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Judgment
S.C. Malte, J.
The petitioner has challenged the detention order dated 24.10.1996 (Annexure P1) passed by the Joint Secretary to Government of India, in exercise of powers under Section 3(1) of the Conservation of Foreign Exchange and Prevention of Smuuggling Activities Act, 1974 (COFEPOSA). The detailed reasons attached with the order indicate in brief that the petitioner''s shop premises and residence were raided by the Officers of the Enforcement Directorate on 3.9.1996. From both these places certain foreign currency as detailed in Annexure P1/A (grounds for detention) has been recovered. The petitioner was arrested and prosecuted. He submitted application for bail before the Chief Judicial Magistrate, Jalandhar. It was rejected. Thereafter the petitioner submitted another application dated 1.10.1996 before the Sessions Court. That was also rejected. The third application for bail was moved before the Sessions Judge, Jalandhar, on 10.10.1996. That was also rejected on 23.10.1996. In the set of this sequence of events the detention order 24.10.1996 was passed.
The counsel for the petitioner submitted that since the repeated bail applications were rejected, and last bail application having been rejected on 23.10.1996, there was no need to pass a preventive detention order because the petitioner was already behind the bars. It was further submitted that there was material variance between the English version of the detention order and the Hindi version of the said order.
Counsel for the respondents (Union of India) submitted that the preventive detention order can be passed even if the petitioner was behind the bars and his bail applications were rejected. Regarding variance between the English and Hindi version of the detention order, it was submitted that there was no material variance and both versions convey the same meaning though in a little bit different way.
The grounds of detention order are attached with the petition at Annexure P1/A. In the context of recovery of foreign exchange from the premises of the petitioner, it may by mentioned here that undisputed position is that the petitioner is a licensed money changer. As per Section 7 of the Foreign Exchange Regulation Act, 1973, a money changer can be appointed by the Reserve Bank. Such money changers are authorised to deal in foreign currency. Section 8 of the Foreign Exchange Regulation Act, 1973, further provides that such authorised dealer would be in a position to acquire or borrow from, or sell, or transfer or lend to or exchange with any foreign exchange. It is pertinent to note that the detaining authority has not in categorical terms claimed that the petitioner violated any terms or conditions of the grant of licence as a money changer. There is also nothing on record to show that any step was taken to move the Reserve Bank for cancellation of the licence of the petitioner on the ground that he has violated any of the conditions of the licence or the provisions of the Foreign Exchange Regulation Act, 1973.
The point hotly contested before me pertains to the question whether the detaining authority would be justified in passing preventive detention order in the light of the fact that the petitioner was already behind the bars and his repeated efforts to get the bail had been rejected, and last such rejection of the bail application was dated 23.10.1996 which was just a day before the passing of the detention order. The counsel for the petitioner brought my attention to the case of Rivadeneyta Ricardo Agustin v. Government of the National Capital, 1994 SCC (Cri) 354. In this case the petitioner, a foreign national was apprehended on finding that a substantial quantity of gold was found concealed in the VCR. The petitioner was produced before the Magistrate in respect of offence under Section 135 of the Customs Act. He moved an application for bail which was dismissed on 9.6.1992, and thereafter no fresh bail application had been moved by him. Thereafter detention order was passed on 11.8.1992. Their Lordships observed that since there was no circumstance indicating that the petitioner would be released from custody or getting enlarged on bail, it was necessary for the detaining authority to ascertain whether the detention order would be necessary to prevent him from engaging in such activities. Their Lordships followed the principle laid down in the case of Kamarunnissa v. Union of India, (1991)1 SCC 128 : 1991 SCC (Cri) 88 and observed that detention order against the detenu in jail can be passed provided the officer passing the order is equipped with the material on record to justify his conclusion that such a person would indulge in similar activity if set at liberty. Their Lordships found that in the case in hand no such material was before the detaining authority, and the detention order cannot be sustained. The counsel for the Union of India brought my attention to a case of Abdul Sathar Ibrahim Maink v. Union of India, 1992 Supreme Court Cases (Cri) 1. In that case their Lordships laid down the proposition arrived at after considering various authorities. Their Lordships were of the view that the detention order can validly be passed even in the case of a person who is already in custody. In such a case it must appear from the grounds that the authority was aware that detenu was already in custody. Their Lordships further observed that in such a case it should further appear from the grounds that there was enough material necessitating the detention of a person in custody. This aspect depends upon various considerations and facts and circumstances of each case. If there is a possibility of his being released, and on being so released, he is likely to indulge in prejudicial activity, then that would be one of such compelling necessity to pass the detention order.
In the light of these authoritative pronouncement, now it has become necessary to examine the case to find out whether the principles indicated in those cases have been spelt out or not. As mentioned above, the petitioner is a licensed money changer. He is, therefore, entitled to deal with various currencies. No steps have been taken for cancellation of his licence of money changer on the ground that he violated any of the conditions or provisions governing his activities as money changer. In my opinion, mere finding of certain foreign exchange with the petitioner by itself would not be enough to jump to the conclusion that he happened to misuse it in any manner. In para 3 of the order it is stated that the petitioner has purchased certain foreign currencies at the rates mentioned therein. But it is not clarified there that what was the official rate. As per the licence of a moneychanger he would be entitled to exchange the foreign currencies at an official rate. In the grounds it is not clarified in what way the rates varied and in what way thereby the petitioner can be said to be dealing in the blackmarket sale and purchase of the various foreign currencies. Had it been the case, certainly some steps would have been taken for the cancellation of the licence of the moneychanger.
Reliance has also been placed on the statements of certain persons. In para 7 of the grounds it is indicated that while seeking the bail in the Court of Chief Judicial Magistrate, certain affidavits of the NRI were filed which indicated entrustment of certain foreign currency for safe custody, and that currency was among the currency seized during the raid mentioned above. One Gurbachan Singh of Newzealand had also sent a representation that he had deposited foreign currency with the petitioner for safe custody. In respect of the above mentioned affidavit filed by the two NRIs, it was found that one of them had not given his proper address. In respect of the other, the brother of such NRI was found, and the statement of that brother was recorded. That statement indicated that his NRI brother had not brought foreign exchange from abroad. In my opinion, such material can hardly be enough to conclude the question as to whether the said NRIs had deposited or had not deposited foreign currency for safe custody. The knowledge of the said brother of NRI can hardly be used to conclude such an aspect.
Briefly stated, the grounds for detention have not sufficiently spelt out the compelling necessity for detention despite the fact that the petitioner was already behind the bars on his bail applications having been rejected. There was nothing to show on record that the petitioner would be released from custody in the near future. Under these circumstances, I find that the detention order cannot be upheld. Hence the petition is allowed. The order of detention dated 24.10.1996 (Annexure P1) passed by the Joint Secretary to Government of India is set aside. He be set at liberty if not required in connection with any other case.