# DROPTI DEVI & ANR v. UNION OF INDIA & ORS

- **Citation:** [2012] 6 S.C.R. 307
- **Court:** Supreme Court of India
- **Decided:** 2012-07-02
- **Bench:** R.M. Lodha, H.L. Gokhale
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/dropti-devi-anr-v-union-of-india-ors-28183
- **Pages:** 49

## Headnote

A
B
Conservation of Foreign Exchange and Prevention of
Smuggling Activities Act, 1974 - s. 3(1) - Constitutional
validity of, to the extent it empowers the competent Authority C
to make an order of detention against any person with a view
to prevent him from acting in any manner P.rejudicial to the
conservation or augmentation of foreign exchange - Held: If
the activity of any person is prejudicial to the conservation or
augmentation of foreign exchange, the authority is o
empowered to make a detention order against such person
and the Act does not contemplate that such activity should
be an offence - The whole intent and idea behind the Act is
to prevent violation of foreign exchange regulations or
smuggling activities having serious and deleterious effect on
E
the national economy - There is no constitutional mandate
that preventive detention cannot exist for an act where such
F
act is not a criminal offence and does not provide for
punishment - An act may not be declared as an offence
under law but still for such an act, which is an illegal activity,
the law can provide for preventive detention if such act is
prejudicial to the State security - Essential concept of
preventive detention is not to punish a person for what he has
done but to prevent him from doing an illegal activity
prejudicial to the security of the State -
Thus, the
constitutional validity of impugned part of s. 3(1) upheld.
G
Detention order was passed in respect of second
petitioner by the Joint Secretary to the Government of
India, specially empowered under Section 3(1) of the
307
H
308
SUPREME COURT REPORTS
[2012] 6 S.C.R.
A Conservation of Foreign Exchange and Prevention of
Smuggling Activities Act, 1974 (as amended), for
indulging in hawala activities. The first petitioner (mother
of detenue) filed a writ petition before the High Court
challenging the detention order. The Division Bench of
B the High Court by an interim order directed that the
detenue would not be arrested till the next date of hearing
and the said order was later made absolute. Thereafter,
the Division Bench of the High Court dismissed the writ
petition holding that if the activity of any person was
c prejudicial to the conservation or augmentation of foreign
exchange, the authorities were empowered to make a
detention order against such person. Aggrieved, the
petitioners filed Special Leave Petition. During the
pendency, the petitioners filed the instant writ petition.
0 Thereafter, the writ petition was detagged from special
leave peti"tion. Thus, the instant writ petition.
The petitioners challenged the constitutional validity
of COFEPOSA on the ground that on repeal of Foreign
Exchange Regulation Act, 1973 and enactment of Foreign
E Exchange Management Act, 1999 (did not regard its
violation of criminal offence) an act where no punitive
detention (arrest and prosecution) is even contemplated
or provided under law, such an act cannot be made the
basis for preventive detention and any law declaring it to
F be prejudicial to the interest of the State so as to invoke
the power of preventive detention is violative of Articles
14, 19 and 21 of the Constitution and must be struck
down.
G
Dismissing the writ petition and the criminal
miscellaneous application, the Court
H
HELD: 1.1. The importance of foreign exchange in the
development of a country needs no emphasis. The
Foreign Exchange Management Act, 1999 regulates the
DROPTI DEVI & ANR. v. UNION OF INDIA & ORS.
309
foreign exchange. The conservation and augmentation of
A
foreign exchange continues to be its important theme.
Although contraventioh of its provisions is not regarded
B
as a criminal offence, yet it is an illegal activity
jeopardizing the very economic fabric of the country. For
violation of foreign exchange regulations, penalty can be
levied and its non-compliance results in civil
imprisonment of the defaulter. The whole intent and idea
behind Conservation of Foreign Exchange and
Prevention of Smuggling Activities Act,

## Text

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[2012] 6 S.C.R. 307
DROPTI DEVI & ANR.
.v.
UNION OF INDIA & ORS.
(Writ Petition (Crl.) No. 65 of 2010)
JULY 2, 2012
[R.M. LODHA AND H.L. GOKHALE, JJ.]
A
B
Conservation of Foreign Exchange and Prevention of
Smuggling Activities Act, 1974 - s. 3(1) - Constitutional
validity of, to the extent it empowers the competent Authority C
to make an order of detention against any person with a view
to prevent him from acting in any manner P.rejudicial to the
conservation or augmentation of foreign exchange - Held: If
the activity of any person is prejudicial to the conservation or
augmentation of foreign exchange, the authority is o
empowered to make a detention order against such person
and the Act does not contemplate that such activity should
be an offence - The whole intent and idea behind the Act is
to prevent violation of foreign exchange regulations or
smuggling activities having serious and deleterious effect on
E
the national economy - There is no constitutional mandate
that preventive detention cannot exist for an act where such
F
act is not a criminal offence and does not provide for
punishment - An act may not be declared as an offence
under law but still for such an act, which is an illegal activity,
the law can provide for preventive detention if such act is
prejudicial to the State security - Essential concept of
preventive detention is not to punish a person for what he has
done but to prevent him from doing an illegal activity
prejudicial to the security of the State -
Thus, the
constitutional validity of impugned part of s. 3(1) upheld.
G
Detention order was passed in respect of second
petitioner by the Joint Secretary to the Government of
India, specially empowered under Section 3(1) of the
307
H
308
SUPREME COURT REPORTS
[2012] 6 S.C.R.
A Conservation of Foreign Exchange and Prevention of
Smuggling Activities Act, 1974 (as amended), for
indulging in hawala activities. The first petitioner (mother
of detenue) filed a writ petition before the High Court
challenging the detention order. The Division Bench of
B the High Court by an interim order directed that the
detenue would not be arrested till the next date of hearing
and the said order was later made absolute. Thereafter,
the Division Bench of the High Court dismissed the writ
petition holding that if the activity of any person was
c prejudicial to the conservation or augmentation of foreign
exchange, the authorities were empowered to make a
detention order against such person. Aggrieved, the
petitioners filed Special Leave Petition. During the
pendency, the petitioners filed the instant writ petition.
0 Thereafter, the writ petition was detagged from special
leave peti"tion. Thus, the instant writ petition.
The petitioners challenged the constitutional validity
of COFEPOSA on the ground that on repeal of Foreign
Exchange Regulation Act, 1973 and enactment of Foreign
E Exchange Management Act, 1999 (did not regard its
violation of criminal offence) an act where no punitive
detention (arrest and prosecution) is even contemplated
or provided under law, such an act cannot be made the
basis for preventive detention and any law declaring it to
F be prejudicial to the interest of the State so as to invoke
the power of preventive detention is violative of Articles
14, 19 and 21 of the Constitution and must be struck
down.
G
Dismissing the writ petition and the criminal
miscellaneous application, the Court
H
HELD: 1.1. The importance of foreign exchange in the
development of a country needs no emphasis. The
Foreign Exchange Management Act, 1999 regulates the
DROPTI DEVI & ANR. v. UNION OF INDIA & ORS.
309
foreign exchange. The conservation and augmentation of
A
foreign exchange continues to be its important theme.
Although contraventioh of its provisions is not regarded
B
as a criminal offence, yet it is an illegal activity
jeopardizing the very economic fabric of the country. For
violation of foreign exchange regulations, penalty can be
levied and its non-compliance results in civil
imprisonment of the defaulter. The whole intent and idea
behind Conservation of Foreign Exchange and
Prevention of Smuggling Activities Act, 1974 is to prevent
violation of foreign exchange regulations or smuggling c
activities which have serious and deleterious effect on
the national economy. In today's world the physical and
geographical invasion may be difficult but it is easy to
imperil the security of a State by disturbing its economy.
The smugglers and foreign exchange manipulators by 0
flouting the regulations and restrictions imposed by
FEMA-by their. misdeeds and misdemeanours-directly
affect the national economy and thereby endanger the
security of the country. In this situation, the distinction
between acts where punishments are provided and the
acts where arrest and prosecution are not contemplated
pales into insignificance. It must be remembered that the
person who violates foreign exchange regulations or
indulges in smuggling activities succeeds in frustrating
E
the development and growth of the country. His acts and
omissions seriously affect national economy. Therefore, F
the relevance of provision for preventative detention of
the anti-social elements indulging in smuggling and
violation and manipulation of foreign exchange in
COFEPOSA continues even after repeal of Foreign
Exchange Regulation Act, 1973. [Para 58] [351-E-H; 352- · G
A-CJ
1.2. The menace of smuggling and foreign exchange
violations has to be curbed. Notwithstanding the many
disadvantages of preventive detention, particularly in a
H
310
SUPREME COURT REPORTS
[2012] 6 S.C.R.
A country like ours where right to personal liberty has been
placed on a very high pedestal, the Constitution has
adopted preventive detention to prevent the greater evil
of elements imperiling the security, the safety of State
and the welfare of the Nation. [Para 59] [352-D-E]
B
1.3.
On
the
touchstone
of constitutional
jurisprudence, as reflected by Article 22 read with Articles
14, 19 and 21, the impugned provision is not rendered
unconstitutional. There is no constitutional mandate that
C preventive detention cannot exist for an act where such
act is not a criminal offence and does not provide for
punishment. An act may not be declared as an offence
under law but still for such an act, which is an illegal
activity, the law can provide for preventive ~etention if
such act is prejudicial to the state security. After all, the
D essential concept of preventive detention is not to punish
a person for what he has done but to prevent hitn from
doing an illegal activity prejudicial to the security of the
State. Strictly speaking, preventive detention is not
regulation (many people call it that way), it is something
E much more serious as it takes away the liberty of a
person but it is accepted as a necessary evil to prevent
danger to the community. The law of preventative
detention arms the State with precautionary action and
must be seen as such. The safeguards that the
F Constitution and preventive detention laws provide must
be strictly insisted upon whenever the Court is called
upon to examine the legality and validity of an order of
preventive detention. If the activity of any person is
prejudicial to the conservation or augmentation of foreign
G exchange, the authority is empowered to make a
detention order against such person and the Act does not
contemplate that such activity should be an offence.
[Paras 60, 61] [352-F-H; 353-A-B, F]
Union of India and Anr. vs. Venkateshan S. and Anr.
H (2002) 5 sec 285: 2002 (3) SCR 268 - relied on.
DROPTI DEVI & ANR. v. UNION OF INDIA & ORS.
311
1.4. It is too naive to suggest that in today's economic A
scenario of abundant foreign exchange and booming
foreign trade, contravention of foreign exchange laws
does not pose any threat to the national interest for which
a person has to be detained. Thus, there is no merit in
challenge to the constitutional validity of impugned part B
of Section 3(1) of COFEPOSA. [Paras 62 and 63] [353-G-~
H; 354-A]
.
1.5 The prayer made in the criminal miscellaneous
application by the petitioners to quash the detention order C
cannot be granted. While dismissing the special leave
petition as withdrawn, this Court granted liberty to the
petitioners to avail such remedy as may be available in
law in challenging the order of detention and the grounds
on which detention order has been passed after its
execution. The order of detention has not been executed D
so far in view of the contumacious conduct of the second
petitioner. He is alleged to have absconded initially. Then
on December 14, 2009 High Court, by an interim order
directed that the detenue shall not be arrested till the next
date of hearing, i.e. December 22, 2009. The said interim E
order was continued until the disposal of writ petition by
the High Court and thereafter, that interim order was
continued by this Court in the special leave petition. In
the writ petition also an interim order has been in
operation. In view of the order dated July 13, 2010 passed F
by this Court, the petitioners cannot be permitted to
challenge the order of detention until its execution. Thus,
the leave to make additional prayer for quashing the
detention order by means of criminal miscellaneous
application is rejected. However, it is clarified that after the G
execution of the detention order, the petitioners would be
at liberty to challenge the detention order in accordance
with law. [Paras 65, 66 and 67] [354-C, G-H; 355-A-D]
1.6. Since the criminal miscellaneous application is
rejected, the argument that the impugned order of H
312
SUPREME COURT REPORTS
[2012] 6 S.C.R.
A
detention was passed way back on September 23, 2009;
the impugned order was preventive in nature and the
maximum period of detention as per law is one year,
which would have lapsed by now and, therefore, no
purpose for the execution of the detention order survives,
B
is rejected. The detention order could not be executed
because of the contumacious conduct of the second
petitioner and, therefore, he cannot take advantage of his
own wrong. [Para 68) [355-E-F]
Motor General Traders and Anr. v. State of Andhra
C Pradesh and Ors. (1984) 1 SCC 222: 1984 (1) SCR 594;
John Vallamattom and another v. Union of India (2003) 6 sec
611: 2003 (1) Suppl. SCR 638; Satyawati Sharma (Dead) by
LRs. v. Union of India and Anr. (2008) 5 SCC 287: 2008 (6)
SCR 566; l.R. Coelho (Dead) by LRs. v. State ofT.N. (2007) 2
D SCC 1: 2007 (1) SCR 706; State of Bombay v. Atma Ram
Sridhar Vaidya 1951 SCR 167; Bhut Nath Mete v. The State
of West Bengal (1974) 1 SCC 645: 1974 (3) SCR 315;
Haradhan Saha v. The State of West Bengal and Ors. (1975)
3 SCC 198: 1975 (1) SCR 778; Kanchanlal Maneklal Chokshi
E
v. State of Gujarat and Ors. (1979) 4 SCC 14: 1980 (1) SCR
54; Smt. Hemlata Kanti/al Shah v. State of Maharashtra and
Anr. (1981) 4 SCC 647: 1982 (1) SCR 1028; State of Punjab
v. Sukhpal Singh (1990) 1 SCC 35: 1989 (1) Suppl. SCR
420; Rekha v. State of Tamil Nadu Through Secretary to
F
Government and Anr.(2011) 5 SCC 244: 2011 (4) SCR 740;;
Attorney General for India and Ors. v. Amratla/ Prajivandas
and Ors. (1994) 5 sec 54: 1994 (1) Suppl. SCR 1; A.K.
Gopa/an v. The State of Madras 1950 SCR 88; Khudiram Das
v. The State of West Bengal and Ors. (1975) 2 SCC 81:1975
G ( 2 ) SCR 832; Additional Secretary to the Government of India
and Ors. v. Smt. Atka Subhash Gadia and Anr. 1992 Suppl
(1) SCC 496: 1990 (3) Suppl. SCR 583; Suni/ Fulchand
Shah v. Union of India and Ors. (2000) 3 SCC 409: 2000 (1)
SCR 945; R.K. Garg v. Union of India and Ors. (1981) 4 SCC
H 675:
1982
(1)
SCR 947;
Kesavananda
Bharati
DROPTI DEVI & ANR. v. UNION OF INDIA & ORS.
313
Sripadagalvaru v. State of Kera/a and Anr. (1973) 4 SCC 225;
A
Indira Nehru Gandhi v. Shri Raj Narain (1975) Supp SCC 1:
Minerva Mills Limited and Ors. v. Union of India and Ors.
(1980) 3 SCC 625: 1981 (1) SCR 206; Waman Rao and Ors.
v. Union of India and Ors. (1981) 2 SCC 362: 1981 (2) SCR
1; Maharao Sahib Shri Bhim Singhji v. Union of India and 8
Ors. (1981) 1 SCC 166 - referred to.
United States v. Anthony Salemo and Vincent Cafaro 481
US 739- referred to.
"The Limits of Preventive Detention" by Rinat Kitai c
Sangero 2009 p 904-932 - referred to.
Case Law Reference:
1984 (1) SCR 594
Referred to.
Para 16
D
2003 (1) Suppl. SCR 638
Referred to.
Para 16
2008 (6) SCR 566
Referred to.
Para 16
2007 (1) SCR 706
Referred to.
Para 17
1951 SCR 167
Referred to.
Para 18
E1974 (3) SCR 315
Referred to.
Para 18
1975 (1) SCR 778
Referred to.
Para 18
1980 (1) SCR 54
Referred to.
Para 18
F
1982 (1) SCR 1028
Referred to.
Para 18
1989 (1) Suppl. SCR 420
Referred to.
Para 18
2011 (4) SCR 740
Referred to.
Para 18
G
481 us 739
Referred to.
Para 21
1994 (1) Suppl. SCR 1
Referred to.
Para 24
1950 SCR 88
Referred to.
Para 37
H
A
8
c
D
E
314
SUPREME COURT REPORTS
[2012] 6 S.C.R.
1975 (2) SCR 832
Referred to.
Para 40
1990 (3) Suppl. SCR 583
Referred to.
Para 43
2000 (1) SCR 945
Referred to.
Para 45
1982 (1) SCR 947
Referred to.
Para 49
1973 (4) sec 225
Referred to.
Para 51
(1975) Supp sec 1
Referred to.
Para 51
1981 (1) SCR 206
Referred to.
Para 51
1981 (2) SCR 1
Referred to.
Para 51
(1981) 1 sec 166
Referred to.
Para 51
2002 (3) SCR 268
Relied on.
Para 61
CRIMINAL ORIGINAL JURSIDICTION : Writ Petition (Crl)
No. 65 of 2010.
Under Article 32 of the Constitution of India.
Vikram Chaudhari, Nikhil Jain, Preeti Singh, Gagan Deep
Sharma for the Petitioners.
P.P. Malhotra, ASG, R.P. Bhatt, Ranjana Narayan, Wasim
Quadri, Arvind K. Sharma for the Respondents.
F
The Judgment of the Court was delivered by
R.M. LODHA, J. 1. The central issue in this petition under
Article 32 of the Constitution concerns constitutional validity of
Section 3(1) of Conservation of Foreign Exchange and
G
Prevention of Smuggling Activities Act, 1974 (for short,
'COFEPOSA') to the extent it empowers the competent
authority to make an order of detention against any person 'with
a view to preventing him from acting in any manner prejudicial
to the conservation or augmentation of foreign exctiange'.
;
H
2. It is necessary to state few material facts which have
DROPTI DEVI & ANR. v. UNION OF INDIA & ORS.
315
[R.M. LODHA, J.]
given rise to this petition. The first petitioner - Dropti Devi - is A
the mother of second petitioner - Raj Kumar Aggarwal. In
respect of second petitioner an order of detention has been
passed on September 23, 2009 by Smt. Rashada Hussain,
Joint Secretary to the Government of India, specially
empowered under Section 3(1) of the COFEPOSA (as B
amended). The said order reads as follows :
"No. 673/02/2009-Cus. VIII
Government of India
Ministry of Finance
Department of Revenue
Central Economic Intelligence Bureau
COFEPOSA Unit
6th Floor, 'B' Wing, Janpath Bhawan,
Janpath, New Delhi - 110001
c
Dated 23rd September, 2009 D
ORDER
Whereas, I Smt. Rashada Hussain, Joint Secretary
to the Government of India, specially empowered under E
Section 3(1) of the Conservation of Foreign Exchange &
Prevention of Smuggling Activities Act, 1974 (as
amended), am satisfied with respect to the person known
as Shri Raj Kumar Aggarwal@ Munna, Rio SU-184, G.F.
Near Park Citi Hostel Pitampura, New Delhi that with a
view to preventing him from acting in any manner F
prejudicial to the conservation and augmentation of foreign
exchange in future, it is necessary to make the following
order:-
Now, therefore, in exercise of the powers conferred G
by Section 3(1) of the Conservation of Foreign Exchange
and Prevention of Smuggling Activities Act, 1974 (as
amended), I direct that the said Shri Raj Kumar Aggarwal
@ Munna , be detained and kept in custody in the Central
Jail, Tihar, New Delhi.
H
316
A
SUPREME COURT REPORTS
[2012] 6 S.C.R.
Sd/-
(Rasheda Hussain)
Joint Secretary to the Government of India"
3. The above detention order came to be passed in the
backdrop of the following events. On February 17, 2009 the
8
premises of Ambika Electronics situate at 136, MCD Market,
Karol Bagh, New Delhi was raided by the Office of the
Directorate of Enforcement, New Delhi. In the course of search,
Indian currency amounting to Rs. 8.9 lacs (approximately) was
recovered along with some documents. The enforcement
C authorities took into custody the passport of second petitioner
(hereinafter referred to as 'detenue') as well. On that day itself,
i.e. February 17, 2009 Office of the Directorate of Enforcement
also raided the residential premises of detenue's brother Anil
Kumar Aggarwal at Pitam Pura, New Delhi and another
D commercial premises of Ambika Electronics at Beadartpura,
Karol Bagh, New Delhi and M/s. Bhagwati Electronics, 135
Municipal Market, Karol Bagh, New Delhi belonging to one
Kapil Jindal were also raided. The detenue was also taken
away by the officials of the Directorate of Enforcement to their
E
office at Jamnagar House, Akbar Road, New Delhi in the
intervening night of February 17, 2009 and February 18, 2009.
The detenue was interrogated and his statement was recorded.
On February 19, 2009 the detenue retracted from the
statement recorded in the previous night. The detenue was
F
summoned on various occasions but he did not appear before
the authorities on the ground of his illness. On May 15, 2009
the detenue appeared before the authorities and his statement
was recorded on that day and subsequently on May 18, 2009.
May 20, 2009 and May 28, 2009. The evidence gathered in
G the course of searches and the follow up action revealed that
the detenue was indulging in hawala activities, the last of such
activity being on April 24, 2009. Hence, the detention order
which has been quoted above.
4. Initially a writ petition was filed before this Court
H challenging the detention order but that was withdrawn. Tfle first
DROPTI DEVI & ANR. v. UNION OF INDIA & ORS.
317
[R.M. LODHA, J.]
petitioner then filed a writ petition before Delhi High Court being
A
W.P. (Crl.) No. 1787 of 2009 challenging the detention order
dated September 23, 2009.
5. The Division Bench of the Delhi High Court on
December 14, 2009 by an interim order. directed that the
B
detenue - Raj Kumar Aggarwal shall not be arrested till the next
date of hearing, i.e. December 22, 2009.
6. On DE1cember 22, 2009 the Division Bench allowed the
application for impleadment of Raj Kumar Aggarwal as
petitioner no. 2, issued rule and made interim order dated C
December 14, 2009 absolute during the pendency of writ
petition, subject to his joining the investigation as and when
called. The court on that day also issued a direction to the
detenue to remain present in the matter during the course of
hearing.
D
7. The Division Bench completed the hearing on February
4, 2010 and reserved the judgment in the matter. On March 18,
2010, the Division Bench dismissed the writ petition. While
dealing with the effect of Foreign Exchange Management Act,
E
, 1999 (for short, 'FEMA') and the repeal of Foreign Exchange
·' Regulation Act, 1973 (for short, 'FERA') , the Division Bench
relied upon a decision of this Court in Union of India & Anr.
vs. Venkateshan S. and another1 and observed that if the
activity of any person was prejudicial to the conservation or
augmentation of foreign exchange, the authorities were
F
empowered to make a detention order against such person.
8. Not satisfied with the judgment of the Delhi High Court
passed on March 18, 2010, the petitioners filed a special leave
petition before this Court and it was mentioned on April 1, 2010.
G
On that day, the Court directed for listing the matter on April 9,
2010 and in the meanwhile continued the interim order that was
passed by the High Court operative during the pendency of the
writ petition.
1.
(2002) s sec 2as.
H
A
B
c
D
E
F
G
H
318
SUPREME COURT REPORTS
[2012] 6 S.C.R.
9. It may be noted here that while the above special leave
petition was pending, the petitioners preferred the present writ
petition. On May 11, 2010 the Court ordered the writ petition
to be heard along with special leave petition (Crl.) no. 2698 of
2010. On May 13, 2010, the special leave petition and the
present writ petition were listed before the Court. On that day
in the special leave petition following interim order was passed:
"By order dated December 22, 2009, the High Court
directed the Petitioner No. 2 i.e. Mr. Raj Kumar Aggarwal
to join the investigation as and when called. The grievance
made by the respondents is that Mr. Raj Kumar Aggarwal
has failed to join the investigation, which is disputed by Mr.
Soli J. Sorabjee, learned senior counsel for the petitioners.
Mr. Sorabjee further states that Mr. Raj Kumar Aggarwal
will present himself on 19th May, 2010 at 11 A.M. in the
office of the Enforcement Director, Delhi Zonal Office,
Jamnagar House, New Delhi and shall also remain present
before the said officer as and when called along with the
requisite documents. Mr. Raj Kumar Aggarwal is directed
to comply with and act according to the statement made
at the Bar by his learned counsel.
Interim orders shall continue subject to the direction given
above.
In view of the order passed above, learned senior counsel
for the petitioners seeks permission to withdraw .the
application for extension of interim order granted by this
Court on 1.4.2010. The permission, as prayed for, is
granted and application is disposed of accordingly.
On the joint request of the learned counsel of the parties,
the matter is adjourned to 13th July, 201 O."
10. In the writ petition, notice was issued and it was
detagged from special leave petition (Crl.) No. 2698 of 2010.
DROPTI DEVI & ANR. v. UNION OF INDIA & ORS.
319
[R.M. LODHA, J.]
11. On July 13, 2010, the special leave petition was
A
dismissed as withdrawn. The Court passed the following order:
"The Special Leave Petition.is dismissed as withdrawn.
The petitioners are at liberty to avail such remedy as may
be available in law challenging the order of detention and
8
the grounds on which detention order has been passed
after its execution. In which event, the matter shall be
considered on its own merits uninfluenced by the
observations made in the impugned order as well as
dismissal of this petition. The High Court may consider the
C
request of the petitioners/detenue for expeditious disposal
of the writ petitio_n to be filed."
12. We have heard Mr. Vikram Chaudhari, learned counsel
for the petitioners and Mr. P.P. Malhotra, learned Additional
D
Solicitor General for the respondents.
13. The crux of the argument advanced by Mr. Vikram
Chaudhari is this: Articles 14, 19 and 21 of the Constitution do
not contemplate preventive detention for an 'act' where no
punitive detention (arrest and prosecution) is even contemplated
or provided under law. Such an 'act' cannot be made the basis
for a preventive detention and such an 'act' could not be termed
as prejudicial so as to invoke the power of preventive detention
and, therefore, Section 3(1) of COFEPOSA to the extent noted
above is unconstitutional.
E
F
14. Elaborating his arguments, Mr. Vikram Chaudhari
submitted that there were three other Central Preventive Acts
apart from COFEPOSA, namely, (a) National Security Act,
1980, (b) Prevention of Blackmarketing and Maintenance of
G
Supplies of Essential Commodities Act, 1980 and (c)
Prevention of Illicit Traffic in Narcotk Drugs and Psychotropic
Act, 1974. In all these three enactments, there are
corresponding penal provisions in the form of prosecution.
However, in COFEPOSA viz., the power to detain a person to
H\
320
SUPREME COURT REPORTS
[2012] 6 S.C.R.
A prevent him from indulging in any prejudicial activities relating
to conservation or augmentation of foreign exchange is given
although there is no corresponding penal punitive law available.
He referred to various provisions of FEMA, particularly, Chapter
IV that deals with contravention and penalties; Chapter V that ·
B provides for adjudication as well as appeal against the order
of adjudicating authority vide Sections 16 and 17; Chapter VI
that provides for establishment of Directorate of Enforcement;
Section 40 that stipulates that the Central Government may in
any peculiar circumstances suspend either indefinitely or for a
c limited period the operation of all or any of the provisions of
FEMA and Section 49 which provides for repeal of FERA and
sub-section (3) thereof that envisages that no court shall take
cognizance of an offence under the repealed Act and submitted
that there was major shift in the approach of the Legislature
0
inasmuch as foreign exchange violation has been made a civil
compoundable offence only under FEMA.
15. It was argued by learned counsel for the petitioners that
a dichotomy had arisen on repeal of FERA as conviction under
FERA would be no longer a relevant basis for initiation of
E proceedings under the Smugglers and Foreign Exchange
Manipulators (Forfeiture of Property) Act, 1976 (SAFEMA)
whereas on the same set of accusations detention order under
COFEPOSA could be made thereby warranting proceedings
under SAFEMA.
F
16. Relying on the decisions of this Court in Motor General
Traders and another v. State of Andhra Pradesh and others2,
John Vallamattom and another v. Union of lndia 3 and
Satyawati Sharma (Dead) by LRs. v. Union of India and
G another", learned counsel for the petitioners contended that
impugned portion of Section 3 might not have been
unconstitutional at the initial stage when it was enacted but by
2.
(1984) 1 sec 222.
3.
(2003) 6 sec 611.
H 4.
c2008) 5 sec 287.
DROPTI DEVI & ANR. v. UNION OF INDIA & ORS.
321
[R.M. LODHA, J.]
reason of the new legal regime articulated in FEMA and
A
replacement of FERA by FEMA, the said provision has
become unconstitutional in the changed situation.
17. Learned counsel for the petitioners submitted that
though Article 31 B of the Constitution provided protection to the
8
laws added to the Ninth Schedule by amendments but, as
exposited by this Court in /.R. Coelho (Dead) by LRs. v. State
of T.N. 5 , constitutionality of such laws can be examined and if
in judicial review, it is found that any of such laws abrogates or
abridges rights guaranteed by Part-Ill of the Constitution, the
Court can invalidate such law. According to him, since the C
impugned provision violates fundamental rights reflected in
Article 21 read with Articles 14 and 19, despite protection
granted to COFEPOSA being part of Ninth Schedule, in the
judicial review the Court has power to declare the said law
unconstitutional.
D
18. Mr. Vikram Chaudhari contended that preventive
detention was aimed at preventing a person from committing
prejudicial act which is necessarily an offence capable of inviting
penal consequences. If such prejudicial act was not E
prosecutable in law and such act has not been made part of
criminal penal law, preventive detention of a person from
committing the prejudicial act which is not an offence is
impermissible. In this regard, he sought to draw support from
decisions of this Court in State of Bombay v. Atma Ram
F
Sridhar Vaidya 6; Bhut Nath Mete v. The State of West
Bengaf; Haradhan Saha v. The State of West Bengal and
others6; Kanchanlal Maneklal Chokshi v. State of Gujarat and
others9; Smt. Hemlata Kantilal Shah. v. State of Maharashtra
5.
(2001) 2 sec 1.
G
6.
1951 SCR 167.
7.
(1974) 1 sec 645.
8.
(1975) 3 SC 198.
9.
(1979) sec 14
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SUPREME COURT REPORTS
[2012] 6 S.C.R.
A
and another10 ; State of Punjab v. Sukhpal Singh 11 and Rekha
v. State of Tamil Nadu Through Secretary to Government and
Another12•
19. As regards the decision of this Court in Venkateshan
S.1, learned counsel submitted that in that case the events
8
which led to the detention of the detenue therein had taken
place when FERA was in place and FEMA had not come into
force and in view of the sunset clause the prosecution for
violation of FERA could continue for next two years and,
therefore, the said decision was clearly distinguishable. He
C further submitted that constitutionality of Conservation of
Foreign Exchange (COFE) part of COFEPOSA was not in
issue. The Court proceeded on the assumption that the past
act which was made basis for preventive detention invited
punishment by way of prosecution and decided the matter
D accordingly. He thus, argued that Venkateshan S.1 did not
come in theway of the petitioners in assailing the constitutional
validity of part of Section 3 of COFEPOSA.
20. Learneq counsel vehemently contended that since
E
FEMA did not regard its violation a criminal offence, the whole
idea, spirit, intent and object behind the enactment of
preventive detention had ceased to exist and the continuation
of such provision was violative of Article 21 read with Articles
14 and 19 of the Constitution. He, thus, submitted that the
F
provision for preventive detention under COFEPOSA was
wholly unsustainable and untenable.
21. Mr. Vikram Chaudhari in his written submissions has
also dealt with legal position with regard to preventive detention
existing in USA, England, Australia and Germany. He referred
G to the excerpts from "The Limits of Preventive Detention" by
Rinat Kitai - Sangero 2009 (Pgs. 904-932) and submitted that
10. (1981) 4 sec 647.
11. (1990) 1 sec 35.
H 12. c2011) s sec 244.
DROPTI DEVI & ANR. v. UNION OF INDIA & ORS.
323
[R.M. LODHA, J.]
in USA and in England law regarding preventive detention does A
not exist except during war time. He, however, did submit that
in United States v. Anthony Salemo and Vincent Cafaro13 the
constitutionality of pre-trial detention on the ground of
dangerousness under the Bail Reform Act of 1984 was upheld
and after Anthony Salemo and Vincent Cafaro13 preventive
B
detention laws were adopted in number of U.S. States but the
said procedure has been used sparingly and in U.K. under the
Prevention of Terrorism (Temporary Provisions) Act, 1984 a
person may be detained upto 7 days. In Australia preventive
detention orders and prohibited conduct orders are two c
mechanisms available under criminal law for addressing
terrorism concerns and dangerous sex offenders. The
preventive detention order permits detention of a person for a
short period of time (upto 48 hours) subject to certain
procedural rights. In Germany in 1998 la~ for the prevention of o
sexual offences and other dangerous criminal acts has been
enacted.
22. Mr. P. P. Malhotra, learned Additional Solicitor General
stoutly defended the constitutional validity of the part of Section
3(1) of COFEPOSA put in issue in the writ petition. He. E
extensively referred to the pr0visions of FERA and FEMA and
the preamble of COFEPOSA and submitted that dealings in
foreign exchange by a person other than authorised persons/
dealers have serious and deleterious consequences. The
foreign exchange is the most precious reserve for national
F
economy and necessary for the economic security of the State
and illegal and/or unaccounted transactions through hawala have
vide ramifications and are definitely prejudicial to the
conservation and augmentation of foreign exchange and since
the need for conservation and augmentation of foreign G
exchange resources of the country continue to exist, preventive
mechanism laid .down in COFEPOSA warrants its continuance
and there is nothing unconstitutional about it.
13. 481 us 739.
H
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SUPREME COURT REPORTS
[2012] 6 S.C.R.
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23. Learned Additional Solicitor General submitted that the
legislative power of the Parliament to enact criminal laws and
preventive detention laws was traceable from two distinct
Entries appearing in Seventh Schedule (List Ill) of the
Constitution, i.e., Entry nos. 1 and 3 respectively. Parliament
B
is, thus, fully competent to enact a law of either type (criminal
or preventive detention) or both the types (criminal laws and
preventive detention) to deal with any prejudicial activity. He
submitted that there was no constitutional prescription that the
Legislature must enact a criminal law as well while making a
c detention law to curb any prejudicial activity. It is not imperative
that detention law should co-exist with a criminal law or vice
versa.
24. Mr. P.P. Malhotra submitted that the constitutional
validity of COFEPOSA had already been upheld by a 9-Judge
D
Bench of this Court in Attorney General for India and others
v. Amrat/a/ Prajivandas and others14. In Amratlal Prajivandas14
this Court has held that Parliament was competent to enact
COFEPOSA. Once constitutional validity of COFEPOSA has
been upheld by a 9-Judge Bench of this Court, learned
E
Additional Solicitor General submitted that constitutionality of
Section 3 was not open to challenge again. He submitted that
in l.R. Coelho5 a 9-Judge Bench of this Court had observed
that if the validity of a Ninth Schedule law had already been
upheld by this Court, it would not be open to challenge such
F
law again on.the principles laid down in the case (i.e., l.R.
Coe/ho5 ). However, if a law held to be violative of any rights in
Part-Ill was subsequently incorporated in the Ninth Schedule
after April 24, 1973, such a violation/infraction would be open
to challenge on the ground that it was destructive of the basic
G
structure of the Constitution. The present case is not covered
by the exception carved out in l.R. Coelho5 and moreover, the
petitioners have miserably failed to make out a case as to how
COFEPOSA or impugned provision was destructive of the
basic structure of the Constitution.
H
14. (1994) 5 sec 54.
DROPTI DEVI & ANR. v. UNION OF INDIA & ORS.
325
[R.M. LODHA, J.]
25. In support of his submissions, learned Additional
Solicitor General heavily relied upon the observations made by
this Court in Venkateshan S. 1•
26. Mr. P.P. Malhotra submitted that the objects and
reasons of COFEPOSA clearly showed that the purpose of the
enactment was to prevent violation of foreign exchange
regulation and smuggling activities which have increasingly
deleterious serious effect on the security of the State. Section
3 of COFEPOSA has not been amended or repealed by
Parliament. Section 3(1) of COFEPOSA that authorises
detention with a view to prevent activities prejudicial to the
conservation or augmentation of foreign exchange is valid from
constitutional angle.
27. On 26th day of November, 1949, People of India .
resolved to constitute India into Sovereign Democratic Republic
and in the Constituent Assembly adopted, enacted and gave
to themselves an instrument of social contract - the Constitution
of India - which became effective from January 26, 1950. The
Constitution of India is fountainhead of all laws and provides
the machinery by which laws are made. Any statutory law, in
order to be valid, must be in conformity with the constitutional
requirements. There cannot be any departure or deviation from
this principle. For the purposes of the present matter, it is not
necessary to deal with the diverse features of the Constitution
elaborately, suffice, however, to state that Part Ill that provides
for fundamental rights is the most important chapter insofar as
individuals and citizens are concerned.
28. Article 12 for the purpose~ of Part Ill defines 'the State'.
29. Article 13(2) mandates that the State shall not make
any law which takes away or abridges the rights conferred by
Part Ill and any law made in contravention of this provision shall
be void to the extent of the contravention.
30. Article 14 states that the State shall not deny to any
A
B
c
D
E
F
G
H
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A person equality before the law or the equal protection of the
laws within the territory of India.
31. Article 19 protects certain rights of the citizens. It
provides that all citizens shall have the right - (a) to freedom
8 of speech and expression; (b) to assemble peaceably and
without arms; (c) to form associations or unions or co-operative
societies; (d) to move freely throughout the territory of India; (e)
to reside and settle in any part of the territory of India and (g)
to practice any profession or to carry on any occupation, trade
or business. The above clauses (a), (b), (c), (d), (e) and (g) are,
C however, subject to restrictions set out in Article 19(2)(3)(4)(5)
and (6) respectively.
32. Article 21, which is the most sacrosanct and precious
of all other Articles insofar as an individual is concerned,
D guarantees protection of life and personal liberty. It mandates
that no person shall be deprived of his life or personal liberty,
except according to procedure established by law.
33. Article 31 B saves challenge to the Acts and
E Regulations specified in the Ninth Schedule on the ground of
inconsistency with, taking away or abridging any fundamental
right. It was brought into statute by the Constitution (First
Amendment) Act, 1951. It reads as follows:
"318. Validation of certain Acts and Regu/ations.-
F
Without prejudice to the generality of the provisions
contained in article 31 A, none of the Acts and Regulations
specified in the Ninth Schedule nor any of the provisions
thereof shall be deemed to be void, or ever to have
become void, on the ground that such Act, Regulation or
G
provision is inconsistent with, or takes way or abridges any
of the rights conferred by, any provisions of this Part, and
notwithstanding any judgment, decree or order of any court
of tribunal to the contrary, each of the said Acts and
Regulations shall, subject to the power of any competent
H
Legislature to repeal or amend it, continue in force."
DROPTI DEVI & ANR. v. UNION OF INDIA & ORS.
327
[R.M. LODHA, J.]
34. COFEPOSA is specified in the Ninth Schedule at Item
A
No. 104. The amendment in COFEPOSA therein by Central Act
20 of 1976 is specified at Item No. 129 in the Ninth Schedule.
35. Article 22 is in two parts. First part that comprises of
clauses 1 and 2 is applicable to those persons arrested or 8
detained under a law otherwise than a preventive detention law.
The second part that comprises of clauses 4 to 7 applies to
persons arrested or detained under the preventive detention
law.
·
36. In the backdrop of the above constitutional provisions C
and scheme, the issue with regard to constitutional validity of
Section 3(1) of COFEPOSA to the extent it empowers the
competent authority to make an order of detention against any
person with a view to preventing him from acting in any manner
prejudicial to the conservation and augmentation of foreign D
exchange has fallen for consideration.
37. There appears to be consistent line of cases of this
Court beginning from 1950 itself which says that preventive
detention can constitutionally operate. In A.K. Gopalan v. The
E
State of Madras15, which was decided by this Court within few
months of coming into force of our Constitution, the Court
upheld the constitutional validity of Section 3(1) of the
Preventive Detention Act, 1950 on the touchstone of Articles
13, 14, 19, 21 and 22 of the Constitution.
F
38. In Atma Ram Sridhar Vaidya6 , Chief Justice Hari Lal
Kania said that preventive detention was not by itself
considered an infringement of any of the fundamental rights
mentioned in Part Ill of the Constitution. He, however,clarified
that this was, of course, subject to the limitations prescribed in G
clause (5) of Article 22. Echoing the same sentiment, Patanjali
Sastri, J. stated, "the Constitution itself has authorised
preventive detention and denied to the subject the right of trial
before a court of law and of consulting or being defended by a
15. 1950 SCR 88.
H
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[2012] 6 S.C.R.
A
legal practitioner of his choice, providing only certain procedural
safeguards, the Court could do no more than construe the words
used in that behalf in their natural sense consistently with the
nature, purpose and scheme of the measure thus authorised,
to ascertain what powers are still left to the court in the matter".
B
39. A Constitution Bench of this Court in Haradhan Saha8
was concerned with constitutional validity of Maintenance of
Internal Security Act, 1971 (for short, 'MISA') wnich enabled the
State and its delegated authority to order preventive detention
of a person.