ABDUL KHADER v. SECRETARY TO GOVT. OF INDIA — 1999 DIGILAW 360 (KAR)

Y. BHASKAR RAO, C. J. ( 1 ) THIS writ of Habeas Corpus is filed by the petitioner assailing the detention order dated 13-9-1998 passed by the second respondent under Section 3 (1) of the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (hereinafter called 'cofeposa' Act ). 1) The brief facts of the case are that the petitioner is a resident of Bangalore and a business man. On the basis of the information that he was unauthorisedly indulging in foreign exchange transaction as his acts were prejudicial to the conservation and augmentation of foreign exchange, the detention order was passed on 23-9-1998 by the 2nd respondent under the COFEPOSA Act. That order is challenged in the present writ petition. ( 2 ) THE learned counsel Mr. Kiran S. Javali for the petitioner has contended that even taking the grounds annexed to the detention order are taken to be true and correct, the acts alleged against the petitioner in the impugned order will not cause any prejudice to conservation of foreign exchange of the country. At the most, it may be prejudicial to the augmentation of foreign exchange of the country. The ground urged in the detention order that the acts of the petitioner are prejudicial or loss to the foreign exchange in the country is not mentioned in the grounds of detention order and therefore, he is entitled to be set at liberty, in view of the law laid down by the Apex Court and Bombay High Court. ( 3 ) THE learned counsel for the respondents Mr. M. V. Vedachala has contended that the conduct of the petitioner in acquiring the foreign exchange within the country from other persons and using the same in the business activities by the petitioner not only cause prejudice to the augmentation of the foreign exchange but also cause prejudice to the conservation of foreign exchange in the country. ( 4 ) THOUGH the words "conservation" and "augmentation" are different, unless conservation of foreign exchange is properly protected, there cannot be proper augmentation of the foreign exchange in the country. Unless augmentation is properly maintained, there cannot be conservation of foreign exchange. Therefore,, there is no merit in the contentions urged in this petition. Hence, he has prayed for dismissal of the petition. The learned counsel for the respondents has sought to justify the impugned order. Unless augmentation is properly maintained, there cannot be conservation of foreign exchange. Therefore,, there is no merit in the contentions urged in this petition. Hence, he has prayed for dismissal of the petition. The learned counsel for the respondents has sought to justify the impugned order. ( 5 ) IN view of the above contentions, the important question of law that has to be considered is - whether the allegations in the impugned order constitute an act causing prejudice for conservation as well as augmentation of foreign exchange ? The detention order is an elaborate one referring to various facts containing the details of transactions of the petitioner with reference to the specific persons with whom he had transactions and it is also based on the statement of the petitioner as well as other persons. In para 11 of the grounds in the impugned order, it is stated thus :". . . . . . . You were interrogated in the Central Prison, Bangalore, on 16-3-1998 by the Enforcement Officer in the presence of the Assistant Superintendent of Prisons. You gave a statement on 16-3-1998. In the said statement, you have inter alia stated that whatever you had stated in your statements on 4-3-1998 and 5-3-1998 was true and correct. . . . . . "in the said ground, it is further mentioned that he used to meet one Mohamed Ali in Commercial Street end and he was buying and selling foreign currencies from the unauthorised persons to the tune of Rs. 2 crore per month for the last six months; and that one Sri Salim from whom he used to buy and sell foreign currencies was having a commercial complex in Singapore Plaza, Commercial Street, Bangalore. In para 13 of the grounds of the detention order, it is stated that he was examined on 25-3-1998 in the prison in the presence of Assistant Superintendent of Prison, wherein he has admitted that whatever he has stated in his earlier statements dated 4-3-1998, 5-3-1998 and 16-3-1998 and 17-3-1998 are true and correct, which would clearly show that he purchased the foreign currencies from one Sri Devraj Jain whose details were written on backside of the Sheet No. 18 and his telephone numbers were also found in page 23 of Telephone Diary, which was seized from him. It is also further shown that he had purchased foreign currency to the tune of Rs. 7,50,000/- from Sri Siraj. Thus there are similar allegations regarding buying of foreign currency from persons and selling the same to the others which are specifically mentioned in the impugned order. ( 6 ) THE question that would arise for consideration by this Court is whether purchase and sale of foreign currency without permission of the Reserve Bank of India cause prejudicial to the conservation of foreign exchange or to the augmentation of foreign exchange in the country. Under Section 6 of the Foreign Exchange Regulation Act, 1973 (for short, FERA Act) the Reserve Bank of India may, on an application made to it in this behalf, authorise any person to deal with foreign exchange. Section 8 imposes restriction in dealing with the foreign exchange and further provides that no person other than the authorised dealer in India, and no other person who is resident in India other than the authorised dealer outside India, can purchase or otherwise acquire or borrow the same, or sell, or otherwise transfer or lend or exchange with any person not being an authorized dealer, any foreign exchange, but with certain exceptions provided therein. Therefore, it is clear from the above provisions of the FERA Act, only the persons who are authorised under FERA Act, can deal with foreign exchange. If foreign exchange is dealt with by the persons without any authority, it would cause prejudice both to the conservation as well as to the augmentation of foreign exchange in the country. ( 7 ) THE flow of foreign exchange in the commercial field or any other field can only be regulated by the Reserve Bank of India. Without permission, nobody can deal with foreign exchange. If he or she deals with the foreign exchange, it amounts to violation of Section 8 of the FERA Act. Conducting business in foreign exchange in lakhs and dealing the foreign currencies in business transactions not only cause prejudicial to the augmentation of foreign exchange, but also cause prejudice to the conservation of foreign exchange. The conservation of foreign exchange depends on augmentation of foreign exchange also. The country's economy position will be determined on the capacity to purchase foreign exchange. The conservation of foreign exchange depends on augmentation of foreign exchange also. The country's economy position will be determined on the capacity to purchase foreign exchange. The illegal transactions as has been carried on by the petitioner as enumerated in the grounds of detention order would affect the conservation of foreign exchange as well as for augmentation of the country. Therefore, we are not able to accept the argument of the learned counsel for the petitioner that the allegations made against the petitioner will constitute only prejudice to augmentation of foreign exchange, but would not cause prejudice to the conservation of foreign exchange. Hence the submission of the learned counsel for the petitioner is devoid of merit. ( 8 ) IN this regard, it is relevant to refer to the Division Bench Judgment of the Calcutta High Court rendered in the case of Mangilal Baid v. Secretary Home (Spl.), Department of State of West Bengal , 1975 Criminal Law Journal 1790. The detenu in that case challenged the detention order passed under Section 3 of the COFEPOSA Act. That order was made preventing the detenu from acting in a manner prejudicial to augmentation of foreign exchange. The question that arose for consideration before that Court was whether the grounds mentioned in the order of detention would constitute prejudicial act of the detenu for conservation of foreign exchange or to the augmentation of foreign exchange in the country. The Court, after considering the argument of the Advocate for the detenu, has laid down the law at paragraph 25 of the Judgment which reads as hereunder at page 1802 :"25. We are unable to accept this contention of Mr. Ghose. Assuming that "augmentation " and conservation" are two completely different expressions which are mutually exclusive and that on the same set of facts it cannot be conservation and augmentation both as contended by Mr. Ghose, this by itself cannot be made the impugned order before us invalid. If the facts disclosed in the grounds are germane to "augmentation" of foreign exchange" as conceded by Mr. Ghose and also held by us, that is the end of the matter. Ghose, this by itself cannot be made the impugned order before us invalid. If the facts disclosed in the grounds are germane to "augmentation" of foreign exchange" as conceded by Mr. Ghose and also held by us, that is the end of the matter. If on the basis of facts set out in the grounds an order of detention could be made on the ground of augmentation of foreign exchange, the mere fact that augmentation and conservation are exclusive of each other, would not make this order of detention bad. At the most, on that ground the previous order could have been challenged. However, we make it clear that we are not holding that the earlier order was bad or that on the same set of facts no order could be passed on the ground of augmentation or conservation or augmentation and conservation both. In our opinion, even though the meaning of the expressions "augmentation" and "conservation" may not exactly be the same, it does not automatically follow that on the same set of facts two orders could not be passed one on the ground of augmentation and another, on the ground of conservation. In our opinion these two expressions are not so mutually exclusive as sought to be contended. Some act which is prejudicial to augmentation of foreign exchange may also be prejudicial to conservation of foreign exchange. The meaning of the expression "conservation" is preservation. The expression "augmentation" means the act or process of increasing the size or amount. It cannot be said that these two expressions are so completely different that orders can never be passed on both the grounds on the same of facts. Accordingly, we reject this contention of Mr. Ghose. "thus the conservation is more wider than the augmentation and the acts prejudicial to the conservation of foreign exchange would also cause the acts of the detenu prejudicial to the augmentation of foreign exchange in the country. Though same meaning is not given to the expressions "augmentation" and "conservation" and they may not be both exact and same, it does not automatically follow that on the same set of facts two orders could not be passed - one on the ground of conservation and another on the ground of augmentation. Though same meaning is not given to the expressions "augmentation" and "conservation" and they may not be both exact and same, it does not automatically follow that on the same set of facts two orders could not be passed - one on the ground of conservation and another on the ground of augmentation. Therefore, the facts of the present case narrated in the grounds of detention constitute that the acts of the detenue is prejudicial to conservation of foreign exchange of the country and the detention order is passed to prevent him from committing the acts prejudicial to the conservation of foreign exchange. ( 9 ) THE learned counsel for the petitioner has placed reliance on the Judgment of the Bombay High Court in Criminal Writ Petition No. 73/1990 in the case of Abdul Rehman Mohideen v. Union of India, DD 16-3-1990. The f acts of that case are that a detention order was passed against the detenu on 13th Dec. 1989 in exercise of the power conferred under Section 3 (1) of the COFEPOSA Act and the same was challenged. It was contended before the Court that Malayalam translation of grounds of the detention order was incorrect and the crucial words were missing therefrom and though the said ground was taken in the petition, no counter is filed controverting the same. The Court, after perusal of the record, found that the allegation is correct. In the original order of detention, it was recited that"with a view to prevent the detenu from acting in any manner prejudicial to augmentation of foreign exchange'. While the Malayalam translation supplied to the detenu recited that. . . . " The detention is with a view to prevent the detenu from activities weakening the foreign exchange resources. "therefore, in that case, the question that arose for consideration for that High Court was as to whether the detenu was prevented from making effective representation against the order of detention. The Court considering the abovesaid legal contention, has observed that the expressions 'conservation' and 'augmentation' are different and distinct. By the expression 'conservation' what is connoted is that the level of foreign exchange in the country should be retained and by expression 'augmentation' what is connoted is that the available exchange should increase in quantity. The Court considering the abovesaid legal contention, has observed that the expressions 'conservation' and 'augmentation' are different and distinct. By the expression 'conservation' what is connoted is that the level of foreign exchange in the country should be retained and by expression 'augmentation' what is connoted is that the available exchange should increase in quantity. The expression 'weakening' is more related to the expression 'conservation' and has nothing to do with the expression 'augmentation' and allowed the petition. ( 10 ) THE question in the present case is as to whether the ground alleged in the detention order would amount to an act prejudicial to the conservation of foreign exchange in the country. The allegations which are referred in the grounds of detention order clearly show that the petitioner was purchasing and selling the foreign exchange without any permission under the FERA Act. Therefore, it has affected the conservation of foreign exchange without any permission under the FERA Act. Therefore, it has affected the conservation of foreign exchange of the country. There is no dispute that there is some difference between the expression 'conservation' and 'augmentation'. Augmentation of foreign exchange only means increase in the foreign exchange of the country. Conservation of foreign exchange is to conserve the foreign exchange levels of the country. In a given year, the foreign exchange of the country may be "x". In another year, it may be "x+1" or "x+2" or even "x-1". Therefore, to conserve foreign exchange of the country, augmentation is also necessary. So the meaning of the word 'conservation' is more than the meaning of the word 'augmentation' as occurring under Section 3 (1) of the COFEPOSA Act. ( 11 ) IN view of the above circumstances, we are not able to accede to the contention of the learned counsel for the petitioner. Except that ground, no other ground is urged before us in this petition. Therefore, we do not see any reason to interfere with the order of detention passed by the second respondent. Therefore, petition must fail. Accordingly, petition is dismissed. Petition dismissed. --- *** --- .