PUSHPABEN KANTILAL SHAH Vs. K N ZUTSHI

JUDGEMENT

(1.) IN these two matters where before the Division Bench consisting of J. B. Mehta and P. D. Desai JJ. certain common questions of law regarding the validity and extent of operation of Section 5-A of the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act 1974, hereinafter referred to as 'the COFEPOSA Act) arose, the Division Bench felt that fundamental questions of widest amplitude had been raised in order to challenge the vires of Section 5-A and so the Division Bench decided that in view of the importance of the matter, the following two questions should be referred to a larger Bench. (1) Whether Section 5-A of the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 is retroactive so as to apply to orders of detention passed on or before July 1, 1975? (2) If so, whether it is ultra vires, either because it impinges upon the power of judicial review and impairs the jurisdiction of the High Court under Article 226 of the Constitution; or it encroaches upon or interferes with the judicial power and arrogates to the Legislature the judicial functions contrary to the scheme of our Constitution?

(2.) IN order to appreciate the contentions which have been raised in these two questions, the facts arising in each of these two cases may be shortly stated. The petitioner in Special Criminal Application No. 15 of 1975 is the wife of the detenu. The detenu has been detained by the impugned order, Exhibit 'a' to the petition, passed on December 19, 1974. The order of detention was passed under Section 3 (1) of the COFEPOSA Act with a view to preventing him from dealing in smuggled goods (otherwise than by engaging in transporting or concealing or keeping smuggled goods) as it was found necessary by the detaining authority to do so. The grounds communicated to the detenu have been set out in Annexure 'b' dated December 22, 1974. It was alleged against the detenu that on 11/12th August 1978, Customs Officers recovered smuggled goods viz. , fabrics, calculators and 555 State Express Cigarettes, valued at Rs. 8,73,694/-from a truck bearing No. GJZ 8891 lying parked in the compound of Modern Flats Co-operative Housing Society behind National Institute of Designs, Paldi, Ahmedabad. Enquiries revealed that there was a telephone call on August 6, 1973 from one Jaku Kara of Salaya to the detenu but this call did not materialise and hence Jaku Kara booked telephone calls to one Shri M. K. Merchant who in his turn had contacted the detenu for disposal of the smuggled goods. In his statement dated August 20, 1973 recorded before the Customs Authorities, the detenu had disclosed that one Shri M. K. Merchant staying at Hotel Meghdoot in Ahmedabad had contracted the detenu for the disposal of smuggled goods which were seized on 11/12th August 1973 and the detenu showed his willingness for the disposal of the said contraband goods to Shri Merchant In connection with this seizure, a show cause notice dated February 4, 1973 had been issued to the detenu by the Collector of Customs and Central Excise, Ahmedabad and the case was pending adjudication. The second ground of detention mentioned that as a follow up action of the above case, the house of the detenu at Maninagar was searched by the Customs Officers on August 20, 1973. During the course of search, certain incriiminating documents showing the detenu's dealings in smuggled goods to the tune of Rs. 14 lakhs were inter alia recovered and seized for action under the Customs Act, 1962. In his statement dated August 21, 1973 recorded before the Smt. Pushpaben Kantilal Shah vs. K. N. Zutshi and Ors. (15. 12. 1975 -GUJHC) Page 3 of 31 paben Kantilal Shah vs. K. N. Zutshi and Ors. (15. 12. 1975 -GUJHC) Page 3 of 31 Customs Officers under Section 108 of the Customs Act, 1962, the detenu admitted that the accounts related to the detenu's transactions in those smuggled goods. In this connection a show cause notice had been issued to the detenu by the Collector of Customs and Central Excise, Ahmedabad, on February 14, 1974 and that case was pending adjudication. The Division Bench on examination of the materials before it came to the conclusion that Ground No. (1) must be held to be invalid because the so-called admission of the detenu on which reliance was placed was no admission at all and there was no admission whatsoever as to the two material incriminating facts, namely, that Merchant had contacted the detenu for disposal of smuggled goods which had been seized and secondly that the detenu had shown any willingness for the disposal of the said contraband goods. Thus, so far as this petition was concerned, the Division Bench found that out of the two grounds, Ground No. (1) was invalid and bad and in view of the law there stated, apart from Section 5-A, there was no grievance made regarding the validity of that ground by the learned advocate appearing for the petitioner.

(3.) IN Special Criminal Application No. 51 of 1975, the order of detention was passed on December 19, 1974 on the allegation that with a view to preventing the detenu Kantilal Damodardas Shah from dealing in smuggled goods (otherwise than by engaging in transporting or concealing or keeping smuggled goods) the detaining authority thought it necessary to detain him and the order under Section 3 (1) of the COFEPOSA Act was passed against him. The petitioner in this Special Criminal Application is the wife of the detenu. The grounds for the order of detention were as set out in annexure 'c' and the grounds were dated December 22, 1974. The following three grounds have been set out. It was alleged in the first ground that on April 10, 1966 when the premises of Messrs Rajkamal Provision Stores at Bhadra, Ahmedabad, belonging to the detenu were searched by the Deputy Superintendent, Central Excise (Gold Cell) Ahmedabad, 99 wrist watches of foreign origin were found in a drawer of the counter and three shavers and 25 wrist watches of foreign origin were found lying in the show case. These goods were seized by the said Deputy Superintendent of Central Excise (Gold Cell) under the Customs Act, 1962. These goods were worth Rs. 17,485/ -. Out of these seized goods, 25 wrist watches of foreign origin were confiscated outright by the adjudication order dated November 10, 1967 by virtue of the order passed by the Deputy Collector, Central Excise, Ahmedabad. The second ground was that on December 19, 1971 the Customs Officers of Ahmedabad Central Excise Collectorate searched the premises of Messrs Rajkamal Provision Stores, Bhadra, Ahmedabad belonging to the detenu and goods viz. , wrist watches, blades, lighters, flints, electric shaver shaving razors perfumes lighters, cigarettes playing cards, fabrics, recording tapes, gas lighters, fountain pens, chocolates and other miscellaneous goods valued at Rs. 15,372/- all of foreign origin were seized by the said Officers of Customs, in the reasonable belief that the same were smuggled goods. Show cause notices were issued to the detenu in connection with this case and the case was decided by the Collector of Central Excise, Ahmedabad, partly on September 5, 1973 and a penalty of Rs. 6,000/- was imposed of Messrs Rajkamal Provision Stores and a penalty of Rs. 3,000/-was imposed on the detenu. The detenu was also being prosecuted in connection with this case for which a criminal complaint was filed on June 29, 1974 and the criminal case was still pending trial in the Court of the Metropolitan Magistrate, Third Court, Ahmedabad. Ground No. (2) was to the effect that the premises of Messrs Prince Medical and Provision Stores, Ahmedabad, owned by the detenu were raided on 9/10th May 1972 by the Customs Officers and as a result of the search fabrics, one film movie projector along with obscene movie films, one transistor set, two obscene books and one projector bulb all of foreign origin valued at Rs. 4,197/-were seized by the above Officers of the Customs in the reasonable belief that the goods were smuggled goods. Along with these goods rough accounts of dealing in smuggled watches and cigarettes valued at Rs. 6,558a and Rupees 6,730/- respectively and currency of Rupees 4,288/-believed to be the sale proceeds of smuggled goods were also seized. In this connection a show cause notice dated February 1, 1973 was issued to the detenu and the case was pending adjudication. Out of these three grounds, in the light of the different authorities set out in the order of reference, the Division Bench held that the first ground which was of 1966 could never be pressed into service as a live-link in the instant case. As regards Ground No. (2), the Division Bench found that ground to be a valid ground but they held that it was not necessary to go into the allegation that Ground No. (3) was invalid as it was a casual and mechanical approach. Here also, out of the three grounds, Ground No. (1) was found to be bad and thereafter in view of the importance of the matter and in order to have the law settled finally, the questions hereinabove set out have been referred to the larger Bench for decision.