ATTORNEY GENERAL FOR INDIA Vs. AMRATLAL PRAJIVANDAS

JUDGEMENT

(1.) Till the wind of liberalisation started blowing across the Indian economic landscape over the last year or two, the Indian economy was a shattered one. At the time of independence, India did not have an industrial base worth the name. A firm industrial base had to be laid. Heavy industry was the crying need. All this required foreign exchange. The sterling balances built up during worldwar-II were fast dissipating. Foreign exchange had to be conserved, which meant prohibition of -import of several unessential items and close regulation of other imports. It was also found necessary to raise protective walls to nurture and encourage the nascent industries. These controls had, however, an unfortunate fallout. They gave rise to a class of smugglers and foreign exchange manipulators who were out to frustrate the regulations and restrictions profit being their sole motive, and success in life the sole earthly judge of right and wrong. As early as 1947, the Central Legislature found it necessary to enact the Foreign Exchange Regulation Act, 1947 and Imports and Exports (Control) Act, 1947. Then came the Import (Control) Order, 1955 to place the policy regarding import on A surer footing. In the year 1962, a new Customs Act replaced the antiquated Sea Customs Act, 1878. The menace of smuggling and foreign exchange violations, however, continued to rise unabated. The Parliament then came forward with the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (COFEPOSA). It provided for preventive detention of these anti-social elements.

(2.) With effect from 1st July, 1975, COFEPOSA was amended in certain respects. Inter alia, it introduced Section 12-A containing special provisions for dealing with emergency. By virtue of Section 12-A, the requirements of supply of grounds (Section 3(3)) and consultation with Advisory Board (Section 8) were practically done away with.

(3.) In the year 1976, no doubt, during the continuance of emergency, the Parliament enacted the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 (SAFEMA). It replaced an Ordinance to the same effect and was brought into force from the date of the Ordinance, viz., 5th November, 1975. This Act applies to persons convicted under the Sea Customs Act, 1878/ Customs Act, 1962/FERA, 1947/FERA, 1973 and to those detained under the COFEPOSA, whose detention order was neither set aside nor revoked in the circumstances mentioned therein. Besides the persons so convicted/ detained, the Act applies to their relatives and associates as well. The main purpose of the Act is to forfeit the illegally acquired properties of such smugglers and foreign exchange manipulators in whosoever's name they may have been kept.