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Judgment
P. Sathasivam, J.—The petitioner herein challenges the impugned order of detention, dated 22.11.2005, detaining him under the provisions
of the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 19 74 (COFEPOSA Act).
Heard Mr. R. Shanmugasundaram, learned Senior Counsel for the petitioner; Mr. M. Babu Muthu Meeran, learned Additional Public
Prosecutor for R-1; and Mr. P. Kumaresan, learned Additional Central Government Standing Counsel for R-2.
Before proceeding to consider the contentions and counter arguments advanced on either side, we deem it necessary to refer to the factual
details of the case in a compact manner so as to understand the controversy involved,
On 08.09.2005, Officers attached to the Air Cargo Intelligence Unit, Air Cargo Complex, Meenambakkam, Chennai-27, on conducting
examination of brown coloured cardboard cartons on the same day at 19.30 hrs and 20.15 hrs., seized 127 cartons containing soiled/torn/used
shoe uppers, attempted to be exported by M/s. Poppy Leather and Apparels, Coimbatore, and M/s. R.G.Impex, Mumbai, to the Companies at
United Kingdom, by mis-declaring the description as ''leather shoe uppers for adults'' and inflating the value so as to claim Duty Drawback vide
Airway Bill Nos.217-6535 5010 (64 cartons) & 217-6343 9390 (63 cartons) and 10 shipping bills, all dated 03.09.2005. The total number of
shoe uppers declared in all the above 10 shipping bills is 31750 pairs whereas on examination, it was found to contain only 19438 pairs out of
which only 3980 were genuine and new show uppers. Likewise, the total value declared in respect of the consignments under the 10 shipping bills
seized by way of two separate seizures was Rs. 1,81,44,064/- with a drawback claim of Rs. 14,15,235/-. The investigation revealed that the
detenu herein, viz., Gunasekar, has played a vital role in floating several proprietary concerns and firms in his name and in the names of his
associates and employees for the purpose of claiming Duty Drawback benefits fraudulently by exporting sub-standard, junk, old and unusable
goods having no definite commercial value by mis-declaring the actual contents/descriptions, quantity and value. Taking note of the alleged
activities of the detenu, the Detaining Authority clamped upon him the impugned order of detention.
At the foremost, learned Senior Counsel appearing for the petitioner submitted that certain material documents, viz., (a) Customs Records with
regard to Rs. 15 Crores of drawback, which has been cleared and drawn by the detenu''s group of companies; (b) Bank Statements pertaining to
detenu''s companies; and (c) Records available with the Department with regard to the ownership of Poppy Leather and R.G. Impex; were not
placed before the Detaining Authority and withheld by the Sponsoring Authority. According to the learned Senior Counsel, if those material
documents had been placed before the Detaining Authority, he would not have passed the detention order. Further, supposing those documents
were placed before the authority, non-supply of the same to the detenu would vitiate the detention order as it is violative of Article 22(5) of the
Constitution.
As against the above contention, learned Additional Public Prosecutor submitted that all the relevant, required and relied upon documents were
furnished to the detenu and there is no truth in the contention.
In para No. 8 Sub-clauses (b) (c) and (e) of the affidavit filed in support of the petition, the petitioner has specifically stated that he claimed for
customs records regarding the amount of Rs. 15 Crores of drawback, which has been claimed and drawn by the detenu''s group of companies;
Bank statement pertaining to detenu''s companies; and records available with the Department with regard to the ownership of Poppy Leathers and
R.G. Impex.
In the counter affidavit, with regard to the above claim, the Additional Secretary to Government, Public (Law and Order) Department, has stated
that the detenu''s statements and all the relevant documents were placed before the Detaining Authority to arrive at a subjective satisfaction for
detaining the detenu. It is further stated that the question regarding Duty Drawback to the tune of Rs. 15 Crores was only for the purpose of
investigation and to elicit certain answers and that the questions posed to the detenu are irrelevant for the purpose of detention. Apart from the
above information, in the grounds of detention, the Detaining Authority has narrated and referred to the relevant details in pages 1 to 5. The total
number of shoe uppers declared in all the above 10 shipping bills is 31750 pairs whereas on examination, it was found to contain only 19438 pairs
out of which only 3 980 were genuine and new show uppers. It further shows that the total value declared in respect of the consignments under 10
shipping bills referred to in the two separate seizures was Rs. 1,81,44,064/- with a drawback claim of Rs. 14,15,235/-. The grounds further show
that in view of the fraudulent attempt to claim ineligible drawback amount on the basis of mis-declaration of contents of the goods sought to be
exported and also the quantity and value thereon noticed consequent to the seizures, further investigation was conducted and, during the course of
such investigation, statements have been given by certain connected persons. The Detaining Authority, after referring to the statements of
S.Balachandran, Customs Clearing Agent; G. Arumugam, his Assistant; V. Devendrudu, Clearing and Forwarding Agent; various documents;
voluntary statements of the detenu and one Ravi Laxman, who is in charge of exports of the companies of the detenu; and after finding that the
detenu played a major role in floating several proprietary concerns and firms in his name and in the names of his Associates and employees for the
purpose of claiming duty drawback benefits fraudulently by exporting sub-standard, junk, old and unusable goods, having no definite commercial
value, by misdeclaring the actual contents/description, quantity and value; with a view to prevent him from indulging in smuggling activities in future,
passed the detention order under the provisions of the COFEPOSA Act. In such circumstances, we are satisfied that all the relevant
records/materials were placed before the Detaining Authority and that those materials were also supplied to the detenu, thus, there is no substance
in the contention. It is settled law that merely because some statements have been made and details of certain records were referred to for the
purpose of narrating the sequence of events, the same need not be supplied to the detenu. In other words, only the relevant and relied upon
documents ought to be supplied to the detenu and, as said earlier, all the required documents were supplied to the detenu.
Learned Counsel for the petitioner next contended that, in the representation dated 06.12.2005, certain documents were asked for from the
State Government, however, the same were not supplied to the detenu, due to which, he was prevented from making effective representation. This
aspect has been answered in para No. 11 of the counter affidavit, wherein, it is stated that copy of the fax, as required, has been supplied and the
same is available in page Nos.253 and 254 of the paper book supplied to the detenu. As said earlier, the question regarding Duty Drawback to
the tune of Rs. 15 crores was only for the purpose of investigation and to elicit certain answers; and the questions posed to the detenu are
irrelevant for the purpose of detention.
According to the learned Senior Counsel, the detenu, when questioned with reference to the Bank Accounts relating to his Companies and
transactions, answered that those details were known to his Accountant by name P.R. Jayaprakash. By pointing out the same, he submits, that
being the case, the said Jayaprakash should have been examined and a statement would have been obtained from him, however, no such statement
was furnished to the detenu.
Insofar as the statement of P.R. Jayaprakash is concerned, it is stated that he has not been located so far by the Department, therefore, no
statement has been recorded from him. In para No. 12 of the counter affidavit, it is stated that the detenu''s statements were placed before the
Detaining Authority and that there is no need to place whatever records referred to in the statement before the Detaining Authority. It is not in
dispute that the representation dated 06.12.20 05 of the detenu has been replied to. In para No. 13 of the counter affidavit, the Additional
Secretary to the Government has specifically stated that there is no relevant document which remains to be supplied to the detenu and that there is
no violation of any provision of the Constitution. In the light of the details furnished in the counter affidavit and also of the fact that all the relevant
materials have been supplied to the detenu, which are available in the paper book, we do not find any substance in the above contention.
Learned Senior Counsel for the petitioner next submitted that the confessional statement of Ravi Laxman, though relied upon by the Detaining
Authority, in the bail application, he retracted his statement, however, the said document containing retraction was not placed before the Detaining
Authority, which vitiates the ultimate order of detention. He pointed out that in para No. xvi, the Detaining Authority has referred to the voluntary
statement dated 20.09.2005 given before the Customs Officers by M.P.Ravi Laxman. He also pointed out that, among other materials, the
confessional statement of Ravi Laxman, who was in charge of exports of the detenu''s concern, was placed when the Detaining Authority decided
to detain the detenu under the COFEPOSA Act, however, the bail application, wherein, the said Ravi Laxman retracted, was not placed before
the Detaining Authority.
A perusal of the grounds of detention shows that the Detaining Authority, after considering the statement of M.P. Ravi Laxman and that of the
detenu and other employees, arrived at a conclusion that, for the purpose of claiming Duty Drawback benefits, the detenu fraudulently exported
substandard, junk, old and unusable goods having no commercial value, by mis-declaring the actual contents, quantity and value. In other words, it
is clear that the Detaining Authority has based his conclusion to detain the detenu under the COFEPOSA Act not only on the statement of Ravi
Laxman but also the statements of other employees viz., Vasumathi, Sankar, Jayaprakash, G. Arumugam, Balachandran and Shanmugam, who are
working in the company of the detenu, as well as various other documents. In such circumstances, even if it is accepted that Ravi Laxman retracted
his earlier confession statement in his Bail Application, we are satisfied that it would not affect the detention order passed by the authority. In this
regard, learned Additional Public Prosecutor heavily relied upon a decision of the Apex Court reported in Madan Lal Anand Vs. Union of India
and others, . Before the Supreme Court, it was contended on behalf of the detenu that while the Detaining Authority had relied upon and referred
to the confessional statement of the detenu as recorded by the Collector u/s 108 of the Customs Act, in the grounds of detention, the retraction
made by the detenu was not placed before the Detaining Authority for his consideration; and urged that if the retraction had been considered by
the Detaining Authority, his subjective satisfaction could have been in favour of the detenu and against making an order of detention. While
answering the said contention, Their Lordships have held thus:
It is desirable that any retraction made should also be placed before the detaining authority. But, that does not mean that if any such retraction
is not placed before the detaining authority, the order of detention would become invalid. Indeed, this question came up for consideration before a
three Judge bench of this Court in Prakash Chandra Mehta v. Commissioner and Secretary, Government of Kerala 1985 Supp SCC 144. In that
case, a similar contention was made. This Court in overruling the contention has referred to Section 5-A of the COFEPOSA Act and has
observed as follows: (SCC p.166, para 71)
Section 5-A stipulates that when the detention order has been made on two or more grounds, such order of detention shall be deemed to have
been made separately on each of such grounds and accordingly that if one irrelevant or one inadmissible ground had been taken into consideration
that would not make the detention order bad.
In the instant case, even assuming that the ground relating to the confessional statement made by the detenu u/s 108 of the Customs Act was an
inadmissible ground as the subsequent retraction of the confessional statement was not considered by the detaining authority, still then that would
not make the detention order bad, for in the view of this Court, such order of detention shall be deemed to have been made separately on each of
such grounds. Therefore, even excluding the inadmissible ground, the order of detention can be justified....
Thus, it is clear that, in view of the abundant materials, merely because the retracted statement of Ravi Laxman/co-accused was not placed
before the Detaining Authority, the subjective satisfaction cannot be said to be affected and we are satisfied that, on that ground, the detention
order cannot be interfered with. It is settled law that the object of prosecution of a person in criminal court is punitive and the purpose of passing
orders of detention is intended to be preventive. In the criminal court, the burden is placed on the prosecution to establish the guilt of an accused
beyond reasonable doubt, whereas, the Detaining Authority can act on the subjective satisfaction of the materials, and pass orders in order to
prevent the activities prejudicial to the community in general, of the persons to be detained.
In the light of the above discussion, we are unable to accept the argument of the learned Senior Counsel for the petitioner.
Mr. Shanmugasundaram, learned Senior Counsel, further submitted that the grounds of detention have to be formulated and the order has to
be passed only after consideration of all the materials together. Since both the last document as also the order of detention are dated 22.11.2005
and the total pages in the Paper Book running into 414 pages, it would not have been possible for the Detaining Authority to pass an order on the
same day, that is, on 22.11.2005. With regard to the same, it is explained in para No. 15 of the counter affidavit that the voluminous paper book
running into 414 pages show that all the relevant materials pertaining to his case were placed by the Sponsoring Authority before the Detaining
Authority. It is further stated that it also belies the claim of the detenu that some of the documents are not supplied to him. It is also explained that
except the last document, which is dated 22.11.2005, the preceding document at page No. 405 is dated 19.10.2005 and the documents previous
to it are all of various prior dates, hence, the detention order is in no way vitiated on this aspect of non consideration of all the documents at the
same time. As rightly pointed out in para No. 4 of the grounds of detention, the State Government had taken into consideration all the facts and
materials referred to and relied upon in the grounds, the statements and mahazars. We are satisfied that the apprehension and allegations of the
detenu in this regard are without any basis or merit.
Learned Senior Counsel for the petitioner pointed out that the Detaining Authority has misread the statement of Balachandran and did not take
into consideration Arumugham''s statement.
These doubts have been specifically clarified in paragraph No. 9 of the counter affidavit. It is stated, ''Thiru Balachandran in his voluntary
statement given on 10.09.2005 specifically states that as reply to question No. 4, that he had met the detenu once.'' As rightly pointed out, it is
evident that he knows the detenu and there is no contradiction on this issue since the statement was given by him voluntarily in his handwriting and
when questions were posed to him, he answered them in his own way and this also shows that it is his voluntary statement. Hence, this cannot be
stated as a contradiction or omission on any account. Likewise, G. Arumugam, in his voluntary statement given on 09.09.2005 inter alia stated that
he had received the export documents of M/s.Poppy Leather and Apparel and M/s. R.G. Impex from Gunasekar, the detenu. In this regard, it is
pointed out that the detenu was absconding from the date of seizure, that is, on 08.09.20 05, and he had to be located by the Customs Officers on
their own, which they did on 27.09.2005. Even the wife of the detenu Tmt. Geetha did not know his whereabouts as given in her voluntary
statement on 20.09.2005. It is stated that due to the said reason, it was not feasible to produce the detenu before Arumugam on 09.09.2005 since
the detenu was absconding. In the light of the explanation offered in the counter affidavit, we are unable to accept the said contention also.
Learned Senior Counsel for the petitioner further contended that the pre detention representation sent to the the Secretary, Government of
Tamil Nadu, Home Ministry (SC) Public, Chennai-9, dated 14.11.2005 and 18.11.2005, by registered post by the wife of the detenu was neither
considered nor reflected in the grounds of detention. In paragraph No. 18 of the counter affidavit, the deponent viz., Additional Secretary to
Government, Public (Law and Order), has specifically denied the receipt of such representation. According to him, no such representation dated
14.11.2005 and 18.11.2005 came to be received before passing of the detention order. There is no reason to disbelieve the assertion made in the
counter affidavit. Learned Additional Public Prosecutor also produced the original records and, on perusal of the same, we accept the stand taken
by the Department. Accordingly, we reject the said contention also.
Finally, learned Senior Counsel for the petitioner submitted that, even if the representation reached the authority after passing of the order of
detention, the same ought to have been placed before the Advisory Board. Reply, dated 15.02.2006, of the State Government shows that the
representation of the detenu''s wife dated 14.11.2005 sent to the Government; the representation of the detenu dated 06.12.2 005 sent to the
Government through the Superintendent, Central Prison, Chennai; and all other documents received by the Government; were placed before the
Advisory Board (COFEPOSA) u/s 8(b) of the COFEPOSA Act. It further shows that the State Advisory Board, after considering the grounds of
detention served on the COFEPOSA detenu, the enclosures attached to the grounds of detention, representation of the detenu''s wife dated
14.11.2005, representation of the detenu dated 06.12.2005 and all other documents sent by the Government and the oral representation of the
detenu as well as his wife Geetha at the time of personal hearing before the State Advisory Board on 27.01.200 6 has unanimously expressed its
opinion that there is sufficient cause for the detention of K. Gunasekar. Thereafter, the Government has also considered the opinion of the State
Advisory Board and agreed with it. In such circumstances, we are unable to accept even the last argument of the learned Senior Counsel for the
petitioner.
We are satisfied that the Detaining Authority, only after considering all the relevant materials and finding that the detenu has played a major role
in floating several proprietary concerns and firms in his name and in the name of his Associates and employees for the purpose of claiming Duty
Drawback benefits fraudulently by exporting sub-standard, junk, old and unusable goods having no definite commercial value by mis-declaring the
actual contents, quantity and value; with a view to prevent him from indulging in smuggling activities in future, detained him under the provisions of
the COFEPOSA Act. We find that the Detaining Authority has not only considered all the relevant materials but the detenu was also provided with
all the required and relied upon materials and there is no procedural error or violation. It is apparent that the detenu was afforded sufficient
opportunities to put forth his defence and that his representation and that of his family members were also considered and disposed of timely and
carefully.
In these circumstances, we do not find any error or infirmity or valid ground for interference. Consequently, Habeas Corpus Petition fails and
the same is dismissed. Connected Miscellaneous Petition is closed.