Esab India Limited vs Special Diriector Of Enforcement ...
2011 Latest Caselaw 1342 Del

2.
*      IN THE HIGH COURT OF DELHI AT NEW DELHI


%                             Judgment delivered on: 8th March, 2011


+      WRIT PETITION (CIVIL) NO. 1138/2010

       ESAB INDIA LIMITED                      ..... Petitioner
                      Through Mr. Mathews J. Nedumpara, Mr.
                      Robin Majumdar & Mr. K. Lingaraja,
                      Advocates.

                     versus

       SPECIAL DIRIECTOR OF ENFORCEMENT & ANR.
       .....                                   Respondents

Through Mr. Sachin Datta, Standing Counsel for UOI.

CORAM:

HON'BLE THE CHIEF JUSTICE HON'BLE MR. JUSTICE SANJIV KHANNA

1. Whether Reporters of local papers may be allowed to see the judgment? Yes.

2. To be referred to the Reporter or not ? Yes.

3. Whether the judgment should be reported in the Digest ? Yes.

DIPAK MISRA, CJ.

Before we proceed to state the facts, we may profitably

refer to a paragraph from the decision rendered in the case of

R.S. Joshi, Sales Tax Officer, Gujarat and others versus Ajit

Mills Ltd. and another, (1977) 4 SCC 98, wherein Krishna Iyer,

J., in his inimitable style expressed thus:-

"2. A prefactory caveat.- When examining a legislation from the angle of

its vires, the Court has to be resilient, not rigid, forward-looking, not static, liberal, not verbal in interpreting the organic law of the nation. We must also remember the constitutional proposition enunciated by the U.S. Supreme Court in Munn Vs. Illinois viz, „that Courts do not substitute their social and economic beliefs for the judgment of legislative bodies‟. Moreover, while trespasses will not be forgiven, a presumption of constitutionality must colour judicial construction. These factors, recognized our Court, are essential to the modus vivendi between the judicial and legislative branches of the State, both working beneath the canopy of the Constitution."

2. That apart, in the case of Charanjit Lal Chowdhary

versus Union of India, AIR 1951 SC 41, it has been held thus:

"It is the accepted doctrine of American Courts, which I consider to be well founded on principle, that the presumption is always in favour of the constitutionality of an enactment, and the burden is upon him who attacks it to show that there has been a clear transgression of the constitutional principles."

3. In Ram Krishna Dalmia and Others versus Justice S.R.

Tendolkar and Others, AIR 1958 SC 538, the Apex Court ruled

that there is always a presumption in favour of the

constitutionality of an enactment and the burden is on him who

challenges the same to show that there has been a clear

transgression of the constitutional principles and it is the duty of

the Court to sustain that there is a presumption of

constitutionality and in doing so, the Court may take into

consideration, the matters of common knowledge, matters of

common report, the history of the times and may assume every

state of facts which can be conceived existing at the time of

legislation.

4. In State of Bihar and Others versus Bihar Distillery

Limited, AIR 1997 SC 1511, the said principle was reiterated.

5. We have referred to the aforesaid authorities for the

sanguine and sacrosanct reason as in this writ petition the

petitioner, Esab India Limited, invoking the extraordinary

jurisdiction of this Court under Article 226 of the Constitution of

India, has prayed for declaring Section 24 read with Second

Schedule of the Right to Information Act, 2005 (for brevity, „the

Act‟) as unconstitutional and also for issuing a writ of certiorari

for quashment of the order dated 11th May, 2009, Annexure-P7,

passed by the Central Information Commission. We are

disposed to think that the seemly cogitation is to be done in the

backdrop of the „caveat‟. The modus vivendi which requires a

purposive and constructive ratiocination while engaged in

viceration of the provision, a legislative one, though may draw

strength and stimulus in all its variation from the greatest

instrument, i.e., the Constitution, in a given case and in a

particular factual situation if the provisions trespass the

quintessential characteristic of Organic Law or Judge made law

should not be allowed to stand.

6. Presently to the factual matrix: The essential facts which

are imperative to be unfurled are that the petitioner, a limited

company, is engaged in the business of welding equipments,

building infrastructure, etc. On 15th April, 2008, a notice was

issued to the petitioner demanding a sum of Rs.6,79,28,975/-

pursuant to a recovery certificate issued by the Special Director

of Enforcement Directorate, the first respondent herein. After

receipt of the said demand notice, the petitioner came to know

that an adjudication order dated 24th February, 2004 imposing

the penalty has been passed under Section 8(3) and 8(4) of the

Foreign Exchange Regulation Act, 1973 (for short, „FERA‟).

After coming to know about the ex parte adjudication order, the

petitioner preferred an appeal before the Appellate Tribunal for

Foreign Exchange and also preferred a writ petition in the High

Court of Bombay. The Appellate Tribunal rejected the appeal on

the foundation that it has no power to condone the delay regard

being had to the statutory provisions incorporated under FERA.

The High Court of Bombay allowed the writ petition and set

aside the entire adjudication proceedings and directed the

Enforcement Directorate to conduct a fresh adjudication.

7. It is asserted in the petition that the authorities under

FERA have issued the show cause notice, which is a laconic

one. The petitioner by letter dated 21st April, 2008 asked for

basic materials and allegations based on which a show cause

notice was issued. As the said letter was not responded to by

the Enforcement Directorate, the petitioner preferred an

application under the Act requiring answer to 14 queries. The

said application was not entertained on the ground that the

requisite information could not be provided by the Directorate of

Enforcement as the Directorate has been exempted under

Section 24 read with Second Schedule of the Act.

8. Being aggrieved by the aforesaid order, the petitioner

preferred a first appeal before the Directorate of Enforcement,

which concurred with the order passed by the Public Information

Officer.

9. Being dissatisfied with the aforesaid order, a further

appeal was filed before the Central Information Commission and

by the impugned order dated 11th May, 2009 the Information

Commission dismissed the same on the following grounds:-

"7. Appellant‟s arguments lacked merit. It is not for this commission to pronounce on the constitutionality of Section 24 of the RTI Act, no is it required that this Commission goes behind the provisions in Section 24 to examine whether in a given case, the claim of exemption by a public authority was at-all valid. Section 24 of the RTI Act is a self-contained Section with a provision which spells out the conditions under which disclosure can be allowed in spite of the exemption enjoyed by a public authority under that Section. Matter is not about the „fundamental rights versus the exemption provision of the RTI Act‟- scenario painted by the appellant‟s Counsel.

8. In the present case, nothing which has been stated would show that the exception to the exemption rule contained in Section 24 of the RTI Act is attracted. In other words, there is no case of human rights violation or corruption that needed to be examined for a decision in this matter."

10. As has been stated earlier, apart from challenging the said

order, the validity of Section 24 read with Second Schedule to

the Act has been assailed on the ground that right to information

is a fundamental right and it has to be treated with sanctity and

the bar created under the Act is contrary to Article 19(1)(a) of the

Constitution of India. That apart, it is urged that the said

provision is totally arbitrary and without any guidance and

hence, is also hit by Article 14 of the Constitution.

11. A counter affidavit has been filed contending, inter alia,

that the petitioner has no locus standi, being a body corporate to

ask for any information under the Act and in the absence of any

locus, the validity of the provision need not be addressed to. It

is also put forth that the orders passed by the authorities below

are in accord with the provisions of the Act and, therefore, the

challenge on that score in untenable. As far as the validity of the

Act is concerned, it is urged that the Section 24 of the Act is a

complete Code and it does not violate either Article 14 or

19(1)(a) of the Constitution.

12. We have heard Mr. Mathews J. Nedumpara, learned

counsel for the petitioner and Mr. Sachin Datta, learned counsel

for the Union of India.

13. Learned counsel for the petitioner has raised the following

contentions:

(a) Right to information is a fundamental and a primary

right in a democratic body polity which respects

transparency, freedom of access to information and

is protected under Article 19(1)(a) of the Constitution

of India and, therefore, the same cannot be infringed

or abridged by a statutory provision.

(b) The exceptions that have been carved out under

Section 24 of the Act suffer from lack of guidance

and, therefore, an unfettered and unbridled power is

conferred on the statutory authority inasmuch the

authority in the name of security or any other facet

can deny the information to a citizen which is

violation of the basic tenet of Article 14 of the

Constitution. That apart, the provision is arbitrary

and unreasonable.

(c) The right to information is a basic human right and

has to be progressive but by incorporating Section

24 in the Act, the said basic human right is

absolutely smothered and consequent of which the

growth of democracy is scuttled which affects the

basic structure of the Constitution.

14. Learned counsel to bolster the said submissions has

commended us to the decisions in S.P. Gupta versus Union of

India, AIR 1982 SC 149, State of U.P. versus Raj Narain,

(1975) 4 SCC 428, Indian Express versus Union of India, AIR

1985 SC 641, Reliance Petrochemicals Limited versus

Proprietors of Indian Express Newspapers, Bombay Private

Limited and Others, (1988) 4 SCC 592, PUCL versus Union

of India, AIR 2004 SC 1442, Union of India versus

Association for Democratic Rights, (2002) 5 SCC 294.

15. Mr. Datta, per contra, has submitted that if the objects and

reasons of the Act are appreciated in proper perspective, the

purpose is to furnish certain information under the Act and what

has been denied under Section 24, relates to the intelligence

and security organizations and the names of organizations have

been mentioned in the Second Schedule of the Act. Learned

counsel for the Union of India would further submit that the

petitioner may approach the authorities under the FERA for

relevant documents within permissible parameters while

challenging the order but that would not entitle him to challenge

the validity of the Act. It is also contended by him the provision

does not invite the frown of either Article 14 or 19(1)(a) of the

Act.

16. It is apt to note the Act was enacted to harmonize the

conflicting interest while preserving the paramountancy of the

democratic ideals and to provide for furnishing certain

information to the citizens who desire to have it. The basic

purpose of the Act is to provide for setting up the practical

regime of right to information for citizens to secure and to have

access to information under the control of public authorities in

order to promote transparency and accountability in the working

of every public authority.

17. Section 24 occurs in Chapter VI of the Act, which is under

the miscellaneous heading. Section 24 of the Act provides for

the Act not to apply certain organizations. As the said provision

is under assail, we think it apposite to reproduce the same in

entirety:

"24. Act not to apply in certain organizations.-(1) Nothing contained in this Act shall apply to the intelligence and security organisations specified in the Second Schedule, being organisations established by the Central Government or any information furnished by such organisations to that Government: Provided that the information pertaining to the allegations of corruption and human rights violations shall not be excluded under this sub-section: Provided further that in the case of information sought for is in respect of allegations of violation of human rights,

the information shall only be provided after the approval of the Central Information Commission, and notwithstanding anything contained in section 7, such information shall be provided within forty-five days from the date of the receipt of request. (2) The Central Government may, by notification in the Official Gazette, amend the Schedule by including therein any other intelligence or security organisation established by that Government or omitting therefrom any organisation already specified therein and on the publication of such notification, such organisation shall be deemed to be included in or, as the case may be, omitted from the Schedule.

(3) Every notification issued under sub- section (2) shall be laid before each House of Parliament.

(4) Nothing contained in this Act shall apply to such intelligence and security organisation being organisations established by the State Government, as that Government may, from time to time, by notification in the Official Gazette, specify:

Provided that the information pertaining to the allegations of corruption and human rights violations shall not be excluded under this sub-section: Provided further that in the case of information sought for is in respect of allegations of violation of human rights, the information shall only be provided after the approval of the State Information Commission and, notwithstanding anything contained in section 7, such information shall be

provided within forty-five days from the date of the receipt of request. (5) Every notification issued under sub- section (4) shall be laid before the State Legislature."

18. Apart from the said provision, what is also under challenge

is the Second Schedule to the Act. The Second Schedule

includes the intelligence and security organizations established

by the Central Government, which reads as follows:-

"THE SECOND SCHEDULE (See section 24) Intelligence and security organisation established by the Central Government

1. Intelligence Bureau.

2. Research and Analysis Wing of the Cabinet Secretariat.

3. Directorate of Revenue Intelligence.

4. Central Economic Intelligence Bureau.

5. Directorate of Enforcement.

6. Narcotics Control Bureau.

7. Aviation Research Centre.

8. Special Frontier Force.

9. Border Security Force.

10. Central Reserve Police Force.

11. Indo-Tibetan Border Police.

12. Central Industrial Security Force.

13. National Security Guards.

14. Assam Rifles.

15. Special Service Bureau

16. Special Branch (CID), Andaman and Nicobar.

17. The Crime Branch-C.I.D.-CB, Dadra and Nagar Haveli.

              18. Special        Branch,   Lakshadweep
              Police."

19. Regard being had to the basic principles, which we have

stated at the very inception, it is to be seen whether the

provision under attack really offends the constitutional principles

because of right to seek information under the Act in respect of

certain institutions is excluded. Learned counsel for the

petitioner has drawn immense inspiration from the view

expressed in the case of Raj Narain (supra), wherein Mathew J.

has held thus:

"71. Few would question the necessity of the rule to exclude that which would cause serious prejudice to the State. When a question of national security is involved, the Court may not be the proper forum to weigh the matter and that is the reason why a minister‟s certificate is taken as conclusive. "Those who are responsible for the national security must be the sole judges of what national security requires." As the Executive is solely responsible for national security including foreign relations, no other organ could judge so well of such matters. Therefore, documents in relation to these matters might fall into a class which per se might require protection. But the Executive is not the organ solely responsible for

public interest. It represents only an important element in it; but there are other elements. One such element is the administration of justice. The claim of the Executive to have exclusive and conclusive power to determine what is in public interest is a claim based on the assumption that the Executive alone knows what is best for the citizen. The claim of the Executive to exclude evidence is more likely to operate to subserve a partial interest, viewed exclusively from a narrow department angle. It is impossible for it to see or give equal weight to another matter, namely, that justice should be done and seen to be done. When there are more aspects of public interest to be considered, the Court will, with reference to the pending litigation, be in a better position to decide where the weight of public interest predominates.

72. The power reserved to the Court is a power to order production even though public interest is to some extent prejudicially affected. This amounts to a recognition that more than one aspect of public interest will have to be surveyed. The interests of Government for which the minister speaks do not exhaust the whole public interest. Another aspect of that interest is seen in the need for impartial administration of justice. It seems reasonable to assume that a court is better qualified than the minister to measure the importance of the public interest in the case before it. The court has to make an assessment of the relative claims of these different aspects of public interest. While there are overwhelming arguments for giving to the Executive the power to determine what matters may prejudice public security, those arguments give no sanction to giving the executive an exclusive power to determine what matters may affect public interest. Once considerations of national security are

left out, there are few matters of public interest which cannot safely be discussed in public. The administration itself knows of many classes of security documents ranging from those merely reserved for official use to those which can be seen only by a handful of ministers or officials bound by oath of secrecy.

73. According to Wigmore, the extent to which this privilege has gone beyond "secrets of State" in the military or international sense is by no means clearly defined and therefore its scope and bearing are open to careful examination in the light of logic and policy. According to him, in a community under a system of representative Government, there can be only few facts which require to be kept secret with that solidity which defies even the inquiry of courts of justice.

74. In a Government of responsibility like ours, where all the agents of the public must be responsible for their conduct, there can be but few secrets. The people of this country have a right to know every public act, everything that is done in a public way, by their public functionaries. They are entitled to know the particulars of every public transaction in all its bearing. The right to know, which is derived from the concept of freedom of speech, though not absolute, is a factor which should make one wary, when secrecy is claimed for transactions which can, at any rate, have no repercussion on public security. To cover with veil of secrecy, the common routine business, is not in the interest of the public. Such secrecy can seldom be legitimately desired. It is generally desired for the purpose of parties and politics or personal self- interest or bureaucratic routine."

20. In paragraph 71, it has been recognized that there is a

necessity to exclude from right to access information, matters

which could cause serious prejudice to the State like national

security. It has been observed therein that documents in

relation to these matters might fall in a class which per se

require protection and, therefore, form a separate class.

However, word of caution has been sounded and an opinion has

been expressed that the Executive is not solely responsible for

public interest though they represent an important element in it.

The Court, in a given case and when a situation warrants, can

weigh which public interest predominates. In a particular case

when a larger public interest warrants access to certain

information, objection of the Executive can be overruled. In the

present case, we are not concerned with the power of Court to

decide Executive‟s claim for privilege viz. a particular public

interest. This is not the subject matter in issue before us. The

Act does not curtail or do away with the powers of the court and

the petitioner‟s right to approach the court in accordance with

law, if the situation warrants. The Act, on the other hand,

provides machinery for easy, inexpensive and fast access to

information, which should not be per se denied to the citizens of

the country. The observations in the case of Raj Narain (supra)

show that the Apex Court had made a clear distinction between

the matters of national security and other matters. Although the

right of the Executive at the first instance to decide what

constitutes "secrets of State" and the matters of national security

has been accepted and recognized in the aforesaid passages,

however, it is stated that the power of the Court to decide and

weigh public interest is sacrosanct and not curtailed. Read on

the said touchstone, the Act does not curtail and does not

subjugate right to information, but ensures easy and transparent

access to information in all public matters, which ex-facie are not

concerned with national security or intelligence agencies of the

State. As noticed below, Article 19(2) of the Constitution also

carves out exception in the matters relating to interests of

sovereignty and integrity of India and the security of the State.

The distinction between the two sets of information has been

recognized and accepted in the aforesaid paragraphs in the

case of Raj Narain (supra).

21. In paragraph 72 of the said decision, it has been ruled that

the court has to make an assessment of the relative influence of

different aspects of public interest. The interest of Government

for which the Minister speaks does not exhaust the whole public

interest. In paragraph 74 what has been stated is worthy of

reproduction and we have done so. Thus, it can be stated with

certitude that a distinction has been drawn with regard to

common routine business and the security factor.

22. In Reliance Petrochemicals Limited (supra) it has been

opined thus:-

"34. ........Right to know is a basic right which citizens of a free country aspire in the broader horizon of the right to live in this age in our land under Article 21 of our Constitution. That right has reached new dimensions and urgency. That right puts greater responsibility upon those who take upon themselves the responsibility to inform."

23. At this juncture, we may think it appropriate to reproduce

Article 19(1) and (2) of the Constitution of India.

""19. (1) All citizens shall have the right--

(a) to freedom of speech and expression;

(b) to assemble peaceably and without arms;

(c) to form associations or unions;

(d) to move freely throughout the territory of India;

(e) to reside and settle in any part of the territory

of India; 1[and] 2* * * * *

(g) to practise any profession, or to carry on any occupation, trade or business. (2) Nothing in sub-clause (a) of clause (1) shall affect the operation of any existing law, or prevent the State from making any law, in so far as such law imposes reasonable restrictions on the exercise of the right conferred by the said sub-clause in the interests of the sovereignty and integrity of India, the security of the State, friendly relations with foreign States, public order, decency or morality, or in relation to contempt of court, defamation or incitement to an offence."

24. On a perusal of Article 19, it is clear that every citizen shall

have a right to freedom of speech and expression, but the same

is not absolute and the State while making law can impose

reasonable restrictions on the exercise of the rights conferred by

the State under sub-clause (a) of clause 1 in the interest of the

sovereignty and integrity of India, the security of the State,

friendly relations with foreign States, public order, decency or

morality, or in relation to contempt of court, defamation or

incitement to an offence.

25. In the case of People's Union for Civil Liberties versus

Union of India, (2004) 2 SCC 476, while treating the right to the

human right or a fundamental right and a right in the public

interest, the court opined thus:-

"64. It has not been contended nor could it be contended that the operation and functioning of a nuclear plant is not sensitive in nature. Any information relating to the training features, processes or technology cannot be disclosed as it may be vulnerable to sabotage. As rightly pointed out by the learned Attorney General, knowledge of specific data may enable the enemies of the nation to estimate and monitor strategic activities. As fissile materials are used in fuels although the nuclear plants are engaged in commercial activities, the contents of the fuel discharged or any other details must be held to be matters of sensitive character.

65. Before the High Court, as noticed hereinbefore, several affidavits have been filed showing the extent of disclosures made. The Board also publishes annual reports as also quarterly newsletters. The informations which are not classified as "secret" or do not come within the purview of the aforementioned order dated 4-2-1975 are published. If a reasonable restriction is imposed in the interest of the State by reason of a valid piece of legislation, the court normally would respect the legislative policy behind the same."

26. A reasonable restriction on the exercise of the right is

always permissible in the interest of the security of the State.

Thus, in the aforesaid decision the concept of reasonable

restriction as well as the functioning of a nuclear plant and its

sensitivity, were taken into consideration.

27. In the case at hand, as far as Section 24 is concerned, it is

evincible that the said provision excludes the intelligence and

security organizations specified in the Second Schedule. We

have already reproduced the Second Schedule. The petitioner

is concerned with the Directorate of Enforcement which comes

at serial No. 5 in the Second Scheule. What has been denied in

first part of Section 24 is the intelligence and security

organizations. The first proviso adds a rider by stating that an

information pertaining to allegations of corruption and human

right violations shall not be excluded under the sub-section.

Thus, it is understood that information relating to corruption and

information pertaining to human rights are not protected. In our

considered opinion, the restriction on security and intelligence

aspect cannot be scuttled as the same has paramountancy as

far as the sovereignty and economic order is concerned. Article

19(1)(2), which deals with reasonable restriction, mentions a

reasonable restriction which pertains to security of the State,

integrity of India and public order.

28. In our considered opinion, the restrictions imposed are

absolutely reasonable and in the name of right to freedom of

speech and expression and right to information, the same

cannot be claimed as a matter of absolute right. Thus, the

submissions advanced on this score are untenable and

accordingly we repel the same.

29. The next ground of attack is that the said provision suffers

from arbitrariness, there being no guidance. On a perusal of

Section 24 in a studied manner, we find that there is guidance

inasmuch as two organizations, namely, security and

intelligence, have been included, and apart from the above, we

really fail to fathom how the said provision is arbitrary or without

any guidance when the basic intrinsic purpose in respect of an

individual and the nation, viz., the human right violation and

corruption are not excluded. Therefore, the legislature has

taken care to see that matters relating to human right violation

and corruption are not excluded because they are of paramount

concern to any citizen and for the economic growth of the

country. The same, we are disposed to think has stemmed from

the neat logic of proper governance. Thus, we perceive that the

provision is not arbitrary and unreasonable to invite the wrath of

Article 14 of the Constitution of India.

30. In the result, we do not find any merit in this writ petition

and accordingly the same stands dismissed without any order as

to costs.

CHIEF JUSTICE

SANJIV KHANNA, J.

MARCH 08, 2011 VKR