In Naveen Kasera alias Naveen Agarwal v. Union of India Secretary Ministry of Finance W.P.(CRL) 630/2021 dated September 30, 2021] the current writ petition has been filed by Naveen Kasera alias Naveen Agarwal (Petitioner) challenging the detention order bearing F.No.:PD-12001/03/2021–COFEPOSA dated January 15, 2021 wherein the Petitioner was put under preventive detention under Section 3(1) of the Conservation of Foreign Exchange & Prevention of Smuggling Activities Act, 1974, (COFEPOSA Act).

The ground for preventive detention is alleged to be that the Petitioner was controlling a syndicate which was involved in effecting fraudulent exports and imports in order to evade Customs duty and earn undue export benefits including Integrated Goods and Services Tax (IGST) refunds through 33 non-existent and/or dummy firms.

In a report dated March 26, 2021, the advisory board opined that there existed sufficient grounds for the Petitioner’s detention, and it was on the basis of that opinion and other facts, the impugned detention order was confirmed by the Ministry vide its order dated April 08, 2021.

The Petitioner contended that there is no cogent material to show any prejudicial activity before the passing of impugned detention order other than one shipping bill dated December 11, 2018 wherein the Petitioner allegedly has attempted to export goods on-paper without actually exporting anything, with the intent of illegally availing duty drawback. Neither any proceeding nor any Show Cause Notice (“SCN”) has been issued with regards to the shipping bill dated December 11, 2018.

The Petitioner further contended that there lies no connection with company that issued the shipping bill except that he acted as an intermediary, that too only during the course of his ordinary business activities. Also contended that there is an unexplained delay in passing of the detention order as well as the SCN dated January 07, 2021

The Hon’ble Delhi High Court noted that there are two issues pertaining to the matter, i.e. if there lies a “live-link” or “casual connection” between the prejudicial activity in which the Petitioner is alleged to have indulged  and consequently passing of the detention order and whether the grounds on which the detention order is premised are “stale” or “illusory” or have “no real nexus” with the need for placing the Petitioner under prevention detention.

It was observed by the Hon’ble Delhi High Court that the last act which the Petitioner undertook and which may amount to prejudicial activity was on December 11, 2018 whereas the detention order was passed more than 2 years later on January 12, 2021. Noted “it is evident that the live-link or causal connection between the Petitioner’s preventive detention, meant to forestall the petitioner from indulging in any prejudicial activity, can surely be said to have snapped.”

Further noted, the ground of detention on the basis of only activity arising from shipping bill dated December 11, 2018 is clearly stale, illusory and lacks real nexus with detention order which was passed more than 2 years later.

Additionally, it was observed that “delay in the passing and execution of a preventive detention order not only defeats the very purpose of such order, but more importantly, creates a doubt as to the necessity of adopting such a harsh measure against an individual, whereby the individual’s liberty is curtailed on suspicion alone.”

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October 2021