( 1 ) THE petitioner,shri Bhupinder Singh is challenging the order of preventive detention dated 19. 7. 95 and served on him on 24. 7. 95. It was passed by the Central Government under the provisions of the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974, (hereinafter called COFEPOSA ).

( 2 ) THE brief facts as set out in the grounds of detention are as follows:

(A) Information was received on 18. 4. 95 that the petitioner, Bhupinder Singh was having business at 142, MCD Market, Karol Bagh New Delhi. Petitioner was selling foreign exchange to one Navneet Bhatia, resident of WZ-11, Rattan Park, New Delhi and the latter was carrying huge amounts on his person. On 18. 4. 95, Navneet Bhatia was intercepted and search of his person revealed US $ 30,000 and search of his car revealed Indian currency of Rs. 18,00,000 and these were seized. Search of the premises of Navneet Bhatia revealed US $ 15,151, D. M. 2200, Saudi Riyals 2600. 00 , H. K. $ 500, Japanese Yen 5000 and Thai Bhat 2690 and Indian Currency of Rs. 6,80,000 and documents. Search of shop of petitioner revealed US $ 6517, Saudi Riyals 500, Italian Lira 4 lakhs, Thai Bhat 2250, DM 2690. 00 and Indian currency of Rs. 1,45,000. Statements were recorded from Navneet Bhatia on 18. 4. 95 and 19:4. 95. Among other things, Navneet Bhatia stated:

"that on 16. 4. 93, Harjinder Singh asked him (navneet) to take US $ 10,000 from you; that accordingly he talked with you at your telephone No. 5713622 and went to your shop and took up $ 10,000 from you; that in lieu of this, he (Navneet) paid you Rs. 3. 40 lakhs; that on that day (i. e. 18. 4. 95) also, he talked with you on phone and that between 3. 30 PM to 3. 45 PM, he gave Rs. 9 lakhs to you and some balance amount was to be given to you afterwards;"

NAVNEET Bhatia s statement shows that he was purchasing the foreign exchange from petitioner and others and handing over the same to one Harjinder Singh of Singapore. On this occasion, he was caught before he could pass on the foreign currency to the said Harjinder Singh.

(B) The grounds of detention further state as follows: They refer to the petitioner being summoned to the Enforcement Department on 18. 4. 95 and to petitioner s statement dated 18. 4. 95 admitting that he deals in sale/purchase of foreign currency, that various persons came to his shop to sell US $, that on 18. 4. 95, when his shop was searched the foreign currency US $ 6517, Saudi Riyals 500, Thai Bhat 2250. 00 , DM 2690. 00 , and Italian lira 4 lakhs and Indian Rs. 1. 45 lakhs were seized. On 18. 4. 95, he had purchased US $ at 33. 80 to Rs. 34. 00 from 3 or 4 persons. They were to be sold at Rs. 34. 50 on that evening. Petitioner also gave the rate of purchase/sale of other foreign currency. Harjinder Singh of Singapore had introduced Navneet Bhatia to petitioner and told petitioner to collect foreign exchange give it to Navneet Bhatia in lieu of Indian Rupees. The petitioner is supposed to have sold US $ 10,000 at Rs. 34. 00 to Navneet on 16. 4. 95, and another $ 30,000 on 18. 4. 95 and recover Rs. 9 lakhs, that out of these $ 30,000 petitioner had purchased part from Jolly, part from Mantu and from others.

(C) Navneet Bhatia s brother, Deepak Bhatia also gave a statement on 18. 4. 95 slating that his brother Navneet told him that Rs. 9 lakhs were to be given to petitioner alter collecting $ 30,000 from petitioner, that Navneet had gone to petitioner, paid Rs. 9 lakhs and got $ 30,000 and was intercepted at that time. They recovered $ 30,000 from Navneet and Rs. 18 lakhs from Navneet s car.

(D) Reference is made to statement of Bitto and Jolly. Jolly stated he knew petitioner but denied sale of currency to petitioner but Jolly told customers to go to petitioner for sale of foreign currency as "petitioner was known in the market for sale or purchase of foreign currency.

(E) It is stated that Navneet Bhatia was arrested on 19. 4. 95 and ultimately released on b