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Judgment
D.N. Mehta, J.—The Petitioner herein, Kamlesh Jayantilal Ganatra, hereinafter referred to as "the Detenu", has challenged in this Writ Petition the Order of Detention dated 10th October, 1988 pased by the Joint Secretary to the Government of India u/s 3(1) of the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (hereinafter referred to as "the COFEPOS A Act").
Shri A. H. Desai, learned Counsel appearing for the Detenu, has submitted only one contention before us and that is that vital and material documents which could have swayed the subjective satisfaction of the Detaining Authority one way or the other, had not been placed by the Sponsoring Authority before the Detaining Authority resulting in non-application of mind on the part of the Detaining Authority.
Shri A. H. Desai has produced before us 28 documents out of a bunch of 150 documents, which according to learned Counsel, were documents which could have influenced the Detaining Authority in arriving at his subjective satisfaction and which were not placed before him. These documents come into the hands of the Detenu pursuant to a letter dated 29th October, 1988 addressed by the Detenu to the Detaining Authority Shri U. K. Sen. In this letter the Detenu complained to the Detaining Authority that during the search of his premises certain files were taken charge of by the Enforcement Directorate but the copies of those files and diary had not been supplied to him. Similarly certain documents which were taken charge of during the search of the premises of K. F. Daruwala, co-detenu and Proprietor of M/s. K. V. International Services had not been furnished to him. The Detenu, therefore, requested the Detaining Authority to supply him with copies of these documents in order to enable him to make an effective representation against the Order of Detention.
This letter of the Detenu dated 29th October, 1988 was replied to by one Shri S. K. Chowdhry, Under Secretary to the Government of India by his letter dated 10th November 1988 stating that the Detenu''s representation had been considered by the Detaining Authority and that all documents relied on by the Detaining Authority had been supplied to him alongwith the grounds of Detention. The letter went on to state that the documents referred to by the Detenu in his letter had not been supplied for the reason that they were not relied upon by the Detaining Authority while passing the Order of detention. However, the Directorate of Enforcement had been directed to supply to the Detenu additional documents asked for in his letter. Pursuant to this letter a file containing about 150 documents was furnished to the Detenu. Shri A. H. Desai has produced before us 28 documents out of this file and has drawn our attention to each of these documents contending that the 28 documents produced by him were vital and material documents relating to the transactions complained of and hence it was obligatory on the Sponsoring Authority to furnish these documents to the Detaining Authority in order to enable the latter to arrive at his subjective satisfaction one way or the other while passing the order of detention.
Shri A. H. Desai submitted that the failure to furnish these documents to the Detaining Authority had resulted in non-application of mind to vital materials and this in turn had affected adversely the Order of Detention.
Now, in order to appreciate the submissions made by Shri A. H. Desai, it will be relevant to state briefly a few facts pertaining to the transaction relied upon in the Order of Detention by the Detaining Authority. The Detenu carried on his business as a Commission agent in the name and style of M/s. K. Vishal Exports, situated at 2nd floor, Mangaldas Building, Mangaldas Road, Bombay - 400002. Sometime in December 1987 the Detenu received certain orders from M/s. Impax Ltd., London, for 120 metric tonnes of rice. Out of these 120 metric tonnes, 40 metric tonnes had to be consigned to London and the balance of 80 metric tonnes had to be consigned to Singapore to M/s. K. Arkay Trading Company in two shipments of 40 metric tonnes each.
On receipt of this order form M/s. Impax Ltd., U.K., the Detenu approached one K. F. Daruwalla, who carried on business of import and export in the name and style of M/s. K. V. M. International Services. Shri Daruwalla purchased the required kind of rice and shipped 80 metric tonnes of rice to Singapore and 40 metric tonnes to M/s. Impax Ltd., U.K.
The Singapore party on receipt of the 40 metric tonnes of rice found the same to be sub-standard and raised a dispute with regard to the payment of the price. According to the Detaining Authority while the correspondence was being carried on between K. F. Daruwala and M/s. K. Arkay Trading, the Detenu went to Singapore and out of the part of sale proceeds received by him from M/s. K. Arkay Trading Company, he purchased brass scrapping and shipped the same to M/s. Impax Ltd., U.K.
The Detaining Authority stated that this consignment of 120 metric tonnes was shipped to London and Singapore as per the directions of M/s. Impax Ltd., U.K. However, the sale price of the 40 metric tonnes of rice shipped to Singapore had not been transferred to India within six months of the transaction, as provided under the Foreign Exchange Regulations Act, 1973. According to the Detaining Authority, the Detenu had committed a breach of the provisions of the Foreign Exchange Regulations Act, thus attracting the provisions of the COFEPOSA Act. The Detaining Authority stated that it was necessary to detain the Detenu under the provisions of the COFEPOSA Act.
The short question, which requires to be decided in the instant case is whether the 28 documents produced before us by Shri A. H. Desai are relevant and vital documents in the sense that they would have swayed the subjective satisfaction of the Detaining Authority one way or the other in arriving at the conclusions whether to pass the Order of detention or not.
Before we deal with the submissions made by learned Counsel for the Detenu as well as for the Detaining Authority, the Respondents herein, it will be appropriate to examine the legal position on this aspect. Shri A. H. Desai has relied on the observations of the Supreme Court in the case of Ashadevi v. K. Shivraj and Anr. reported in AIR 1979 SC 447 to the effect:
It is well settled that the subjective satisfaction requisite on the part of the Detaining Authority, the formation of which is a condition precedent to the passing of the detention order will get vitiated if material or vital facts which would have a bearing on the issue and would influence the mind of the Detaining Authority one way or the other are ignored or not considered by the Detaining Authority before issuing the detention order.
The principle that could be clearly deduced from the above observations is that if material or vital facts which would influence the mind of the Detaining Authority one way or the other on the question whether or not to make the detention order, are not placed before or arc not considered by the Detaining Authority it would vitiate its subjective satisfaction rendering the detention order illegal. After all the Detaining Authority must exercise due care and caution and act fairly and justly in exercising the power of detention and if taking into account matter extraneous to the scope and purpose of the statute vitiate the subjective satisfaction and renders the detention order invalid then failure to take into consideration the most material or vital facts likely to influence the mind of the authority one way or the other would equally vitiate the subjective satisfaction and invalidate the detention order.
It may be pointed out that the observations in the ruling cited heretofore in Ashadevi''s case were reiterated by the Supreme Court in the case of the State of U.P. Vs. Kamal Kishore and Another, . In that case the Supreme Court was considering the effect of not furnishing to the Detaining Authority copies of the statement of the co-accused and the bail application filed by the Detenu in the Court. Their Lordships observed:
The High Court, therefore, was justified in holding that the assertion made in the return that even if the material had been placed before the Detaining Authority, he would not have changed the subjective satisfaction as this has never been accepted as a correct proposition of law. It is incumbent to place all the vital materials before the Detaining Authority to enable him to come to a subjective satisfaction as to the passing of the order of detention as mandatorily required under the Act. This finding of the High Court is quite in accordance with the decision of this Court in the case of Asha Devi v. K. Shivraj AIR 1979 S.C. 447.
Lastly Shri A. H. Desai relied on the decision of the Supreme Court in the case of Union of India (UOI) and Others Vs. Manoharlal Narang, to the effect:
The failure of the State Government to place before the Detaining Authority in the instant case, the opinion which the Advisory Board had recorded in favour of a detenu who was detained partly on a ground relating to the same incident deprived the Detaining Authority of an opportunity to apply its mind to a piece of evidence which was relevant, if not binding. In other words, the Detaining Authority did not, because it could not, apply its mind to a circumstance which, reasonably, could have affected its decision whether or not to pass an order of detection against the petitioner.
Shri R. V. Desai, learned Counsel appearing on behalf of the Union of India, the Respondent No. 1, and Shri U. K. Sen, the Detaining Authority, Respondent No. 2 submitted that the bunch of 28 documents produced before us by Shri A. H. Desai were not relevant or material for the purpose of the Detaining Authority arriving at his subjective satisfaction. Shri R. V. Desai drew our attention to paragraph 19 of the affidavit filed by the Detaining Authority wherein the Detaining Authority stated that all the relevant documents relied upon were placed before him and copies of the same were furnished to the Petitioner. Apart from this bald suspicion no further light is thrown on the questions as to whether the documents which were furnished to the Detenu at a later stage upon his request were or were not furnished to the Detaining Authority. There is however no controversy at the Bar that these documents were not supplied to the Detaining Authority. Shri R. V. Desai contended that this Court ought not to evaluate the contents of the 28 documents supplied to us by the Detenu for the reason that that would tantamount to evaluating the truth or otherwise of the facts stated therein. Shri R.V. Desai contended that the scope of judicial review of detention orders was extremely limited and only to find out whether the procedural laws had been adhered to by the Detaining Authority. Any further enquiry would tantamount to re-appraising the facts, a procedure denied to the Courts.
In support of his submission Shri R. V. Desai relied on the observations of the Supreme Court in the case of Mst. L.M.S. Ummu Saleema Vs. Shri B.B. Gujaral and Anr, to the effect:
It is, therefore, clear that every failure to furnish copy of a document to which reference is made in the grounds of detention is not an infringement of Article 22(5), fatal to the order of detention. It is only failure to furnish copies of such documents as were relied upon by the Detaining Authority, making it difficult for the detenu to make an effective representation, that amounts to a violation of the fundamental rights guaranted by Article 22(5). In our view it is unnecessary to furnish copies of documents to which casual or passing reference may be made in the course of narration of facts and which are not relied upon by the Detaining Authority in making the order of detention.
Now the observations cited above do not apply to the facts of the instant case. In the instant case the issue is whether the relevant documents which were not supplied to the ''Detaining Authority were such as to sway the subjective satisfaction of the Detaining Authority one way or the other, and whether these documents ought to have been supplied to the Detaining Authority. The observations cited theretofore do not in any way run counter to the observations of Their Lordships in Ashadevi''s case and the other two cases cited heretofore.
16A. The next authority cited by Shri R. V. Desai is in the case of State of Gujarat v. Ismail Juma and Ors. reported in AIR 1982 SC 683. Their Lordships observed:
A perusal of these three documents do not justify the finding of the High Court that the Detaining Authority had not applied its mind to the materials before it and that it had not "reached satisfaction that the facts of the case warranted the detention of the petitioner." The finding of the High Court has been based on a presumption which is unjustified. This Court in Criminal Appeal No. 92 of 1981 (reported in State of Gujarat Vs. Adam Kasam Bhaya, ) in the case of State of Gujarat v. Adam Kasam Bhaya held: "The High Court in its writ jurisdiction under Article 226 of the Constitution is to see whether the order of detention has been passed on the materials before it. If it is found that the order has been based by the Detaining Authority on materials on record, then the Court cannot go further and examine whether the material was adequate or not which is the function of an appellate authority or Court. It can examine the material on record only for the purpose of seeing whether the order of detention has been based on no material. The satisfaction mentioned in Section 3 of the Act is the satisfaction of the Detaining Authority and not of the Court." The reason is that the satisfaction of the Detaining Authority is subjective.
Now the Supreme Court in the above case had considered the documents concerned in that case along with the facts of that case and had made the above observations. Having considered the ratio of the decision cited above it appears that the well settled position in law is that the subjective satisfaction requisite on the part of the Detaining Authority, the formation of which is a condition precedent to the passing of the detention order would get vitiated if material or vital facts which would have a bearing on the issue and would influence the mind of the Detaining Authority one way or the other were ignored or not considered by the Detaining Authority before issuing the Order of Detention.
Now we agree with Shri R. V. Desai to the extent that it is true that the scope of judicial review is narrowed and restricted to finding out whether the Detaining Authority had adhered to and strictly followed the rules of procedure. It is also true that the Court trying preventive detention cases under its writ jurisdiction cannot evaluate the truth or otherwise of the facts stated in the Order of Detention. However, we cannot agree with Shri R. V. Desai when he states that perusing the 28 documents furnished to us by the Detenu would tantamount to evaluating the truth of the facts. We have perused these documents not for the purpose of ascertaining the truth of the facts stated therein but for the purpose of finding out whether they were relevant and material and whether they would have swayed the subjective satisfaction of the Detaining Authority one way or the other.
We shall now consider whether the 28 documents, marked as Exhibit-A, are relevant and material to the transactions of sale of 80 metric tonnes of rice to M/s. K. Arkay Trading, Singapore. The first 22 pages contain the invoices, Bill of Lading and the Exchange G.R. relating to three transactions (i) 40 metric tonnes of rice to M/s. K. Arkay Trading, Singapore (ii) 40 metric tonnes of rice to M/s. K. Arkay Trading, Singapore and (iii) 40 metric tonnes of rice to M/s. Impax Ltd., U.K. The bills of exchange and the export exhange G.R. would have assisted the Detaining Authority in formulating whether the transactions were legal or illegal. The fact that the document at pages 1 to 28 pertain to the shipping of three transactions of rice is not in dispute.
The documents at pages 23 to 28 contain correspondence between M/s. Impax Ltd., U.K. and the State Bank of Mysore, who were the bankers for M/s. K.V.M. International. At page 26, there is a letter addressed by M/s. Impax Limited, U.K. to M/s. K.V.M. International Services wherein the English Company had complained that the quality of the rice shipped to U.K. and Singapore was sub-standard and that the same had occasioned loss to M/s. Impax Ltd. At page 27 there is an important letter dated 28th April, 1988 addressed by M/s. K.V.M. International Services to the Reserve Bank of India wherein Shri K.F.Daruwalla, the proprietor of M/s. K.V.M. International Services pointed out that the importer in London had complained that the consignments of rice were of inferior quality and were not 100% pure Basmati. The letter further stated that similar complaints had been recieved from Singapore. Unfortunately this letter is not complete as the continuation page does not find place in the compilation furnished to us. But one thing appears to be certain from a perusal of this letter that Shri Daruwalla had informed the Reserve Bank of India that the three consignments had been sent to their destinations in U.K. and Singapore. However, the goods were found to be sub-standard.
Now we have perused each of these 28 documents with the assistance of learned Counsel appearing for the Detenu and we find that each document pertains to the transactions of exporting rice to London and Singapore. Those documents are, therefore, relevant and material to the transactions which were relied upon by the Detaining Authority in the order of detention. These documents, therefore, would certainly have assisted the Detaining Authority informing his subjective satisfaction one way or the other. Failure to place these documents before the Detaining Authority would mean that the Detaining Authority had failed to take into consideration vital and material documents relating to the transaction of rice. This would indicate non-application of mind on the part of the Detaining Authority. On the facts of this case, therefore, the order of detention deserves to be struck down.
In the result, the Rule is made absolute. The order of detention dated 10th October, 1988 is set aside. The Detenu shall be set at liberty forthwith, unless required in any other case.