Full Judgment Text
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CASE NO.:
Appeal (crl.) 1058 of 2003
PETITIONER:
Smt. Heena Kausar
RESPONDENT:
Competent Authority
DATE OF JUDGMENT: 24/04/2008
BENCH:
S.B. Sinha & V.S. Sirpurkar
JUDGMENT:
J U D G M E N T
REPORTABLE
CRIMINAL APPEAL NO.1058 OF 2003
S.B. Sinha, J.
1. Validity of the proviso appended to Section 68C of the Narcotic
Drugs and Psychotropic Substances Act, 1985 (NDPS Act) is in question in
this appeal which arises out of a judgment and order dated 27.11.2002
passed by a Division Bench of the High Court of Judicature at Bombay.
2. The basic fact of the matter is not in dispute.
3. Appellant herein is wife of one Iqbal Mohammed Memon. An order
of detention was passed against him under the provisions of the Prevention
of Illicit Traffic in Narcotic Drugs and Psychotropic Substances Act, 1988
(PINDPS Act) by the State of Marharashtra. Allegedly, both the appellant
and her husband left India in or about the year 1991. Appellant has not yet
come back to India. Her husband admittedly had not been taken incustody
pursuant to the order of detention. Admittedly again, Appellant has several
properties in her name. A proceeding was initiated against her in terms of
Chapter V-A of the Act, wherefor, she was served with a show cause notice
dated 9.5.1995 asking her to furnish the proof and/or source of income
and/or the channels from which the assets being Flat Nos.501 and 502A
along with stilt parking No.19 in Milton Apartments at Juhu Tara Road,
Santacruz (W) had been acquired as also to show cause why the said
properties should not be held to be "illegally acquired properties" and
forfeited by the Central Government under the Act.
4. An appeal thereagainst was preferred before the Appellate Tribunal.
By an order dated 10.2.1999, the properties were directed to be confiscated.
A writ petition was filed by her before the Bombay High Court which
was marked as Writ Petition No.1867 of 1999. The said writ petition was
dismissed by a judgment and order dated 15.12.1999 insofar as the order of
confiscation of flat No.501 and 502 and stilt parking in Milton Apartments
were concerned. However, in regard to the confiscation of three bank
accounts, the matter was remitted to the Appellate Tribunal for its decision.
5. Proviso appended to Section 68-C prior to its amendment stood as
follows :
"Provided that no property shall be forfeited under
this Chapter, if such property was acquired by a
person to whom this Act applies before a period of
six years from the date on which he was charged
for an offence relating to illicit traffic."
Section 68-C, after the amendment, reads as under :
"Section 68C - Prohibition of holding illegally
acquired property\027(1) As from the
commencement of this Chapter, it shall not be
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lawful for any person to whom this Chapter applies
to hold any illegally acquired property either by
himself or through any other person on his behalf.
(2) Where any person holds any illegally acquired
property in contravention of the provisions of sub-
section (1), such property shall be liable to be
forfeited to the Central Government in accordance
with the provisions of this Chapter:
Provided that no property shall be forfeited under
this Chapter if such property was acquired, by a
person to whom this Act applies, before a period of
six years from the date he was arrested or against
whom a warrant or authorisation of arrest has been
issued for the commission of an offence
punishable under this Act or from the date the
order or detention was issued, as the case may be."
Indisputably, the Act was amended by Act No.9 of 2001 with effect
from 2.10.2001.
6. An application purported to be for rectification having regard to the
said amendment, was filed by the appellant before the Appellate Tribunal,
inter alia, praying therein for setting aside its order dated 15.2.1999 as also
the order of the competent authority dated 20.10.1997.
7. In the said purported application for rectification, the appellant raised
the following contentions :
1. That prior to coming into force of the said Act, the Competent
Authority had no jurisdiction to initiate any proceeding under the said
Act against a citizen of India who had been residing out of the
country.
2. That the proviso, as it stood prior to amendment, was ultra vires
Article 14 of the Constitution of India.
The said application was dismissed by the Appellate Tribunal by an
order dated 20.6.2002. A writ petition was filed theragainst before the
Bombay High Court which was marked as writ petition No.1283 of 2002.
By reason of the impugned judgment, the said writ petition has been
dismissed.
8. Mr. Raju Ramachandran, learned senior counsel appearing on behalf
of the appellant, at the outset, did not press the first contention raised before
the Appellate Authority as also before the High Court.
The learned counsel, however, would submit that a classification
made in a statute by way of under inclusion would not validate the proviso
to Section 68E of the Act as it stood prior to 2001 insofar as there did not
exist any valid or cogent reason for not providing the period of limitation of
six years in respect of a person who was charged for commission of an
offence relating to illicit traffic vis-‘-vis a person who is sought to be
detained under a preventive detention.
9. The learned counsel would submit that the show cause notice did not
contain any reason which was required to be recorded in terms of Section
68E read with Section 68H of the NDPS Act, and, thus, the impugned
judgment cannot be sustained.
Admittedly, the order of the Appellate Authority was the subject
matter of the writ petition. The contentions raised herein were not raised
before the said Authority or before the High Court.. The order of the High
Court dated 15.12.1999 attained finality.
The flats in question stood forfeited to the State Government. The
said proceedings cannot be permitted to be reopened.
10. Only because in relation to the bank accounts, the matter was
remanded, during pendency whereof, the proviso appended to Section 68C
was inserted, the same by itself, in our opinion, would not give rise to
another cause of action so as to enable the appellant to raise the contentions
which he could and ought to have raised in the earlier proceedings.
The principle of ’Constructive Res Judicata’, it is trite, applies also to
a writ proceeding. Furthermore, admittedly such a contention has not been
raised even in the second writ application. The documents which were
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necessary to be taken into consideration for determining the said question
are also not before us. We, therefore, are of the opinion that it is not
possible for us to go into the said question.
11. The ’Proviso’ appended to Section 68C was in the statute book since
1989. Appellant’s husband was served with an order of detention as far
back as in the year 1994. The notice under Section 68D of the Act was
issued in the year 1995.
12. Only because at a later stage, a period of limitation was prescribed for
initiation of proceedings for forfeiture of the properties, the same, in our
opinion, by itself would not be sufficient to arrive at a conclusion that the
same attracts the wrath of Article 14 of the Constitution of India.
13. It is now well settled that validity of a statute can be upheld if there
exists a valid and reasonable classification therefor, being based upon the
substantial distinction bearing a reasonable and just relation with the object
sought to be attained.
14. In this regard, we may notice some well settled legal principles. A
law may be constitutional even though it affects an individual. There exists
a presumption in favour of the constitutionality of an enactment. The burden
of proof that the legislation is unconstitutional is upon the person who
attacks it, save and except the cases where, inter alia, arbitrariness appears
on the face of the statute and the burden of proof in regard to
constitutionality of the statute is on the State. The principle of equality
would not mean that every law must have universal application for all
persons who, by nature, attainment or circumstances, are in the same
position.
15. A law is amended by the Parliament having regard to its experience. It
is a matter of legislative policy and for that purpose mere inequality cannot
be the sole factor for determining the constitutionality of the impugned
provision.
16. Whereas Article 14 forbids classification, it is trite, it does not forbid
reasonable classification. {See M.P. Rural Agriculture Extension Officers
Association v. State of M.P. & Anr. [(2004) 4 SCC 646]; and State of Bihar
& Ors. v. Bihar State +2 Lecturers Associations & Ors. [(2007) 7 SCALE
697]}.
17. This court in State of West Bengal v. Anwar Ali Sarkar [AIR 1952 SC
75] as also Ram Krishna Dalmia v. Shri Justice S.R. Tendolkar & Ors. [1959
SCR 279], categorically laid down the twin test of classification. The
classification, however, should be based on reasonable and rational
differentia and should not be arbitrary.
18. It is not a case where validity of the statute itself is in question.
Ordinarily, a statute providing for ’under inclusion’ would not be held to be
attracting the wrath of Article 14. A Constitution Bench of this Court held
so in State of Gujarat & Anr. v. Shri Ambika Mills Ltd. & Anr. [(1974) 4
SCC 656], in the following words:
"54. A reasonable classification is one which
includes all who are similarly situated and none
who are not. The question then is: what does the
phrase "similarly situated" mean? The answer to
the question is that we must look beyond the
classification to the purpose of the law. A
reasonable classification is one which includes all
persons who are similarly situated with respect to
the purpose of the law. The purpose of a law may
be either the elimination of a public mischief or the
achievement of some positive public good.
55. A classification is under-inclusive when all
who are included in the class are tainted with the
mischief but there are others also tainted whom the
classification does not include. In other words, a
classification is bad as under-inclusive when a
State benefits or burdens persons in a manner that
furthers a legitimate purpose but does not confer
the same benefit or place the same burden on
others who are similarly situated. A classification
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is over-inclusive when it includes not only those
who are similarly situated with respect to the
purpose but others who are not so situated as well.
In other words, this type of classification imposes
a burden upon a wider range of individuals than
are included in the class of those attended with
mischief at which the law aims. Herod ordering the
death of all male children born on a particular day
because one of them would some day bring about
his downfall employed such a classification.
56. The first question, therefore, is, whether the
exclusion of establishments carrying on business
or trade and employing less than 50 persons makes
the classification under-inclusive, when it is seen
that all factories employing 10 or 20 persons, as
the case may be, have been included and that the
purpose of the law is to get in unpaid
accumulations for the welfare of the labour. Since
the classification does not include all who are
similarly situated with respect to the purpose of the
law, the classification might appear, at first blush,
to be unreasonable. But the Court has recognised
the very real difficulties under which legislatures
operate \027 difficulties arising out of both the
nature of the legislative process and of the society
which legislation attempts perennially to re-shape
\027 and it has refused to strike down
indiscriminately all legislation embodying
classificatory inequality here under consideration.
Mr. Justice Holmes, in urging tolerance of under-
inclusive classifications, stated that such
legislation should not be disturbed by the Court
unless it can clearly see that there is no fair reason
for the law which would not require with equal
force its extension to those whom it leaves
untouched. What, then, are the fair reasons for
non-extension? What should a court do when it is
faced with a law making an under-inclusive
classification in areas relating to economic and tax
matters? Should it, by its judgment, force the
legislature to choose between inaction or
perfection?"
The said ratio was followed by this Court in The Superintendent and
Remembrancer of Legal Affairs, West Bengal v. Girish Kumar Navalakha
and Ors. [(1975) 4 SCC 754, holding:
"8. Oftentimes the courts hold that under-inclusion
does not deny the equal protection of laws under
Article 14. In strict theory, this involves an
abandonment of the principle that classification
must include all who are similarly situated with
respect to the purpose. This under-inclusion is
often explained by saying that the legislature is
free to remedy parts of a mischief or to recognize
degrees of evil and strike at the harm where it
thinks it most acute."
It was furthermore held :
"10. There are two main considerations to justify
an under-inclusive classification. First,
administrative necessity. Second, the legislature
might not be fully convinced that the particular
policy which it adopts will be fully successful or
wise. Thus to demand application of the policy to
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all whom it might logically encompass would
restrict the opportunity of a State to make
experiment. These techniques would show that
some sacrifice of absolute equality may be
required in order that the legal system may
preserve the flexibility to evolve new solutions to
social and economic problems. The gradual and
piecemeal change is often regarded as desirable
and legitimate though in principle it is achieved at
the cost of some equality. It would seem that in
fiscal and regulatory matters the court not only
entertains a greater presumption of
constitutionality but also places the burden on the
party challenging its validity to show that it has no
reasonable basis for making the classification."
19. The statute deals with an economic aspect of the matter. The
purported object for which such a statute has been enacted must be noticed
in interpreting the provisions thereof. The nexus of huge amount of money
generated by drug trafficking and the purpose for which they are spent is
well known. Harsh laws, not only for punishing the drug traffickers but also
for preventive detention, if the conditions therefor are satisfied, were made.
Necessity was felt for introduction of strict measures so that money earned
from the drug trafficking by the persons concerned may not continue to be
invested, inter alia, by purchasing moveable or immoveable properties not
only in his own name but also in the names of his near relatives.
This case, itself throws sufficient light as to why the Parliament
thought it fit to exclude the applicability of the provisions of the period of
limitation in the matter of initiation of proceedings for forfeiture of
properties.
20. The Union of India and the State of Maharashtra have not been able to
serve even the order of detention upon the husband of the appellant. There
may be a large number of other cases of that nature.
A person might have committed only one time offence, another not
only may be an offender but also might have been indulging in drug
trafficking for a long time. Whereas in the former an order of preventive
detention may not be necessary, in case of the latter, it may be found to be
necessary. The distinction although appears to be fine, but real.
21. This Court in Re : The Special Courts Bill, 1978 [(1979) 1 SCC 380,
held that the offences which were emergency related form a class of
offences, stating :
"72. As long back as in 1960, it was said by this
Court in Kangsari Haldar that the propositions
applicable to cases arising under Article 14 "have
been repeated so many times during the past few
years that they now sound almost platitudinous".
What was considered to be platitudinous some 18
years ago has, in the natural course of events,
become even more platitudinous today, especially
in view of the avalanche of cases which have
flooded this Court. Many a learned Judge of this
Court has said that it is not in the formulation of
principles under Article 14 but in their application
to concrete cases that difficulties generally arise.
But, considering that we are sitting in a larger
Bench than some which decided similar cases
under Article 14, and in view of the peculiar
importance of the questions arising in this
reference, though the questions themselves are not
without a precedent, we propose, though
undoubtedly at the cost of some repetition, to state
the propositions which emerge from the judgments
of this Court insofar as they are relevant to the
decision of the points which arise for our
consideration. Those propositions may be stated
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thus:
The Court noticed as many as thirteen propositions, some of which
are:
"(2) The State, in the exercise of its
governmental power, has of necessity to
make laws operating differently on different
groups or classes of persons within its
territory to attain particular ends in giving
effect to its policies, and it must possess for
that purpose large powers of distinguishing
and classifying persons or things to be
subjected to such laws.
(3) The constitutional command to the State to
afford equal protection of its laws sets a goal
not attainable by the invention and
application of a precise formula. Therefore,
classification need not be constituted by an
exact or scientific exclusion or inclusion of
persons or things. The courts should not
insist on delusive exactness or apply
doctrinaire tests for determining the validity
of classification in any given case.
Classification is justified if it is not palpably
arbitrary.
(4) The principle underlying the guarantee of
Article 14 is not that the same rules of law
should be applicable to all persons within
the Indian territory or that the same
remedies should be made available to them
irrespective of differences of circumstances.
It only means that all persons similarly
circumstanced shall be treated alike both in
privileges conferred and liabilities imposed.
Equal laws would have to be applied to all
in the same situation, and there should be no
discrimination between one person and
another if as regards the subject-matter of
the legislation their position is substantially
the same.
(5) By the process of classification, the State
has the power of determining who should be
regarded as a class for purposes of
legislation and in relation to a law enacted
on a particular subject. This power, no
doubt, in some degree is likely to produce
some inequality; but if a law deals with the
liberties of a number of well defined classes,
it is not open to the charge of denial of equal
protection on the ground that it has no
application to other persons. Classification
thus means segregation in classes which
have a systematic relation, usually found in
common properties and characteristics. It
postulates a rational basis and does not mean
herding together of certain persons and
classes arbitrarily.
XXX XXX XXX
(11) Classification necessarily implies the
making of a distinction or discrimination
between persons classified and those who
are not members of that class. It is the
essence of a classification that upon the
class are cast duties and burdens different
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from those resting upon the general public.
Indeed, the very idea of classification is that
of inequality, so that it goes without saying
that the mere fact of inequality in no manner
determines the matter of constitutionality."
22. In view of the settled legal position as noticed above, we are of the
opinion that no case has been made out for us to invoke Article 14 of the
Constitution of India so as to hold that the proviso amended in the year 2001
shall also apply to the present category of cases. Accordingly, the appeal is
dismissed with costs. Counsel’s fee assessed to Rs.50,000/- (Rupees fifty
thousand only)