Supreme Court Explains Application Of SAFEMA After Detention Order Under COFEPOSA Has Been Revoked

The Supreme Court, recently (On November 10), held that provisions of the 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, 19742 (COFEPOSA) unless it comes under exception given in proviso to section 2(2)(b) of SAFEMA.

Section 2 of the SAFEMA talks about its application. According to sub-section (2)(b) every person in respect of whom an order of detention has been made under COFEPOSA, the Act would be applicable subject to four clauses mentioned under its proviso.

The matter was placed before Justice Vikram Nath and Ahsanuddin Amanullah.

The instant case revolves around the two set of appeals arising out of Division Bench of Bombay and Delhi High Courts wherein the order of forfeiture of properties under SAFEMA was upheld. Aggrieved by the same, the appellants challenged the same before the Top Court. It is also important to note that prior to the proceedings under SAFEMA, a detention order under COFEPOSA was passed however, the same was withdrawn/ revoked later on.

Based on this, the contention of the appellant rested upon the fact that since the detention order passed under the COFEPOSA was subsequently withdrawn/ revoked thus, as per section 2(2) (b) of the SAFEMA, the proceedings under the same will not be maintainable.

“The submission is that provisions of SAFEMA could be made applicable only against the person in respect of whom the order of detention has been made under COFEPOSA. Once the order of detention itself had been revoked for whatever reasons there would be no order of detention against such person under COFEPOSA and therefore, no applicability of SAFEMA.,” contended the Appellant.

Per Contra, the Union opposed the same and contended that it is only where the revocation due to the reasons given under four clauses of the proviso that SAFEMA would not be applicable to a person against whom the detention order had been passed under COFEPOSA.

Analysis and Observations of the Supreme Court

At the outset the Court observed that apart from the four contingencies prescribed in proviso of section 2(2)(b) of SAFEMA, every person against whom an order of detention has been passed under COFEPOSA, the provisions of SAFEMA would apply. Thereafter, the Court examined the present case on the threshold of these contingencies.

For convenience, the concerned portion of Section 2. (Application) reads as:

“(b) every person in respect of whom an order of detention has been made under the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (52 of 1974);

Provided that-

(i) such order of detention, being an order to which the provisions of section 9 or section 12A of the said Act do not apply, has not been revoked on the report of the Advisory Board under section 8 of the said Act or before the receipt of the report of the Advisory Board or before making a reference to the Advisory Board;

(ii) such order of detention, being an order to which the provisions of section 9 of the said Act apply, has not been revoked before the expiry of the time for, or on the basis of, the review under sub-section (3) of section 9, or on the report of the Advisory Board under section 8, read with sub-section (2) of section 9, of the said Act; or

(iii) such order of detention, being an order to which the provision of section 12A of the said Act apply, has not been revoked before the expiry of the time for, or on the basis of, the first review under sub-section (3) of that section, or on the basis of the report of the Advisory Board under section 8, read with sub-section (6) of section 12A, of that Act; or

(iv) such order of detention has not been set aside by a court of competent jurisdiction;”

The Court scrutinised these clauses of provisos one by one. With respect to clause (i), it noted that firstly, the detention order was not revoked on the report of the Advisory Board and apart from that the detention order was not passed under section 9 or section 12A of the relevant provisions. Similarly, the present case would not fall under clauses ii and iii either, as Section 9 as well as 12A of the COFEPOSA had no application to the instant detention order.

Lastly, the revocation was not set aside by the Court of competent jurisdiction instead the same was revoked based on the statement given by the Union of India before the Apex Court so that a complaint under the relevant statute can be lodged.

Based on the above projection, the Court did not find any merit in the present appeals and dismissed the same.

Case Title: THANESAR SINGH SODHI (D) THR. LRS v. UNION OF INDIA AND ORS (CIVIL APPEAL NO.5500 OF 2011), SUJATA S. SHETTY v. UNION OF INDIA AND ORS. (CRIMINAL APPEAL NO.730 OF 2014).

Citation : 2023 LiveLaw (SC) 980

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