JAYESH ASHOKKUMAR BHAVSAR Vs. UNION OF INDIA

JUDGEMENT

(1.) THIS petition is filed challenging the order of detention dated 18th August, 1997 issued under section 3 (1) of the Conservation of foreign Exchange and Prevention of Smuggling Activities Act, 1974 detaining ghanshyam Kalyandas Bhavsar. This petition has been filed by the nephew of the detenu. The said order of detention was served on the detenu and he was taken into custody, purrsuant to the said order, on 8th July, 2003. The order of detention was passed with a view to prevent the detenu in future from acting in any manner prejudicial to the Conservation of Foreign Exchange. The allegations against the detenu are that he was showing import of rough diamonds under bogus documents and making remittances through the bank against the bogus import documents and, therefore, necessity was felt to detain the detenu from indulging in any unauthorised transactions which had adversely affected the foreign exchange resources of the country.

(2.) ON behalf of the petitioner five contentions were raised before us challenging the order of detention. Firstly, it was contended that material change in the procedure of import of goods was not brought to the notice of Detaining authority before passing of the order and, therefore, the same was not considered by the Detaining Authority before issuing the order nor before the service of the detention order on the detenu. The next contention was that there was undue and unexplained delay in service of the order of detention on the detenu. It was next contended that the Detaining Authority did not consider whether the detention of the detenu was necessary after a gap of almost six years. Lastly, it was contended that Detaining Authority ought to have considered wether the execution of the detention order after a lapse of almost six years was necessary especially when no material is brought on record to show that in the meantime the detenu was indulging in such activities.

(3.) AS regards the first contention, Mr. Khan contended that by Circular issued by the Reserve Bank of India on 27th February, 1996, guide-lines were issued to the authorised dealers putting stringent conditions to ensure curbing illegal imports and remittances. He brought to our notice the said circular dated 27th February, 1996 issued by the Reserve Bank of India, Exchange control Department, Central Office, Mumbai. The said circular was issued to all authorised dealers in foreign exchange, which lays down the precautions for handling import documents. The said precautions were issued as the incidents of frauds were found to be on increase in import transaction as the authorised dealers had not observed prudent banking practice of knowing the customer while handling the import transactions. The said Circular was issued under section 73 (3) of the Foreign Exchange Regulation Act. One of the conditions in the said circular is that the authorised dealers should not accept import bills received directly by the importers from the overseas seller. It is argued by Mr. Khan that in view of the said circular issued in February, 1996, it was not possible for the detenu and his associates to indulge in practice of making remittances on the basis of bogus import documents and if the said circular had been placed before the Detaining Authority and considered by him, he might not have felt necessity of issuing the order of detention.