Fathimathu Zohra v. The State of Tamil Nadu & Ors.

In the High Court of Judicature at MadrasDated : 25..09..2008C O R A MTHE HONOURABLE MRS. JUSTICE PRABHA SRIDEVANANDTHE HONOURABLE MR. JUSTICE V. PERIYA KARUPPIAHHabeas Corpus Petition No.108 of 2008Fathimathu Zohra.. Petitioner versus1. The State of Tamil Nadu, Rep. by its Secretary to Government, Public (SC) Department, Fort St. George, Chennai-9.2. The Union of India, Rep. by the Secretary to Government,Ministry of Finance,Department of Revenue (COFEPOSA Unit),Central Economic Intelligence Bureau,Janpath Bhavan, VI Floor, 'B' Wing,Janpath, New Delhi-110 001.3.The Superintendent of Central Prison,Central Prison, Puzhal, Chennai... Respondents- - - - -PRAYER : Petition under Article 226 of theConstitution of India seeking to issue a writ ofhabeas corpus calling for the records relating to thedetention order in G.O. SR.1/1154-8/2007, Public (SC)Department, dated 4.1.2008 passed by the firstrespondent, quashing the same and directing therespondents to produce the body of the person of thedetenu, Moula Mohideen Sujath Ali, son of MaulaMohideen, now detained in the Central Prison, Chennaias COFEPOSA detenue before this Court and set him atliberty.- - - - - For Petitioner : Mr. B. Kumar, Senior Counselfor Mr. M.M.K. Alifudeen For Respondents : Mr. P. Kumaresan, Addl. Public Prosecutor.- - - - - https://hcservices.ecourts.gov.in/hcservices/ O R D E RPrabha Sridevan, J.The wife of the detenu Moula Mohideen Sujath Ali has filedthis habeas corpus petition challenging the order of detentiondated 4.1.2008 passed against her husband, detaining him underSection 3(1)(i) of the Conservation Of Foreign Exchange andPrevention of Smuggling Activities Act, 1974 (Central Act 52 of1974).2. The detenu came from Singapore and landed at the ChennaiInternational Airport on 27.11.2007 with one hand baggage and fourchecked-in baggage. He was intercepted by the Customs Offcer atthe Green Channel on a reasonable suspicion that he might becarrying contraband goods. He was asked to declare the contentsof the baggage. He declared the contents of the baggage as usedclothes and some gift articles totally valued at Rs.20,000/-. Notsatisfied with that, the Customs Officers decided to examine hisbaggage. They found some gift articles and used clothes. In hislaptop bag, they recovered a swiss make, brand new ladies wristwatch of 'de-GRISOGONO' brand, which appeared to be made of whitegold, embedded with very small diamond stones all over the case.On a personal search in the presence of witnesses, the CustomsOfficer observed that he was wearing a swiss make, brand new andexpensive gents wrist watch on his left hand, which was of 'ULYSSENARDIN' brand. The Officer noted the markings, model number andother particulars engraved on the above said watches and browsedthe Internet and referred to two sites, viz. www.luxurybazaar.comand www.pricegrabber.com to ascertain the sale price of thewatches and arrived at a total value of an equivalent of IndianRupees 29,29,054/-. Since the detenu had failed to declarepossession of the said two watches and had attempted to go throughthe Green Channel, the goods were seized by the Customs Officerunder a mahazar on the reasonable belief that they were smuggledinto India and liable to confiscation under the provisions of theCustoms Act, 1962 (hereinafter referred to as the Act).3. The detenu gave a statement dated 28.11.2007 under Section108 of the Act. He had said that he new it was an offence toattempt to go through the Green Channel without declaring thecorrect value of goods and requested pardon. In the furtherstatement given before the Customs Officer, he had stated that thetwo watches were given to him by one A. Seng in Singapore asgifts. For attempting to smuggle the watches by way ofmisdeclaration, the detenu was alleged to have committed anoffence punishable under Sections 132 and 135 of the Customs Act.He was arrested on 28.11.2007 and produced before the AdditionalChief Metropolitan Magistrate, E.O.II, Egmore, Chennai on the same https://hcservices.ecourts.gov.in/hcservices/ day and was remanded to judicial custody till 12.12.2007. Fromthe above materials, the detaining authority was satisfied thatthe detenu had indulged in smuggling of goods and therefore, thedetention order came to be passed.4. Learned senior counsel appearing for the petitionerfirstly referred to the application filed by the detenu forcompounding the offence. According to him, by the letter dated7.12.2007 sent by the Chief Commissioner of Customs, a report wascalled for from the sponsoring authority, but the report of thesponsoring authority was not placed before the detaining authorityat the time of passing the order of detention. This is stated inthe order of detention. Next, he submitted that the value of thegoods brought in by the detenu was assessed based on the internetvaluation, which was not in accordance with the relevant rules,and since the price of the goods shown in the two sites mentioneddoes not refer to the country of origin, the valuation reflectedin the two sites would not accurately refer to the actual value ofthe goods in the country from where they were purchased, viz.Singapore. Learned senior counsel referred to Notification No.94of 2007 dated 13.9.2007 issued under the Customs Valuation(Determination of Value of Imported Goods) Rules, 2007, whichrefers to how the price of goods shall be determined. Rule 9 ofthe said Rules was referred to by both the counsel. LearnedAdditional Public Prosecutor submitted that Rule 9 provides thatif the value of the imported goods cannot be determined by any ofthe preceding rules, then the value shall be determined usingreasonable means consistent with the principles and generalprovisions of these rules. But, the learned senior counselreferred to sub-rule (2) of Rule 9, which said that no value shallbe determined under the provisions of this Rule on the basis ofthe selling price in India of the goods produced in India or theprice of the goods in the domestic market of the country ofexportation. It was pointed out by the learned senior counselthat there is no way of ascertaining as to whether the value ofthe watches which was shown on the two websites was the actualvalue of the goods in the domestic market of the country ofexportation. If it was so, then sub-rule (2) of Rule 9specifically bars assessing the value of the goods on that basisunder Rule 9. Learned senior counsel also submitted that theCEGAT, Delhi had, in 2000 (117) E.L.T. 49 (Tribunal) [AggarwalDistributors (P) Ltd. vs. Commissioner of Customs, New Delhi],held that the document displayed on the internet is not worthy ofreliance for the reasons that the document is unsigned, no oneknows who has introduced the document on the internet, what wasthe nature of the price indicated in the document and whether itwas a retail price and refused to accept the internet value owingto lack of documentary evidence in support thereof. According tothe learned senior counsel, the Supreme Court dismissed the civilappeal filed against the said order of the Tribunal. Learned https://hcservices.ecourts.gov.in/hcservices/ senior counsel further submitted that if the correct valuation hadbeen done and it was less than rupees five lakhs, then as per theAct, no arrest can be made on the ground of suspected evasion ofcustoms duty unless the value of the goods in respect of which theevasion of duty is suspected exceeds rupees five lakhs. Learnedsenior counsel also submitted that it will be seen that there wasno effort to conceal the watches. The gents watch was worn by thedetenu and the ladies watch was kept loosely in the hand baggage.It was further submitted that this is only a solitary instance andthere is nothing to show that the detenu is likely to repeat theactivity and therefore, it is necessary to prevent him from doingso. Lastly, learned senior counsel submitted that there was noeffective consideration of the representation of the detenu. Insupport of his submissions, learned senior counsel referred tovarious judgments.5. Learned Additional Public Prosecutor, on the other hand,submitted that the non-disclosure of the possession of thevaluable goods would itself show that the detenu had intention tosmuggle them into the country. When the detaining authority hadreferred to the compounding proceeding and the adjudicationproceeding, the further proceedings regarding that will not haveany bearing on the detention and therefore, the non-placing ofthese documents would not really be material. As regards thevalue of the goods, learned Additional Public Prosecutor submittedthat the authorities had properly followed the rules whilearriving at the value of the goods, viz. the residual method ofevaluation. He also relied on several decisions in support of hissubmissions.6. The following documents in the paper book supplied to thedetenu were relied on on behalf of the respective parties. Pages16 and 19 would refer to the value of the watches as shown on theinternet. Here, the learned senior counsel pointed out that thedocument shows that the gents watch worn by the detenu was alimited edition and there was no material before the detainingauthority that the seized watch was a limited edition. This wouldhave a definite bearing on the value of the watch. Limitededition goods are definitely much more highly priced than thenormal editions. Therefore, the reliance on the internet value ofthe goods would not be reliable. On the other hand, according tothe learned Additional Public Prosecutor, this is the onlyavailable method of assessing the value of these expensivewatches. 7. Learned Additional Public Prosecutor referred to thetravel documents of the detenu which would show that the detenuhad repeatedly made trips between Singapore and India in a shortspan of time and therefore, there was justifiable material for theauthorities to come the the conclusion that he had to be prevented https://hcservices.ecourts.gov.in/hcservices/ from repeating the smuggling activity. Learned Additional PublicProsecutor, in this context, referred to (2005) S.C.C. (Cri) 17[Kirtikumar Nirula vs. State of Maharashtra] where the detenu wasfound to travel on the same route, viz. Delhi-Bombay-Ahmedabadedin a particular manner, in fact, 16 times in a short period. TheSupreme Court held that the conduct is sufficient to form areasonable conclusion that the detenu is likely to indulge insimilar activities in future also. To this, the learned seniorcounsel responded by saying that in the voluntary statement givenby the detenu, he had stated that the detenu exports musicalinstruments to Singapore and Japan and that he has the D.G.F.T.License for that and therefore, there is explanation for hisfrequent travel. Further, according to the learned seniorcounsel, merely because someone travels frequently to Singaporeand back, it would not mean that they are engaged in smugglingactivity. He relied on (2002) 3 S.C.C. 754 [ChowdarapuRaghunandan v. State of Tamil Nadu] where the detenu had visitedSingapore twice earlier and the Supreme Court held that from that,no inference can be drawn that he is likely to be involved inprejudicial activities in future.8. Now, let us examine the various grounds that arise forconsideration in the case on hand.8.1 Important documents not placed for considerationIn (1999) S.C.C. (Cri) 1469 [Ahamed Nassar vs. State of TamilNadu], the Supreme Court held as follows :"20. So far as the stand of the respondent withreference to the advocate’s letter dated 19-4-1999 isconcerned it cannot be held to be a justifiable stand.These technical objections must be shunned where adetenu is being dealt with under the preventivedetention law. A man is to be detained in the prisonbased on the subjective satisfaction of the detainingauthority. Every conceivable material which is relevantand vital which may have a bearing on the issue shouldbe placed before the detaining authority. Thesponsoring authority should not keep it back, based onhis interpretation that it would not be of any help toa prospective detenu. The decision is not to be made bythe sponsoring authority. The law on this subject iswell settled; a detention order vitiates if anyrelevant document is not placed before the detainingauthority which reasonably could affect his decision.""25. The aforesaid two letters, viz., dated 23rdApril and 19th April contain factual assertions, notonly retraction of the detenu’s earlier allegedconfession but other matters. So far as the retractionof confession by the detenu is concerned, we accept thestand of the respondent that the same was also recorded https://hcservices.ecourts.gov.in/hcservices/ in the bail application dated 1-4-1999 of the detenuwhich was placed and considered by the detainingauthority. But in these letters the stand of the detenuwas that the seized goods are not prohibited goodswhich passed through the red channel for which thedetenu offered to pay the duty but instead, the officerconcerned without listening proceeded to arrest him. Itis true, the respondent’s case is that the detenubrought these goods in trade which were not bona fidebaggage and were misdeclared; both the type andquantity of goods were found concealed (65 cellularphones in 10 cigarette cartons of State Express 555) toevade detection and payment of customs duty. But thisstand is on merits. It is not necessary in theseproceedings to go into its merits and demerits.26. The question is not whether the second part ofthe contents of those letters was relevant or not butwhether they were placed before the detaining authorityfor his consideration. There could be no two opinionson it. It contains the very stand of the detenu ofwhatever worth. What else would be relevant if notthis? It may be that the detaining authority might havecome to the same conclusion as the sponsoring authoritybut its contents are relevant which could not bewithheld by the sponsoring authority. The letter dated19-4-1999 reached the sponsoring authority and reachedwell within time for it being placed before thedetaining authority. There is an obligation cast on thesponsoring authority to place it before the detainingauthority, which has not been done. Even the letterdated 23-4-1999 which reached the Secretary concernedat 3.00 p.m. on 26-4-1999 was much before the formaldetention order dated 28-4-1999. The Secretaryconcerned was obliged to place the same before thedetaining authority. The respondent authority was notright in not placing it as it contains not only what isalready referred to in the bail application dated 1-4-1999 but something more."8.2 In (2007) 1 S.C.C. (Cri) 464 [Adishwar Jain vs. Union ofIndia], the documents which had not been placed before theauthorities and which were alleged to have prejudiced the detenuwere the report of the D.R.I. stating that the appellant in thatcase had been exonerated of the offence based on the orders of thecivil court, orders of the Tribunals etc. Before the SupremeCourt, it was contended that the appellant had obstructed theproceedings by initiating various civil litigations. But, theSupreme Court held as follows :"... But, indisputably, those documents involvingthe civil court proceedings were not placed before the https://hcservices.ecourts.gov.in/hcservices/ detaining authority. If the same had not been done,not only the delay in issuing the order of detentionstood unexplained, but also thereby the order itselfwould become vitiated. Furthermore, the civil courtproceedings were over on 19.11.2004. Evidently, thedetaining authority did not take immediate steps todetain the appellant. Why the documents pertaining tothe proceedings of the civil court had not been placedbefore the detaining authority has not beenexplained. ..."8.3 In (2006) 1 M.L.J. (Crl.) 398 [Rajinder Arora vs. Unionof India], the document that was not placed before the detainingauthority was a status report submitted by the third respondenttherein to the D.R.I., Delhi. The defence of the sponsoringauthority and the detaining authority was that the status reportis an internal correspondence and has not been relied upon andtherefore, it is not necessary to serve it on the detenu. TheSupreme Court held that the status report, which was called forfrom the Customs Department, was not taken into consideration bythe competent authorities and referred to the decision in (2005) 9SCALE 534 [S. Nagamuthu vs. State of Tamil Nadu], where the orderof detention was struck down on the ground that the relevantmaterial had been withheld from the detaining authority. 8.4 It is true that in (1992) 1 S.C.C. 1 [Abdul SattarIbrahim Manik vs. Union of India], the Supreme Court held that thenon-supply of the copies of the bail application or the orderrefusing bail to the detenu cannot affect the detenu's right ofbeing awarded a reasonable opportunity, if the authority had notrelied or referred to the same in the order of detention. 8.5 In (2007) 1 S.C.C. 295 [Usha Agarwal vs. Union of India],the Supreme Court observed as follows :"The sponsoring authority should not undertake anyexercise of examination and interpretation of theavailable material with a view to place the documentsselectively before the detaining authority. It is notfor the sponsoring authority to decide as to which ofthe relevant documents should be placed before thedetaining authority, or which of the documents arelikely to help, or not help the prospective detenu;consequently, the sponsoring authority cannot excludeany particular document from the material to be placedbefore the detaining authority. If the relevant factsor documents which may influence the subjectivesatisfaction of the detaining authority on the questionwhether or not to make the detention order, are notplaced before the detaining authority, or are notconsidered by the detaining authority, it may vitiatethe detention order itself. It is no answer to say thatthe exclusion of a relevant document did not affect thedecision to detain a person, in view of the other https://hcservices.ecourts.gov.in/hcservices/ documents that were placed before the detainingauthority or that the detaining authority would havecome to the same conclusion even if it had consideredthe said document."8.5 In (2005) 7 S.C.C. 70 [J. Abdul Hakeem vs. State of TamilNadu], the Supreme Court held that though the detenu has a rightto be supplied with the material documents on which reliance isplaced by the detaining authority for passing the detention order,the detention order will not be vitiated, if the document althoughreferred to in the order is not supplied which is not relied uponby the detaining authority for forming of its opinion or was madethe basis for passing the order of detention. It was held that thecrux of the matter lies in examining whether the detenu's right tomake a representation against the order of detention is hamperedby non-supply of the particular document.8.6 In H.C.P. No.1805 of 2007 dated 22.7.2008 [R. ChandraMohan vs. State of Tamil Nadu & Others], the question whether thenon-placement of the report of the sponsoring authority was vitalwas considered and the Division Bench held as follows :"Insofar as the non-placement of the report of thesponsoring authority dated 4.12.2007 is concerned, ofcourse, by the said report, the letters of retractionof earlier confession were neither considered norrejected. Nevertheless, the application of the detenufor compounding the offences made under Rule 4(3) ofthe Customs (Compounding of Offences) Rules, 2005 on14.11.2007 to the compounding authority was consideredand in fact, the detaining authority had reported thatthe compounding of offences would be considered in thecase under Sections 132 and 135(1)(a) of the CustomsAct, 1962 and not u/s.132 alone. In our consideredview, the said report attaches some materials in favourof the detenu and in the said circumstances, the reportassumes importance. Again, had the said report beenplaced before the detaining authority, differentconsiderations could have occurred in the mind of thedetaining authority to arrive at a subjectivesatisfaction or opinion as to whether the detenu shouldbe clamped with the order of detention under theprovisions of the COFEPOSA Act. The said report dated4.12.2007 is a material document and therefore, non-consideration of the said document would also vitiatethe order of detention. As both the letters retractingthe confession and the report of the Commissioner ofCustoms were much prior to the order of detention dated17.12.2007 and since these documents were in thecustody of the sponsoring authority even before thedetention order came to be passed, the sponsoringauthority ought not to have withheld these documents https://hcservices.ecourts.gov.in/hcservices/ from the consideration of the detaining authority.Therefore, the failure on the part of the sponsoringauthority to place the above documents will certainlyaffect the consideration of the detaining authority topass the detention order."The case on hand is similar to the above case decided by theDivision Bench. In this case, the compounding application was infact allowed subsequently on 10.4.2008. Had the report of thesponsoring authority been placed before the detaining authority,he may have decided differently. As observed in Ahamed Nassar'scase (supra), it is not for the sponsoring authority to decidethat the report will not have any bearing on the decision of thedetaining authority. Therefore, we hold that failure on thepart of the sponsoring authority to place the above document willcertainly affect the legality of the detention order.9. Mode of ValuationIn (2006) 2 M.L.J. (Crl.) 487 [Khathija Beevi vs. State ofTamil Nadu & Another], the mode of vaulation of the watch broughtin by the detenu was called into question and the order ofdetention was quashed on the ground that in respect ofcontemporaneous import of similar goods, the valuation was made bythe Customs Authorities on the basis of a different yardstick. InH.C.P. No.1126 of 2005 dated 15.2.2006 [Rizwana Ziyath vs. Stateof Tamil Nadu & Another], a Division Bench of this Court had heldon seeing the physical condition of the goods that the valuationarrived at by the Department was neither arbitrary nor unfair andaccordingly confirmed the order of detention. 9.1 In appropriate circumstances, the internet value may bethe acceptable method of valuation. Each case will have to betested on its own factual basis. In the present case, we have nomaterial to indicate that the goods that were seized from thedetenu were identical to the goods whose picturisation is shown inthe paper book. So, apart from the statement in the mahazar thatthe Customs Officer noted down the markings and examined them onthe website, there is no other satisfactory basis for us toconclude that the goods brought in by the detenu were identical orat least similar to the watches shown at pages 16 and 19 of thepaper book. 9.2 The contention of the learned senior counsel regardingthe gents watch being a limited edition cannot also be ignored,for we are informed that limited edition watches are much moreexpensive than the normal editions which are placed in the market.We are not sure that was the most satisfactory method of valuationas far as these expensive and rare items are concerned. And, somany questions surround the method by which this valuation hadbeen arrived at. As rightly contended by the learned seniorcounsel, if an Appraiser had valued the two watches and hadarrived at a value which was less than rupees five lakhs, thenthere may have been no arrest. These are questions that should https://hcservices.ecourts.gov.in/hcservices/ have arisen in the mind of the detaining authority. The detainingauthority has not chosen to seek clarify these doubts. Had hedone so, his conclusion may have been different. This is anothervitiating factor. 10. Past ConductIn (2002) 3 S.C.C. 754 [Chowdarapu Raghunandan v. State ofTamil Nadu], the Supreme Court held as follows :"In appropriate case, an inference couldlegitimately be drawn even from a single incident ofsmuggling, that the person may indulge in smugglingactivity but for that purpose antecedents and nature ofthe activities carried out by a person are required tobe taken into consideration for reaching justifiablesatisfaction that the person was engaged in smugglingand that with a view to prevent, it was necessary todetain him. It is also settled law that an order ofpreventive detention is founded on a reasonableprognosis of the future behaviour of a person based onhis past conduct judged in the light of the surroundingcircumstances. Such past conduct may consist of onesingle act or a series of acts. It must be of such anature that an inference can reasonably be drawn fromit that the person concerned would be likely to repeatsuch acts so as to warrant his detention."In the above case, the detenu was an Engineering Graduate and wasthe Managing Director of a public limited company. There was noallegation that he was involved in any other anti-social activity.The only allegation was that he visited Singapore twice as a'tourist'. The Supreme Court held that from the fact that aperson had visited Singapore twice earlier as a 'tourist',inference cannot be drawn that he was involved in smugglingactivities or is likely to indulge in such activities in future.Hence, from the facts stated above, the Supreme Court held that itwas totally unreasonable to arrive at a prognosis that thepetitioner is likely to indulge in any such prejudicialactivities. The Supreme Court held thus:"... Preventive detention is not a punitive Actand it is not an alternative to criminal trial underthe law. It does not empower the authority to punish aperson without trial. Its purpose is to prevent aperson from indulging in activities, such as smugglingand/or such other anti-social activities as providedunder the preventive detention law."The Supreme Court further held as follows : https://hcservices.ecourts.gov.in/hcservices/ "... What is required to be seen is as to whetheron the materials placed on record, it could reasonablybe said to indicate any organized act or manifestationof organized activity or give room for an inferencethat the petitioner would continue to indulge insimilar prejudicial activity warranting ornecessitating the detention of the person to ensurethat he does not repeat his activity in future....Though, no doubt, the courts exercising powers ofjudicial review do not consider the challenge to anorder of detention, as if on an appeal re-appreciatingthe materials, yet since an order of detention inprison involves the fundamental rights of the citizen,freedom of movement and pursuit of normal life andliberty, no absolute immunity can be claimed by therespondents as to the decision arrived at and it isopen to the courts to see whether there has been dueand proper application of mind and that all therelevant and vital materials for the purpose have beennoticed, adverted to and considered."11. In the present case, the detenu claims to be exportingmusical instruments to Singapore and Japan. No doubt, hefrequently made trips between India and Singapore. In theapplication for compounding the offence, the detenu has statedthat this is the first case and no previous case has beenregistered against him. It is not the case of the respondentsthat he is a previous offender, nor is anything stated to theeffect that he does not have a D.G.F.T. License to export musicalinstruments to Singapore and Japan. So, the claim of the detenuthat he is an exporter and also that there has been no smugglinghistory on his part must be accepted. If so, the ratio laid downin Chowdarapu Raghunandan's case (supra) is squarely applicable tothe present case. 12. As regards the representation sent by on behalf of thedetenu, it is seen that several objections have been raised in therepresentation, but the representation has been rejected onmechanical basis. It has been repeatedly held that considerationof representation of the detenu is not an empty formality. Theconsideration should be in the real sense of the term with regardto all the objections raised by or on behalf of the detenu in hisrepresentation. https://hcservices.ecourts.gov.in/hcservices/

13. For all these reasons, the order of detention dated dated4.1.2008 passed by the first respondent is quashed. The habeascorpus petition is allowed. The detenu, Moula Mohideen SujathAli, son of Maula Mohideen, now detained in the Central Prison,Chennai as COFEPOSA detenu is directed to be released forthwithunless his custody is required in connection with any other case.AbSd/Asst.Registrar/true copy/Sub Asst.RegistrarTo1. The Secretary to Government, Public (SC) Department, Govt. of Tamil Nadu, Fort St. George, Chennai-9.2. The Secretary to Government,Ministry of Finance,Department of Revenue (COFEPOSA Unit),Central Economic Intelligence Bureau,Govt. of India,Janpath Bhavan, VI Floor, 'B' Wing,Janpath, New Delhi-110 001.3.The Superintendent of Central Prison,Central Prison, Puzhal, Chennai.4.The Public Prosecutor,High Court, Madras.+ 1 cc to the Mr. M. M. K. Alifudeen, Advocate SR No. 55622H.C.P. No.108 of 2008MS(CO)SR/15.10.2008