Case: Usha Agarwal Vs. Union Of India

2. The facts, in brief, leading to the preventive detention of the detenu, as gathered from the grounds of detention, are as follows - Sandip Agarwal, the detenu, was the Director in-charge of the management of M/s Sandip Exports Ltd., the other Directors being his family members. On receipt of information about irregularities committed by the detenu, a search of the premises of Sandip Exports Ltd. was conducted by the Directorate of Revenue Intelligence on 7.11.2003. The search and the investigations disclosed that M/s. Sandip Exports Ltd. had obtained two Annual Advance Licences dated 28.3.2001 and 22.3.2002 on actual user conditions from the Director General of Foreign Trade, Kolkata, as manufacturer-exporter. The said Annual Advance Licences issued under the Duty Exemption Entitlement Certificate Scheme (DEEC Scheme for short) enabled the Licensee to import goods free of duty subject to the condition that the Licensee shall manufacture and export products (by utilizing the imported goods) within 18 months, the quantity and value being as specified in the licences in terms of Customs Notification No. 48/99 dated 29.4.1999 as amended from time to time. The detenu imported different types of polyester and silk yarn/fabric, duty free, under the scheme by using the said licences of Sandip Exports Ltd. The duty foregone on importations made under the said two Advance Licences was Rs.14 crores. Instead of utilizing such imported materials in the manufacture of products for exports, he diverted and disposed of the imported goods in the domestic market, and did not fulfil the export obligation. He falsely claimed that the goods for export were manufactured from out of the imported goods through a non-existing manufacturing unit, and through alleged job-workers; and he also falsely claimed that the products so manufactured out of goods imported by Sandip Exports Ltd. were exported through M/s Karan Exports (India) Ltd., another company owned and controlled by detenus family. In this manner, the detenu indulged in a systematic and organized import-export fraud by importing goods duty-free, under the DEEC Scheme and diverting them to domestic market.  3. At the instance of the Directorate of Revenue Intelligence (the Sponsoring Authority), the Detaining Authority (Government of India, Ministry of Finance, Department of Revenue, represented by its Joint Secretary) passed an order of detention dated 19.8.2004 under Section 3(1) of the COFEPOSA Act. In the grounds in support of the detention order, the detaining authority stated that the action of the detenu in diverting duty free imported goods into the domestic market in violation of the DEEC Scheme Licences, amounted to smuggling of goods. The detaining authority also stated that the nature and gravity of the offence and the dubious and fraudulent modus operandi employed by the detenu showed his propensity and potentiality to indulge in such illegal activities in future, necessitating detention to prevent him from continuing such activities.  4. The detention order could not be executed as the detenu absconded. As a consequence, an order dated 29.3.2004 was issued under Section 7(1) of the Act. On the basis of a situation report filed under Section 7(1)(a) of the Act on 26.10.2004, the Chief Metropolitan Magistrate, Calcutta, passed an order dated 18.11.2004 for proclamation by proceeding under Section 82 Cr.P.C. The detenu filed a writ petition challenging the order of detention. The said pre-execution challenge was rejected by the High Court on 10.6.2005. Ultimately, on 11.11.2005, the detenu was taken into custody and the detention order and the grounds in support of the detention were served on him. The copies of the documents relied upon by the detaining authority in making the order of detention, were furnished to the detenu on 14.11.2005. As the detenu claimed that he had no working knowledge of Hindi, English translations were furnished to him on 16.11.2005.  5. The detenu made a representation against his detention to the detaining authority on 25.11.2005. The said representation was rejected by the Detaining Authority on 7.12.2005 and the same was communicated to the detenu on 13.12.2005. On 14.12.2005, the detenus mother filed W.P. No.23908/2005 in the High Court of Calcutta, seeking quashing of the detention order dated 19.8.2004 and release of the detenu.  6. The detenu made a representation to the Advisory Board constituted under the COFEPOSA Act on 16.1.2006. The Advisory Board gave a hearing on 19.1.2006 and recommended confirmation of the detention. On receiving a copy of the representation to the Advisory Board along with the report of the Advisory Board on 27.1.2006, the Central Government confirmed the detention on 1.2.2006. The representation dated 16.1.2006, copies of which were furnished to the detaining authority and Central Government, was also independently considered by them. The Detaining Authority by order dated 10.2.2006 rejected the representation of the detenu dated 16.1.2006. The Central Government (Special Secretary and Director General, Central Economic Intelligence Bureau) also rejected the said representation of the detenu by order dated 13.2.2006. These orders of rejection were served on the detenu on 17.2.2006. The detenu made another representation dated 7.2.2006 against his detention to the Central Government. By order dated 22.2.2006 the Central Government rejected the said representation and a copy thereof was served on the detenu on 18.3.2006.  7. The events subsequent to filing of the writ petition were placed on record in the pending writ petition and the order of detention was challenged on the following grounds:a) Relevant materials were withheld by the sponsoring authority from the Detaining Authority.  b) The Detaining Authority had considered and relied on non-existent and irrelevant material in making the order of detention.  c) The translations of Hindi documents were belatedly supplied.  d) Copies of the documents which were relied upon by the Detaining Authority furnished to the detenu, contained several sheets which were illegible thereby preventing the detenu from making an effective representation.  e) There was inordinate delay in considering the representation made by the detenu to the Central Government and serving the same on the detenu.  f) The order of detention was based on a solitary incident. There was no material to show that there was any possibility of the detenu indulging in smuggling activities in future.  g) The allegations against the detenu did not amount to smuggling and therefore the order of detention was not justifiedA Division Bench of the Calcutta High Court rejected all these contentions and consequently, dismissed the writ petition by judgment dated 21.4.2006. The said judgment of the Calcutta High Court is challenged in this appeal by special leave. Simultaneously, the petition under Article 32 has also been filed before this Court, challenging the detention.

Court's reasoning:
12. The document in question did not prove any smuggling/prejudicial activity on the part of the detenu. It only shows that the Department of Foreign Trade had stopped all EXIM benefits to Sandip Exports Ltd., pending further action, as certain illegal activities of that company had come to its notice. The said document was, therefore, neither relevant nor necessary to decide whether the detenu had indulged in smuggling or other prejudicial activity. The detaining authority obtained satisfaction in regard to that aspect from the material that was placed by the sponsoring authority to show illegal activities which amounted to smuggling13. The said document was also not relevant to establish propensity or potentiality of the detenu to continue his illegal activities. The export-import violations, which amount to smuggling, involve considerable planning, organization and establishing a network. The propensity is deducible from the modus operandi adopted by the violator, the inclination of the violator to indulge in such activities and the further opportunity to commit such illegal activities. Persons indulging in such prejudicial activities routinely create front companies and firms. The fact that a particular front company is denied the EXIM benefits will not deter a violator from continuing such activities, as he can always operate through other front companies/firms. The contention of the detenu that as the said order dated 15/20.4.2004, stopped the EXIM benefits to Sandip Exports Ltd., he could not have continued the alleged illegal activity, and therefore, the detention order was not warranted, is untenable. The EXIM benefits were stopped with reference to only one company namely, Sandip Exports Ltd., and that too till finalization of further action. The investigation and search by the Directorate of Revenue Intelligence, had disclosed that the detenu had other front companies. In fact the detention order makes reference to a similar violation by the detenu by using M/s. Scandia Investments (P) Ltd. which was another front company controlled by him and his family. When the benefits of illegal activity are stopped to a particular company, the brain behind the violation, would merely shift the operations to another front company or start the activities through a new company. It should also to be noted that whenever any irregularities/violations in regard to export/ import comes to the attention of the department, the benefits are stopped in the normal course, pending finalization of further action. Therefore, it cannot be said that the document whereby EXIM benefits to one of the companies controlled by the detenu was stopped, was a relevant document, non-consideration of which would vitiate the detention order. The first contention is therefore rejected16. The High Court has examined the copies that were furnished to the detenu. In regard to the grievance relating to illegible copies occurring between pages 493 and 887 and the last page, the High Court found that these were copies of the documents which were supplied by the detenu himself, and the department could do no better than to furnish the copies thereof. If the documents furnished by the detenu to the department contained some portions or pages which were illegible, obviously the copies thereof furnished by the detaining authority to the detenu will also contain such illegible portions. The learned counsel for the appellant contented that if really any document furnished by the detenu was illegible, it could not have been used against the detenu.. But this contention overlooks the fact that a document may contain several sheets and illegibility of some sheets or parts of some sheets will not come in the way of the authorities making use of the legible portions of the documents furnished by the detenu, supplemented by other documents secured during investigation. There is nothing strange in the department making use of partially legible documents furnished by detenu. Therefore, illegibility of portions of documents which are copies of documents furnished by the detenu, cannot be a ground for grievance by the detenu. Insofar as the allegation that some of the sheets between pages 124 to 371B were illegible, the High Court after having gone through the copies of documents furnished to the detenu, has found no substance in the contention. In fact, while acknowledging the copies of documents, the detenu has made an endorsement that they were legible17. The entire issue of furnishing of illegible copies is with reference to the question whether detenus right to make an effective representation against his detention is hampered by non-supply of legible copies. The High Court after an examination of the copies of documents found that the detenu was not so hampered. Having gone through the representations made by the detenu against his detention, we also find that he was in no way hampered by the fact that a few of the sheets/copies of documents were partly illegible. We therefore find no merit in the second condition, nor any reason to interfere with the finding of the High Court in this behalf19. The order of detention states that detenu can make representations to (i) Detaining Authority, (ii) Central Government, and (iii) Advisory Board, in regard to the detention. The detenu has a constitutional as also statutory right to make a representation against detention not only to the Detaining Authority but to any authority which can revoke the order of detention. He can also represent to the Advisory Board constituted under section 8 of COFEPOSA Act. Such representations no doubt should be disposed of by the concerned authority as early as possible. The fact that the Detaining Authority or the Advisory Board have rejected the representation of the detenu does not discharge the Central Government from its responsibility to consider and dispose of the representation expeditiously20. The grievance of the detenu is in respect of the representation to the Central Government on 7.2.2006 which was rejected by the Central Government and the detaining authority, by two separate orders dated 22.2.2006. The Central Government in its counter-affidavit has satisfactorily explained how the time between 7.2.2006 and 22.2.2006 was spent. But the said orders dated 22.2.2006 rejecting the representation was served on the detenu only on 18.3.2006. The reason why the rejection orders dated 22.2.2006 were not served till 18.3.2006 on the detenu remains unexplained21. The grievance of the detenu is in regard to the delay in communicating the decision dated 22.2.2006 of the Central Government till 18.3.2006. The learned counsel for the respondent however relied on the decision of this Court in Abdul Razak Dawood Dhanani vs. Union of India [2003 (9) SCC 652 ], to contend that delay on the part of the Central Government in considering the detenus representation or the delay in communication of such decision on the detenu will not be material, where the Central Government has already considered the representation of the detenu and rejected it and what is delayed is the decision on the second representation. In that case, the representation dated 12.4.2002 given by the detenu to the three authorities namely, Advisory Board, Detaining Authority and Central Government were rejected respectively by orders dated 19.4.2002, 06.5.2002 and 08.5.2002. In addition to the first representation dated 12.4.2002, the detenu had submitted a further representation dated 19.4.2002 to the Central Government and the grievance was that the second representation had not been disposed of by the Central Government by a separate order. This Court rejected the contention on the ground that the second representation dated 19.4.2002 contained the same grounds and same material as contained in the first representation dated 12.4.2002 and in the absence of any fresh ground or material or subsequent event justifying the consideration of the second representation, the Central Government was not bound to pass separate order disposing of the second representation. The ratio of that decision squarely applies to this case.