2004 (2) TMI 653 - SC - FEMA

Supreme Court remits SAFEMA proviso case back to High Court, directs fresh adjudication within six months

The Supreme Court set aside the High Court's judgment regarding the applicability of the first proviso to Clause (b) of sub-section (2) of Section 2 of ... Application of the proviso to clause (b) of sub-section (2) of Section 2 of SAFEMA concerning orders of detention - revocation of detention under Section 11(1)(b) of COFEPOSA vis-a -vis revocation on the report of the Advisory Board under Section 8 - maintainability of a fresh writ petition challenging a detention order after an earlier writ petition is rendered infructuous - legal effect of counsel's concession where statutory provision applies (no estoppel against statute)Application of the proviso to clause (b) of sub-section (2) of Section 2 of SAFEMA concerning orders of detention - revocation of detention under Section 11(1)(b) of COFEPOSA vis-a -vis revocation on the report of the Advisory Board under Section 8 - Proviso to clause (b) of sub section (2) of Section 2 of SAFEMA did not apply where the detention orders were revoked under Section 11(1)(b) of COFEPOSA and not on the report of the Advisory Board under Section 8 nor before receipt of such report or reference to the Advisory Board. - HELD THAT: - The first sub clause of the proviso to clause (b) of sub section (2) of Section 2 of SAFEMA operates only in the specific situations where a detention order has been revoked on the report of the Advisory Board under Section 8, or has been revoked before receipt of the Advisory Board's report, or before making a reference to the Advisory Board. The factual material before the Court (including the Government letter and the counter affidavit) establishes that the revocation in the present cases was effected under Section 11(1)(b) of COFEPOSA by the Central Government and was not based on a report of the Advisory Board nor was it done before receipt of the report or before making a reference. Consequently none of the contingencies in the first sub clause of the proviso are attracted. The High Court's contrary conclusion was therefore unsustainable and is set aside.Proviso to clause (b) of sub section (2) of Section 2 SAFEMA had no application on the facts; High Court's finding to the contrary is set aside.Legal effect of counsel's concession where statutory provision applies (no estoppel against statute) - A counsel's concession before the High Court cannot override or bind the court where the correct application of statutory provisions shows the concession to be legally incorrect. - HELD THAT: - The Court reiterated settled authorities that courts must decide questions of statutory applicability on the basis of law and not on counsel's concession. A mistaken or inadvertent concession does not bind the client where statutory provisions operate differently; decisions founded on wrong concessions lack precedential value. Accordingly the so called concession recorded by the High Court did not justify sustaining the High Court's conclusion on the applicability of the proviso.The recorded concession is of no consequence; the Court will apply the statutory provisions notwithstanding any wrong concession.Maintainability of a fresh writ petition challenging a detention order after an earlier writ petition is rendered infructuous - Whether respondents could challenge the legality and validity of the detention orders in fresh writ petitions after earlier writ petitions were disposed of as rendered infructuous was not finally decided by the High Court and requires adjudication on merits; the matter is remitted to the High Court for fresh consideration. - HELD THAT: - The Supreme Court observed that earlier precedents relied upon by the respondents accept that a subsequent writ petition is maintainable where consequential action (such as proceedings under SAFEMA) results in prejudice to the detenue and where otherwise the Government could by its actions preclude effective challenge to applicability of SAFEMA. The High Court did not consider or decide the legality and validity of the detention orders on merits. In view of these considerations the Supreme Court directed remittance for fresh adjudication of the legality and validity of the orders of detention so as to determine application of SAFEMA to the respondents and their properties.Matter remitted to the High Court for fresh merits adjudication of the legality and validity of the detention orders; parties to be heard and writ petitions disposed within six months with interim status quo directions.Final Conclusion: The High Court's finding that the proviso to clause (b) of sub section (2) of Section 2 of SAFEMA applied was set aside; counsel's concession did not bind the Court; the question of legality and validity of the detention orders was remitted to the High Court for fresh adjudication on merits, with directions to maintain status quo in respect of the properties and to decide the writ petitions within six months. Issues Involved:1. Legality of the High Court's decision regarding the order under Section 7 of SAFEMA.2. Applicability of the first proviso to Clause (b) of sub-section (2) of Section 2 of SAFEMA.3. Validity of the subsequent writ petitions challenging the order of detention.4. Impact of concessions made by counsel on the judgment.Detailed Analysis:1. Legality of the High Court's Decision Regarding the Order Under Section 7 of SAFEMA:The Union of India questioned the legality of the Bombay High Court's judgment which held that the order dated 31.8.1995 under Section 7 of SAFEMA was not sustainable. The High Court referenced orders dated 19.12.1994 under Section 11(1)(b) of COFEPOSA revoking the detention order and an order dated 11.1.1995 from earlier writ petitions. The High Court concluded that the proceedings under SAFEMA became non est due to these orders.2. Applicability of the First Proviso to Clause (b) of Sub-section (2) of Section 2 of SAFEMA:The Union argued that the first proviso to Clause (b) of sub-section (2) of Section 2 of SAFEMA did not apply as the revocation of the detention order was under Section 11(1)(b) of COFEPOSA, not under Section 8. The proceedings initiated under Section 6(1) of SAFEMA on 12.10.1994 were valid as the detention orders were in force when the proceedings began. The High Court's reliance on the proviso was, therefore, incorrect.3. Validity of the Subsequent Writ Petitions Challenging the Order of Detention:The Union contended that the respondents could not challenge the legality of the detention order in subsequent writ petitions after the initial writ petitions were disposed of as infructuous. The respondents countered that filing a fresh writ petition was permissible to address the prejudice caused by the SAFEMA proceedings. The Supreme Court referenced the cases of Amritlal Chandmal Jain and Karimaben K. Bagad, which supported the maintainability of subsequent writ petitions.4. Impact of Concessions Made by Counsel on the Judgment:The Supreme Court noted that any concession made by counsel before the High Court was inconsequential if it was contrary to statutory provisions. The Court emphasized that wrong concessions cannot bind parties when statutory provisions clearly indicate otherwise, referencing the cases of Sanjeev Coke Manufacturing Company and Uptron (India) Ltd. The Court held that the High Court's judgment based on such concessions was indefensible.Conclusion:The Supreme Court set aside the High Court's judgment to the extent that it held the first proviso to Clause (b) of sub-section (2) of Section 2 of SAFEMA applicable. The Court remitted the matter back to the High Court for fresh adjudication on the legality and validity of the detention orders. The High Court was directed to dispose of the writ petitions within six months, maintaining the status quo regarding the properties in question until the writ petitions are resolved. The appeals were allowed to the extent indicated.