2008 (8) TMI 926 - SC - Customs

Supreme Court overturns detention order due to inactivity, emphasizes future risks

Maqsood Yusuf Merchant Versus Union of India

The Supreme Court set aside the detention order under the COFEPOSA Act due to its futility as the appellant had not engaged in similar activities since ... Continuation of detention order - Held that: - There is no dispute that despite the fact that the order of detention was passed as far back as on 19-3-2002, the same could not be or has not been executed against the appellant till date. The detention order was in respect of the activities indulged in or said to have been indulged in by the appellant as far back as in 2002 - continuing the order of detention today is an exercise in futility and the same should not, therefore, be given effect to any further - appeal allowed. Issues:1. Detention under COFEPOSA Act2. Settlement Commission order and penalty imposition3. Challenge of detention order in High CourtAnalysis:1. The judgment involves the detention of the applicant under the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (COFEPOSA). The applicant was arrested on allegations of preparing fraudulent bills of lading and cheating the Revenue. Despite the order of detention passed in 2002, it had not been executed till the present time. The Union of India acknowledged that the appellant had not engaged in similar activities since the detention order. The Supreme Court deemed continuing the detention order as futile and set it aside, allowing for the possibility of future orders if similar allegations arise.2. The matter also pertains to the Settlement Commission's order where immunity from prosecution was granted to the appellant with conditions. The Settlement Commission observed that immunity could not be granted without imposing conditions and noted the deposit of dues amounting to Rs. 7,64,224 by the appellant. Additionally, a penalty of Rs. 50,000 was imposed, which was later set aside by the Settlement Commission upon the appellant's challenge in the High Court.3. Furthermore, the appellant challenged the detention order in the High Court, which was disposed of on the grounds that the petition was not maintainable at the pre-arrest stage. The High Court held that the appellant could not challenge the detention order until it was served or executed on them. Subsequently, the appellant appealed the High Court's decision, leading to the Supreme Court setting aside the High Court's order and disposing of the appeal.In conclusion, the Supreme Court's judgment addressed the futility of continuing the detention order, the Settlement Commission's order with imposed penalties, and the challenge of the detention order in the High Court. The decision emphasized the possibility of future detention orders if similar allegations resurface against the appellant.