Neher Shiju v Union of India; Shini Shibu v Union of India

# **`IN THE HIGH COURT OF KERALA AT ERNAKULAM`** # **`PRESENT`** ``` THE HONOURABLE MR. JUSTICE A.MUHAMED MUSTAQUE ``` ``` & ``` ``` THE HONOURABLE MRS. JUSTICE SHOBA ANNAMMA EAPEN ``` ``` FRIDAY, THE 12[TH] DAY OF APRIL 2024 / 23RD CHAITHRA, 1946 ``` ``` WP(CRL.) NO.31 OF 2024 ``` ## **`PETITIONER/S:`** ``` NEHER SHIJU AGED 44 YEARS ``` ``` W/O MUHAMMED SHIJU, KALLOLAPARAMBIL, ERATTUPETTA - 2, ERATTUPETTA, KOTTAYAM DISTRICT, PIN - 686122 BY ADVS. ``` ``` M.AJAY ``` ``` V.P.PRASAD ``` ## **`RESPONDENT/S:`** ``` 1THE UNION OF INDIA [REPRESENTED BY ITS SPECIAL SECRETARY AND DIRECTOR GENERAL, CENTRAL ECONOMIC INTELLIGENCE BUREAU], MINISTRY OF FINANCE, DEPARTMENT OF REVENUE, 5TH FLOOR, B WING, JANPATH BHAVAN, JANPATH, NEW DELHI, PIN - 110001 ``` ``` 2SRI. RAVI PRATAP SINGH IRS, JOINT SECRETARY (COFEPOSA), GOVERNMENT OF INDIA, MINISTRY OF FINANCE, DEPARTMENT OF REVENUE, CENTRAL ECONOMIC INTELLIGENCE BUREAU, 5TH FLOOR, B WING, JANPATH BHAVAN, JANPATH, NEW DELHI, PIN - 110001 ``` ## **`W.P.(Crl.).Nos.31/2024 and 33/2024`** ## **`-:2:-`** - **`3 THE ENFORCEMENT DIRECTORATE , [REPRESENTED BY ITS ADDITIONAL DIRECTOR], COCHIN ZONAL OFFICE, KANOOS CASTLE, A.K. SESHADRI ROAD, KOCHI, PIN - 682011`** ``` 4THE COFEPOSA ADVISORY BOARD HIGH COURT OF KERALA, [REPRESENTED BY THE SECRETARY, (COFEPOSA)], REGISTRAR (JUDICIAL), HIGH COURT BUILDINGS, ERNAKULAM, PIN - 682031 ``` ``` 5THE SUPERINTENDENT THE SUPERINTENDENT, CENTRAL PRISON AND CORRECTIONAL HOME, POOJAPPURA, THIRUVANANTHAPURAM, PIN - 695012 BY ADVS. ``` ``` MANU S. DSG OF INDIA Jaishankar V.Nair FOR R3 K.S.PRENJITH KUMAR FOR R1 AND R2 ``` SHRI K.A.ANAS PUBLIC PROSECUTOR ``` THIS WRIT PETITION (CRIMINAL) HAVING BEEN FINALLY HEARD ON 8/3/2024 ALONG WITH WP (CRL) 33/2024, THE COURT ON 12/4/2024 DELIVERED THE FOLLOWING: ``` ## **`W.P.(Crl.).Nos.31/2024 and 33/2024`** ## **`-:3:-`** ``` IN THE HIGH COURT OF KERALA AT ERNAKULAM ``` ``` PRESENT ``` ``` THE HONOURABLE MR. JUSTICE A.MUHAMED MUSTAQUE ``` ``` & ``` ``` THE HONOURABLE MRS. JUSTICE SHOBA ANNAMMA EAPEN ``` ``` FRIDAY, THE 12[TH] DAY OF APRIL 2024 / 23RD CHAITHRA, 1946 ``` ``` WP(CRL.) NO.33OF 2024 ``` ## **`PETITIONER/S:`** ``` SHINI SHIBU AGED 46 YEARS W/O. MUHAMMED SHIBU, RESIDING AT KALLOLAPARAMBIL, ERATTUPETTA - 2, ERATTUPETTA, KOTTAYAM DISTRICT, PIN - 686122, PIN - 686122 BY ADVS. M.AJAY V.P.PRASAD ``` ## **`RESPONDENT/S:`** ``` 1THE UNION OF INDIA [REPRESENTED BY ITS SPECIAL SECRETARY AND DIRECTOR GENERAL, CENTRAL ECONOMIC INTELLIGENCE BUREAU], MINISTRY OF FINANCE, DEPARTMENT OF REVENUE, 5TH FLOOR, ``` ## **`W.P.(Crl.).Nos.31/2024 and 33/2024`** ## **`-:4:-`** ``` B WING, JANPATH BHAVAN, JANPATH, NEW DELHI, PIN - 110001 ``` - **`2 SRI. RAVI PRATAP SINGH IRS, JOINT SECRETARY (COFEPOSA), GOVERNMENT OF INDIA, MINISTRY OF FINANCE, DEPARTMENT OF REVENUE, CENTRAL ECONOMIC INTELLIGENCE BUREAU, 5TH FLOOR, B WING, JANPATH BHAVAN, JANPATH, NEW DELHI, PIN - 110001`** - **`3 THE ENFORCEMENT DIRECTORATE [REPRESENTED BY ITS ADDITIONAL DIRECTOR], COCHIN ZONAL OFFICE, KANOOS CASTLE, A.K. SESHADRI ROAD, KOCHI, PIN - 682011`** - **`4 THE COFEPOSA ADVISORY BOARD HIGH COURT OF KERALA, [REPRESENTED BY THE SECRETARY, (COFEPOSA)], REGISTRAR (JUDICIAL), HIGH COURT BUILDINGS, ERNAKULAM, PIN - 682031`** - **`5 THE SUPERINTENDENT CENTRAL PRISON AND`** ``` CORRECTIONAHOME,POOJAPPURA,THIRUVANANTHAPURAM, PIN - 695012 ``` ``` BY ADVS. ``` ``` S. BIJU FOR R1 AND R2 ``` ``` Jaishankar V.Nair FOR R3 ``` SHRI K.A.ANAS PUBLIC PROSECUTOR ``` THIS WRIT PETITION (CRIMINAL) HAVING BEEN FINALLY HEARD ON 8/3/2024 ALONG WITH WP(CRL) 31/2024, THE COURT ON 12/4/2024 DELIVERED THE FOLLOWING: ``` ``` W.P.(Crl.).Nos.31/2024 and 33/2024 ``` ## **`-:5:-`** ## **`J U D G M E N T`** ``` Dated this the 12th day of April, 2024 ``` ## `A.Muhamed Mustaque, J.` ``` These writ petitions were filed challenging detention orders invoking Section 3(1) of the Conservation of Foreign Exchange and Prevention of Smuggling Activities act, 1974 (“COFEPOSA” for short). In both cases, the petitioners are the spouses of the detenus, who are brothers.Additionally, they are also Directors of Company M/s.Ettumanoor Forex and Financial Service Private Limited. The above company is having the FFMC Licence issued by the Reserve Bank of India. The validity of which will expire on 31/1/2025. The detention orders in both cases were issued based on a search conducted on 20/6/2023 in the premises of the above company located in Ettumanoor, Kottayam. In the light of the fact that detention ``` ## **`W.P.(Crl.).Nos.31/2024 and 33/2024`** ## **`-:6:-`** ``` orders are on the same grounds, it is appropriate these matters be disposed of by a common judgment. ``` ``` 2. The detention orders in these cases were issued on 31/8/2023. Grounds of detention in both orders are one and the same. ``` ``` 3. We heard the learned Counsel Shri M.Ajay appearing for the petitioners, the learned Central Government Counsel Shri K.S.Prenjith Kumar and Shri S.Biju for respondents 1 and 2 and Shri Jaishankar V.Nair appearing for the third respondent. ``` ``` 3. We shall advert to the arguments after a brief narration of the facts and the recovery made leading to the detention orders. ``` ``` 4. On 20/6/2023, a search was conducted by the officers of the Enforcement Directorate. On search, unaccounted foreign currency equivalent to INR.84,98,487.21 and unaccounted Indian Rupee of Rs.65,63,800/- totalling Rs.1,50,62,287.21 were seized from M/s.Ettumanoor Forex and Financial Service Private Limited and Zion Gift House shop, the business premises of the detenus. ``` ## **`W.P.(Crl.).Nos.31/2024 and 33/2024`** ## **`-:7:-`** ``` Based on the sponsoring authority’s report, the detention authority issued detention orders invoking Section 3(1) of COFEPOSA to prevent augmentation of Foreign Exchange in future. The detaining authority also placed reliance on WhatsApp chats found on the mobile of Muhammed Shiju Abdul Latheef K., one of the detenus. ``` ``` 4. The learned counsel for the petitioners challenged the detention on the following grounds. We shall refer to each ground either separately or together. ``` ``` i. The detenus have the right to request for further documents/materials than what was supplied to them as relied upon documents. ``` ``` ii. Documents, information and materials denied to the detenus which have prejudiced them and disabled them from making effective representations before the authorities and meaningful submissions before the Advisory Board. ``` ``` iii. Documents placed before the Advisory Board without serving copies of it on the detenus. ``` ## **`W.P.(Crl.).Nos.31/2024 and 33/2024`** ## **`-:8:-`** ``` iv. Treating requests for documents as representations vitiates the detention orders. Ext.P6 rejected but only factum of rejection informed by Ext.P8. The orders of rejection or reasons for rejection not supplied. ``` ``` v. Ext.P5 rejected by Ext.P13 for unsustainable reasons and even ignoring the requests for legible copies of relied upon documents. ``` ``` vi. The DG, CEIB on behalf of the first respondent ought not to have kept aside Ext.P5 requests for documents and materials by the detenus for consideration after the hearing of the Advisory Board, after receiving the opinion of the Advisory Board and even after the Central Government considered all documents and confirmed the orders of detention. ``` ``` vii. The proceedings constituting the Advisory Board, referring the cases of the detenus and hearing them by an Advisory Board to which the cases of the detenus were never referred. ``` ## **`W.P.(Crl.).Nos.31/2024 and 33/2024`** ## **`-:9:-`** ``` viii. The failure of the Advisory Board to consider Ext.P7 petitions made to it by the detenus. ``` ``` ix. The procedure adopted by the Advisory Board has rendered the hearing provided to the detenus unconstitutional and illegal. ``` - `x. Burden of proof.` ``` xi. Scrupulous adherence to constitutional protection is called for. No prejudice to be shown when constitutional safeguards are infringed. ``` ``` xii. Failure of the detaining authority to forward Ext.P6 requests for documents to the DG, CEIB on behalf of the first respondent and failure of the DG, CEIB to forward Ext.P5 requests for documents to the second respondent. ``` ## `Grounds i to iv:` ``` 5. Referring to grounds i to iv and placing reliance on various precedents, the learned counsel for the petitioners submits that the documents and materials required for the detenus to make ``` ``` a representation were not given, which would amount to denial of ``` ## **`W.P.(Crl.).Nos.31/2024 and 33/2024`** ## **`-:10:-`** ``` constitutional protection under Article 22(5) of the Constitution. It is submitted that the entire records were taken and seized by the officers of the Enforcement Directorate. Therefore, the detenus made a request in writing to provide copies of materials required to make an effective representation. However, they have not been supplied with materials, information and documents sought by them. The detenus have also made a request before the Advisory Board to provide them with materials, documents and information sought by them. It is submitted that the detenus received a reply from the Under Secretary of the Central Government, stating that the representations have been rejected. ``` ``` 6. The learned counsel for the petitioners asserts that since accounts were maintained using software, the detenus could have adequately explained the legality of the seized amount. However, since materials and documents were not provided, the detenus could not make an effective representation explaining details of accounts maintained by them. Further, it is submitted that the refusal to supply legible copies of the documents relied ``` ## **`W.P.(Crl.).Nos.31/2024 and 33/2024`** ## **`-:11:-`** ``` also prejudiced them from making representations. The learned counsel further submitted that their requests for documents have been treated and rejected as though representations have been rejected. ``` ``` 7. The seizure of such a high volume of foreign currency is not much in dispute. The staff attached to the detenus explained how the business operates on a day-to-day basis. The statements of the detenus were recorded after showing them WhatsApp chats. These chats clearly show that dealings in foreign currency are not based on licence. The statement of Sujimol A.R. also indicates unauthorised dealing in foreign currency. All the statements of the staff show that there were both legal and illegal transactions. The statements, WhatsApp chats and seizure of foreign currencies clearly establish illegal transactions of foreign currency by the detenus along with the legal exchange of foreign currency. The sponsoring authority as well as detaining authority had a strong foundation to suspect the illegal transaction of foreign currency. Merely making a request, without specifically requesting the ``` ## **`W.P.(Crl.).Nos.31/2024 and 33/2024`** ## **`-:12:-`** ``` details of materials, cannot be said to result in denial of making effective representations. The illegality already explained in the statements, cannot be improved or explained otherwise by requesting certain materials which in no way can contradict statements relied on to pass the detention order. In factual circumstances, we do not find any reason to hold that the detenus were denied any opportunity to make an effective representation. We also perused the copies of documents supplied to the detenus. The documents are not per se ineligible. It was the documents seized from the detenus and their premises which were given to them. The seizing authority cannot improve the texture of the seized documents. It is true that the requests for materials as well as representations have been rejected without assigning any reasons but that does not mean that there was no application of mind. ``` ``` 8. In a challenge like this, the Court has to consider whether any prejudice has been caused or not resulting in denial of constitutional protection. On a perusal of the statements, we ``` ## **`W.P.(Crl.).Nos.31/2024 and 33/2024`** ## **`-:13:-`** ``` are satisfied that the requests for materials and non providing of such materials had not caused any prejudice to the detenus. ``` ``` Grounds vii to ix: ``` ``` 9. The learned counsel for the petitioners placing reliance on the recent Apex Court judgment in Nenavath Bujji v. State of Telangana and Others [2024 SCC Online SC 367] submits that the Advisory Board failed to discharge its constitutional duty. It is submitted that the Advisory Board did not permit the detenus to examine the witnesses. It is further submitted that though reference was to be heard by the then members of the Advisory Board and it was heard by another set of members. The detenus have no case that they were not heard by the Advisory Board. It is to be noted that the members of the Advisory Board are the Judges of the Hon’ble High Court. We cannot for a moment accept that a fair opportunity was denied to the detenus and their counsel. There is no requirement under law that only the Board with members to whom reference was made alone can hear and dispose a reference. A ``` ## **`W.P.(Crl.).Nos.31/2024 and 33/2024`** ## **`-:14:-`** ``` Division Bench of this Court in W.P.(Crl.).No.107/2022 dated 3/6/2022 repelled on the very same argument. ``` ``` Ground No.x and xii: ``` ``` 10. The subjective satisfaction arrived by the detaining authority cannot be subjected to judicial review if there are materials on record for the detaining authority to conclude that the detenus’ detention is required to prevent augmentation of foreign exchange illegally. We are satisfied with the materials on record to arrive at such conclusion by the detaining authority. There is no violation of any constitutional safeguards. Procedures have been adhered to by the detaining authority. The petitioners apparently want to create a cloud over the detention orders by making unnecessary requests and demands. The materials on record clearly establish the illegal dealing of foreign exchange. There ``` ``` is no violation of constitutional safeguards. Though the petitioners have cited a large number of precedents, in the factual situation we find those precedents do not require consideration in ``` ## **`W.P.(Crl.).Nos.31/2024 and 33/2024`** ## **`-:15:-`** ``` this matter. Accordingly, we dismiss these writ petitions. No costs. ``` ``` Sd/- ``` ``` A.MUHAMED MUSTAQUE, JUDGE ``` ``` Sd/- ``` ``` SHOBA ANNAMMA EAPEN, JUDGE ``` ``` ms ``` ## **`W.P.(Crl.).Nos.31/2024 and 33/2024`** ## **`-:16:-`** ## **`APPENDIX OF WP(CRL.) 31/2024`** ``` PETITIONER EXHIBITS Exhibit P1A TRUE COPY OF THE DETENTION ORDER [DO] DATED 31.8.23 Exhibit P2THE TRUE COPY OF THE GROUNDS OF DETENTION [GOD] DATED 31.08.2023 Exhibit P3A TRUE COPY OF THE LIST OF DOCUMENTS RUNNING INTO 413 PAGES SERVED ON THE DETENU Exhibit P4A TRUE COPY OF COMMUNICATION NO. PD- 13003/01/2023- COFEPOSA DATED 3.10.23 Exhibit P5A TRUE COPY OF THE COMMUNICATION ADDRESSED BY THE DETENU TO THE DG, CEIB OF THE CG, THE OFFICER EMPOWERED TO HANDLE COFEPOSA MATTERS ON BEHALF OF THE FIRST RESPONDENT DATED 8.10.23 Exhibit P6A TRUE COPY OF THE COMMUNICATION ADDRESSED BY THE DETENU TO THE DA DATED 8.10.23 Exhibit P7A TRUE COPY OF THE PETITION ADDRESSED BY THE DETENU TO THE CHAIRMAN OF THE AB DATED 18.10.23 Exhibit P8A TRUE COPY OF THE MEMORANDUM NO. PD- 15003/07/2023 ISSUED BY THE UNDER SECRETARY TO THE CENTRAL GOVERNMENT [USCG] DATED 20.10.23 Exhibit P9A TRUE COPY OF THE COMMUNICATION NO. PD- 13003/01/2022-COFEPOSA ADDRESSED BY THE DIRECTOR (COFEPOSA) OF THE CG TO THE SECRETARY OF THE AB DATED 23.10.23 Exhibit P10A TRUE COPY OF THE MEMORANDUM NO. PD- 13003/01/2023- COFEPOSA ISSUED BY THE DIRECTOR (COFEPOSA) TO THE DETENU DATED 10.11.23 Exhibit P11A TRUE COPY OF THE NOTICE SERVED BY THE FIFTH RESPONDENT TO THE DETENU DATED 11.11.23. Exhibit P12A TRUE COPY OF THE WRITTEN SUBMISSION MADE ON BEHALF OF THE DETENU HAND OVER THE AB ON 14.11.23 IN THE MANNER DIRECTED BY THE AB ``` ## **`W.P.(Crl.).Nos.31/2024 and 33/2024`** ## **`-:17:-`** ``` Exhibit P13 ``` ``` Exhibit P14 ``` ``` Exhibit P15 Exhibit P16 ``` ``` A TRUE COPY OF THE ARGUMENT NOTES BY RESPONDENTS 1 - 3 SERVED ON THE COUNSEL FOR THE DETENU ON 17.11.23 ``` ``` A TRUE COPY OF THE ORDER NO. PD12003/05/2023COFEPOSA ISSUED BY USCG OF THE FIRST RESPONDENT DATED 28.11.23 ``` ``` A TRUE COPY OF THE MEMORANDUM DATED 5.12.23 A TRUE COPY OF THIS ACCOUNT STATEMENT HAS NOW BEEN OBTAINED BY THE PETITIONER ON THE INSTRUCTIONS OF THE DETENU ``` ## **`W.P.(Crl.).Nos.31/2024 and 33/2024`** ## **`-:18:-`** ## **`APPENDIX OF WP(CRL.) 33/2024`** |**`PETITIONER EXHIBITS`**|| |---|---| |**`Exhibit P1`**|**`A TRUE COPY OF THE DETENTION ORDER F. NO. PD`**| ||**`12003/04/2023-COFEPOSA DATED 31.8.23`**| |**`Exhibit P2`**|**`A TRUE COPY OF THE GROUNDS OF DETENTION`**| |**`Exhibit P3`**|**`A TRUE COPY OF THE LIST OF DOCUMENTS`**| |**`Exhibit P4`**|**`A TRUE COPY OF COMMUNICATION NO. PD-`**| ||**`13003/01/2023- COFEPOSA DATED 3.10.23`**| |**`Exhibit P5`**|**`A TRUE COPY OF THE COMMUNICATION ADDRESSED`**| ||**`BY THE DETENU TO THE DG, CEIB OF THE CG, THE`**| ||**`OFFICER EMPOWERED TO HANDLE COFEPOSA MATTERS`**| ||**`ON BEHALF OF THE FIRST RESPONDENT DATED`**| ||**`8.10.23`**| |**`Exhibit P6`**|**`A TRUE COPY OF THE COMMUNICATION ADDRESSED`**| ||**`BY THE DETENU TO THE DA DATED 8.10.23`**| |**`Exhibit P7`**|**`A TRUE COPY OF THE PETITION ADDRESSED BY THE`**| ||**`DETENU TO THE CHAIRMAN OF THE AB DATED`**| ||**`18.10.23`**| |**`Exhibit P8`**|**`A TRUE COPY OF THE MEMORANDUM NO. PD-`**| ||**`15003/06/2023 ISSUED BY THE UNDER SECRETARY`**| ||**`TO THE CENTRAL GOVERNMENT [USCG] DATED`**| ||**`20.10.23`**| |**`Exhibit P9`**|**`A TRUE COPY OF THE COMMUNICATION NO. PD-`**| ||**`13003/01/2022-COFEPOSA ADDRESSED BY THE`**| ||**`DIRECTOR (COFEPOSA) OF THE CG TO THE`**| ||**`SECRETARY OF THE AB DATED 23.10.23`**| |**`Exhibit P10`**|**`A TRUE COPY OF THE MEMORANDUM NO. PD-`**| ||**`13003/01/2023-COFEPOSA ISSUED BY THE`**| ||**`DIRECTOR (COFEPOSA) TO THE DETENU DATED`**| ||**`10.11.23.`**| |**`Exhibit P11`**|**`A TRUE COPY OF THE NOTICE SERVED BY THE`**| ||**`FIFTH RESPONDENT TO THE DETENU DATED`**| ||**`11.11.23.`**| |**`Exhibit P12`**|**`A TRUE COPY OF THE WRITTEN SUBMISSION MADE`**| ||**`ON BEHALF OF THE DETENU HANDOVER TO THE AB`**| ||**`14.1.23.`**| |**`Exhibit P13`**|**`A TRUE COPY OF THE ARGUMENT NOTES BY`**| ||**`RESPONDENTS 1 - 3 SERVED ON THE COUNSEL FOR`**| ||**`THE DETENU ON 17.11.23`**| ## **`W.P.(Crl.).Nos.31/2024 and 33/2024`** ## **`-:19:-`** ``` Exhibit P14 Exhibit P15 Exhibit P16 ``` ``` A TRUE COPY OF THIS CONFIRMATION ORDER [CO] DATED 28.11.23 A TRUE COPY OF THE MEMORANDUM DATED 5.12.23 A TRUE COPY OF THIS ACCOUNT STATEMENT HAS NOW BEEN OBTAINED BY THE PETITIONER ON THE INSTRUCTIONS OF THE DETENU ```