USHA AGARWAL versus UNION OF INDIA AND ORS.

Citation: [2006] SUPP. 8 S.C.R. 342 · Decided: 02-11-2006 · Supreme Court of India · Bench: S.H. KAPADIA · Disposal: Dismissed

Judgment (excerpt)

A 
c 
.D 
USHA AGARWAL 
V. 
UNION OF INDIA AND ORS. 
NOVEMBER 2, 2006 
[S.H. KAPADIA AND R.V. RA VEENDRAN, JJ.] 
Conversation of Foreign Exchange and Prevention of Smuggling 
Activities Act, 1974. 
Section 3(1)-Director of company indulging in systematic and organized 
import-export fraud by diverting goods, imported duty free for manufacture 
of goods for export, into domestic market-Grant of all EXIM benefits to 
company stopped after detection of fraud-Order of detention passed against 
director of company-Order stopping EXJM benefits not placed before detaining 
authority-Detention order challenged-Held, every relevant material having 
bearing on the detention of a person should be placed before the detaining 
authority-Sponso~ing authority should not place documents selectively before 
detaining authority-Failure to place relevant material before detaining 
authority may vitiate detention order-Jn the facts held, document stopping 
EXIM benefits to company controlled by the detenu was not a relevant 
E document, non-consideration of which would vit~ate the detention order-
Constitution of India, 1950-Artic/e 22. 
S was Director in-charge of management of company L in which 
other Directors were his family members. L was availing EXIM benefits 
under the Duty Exemption Entitlement Certificate Scheme (DEEC) and 
F upon detection of irregularities by S, grant of all EXIM benefits to L were 
stopped by order dated 15/20.4.2004. Thereafter, a detention order under 
Section 3(1) of Conversation of Foreign Exchange and Prevention of 
Smuggling A<;tivities Act, 1974 (COFEPOSA Act) was passed against S 
on 19.8.2004 by the detaining authority on the ground that the detenu-S 
G had diverted goods, imported duty free for manufacture of goods for 
export, into domestic market and thereby indulged in smuggling and the 
fraudulent modus operandi employed by the detenu showed his propensity 
and potentiality to such illegal activities in future, necessitating detention 
to prevent him from continuing such activities. The detenu was taken into 
H 
342 
USHA AGARWAL v. U.0.1. 
343 
· custody on 11.11.2005. Mother of the detenu filed writ petition in High A 
Court seeking quashing of detention order and release of the detenu. Writ 
petition challenging detention was dismissed by Division Bench of the High 
Court. Hence this appeal by mother of detenu-S. Simultaneously, petition 
under Article 32 also filed challenging detention of S . 
Appellant-petitioner contended that sponsoring authority had B 
withheld the order stopping EXIM benefits to company L which was 
relevant material from the detaining authority on account of which the 
detaining authority could not apply its mind to all relevant material before 
making order of detention which vitiated the order of detention; that 
several sheets among the copies of documents supplied to the detenu were C 
illegible which came in the way of the detenu making an effective 
representation for his release; and that there was inordinate delay in 
considering the representation dated 7.2.2006 submitted by the detenu to 
the Central Government and in communicating the decision to the detenu. 
Dismissing the appeal and the writ petition, the Court 
D 
HELD: 1. A detention under Conversation of Foreign Exchange and 
Prevention of Smuggling Activities Act, 1974 (COFEPOSA Act) is 
anticipatory and preventive. It is neither punitive nor curative. Preventive 
detention being one of the two exceptions to the constitutional protection 
under Article 22 against arrest and detention, certain procedural E 
safeguards are provided in respect of exercise of the power to direct 
preventive detention. The procedural safeguards under the Constitution 
have been interpreted, to require every material which is relevant, having 
a bearing on the question as to whether a person should be detained under 
the Act, to be placed before the detaining authority, as the decision to F 
detain a person is rendered by a detaining authority on his subjective 
satisfaction as to the existence of the grounds for such detention. The 
sponsoring authority should not undertake any exercise of examination 
and interpretation of the available material with a view to place the 
documents selectively before the detaining authority. It is not for the 
sponsoring authority to decid'e as to which of the relevant documents G 
should be placed before the detaining authority, or which of the documents 
are likely to help, or not hel

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