2006 (4) TMI 500 - SC - Customs

Supreme Court Upholds Detention Order under COFEPOSA Act despite NRI Status

The Supreme Court upheld the detention order issued under Section 3(1) of the COFEPOSA Act, rejecting challenges related to the detenue's status as an ... Whether the detenue was a non-resident Indian and, therefore, the detention order could not have been passed against him? Issues Involved:1. Legality of the detention order under Section 3(1) of the COFEPOSA Act.2. Status of the detenue as an NRI and applicability of COFEPOSA Act.3. Delay in considering the detenue's representation.4. Non-supply of relevant documents to the COFEPOSA Advisory Board.5. Delay in forwarding documents to the Advisory Board.6. Alleged prejudice due to non-placement of certain materials before the detaining authority.7. Validity of the detention order based on alleged stale materials.Issue-wise Detailed Analysis:1. Legality of the Detention Order under Section 3(1) of the COFEPOSA Act:The appeal was against the Division Bench judgment of the Madras High Court, which upheld the detention order passed under Section 3(1) of the COFEPOSA Act. The detention order was issued based on allegations that the detenue was involved in transactions violating the Foreign Exchange Regulation Act (FERA), 1973. The High Court rejected the appellant's contentions and held the detention order to be legal.2. Status of the Detenue as an NRI and Applicability of COFEPOSA Act:The appellant contended that the detenue was an NRI and thus beyond the reach of COFEPOSA Act provisions. The High Court considered and rejected this plea, affirming that the detenue was not an NRI and thus subject to the COFEPOSA Act.3. Delay in Considering the Detenue's Representation:The appellant argued that the representation submitted on behalf of the detenue was not considered in time, resulting in a violation of Article 22 of the Constitution. The Supreme Court noted that although there was a delay in dealing with one of the representations, the delay was satisfactorily explained due to the need for translation. The Court emphasized that such delays should be avoided but did not find the delay sufficient to vitiate the detention order.4. Non-supply of Relevant Documents to the COFEPOSA Advisory Board:The appellant argued that relevant documents were not forwarded to the Advisory Board within the stipulated five weeks, as required under Section 8(b) of the COFEPOSA Act. The Court found that although there was a minor delay in sending some documents, it did not vitiate the proceedings as the Advisory Board had sufficient time to consider the materials and call for additional information if necessary.5. Delay in Forwarding Documents to the Advisory Board:The appellant contended that the delay in sending documents to the Advisory Board violated Section 8 of the COFEPOSA Act. The Court acknowledged the delay but held that it did not render the entire proceedings illegal. The Advisory Board had the power to call for further information and had sufficient time to review the case.6. Alleged Prejudice Due to Non-placement of Certain Materials Before the Detaining Authority:The appellant argued that certain relevant documents were not placed before the detaining authority, causing prejudice to the detenue. The Court found that the materials not placed before the detaining authority were either irrelevant or did not affect the decision. The Court held that even if some materials were not placed, the detention order could still stand on other grounds.7. Validity of the Detention Order Based on Alleged Stale Materials:The appellant contended that the detention order was based on stale materials, as it was issued two years after the alleged violations. The Court rejected this argument, noting the serious nature of the allegations involving significant amounts of money and clandestine transactions. The Court held that the detention order was not based on stale materials and was valid.Conclusion:The Supreme Court upheld the detention order, finding no merit in the appellant's contentions. The criminal appeal was dismissed. The Court emphasized the importance of timely consideration of representations and the need for detaining authorities to ensure all relevant materials are placed before them.