ARUN KUMAR BAJORIA Vs. UNION OF INDIA

JUDGEMENT

(1.) The writ petition has been filed challenging the threat of detention of the petitioner under Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1973 popularly known as (COFEPOSA Act). There is a prayer for issuance of a Writ of Mandamus commanding the respondents to withdraw, recall and/or rescind the recommendation of issuance of an order of detention under the COFEPOSA Act and other consequential reliefs by way of injunction restraining the respondents from issuing any order of detention under the said Act upon declaration that the COFEPOSA Act itself is unconstitutional, illegal and null and void. It is stated in details that the petitioner is a businessman of repute being a Director of several Jute Mills. It is alleged that on 16th March, 1990 the officers of the Enforcement Directorate, Foreign Exchange Regulation Act in purported exercise of powers under section 37 of the Foreign Exchange Regulation Act searched the petitioner's residential premises and also the office at no. 10, Clive Row, Calcutta and the petitioner was interrogated closely under a circle of various officers in the office of the respondent no. 4, the Deputy Director of Enforcement Directorate and the respondent no. 5 Chief Enforcement Officer. There are allegations that under duress and coercion, the petitioner and his wife made statements relating to maintaining of 2 (two) Foreign Currency Bank Account Nos. 570 and 67470 for more than 10 years with Discount Bank 3, Quai-De Lile, Geneva, Switzerland. The said account stands in the joint names of the petitioner Arun Kumar Bajoria and his wife Smt. Lata Bajoria both residing in India, without any previous or special permission of the Reserve Bank of India. The statement discloses further that the petitioner and his wife have certain fixed deposits in the two Foreign Currency Bank Accounts and they are holding a locker in the said overseas bank of Switzerland. Certain incriminating documents have been seized disclosing inter alia that the petitioner and his wife have accounts with an overseas bank and there is substantial holding in Foreign Exchange to the tune of Rs. 35 Crores approximately. The petitioner has alleged that the said statement has been procured by force and the steps taken by the respondent authorities are nothing but an abuse of process of law. A Supplementary Affidavit has been filed disclosing further that the petitioner was arrested and he has, however, been enlarged on bail by the Division Bench of this Court by imposing certain conditions. However, on or about October 26, 1990, 26 separate notices dated 12th October, 1990 were issued by Mr. S. C. Ghose, Enforcement Directorate, FERA wherein Messrs. Hooghly Mills Company Limited, Bhabani Roychowdhury, a Senior Officer Assistant of the Company and the petitioner were called to show cause why adjudication proceedings as contemplated under section 15 of the Foreign Exchange Regulation Act, 1973 should not be held against them for violation of sections 18(g) and 18(3) of the said Act, for failure to take action or reasonable steps or reframing from taking any action or all reasonable steps to secure them as to the receipt of the full expert value of the goods exported from the country within six months from the date of shipment within the time extended by the Reserve Bank of India. Subsequently, 6 (six) more similar notices were served by the FERA Authorities. On April 18, 1991 a notice to show cause bearing no. T.4/F-C/91 Sc N-1 dated March 8, 1991 under the signature of the Special Director, Enforcement Directorate, Foreign Exchange Regulation Act, Government of India had been served by Special Messenger. According to the petitioner, the notice to show cause has been formulated on the self-same facts and grounds upon which the threatened order of detention has been made and the writ petition has been moved. The adjudication proceedings have been initiated with a view to impose penalty and during the long period the petitioner is on bail with relaxed conditions made time to time by the appropriate Benches.

(2.) Stating all these facts in details, the petitioner has tried to make out a case that the threat of detention is in excess of jurisdiction and/or by wrongful usurption of the power inasmuch as the COFEPOSA Act itself is violative of the Fundamental Rights and all the acts done or caused to have done by the respondent authorities are wholly unguided and, consequence of uncanalized power to detain any person arbitrarily. It is also alleged that any power without proper guideline and without any basis or standard is likely to infringe the fundamental right of the petitioner and as such the provisions of the said COFEPOSA Act are illegal and ultra vires.

(3.) The writ petition is strongly contested by the respondent authorities by filing an affidavit-in-opposition . It is placed on record that on 16th of March, 1990 during the course of searches at the office premises of Messrs. Hooghly Mills Company Limited and Messrs. Hooghly Mills Projects Limited and the Directors office situated at no. 10, Clive Row, Calcutta and at the residential premises under occupation of Sri Arun Kumar Bajoria, one of the Directors of the aforesaid Companies, under the provision of section 37 of the Foreign Exchange Regulation Act, 1973, some incriminating documents were recovered and seized by the officers of Enforcement Directorate, Calcutta as per seizure Memo dated 16th March, 1990. After completion, of searches, statements of the petitioner were recorded under section 40 of the said Act with reference to the documents seized from the above office premises. The petitioner is alleged to have disclosed in the said statements that he has been maintaining 2 (two) Foreign Currency Bank Accounts for more than 10 (ten) years with the Foreign Bank's and it is further revealed that the petitioner along with his wife have Fixed Deposits in the Foreign Bank's in Switzerland and both the petitioner and his wife are alleged to have given a letter to the said Overseas Bank to repatriate the deposited amount in India through proper banking channel. It is also alleged that the petitioner Arun Kumar Bajoria is engaged in illegal transaction in foreign exchange in contravention of the provisions of the said Act in a systematic and calculated manner and thereby he is avoiding and evading the provisions of the Act. It is further placed on record that on perusal of the said statement of one Bhabani Roychowdhury associated with the aforesaid Companies, there is a failure to realize export proceeds to the tune of Rs. 80 lakhs approximately without having any extension of time from the Reserve Bank of India. The petitioner was arrested on 16th of March, 1990 and he was enlarged on bail by the order of the Division Bench of this Court by imposing certain conditions. There are denials of the allegations of the petitioner and it is alleged that the present writ petition is thoroughly misconceived and filed for the specific purpose to frustrate the investigation and to cause delay in smooth progress of the investigation.