Vinod K. Chawla vs Union Of India & Ors

2. Though the detention order was passed on 12.2.1997 but the same could be served upon the appellant after more than a year on 12.3.1998 when he was taken into custody as he was absconding. The appellant filed the writ petition under Articles 226 and 227 of the Constitution soon thereafter before the Delhi High Court which was dismissed on 27.1.1999. The appellant has already undergone the entire period of detention but he is pursuing the present appeal as he is threatened with proceedings under Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976.

3. The grounds of detention mention that the Director of Revenue Intelligence, New Delhi (for short 'DRI') had received information that the appellant was indulging in large scale evasion of customs duty by importing consumer electronic goods at grossly under-invoiced prices and by circumventing Import and Export Policy and remitting payments for the same through illegal channels. The goods were imported through various firms and concerns owned by the appellant. On the basis of the said information, the officers of the DRI conducted simultaneous searches on 20.12.1996 at seven residential/business/factory premises of the appellant, wherein many incriminating articles and documents were recovered. Further searches were also made on 30th December, 1996 and some more goods of foreign origin were recovered which established evasion of excise duty. His statement was recorded on 19th and 20th December, 1996 and 30th January, 1997. On the basis of the material collected, the Joint Secretary to the Government of India passed the impugned order under Section 3(1) of COFEPOSA on 12.2.1997. The appellant evaded service of the detention order and absconded. After great efforts had been made and proceedings had been initiated under Section 7 of COFEPOSA, the appellant was served with the copy of the detention order on 12.3.1998 when he was taken into custody. The representation made by the appellant was rejected by the detaining authority and also by the Central Government after the Advisory Board had recorded an opinion that there was sufficient cause for his detention. The appellant challenged the detention order by filing the writ petition before the High Court of Delhi raising several pleas but the same was dismissed on 27.1.1999.

5. In your statement recorded on 19.12.96 under Section 108 of the Customs Act, 1962 you inter alia stated that initially you started doing business in purchase and sale of electronic components under a firm named M/s WINGS Electronics, 309, Lajpat Rai Market, Delhi 6; that at the same place you opened another firm, M/s LIFE Electronics (P) Ltd. in 1984-85 of which you were the Managing Director.

.................................................................................. ....................................................... that in addition to this, you also had a trading centre in the name and style of M/s CONNECTRONICS AND CABLES Pvt. Ltd. G-3, Osian Building, 12, Nehru Place, New Delhi since 1991, in which you were dealing in stock and trade of connectors, cables, switches, wires and other electronic components which were being imported from Hongkong/Taiwan. Your son Asheesh Chawla, was the Managing Director of this firm.

6. You further stated that you were importing components such as plastic molded items, wires and cables, connectors, hardware switches etc. through your firms and that this work of imports was being looked after by you; that you yourself used to negotiate prices and finalize the orders on behalf of M/s LIFE Electronics and M/s WINGS Electronics, Noida, that you were looking after the business interest of M/s CONNECTORS AND CABLES including the imports, that their main overseas suppliers were i) M/s Pearl Industrial Co., Hongkong. ii) M/s Mirtex Enterprises (HK) Ltd., Taiwan and Hongkong, iii) M/s RAFS Enterprises, Singapore

11. In view of the admissions made by you in various statements in connection with the import of juice extractors VCRs and cables the officers of the Directorate again visited the factory premises of M/s WINGS Electronics on 30.12.1996 and conducted further search of the said premises. As a result, 2460 pieces of car audio speaker "made in Korea" and 254 nos. of Spectra Strap Planar Cables valued at Rs.20 lakhs (approx) were recovered which were detained pending further enquiries which were subsequently seized on 15.01.97 as no person including you could produce the documents for legal importation and acquisition of the said goods................................................................................. .........................................................

12. Further the officers of DRI scrutinized the documents which were recovered from your various premises, as a result of searches conducted on 10.12.96. Scrutiny of records resumed from the business premises of M/s CONNECTRONICS AND CABLES Pvt. Ltd. revealed gross under valuation of the items viz. connectors imported by the company from Taiwan. It was found that all the goods imported by the said company since 1994 were supplied by a single supplier, namely, M/s MIRTEX ENTERPRISES (HK) LTD., Taiwan. Investigations revealed that this was a branch office with the main office at Hongkong.

7. The grounds of detention are very detailed and long and run into 35 paragraphs and several pages. They refer to the documents recovered from business premises of M/s Connectronics and Cables Pvt. Ltd., M/s Wings Electronics and M/s Mobicon and factory premises of M/s Life Electronics Pvt. Ltd. situate in Noida and also the godown of M/s Connectronics and Cables Pvt. Ltd. at Chittaranjan Park, New Delhi. They extensively refer to the statement of the appellant recorded on 19.12.1996 wherein he admitted that he was doing business through two firms owned by him, viz., M/s Wings Electronics and M/s Life Electronics Pvt. Ltd. and that he had started trading centre in the name and style of M/s Connectronics and Cables Pvt. Ltd. and also the fact that his son Asheesh Chawla was the Managing Director of this firm. The detention order refers to the several other statements of the appellant himself which were recorded on different dates and the admissions made by him. The statement of Asheesh Chawla, who is the son of the appellant, has been referred to in para 14 of the detention order, wherein it is mentioned that in his written statement he stated that for the last one year he had been placing orders with M/s MIRTEX though previously the appellant had been placing the orders. In para 15 of the detention order it is stated that Asheesh Chawla was shown several invoices and corresponding quotations/proforma invoices wherein difference in prices was evident in each and every case to which he agreed, but could not explain the difference. A reading of the whole of the detention order clearly shows that the detaining authority had placed reliance entirely upon the statement of the appellant Vinod K. Chawla himself and the documents and material recovered from the business premises and godowns of the firms which were admittedly owned by the appellant. There was only a passing reference to the statement of Asheesh Chawla, wherein he had stated that for the last one year he had been placing orders with M/s MIRTEX though previously the orders had been placed by the appellant. The detention order is not at all based upon the statement of Asheesh Chawla nor any real support is taken by the detaining authority from his statement in order to come to the conclusion that the appellant was the owner of the firms which placed orders for import of various items and invoices whereof were deliberately grossly undervalued in order to evade customs duty and huge sum of money was remitted through illegal channels. Another fact which deserves notice is that Asheesh Chawla had merely stated that orders with M/s MIRTEX used to be placed by the appellant till one year earlier to the recording of his statement. It is important to note that the alleged retraction of statement has not been made by the appellant but by his son Asheesh Chawla. As mentioned earlier, the detention order is not based upon the statement of Asheesh Chawla but merely makes a passing reference to the same. Had the appellant retracted from his statement and the said retraction had not been placed before the detaining authority, the position may have been different as in such a case it could be urged that the formation of opinion by the detaining authority and his subjective satisfaction in that regard had been affected. But such is not the case here. The retraction of the statement by Asheesh Chawla has no bearing at all as it in no way could affect the formation of opinion and the subjective satisfaction of the detaining authority. Therefore, the contention raised by the learned counsel for the appellant has no substance and is liable to be rejected.

13. It was lastly urged that the searches of the premises of the appellant were conducted on 20.12.1996 and 30.12.1996 and his statement was also recorded between 19.12.1996 and 30.1.1997, but he was taken into custody after more than a year on 12.3.1998 and on account of this long delay the live and proximate link in the alleged activities of the appellant and the date of his actual detention was snapped and there was no reasonable cause for detaining the appellant. The argument raised is wholly misconceived. The detention order was passed on 12.2.1997 soon after searches were conducted and his statement had been recorded but as the appellant was evading arrest and was absconding, it could only be served on 12.3.1998 when he was taken into custody. In the counter affidavit filed in the High Court on behalf of the respondents it was averred that continuous efforts were made both by the police authorities as well as the officers of DRI to arrest the appellant. A notice under Section 7(1)(b) of COFEPOSA was published in Official Gazette on 23.3.1997 and also in leading English and Hindi newspapers on 4.10.1997. An application under Section 7(1)(a) of the Act was also moved before the Court of ACMM for initiating proceedings under Section 82 and 83 Cr.P.C. where proclamation was made on 3.12.1997 to appear on 9.1.1998. An order of attachment under Section 83 Cr.P.C. was also issued which was brought to the notice of his family members and only then the appellant could be apprehended and detained on 12.3.1998. Reference has also been made to three letters dated 28.2.1997, 17.7.1997 and 5.9.1997 from the Police Headquarters regarding the efforts made to serve the detenu and copies of those letters were placed on record. Every time the family members of the appellant reported before the police that the appellant had left the house on 12.3.1997 to an unknown place and that his whereabouts were not known. An additional affidavit of Assistant Director of Revenue Intelligence was also filed before the High Court wherein it was averred that 11 summons were issued to the appellant during 20.2.1997 and 26.11.1997 and a red alert was also issued by the DRI on 5.3.1997. These facts conclusively establish that the detention order which was passed on 12.2.1997 soon after the searches had been made and the statement of the appellant had been recorded, could not be served in spite of every possible attempt had been made to serve him as the appellant was absconding. Where a person himself evades service of detention order, it is not open to him to contend that in view of the long period which has elapsed between the offending activities and the actual arrest and detention, the vital link had snapped and there was no ground for actually detaining him. An otherwise valid detention order cannot be rendered invalid on account of the own act of the detenu of evading arrest and making himself scarce. The contention thus raised has absolutely no merit and has to be rejected.

14. In view of the discussions made, we are in complete agreement with the view taken by the High Court. The appeal being wholly devoid of merit, is hereby dismissed.