule 9 provides that if the value of the imported goods cannot be determined by any of the preceding rules, then the value shall be determined using reasonable means consistent with the principles and general provisions of these rules. But, the learned senior counsel referred to sub-rule (2) of Rule 9, which said that no value shall be determined under the provisions of this Rule on the basis of the selling price in India of the goods produced in India or the price of the goods in the domestic market of the country of exportation. It was pointed out by the learned senior counsel that there is no way of ascertaining as to whether the value of the watches which was shown on the two websites was the actual value of the goods in the domestic market of the country of exportation. If it was so, then sub-rule (2) of Rule 9 specifically bars assessing the value of the goods on that basis under Rule 9. Learned senior counsel also submitted that the CEGAT, Delhi had, in 2000 (117) E.L.T. 49 (Tribunal) [Aggarwal Distributors (P) Ltd. vs. Commissioner of Customs, New Delhi], held that the document displayed on the internet is not worthy of reliance for the reasons that the document is unsigned, no one knows who has introduced the document on the internet, what was the nature of the price indicated in the document and whether it was a retail price and refused to accept the internet value owing to lack of documentary evidence in support thereof. According to the learned senior counsel, the Supreme Court dismissed the civil appeal filed against the said order of the Tribunal. Learned https://hcservices.ecourts.gov.in/hcservices/ senior counsel further submitted that if the correct valuation had been done and it was less than rupees five lakhs, then as per the Act, no arrest can be made on the ground of suspected evasion of customs duty unless the value of the goods in respect of which the evasion of duty is suspected exceeds rupees five lakhs. Learned senior counsel also submitted that it will be seen that there was no effort to conceal the watches. The gents watch was worn by the detenu and the ladies watch was kept loosely in the hand baggage. It was further submitted that this is only a solitary instance and there is nothing to show that the detenu is likely to repeat the activity and therefore, it is necessary to prevent him from doing so. Lastly, learned senior counsel submitted that there was no effective consideration of the representation of the detenu. In support of his submissions, learned senior counsel referred to various judgments. 5. Learned Additional Public Prosecutor, on the other hand, submitted that the non-disclosure of the possession of the valuable goods would itself show that the detenu had intention to smuggle them into the country. When the detaining authority had referred to the compounding proceeding and the adjudication proceeding, the further proceedings regarding that will not have any bearing on the detention and therefore, the non-placing of these documents would not really be material. As regards the value of the goods, learned Additional Public Prosecutor submitted that the authorities had properly followed the rules while arriving at the value of the goods, viz. the residual method of evaluation. He also relied on several decisions in support of his submissions. 6. The following documents in the paper book supplied to the detenu were relied on on behalf of the respective parties. Pages 16 and 19 would refer to the value of the watches as shown on the internet. Here, the learned senior counsel pointed out that the document shows that the gents watch worn by the detenu was a limited edition and there was no material before the detaining authority that the seized watch was a limited edition. This would have a definite bearing on the value of the watch. Limited edition goods are definitely much more highly priced than the normal editions. Therefore, the reliance on the internet value of the goods would not be reliable. On the other hand, according to the learned Additional Public Prosecutor, this is the only available method of assessing the value of these expensive watches. 7. Learned Additional Public Prosecutor referred to the travel documents of the detenu which would show that the detenu had repeatedly made trips between Singapore and India in a short span of time and therefore, there was justifiable material for the authorities to come the the conclusion that he had to be prevented https://hcservices.ecourts.gov.in/hcservices/ from repeating the smuggling activity. Learned Additional Public Prosecutor, in this context, referred to (2005) S.C.C. (Cri) 17 [Kirtikumar Nirula vs. State of Maharashtra] where the detenu was found to travel on the same route, viz. Delhi-Bombay-Ahmedabaded in a particular manner, in fact, 16 times in a short period. The Supreme Court held that the conduct is sufficient to form a reasonable conclusion that the detenu is likely to indulge in similar activities in future also. To this, the learned senior counsel responded by saying that in the voluntary statement given by the detenu, he had stated that the detenu exports musical instruments to Singapore and Japan and that he has the D.G.F.T. License for that and therefore, there is explanation for his frequent travel. Further, according to the learned senior counsel, merely because someone travels frequently to Singapore and back, it would not mean that they are engaged in smuggling activity. He relied on (2002) 3 S.C.C. 754 [Chowdarapu Raghunandan v. State of Tamil Nadu] where the detenu had visited Singapore twice earlier and the Supreme Court held that from that, no inference can be drawn that he is likely to be involved in prejudicial activities in future. 8. Now, let us examine the various grounds that arise for consideration in the case on hand. 8.1 Important documents not placed for consideration In (1999) S.C.C. (Cri) 1469 [Ahamed Nassar vs. State of Tamil Nadu], the Supreme Court held as follows : "20. So far as the stand of the respondent with reference to the advocate’s letter dated 19-4-1999 is concerned it cannot be held to be a justifiable stand. These technical objections must be shunned where a detenu is being dealt with under the preventive detention law. A man is to be detained in the prison based on the subjective satisfaction of the detaining authority. Every conceivable material which is relevant and vital which may have a bearing on the issue should be placed before the detaining authority. The sponsoring authority should not keep it back, based on his interpretation that it would not be of any help to a prospective detenu. The decision is not to be made by the sponsoring authority. The law on this subject is well settled; a detention order vitiates if any relevant document is not placed before the detaining authority which reasonably could affect his decision." "25. The aforesaid two letters, viz., dated 23rd April and 19th April contain factual assertions, not only retraction of the detenu’s earlier alleged confession but other matters. So far as the retraction of confession by the detenu is concerned, we accept the stand of the respondent that the same was also recorded https://hcservices.ecourts.gov.in/hcservices/ in the bail application dated 1-4-1999 of the detenu which was placed and considered by the detaining authority. But in these letters the stand of the detenu was that the seized goods are not prohibited goods which passed through the red channel for which the detenu offered to pay the duty but instead, the officer concerned without listening proceeded to arrest him. It is true, the respondent’s case is that the detenu brought these goods in trade which were not bona fide baggage and were misdeclared; both the type and quantity of goods were found concealed (65 cellular phones in 10 cigarette cartons of State Express 555) to evade detection and payment of customs duty. But this stand is on merits. It is not necessary in these proceedings to go into its merits and demerits. 26. The question is not whether the second part of the contents of those letters was relevant or not but whether they were placed before the detaining authority for his consideration. There could be no two opinions on it. It contains the very stand of the detenu of whatever worth. What else would be relevant if not this? It may be that the detaining authority might have come to the same conclusion as the sponsoring authority but its contents are relevant which could not be withheld by the sponsoring authority. The letter dated 19-4-1999 reached the sponsoring authority and reached well within time for it being placed before the detaining authority. There is an obligation cast on the sponsoring authority to place it before the detaining authority, which has not been done. Even the letter dated 23-4-1999 which reached the Secretary concerned at 3.00 p.m. on 26-4-1999 was much before the formal detention order dated 28-4-1999. The Secretary concerned was obliged to place the same before the detaining authority. The respondent authority was not right in not placing it as it contains not only what is already referred to in the bail application dated 1-4- 1999 but something more." 8.2 In (2007) 1 S.C.C. (Cri) 464 [Adishwar Jain vs. Union of India], the documents which had not been placed before the authorities and which were alleged to have prejudiced the detenu were the report of the D.R.I. stating that the appellant in that case had been exonerated of the offence based on the orders of the civil court, orders of the Tribunals etc. Before the Supreme Court, it was contended that the appellant had obstructed the proceedings by initiating various civil litigations. But, the Supreme Court held as follows : "... But, indisputably, those documents involving the civil court proceedings were not placed before the https://hcservices.ecourts.gov.in/hcservices/ detaining authority. If the same had not been done, not only the delay in issuing the order of detention stood unexplained, but also thereby the order itself would become vitiated. Furthermore, the civil court proceedings were over on 19.11.2004. Evidently, the detaining authority did not take immediate steps to detain the appellant. Why the documents pertaining to the proceedings of the civil court had not been placed before the detaining authority has not been explained. ..." 8.3 In (2006) 1 M.L.J. (Crl.) 398 [Rajinder Arora vs. Union of India], the document that was not placed before the detaining authority was a status report submitted by the third respondent therein to the D.R.I., Delhi. The defence of the sponsoring authority and the detaining authority was that the status report is an internal correspondence and has not been relied upon and therefore, it is not necessary to serve it on the detenu. The Supreme Court held that the status report, which was called for from the Customs Department, was not taken into consideration by the competent authorities and referred to the decision in (2005) 9 SCALE 534 [S. Nagamuthu vs. State of Tamil Nadu], where the order of detention was struck down on the ground that the relevant material had been withheld from the detaining authority. 8.4 It is true that in (1992) 1 S.C.C. 1 [Abdul Sattar Ibrahim Manik vs. Union of India], the Supreme Court held that the non-supply of the copies of the bail application or the order refusing bail to the detenu cannot affect the detenu's right of being awarded a reasonable opportunity, if the authority had not relied or referred to the same in the order of detention. 8.5 In (2007) 1 S.C.C. 295 [Usha Agarwal vs. Union of India], the Supreme Court observed as follows : "The sponsoring authority should not undertake any exercise of examination and interpretation of the available material with a view to place the documents selectively before the detaining authority. It is not for the sponsoring authority to decide as to which of the relevant documents should be placed before the detaining authority, or which of the documents are likely to help, or not help the prospective detenu; consequently, the sponsoring authority cannot exclude any particular document from the material to be placed before the detaining authority. If the relevant facts or documents which may influence the subjective satisfaction of the detaining authority on the question whether or not to make the detention order, are not placed before the detaining authority, or are not considered by the detaining authority, it may vitiate the detention order itself. It is no answer to say that the exclusion of a relevant document did not affect the decision to detain a person, in view of the other https://hcservices.ecourts.gov.in/hcservices/ documents that were placed before the detaining authority or that the detaining authority would have come to the same conclusion even if it had considered the said document." 8.5 In (2005) 7 S.C.C. 70 [J. Abdul Hakeem vs. State of Tamil Nadu], the Supreme Court held that though the detenu has a right to be supplied with the material documents on which reliance is placed by the detaining authority for passing the detention order, the detention order will not be vitiated, if the document although referred to in the order is not supplied which is not relied upon by the detaining authority for forming of its opinion or was made the basis for passing the order of detention. It was held that the crux of the matter lies in examining whether the detenu's right to make a representation against the order of detention is hampered by non-supply of the particular document. 8.6 In H.C.P. No.1805 of 2007 dated 22.7.2008 [R. Chandra Mohan vs. State of Tamil Nadu & Others], the question whether the non-placement of the report of the sponsoring authority was vital was considered and the Division Bench held as follows : "Insofar as the non-placement of the report of the sponsoring authority dated 4.12.2007 is concerned, of course, by the said report, the letters of retraction of earlier confession were neither considered nor rejected. Nevertheless, the application of the detenu for compounding the offences made under Rule 4(3) of the Customs (Compounding of Offences) Rules, 2005 on 14.11.2007 to the compounding authority was considered and in fact, the detaining authority had reported that the compounding of offences would be considered in the case under Sections 132 and 135(1)(a) of the Customs Act, 1962 and not u/s.132 alone. In our considered view, the said report attaches some materials in favour of the detenu and in the said circumstances, the report assumes importance. Again, had the said report been placed before the detaining authority, different considerations could have occurred in the mind of the detaining authority to arrive at a subjective satisfaction or opinion as to whether the detenu should be clamped with the order of detention under the provisions of the COFEPOSA Act. The said report dated 4.12.2007 is a material document and therefore, non- consideration of the said document would also vitiate the order of detention. As both the letters retracting the confession and the report of the Commissioner of Customs were much prior to the order of detention dated 17.12.2007 and since these documents were in the custody of the sponsoring authority even before the detention order came to be passed, the sponsoring authority ought not to have withheld these documents https://hcservices.ecourts.gov.in/hcservices/ from the consideration of the detaining authority. Therefore, the failure on the part of the sponsoring authority to place the above documents will certainly affect the consideration of the detaining authority to pass the detention order." The case on hand is similar to the above case decided by the Division Bench. In this case, the compounding application was in fact allowed subsequently on 10.4.2008. Had the report of the sponsoring authority been placed before the detaining authority, he may have decided differently. As observed in Ahamed Nassar's case (supra), it is not for the sponsoring authority to decide that the report will not have any bearing on the decision of the detaining authority. Therefore, we hold that failure on the part of the sponsoring authority to place the above document will certainly affect the legality of the detention order. 9. Mode of Valuation In (2006) 2 M.L.J. (Crl.) 487 [Khathija Beevi vs. State of Tamil Nadu & Another], the mode of vaulation of the watch brought in by the detenu was called into question and the order of detention was quashed on the ground that in respect of contemporaneous import of similar goods, the valuation was made by the Customs Authorities on the basis of a different yardstick. In H.C.P. No.1126 of 2005 dated 15.2.2006 [Rizwana Ziyath vs. State of Tamil Nadu & Another], a Division Bench of this Court had held on seeing the physical condition of the goods that the valuation arrived at by the Department was neither arbitrary nor unfair and accordingly confirmed the order of detention. 9.1 In appropriate circumstances, the internet value may be the acceptable method of valuation. Each case will have to be tested on its own factual basis. In the present case, we have no material to indicate that the goods that were seized from the detenu were identical to the goods whose picturisation is shown in the paper book. So, apart from the statement in the mahazar that the Customs Officer noted down the markings and examined them on the website, there is no other satisfactory basis for us to conclude that the goods brought in by the detenu were identical or at least similar to the watches shown at pages 16 and 19 of the paper book. 9.2 The contention of the learned senior counsel regarding the gents watch being a limited edition cannot also be ignored, for we are informed that limited edition watches are much more expensive than the normal editions which are placed in the market. We are not sure that was the most satisfactory method of valuation as far as these expensive and rare items are concerned. And, so many questions surround the method by which this valuation had been arrived at. As rightly contended by the learned senior counsel, if an Appraiser had valued the two watches and had arrived at a value which was less than rupees five lakhs, then there may have been no arrest. These are questions that should https://hcservices.ecourts.gov.in/hcservices/ have arisen in the mind of the detaining authority. The detaining authority has not chosen to seek clarify these doubts. Had he done so, his conclusion may