Bombay High Court
Suresh Jumani vs Union Of India And Anr on 12 October, 2017
Bench: Ranjit More
WP 1065.07.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CRIMINAL APPELLATE JURISDICTION
CRIMINAL WRIT PETITION NO. 1065 OF 2007
Suresh Jumani, ]
Age above 49, ]
of Mumbai, Indian Inhabitant, ]
residing of Plot No.214, Deepak Niwas, ]
10th Road, Khar (W), Mumbai -400 052. ] .....Petitioner
Versus
1 Union of India, Mumbai. ]
2. The Competent Authority, ]
SAFEMA/ NDPS, ]
having its office at Mittal Court, ]
C Wing, 3rd floor, ]
Nariman Point, Mumbai - 400 021. ] ......Respondents
Mr. P. K. Dhakephalkar, senior advocate along with Ms. Simeen Shaikh,
Ms. Suvarna, Mr. Dharam Samani i/b. M/s. S. K. Srivastav and Company,
advocates for the petitioner.
Ms. Rebecca Gonsalvez, advocate for the respondent Nos. 1 and 2.
CORAM : RANJIT MORE &
SMT.SADHANA JADHAV, JJ.
DATE OF RESERVING : 28th SEPTEMBER, 2017.
DATE OF PRONOUNCEMENT : 12th OCTOBER, 2017.
JUDGMENT : (Per Ranjit More, J.)
The petition was admitted by this Court by an order dated
8th October, 2007. In due course, the petition is now placed for final
hearing before this Bench.
Shubhada S Kadam 1/19
WP 1065.07.doc
2. Mr. Dhakephalkar, learned senior advocate for the petitioner,
at the outset, made a statement that he is not pressing the relief claimed
in prayer clause (a) and is restricting this petition to the reliefs claimed
in prayer clauses (b) and (c), which are reproduced hereinbelow :
"(b) issue a writ of certiorari or a writ in the nature thereof
quashing or set-aside the impugned orders i.e. order dated
February 23, 2007 passed by the ATPF, inter-alia dismissing
the Application for condonation of delay, being Exhibit A to
the Petition.
(c) issue a writ of certiorari or a writ in the nature thereof
quashing or set-aside the Order of Forfeiture dated
23rd August 1999 passed by the Respondent No.2 as also the
Show Cause notice dated 31st December 1996 issued by the
Respondent No.2."
3. Heard Mr. Dhakephalkar, learned senior advocate for the
petitioner and Ms. Gonsalvez, learned counsel for the respondent Nos. 1
and 2.
4. The brief facts giving rise to the present petition are as follow:
By an order dated 16th November, 1995, the petitioner was
ordered to be detained under section 3(1) of the Conservation of Foreign
Exchange and Prevention of Smuggling Activities Act, 1974 ( for short
"the COFEPOSA). On 31st December, 1996, a show cause notice under
Shubhada S Kadam 2/19
WP 1065.07.doc
section 6(1) of the Smugglers and Foreign Exchange Manipulators
(Forfeiture of Property) Act, 1976, (for short "the SAFEMA") was issued
against the petitioner and his wife. It is alleged by the petitioner that
though the said notice was served upon his wife, the same was not
served upon him. However, the said assertion is denied by the
respondent No.2. The respondent No.2-competent authority, thereafter,
on 23rd August, 1999, passed a forfeiture order under sections 7 and 19
of the SAFEMA in respect of eight properties, of which, the properties at
serial Nos.(i) to (vii) belonged to the petitioner and the one mentioned at
serial No.(viii) belonged to the petitioner's wife. The forfeiture order was
served upon the petitioner by affixation on 9th September, 1999.
The petitioner's wife challenged the forfeiture order dated
23rd August, 1999 by filing an appeal viz. FPA-40/BOM/1999 before the
Appellate Tribunal for Forfeited Property, New Delhi, ( for short "the
ATFP"). The said appeal was filed by the petitioner's wife in respect of
her property at serial (viii) as well as on behalf of the petitioner in
respect of the properties at serial (i) to (vii). The ATFP, by its order dated
8th February, 2000, held that the appeal filed by the petitioner's wife in
respect of the petitioner's properties was not maintainable. This order
was confirmed by the Bombay High Court by its order dated
6th April, 2000, passed in writ petition No. 653 of 2000. The petitioner's
wife thereafter approached the Apex Court by filing criminal appeal
Shubhada S Kadam 3/19
WP 1065.07.doc
No.501 of 2001. However, the same was dismissed by the Apex Court on
4th May, 2001.
The petitioner's wife also challenged the detention order of
the petitioner by filing writ petition No. 905 of 2000 in Delhi High Court.
However, the same was also dismissed on 31st January, 2001.
The petitioner on 10th September, 2002, filed an appeal being
FPA-78/BOM/2002 before the ATFP along with an application for
condonation of delay being MPA/150/2002. The petitioner also
challenged the detention order in Delhi High Court by filing criminal writ
petition No. 511 of 2002. By an order dated 31 st May, 2004, Division
Bench of the Delhi High Court was pleased to dispose off the said
criminal writ petition by directing the respondents to consider
revocation of the petitioner's detention, if he makes balance payment of
Rs.13.46 lakhs within two months. This judgment of the Delhi High Court
was challenged by the respondents by filing SLP (cri) No.3294 of 2004.
However, the same was dismissed by the Apex Court by its order dated
2nd August, 2004. On 6th August, 2004, the detention order of the
petitioner was revoked by the Central Government under Section 11 of
the COFEPOSA. Thereafter, by an order dated 23rd February, 2007, the
ATFP passed an order upholding the forfeiture order and consequently,
the appeal being FPA No.78/BOM/2002 filed by the petitioner as well as
the appeal being FPA No.40/BOM/99 filed by the petitioner's wife came
Shubhada S Kadam 4/19
WP 1065.07.doc
to be disposed off by a common order. The petitioner's appeal was
dismissed as time barred. So far as the appeal of the petitioner's wife in
respect of property at serial (viii) is concerned, the matter was remanded
back.
5. Mr. Dhakephalkar, learned senior advocate for the petitioner,
took us through the order dated 31st May, 2004, passed by the Division
Bench of the Delhi High Court in criminal writ petition No.511 of 2002
and submitted that the detention order, similar to that of the petitioner,
was also issued against six other persons including one Pawan Bhartiya.
He further submitted that Pawan Bhartiya challenged the detention
order initially before the High Court by filing writ petition, however, the
same was dismissed and, therefore, he approached the Apex Court and
the Apex Court allowed his SLP and thereby quashed his detention order
on the ground that similar detention orders in respect of five other
persons are revoked. Mr. Dhakephalkar submitted that so far as the
petitioner is concerned, the Delhi High Court taking into consideration
the facts that the petitioner has already deposited an amount of
Rs.59,00,000/- directed the respondent authorities to reconsider
revocation of his detention order on making balance payment of
Rs.13.46 lakhs within two months. He submitted this this amount is
deposited by the petitioner within the time prescribed.
Shubhada S Kadam 5/19
WP 1065.07.doc
Mr. Dhakephalkar contended that though the respondent
authority passed revocation under Section 11 of the COFEPOSA, in fact,
the same is in pursuance of the order dated 31 st May, 2004 passed by
the Delhi High Court in criminal writ petition No.511 of 2002 and,
therefore, it should be construed that the detention order of the
petitioner was quashed by the Delhi High Court. He, therefore, relied
upon proviso (iv) to section 2(2)(b) of the SAFEMA and submitted that the
detention order is a condition precedent and, since it was quashed, the
forfeiture order passed under SAFEMA is non est.
6. Ms.Gonsalvez, learned counsel for the respondents, opposed
the petition vehemently. She submitted that the petitioner's detention
order was not revoked under any of the provisions of Section 2(2)(b) of
the SAFEMA. However, the same was revoked under Section 11 of the
COFEPOSA. She heavily relied upon a decision of the Apex Court in
Union of India and others versus Mohanlal Likumal Punjabi and ors.
(2004) 3 SCC 628 and submitted that in such situation, the forfeiture
order cannot be quashed. She submitted that the petitioner's appeal
before the ATFP against the forfeiture order was rightly dismissed on the
ground that the same was barred by law of limitation. Ms. Gonsalvez
further submitted that there is distinction between "revocation of order"
and "quashing of order" and, in the present case, since the petitioner's
detention order was revoked under Section 11 of the COFEPOSA, he is
Shubhada S Kadam 6/19
WP 1065.07.doc
not entitled for the reliefs claimed in the petition. In this regard, she
relied upon a decision of the Apex Court in Ibrahim Bachu Bafan
versus State of Gujarat and ors. AIR 1985 SC 697.
7. We have given our anxious thought to the rival contentions.
We have also gone through the petition and the annexures thereto and
also the decisions cited across the Bar. There is no dispute that by the
order dated 16th November, 1995, issued by the Government of India,
Ministry of Finance, Department of Revenue, under Section 3(1) of the
COFEPOSA, the petitioner was ordered to be detained for his alleged
involvement in customs fraud and smuggling activities in contravention
of the provisions of the Customs laws. One Mr. Pawan Bhartiya, a person
similarly situated with petitioner, was detained under the provisions of
Section 3(1) of the COFEPOSA. Mr. Pawan Bhartiya challenged the
detention order by filing criminal writ petition No. 341 of 2000 before
the Delhi High Court and this petition was dismissed on 25 th May, 2001.
One of the grounds of challenge was that similar detention orders
passed in other five cases were revoked by the respondents. Against the
above said decision of the Delhi High Court, the said Pawan Bhartiya
approached the Apex Court by filing SLP (Cri) No.2591/2000. The said
SLP was granted and converted into appeal, which was ultimately
allowed vide judgment dated 31st October, 2001.
Shubhada S Kadam 7/19
WP 1065.07.doc
8. It is also relevant to mention at this stage that during the
period between 1993 and 1995, when the detention order was passed
against the petitioner under COFEPOSA, similar detention orders were
also issued against six more persons including Pawan Bhartiya for mis-
declaration of quantity in export of fabrics. All these shipments were
done between 1993 and 1995 through the same clearing agent - Mr.
Ashok Pokharkar of Amol Shipping. The respondent No.2 had
recommended for revocation of such detention orders against five
persons. The detention orders of those persons were accordingly
revoked. Such recommendation for revocation was, however, not made
in the case of Mr.Pawan Bhartiya and the petitioner. As mentioned
above, Mr. Pawan Bhartiya challenged the detention order on the
ground that he was meted with discriminatory treatment inasmuch as
detention orders were revoked in other cases and not in his case. This
contention of Pawan Bhartiya found favour with the Supreme Court and
while quashing the detention order, the Supreme Court made the
following observation:
"At the time of hearing of this matter learned counsel for
the appellant pointed out that similar detention orders
were passed against six persons during the period from 7-
12-1995 to 12-8-1996. He pointed out that five out of six
detention orders were revoked by the competent authority
on the ground that the custom duty which was required to
be paid was paid by them before the execution of the
Shubhada S Kadam 8/19
WP 1065.07.doc
detention orders. Despite this fact the detention order
passed against the appellant was not revoked even though
he has also paid the custom duty as demanded. It has also
been pointed out that the sponsoring authority submitted
its report before the detaining authority to revoke the
detention order which was passed against the appellant.
He has also pointed out that after the detention order was
passed the appellant surrendered his licence and had
ceased all economic activities of exporting or importing of
goods.
In response to the contention raised by the appellant the
detaining authority-Joint Secretary to the Govt. of India,
Ministry of Finance, Department of Revenue, Central
Economic Intelligence Bureau has filed an affidavit wherein
it is admitted that similar five detention orders were
revoked. However, it is stated that at the relevant time
when the detention orders were revoked, the perception of
the Central Government was, the fact of payment of duty in
the cases detected against these persons may act as a
deterrent against their chance of indulging in similar
prejudicial activities in future since this may adversely affect
their financial backbone. Following the said line of thinking
Central Government had revoked the detention orders
issued against those five persons. However, subsequently
that perception was changed and according to the view of
the detaining authority there was no necessity of revoking
the detention order before its execution.
In our view, there is no reason to discriminate the appellant
and the reason given by the authority in not revoking the
Shubhada S Kadam 9/19
WP 1065.07.doc
detention order could hardly be justified. It is true that
normally before the execution of the detention order the
same is not required to be quashed and set-aside. However,
considering the peculiar facts and circumstances of the
case, in our view, no purpose will be served by continuing
the detention order. It is pointed out that the appellant has
ceased his activities in the field of import or export. He has
already paid the tax with penalty as demanded by the
authority. There is nothing on record that since last five
years the appellant has indulged in any such activity. It is to
be noted that the purpose of passing the detention order is
to prevent the detenu from continuing his prejudicial
activity but not to punish him.
Hence, in view of the facts and circumstances of the present
case, the impugned order dated 30th July, 1998, passed by
the Joint Secretary to the Government of India under
Section 3(1) of the COFEPOSA is quashed and set-aside. The
appeal is allowed accordingly."
9. So far the petitioner's case is concerned, the Delhi High Court
noted that the petitioner from time to time, on respondent No.2's
demand, deposited an amount of Rs.59.28 lakhs in different instalments.
The Delhi High Court also noted that the claim of the respondent No.2
against the petitioner for evasion of custom duty along with penalty was
Rs.77.74 lakhs and thus, the balance amount payable to the respondent
No.2 was Rs.18.46 lakhs. The Division Bench of the Delhi High Court
noted that the petitioner had deposited an amount of Rs.5,00,000/-
Shubhada S Kadam 10/19
WP 1065.07.doc
before the Customs, Excise, Gold Control Appellate Tribunal( for short
"CEGAT") on 11th January, 1999. The Delhi High Court adjusted this
amount of Rs.5,00,000/- towards the claim of the respondents and
ultimately directed them to consider revocation of the petitioner's
detention order, in case, the petitioner makes payment of balance
amount of Rs.13.46 lakhs and pass appropriate order on the lines
passed in other cases.
The above order of the Delhi High in criminal writ petition
No.511 of 2002 was challenged by the respondent No.2 by filing SLP (Cri)
No.3294 of 2004. However, the same was dismissed on 31st May, 2004.
The respondents, thereafter, revoked the petitioner's detention order
under section 11 of the COFEPOSA on 6th August, 2004.
10. The question which we are called upon to decide is whether
on revocation of the petitioner's detention order under section 11 of the
COFEOSA, the forfeiture order under SAFEMA in respect of the
petitioner's properties becomes non est and cannot be acted upon.
Mr. Dhakephalkar, in this regard, asserted that the petitioner's
case falls under proviso (iv) to Section 2(2)(b) of the SAFEMA. Ms.
Gonsalvez, on the contrary, submitted that none of the provisions
including proviso (iv) to Section 2(2)(b) of the SAFEMA would be
applicable to the present case as the detention order is revoked under
Shubhada S Kadam 11/19
WP 1065.07.doc
Section 11 of the COFEPOSA.
Section 2 of the SAFEMA reads as under :
"2. Application.--(1) The provisions of this Act shall apply only to the
persons specified in sub-section (2).
(2) The persons referred to in sub-section (1) are the following, namely:
--
(a) every person--
(i) who has been convicted under the Sea Customs Act, 1878 (8
of 1878), or the Customs Act, 1962 (52 of 1962), of an offence
in relation to goods of a value exceeding one lakh of rupees; or
(ii) who has been convicted under the Foreign Exchange
Regulation Act, 1947 (7 of 1947), or the Foreign Exchange
Regulation Act, 1973 (46 of 1973), of an offence, the amount or
value involved in which exceeds one lakh of rupees; or
(iii) who having been convicted under the Sea Customs Act,
1878 (8 of 1878), or the Customs Act, 1962 (52 of 1962), has
been convicted subsequently under either of those Acts; or
(iv) who having been convicted under the Foreign Exchange
Regulation Act, 1947 (7 of 1947), or the Foreign Exchange
Regulation Act, 1973 (46 of 1973), has been convicted
subsequently under either of those Acts;
(b) every person in respect of whom an order of detention has been
made under the Conservation of Foreign Exchange and Prevention of
Smuggling Activities Act, 1974 (52 of 1974):
Provided that--
(i) such order of detention, being an order to which the
provisions of section 9 or section 12-A of the said Act do not
apply, has not been revoked on the report of the Advisory
Board under section 8 of the said Act or before the receipt of
the report of the Advisory Board or before making a reference
to the Advisory Board; or
(ii) such order of detention, being an order to which the
provisions of section 9 of the said Act apply, has not been
revoked before the expiry of the time for, or on the basis of,
the review under sub-section (3) of section 9, or on the report
of the Advisory Board under section 8, read with sub-section
Shubhada S Kadam 12/19
WP 1065.07.doc
(2) of section 9, of the said Act; or
(iii) such order of detention, being an order to which the
provisions of section 12-A of the said Act apply, has not been
revoked before the expiry of the time for, or on the basis of,
the first review under sub-section (3) of that section, or on the
basis of the report of the Advisory Board under section 8, read
with sub-section (6) of section 12-A, of that Act; or
(iv) such order of detention has not been set aside by a court of
competent jurisdiction;
(c) every person who is a relative of a person referred to in clause (a) or
clause (b);
(d) every associate of a person referred to in clause (a) or clause (b);
(e) any holder (hereafter in this clause referred to as the present
holder) of any property which was at any time previously held by a
person referred to in clause (a) or clause (b) unless the present holder
or, as the case may be, any one who held such property after such
person and before the present holder, is or was a transferee in good
faith for adequate consideration."
Reading of the provisions of the above section, makes it
abundantly clear and which fact even Mr. Dhakephalkar does not dispute
that the petitioner's case does not fall under provisions (i) (ii) and (iii) of
section 2(2)(b) of the SAFEMA. The relevant issue which deserves
consideration is whether, in the present case, proviso (iv) to section 2(2)
(b) of the SAFEMA applies or section 11 of the COFEPOSA applies.
Therefore, we have to see the effect and purport of the
decision of the Delhi High Court in criminal writ petition No.511 of 2002.
As stated above, the Delhi High Court disposed off the petitioner's
criminal writ petition No.511 of 2002 on the basis of the decision of the
Shubhada S Kadam 13/19
WP 1065.07.doc
Apex Court in SLP(Cri) No.2591 of 2000 filed by Pawan Bhartiya. The
Apex Court quashed the detention order issued against the petitioner on
the ground that detention orders in respect of five other similarly
situated persons are revoked. It is apparent from the record that the
detention order of the five persons were revoked by the respondents on
the ground that the custom duty which was required to be paid was paid
by those persons and so far as Pawan Bhartiya is concerned, it was
quashed by the Apex Court on the ground that since the custom duty
along with penalty was already paid by him, the respondents cannot
discriminate between persons similarly situated. So far as the present
petitioner is concerned, the Delhi High Court in criminal writ petition
No.511 of 2002 directed the respondents to consider revocation of the
petitioner's detention order on similar principles of discrimination and
only after the petitioner deposited the entire amount of Rs. 77.74 lakhs
towards excise duty and penalty. Out of which, the petitioner has already
deposited the amount of Rs.59.28 lakhs plus Rs.5 lakhs. Thus in short,
the Delhi High Court directed the respondents to consider the revocation
of the petitioner's detention order on petitioner depositing balance
amount of Rs. 13.46 lakhs within a period of two months. What is
important to note is that the Delhi High Court directed the respondents
to consider the petitioner's case and pass appropriate orders on the
lines passed in other cases. The respondents initially did not accept this
Shubhada S Kadam 14/19
WP 1065.07.doc
order and challenged the same by filing SLP(Cri) 3294 of 2004 in the
Apex Court. As stated above, the said SLP was dismissed and the
respondents were left with no option but to revoke the petitioner's
detention order. As a matter of fact, the Delhi High Court directed the
respondents to revoke the detention order on petitioner's depositing an
amount of Rs. 77.74 lakhs.
Thus, it is clear from the above discussion that the
respondent-authority passed detention order against similarly situated
seven persons under section 3(1) of the COFEPOSA. The detention
orders of five persons were revoked by the respondent-authority after
payment of excise duty plus penalty. So far as the sixth person viz.
Pawan Bhartiya is concerned, the Apex Court quashed his detention
order as he was similarly situated with the other five persons and he
cannot be meted with discriminatory treatment. As far as the petitioner
is concerned, record revealed that time and again the respondent-
authority asked him to pay excise duty and he has complied with the
directions. The petitioner was also informed that if he did not pay the
excise duty along with the penalty, proceedings under SAFEMA would be
initiated against him. It is clear that the petitioner, in pursuance of these
directions, had already deposited the amount of Rs.59.28 lakhs and Rs.5
lakhs with the CEGAT. The Division Bench of the Delhi High Court has
left no course open to the respondent-authority but to revoke the
Shubhada S Kadam 15/19
WP 1065.07.doc
detention order of the petitioner on his depositing the balance amount
of Rs.13.46 lakhs within the stipulated time and the petitioner has
already complied with the said condition.
11. Mr. Dhakephalkar asserted and Ms. Gonsalvez does not
dispute that except petitioner and his wife, SAFEMA proceedings were
not initiated against other six persons including Pawan Bhartiya whose
detention orders are already revoked by the respondent-authority or
quashed by the Apex Court.
12. In our considered opinion, if the forfeiture order against the
petitioner and his wife under the SAFEMA is allowed to stand then that
would amount to violation of the provisions of Article 14 of the
Constitution of India as the petitioner and his wife are entitled to same
treatment which was given to other six persons who were similarly
situated. In these peculiar facts and circumstances of the case, the
action of the respondent-authority in forfeiting the properties of the
petitioner and his wife under SAFEMA would be discriminatory.
13. Though respondent-authority revoked the petitioner's
detention order under Section 11 of the COFEPOSA, the same was under
express direction of the Delhi High Court. As stated above, the Delhi
Shubhada S Kadam 16/19
WP 1065.07.doc
High Court did not give any option to the respondents but to revoke the
petitioner's detention order. Thus, in our considered view, the Delhi
High Court in fact quashed the detention order issued to the petitioner
under Section 3(1) of the COFEPOSA. If that be so, the petitioner's case
would be covered by proviso (iv) to section 2(2)(b) of the SAFEMA and
section 11 of the COFEPOSA would have no application though it is
purportedly shown that the petitioner's detention order was revoked
under the said section.
14. Once we have held in peculiar facts and circumstances of the
case that the petitioner's detention order was in fact quashed by the
Delhi High Court then in view of the proviso (iv) to Section 2(2)(b), of the
SAFEMA, the proceedings under SAFEMA against the petitioner and his
wife have become non est as the detention order under COFEPOSA is a
condition precedent for proceedings under SAFEMA.
15. Before parting with this order, we must deal with the
decisions cited at Bar by Ms.Gonsalvez.
In Mohanlal Likumal Punjabi and ors.(supra), the Apex
Court considered the proviso (i) to Section 2(2)(b) of the SAFEMA. The
Apex Court held that exception provided by the said proviso will operate
when the order of detention is the one to which the provisions of
section 9 or 12-A of the COFEPOSA do not apply. The Apex Court dealt
Shubhada S Kadam 17/19
WP 1065.07.doc
with the first situation envisaged in proviso (i) to section 2(20(b) of the
SAFEMA and held that if the revocation is passed on the report of the
Advisory Board, then, the said proviso would be applied. It was also held
that the revocation was done by the Central Government in terms of
Section 11 of the COFEPOSA and the same was unrelated to a report of
Advisory Board. In Mohanlal Likumal Punjabi and ors.(supra), the
Apex Court did not consider the scope of proviso (iv) to section 2(2)(b).
Under the said clause, the provisions of SAFEMA, are not applicable if the
detention order is set-aside by a Court of competent jurisdiction. In the
facts of the present case, since we came to the conclusion that the Delhi
High Court in effect quashed the detention order, the decision in
Mohanlal Likumal Punjabi and ors.(supra) has no application to the
facts and circumstances of the present case.
Ms. Gonsalvez cited the decision of the Apex Court in
Ibrahim Bachu Bafan (supra) to point out that there is distinction
between "revocation of detention order" and "quashing of detention
order" by the competent Court. There is no dispute regarding the
proposition that there is difference between the two phrases
viz. "revocation" and "quashing". However, in the present case, on facts,
since we have came to the conclusion that the Delhi High Court in fact
quashed the detention order of the petitioner, there should not be any
Shubhada S Kadam 18/19
WP 1065.07.doc
dispute on any proposition laid down by the Apex Court and, therefore,
the ratio of this decision has no application to the facts and
circumstances of the present case.
16. Taking totality of the facts and circumstances into
consideration, in our view, the petition must succeed. The Rule is,
accordingly, made absolute in terms of prayer clauses (b) and (c) and the
petition is disposed off as such.
[SMT. SADHANA JADHAV, J.] [RANJIT MORE, J.]
Shubhada S Kadam 19/19
