Full Judgment Text
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PETITIONER:
BHIM SEN for R.S. MALIK MATHRA DAS
Vs.
RESPONDENT:
THE STATE OF PUNJABUNION OF INDIA--Intervener.PREM NATH for
DATE OF JUDGMENT:
04/10/1951
BENCH:
KANIA, HIRALAL J. (CJ)
BENCH:
KANIA, HIRALAL J. (CJ)
MAHAJAN, MEHR CHAND
AIYAR, N. CHANDRASEKHARA
CITATION:
1951 AIR 481 1952 SCR 19
CITATOR INFO :
RF 1968 SC1303 (7,8)
R 1974 SC 183 (29)
ACT:
Preventive Detention Act (IV of 1950), s. 3 (1)--Preven-
tive detention for black-marketing--Order based on past
activities--Validity --Power of Court to consider sufficien-
cy of grounds--Effect of establishment of Advisory Boards
under Preventive Detention (Amending) Act, 1951.
HEADNOTE:
An order of detention to prevent black-marketing cannot
be held to be illegal merely because in the grounds for such
detention the detaining authority has referred only to the
past activities of the person detained, inasmuch as in-
stances of past activities may give rise to a subjective
mental conviction that it is necessary to detain such person
to prevent him from indulging in black-marketing in the
future.
Under the Preventive Detention. Act, 1950, the test as
to whether an order of detention should be made is the
subjective satisfaction of the detaining authority; the
Court has no power to consider whether the grounds supplied
by the authority are sufficient to give rise to such satis-
faction. The establishment of the Advisory Board by the
Amending Act of 1951 has not made the matter a justiciable
one, and even after the Amending Act the Court has no power
to consider whether the grounds supplied’ are sufficient for
making an order of detention.
JUDGMENT:
CRIMINAL APPELLATE JURISDICTION: Criminal Appeals Nos.
45 to 49 of 1951.
Appeals from the judgments and orders dated 20th August,
1951, of the High Court of Judicature at
Simla (Bhandari and Soni 33.) in Criminal Writ ’Cases
Nos. 46 to 50 of 1951.
Jai Gopal Sethi (R. L. Kohli and Sri Ramkumar,
with him) for the appellants in Cr. Appeals Nos. 45 and 49.
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N.C. Chatterjoe (Hardyal Hardy and R.L. Kohli with him) for
the appellant in Cr. Appeal No. 46.
Hardyal Hardy for the appellant in Cr. Appeal No. 48. S.M.
S.M. Sikri, Advocate-General of the Punjab (N. S.
Doabia. with him) for the respondent in all the appeals.
M.C. Setalvad, Attorney-General for India (G. N. Joshi,
with him) for the Intervener in Cr. Appeal No. 45.
1951. October 4. The Judgment of the Court was delivered
by
KANIA C.J.--These are five companion appeals from the
judgments of the High Court of East Punjab and the principal
point argued before us is as to the legality of the deten-
tion of the appellants under the Preventive Detention Act on
the ground that they are engaged in black-marketing in
cotton piecegoods.
The Jullundur Wholesale Cloth Syndicate was formed to
work out the distribution of cloth under the Government of
Punjab Control (Cloth) Order passed under the Essential
Supplies Act. Certain persons who held licences as whole-
sale dealers in cloth formed themselves into a corporation
and all cloth controlled by the Government was distributed
in the district to the retail quota holders through them.
The Government allotted quotas to the retailers and orders
were issued by the Government for giving each retailer
certain bales under the distribution control. If some
of the retail licence holders did not take delivery of the
quotas allotted to them under the Notification of the 4th of
October, 1950, issued by the Government of India, Department
of Industries and Supplies, it was, inter alia, provided
that the wholesale syndicate may give the bales not so
lifted to another retail dealer. It may be noted that all
along the price for the cloth to be sold wholesale and
retail had been fixed under Government orders. The Syndi-
cate was suspected to be dealing in black market and had
been warned against its activities by the District Magis-
trate of Jullundur several times. On the 7th of June, 1951,
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an order was issued by the District Organiser, Civil Sup-
plies and Rationing, Jullundur, to the managing agents of
the wholesale cloth corporation, Jullundur City, intimating
that they were strictly forbidden to dispose of any uplifted
stock against unexpired terms without his prior permission
in writing. They were further directed that thenceforth no
such stock would be allowed to be sold to an individual
retailer, but permission would be granted to sell the same
to associations of retailers only. It was stated that this
letter was not in accordance with clause 5 of the Notifica-
tion of the Government of India dated the 4th October, 1950,
which authorized the wholesale syndicate to be at liberty to
sell uplifted cloth to any other retailer or an association
of retail dealers of the same district. It may be further
noted that the Cotton Cloth Control Order was in operation
even prior to 1950. For some time control on the distribu-
tion of cloth was lifted but the price remained under the
control of the Government. During that time it has been
alleged that the appellants and several others sold cloth at
rates higher than those fixed by the Government. Even when
the distribution and price were both controlled, the manu-
facturing mills were allowed to sell at prices fixed by the
Government a certain percentage of cloth which was not taken
by the Government under its control. This was described as
free sale cloth and it was alleged that the appellants and
several others were doing black-marketing in this free sale
cloth.
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By an order passed by the District Magistrate on 19th
June, 1951, he directed that the appellants be detained
under section 3 (2) of the Preventive Detention Act to
prevent them from acting in a manner prejudicial to the
maintenance of supplies of cloth, essential to the communi-
ty. On the 2nd July, 1951, the District Magistrate, Jullun-
dur, directed that the appellants be committed to District
Jail, Jullundur, from the 2nd July until the 1st October,
1951. The appellants were detained accordingly. The
grounds for their detention were given to them on the morn-
ing of the 6th July. The grounds set out the activities of
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the appellants as managing agents or partners in different
firms or employees of the said firms or corporations. It
was stated ,that they had been disposing of most of the
stocks of cloth received for the Jullundur District in the
black market at exhorbitant rates from June, 1949, to Octo-
ber, 1950, during the period when control on distribution
was removed and that even after the reimposition of that
control in October, 1950, they disposed of cloth which has
been frozen under the directions of Director of Civil Sup-
plies in the short interval between the passing of the order
and its service on them. The second ground was in respect
of their individual activities as members of the firm in
which they were partners in disposing of stocks of cloth in
black market at rates higher than the controlled ones, to
various dealers, through agents. The particulars were speci-
fied in Appendix ’A’. They refer to the free sale cloth. In
the-third ground it was alleged that’ by illegal means they
deprived the rightful claimants of the various stocks of
cloth with a view to pass the same into black market at
exorbitant rates. We do not think it necessary to go into
greater details of these grounds or refer to the other
grounds.
On the 9th of July, 1951, petitions under article 226 of
the Constitution of India were filed in the East Punjab High
Court asking for writs of habeas corpus against the State on
the ground that the detention of the appellants under the
Preventive Detention Act was illegal. The District Magis-
trate filed his affidavit in reply challenging the allega-
tion of mala fides and setting out in some detail instances
of the activities of the appellants and contended that on
the reports received by him he was satisfied that the deten-
tion of the appellants was necessary. Early in August,
1951, the executive authorities cancelled the licence of the
appellants as cloth dealers. The High Court dismissed the
petitions and the petitioners have come on appeal to us.
Section 3 of the Preventive Detention Act, 1950, pro-
vides that the Central Government or the State Government
may, if satisfied with respect to any person that
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with a view to preventing him from acting in any manner
prejudicial to the maintenance of supplies and services
essential to the community it is necessary so to do, make an
order directing that such person be detained. The power to
act in accordance with the terms of this provision was given
by section 3 (2) to a District Magistrate. Such Magistrate
however was required to make a report to the State Govern-
ment to which he was subordinate about the order and also to
send the grounds on which the order had been made and such
other particulars as, in his opinion, had a bearing on the
necessity of the order..
It is not disputed that an order under section 3 (2) of
the Preventive Detention Act to prevent black-marketing can
be passed by the District Magistrate. On behalf of the
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appellants it is contended that in the grounds for their
detention reference is made to their activities prior to
June, 1951, only. This cannot be considered objectionable
because having regard to those activities it is alleged that
the satisfaction required under the section had arisen. It
was next argued that such loophole as existed in the total
control of distribution and’ sale and price of piecegoods in
the district was sealed by the order of the District Orga-
niser dated the 7th June, 1951. By virtue of that order the
syndicate or corporation could not sell any cloth without an
express order in writing from the District Organiser, and
therefore there could be no black-marketing after that date
by any of the appellants and the order was therefore unjus-
tified. It was next contended that in any event now as
their licences are cancelled they cannot deal in cloth and
the order of detention now maintained against them is more
in the nature of punishment than prevention. It was argued
that orders under the Preventive Detention Act were for the
purpose of preventing a person from acting in future in the
objectionable way contemplated by the Act and it was beyond
the scope of the Act to pass orders in respect of their
alleged activities anterior to June, 1951.
In our opinion the High Court approached the matter
quite correctly. Instances of past activities are relevant
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to be considered in giving rise to the subjective mental
conviction of the District Magistrate that the appellants
were likely to indulge in objectionable activities. The
grounds which were given for the detention are relevant and
the question whether they are sufficient or not is not for
the decision of the Court. The Legislature has made only the
subjective satisfaction of the authority making the order
essential for passing the order. The contention that because
in the Amending Act of 1951 an Advisory Board is constitut-
ed, which can supervise and override the decision taken by
the executive authority, and therefore the question whether
the grounds are sufficient to give rise to the satisfaction
has become a justifiable issue in Court, is clearly unsound.
The satisfaction for making the initial order is and has
always been under the Preventive Detention Act, that of the
authority making the order. Because the Amending Act of
1951 establishes a supervisory authority, that discretion
and subjective test is not taken away and by the establish-
ment of the Advisory Board, in our opinion, the Court is not
given the jurisdiction to decide whether the subjective
decision of the authority making the order was right or not.
Proceeding on the footing, therefore, that the jurisdiction
to decide whether the appellants should be detained under
the Preventive Detention Act on the grounds conveyed to the
appellants is of the District Magistrate. In the present
cases, two arguments were advanced on behalf of the appel-
lants. It was strenuously urged that by reason of the order
of the District Organiser of the 7th June, 1951, the only
loophole which remained in the scheme of distribution and
sale of cloth under control of the Government was sealed and
it was impossible after that order to do any blackmarketing
by any of the appellants. We are unable to accept this
contention. In the first place, this order appears to be an
administrative order and is in the nature of a warning. It
is at variance with the provisions of clause 5 of the Order
of the Central Government of the 4th October, 1950. Moreover
this order does not bring about the result claimed for it.
A lot
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of cloth which the manufacturers are permitted to distribute
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through persons outside the Government agencies can still be
secured and sold at exhorbitant rates, i.e., at rates higher
than those fixed by the Government. The second argument was
that as the licences of the appellants are now cancelled
they cannot deal in textile cloth at all and therefore there
can be no apprehension of their indulging in black market
activities. We are unable to accept this argument also
because it is common knowledge that licences can be obtained
in the name of nominees. Again while these people may not
have their licences in Jullundur District they may have or
may obtain licences in other districts. From the fact that
their licences have been cancelled a month after the order
of detention was passed we are unable to hold that it is
impossible on that ground for the appellants to indulge in
black market activities. In this connection an extract from
the further affidavit of the District Magistrate of Jullun-
dur dated 1st August, 1951, may be usefully noticed. He
stated:
"There have been orders for the release of certain
stocks of cloth in respect of other mills, as free sale
cloth after the 9th June, 1951. Any quantity of cloth not
paid for and lifted by the owners’ nominees will revert to
the Mills for free sale: vide letter No. CYC-2/ SLM, dated
the 31st May, 1951, from the Textile Commissioner, Bombay,
to all selected Mills in Bombay and Ahmedabad. This cloth
can be purchased by any wholesale dealer of cloth of India,
without any restriction. Not only this, free sale cloth can
be transported from one district to another without a per-
mit: vide Memo No. 28894-CS (C) 50/48791, dated 2nd January,
1951, from the Joint Director, Civil Supplies, and Under-
Secretary to Government Punjab to the District Organiser,
Civil Supplies and Rationing, Ludhiana. Again free sale
cloth is also procurable from individual firms who conspired
to make profit by black marketing. The only information
which is supplied by a purchaser of wholesale cloth to the
District Magistrate is as to what quantity of such cloth has
been imported
4
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into the district. According to the report of the District
Organiser no such cloth was imported into Jullundur by the
corporation but there are reasons to believe that the Corpo-
ration had been making their purchases in free sale cloth
from the Mills and using those bales to make up the defi-
ciency in the bales of quota cloth of superior quality which
they used to dispose of in the black market in collusion
with the Mills. Besides, the firm Rattan Chand Mathra Dass,
as would be evident from the attached lists signed by the
District Organiser, had been dealing in free sale cloth and
had also been importing cloth as Reserve of Kangra and also
Provincial Reserve. Most of this quota also found its way
into the black market. Similarly the firm Madan Gopal Nand
Lall and Company had been dealing in free sale cloth on a
large scale. It would be evident from the attached list.
Santi Sarup, the Secretary of the Corporation, is believed
to be a partner in the firm Hari Chand Bindra Ban and this
firm also had been dealing in free sale cloth. The free sale
cloth acquired by them used to be invariably sold in the
black market as reported by the District Organiser in his
Memo No. 6306/6734-M/CT/Do. 7 dated 1st August, 1950, in
reply to my Memo. No. nil dated 30th July, 1951. There is
absolutely no bar for the wholesale cloth corporation,
Jullundur, to its getting free sale cloth from the Mills or
other wholesale dealers nor is there any bar for the firms
Rattan Chand Mathra Dass and Madan Gopal Nand Lal and Co. to
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the acquiring of free sale cloth."
It was next argued on behalf of the appellants that the
only order of detention made against them was the order of
the 2nd July and that did not refer to any section of the
Preventive Detention Act and did not suggest that there was
any satisfaction of the detaining authority. It was argued
that no order of the 19th of June was ever shown to any of
the appellants or served on them and therefore their deten-
tion was illegal. It should be pointed out that these con-
tentionsare raised in the affidavits not of the detained
persons, but of their relations. Their affidavits do not
show that they have any personal knowledge. The affidavits
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on this point are based only on their belief and information
and the source of the information is not even disclosed. As
against this, there is the affidavit of the District Magis-
trate which expressly states that the terms of the Order of
the 19th of June were fully explained to each of the dete-
nus. The petitions for the writs of habeas corpus were
filed within a week after the service of the detention order
and we do not think there is any reason to doubt the cor-
rectness of the statements of the District Magistrate. In
our opinion this ground of attack on the order of detention
has no substance and the detention cannot be held illegal on
that ground. The judgment of the High Court was attacked on
these grounds and as we are unable to accept any of these
contentions the appeals must fail.
One of the appellants is the secretary of one corpora-
tion and another is a salesman and clerk in one of the
firms. On their behalf it was urged that they could not
indulge in black market activities. We are unable to accept
this contention in view of what is stated in the affidavits
of the District Magistrate. It is there pointed out that in
addition to being a secretary or a clerk and in those capac-
ities actively participating in the black market activities
of their principals, they were themselves indulging in black
market activities in cloth. If these and other facts in
respect of the appellants are disputed the matter will be
considered by the Advisory Board. The question of the truth
of those statements however is not within the jurisdiction
of this Court to decide. As all the grounds urged against
the judgment of the High Court fail, all the five appeals
are dismissed.
Appeals dismissed.
Agent for the appellants in all the appeals: R.S. Naru-
la.
Agent for the respondent and Intervener: P.A. Mehta.
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