# PUSHPADEVI M. JATIA v. M.L. WADHAVAN, ADDL. SECRETARY GOVERNMENT OF INDIA & ORS - **Citation:** [1987] 3 S.C.R. 46 - **Court:** Supreme Court of India - **Decided:** 1987-04-29 - **Bench:** A.P. Sen, S. Natarajan - **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/pushpadevi-m-jatia-v-m-l-wadhavan-addl-secretary-government-of-india-ors-9751 - **Pages:** 38 ## Headnote Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974-s. 3( 1)-Subjective satisfaction of the detaining authority-Court cannot consider propriety or sufficiency of grounds of detention-Court can examine whether requisite satisfaction was arrived at by the authority. Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974-s. 5A-The principle that even if one of the grounds which led to the subjective satisfaction of the detaining authority is non-existent, etc., the order of detention would be invalid no longer holds good. Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974-s. 3( 1)-Power of detention being subject to the /imitations imposed by the Constitution, Government must ensure that E safeguards provided in Art. 22(5) read withs. 3( 1) are fully complied with. F Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974-S. 3(1)-Period of parole has to be excluded in reckoning the period of detention. Foreign Exchange Regulation Act, 1973-s. 40( 1)- 'Gazetted Officer of Enforcement' means any person appointed to be an officer of Enforcement under s. 4 and holding a gazetted post. Law of Evidence-If evidence is relevant, the Court is not conG cerned with the method by which it was obtained. ' y De facto Doctrine-Where an office exists under law, so far as validity of its acts are concerned it matters not how the appointment is '<:I made. H The Petitioner's husband, Mohan i.al Jatia, was detained by an 46 J .L ' !I - .i. . y f PUSHPADEVI v. M.L WADHAVAN 47 order passed under sub·s. (I) of s. 3 of the Conservation of Foreign A Exchange and Prevention of Smuggling Activities Act, 1974 (COFEPOSA) by the Addditional Secretary to the Government of India, Ministry of Finance on being satisfied that it was necessary to detain him 'with a view to preventing him from acting in any manner prejudicial to the augmentation of foreign exchange'. B The residential premises of one Subhash Gadia, a very rich and prosperous businessman of Bombay, the brother-in-law of the detenu, were searched on the basis of intelligence gathered by the Directorate of Revenue Intelligence that he was under-invoicing imports of yarn from Japan and it resulted in seizure of certain documents. As the seized documents not only revealed violation of the provisions of the Customs C Act but also indicated certain payments and transactions in violation of the Foreign Exchange Regulation Act, 1973 (FERA), the matter was referred to the Enforcement Directorate Investigation from the FERA angle. Subhash Gadia was summoned under s. 40 of the FERA and his statement was recorded by Shri R.C. Singh, an otlicer of the Enforce· ment Directorate. The incriminating documents seized from the resi· D dential premises of Subhash Gadia and the revelations made by him during his examination in relation to the documents seized which revealed that the detenu Mohan i,al Jatia was engaged in foreign exchange racketeering to the tune of several crores of rupees formed the basis ot' the aforesaid order of detention. The petitioner approached the High Court with petitions under Art. 226 of the Constitution seeking to challenge the impugned order of detention. Upon the dismissal of the first of these petitions by the High Court, the petitioner had approached this Court under Art. 136, and, the Court, while declining to grant special leave to appeal, had directed E • that the detenu should appear before the Commissioner of Police and, F upon his doing so, he should immediately be released on parole for a period of ten days. Thereafter, the petitioner tiled the second petition under Art. 226 with an application for extending the period of parole which was rejected by the High Court. The petition tiled under Art. 136 against refusal of interim relief by the High Court was also rejected by this Court. Thereafter, the High Court dismissed the writ petition, G against which, the petitione ## Text _Characters 0–39,639 of 100,121. This is a partial read: ask again with offset=39639 for what follows._ ... A B c D PUSHPADEVI M. JATIA v. M.L. WADHAVAN, ADDL. SECRETARY GOVERNMENT OF INDIA & ORS. APRIL 29, 1987 [A.P. SEN AND S. NATARAJAN, JJ.) Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974-s. 3( 1)-Subjective satisfaction of the detaining authority-Court cannot consider propriety or sufficiency of grounds of detention-Court can examine whether requisite satisfaction was arrived at by the authority. Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974-s. 5A-The principle that even if one of the grounds which led to the subjective satisfaction of the detaining authority is non-existent, etc., the order of detention would be invalid no longer holds good. Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974-s. 3( 1)-Power of detention being subject to the /imitations imposed by the Constitution, Government must ensure that E safeguards provided in Art. 22(5) read withs. 3( 1) are fully complied with. F Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974-S. 3(1)-Period of parole has to be excluded in reckoning the period of detention. Foreign Exchange Regulation Act, 1973-s. 40( 1)- 'Gazetted Officer of Enforcement' means any person appointed to be an officer of Enforcement under s. 4 and holding a gazetted post. Law of Evidence-If evidence is relevant, the Court is not conG cerned with the method by which it was obtained. ' y De facto Doctrine-Where an office exists under law, so far as validity of its acts are concerned it matters not how the appointment is '<:I made. H The Petitioner's husband, Mohan i.al Jatia, was detained by an 46 J .L ' !I - .i. . y f PUSHPADEVI v. M.L WADHAVAN 47 order passed under sub·s. (I) of s. 3 of the Conservation of Foreign A Exchange and Prevention of Smuggling Activities Act, 1974 (COFEPOSA) by the Addditional Secretary to the Government of India, Ministry of Finance on being satisfied that it was necessary to detain him 'with a view to preventing him from acting in any manner prejudicial to the augmentation of foreign exchange'. B The residential premises of one Subhash Gadia, a very rich and prosperous businessman of Bombay, the brother-in-law of the detenu, were searched on the basis of intelligence gathered by the Directorate of Revenue Intelligence that he was under-invoicing imports of yarn from Japan and it resulted in seizure of certain documents. As the seized documents not only revealed violation of the provisions of the Customs C Act but also indicated certain payments and transactions in violation of the Foreign Exchange Regulation Act, 1973 (FERA), the matter was referred to the Enforcement Directorate Investigation from the FERA angle. Subhash Gadia was summoned under s. 40 of the FERA and his statement was recorded by Shri R.C. Singh, an otlicer of the Enforce· ment Directorate. The incriminating documents seized from the resi· D dential premises of Subhash Gadia and the revelations made by him during his examination in relation to the documents seized which revealed that the detenu Mohan i,al Jatia was engaged in foreign exchange racketeering to the tune of several crores of rupees formed the basis ot' the aforesaid order of detention. The petitioner approached the High Court with petitions under Art. 226 of the Constitution seeking to challenge the impugned order of detention. Upon the dismissal of the first of these petitions by the High Court, the petitioner had approached this Court under Art. 136, and, the Court, while declining to grant special leave to appeal, had directed E • that the detenu should appear before the Commissioner of Police and, F upon his doing so, he should immediately be released on parole for a period of ten days. Thereafter, the petitioner tiled the second petition under Art. 226 with an application for extending the period of parole which was rejected by the High Court. The petition tiled under Art. 136 against refusal of interim relief by the High Court was also rejected by this Court. Thereafter, the High Court dismissed the writ petition, G against which, the petitioner sought special leave to appeal and also tiled a petition under Art. 32 challenging the order of detention. While issuing notice on the petitioner, ·the Court directed the release of the detenu on parole for a week and by a subsequent order further exten· ded the period of parole. Both the special leave petition and the writ petition were heard together. \ H --- • 48 SUPREME COURT REPORTS [1987] 3 S.C.R. A In the writ petition tiled before the High Court from which the petition for special leave petition arose, the petitioner had challenged the order of detention on two grounds: that there was no material on which the satisfaction of the detaining authority could be reached that the detention of the detenu was necessary; and, that ther.o was total non-application of mind on the part of the detaining authority to the B material on record, and in particular, to the !'actual mi•-statements contained in paragraph 44 of the grounds of detention as detailed in entries •A' to 'F'. The writ petition filed before this Court was principally based on the ground that there was information of the Constitutional Safeguard Contained in Art. 22(5) of the Constitution inasmuch · as there was failure on the part of the detaining authority to consider an C alleged representation made by the detenu under s. 8(b) read wi!h s. 11 of the COFEPOSA against the order of detention addressed to the President of India which was presented throu11h one Ashok Jain at the President's Secretariat. The other substantial question raised was that R.C. Singh was not a gazetted officer of Enforcement within the meaning of s. 40 of the FER A and therefore the statements recorded by him D could not be regarded as valid statements under the aforesaid s. 40 and thus could not form the basis upon which the satisfaction of the detaining authority could be reached. Alternatively, it was contended that the statements recorded by him could not be treated as statements recorded under s. 39. E The respondents not only denied that the detenu had addressed any respresentation to the President of India but made an application under s. 340, Cr. P.C. for prosecution of persons responsible for for- 1 going the document purporting to be the alle!!ed representation made by the detenn and for making certain interpolations in the Dak Register kept at the President's Secretariat. The respondents also placed on , F record an order showing that R .C. Singh had been appointed an ofticer / of enforcement on ad hoc basis three years before he had summoned Subhash Gadia for examination. Dismissing both the petitions, G HELD: I. (a) The expression 'otlicers of Enforcement' as defined in s. 3 of the Foreign Exchange Regulation Act, 1973, embraces within itself not only (a) a Director (b) Additional Director (c) Deputy Director and (d) Assistant Director of Enforcement but also (e) such other class of otlicers of Enforcement as may be appointed for the purpose of the Act. Obviously, R .C. Singh who was Assistant Enforcement Ofticer H having been appointed as an otlicer of Enforcement on an ad-hoc basis -~ PUSllPADEVI v. M.L. WADllAVAN 49 in 1932 !'ell within the category 'such other class of ot)icers' covered by A s. 3(e). Sub-s. (1) of s. 4 provides that the Central Government may appoint such persons, as it thinks tit, to be o!licers of Enforcement. Sub-s. (2) thereof provides for delegation of such power of appointment by the Central Govern.men! to a Director of Enforcement er an Additional Director of Enforcement etc., to appoint ot)icers of Enforcement below the rank of an Assistant Director of Enforcement. Sub-s. (3) of s. B 4 provides that subject to snch conditions and limitations as the Central Government may impose, an o!licer of Enforcement may exercise the powers and discha-ge the duties conferred or imposed on him under the Act. Undoubtedly R.C. Singh was discharging bis duties and functions as a gazetted ot)icer of Enforcement under s. 40(1) when he recorded the statements in question. The expressiou 'gazetted o!licer of EnforceC ment' appearing in s. 40(1) must take its colour from the context In which it appears and it means any pers~n appointed to be an o!licer of Enforcement under s. 4 holding a gazetted post, There is no denying the · fact that R.C. Singh answered that description. [69G-H; 70A-D] I (b) Even if the contention that R.C. Singh was not a gazetted D o!licer of Enforcement within the meaning of s. 40(1) were to prevail, it would be of little consequence. If evidence Is relevant the Court is not concerned with the method by which it was obtained. There is a long line of authority to support the opinion that the Court is not concerned with how evidence Is obtained. The rule Is however subject to an exceptbn. The Judge has a discretion to exclude evidence procured, a!ler the E commencement of the alleged offence, which although technically admissible appears to the Judge to be unfair. This being the substantive• law, it follows that the detaining authority was entitled to rely upon the statements recorded by R.C. Singh under s. 40(1), Even if R.C. Singh was not competent to record such statements under s. 40(1), the statements were clearly relatable to s. 39(b) of the Act. It cannot therefore be F said that there was no material on which the detaining authority could have based his subjective satisfaction. [70E-H] · Barindra Kumar Ghose v, Emperor, ILR (1910) 37 Cal. 467; Kuruma v, Reginam, [1955] 1 All E.R: 236; R. V. Sang, (1979] 2 All E.R. 1222; Magraj Patadia v. R.K. Bir/a & Ors., [1971] 2 S.C.R. 118; G R.M. Malkani v. State of Maharashtra, (1973] 2 S.C.ll. 417; and Pooran Mal, etc. v. Director of Inspection, [1974] 2 S.C.R. 704; referred to. ' (c) Where an o!lice exists under the law, it matters not how the appointment of the incumbent is made, so t'ar as validity of its acts are H ,. 50 SUPREME COURT REPORTS [ 1987] 3 S.C.R. A concerned. It is enough that he'is clothed with the insignia of the onice, and exercises its powers and functions. The onicial acts of such persons are recognised as valid under the de facto doctrine, born of necessity and public policy to prevent needless confusion and endless mischief. [69B-C J B Gokaraju Rangaraju v. State of Andhra Pradesh, [1981) 3 S.C.R. c 474; Pu/in Behari v. King Emperor, [1912] 15 Cal. ZJ 517; and P.S. Menon v. State of Kera/a & Ors., AIR (1970) Kerala 165; referred to. 2. (a) It has long been established that the subjective satisfaction of the' detaining authority as regards the factual existence of the condition on which the order of detention can be made, i.e., the grounds of detention constitutes the foundation for the exercise of the power of detention and the Court cannot be invited to consider the propriety or sutnciency of the grounds on which the satisfaction of the detaining authority is based. Nor can the Court, on a review of the grounds, substitute its own opinion for that of the authority, But this does not D imply that the subjective satisfaction of the detaining authority is wholly immune from the power of judicial review. It inferentially follows that the subjective satisfaction being a condition precedent for the exercise of the power conferred on the executive, the Court can always examine whether the requisite satisfaction was arrived at by the authority; if it is not, the condition precedent to the exercise of the E power would not be fullilled and the exercise of the power would be bad. The simplest case is where the authority has not applied its mind at all; in such a case, the authority could not possibly be satisfied as regards the fact in respect of which it is required to be satisfied. [66E-H] F Emperor v. Shibnath Banerjee & Ors., AIR (1943) FC 75 and Khudi Ram Das v. State of West Bengal & Ors., [1975] 2 SCR 832, referred to. In this case, it is quite apparent that the so-called factual mis-statements listed as items 'A' to 'F' in paragraph 44 of the grounds>)llf G detention are not mis-statements at all. The High Court rightly held that ~ - the alleged mistakes or infirmities pointed out were not so material or serious in nature as to vitiate the impugned order of detention and rightly observed that the facts stated in paragraph 44 of the grounds cannot be read in isolation and the grounds of detention have to be read as a whole with the accompanying documents and material. The H grounds of dentention was only one, viz., that the detenu was engaged PUSHPADEVI v. M.L. WADHAVAN 51 r-l in activities prejudicial to the augmentation of foreign exchange and therefore it became necessary in the public interest to place him under A detention. It cannot be said on a perusal of the grounds that there was no material on which the detaining authority could have acted. [74E; 78A-B] (b) The contention that, even if one of the gronnds or reasons which led to the subjective satisfaction of the detaining authority is non-existent B .l or mis-conceived or irrelevant, the order of detention would be invalid since it is not possible to predicate as to whether the detaining authority , would have made an order for detention even in the absence of non-existent or irrelevant ground, cannot be accepted. That principle was ennnciated by this Court some 30 years ago. With the change in law brought about by the introduction of s. SA of the COFEPOSA Act that though one or c more of the grounds of detention were found to be vague, non-existent, .-l. not relevant, not connected, irrational or invalid for any other reason , whatsoever, the detention could be sustained on the remaining grounds, that principle no longer holds goods. [63A-C] Shibban Lal Saxena v. State of Uttar Pradesh & Ors., [1954] D S.C.F. 418; Dr. Ram Manohar Lohia v. State of Bihar & Ors., [1966] I y S.C.F. 709 and Pushkar Mukherjee & Ors. v. State of West Bengal, [!969] 2 S.C.R. 635; referred to. Mohd. Shakeel Wahid Ahmed v. State of Maharashtra & Ors., [!983] 2 S.C.F. 614; Asha Devi v. K. Shivraj, Additional Chief SecretE ll ary, [1979j 2 S.C.F. 215 and Kurjibhai Dhanjibhai Patel v. State of Gujarat, [1985] I Scale 964; distinguished. (c) Sutnciency of grounds is not for the Court but for the detain1' ing authority for the formation of his subjective satisfaction that the detention of a person under s. 3(1) of the COFEPOSA Act is necessary F with a view to preventing him from acting in any manner prejudicial to the augmentation of foreign exchange. The Act is a law relating to preventive detention. That being so, the power of detention exercisable under sub-s. (I) of s. 3 of the Act is subject to the limitations imposed by the Constitution. When the liberty of the subject is involved, it is the bounden duty of the court to satisfy itself that all the safeguards proG ll.- vided by the law have been scrupulously observed and that the subject is not deprived of his personal liberty otherwise than in accordance with law. Nevertheless, the community has a vital interest in the proper enforcement of its laws, particularly in an area such as conservation of foreign exchange and prevention of smuggling activities in dealing effeclively with persons engaged in such smuggling and foreign exchange H ~- A B c 52 SUPREME COURT REPORTS [1987] 3 S.C.R. rackteering by orderina their preventive detention and at the same time, in assurin& that the law is not used arbitrarily to suppress the citizen of his right to life and liberty. The Guvemment must therefore ensure that the constitutional safeguards of Art. 22(5) read with subs. (I) of s. 3 of the Act are fully complied with. [65A-B] Mangalbhai Motiram Patel v. State of Maharashtra, [1980] 4 S.C.C. 470 and Narendra Parshotam Umrao v. B.B. Gujral, [1979] 2 S.C.F. 315; relied on. In the instant case there was no failure on the part of the Gilvemment to discharge its obligation under Art. 22(5). The relevant records ot' the Enforcement Directorate placed before us clearly show that there was sutlicient material for the formation of the subjective satisfaction of the detaining authority under sub-s.(l) ot' s. 3 ot' the Act. They also show that the detenu was afforded a reasonable opportunity for making an effective representation against his detention. [66C-D] D 3. (a) Preventive detention Is an extraordinary measure resorted to by the State on account of compulsive factors pertaining to maintenance of public order, safety ot' public life and the welfare or the economy of the country. The need for this extraordinary measure was realised by the founding fathers ot' the Constitution as an inevitable necessity and hence a specitlc provision has been made in cl. (3) of Art. E 12 providing for preventive detention. Placing the interests ot'the nation above the individual liberty of the anti-social and dangerous elements who constitute a grave menace to society by their unlawful acts, the preventive detention laws have been made for effectively keeping out of circulation the detenus during a prescribed period by means of preventive detention. The underlying object cannot be achieved if the detenu is F granted parole and brought out ot' detention. Even it' any conditions are imposed with a view to restrict the movements of the detenu while on parole, the ubservance of those conditions can never lead to an equation of the period of parole with the period of detention. Due to the spectacular achievements in modem communication system, a detenu, while on parole, can sit in a room in a house or hotel and have contracts with G all his relations, friends and confederates in any part of the country or even any part ot'the world and thereby pursue his unlawful activities if so inclined. It will, therefore, be futile to contend that the period of parole of a detenu has all the trappings of actual detention in prison and as such both the periods should !ind a natural merger and they stand denuded of their distinctive characteristics. It will not be out of place to i-1 point out here that inspite of the Criminal Procedure Code providing ! A_ ' :'· __ ,,, ' PIJSHPADEV! '· M.L WADHAVAN 53 for release of the convicted offenders on probation of good conduct, it A expressly provides, when it comes to a question of giving set-oil' to a convicted person in the period of sentence, that only the actual pre-trial detention period should count for set-otl and not the period of bail even if bail had been granted subject to stringent conditions. In contrast, in so far as preventive detentions under the COFEPOSA Act are concerned, it has been specitically laid down in s. 12(6) that a person B against whom an order of detention has been passed shall not be released on bail or bail bond or otherwise and that any revocation or modilication of the order of detention can be made by the Government in exercise of its power under s. 11. [78E-H; 79G] lb) The question whether the period of parole should be treated as part of the detention period itself was elaborately considered by this Court in Smt. Poonam Lata v. M.L. Wadhawan & Ors., and it was held therein that the period of parole has to he excluded in reckoning the period of detention under sub-s. (1) of s. 3 of the COFEPOSA Act. [78C] Smt. Poonam Lata v. M.L. Wadhawan & Ors. J. T., [1987] 2 S.C. 204, relied on. c D 4. The respondents have placed sutl1cient material before the Court to show that the alleged representation addressed to the President of India was neither filed by the detenu nor was it received at the E President's Secretariat. The attempt to assail the order of detention on the ground of violation of the constitutional safeguard enshrined in Art. 22(5) and the violation of s. 11 of the Act by the Central Government is a well planned and ingenuous move on the part of the detenu. The facts revealed not only warrant an inference that the detenu and his associates have gone to deplorable lengths to create evidence favourable to F the detenu but arouse convulsive thoughts in our minds about the efficiency and integrity of the concerned sections of the President's Secretariat. The case with which and the fascile manner in which the detenu's agent Ashok Jain claims to have entered the President's Secretariat and delivered the Dak and obtained an endorsement of acknowledgement in a copy of the representation and the length to G which the concerned Secretariat staff have gone to give credence to the version of Ashok Jain not only reveals the deep fall in standards but also lack of security and vigilance. We feel fully persuaded to hold that this is a fit case in which the detenu, the petitioner, Ashok Jain and all other persons responsible for the fabrication of false evidence should be pnllleCuted for tile offences committed by them. We defer the pam• of H - . ·- 54 SUPREME COURT REPORTS [1987} 3 S.C.R. A final orders on the application tiled under s. 340, Cr. P.C. till }.__ the investigation by the Central Bureau of Investigation is comp· B c D E F G leted. (SOE·F; 82F·H; 83A·B} APPELLATE/ORIGINAL JURISDICTION: Special Leave Petition (CRL.) No. 1370 of 1986. From the Judgment and Order dated 23.5.1986 of the Bombay High Court in Crl. W.P. No. 385 of 1986. AND WRIT PETITION NO. 363 OF 1986. (Under Article 32 of the Constitution of India). G.L. Sanghi, D. Canteenwala, V.B. Agarwala, B.R. Agarwala and Miss Vi jay Lakshmi Mannen for the Petitioner. K. Parasaran, Attorney General, C. V. Subba Rao and A. Subba Rao for the Respondent. ·-.( The following Judgment of the Court was delivered: This petition for special leave directed against the judgment and order of the Bombay High Court dated May 3, 1986, and the con· nected petition under Art. 32 of the Constitution raise common questions and therefore they are disposed of by this common order. The petitioner by a petition under Art. 226 filed before the High Court prayed for the issuance of a writ of habeas corpus which is also the prayer before us, for the release of her husband Mohanlal Jatia, who has been detained by an order of the Additional Secretary to the Government of India, Ministry of Finance, Department of Revenue dated December 13, 1985 under sub-s. (I) of s. 3 of the Conservation of Foreign Exchange & Prevention of Smuggling Activities Act, 1974 on being satisfied that it was necessary to detain him with a view to preventing him from acting in any manner prejudicial to the augmentation of foreign exchange. Intelligence gathered by the Directorate of Revenue Intelligence, Bombay was that one Subhash Gadia, the brother-in-law of the detenu Mohanlal Jatia, a very rich and prosperous businessman of H Bombay, was under-invoicing the imports of yarn from Japan. On the - -•-.I ' PUSHPADEVI v. M.L. WADHAVAN 55 basis of the said information the officers of the Directorate of Revenue A Intelligence and officers the Customs, Bombay searched his residential premises at A-121, Sea Lord Cuffe Parade, Colaba, Bombay under the Customs Act, 1962 on June 27, 1985 which resulted in seizure of certain documents. As the seized documents not only revealed violation of the provisions of the Customs Act but also indicated certain payments and transactions in violation of the Foreign Exchange RegulaB ti on Act, 1973, the matter was referred to the office of the Enforcement Directorate for purposes of investigation from the angle of the Foreign Exchange Regulation Act on October 24, 1985. The aforesaid Subhash Gadia was summoned under s. 40 of the Foreign Exchange Regulation Act and his statement was recorded by R.C. Singh, an officer of the Enforcement Directorate, Bombay on November 5, C 1985. In his statement of even date, Subhash Gadia stated that he went to Japan in 1970 seeking employment with a proprietary concern known as Messrs Greenland Corporation, Tolo Building, Osaka, Japan owned by a Nepali national and was engaged in exporting yam, fibre, fabrics, chemicals etc. to India and Middle-East countries. Messrs J.M. Trading Corporation, 701, Tulsiani Chambers, 212 D Nariman Point, Bombay (of which Mohanlal Jatia is a partner} are the sole-selling agents of Messrs Greenland Corporation for yarn and fibre. He further revealed that Satyanarayan Jatia, the elder brother of Mohanlal Jatia who is the partner of Messrs J.M. Trading Corporation, Bombay had been staying in Japan for some 35 years and was the sole representative of Messrs Greenland Corporation in Japan. While E explaining the entries in the seized documents from his residence on June 27, 1985, Subhash Gadia admitted that the bunch marked S.G. 6 containing pages 1 to 94 are written by him in his own writing and that these contained accounts relating to his trade or business including imports and cash transactions and payments. He further confirmed that all the transactions reflected in these documents were his real F business transaction dealings and some of which were not reflected in his regular account books. While explaining page 94 of the seized bunch S.G. 4, he stated that this page contained coded account in Indian rupees of his firm Messrs Piyush Corporation and that on the left side of this page credit entries were shown in Indian rupees with two zeros (00) missing and that while writing his account he had deleted two zeros in the credit side as well as debit side (right side) of the page. While decoding the codes he stated that the figure 8582/38 written on the right hand side was actually Rs.8,58,238 and this amount had been debited against A/S investment. Further, that A/S investment was his private investment abroad in US dollars which had been utilised by him for under-invoicing of several imports etc. G H 56 SUPREME COURT REPORTS [1987] 3 S.C.R. A Paragraph 44 of the grounds of detention revealed transactions J_ relating to the detenu Mohanlal Jatia and it is extracted: B c D E F G H "44. When confronted with the documents seized from Subhash Gadia's residence even though you have denied any connection in respect of various unauthorised transactions between you, Greenland Corporation. Japan and others abroad, but the following documents clearly re1. vealed that you have been indulging in various unauthorised transactions in violations of provisions of Foreign -. Exchange Regulation Act. 1973. A. Page338 S.G.6 B. C. Page215 S.G.6 D. Page335 S.G.6 E. Page318 S.G.6 Trial Balance of Greenland Corporation entries of ML. GN. RN. R.G.T. and Gadia admits before that they are Jatia's account. M.L. Jatia's i.e. your account maintained m Japan, however. you admit receipt of Gifts by your children such as T.V., Video and M.V. Parts. Keeping U.S. $ 2 lakhs in fixed deposit on 2.6.83 in Kamal Account, also including 20 lakhs ${dollars). American dollar account as on 31. 1. 1984. Account in Japanese Yen total of 141147 .27. F.D.R. amount of Japanese Yen 1093147 l. 16 to be equally divided between Yen, GN, SN and Laxmiji account! Capital account. Final position of Bombay. ).. 1 y - J.._ y ...- t ' ~ --.,.. PUSHPADEVI "· M.L. WADHAVAN F. Page2J4.J5 U.S. $ 780001converted S.G. 6 into Rs.9,16,5001commi· ssion of." 57 The Additional Secretary to the Government of India, Ministry of Finance, in exercise of his powers conferred by sub-s. (1) of s. 3 of the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, !974 ('COFEPOSA') ordered the detention of the aforesaid Mohanlal Jatia by an order dated December 13, 1985 on being satisfied that it was necessary to detain him "with a view to preventing him from acting in any manner prejudicial to the augmrntation of foreign exchange". The petitioner thrice approached the High Court with petitions under Art. 226 of the Constitution seeking to challenge the impugned order of detention. Immediately after the passing of the impugned order i.e. on December 16, 1985, she moved the first of these petitions being W.P. No. 2530/85 for an appropriate writ or direction to quash the impugned order of detention and applied for stay. The Writ Petition was admitted but stay was refused. On appeal, a Division Bench in Writ Appeal No. 1162/85 granted interim stay till the disposal of the appeal. On February 28, 1986 the Division Bench dismissed the appeal as well as the Writ Petition. By its subsequent order dated March 4, !986 the Division Bench granted stay of e11Cecution upto April 4, 1986 on certain terms and conditions. The petitioner filed a petition under Art. 136 in this Court for grant of special leave being SLP No. 3742/86. The Court by its order dated April 3, 1986 dismissed the petition and ordered the detenu to appear before the Commissioner of Police, Bombay on the next day i.e. on April 4, 1986 when the impugned order of detention was to be served upon him and directed that the impugned order was to become effective. The further direction made by this Court was that the detenu should immediately be released on parole for a period of IO days subject to certain term~ and conditions. On April 4, 1986 the detenu appeared before the Commissioner of Police, Bombay when he was served with the impugned order of detention together with the grounds of detention and the relevant documents. In compliance with the direction of this Court, the detenu was released on parole. On April 7, 1986 the petitioner filed second petition under Art. 226 of the Constitution being WP No. 385/86 for quashing the impugned order of detention along with an application for extending the period ?f parole. On April 14, 1986 the parole period having eKpired, the detenu was taken into custody and lodged in the Central Prison, Bombay. The Writ Petition came up for hearing before the High Court on April 18, 1986 and admitted but the application for extending the period of parole was -- A B c 0 E F G H . A B c D E 58 SUPREME COURT REPORTS [1987] 3 S.C.K. rejected. Aggrieved by the refusal of interim relief, the petitioner again moved this Court under Art. 136 of the Constitution which was dismissed as withdrawn. It appears that the impugned order of detention was mainly challenged on two grounds, namely: (1) There was no matenal on which the satisfaction of the detaining authority could be reached that the detention of the detenu was necessary under s. 3(1) of the COFEPOSA with a view to preventing him from acting in any manner prejudicial to the augmentation of foreign exchange. And (2) There was total non-application of mind on the part of the detaining authority to the material on record, and in particular to the factual misstatements contained in paragraph 44 of the grounds of detention as detailed in entries 'A to F'. The Division Bench of the High Court did not feel impressed with any of these submissions and by its judgment and order