COMPETENT AUTHORITY, AHMEDABAD ETC.versusAMRITLAL CHANDMAL JAIN AND ORS. ETC.

A              COMPETENT AUTHORITY, AHMEDABAD ETC.
                                          v.
               AMRITLAL CHANDMAL JAIN AND ORS. ETC.

                                  APRIL 29, 1998

B      [M.M. PUNCHHI, CJI., K.T. THOMAS AND D.P. WADHWA JJ.]


          Smugglers and Foreign Exchange Manipulators (Forfeiture of Property)
    Act, 1976-Sections 6 and 8-Notice of Forfeiture-Preventive Detention-
    Proceedings initiated under SAFEMA on the basis of an earlier detention
C   order made under COFEPOSA-Such order ofdetention cannot be questioned
    unless the same was challenged by the detenu or his relatives or his associates
    when the order was in force and that challenge had either been upheld or
    negatived-But where on the ground of the release of detenu, the Writ of
    Habeas Corpus is disposed off without going into the question of validity of
D   the order , detenu cannot be made to suffer holding that he did not
    successfully challenge his detention order-Such detenu or his relatives or
    his associates are not debarred from challenging said order of detention
    subsequently when notices under Section 6 of SAFEMA are issued to them.

          Constitution of India, Articles 22(5), 32 and 226-Detentiorr--Writ of
E   Habeas Corpus filed-Challenge is in effect to the legality and validity of
    grounds of detention-Detenu need not file separate writ seeking Writ of
    Certiorari to challenge validity of grounds.

          The first respondent was detained under Section 3 of COFEPOSA by
    order dated July 21, 1982. He challenged the detention order before this
F   court by Writ of Habeas Corpus. The appellants-State revoked the detention
    order, by order dated 18.10.1982. But on the same day, by separate order on
    same grounds, the respondent was again detained and this led to filling of
    second Writ Petition before this court by the respondent, Subsequently the
    first Writ Petition was dismissed as infructuous. During the pendency of the
    second Writ Petition, by order dated 8.1 J.1982, the respondent was ordered
G   to be released on parole and in the meanwhile his detention period was
    reduced till 16.08.1983 and he was released on that day. This led to the
    disposal of the second Writ Petition with the observation that the period of
    parole would be taken into account for the purpose of detention,

          On 10.10.1985 the competent authority issued notice under Section 6
H ofSAFEMA to the respondent. The respondent challenged this before the
                                          64
                 COMPETENT AUTHORITY v. A.C. JAIN                          65
High Court. Subsequently the appellants revised the grounds of notice under      A
Section 6 and issued another notice which led to filing of another Writ
Petition, following which notice under Section 8 of SAFEMA was issued
which was challenged by the Respondent before High Court. Since the
foundation of action against the respondent was earlier detention, Writ
Petitions were allowed holding that the order of detention of the respondent     B
was illegal and the proceedings under SAFEMA were quashed.

       Thereafter, the search and seizure operations were conducted at the
premises of the Respondent by the Income-Tax Authorities and 1465.201
kgs of silver was seized. The respondent approached the Settlement
Commissioner and the Settlement Commissioner passed orders for releasing         C
the seized silver to the Respondent. However, the competent authority
requested Commissioner of Income-Tax, Gujarat not to release the seized
silver but CIT, Gujarat refused to do so. Against this the Competent Authority
approached the High Court in a Writ Petition challenging the order of CIT.
But the same was withdrawn unconditionally and another writ petition was
filed by competent authority claiming the same relief. Thereafter, by impugned   D
judgment dated 23.06.1993, High Court dismissed the Writ Petition of
Competent Authority holding the same as infructuous, as proceedings under
SAFEMA had been quashed.

      In these appeals, challenging order dated 29.04.1993 and 23.06.1993
the Competent Authority, relying on the law laid down in Amratlal Prajivandas    E
case submitted that proceeding under SAFEMA could not be challenged on
the alleged ground of detention being illegal unless the detenu chose to
question his detention before the Court during the period when such order
of detention was in force or he is unsuccessful in his attack thereon.

     Dismissing the appeals, this Court.
                                                                                 F

      HELD : 1.1. The challenge to the order of detention by respondent was
not unsuccessful and the respondent or his relatives or his associates were
not debarred from challenging the order of detention subsequently when
notices under SAFEMA were issued to them because the second Writ of              G
Habeas Corpus was disposed off without going into the question of validity
of the order of detention but on the ground that detenu had already been
released from detention. [70-Fl

     1.2. Once the detenu is released during pendency of his Writ of Habeas
Corpus by the detaining authority it cannot always be said that writ petition    H
    66                    SUPREME COURT REPORTS                    (1998] 3 S.C.R.

A had become infructuous and that the grounds on which the order of detention
    was based became invalid. But then if the Court refuses or itself does not
    go into the merits of controversy in Writ of Habeas corpus when detenu is
    released, the detenu on that account cannot be made to suffer holding that
    he did not successfully challenge his order of detention. [71-B)

B        Union ofIndia v. Hazi Mastan Mirza, AIR (1984) SC 681 and Attorney
    General ofIndia & Ors. v. Amratlal Prajivandas & Others, (1994) 5 SCC 54,
    referred to.
          2. When there is challenge to the legality of detention in Writ of
    Habeas Corpus the challenge is in effect to the legality and validity of the
C   grounds on which the order of detention is made. It is not that to challenge
    the legality and validity of the grounds on which order of detention is passed
    the detenu has to file a separate writ petition seeking a Writ of Certiorari.
                                                                            (71-A)

         CRIMINAL APPELLATE JURISDICTION : Criminal Appeal No.
D   2 of 1994 ETC.

          From the Judgment and Order dated 28/29.4.93 of the Gujarat High Court
    in S.Crl. Application No. 499 of 1991.

          N.N. Goswami, K.G. Shah, Kapil Sibal, Sunjawala, T.L.V. Iyer, D.S. Mehra,
E   M.P. Mullick, Ms. Hemantika Wahi, Ms. Neithono Rhetso, R.N. Keshwani,
    H.A. Ahmadi, Chandrakant Nayak, V.T. Francis, P.I. Jose, (Ms. Laxmi Arvind)
    (A.C.), and B. Y. Bairam Das for the appearing parties.

          The Judgment of the Court was delivered by

F          D.P. WADHWA, J. These are three appeals. Two appeals (Criminal
    Appeal Nos. 2/94 and 574/94) are directed against the judgment dated April
    29, 1993 of a Division Bench of the Gujarat High Court and have been filed
    respectively by the Competent Authority and the State of Gujarat. By this
    impugned judgment the High Court allowed two writ petitions filed by the
G   respondents declaring that the order of detention passed against the first
    respondent Amritlal Chandmal Jain ("Amritlal") unoer the provisions of the
    Conservation of Foreign Exchange and Prevention of Smuggling Activities
    Act, 1974 (for short 'COFEPOSA ')was illegal and it quashed the proceeding
    initiated under the Smugglers and Foreign Exchange Manipulators (Forfeiture
    of property) Act, 1976 (for short 'SAFEMA ') against the respondents. The
H   third appeal (Civil Appeal 1487/94) has been filed by the Competent Authority
       COMPETENT AUTHORITY v. A.C. JAIN [D.P. WADHWA, J.]                     67
and is directed against the judgment dated June 23, 1993 of another Division        A
Bench of the Gujarat High Court by which the High Court dismissed the writ
petition filed by th.e Competent Authority in which the Competent Authority
had sought directions restraining Commissioner of Income-tax, Gujarat- I from
releasing seized silver to Mis. Agra Bullion Company and Amritlal. In this
appeal Commissioner oflncome-tax, Gujarat-I is also respondent. The Competent       B
Authority has been constituted under the SAFEMA and it means an officer
of the Central Govern~ent to perform the functions under SAFEMA.

       By order dated July 21, 1982, passed under Section 3 of the COFEPOSA
by the State of Gujarat A1nritlal was detained. He challenged his detention by
filing a writ of habeas corpus under Article 32 of the Constitution in this Court   C
(WP 1151182). State of Gujarat, however, revoked the order of detention by
order dated October 18, 1982 but by separate order on the same grounds and
passed on the same day Amritlal was again detained. This led to filing of
second writ of habeas corpus by Amritlal in this Court (WP 1342/82). First
writ petition was disposed of on October 20, 1982 by the following order:-
                                                                                    D
            "Shri Ram Jethmalani, learned counsel for the petitioners states
        that the impugned order of detention in each of these cases has since
        been revoked and the petitioners were thereafter released. The
        learned counsel fmther states that sometime after their release, on the
        day of release itself, each of the petitioners, has been served with a
        fresh order of detention and taken into custody. He proposes to file        E
        fresh petitions under Article 32 of the Constitution. Such petitions, if
        and when filed, may be listed for preliminary hearing. Liberty to
        mention.

            The petitions are, therefore, dismissed as infructuous."
                                                                                    F
      During the pendency of the second writ petition the detenu Amritlal
was ordered to be released on parole by order date November 8, 1982. In the
meanwhile the period of detention of Amritlal was reduced by the detaining
authority up to August 16, 1983 when he was released from detention. Second
writ petition was disposed of on July I 0, 1985 by the following order:-
                                                                                    G
            "In so far as these cases are concerned, the period during which
        the petitioners were on parole shall be taken into account while
        calculating the total period of detention. The order of detention was
        passed more than two and half years ago.

           The writ petitions will stand disposed of in terms of this- 0rder."      H
    68                    SUPREME COURT REPORTS                     [ 1998] 3 S.C.R.

A         On October 10, 1985 Competent Authority issued notice under Section
    6 of the SAFEMA to the respondents in Cr!. As. 2194 and 574194. That was
    challenged by filing a writ petition in the Gujarat High Court (SCA 5684/85).
    Subsequently, however, the grounds on which notice of forfeiture under
    Section 6 of SAFEMA was issued were revised and other notice under
B   Section 6 was issued. That led to filing of another writ petition in the Gujarat
    High Court (S. Cr/. A. 49919 I). When notice under Section 8 of SAFEMA was
    issued on July 28, 1991 yet another writ petition (SCA 5900/91) was filed.
    Since the very foundation of action under SAFEMA was the order of detention
    passed against Amritlal under COFEPOSA, that very orders were challenged
C in these writ petitions. By the impugned judgment dated April 29, 1993 SCA
    5684/85 was allowed to be withdrawn and S.Crl.A. 499/91 and SCA 5900191
    were allowed. It was held that the order of detention of Amritla! was illegal
    and the proceedings initiated under SAFEMA on the basis of said illegal
    order were quashed.

D          To understand the third appeal (CIVIL APPEAL NO. 1487/94) we may
    refer to some of the facts. Search and seizure operations were conducted at
    the premises of Amritlal by the authorities under the Income-tax Act, 1961 on
    December 24, I 981, which led to seizure of 1465.20 I kgs. of silver. Out of that
    Mis Agra Bullion Company claimed ownership of 301.203 kgs. of silver..·
E   Amritlal approached the Settlement Commissioner under the Income-tax Act
    on December 7, 1984 and the proceedings were admitted by the Settlement
    Commission. The Settlement Commissioner, it would appear, passed orders in
    favour of Amritlal and Agra Bullion Company for releasing the seized silver
    to them. By letter dated October 21, I 991 the Competent Authority requested
    the Commissioner oflncome-tax, Gujarat-I not to re.lease the silver to Amritlal
F   and Agra Bullion Company until the proceedings under SAFEMA, which had
    been initiated in the meanwhile, were concluded. Commissioner of Income-tax,
    Gujarat-I by his letter dated November 4, 1991 expressed his inability to
    accede to the request of the Competent Authority and said it was not possible
    to hold back the silver ordered to be released to Amritlal and Agra Bullion
G   Company by the Settlement Commission. This prompted the Competent
    Authority to file writ petition (SCA 309/92) in the Gujarat High Court challenging
    the order of Commissioner of Income-tax, Gujarat-I which had been
    communicated to the Competent Authority by letter dated November 4, 1991.
    This SCA 309192 subsequently came to be unconditionally withdrawn on                 A'
    April 8, 1991. Having thus withdrawn SCA 309/92 the Competent Authority,
H   it is stated that under legal advice, filed another writ petition (SCA 7623/92)
        COMPETENT AUTHORITY v. A.C.JAIN [D.P. WADHWA, J.]                   69
 practically claiming the same reliefs which it had prayed earlier in SCA 309/    A
 92. The High Court was called upon to decide the validity and legality of the
 order passed by the Settlement Commission under the Income-tax Act as well
 as that contained in the letter dated November 4, 1991 of the Commissioner
 of Income-tax, Gujarat-I. By impugned judgment dated June 23, 1993, SCA
 7623/92 was dismissed by the High Court holding the same infructuous as          B
 proceedings under SAFEMA had been quashed against Amritlal and others.
 High Court also did not go into the question whether second writ petition by
 the Competent Authority was maintainable after the first having been
 withdrawn when relief claimed in both the writ petitions was practically the
 same. High Court took notice of decision dated April 29, 1993 of another
  Division Bench where it was held that detention of Amritlal was illegal and     C
  since the very foundation for initiation of proceedings under SAFEMA was
  knocked out the proceedings under SAFEMA had come to an end and there
  was nothing further that was required in SCA 7623/92 to be considered which
  had thus become infructuous. Aggrieved by the judgment dated June 23, 1993
. (in SCA 7623/92) Competent Authority has filed appeal in this Court (CIVIL      D
  APPEAL NO. 1487/84).

        We may also note that the High Court in its judgment dated. April 29,
 1993 had held that the order of detention of Amritlal was bad on two counts,
 viz., (I) that second order of detention on the same grounds cou Id not be
 passed and (2) the order of revocation of the first detention order was itself   E
 null and void. High Court, however, did not consider other challenges to the
 validity of detention order.


      Mr. Goswamy, learned counsel appearing for the Competent Authority,
 submitted that the Division Bench in SCA 7623/92 did not go into the merits      F
of the controversy and had solely relied on a decision of this Court in Union
of India v. Haji Mastan Mirza, AIR (1984) SC 681, which was held not to be
good law in the 9 Judges Bench decision of this Court in Attorney General
of India and Ors. v. Amratla/ Prajivandas and Ors., [1994] 5 SCC 54. Mr.
Goswamy did not refer to the decision of the Gujarat High Court dated April       G
29, 1993 which was the subject matter of two other appeals when all the three
appeals were being heard together. He confined his attack to the judgment
of the High Court dated June 23, 1993. However, whatever he said also
touched upon the validity of the order of(he High Court dated April 29, 1993.
Mr. Goswamy said that the order of detention passed in 1982 Was being
challenged in 1991 which he said could not be done in view of the law laid        H
    70                    SUPREME COURT REPORTS                    [ 1998] 3 S.C.R.

A   by this Court in Amratlal Prajivandas case. His submission was that
    proceeding under SAFEMA could not be challenged on the alleged ground             ~
    of detention being illegal unless the detenu chose to question his detention
    before the Court during the period when such order of detention was in force
    or he is unsuccessful in his attack thereon. To support his submission he
B   relied upon detailed observations of this Court in paras 40,41 and 42 of the
    judgment in Amratlal Prajivandas case and particularly to para 56 where this
    Court summarized its decision on various issues raised before it in that case.
     We are concerned with sub-para 3(b) of para 56 which is as under:-

            "(b) An order of detention to which Section 12-A is applicable as well
c           as an order of detention to which Section 12-A was not applicable can
            serve as the foundation, as the basis, for applying SAFEMA to such
            detenu and to his relatives and associates provided such order of
            detention does not attract any of the sub-clauses in the proviso to
            Section 2(2)(b ). If such detenu did not choose to question the said
            detention (either by himself or through his next friend) before the
D           Court during the period when such order of detention was in force,
            • or is unsuccessful in his attack thereon, • he, or his relatives and
            associates cannot attack or question its validity when it is made the
            basis for applying SAFEMA to him or to his relatives or associates." .

E         None of the appellants questioned validity of the order of the High
   Court in the judgment dated April 29, 1993 holding that second order of
   detention on the same grounds could not have been passed and on that
   account order of detention was illegal. Their only contention was that the
   order of detention had not been challenged at the appropriate time and that
   the impugned judgment could not be sustained in view of decision of this
F Court in Amritlal Prajivandas 's case. That does not appear to us to be quite       ,,;.   I
   correct. We may at this stage refer to challenges made to the orders of
   detention by Amritlal when the orders of detention were in force. First order
   of detention was itself revoked by the detaining authority. This, therefore,
    ceased to exist. This is apart from the fact that High Court had held that
G revocation was not validly made. Nevertheless the detenu had been released.
    Second order of detention was challenged on various grounds but this Court
    again did not go into the validity of the order of detention. If Amritlal had
    not challenged his order of detention during the period the orders of detention
  . were in force Mr. Goswamy would have been right but, unfortunately, for him
    that is not ·SO. There were challenges to both the orders of detention. True,
H it is not enough that there is a mere challenge and that challenge has to be
            COMPETENT AUTHORITY v. A.C.JAIN [D.P. WADHWA, J.)                 71
     upheld or negatived by the Court When there is challenge to the legality of A
     detention in writ of habeas corpus the challenge is in effect to the legality
     and validity of the grounds on which the order of detention is made. It is not
     that to challenge the legality and validity of the grounds on which order of
     detention is passed the detenu has to file a separate writ petition seeking a
     writ of certiorari. Once the detenu is released during pendency of his writ of B
     habeas corpus by the detaining authority it cannot always be said that writ
     petition had become infructuous and that the grounds on which the order of
     detention become invalid. But then if the Court refuses or itself does not go
     into the merit of controversy in writ of habeas corpus when detenu is released
     the detenu on that account cannot be made to suffer holding that he did not
     successfully challenge his order of detention. That is exactly what has C
     happe~ed in this case. Writ petition 1342/92 came to be disposed of an July
      10, 1985. This writ petition along with others was being heard together. This
     Court did not go into the question of validity of the order of detention but
     disposed of the matter on account of the fact that detenu had already been
     released from his detention. We, therefore, cannot say that challenge to the
     order of detention by Amritlal was not unsuccessful and that he or his D
     relatives or his associates were in any way debarred from challenging the
-<   order of detention subsequently when notices under SAFEMA were issued
     to them.

          Accordingly, we do not find any merit in these appeals. These are        E
     dismissed.

     N.J.                                                   Appeals dismissed.