MADHU GARG versus UNION OF INDIA AND ANR.

Citation: [2004] SUPP. 4 S.C.R. 581 · Decided: 21-09-2004 · Supreme Court of India · Bench: N. SANTOSH HEGDE · Disposal: Appeal(s) allowed

Judgment (excerpt)

MADHU GARG 
A 
v. 
UNION OF INDIA AND ANR. 
SEPTEMBER 21, 2004 
[N. SANTOSH HEGDE AND S.B. SINHA, JJ.) 
B 
Conservation of Foreign Exchange and Prevention of Smuggling 
Activities Act, 1974-Section 3(1)-Detention under-On grounds of 
misdeclaration of export consignment and over-invoicing of goods-
Misdeclaration not proved by report of chemical analysis of goods-:-
C 
Detention upheld by High Court-On appeal, held: Detention on first ground 
was without there being adequate material-The entire order of detention 
stands vitiated in law as one of the grounds was found to be based on 
irrelevant materials. 
Husband o( appellant (detenu), his brother and their manager were D 
detained under Section 3(1) of Conservation of Foreign Exchange and 
Prevention of Smuggling Activities Act, 1974 on the grounds that (1) the 
export consignment was misdeclared stating it to be alloy steel forging 
(machined) although ·actually the same was metal scrap and (2) the 
goods were over invoiced. Allegations were based on self-inculpatory 
E 
statements. However, the same was retracted later. Central Advisory 
Board Approved the detention orders of the detenu and his brother, but 
detention of their manager was not approved. Writ petitions against the 
detention order were dismissed. A show cause notice was served upon 
detenu wherein it was stated that report of chemical analysis by CRCL 
showed that the alleged samples were made up of alloy steel. 
F 
In appeal to this Court, appellant contended that the detention 
order was not sustainable in view of the averments in the show cause 
notice that goods were made up of alloy steel. 
Allowing the appeals, the Court 
G 
HELD: 1. A bare perusal of the averments in the show cause 
notice do not leave any manner of doubt whatsoever that upon chemical 
analysis of materials, it was found that the samples were made up of 
alloy steel. .flt has not been disputed that the alleged goods which are H 
581 
582 
SUPREME COURT REPORTS (2004] SUPP. 4 S.C.R. 
A 
subject matter of the export were seized in presence of the detenu and 
were sent for chemical analysis before CRCL. The subject matter of the 
consignment, therefore, was not scrap metal. Had the detaining Authority 
waited for the results of the said chemical analysis before issuing the 
impugned order of detention, the first ground stated therein could not 
B 
have been made a basis therefor. The order of detention was passed in 
haste without there being adequate materials. [586-B-D] 
c 
D 
2. Even though over invoicing of the goods is the subject matter 
of the adjudication proceedings, but when one of the grounds of detention 
is found to be based on irrelevant materials not germane for passing the 
order of detention, the entire order of detention shall stand vitiated in 
law. [586-E] . 
CRIMINAL APPELLATE JURISDICTION : Criminal Appeal No. 821 
of 2004. 
From the Judgment and Order dated 6.4.2004 of the Punjab and 
Haryana High Court in Cr!. W.P. No. 1397 of 2003. 
WITH 
E 
Cr!. A. No. 822 of 2004. 
F 
Gopal Subramaniam, Vikram Chaudhary, Rakesh Dahiya, 
Ms. Madhusmita Bora, Nikhil Jain, Mahabir Singh and C.D. Singh for the 
Appellants. 
T. S. Doabia, Manish Sharma, Arun K. Sinha and Rakesh Singh, Manoj 
Saxena, S. K. Mitra and Ms. Naresh Bakshi for the Respondents. 
The Judgment of the Court was delivered by 
G 
S.B. SINHA, J: These appeals arising out of the judgments and orders 
dated 04.04.2004 passed by the High Court of Punjab and Haryana at 
Chandigarh in Criminal Writ Petition Nos.1397 and 1432 of2003 involving 
similar questions of law and fact were taken up for hearing together and are 
being disposed of by this-common judgment. However, the factual matrix 
H 
of the matter is being noticed from Criminal Appeal No. 821 of 2004. 
.. 
MADHU GARG v. U.0.1. [SINHA, J.] 
583 
The Appellant is. the wife of the detenu Vinod Kumar Garg who was 
detained by an order dated 20th October, 2003 passed by the Joint Secretary 
to the Government of India, Ministry of Revenue, New Delhi purported to 
be under Section 3(1) of the Conservation of Foreign Exchange and 
Prevention of Smuggling Activities Act, 1974 (for short 'the COFEPOSA 
Act'). 
The grounds of detention indicate that the said order of detention was 
passed primarily on two allegations, viz.,: 
A 
B 
(a) 
the export consignment was misdeclared stating it to be alloy steel 
forging (machined) although actually the same was a me~al scrap; 
C 
and 
(b) 
the goods were over invoiced

Excerpt shown. Read the full judgment & AI analysis in Lexace.