IMPORTANT POINT
High Court was not justified in setting aside preventive detention order passed under Section 3(1) of COFEPOSA Act, 1974 to be continued after 1.6.2000 holding that what was considered to be the criminal violation of FERA, 1973 has ceased to be criminal offence under FEMA, 1999 which has (impliedly) repealed FERA, 1973.

Headnote:Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (= COFEPOSA Act)-Section 3(1)-Preventive detention order to prevent Criminal Violation of Foreign Exchange Regulation Act, 1973-(=FERA) set aside by High Court in writ petition on ground that on repeal of (FERA) by Foreign Exchange Management Act, 1999 (=FEMA) violation of FERA ceased to be a criminal violation and so detention order cannot be continued after 1-6-2000-Appeal against -Whether High Court s order is sustainable in law? (No)-Appeal allowed-Whether detenue be re-detained? (No)-Appeal allowed accordingly-Case law referred (Customs Act, 1962) -Sections 2(39), 111, 113, 135, 135A-Constitution of India-Articles 226, 136).
       Held : COFEPOSA Act contemplates two situations for exercise of power of preventive detention - (a) to prevent violation of foreign exchange regulations; and (b) to prevent smuggling activities. Under Section 2(e) of COFEPOSA Act, smuggling is to be understood as defined under clause (39) of Section 2 of the Customs Act, 1962 which provides that smuggling in relation to any act or omission will render such goods liable to confiscation under Section 111 or Section 113. Section 111 contemplates confiscation of improper imported goods and Section 113 contemplates confiscation of goods attempted to be improperly exported. This has nothing to do with the penal provisions i.e. Sections 135 and 135A of the Customs Act which provide for punishment of an offence relating to smuggling activities. Hence, to contend that for exercising power under COFEPOSA Act for detaining a person, he must be involved in criminal offence is not born out by the said provisions. (Para 9)
       Other important aspect is that COFEPOSA Act and the FEMA occupy different fields. COFEPOSA Act deals with preventive detention for violation of foreign exchange regulations and FEMA is for regulation and management of foreign exchange through authorised person and provides for penalty for contravention of the said provisions. (Para 10)
       Hence, in our view, the order passed by the High Court holding that what was considered to be the criminal violation of FERA has ceased to be criminal offence under FEMA, the detention order cannot be continued after 1.6.2000, cannot be justified. (Para 11)
       Further, if the view taken by the High Court and the contentions raised by learned counsel for the respondent are accepted, it would result in implied repeal of substantial part of Section 3 of COFEPOSA Act. One of the established principles of interpretation of the statutory provisions is that courts as a rule lean against implied repeal unless the provisions are plainly repugnant to each other. There is also a presumption against repeal by implication. (Para 12)
       Held finally : In view of the aforesaid discussion, the judgment and order passed by the High Court cannot be sustained and is, therefore, set aside. However, next question would be whether this would be a fit case for directing the detenu to surrender to undergo the remaining period of detention? In our view, considering the fact that detention order was passed in February, 2000 and the fact that the impugned judgment was passed by the High Court in November, 2000, this would not be a fit case for directing the detenu to surrender to undergo the remaining period of detention. In the result, the appeal is allowed to the aforesaid extent only. (Paras 14 and 15)

JUDGMENT

Shah, J.-Leave granted.

2. By order dated 8th February 2000, the Joint Secretary, Ministry of Finance, Department of Revenue, Government of India made a detention order under Section 3(1) of the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (hereinafter referred to as "COFEPOSA Act") directing that one B. Sankar be detained and kept in custody with a view to prevent him from acting in any manner prejudicial to the augmentation of foreign exchange. The said order was served upon detenu on 15th February, 2000 along with grounds of detention and copies of the documents relied upon by the Detaining Authority. That order was challenged by filing Writ Petition (HC) No. 41 of 2000 before the High Court of Karnataka at Bangalore. By the impugned judgment and order dated 2nd November, 2000, the High Court quashed and set aside the detention order on the ground that what was considered to be criminal violation of the Foreign Exchange Regulation Act, 1973 (hereinafter referred to as "FERA") has ceased to be so on the repeal of FERA which is replaced by the Foreign Exchange Management Act, 1999 (hereinafter referred to as "FEMA"). That order is challenged by filing this appeal.

3. In the detention order, it has been stated that upon receipt of information that B. Sankar was indulging in receiving and making payments in India on behalf of a resident of Riyadh (Saudi Arabia), a search was conducted at detenu s residential premises and also at his office premises on 22nd and 23rd September, 1999. As a result of the search, Indian currency of about Rs. 42,90,000/- (forty two lakhs and ninety thousand) was seized. In his statement recorded by the officers, detenu stated that during the first week of June, 1999 one Rafeeq, who was his friend, met him in his office and informed that he was doing business of collecting Saudi Riyals from Indians in Saudi Arabia and in equivalent thereof he was making arrangements for delivery of Indian rupees to various persons in India : that if he assists him in this business and receives Indian rupees as per his instructions and distributes the respective amounts to various persons as per his instructions, he would pay a commission of Rs. 200/- for every one lakh of rupees received and distributed by him. To that proposal, detenu agreed and various transactions took place in pursuance of the aforesaid talks. Various documents were also seized from his office premises. It is also stated that when asked about the seized currency, detenu in his statement inter alia admitted that he had received it from one unknown person in Bangalore as per instructions of his friend, Mr. Rafeek, a resident of Riyadh. He also stated that his friend Rafeek from Riyadh telephonically informed him to receive a sum of Rs. 42,90,000/- in his name at Bangalore and deliver it to the persons, whose details were to be furnished by his friend Rafeek. It is alleged that in a very short span, the detenu had collected Rs. 1,67,90,000/- and had distributed Rs. 1,25,00,000/- and was doing hawala transactions. On the basis of the said material, the detention order was passed.

4. At the time of hearing of this appeal, learned counsel for the parties admitted that period of detention is over. Still however, learned counsel for the appellant Union of India submitted that the interpretation of COFEPOSA Act by the High Court is erroneous as it has not considered relevant part of Section 3 of the COFEPOSA Act. He submitted that the language of Section 3 does not provide for any pending criminal action against the person to be detained and the nature of detention being preventive, it is not necessary in law that the person sought to be detained should have committed a criminal offence punishable with imprisonment. For passing detention order, detaining authority should be satisfied that there is a possibility of the person who has committed an act which is prohibited under FERA or FEMA indulging in similar activi

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2002 Supreme(SC) 530

Cases Referred (5)