ADISHWAR JAIN Vs. UNION OF INDIA

JUDGEMENT

(1.) BY way of the present Criminal Writ Petition, filed under Article 226 of the Constitution of India, the petitioner prays for the issuance of a writ in the nature of Haneas Corpus for quashing the order of this detention, dated 5.4.2005, passed under Section 3(1) of the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974.

(2.) THE petitioner, pursuant to the aforementioned order, is under detention since 18.5.2005. The petitioner is the Managing Director of M/s. Sundesh Spring Pvt. Ltd. Ludhiana. In the year 1997, the Government of India introduced the Duty Entitlement Passbook Scheme (hereinafter referred to as "DEPB Scheme") with the object of encouraging exports. Under the DEPB Scheme, an exporter was entitled to certain benefits with respect to goods exported by him. The Directorate of Revenue Intelligence, Regional Unit, Ludhiana, allegedly received information that the petitioner was engaged in availing fraudulent credits under the DEPB Scheme by misdeclaration of the value and description of the goods exported. He was procuring fake and false bills through one Prabhjot Singh, Proprietor and partner of M/s. S.P. Industrial Corporation, M/s. Aaysons (India) and M/s. P.J. Corporation, Ludhiana. The export proceeds were being arranged though Hawala Channel. Pursuant to the aforementioned information, the Directorate of Revenue Intelligence commenced investigation and conducted a search of the factory, as also residential premises of both Adishwar Jain and Prabhjot Singh. During the course of investigation, statements of Adishwar Jain, as also his employees, and Prabhjot Singh were recorded, wherein they allegedly admitted misdeclaration of the value and description of the good exported and use of Hawala channel for remittance as well as the over-valuation. Prabhjot Singh admitted that he had supplied fake bills to the units owned and controlled by Adhishwar Jain on commission basis, without actually supplying any goods. Adishwar Jain is alleged to have misdeclared the goods exported as "alloy steel", whereas after a test conducted by the Central Revenue Control Laboratory, New Delhi, the goods were found to be "other than alloy steel" i.e. Non-alloy. The Counsel (Economic), Consulate General of India at Dubai confirmed the existence of a parallel set of export invoices. Invoices with a higher value were presented before the Indian Customs in order to avail DEPB incentives but invoices, with a lower value, were presented to Dubai Customs for clearance. Statements of major suppliers of raw materials of non-alloy steel as well as alloy steel, to the units of Adishwar Jain, were recorded and it was confirmed that the majority of the supplies related to non-alloy steel items and that the material purchased by Adhishwar Jain was of much lower value than declared by him. In order to cover the bogus exports, the petitioner procured false and fake invoices from the units of Prabhjot Singh and the amounts realized by the export proceeds over and above the actual values were routed through Hawala channel through one Raju. Show cause notice was issued to Adishwar Jain on 17.8.2004. A bank account of Prabhjot Singh was got opened in the Indian Overseas Bank where Adishwar Jain's firm's accounts existed. The accounts in the name of Prabhjot Singh's firms were actually operated by Adhishwar Jain through his employees, namely, Amarjit Singh and Darshan Kumar, who confessed to the aforementioned facts. Four blank cheques, signed by Prabhjot Singh were recovered from Adishwar Jain. Inquiry from the production managers of M/s. Sundesh Springs, owned by Adishwar Jain, where the exported goods were reportedly processed, revealed that at no point in time, alloy steel had been processed and that no facility, whatsoever, existed in their factory for making alloy steel goods.

(3.) COUNSEL for the petitioner contends that the impugned order is illegal, void, being violative of Article 21 of the Constitution of India and is, therefore, liable to be quashed. It is vehemently argued by counsel for the petitioner that the order of detention is based upon a solitary instance of alleged "smuggling". There is no other material on record to infer that the petitioner indulged in any such activity previously or after the aforementioned transaction. It is further contended that prior to the order of detention, the petitioner was kept in illegal detention for three days, during which he was threatened, coerced and physically assaulted. The petitioner was thereafter forced and coerced into making statements implicating him in the commission of the offences. However, on 17.10.2003, the statements were subsequently retracted by the petitioner and consequently have no value in law.