The Supreme Court observed that the provisions of Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976, (SAFEMA) would apply to every person against whom an order of detention has been passed under Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (COFEPOSA).

The court was considering two appeals against the orders from the Delhi and Bombay High Courts related to property forfeiture under the SAFEMA.

A two judge Bench of Justice Vikram Nath and Justice Ahsanuddin Amanullah held, “in the present case against the detention order, the appellant had made a representation which had been rejected. Thereafter the said order was challenged before the High Court by way of a writ petition which had also been dismissed on merits by a detailed order upholding the detention order. The revocation however had been made on a statement given on behalf of the Union of India before this Court in order to institute a complaint under the relevant statute. The said revocation is not contemplated under Section 2(2)(b) and its proviso, and, therefore, no benefit can be extended to the appellant(s) on the said count. Therefore, in our view, the impugned judgment does not suffer from any infirmity warranting interference.

Senior Advocate Chinmoy Pradeep Sharma appeared for the Appellants and Advocate Vikramjit Banerji appeared for the Respondents.

The main grounds for challenge in both cases were that the detention order under the COFEPOSA, against the appellants, had been subsequently revoked, rendering SAFEMA proceedings non-existent. Additionally, in Civil Appeal it was argued that the dismissal of a criminal complaint under the Customs Act, 1962, and the withdrawal of penalties would further make SAFEMA proceedings untenable.

The detention order against the appellant in Civil Appeal was revoked in 1978, following an undertaking given before the Supreme Court. SAFEMA proceedings commenced in 1981, resulting in property forfeiture in 1983. The appellant challenged this through various legal forums, including a writ petition in 1995.

The relevant provisions under Section 2(2)(b) of the SAFEMA were examined by the Court. The proviso under Section 2(2)(b) lists four specific circumstances under which SAFEMA would not apply, and the Court to assessed their applicability in the present case.

Upon scrutiny, it was established that none of the four clauses (i to iv) of the proviso applied to the appellants. The Court said, “22.1.(i)The order of detention had not been revoked on the report of the Advisory Board or before the receipt of the report of Advisory Board or before making a reference to the Advisory Board. Further, it was an order of detention passed under Section 3 of COFEPOSA. Section 9 and Section 12 A of COFEPOSA had no application to the detention order. As such, clause (i) would not be applicable. 22.2. Clause (ii) would also not be applicable in as much as neither the detention order was made to which provisions of Section 9 of COFEPOSA would apply nor had it been revoked before the expiry of the time on the basis of review on the report of the Advisory Board. 22.3. Further, clause (iii) would also not be applicable as Section 12A of COFEPOSA had no application to the detention order. 22.4. Lastly, the detention order had not been set aside by the Court of competent jurisdiction. Therefore, clause (iv) would have no application.”

The Court rejected the appeals, emphasizing that the revocation of the detention order did not fall within SAFEMA exceptions outlined in Section 2(2)(b). The Court added, “A perusal of the above quoted provision makes it clear that apart from the four contingencies given in clauses (i) to (iv) above, every person against whom an order of detention has been passed under COFEPOSA, the provisions of SAFEMA would apply. In the present case, it is an admitted position that an order of detention under COFEPOSA was made against the appellants.

Cause Title: Thanesar Singh Sodhi v. Union Of India & Ors., [2023 INSC 997]

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