On 30th September, a bench of Delhi High Court consisting of Justices Siddharth Mridul and Anup Jairam Bhambhani held that preventive detention being drastic State action based only upon suspicion arising from a person‟s past activity, can be allowed, as the settled legal position mandates, only if there is a live, causal link between a person‟s past activities and the need for passing of a preventive detention order. A preventive detention order is unsustainable on stale or illusory grounds, which have no real nexus with the past prejudicial activity.

Fact of the case:

By way of the present petition filed under Articles 226 and 227 of the Constitution of India and section 482 of the Code of Criminal Procedure, 1973, the petitioner Naveen Kasera alias Naveen Agarwal, challenges order dated 15.01.2021 bearing F.No.:PD-12001/03/2021–COFEPOSA (detention order) made under section 3(1) of the Conservation of Foreign Exchange & Prevention of Smuggling Activities Act, 1974, (COFEPOSA Act) whereby the petitioner has been put under preventive detention, having been taken into custody on 20.01.2021. It is the petitioner’s case that consequent upon his detention on 20.01.2021, he was taken from his home in Delhi to the Presidency Correctional Home, Alipore, Kolkata on the pretext of questioning him and is being held in detention at the Kolkata Jail ever since.

Contention of the petitioner:

Mr. Neeraj Jain, learned counsel appearing for the petitioner contended the following:

  1. It was submitted that there is nothing to show that the detaining authority arrived at any subjective satisfaction to warrant the petitioner’s detention under section 3(1) of the COFEPOSA Act.
  2. It was also submitted that in relation to the transaction comprised in shipping bill dated 11.12.2018, no proceedings have been initiated against the petitioner; not even a show cause notice has been issued; and it is the petitioner’s contention that he has no connection with the company that issued the said shipping bill, except that he acted as an intermediary.
  3. It was argued that a substantial number of the documents relied upon by the respondents, as served upon the petitioner, are completely illegible and the petitioner is accordingly unable to comprehend the purport and effect thereof, especially since, according to the petitioner, such documents do not relate to him.
  4. It was urged that there is inordinate and unexplained delay in the passing of the detention order, which proceeds on the heels of a show cause notice dated 07.01.2021; but the issuance of the show cause notice itself suffers from inordinate and unexplained delay.
  5. It was also submitted that the detention order suffers from nonapplication of mind, for which reason also, it is vitiated.

Contention of the respondent:

Mr. Anurag Ahluwalia, learned Central Government Standing Counsel appearing for respondents Nos. 1 to 5, namely the Ministry of Finance (Department of Revenue), Government of India, contended the following:

  1. It was argued that the petitioner was involved in fraudulent transactions through 33 non-existent or “dummy” firms, the details of which were revealed during a search conducted at the premises of M/s Buller Trades, a firm which was “under the petitioner’s directorship”
  2. It was submitted that 17 of these 33 firms purportedly exported goods worth Rs. 1,45,60,63,026/- under 133 shipping bills but no export remittances have been realised against the said bills, while customs duty drawback in the sum of Rs. 3,02,35,243/- and benefit of Rs. 12,72,25,116/- has been availed under the Integrated Goods & Services Tax Act, 2017.
  3. It was also submitted that all branch offices of M/s Buller Trades, except the main office in Delhi, were found to have fake or wrong addresses, meaning thereby, that these branches did not exist.
  4. It was argued that summonses were issued to the petitioner on 04 occasions at the address of one of his firms M/s Global Impex, calling him to appear before the concerned officer but the petitioner failed to comply with such summons, consequent whereupon a criminal complaint was also filed against the petitioner under section 174 of the Indian Penal Code, 1860.
  5. It was also contended that the petitioner was operating under two identities, Naveen Kasera and Naveen Agarwal, which is indicative of his mala-fidé approach towards the law.

Observation and Judgment of the court:

The following observation has been made by the hon’ble court:

  1. The essential allegation is that the petitioner wilfully omitted to load for exportation, goods that were cleared for that purpose, in an attempt to avail duty drawback and benefit under the IGST Act, that would prima-facie amount to smuggling, and consequently to prejudicial activity under the law.
  2. Incidents which are old and stale and in which the detenu has been granted bail, cannot be said to have any relevance for detaining a citizen and depriving him of his liberty without a trial.
  3. A gap of more than 02 years between the last alleged prejudicial activity undertaken by the petitioner cannot be the basis for a justifiable apprehension that the petitioner would indulge again in similar prejudicial activity.

Thus, the court quashed and set-aside order dated 15.01.2021 directed that the petitioner be released from custody forthwith, unless his custody is required in any other matter.

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