Mohd. Nashruddin Vs Union of India (Delhi High Court)
1. The present petition under Article 226 of the Constitution of India, essentially in the nature of writ of habeas corpus, has been instituted on behalf of Mohammed Nashruddin Khan (hereinafter referred to as the ‘detenu’), praying for quashing of detention order bearing No. PD-12001/03/2020- COFEPOSA dated 21.01.2020 under Section 3(1) of The Conservation of Foreign Exchange And Prevention of Smuggling Activities Act, 1974 (hereinafter referred to as ‘COFEPOSA’), and for a further direction that he be set at liberty forthwith.
FACTS OF THE CASE:-
2. The relevant facts qua the detenu as are necessary for the adjudication of the subject writ petition are briefly encapsulated as follows:
i) The detenu has been a non-resident Indian citizen based in United Arab Emirates (UAE) and has been engaged in trading in gold/gold jewellery in/from UAE in the name and style of M/s. M.N. Khan Jewellers (FZE).
ii) One Amit Pal Singh (co-detenu), who is an employee of M/s. Its My Name Private Limited (hereinafter referred to as ‘IMNPL’) was entrusted with the work of importing and exporting gold jewellery through hand-carry (personal carriage) to UAE; for the purpose of taking part in an exhibition organized by M/s. M.N. Khan Jewellers (FZE), as per the permission by the Gem & Jewellery Export Promotion Council (hereinafter referred to as ‘GJEPC’).
iii) IMNPL is a government recognized three-star export house, engaged in the business of manufacturing, import and export of gold jewellery and other allied bullion items.
iv) IMNPL has been duly issued an Import Export Code (IEC) bearing No.0514037342 from the office of the Joint Director, Directorate General of Foreign Trade (hereinafter referred to as ‘DGFT’) and is stated to have earned foreign exchange valuing around US Dollars 150 million for the country.
v) IMNPL had also obtained Advance Authorization License from the office of DGFT, New Delhi, inter alia permitting import of 1000 kgs of gold bars.
vi) IMNPL has against the said Advance Authorization License imported 50 kgs of gold bars and completed export obligation of approximately 19 kgs of gold bars vídé Export Invoice No.ITS/EXP/04 dated 20.04.2019; with balance export obligation of approximately 31 kgs.
vii) At this juncture, it is relevant to observe that the stock related to the aforementioned balance export obligation, was resumed by the Directorate of Revenue Intelligence (hereinafter referred to as the ‘DRI’) on 24-25.04.2019, from the factory premises of IMNPL at Pitampura, Delhi.
viii) IMNPL also purchased gold from the domestic market, duty and GST in relation to which has been duly paid; besides directly importing gold under the Advance Authorization Scheme, as afore-stated.
ix) IMNPL is stated to have exported domestic gold jewellery under the Exhibition Export Scheme of the Foreign Trade Policy (FTP 2015-20)
x) At this stage, it is relevant to observe that as per Para 46 of FTP, read with Para 4.80 of the Hand Book of Procedure, domestic jewellery can be exported for exhibitions abroad with the approval of Gems & Jewellery Export Promotion Council (hereinafter referred to as ‘GJEPC’), which approval was granted to IMNPL subject to the condition that unsold gold jewellery has to be re-imported back within 60 days from the close of such exhibition, failing which they would become liable to pay import duty on the quantity of the said re-import. Further, as per Customs Notification No.45/17 dated 30.06.2017, the condition for exemption is that, the goods that are re-imported from such exhibition abroad are required to be the same which were exported.
xi) IMNPL had, with the approval of GJEPC, exported gold jewellery manufactured from the domestic stock of gold for overseas exhibition. It is, therefore, the detenu’s case that, evidently there was no duty payment required at the stage of re-import of the subject gold into the country, within the stipulated time period of 60 days.
xii) In pursuance to the said invitation, received from M/s. N. Khan Jewellers (FZE), as above mentioned, Amit Pal Singh, co-detenu, was entrusted with hand-carrying (personal carriage) of the gold jewellery to UAE for the purpose of the said exhibition, in accordance with the permission granted and in compliance with the provisions applicable.
xiii) Export of the gold jewellery was done by IMNPL after filing the requisite shipping bills along with necessary documents.
xiv) The subject gold was duly assessed by the Customs at the time of clearance for export; the photographs of the goods being exported through hand-carry, were also checked and seen by the Customs Jewellery Appraiser posted at the Export Shed Air Cargo; and after verification of the same, the said photographs were signed and appraised by the Appraiser and then given back in sealed cover to the person hand-carrying the gold jewellery.
xv) The gold jewellery, which remained unsold at the time of exhibition was brought back by the co-detenu Amit Pal Singh, from UAE. The co-detenu Amit Pal Singh, landed at the Indira Gandhi International Airport, New Delhi on 24.04.2019 at around 06.30 p.m. and approached the Red Channel for the purpose of declaration of the goods brought back by him.
xvi) Amit Pal Singh, the co-detenu is stated to have filed reimport documents such as packing lists cum invoice; and provided the sealed packet of photographs to the Customs Appraiser along with the shipping bills, Export Declaration Form and endorsed copies of packing list-cum-invoice, given to him at the time of export, respectively for the quantities of unsold gold jewellery being brought back out of earlier exported goods concerning shipping bills dated 20.02.2019 and 13.03.2019; as well as making requisite declaration, as per the Standard Operating Procedures.
xvii) The Customs Jewellery Appraiser deputed at the Red Channel, duly checked and verified the said documents and appraised the subject gold jewellery and after properly satisfying himself that the gold jewellery was the same, which was exported, allowed Amit Pal Singh, the co-detenu to take the same by issuing necessary Customs Gate Pass in this behalf.
xviii) However, when Amit Pal Singh the co-detenu, was about to leave the IGI Airport, after clearance from the Red Channel, the officers of DRI intercepted him, statedly on specific information and carried-out search of his baggage as well as his person allegedly on the suspicion that he was illegally importing gold jewellery for evasion of customs duty.
xix) The detenu also arrived in India by the same flight as the co-detenu, albeit separately. The detenu was thoroughly searched, but nothing objectionable was found in his possession. The detenu was however, also detained by the officers of DRI at IGI Airport, New Delhi, on the allegation of involvement in illicit import and export of gold jewellery along with two co-detenus Amit Pal Singh and Gopal Gupta. The latter is statedly working as Chartered Accountant with IMNPL. During his detention by the DRI on 24/25.04.2019, he was kept at DRI Headquarters, New Delhi.
xx) According to the detenu, the statements of the detenu and co-detenus were extracted over the night of 24.04.2019, 25.04.2019 and 26.04.2019, until he was produced before the learned Duty Magistrate at 11:00 PM at the latter’s residence, by the DRI by coercing, forcing, giving false promises and threatening the detenu with arrest and false implication.
xxi) All the three persons were shown to have been arrested on 26.4.2019, on which date they were produced before the learned Duty Magistrate New Delhi, in the late hours at around 23.00 hrs.
xxii) It is submitted that the allegations by the DRI are completely false and incorrect and without any basis whatsoever and in fact the DRI has tried to give a wrong colour to otherwise genuine transactions.
xxiii) The said statements under Section 108 of the Customs Act, 1962 (hereinafter referred to as the ‘Customs Act’) procured from all the aforementioned three persons were immediately retracted verbally before the learned Duty Magistrate and thereafter before the Court of learned Chief Metropolitan Magistrate, Patiala House Courts, New Delhi on 27.04.2019 in writing. Detenu also filed a detailed retraction on 26.05.2019 from Tihar Jail through Superintendent of Jail No. 7, prior to his release on bail. Retractions were filed by the detenu and also Amit Pal Singh and Gopal Gupta (co-detenus) before the learned Chief Metropolitan Magistrate, Patiala House Courts, New Delhi on 27.04.2019 while they were lodged in Tihar Jail.
xxiv) At this juncture it is averred by the detenu that vídé additional submissions filed by DRI, opposing the bail application of the detenu, it was reiterated that ‘it is not a case of evasion of customs duty’. Consequently, the detenu and co-detenus were granted bail by the learned Chief Metropolitan Magistrate, Patiala House Court, New Delhi vídé common bail order dated 3.6.2019 wherein it was pertinently observed that “it is not explained that as to how the duty could be saved by replacing the larger quantity of bills of entries of jewellery in India by bill of entry of smaller quantity” and that “the statement of the accused persons recorded by DRI officials u/s 108 Customs Act have already been retracted and it is alleged by the accused persons therein that their statements were taken under threat and pressure. The accused persons have been in JC since 26.04.2019 and their custodial interrogation is no more required”.
xxv) Our attention is invited by the detenu to the circumstance that the DRI arrested Jewellery Appraiser Vikram Bhasin and on several dates his statements were recorded which were relied on as well. Since the statements recorded were not voluntary in nature and were statedly recorded under duress, threat and coercion; the Jewellery Appraiser, Vikram Bhasin duly retracted his statement through an application directly addressed to Learned Chief Metropolitan Magistrate on 03.06.2019. The DRI has, however, sent a letter dated 17.01.2020, thereby rebutting the retraction application of the Vikam Bhasin. Further a reply to said rebuttal has been sent by Vikram Bhasin to DRI on 02.03.2020
xxvi) It was further submitted that DRI has been approaching different statutory authorities from time to time in order to somehow harass the IMNPL/detenu etc., DRI also sent a UO Note dated 18/21.06.2019 to DG, DGFT and acting merely upon the said Note, a Show Cause Notice dated 27.06.2019 has admittedly issued to the company IMNPL by DGFT, recording as under:-
“01. Whereas DRI Hqrs. has informed that firm M/s Its My Name Pvt. Ltd. (IEC No.0514037342) is suspected to be misusing the Advance Authorization and the Exhibition Reimport Scheme through circular trading of gold jewellery exported under the guise of goods for exhibition purpose from India through hand carriage…..”
xvii) Even prior to the issuance of the Show Cause Notice., vídé Order dated 26.06.2019, the DGFT placed the IEC (Import Export Code) of the Company IMNPL in Denied Entity List (DEL) – Blacklist.
xviii) In relation to the dispute regarding the local address of the present detenu, a verification report was filed in compliance to order dated 20.06.2019 passed by learned Chief Metropolitan Magistrate by the DRI Headquarters, New Delhi. The report expressly states that “..the department has no objection in serving the summons/other correspondence pertaining to Mohd. Nashruddin till pendency of investigation through Mr. Himanhu Lohiya as requested in application and affidavit dated 20.06.2019 filed by Mohd. Nashruddin.”
xix) In relation to the seizure of the gold jewellery from the co-detenu Amit Pal Singh at the IGI Airport, New Delhi on 24.04.2019 and further seizure of gold jewellery from the IMNPL business premises on 24-25.04.2019, purportedly after completion of the investigation, a Show Cause Notice dated 26.09.2019 was issued by the DRI, New Delhi, wherein the detenu was also made a noticee and penalty was proposed upon the detenu under the provisions of Customs Act.
xxx) The detenu’s passport was released vídé order dated 01.2020 by the learned Chief Metropolitan Magistrate, Patiala House Courts, New Delhi and he was permitted to travel abroad. The DRI carried the said order passed by the learned Chief Metropolitan Magistrate in appeal to the Sessions Court, as well as this Court, but to no avail.
xxxi) It is also averred on behalf of the detenu that despite the release of his passport and the permission granted to the detenu to travel abroad; the detenu has not exercised his liberty to travel abroad, exhibiting his bona fides and negating the stand taken by the DRI qua his propensity to indulge in the alleged act in any manner.
xxxii) It is curious to observe that after almost 09 months of the detenu’s arrest and the filing of retraction statement before the learned Chief Metropolitan Magistrate, DRI belatedly sent a letter to him dated 16.01.2020 and dispatched only on 22.01.2020 by them, stating therein that his retraction had been dismissed by the “Competent Authority”. It is relevant to note that the said communication dated 16.01.2020 was received by the detenu only on 23.01.2020 i.e. after issuance of the impugned order of detention.
xxxiii) Insofar as, the detenu is concerned, when he came to know about the passing of the impugned detention order dated 21.01.2020, he assailed the same before the Hon’ble Supreme Court of India vídé W.P. (CRL.) No.63/2020, which however, was disposed of by the Hon’ble Supreme Court granting him liberty to institute the same before this Court. In terms of the aforesaid liberty, the detenu filed W.P.(CRL.) No.786/2020, challenging the impugned detention order at the pre-detention stage. However, the same came to be dismissed by this Court vídé order dated 11.09.2020. The detenu carried the said order dated 11.09.2020 in appeal before the Hon’ble Supreme Court vídé SLP (CRL.) No.4618/2020, which was however dismissed by the Hon’ble Supreme Court vídé order dated 30.092020.
xxxiv) The detenu after exhausting his legal remedies in the form of the above mentioned writ petitions, then surrendered before the learned Additional Sessions Judge, Patiala House Court, New Delhi, by filing a surrender application dated 11.10.2020, whereupon he was served with a one-page detention order dated 21.01.2020 in the court premises on 12.10.2020 by officers of the executing authority, and then taken to Tihar Jail, New Delhi, in pursuance to the detention order.
xxxv) The detenu filed a representation dated 27.10.2020 before the Detaining Authority as well as Central Government on the grounds stated therein and praying for revocation of the detention order. Simultaneously, the detenu vídé separate letter dated 27.10.2020 sought for supply of the relevant documents from the Detaining Authority. The Joint Secretary, COFEPOSA however rejected the representation made vídé letter dated 27.10.2020 filed by the detenu praying for supply of the relevant documents vídé Memorandum dated 09.11.2020. It is the detenu’s case that his representation was rejected without any valid or proper explanation and without supplying the documents asked for by him, thereby preventing him from making an effective representation against the impugned detention order.
xxxvi) A perusal of the grounds of detention impugned in these proceedings reveals that the role assigned to the detenu therein, pursuant to the investigation carried-out, is that IMNPL, in connivance with the detenu, opened a dummy company in the name and style of M/s. M.N. Khan Jewellers (FZE) in UAE in the year 2015 to manage the business interest of IMNPL and other related firms of the company at Dubai. The detenu is a key member of the syndicate and its conduit in UAE and abetted the company in the execution of conspiracy relating to misuse of the Advance Authorization Scheme. In order to fulfil the export obligation under the said scheme, IMNPL hatched a conspiracy, whereby gold jewellery was exported to the detenu’s company M/s. M.N. Khan Jewellers (FZE), U.A.E. for exhibition
ARGUMENTS ON BEHALF OF THE PETITIONER:-
3. Mr. Sourabh Kirpal, learned Senior Counsel appearing on behalf of the petitioner vehemently assails the impugned order of detention whilst submitting that the Sponsoring Authority has suppressed and failed to supply vital documents i.e. (i) Order dated 26.06.2019 passed by DGFT placing the co-detenu’s company “It’s My Name Private Limited” in Denied Entity List; (ii) Retraction statement dated 03.06.19 of Mr. Vikram Bhasin; (iii) Suspension order dated 22.05.2020 of Mr. Vikram Bhasin; (iv) Retraction subjective satisfaction, and consequently vitiating the Detention Order. It is pertinent to note that the COFEPOSA does not recognize any authority like the ‘Sponsoring Authority’. It appears that in the present case the officers of the DRI have been conducting the investigation which they are not authorized under law to do, as they are not ‘proper officers’ for the said purpose under the provisions of Customs Act.
4. Further, it is submitted that the material documents i.e. (i) Advance Authorisation License, whose Condition 6 was alleged by the DRI to have been violated, stipulating that “The exempt goods imported against the authorization shall only be utilized in accordance with the provisions of Paragraph 4.16 of the Foreign Trade Policy 2015-20 and other provisions and the relevant Customs Notification – [Custom Notification 18/2015 dated 01.04.2015 (for physical exports), 21/2015 dated 01.04.2015 (for deemed exports) 22/2015 dated 01.04.2015 (for Advance Authorization for prohibited goods) and 20/2015 (for Annual Advance Authorization) as the case may be]”; and (ii) Statements of Mr. Amit Pal Singh and Mr. Gopal Gupta, the co-detenus and the detenu recorded while in judicial custody during the investigation in the case of M/s Bharti Gems Private Limited, were neither supplied to the detenu nor were made part of Relied Upon Documents but have been heavily relied in establishing Grounds of Detention, thus disabling the detenu from making an effective purposeful and meaningful representation.
5. It was further submitted that by learned Senior Counsel appearing on behalf of petitioner that there has been delay in deciding Representation by the Central Government as the petitioner was detained on 12.10.2020; the petitioner filed representation dated 27.10.2020 with the Detaining Authority and with the Central Government (DG, CEIB); the Detaining Authority rejected the representation made by the petitioner vídé Memorandum dated 09.11.2020; however, the DG CEIB, did not deal with the representation of the detenu expeditiously and instead made a Reference dated 10.11.2020 in terms of Section 8(b) of COFEPOSA to the Central Advisory Board. The Central Advisory Board gave its opinion that there existed sufficient grounds for the detention of the petitioner. Basis the opinion of the Central Advisory Board, the Central Government on 21.12.2020, in exercise of powers under Section 8(f) of COFEPOSA, confirmed the Detention Order dated 21.01.2020. Representation of the petitioner was rejected vídé Memorandum dated 24.12.2020. Peculiarly, the order confirming the detention was passed on 21.12.2020 i.e., 03 days prior to rejection of the Representation. This shows complete non-application of mind by the Central Government while dealing with the petitioner’s representation.
6. It is further argued, that there has been a complete and utter non-application of mind by the Detaining Authority, while passing the impugned detention order, as is further evident from the fact that the grounds of detention in the case of the petitioner are identical to the grounds of detention of another detenu in an entirely different case. A person named Happy Arvind Kumar Dhakad came to be detained vídé Detention Order dated 17.05.2019, also passed by the same officer Mr. R.P. Singh. On a comparison between the impugned detention orders and the detention order dated 17.05.2019 in respect of Happy Arvind Kumar Dhakad, it is clear that the same are identical, barring a few differences in names and references etc. The petitioner have filed the Detention Order dated 17.05.2019 passed in the case of Happy Arvind Kumar Dhakad along with a comparison of the grounds of detention in the impugned detention orders dated 21.01.2020. A comparison makes it clear that the entire exercise of passing the impugned detention orders is mechanical, as grounds have been lifted from the grounds of an altogether distinct case. Such a blatant copy-paste job by the Detaining Authority shows non-application of mind.
7. It was further submitted that by learned Senior Counsel appearing on behalf of petitioner that the proposal for preventive detention was sent to the Detaining Authority on 02.01.2020 and the meeting of the Central Screening Committee was held on 13.01.2020 and the recommendations of the Central Screening Committee were submitted to the Detaining Authority on 14.01.2020. The
8. It has also been argued on behalf of petitioner that there was delay in passing of Detention Order dated 21.01.2020, viewed within the four corners of the settled position of law that a detention order will be vitiated if on account of delay in passing the Detention Order, the live-link between the prejudicial activities of the detenu and the rationale of clamping a detention order on the detenu is snapped, since the impugned detention order was passed on 21.01.2020, after:
