Transfer Petition (Civil) No. 17 of 1978

Decided On: 12.05.1994

Appellants: Attorney General for India and Ors. Vs. Respondent: Amratlal Prajivandas and Ors.

Hon'ble Judges/Coram:
A.M. Ahmadi, P.B. Sawant, K. Ramaswamy, K. Jayachandra Reddy, S.C. Agrawal, S. Mohan, B.P. Jeevan Reddy, G.N. Ray and N.G. Venkatachala


1. Till the wind of liberalisation started blowing across the Indian economic landscape over the last year or two, the Indian economy was a sheltered one. At the time of independence, India did not have an industrial base worth the name. A firm industrial base had to be laid. Heavy industry was the crying need. All this required foreign exchange. The sterling balances built up during World War 11 were fast dissipating. Foreign exchange had to be conserved, which meant prohibition import of several unessential items and close regulation of other imports. It was also found necessary to raise protective walls to nurture and encourage the nascent industries. These controls had, however, an unfortunate fall-out. They gave rise to a class of smugglers and foreign exchange manipulators who were out to frustrate the regulations and restrictions - profit being their sole motive, and success in life the sole earthly judge of right and wrong. As early as 1947, the Central Legislature found it necessary to enact the Foreign Exchange Regulation Act, 1947 and Imports and Exports (Control) Act, 1947. Then came the import (Control) Order, 1955 to place the policy regarding import on a surer footing. In the year 1962, a new Customs Act replaced the antiquated Sea Customs Act, 1878. The menace of smuggling and foreign exchange violations, however, continued to rise unabated. The Parliament then came forward with the conservation of Foreign Exchange and Prevention of Smuggling Act, 1974 (COFEPOSA). It provided for preventive detention of these anti-social elements.

2. On June 25, 1975, the President of India proclaimed an emergency under Article 352(1) of the Constitution of India on the ground that "the security of India is threatened by internal disturbance." A proclamation of emergency dated December 3, 1971 issued under Article 352(1) on the ground that "the security of India is threatened by external aggression" was already in force. These declarations had the effect of 'suspending' - to use a popular though not strictly accurate expression - Article 19 as provided by Article