Union Of India vs Dimple Happy Dhakad

3. The facts giving rise to these appeals are that pursuant to an investigation by the office of Directorate of Revenue Intelligence in the matter of smuggling of foreign origin gold by a syndicate of persons from UAE to India. On 28.03.2019 search and interception of two vehicles i.e. a Honda Activa Scooter and a Honda City car was held. It was noticed that there were two persons Abdul Ahad Zarodarwala and Shaikh Abdul Ahad, employee of Zarodarwala. Search of the vehicles 2 resulted in recovery of 75 kgs of gold in the form of five circular discs valued at Rs.24.5 crores. Follow-up searches were conducted in the offices and residential premises of the connected persons resulted in further recovery of 110 kgs of gold and currency amounting to Rs.1.81 crores. Shoeb Zarodarwala, Abdul Ahad Zarodarwala and Shaikh Abdul Ahad were summoned and their statements were recorded and they are alleged to have made statement regarding receiving of smuggled gold from respondent detenu-Nisar Pallathukadavil Aliyar.

4. Facts in SLP (Crl.) No. 5408 of 2018: Case of the appellants is that the respondent-detenu Nisar Pallathukadavil Aliyar is a full-time organised smuggler of large quantities of gold and is the mastermind of the smuggling syndicate and has been smuggling gold into India since 2016. It is stated that two companies, viz. M/s. Al Ramz Metal Scrap Trading and M/s. Blue Sea Metal FZE were floated and registered by the appellant in the name of one Kalpesh Nanda for exporting metal scrap to India which is alleged to cover cargo to smuggle gold. It is alleged that detenue Nisar Aliyar ensured that the 3 sale proceeds of the smuggled gold were siphoned off to Dubai through hawala. It is alleged that Nisar Aliyar created a wide network of people to look after the operations at every stage and was smuggling gold into India since 2016 and is alleged to have smuggled more than 3300 kgs of gold having approximate value of Rs.1000 crores and is alleged to be a mastermind of the smuggling syndicate. Detenu Nisar Aliyar was arrested on 31.03.2019 for commission of offences punishable under Section 135 of the Customs Act, 1962 and his statement was recorded.

5. Facts in SLP (Crl.) No. 5396 of 2019: Detenu-Happy Arvindkumar Dhakad is a Director of Bullion Trading Firm and is a jeweller. As per the appellants, investigations revealed that the husband of the detenu Happy Dhakad was directly dealt with Shoeb Zarodarwala and Jignesh Solanki who are his relatives by buying gold from Nisar Aliyar. Detenu Happy Dhakad is alleged to have abetted Nisar Aliyar in his illegal activities of receiving and concealing smuggled gold and disposing it off through his jewellery outlets and is said to have played a vital role. It is alleged that through multiple jewellery 4 outlets owned by him and his relatives, detenu-Happy Dhakad disposed of the foreign origin smuggled gold easily. Follow up searches were conducted at various offices and residential premises of persons found connected with smuggling of gold. A total quantity of 110 kgs of gold was recovered from these premises. Thirty-one pieces of gold carrying a total weight of 20.4 kgs and 11.5 kgs of foreign marked gold bars totally valued at Rs.10.21 crores, Rs. 28.53 lakhs cash and unaccounted cash of Rs.28.53 lakhs and Rs.44.50 lakhs were seized respectively from the office and residence of detenu Happy Dhakad and he did not have any documents for his possession of gold. In his statement recorded on 29.03.2019, detenu Happy Dhakad is alleged to have accepted that 20.4 kgs of gold recovered from his premises was from the smuggled gold supplied to him by appellant Nisar Aliyar and the other 11.5 kgs of foreign marked gold was procured from other sources. Detenu Happy Dhakad was arrested on 29.03.2019 for the offence punishable under Section 135 of the Customs Act, 1962 and was remanded to judicial custody. 5

6. The Detaining Authority-Joint Secretary (COFEPOSA), on being satisfied that the detenues have high propensity to indulge in the prejudicial activities, with a view to prevent them from smuggling and concealing smuggled gold in future, passed the orders of detention dated 17.05.2019 under Section 3 of the Conservation of Foreign Exchange & Prevention of Smuggling Activities Act, 1974 (COFEPOSA). The detention orders and the grounds of detention were served on the detenues on 18.05.2019. The copies of the relied upon documents were served on the detenues on 21.05.2019 and 22.05.2019.

7. The detention orders dated 17.05.2019 was assailed by the detenues by filing writ petitions before the High Court. The High Court vide interim order dated 04.06.2019 directed the appellant to consider the writ petitions as a representation of the detenues. Accordingly, the representation was considered and the same was rejected by the Joint Secretary (COFEPOSA) who did not find any justification in modification of the detention orders.

12. The present case relates to alleged smuggling of huge volume of gold of more than 3300 kgs of gold camouflaging it with brass metal scrap. Detenue Nisar Aliyar is stated to be the mastermind and kingpin of the syndicate who along with others smuggled gold from UAE to India. Detenu Happy Dhakad abetted smuggling by receiving smuggled gold from Nisar Aliyar and his group and disposing them off through jewellery outlets run by him and his relatives. The respondents were arrested for the offence punishable under Section 135 of the Customs Act on 29.03.2019 and their statements were recorded under Section 108 of the Customs Act. The orders of detention were issued on 17.05.2019. The detention orders along with grounds of detention were served on the detenues on 18.05.2019. Since the documents were running into 2364 12 pages and there were fifteen detention orders passed against various detenues, the compilation of documents was served on detenues on 21.05.2019 and 22.05.2019 respectively. Section 3(3) of COFEPOSA Act states that “the detenue should be communicated with the order of detention and the grounds as soon as may be after detaining him but ordinarily not later than five days……” According to the appellants, in the present case, the orders of detention and the grounds were served on the detenues on 18.05.2019. However, since the documents were voluminous running about 2364 pages, the same was served on the detenues on 21.05.2019 and 22.05.2019 respectively which, of course, was within the time period stipulated under Section 3(3) of the Act.

13. In the detention orders dated 17.05.2019, though it was expressly mentioned that the documents mentioned in the list relied upon by the detaining authority are served upon the detenues along with the detention orders, the relied upon documents were served upon the detenues between 20.05.2019 and 22.05.2019. The High Court quashed the detention orders dated 17.05.2019 on the ground that on 13 18.05.2019, the detention orders and the grounds of detention were served on the detenues; but the relied upon documents and other material particulars were not served upon the detenues together with the grounds of detention. After extracting the relevant portion of the detention orders, the High Court held that though it was stated that the relied upon documents were served upon the detenues along with the detention orders, actually they were not served on the detenues together with the detention orders and the grounds of detention and while so, the appellants cannot have recourse to Section 3(3) of the COFEPOSA Act, 1974. The relevant portion of the detention orders where the detaining authority has stated that the relied upon documents are being served upon the detenues along with the grounds of detention reads as under:-

serving of copies of documents together with detention order cannot be a ground to quash the detention order.

35. In the light of the well settled principles, we have to see, in the present case, whether there was awareness in the mind of the detaining authority that detenu is in custody and he had reason to believe that detenu is likely to be released on bail and if so released, he would continue to indulge in prejudicial activities. In the present case, the detention orders dated 17.05.2019 record the awareness of the detaining authority:- (i) that the detenu is in custody; (ii) that the bail application filed by the detenues have been rejected by the Court. Of course, in the detention orders, the detaining authority has not specifically recorded that the “detenu is likely to be released”. It cannot be said that the detaining authority has not applied its mind merely on the ground that in the detention orders, it is not expressly stated as to the “detenue’s likelihood of being released on bail” and “if so released, he is likely to indulge in the same prejudicial activities”. But the detaining authority has clearly 33 recorded the antecedent of the detenues and its satisfaction that detenues Happy Dhakad and Nisar Aliyar have the high propensity to commit such offences in future.

36. The satisfaction of the detaining authority that the detenu is already in custody and he is likely to be released on bail and on being released, he is likely to indulge in the same prejudicial activities is the subjective satisfaction of the detaining authority. In Senthamilselvi v. State of T.N. and Another (2006) 5 SCC 676, the Supreme Court held that the satisfaction of the authority coming to the conclusion that there is likelihood of the detenu being released on bail is the “subjective satisfaction” based on the materials and normally the subjective satisfaction is not to be interfered with.

Shivakant Shukla (1976) 2 SCC 521).” [underlining added].

44. In the result, the impugned judgment of the High Court dated 25.06.2019 in W.P. (Crl.) Nos.2843 and 2844 of 2019 quashing the detention orders of the detenues viz. Happy Arvindkumar Dhakad and Nisar Pallathukadavil Aliyar is set aside and the appeals preferred by Union of India are allowed. Consequently, the appeals preferred by the detenues shall stand dismissed.

July 18, 2019 41