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Union Of India And Others v. Mohanlal Likumal Punjabi And Others
Factual and Procedural Background
The Union of India appealed against a Bombay High Court judgment which had quashed an order dated 31-8-1995 passed under Section 7 of the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 (SAFEMA). The High Court held that, because detention orders passed against Respondents 1 and 2 under Section 3(1) of the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (COFEPOSA) were revoked on 19-12-1994, the SAFEMA proceedings became non est.
Key chronology derived from the opinion:
- 24-5-1994 – Detention orders issued under Section 3(1), COFEPOSA.
- 12-10-1994 – Competent Authority issued notice under Section 6(1), SAFEMA for forfeiture of properties.
- 19-12-1994 – Central Government revoked the detention orders under Section 11(1)(b), COFEPOSA.
- 11-1-1995 – Bombay High Court disposed the initial writ petitions (Nos. 1071 & 1072/1994) as infructuous because the detention had been revoked.
- 31-8-1995 – Competent Authority ordered forfeiture of properties under Section 7, SAFEMA.
- 23-11-1995 – Respondents filed fresh writ petitions challenging both detention and forfeiture; challenge to forfeiture was by amendment.
- 13-6-1996 – Division Bench of the High Court set aside the forfeiture order relying on the first proviso to Section 2(2)(b), SAFEMA.
- The Union of India filed the present criminal appeals before the Supreme Court.
Legal Issues Presented
- Whether the first proviso to Section 2(2)(b) of SAFEMA applies when a COFEPOSA detention order is revoked under Section 11(1)(b) (and not under Section 8) after receipt of the Advisory Board’s report.
- Whether a concession allegedly made by Union counsel before the High Court could bind the Union when the statutory provisions suggest otherwise.
- Whether respondents could maintain a subsequent writ petition challenging the detention order after the earlier petitions had been disposed of as infructuous.
Arguments of the Parties
Appellant: Union of India
- The first proviso to Section 2(2)(b), SAFEMA is inapplicable because the detention was revoked under Section 11(1)(b), COFEPOSA, not under Section 8, and only after the Advisory Board’s report.
- Proceedings under SAFEMA commenced while the detention orders were subsisting; therefore, the Competent Authority was entitled to pass the forfeiture order.
- A second writ petition challenging the detention order is barred, relying on Attorney General for India v. Amratlal Prajivandas.
- Any concession recorded by the High Court on proviso applicability is ineffective where it contradicts statutory text.
Respondents 1 & 2
- The Union, having conceded before the High Court that the proviso applied, is estopped from challenging that finding.
- Revocation under Section 11(1)(b) is “relatable” to the Advisory Board’s report; hence the proviso is triggered.
- Even if earlier writ petitions were rendered infructuous, fresh writ petitions are maintainable to protect rights affected by subsequent SAFEMA action, relying on Amritlal Chandmal Jain and Karimaben K. Bagad.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Attorney General for India v. Amratlal Prajivandas (1994) 5 SCC 54 | Maintainability of subsequent challenges after detention revocation. | Cited by Union; Court held later cases clarified its effect. |
| Competent Authority v. Amritlal Chandmal Jain (1998) 5 SCC 615 | Subsequent writ petition challenging detention is maintainable. | Applied to uphold respondents’ right to a fresh writ. |
| Karimaben K. Bagad v. State of Gujarat (1998) 6 SCC 264 | Same principle as above regarding maintainability of fresh writ petitions. | Followed; matter remitted to High Court for merits. |
| Sanjeev Coke Mfg. Co. v. Bharat Coking Coal Ltd. (1983) 1 SCC 147 | Court should not decide on the basis of counsel’s concession contrary to statute. | Used to disregard alleged concession before High Court. |
| Uptron India Ltd. v. Shammi Bhan (1998) 6 SCC 538 | A wrong concession by counsel does not create precedent or bind parties. | Reinforced principle that concession cannot override law. |
| Central Council for Research in Ayurveda & Siddha v. Dr K. Santhakumari (2001) 5 SCC 60 | Erroneous concession cannot confer rights contrary to statutory provisions. | Quoted para 12 to emphasize same point. |
Court's Reasoning and Analysis
1. Effect of Concession: The Supreme Court held that any concession recorded by the High Court cannot override clear statutory language. Relying on Sanjeev Coke, Uptron, and Central Council decisions, it stated that wrong concessions have no binding effect.
2. Applicability of the Proviso to Section 2(2)(b), SAFEMA: The proviso operates only when a detention order is revoked on or before the Advisory Board’s report as contemplated by Section 8, COFEPOSA. The revocation here occurred under Section 11(1)(b) after the Advisory Board considered the representations. Government correspondence and affidavits confirmed this sequence. Therefore, none of the three situations in sub-clause (i) of the proviso were met, rendering the High Court’s interpretation erroneous.
3. Maintainability of Subsequent Writ Petition: The Court examined Amritlal Chandmal Jain and Karimaben K. Bagad and affirmed that a fresh writ petition challenging the detention order is maintainable even after earlier petitions became infructuous because SAFEMA consequences continued to operate. This view was considered consistent with rule of law and did not require reconsideration.
4. Outcome of Analysis: Given that the High Court quashed the forfeiture solely on an inapplicable proviso, its judgment was set aside. However, the legality of the detention order itself had not been adjudicated on merits; consequently, the matter was remitted to the High Court for fresh consideration.
Holding and Implications
PARTLY ALLOWED & REMITTED
The Supreme Court set aside the Bombay High Court’s finding that the forfeiture proceedings were void under the first proviso to Section 2(2)(b), SAFEMA. It remitted the writ petitions to the High Court to decide, within six months, the legality of the underlying detention orders, which will in turn determine applicability of SAFEMA.
Implications: The judgment clarifies that revocation of detention under Section 11(1)(b), COFEPOSA, after an Advisory Board report, does not trigger the proviso that would nullify SAFEMA proceedings. It also reaffirms that erroneous concessions by counsel cannot override statutory mandates and that subsequent writ petitions may be entertained where consequential statutory actions persist. No new precedent was set, but existing principles were emphatically applied.
Arijit Pasayat, J.— Since the points involved in the criminal appeals are identical, they are taken up together for disposal.
2. Union of India questions legality of the judgments rendered by the Division Bench of the Bombay High Court holding that order dated 31-8-1995 passed by the competent authority under Section 7 of the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 (in short “the SAFEMA”) against Respondents 1 and 2 was not sustainable in law. For coming to such conclusion, reference was made to orders dated 19-12-1994 passed under Section 11(1)(b) of the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act (in short “the COFEPOSA”) revoking the order of detention and order dated 11-1-1995 passed in earlier writ petitions filed by Respondents 1 and 2. Reference was made to the first proviso to clause (b) of sub-section (2) of Section 2 of the SAFEMA for holding that proceedings initiated under the said statute became non est.
3. According to learned counsel for the appellant Union, the view taken by the High Court is clearly untenable. On the facts of the case, the first proviso to clause (b) of sub-section (2) had no application to the facts of the case. The revocation of the order of detention was in exercise of power conferred under Section 11(1)(b) of the COFEPOSA and not under Section 8 as stipulated in the said provision. It is further submitted that the proceedings were initiated by issuance of notice under Section 6(1) of the SAFEMA for forfeiture of property on 12-10-1994. The orders of detention under Section 3(1) of the COFEPOSA were passed on 24-5-1994. The orders of detention were challenged by Respondents 1 and 2 in Writ Petitions Nos. 1071 and 1072 of 1994. After the show-cause notice was issued in exercise of power under Section 11(1)(b) of the COFEPOSA, the Central Government revoked the orders of detention on 19-12-1994 as indicated above. In view of the revocation of the orders of detention, the writ petitions were disposed of on 11-1-1995. By order dated 31-8-1995, properties mentioned in the show-cause notice were directed to be forfeited under Section 7 of the SAFEMA. The order directing forfeiture was challenged on merits before the Tribunal constituted under the SAFEMA. Thereafter, writ petitions were filed on 23-11-1995 challenging the orders of detention and also challenging the order of forfeiture. The latter additional challenge was by way of amendment. By the impugned judgment dated 13-6-1996 the High Court passed the impugned order in each case.
4. Learned Senior Counsel for the Union of India further submitted that the Tribunal did not consider that the first proviso has no application to the facts of the case. The order of detention was not revoked under Section 8 of the SAFEMA but on the contrary under Section 11(1)(b) of COFEPOSA. There was no revocation before receipt of the report of the Advisory Board or before making reference to the Advisory Board. Since the proceedings were initiated when the order of detention was in force, and were brought to the logical end by passing the order under Section 7 of the SAFEMA, no illegality existed.
5. It is further submitted that it was not open to the respondents to question legality of the order of detention in the subsequent writ petition after the first writ petition was disposed of as having been rendered infructuous. Reliance was placed on a Constitution Bench judgment of this Court in Attorney General for India v. Amratlal Prajivandas (1994) 5 SCC 54 more particularly on paras 40, 41, 42 and 56 of the judgment.
6. In response, Mr Huzffa Ahmadi, learned counsel for Respondents 1 and 2, submitted that it is not open to the appellants to question correctness of the judgment after there was concession before the High Court about applicability of the proviso, and the absence of any scope for passing of any order under Section 7 of the SAFEMA.
7. It was further submitted that even otherwise order under Section 11(1)(b) is clearly relatable to the report of the Advisory Board under Section 8 of the SAFEMA. Therefore, the proviso has application to the facts of the case. It, however, could not be disputed by the learned counsel that in case the revocation is not under Section 8 of the SAFEMA, the proviso would not have any application. It is submitted that when the earlier writ petition is rendered infructuous there is no bar on filing a fresh writ petition on merits to avert the prejudice and damage caused on account of initiating proceedings under the SAFEMA. Strong reliance is placed on Competent Authority v. Amritlal Chandmal Jain (1998) 5 SCC 615 and Karimaben K. Bagad v. State of Gujarat (1998) 6 SCC 264.
8. We shall first deal with the effect of concession, if any, made by learned counsel appearing for the present appellants before the High Court. Closer reading of the High Court's order shows that the High Court took the view that in view of the revocation of the order on 19-12-1994 and the order passed by the High Court on 11-1-1995, no further order could have been passed under Section 7 of the SAFEMA. After having expressed this view, the so-called concession is recorded. In our view the concession, if any, is really of no consequence, because the wrong concession made by a counsel cannot bind the parties when statutory provisions clearly provided otherwise. It was observed by a Constitution Bench of this Court in Sanjeev Coke Mfg. Co. v. Bharat Coking Coal Ltd. (1983) 1 SCC 147 that courts are not to act on the basis of concession but with reference to the applicable provisions. The view has been reiterated in Uptron India Ltd. v. Shammi Bhan (1998) 6 SCC 538 and Central Council for Research in Ayurveda & Siddha v. Dr K. Santhakumari (2001) 5 SCC 60. In para 12 of Central Council case (2001) 5 SCC 60 it was observed as follows:
“12. In the instant case, the selection was made by the Departmental Promotion Committee. The Committee must have considered all relevant facts including the inter se merit and ability of the candidates and prepared the select list on that basis. The respondent, though senior in comparison to other candidates, secured a lower place in the select list, evidently because the principle of ‘merit-cum-seniority’ had been applied by the Departmental Promotion Committee. The respondent has no grievance that there were any mala fides on the part of the Departmental Promotion Committee. The only contention urged by the respondent is that the Departmental Promotion Committee did not follow the principle of ‘seniority-cum-fitness’. In the High Court, the appellants herein failed to point out that the promotion is in respect of a ‘selection post’ and the principle to be applied is ‘merit-cum-seniority’. Had the appellants pointed out the true position, the learned Single Judge would not have granted relief in favour of the respondent. If the learned counsel has made an admission or concession inadvertently or under a mistaken impression of law, it is not binding on his client and the same cannot enure to the benefit of any party.”
(italicized for emphasis)
9. In Uptron India Ltd. v. Shammi Bhan (1998) 6 SCC 538 it was held that a case decided on the basis of wrong concession of a counsel has no precedent value. That apart, the applicability of the statute or otherwise to a given situation or the question of statutory liability of a person/institution under any provision of law would invariably depend upon the scope and meaning of the provisions concerned and has got to be adjudged not on any concession made. Any such concessions would have no acceptability or relevance while determining rights and liabilities incurred or acquired in view of the axiomatic principle, without exception, that there can be no estoppel against statute.
10. The respective stands on merits need careful consideration. Section 2(2) of the SAFEMA, so far as relevant, reads as follows:
“2. Application.—(1) The provisions of this Act shall apply only to the persons specified in sub-section (2).
(2) The persons referred to in sub-section (1) are the following, namely:
(a) every person—
(i) who has been convicted under the Sea Customs Act, 1878 (8 of 1878), or the Customs Act, 1962 (52 of 1962), of an offence in relation to goods of a value exceeding one lakh of rupees; or
(ii) who has been convicted under the Foreign Exchange Regulation Act, 1947 (7 of 1947), or the Foreign Exchange Regulation Act, 1973 (46 of 1973), of an offence, the amount or value involved in which exceeds one lakh of rupees; or
(iii) who having been convicted under the Sea Customs Act, 1878 (8 of 1878), or the Customs Act, 1962 (52 of 1962), has been convicted subsequently under either of those Acts; or
(iv) who having been convicted under the Foreign Exchange Regulation Act, 1947 (7 of 1947), or the Foreign Exchange Regulation Act, 1973 (46 of 1973), has been convicted subsequently under either of those Acts;
(b) every person in respect of whom an order of detention has been made under the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (52 of 1974):
Provided that—
(i) such order of detention, being an order to which the provisions of Section 9 or Section 12-A of the said Act do not apply, has not been revoked on the report of the Advisory Board under Section 8 of the said Act or before the receipt of the report of the Advisory Board or before making a reference to the Advisory Board; or
(ii) such order of detention, being an order to which the provisions of Section 9 of the said Act apply, has not been revoked before the expiry of the time for, or on the basis of, the review under sub-section (3) of Section 9, or on the report of the Advisory Board under Section 8, read with sub-section (2) of Section 9, of the said Act; or
(iii) such order of detention, being an order to which the provisions of Section 12-A of the said Act apply, has not been revoked before the expiry of the time for, or on the basis of, the first review under sub-section (3) of that section, or on the basis of the report of the Advisory Board under Section 8, read with sub-section (6) of Section 12-A, of that Act; or
(iv) such order of detention has not been set aside by a court of competent jurisdiction;”
11. The first sub-clause of the proviso to clause (b) of sub-section (2) of Section 2 deals with three situations, when the exceptions provided by the proviso can operate. When the order of detention is one to which provisions of Section 9 or Section 12-A of the COFEPOSA do not apply, the situations are: (1) when orders of revocations on the report of the Advisory Board under Section 8, or (2) before the receipt of the report of the Advisory Board, or (3) before making a reference to the Advisory Board.
12. The appellants have relied on a letter dated 22-2-1995 issued by the Government of India, Ministry of Finance, Department of Revenue addressed to the competent authority of the SAFEMA indicating as follows:
“… The orders of detention were not revoked on the report of the Advisory Board under Section 8 of the said Act or before the receipt of the report of the Advisory Board or before making a reference to the Advisory Board.
The representations of the detenus were considered by the Advisory Board which did not accept them.”
13. Additionally, in the counter-affidavit filed before the High Court it was categorically stated that the revocation under Section 8 was not done before receipt of the report of the Advisory Board, and was not also revoked before making a reference to the Advisory Board. The further contingencies which arise when the situations envisaged in relation to the orders to which also provisions of Section 9 or Section 12-A of the COFEPOSA do not apply, are not relevant for the purpose of this case and are dealt with in sub-clauses (ii) and (iii) of the proviso. The order of detention was also not quashed in any judicial proceedings by a court of competent jurisdiction to attract sub-clause (iv). Section 11(1) of the COFEPOSA reads as follows:
“11. Revocation of detention orders.—(1) Without prejudice to the provisions of Section 21 of the General Clauses Act, 1897 (10 of 1897), a detention order may, at any time, be revoked or modified—
(a) notwithstanding that the order has been made by an officer of a State Government, by that State Government or by the Central Government;
(b) notwithstanding that the order has been made by an officer of the Central Government or by a State Government, by the Central Government.”
14. The first situation envisaged in sub-clause (i) of the proviso to clause (b) of sub-section (2) of Section 2, SAFEMA applies when the revocation is based on the report of the Advisory Board. As the factual position noted above goes to show, the revocation was only in terms of Section 11(1)(b) of the COFEPOSA. Such revocation when is done by the Central Government as in this case is really unrelated to a report of the Advisory Board. On the factual position, none of the three situations indicated in the first sub-clause of the said proviso is applicable.
15. The inevitable position is, therefore, crystal clear that the proviso to clause (b) of sub-section (2) of Section 2 of the SAFEMA had no application to the facts of the case as held by the High Court. To that extent the judgment of the High Court is indefensible and is set aside.
16. That brings us to the residual question as to whether the order of detention could be challenged subsequent to the disposal of the earlier writ petition on the ground that it had become infructuous. According to learned counsel for the appellants, position has been settled beyond doubt that it is impermissible in view of what has been stated in Attorney General case (1994) 5 SCC 54. This submission deserves no serious consideration, being one made in disregard of the view taken already by this Court. We find that the effect of the said decision was considered in the two decisions relied upon by learned counsel for Respondents 1 and 2. The view taken in Amritlal Chandmal Jain case (1998) 5 SCC 615 and Karimaben K. Bagad case (1998) 6 SCC 264 does not call for any further or fresh look or consideration — the same being not only just and reasonable but quite in conformity with the basic tenets of rule of law but commends for our respectful acceptance, as well.
17. In both these cases, it was held that the subsequent writ petition is maintainable and it should rightly be so having regard to the consequential action taken at any rate under the SAFEMA. Otherwise it would amount to the Government concerned being allowed/enabled by their action to disable and denude the person aggrieved from questioning the very applicability of the SAFEMA to him or his properties dehors his other rights to challenge the same otherwise on merits as well. In any event, this aspect as to the legality and validity of the order of detention does not appear to have been considered and decided on merits by the High Court. We, therefore, remit the matter back to the High Court for fresh adjudication on merits as to the legality and validity of the orders of detention, for the purpose of applying the provisions of the SAFEMA against the respondents or the properties concerned.
18. Since the matter is pending for a long time, it would be appropriate and in the interests of both parties as well, if the writ petitions are disposed of according to law after hearing parties within a period of six months from the date of judgment.
19. Parties are directed to maintain status quo in respect of the properties covered by the order under Section 7 of the SAFEMA. Respondents 1 and 2 shall not transfer or in any manner encumber the properties till the disposal of the writ petitions. Similarly, the order under Section 7 of the SAFEMA shall not be given effect till the disposal of the writ petitions and its implementation and enforcement would abide by the outcome of decision in the writ petition. We make it clear that we are not expressing any opinion on any of the contentions regarding the respective stands taken by the parties by way of challenge made to the legality and validity of order of detention or proceedings/orders passed on merits, except to the extent undertaken for setting aside the order of the High Court and the reasons assigned therefor.
20. The appeals are allowed to the extent indicated.
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