With enough statutory measures in place for fighting the menace of smuggling and foreign exchange violations, there is no need to enact a newer diluted version of COFEPOSA and SAFEMA leading to further expansion of the bureaucracy.
Arjun Raghavendra M
The Conservation of Foreign Exchange and Prevention of Smuggling Act (COFEPOSA) introduced in 1974, which led to the repeal of Maintenance of Internal Security Act (Amendment) Ordinance, 1974, has survived to this date to form a part of former Prime Minister Indira Gandhi’s political legacy.
The Janata Party repealed MISA 1971 but its economic adjunct COFEPOSA continues to be in vogue and is back in the spotlight owing to the Supreme Court order in the Dimple Dhakkad case delivered on July 18. At a time when the courts, in the context of the COFEPOSA, discuss the touchstone of procedural rigour at the altar of substantive justice, it is time to review the necessity of this preventive detention law.
Under COFEPOSA, the Centre and state governments are empowered to detain a person (including a foreigner) to prevent such a person from smuggling of goods or acting in a manner prejudicial to conservation of foreign exchange. Riding on the wave of ‘garibi hatao’, a slew of legislations, including Monopolistic and Restrictive Trade Practices Act 1969, MISA 1971, Insurance and Coal Nationalisation laws, Foreign Exchange Regulation Act 1973 and Smugglers and Foreign Exchange Manipulators Act (SAFEMA) 1976 (to confiscate properties of smugglers) were introduced in the backdrop of 25 per cent inflation and $1.3 billion foreign exchange reserve in 1975.
Although these archaic legislations have been repealed, replaced or amended, COFEPOSA and its sister concern SAFEMA enacted during the Emergency and placed in the IX Schedule along with COFEPOSA, have survived undiluted. Though “socialism” was smuggled into the Preamble during the darkest hour of our democracy, the economy opened up in 1991 changing the very nature, scope and extent of our market fabric.
Customs law defined “smuggling” relating to goods as any act or omission that will render such goods liable to confiscation, making most disputes therein fall under this category. With the abolition of gold control Act and removing import/export restrictions, gold smuggling got re-invented with violations of free trade agreements, exemption schemes and policy frauds, concealment of gold took a backseat.
If a white paper were to be prepared on gold smuggling, official statistics would show that the quantum has reduced significantly post-1991 and around billion dollars is locked up in tax litigation owing to under/over-invoicing of import goods. The human rights angle notwithstanding, in the changing economic scenario there has been no attempt to re-examine COFEPOSA and the legislative intent therein. Is it because the detenus belong to a specific strata of society are not suave and sophisticated English-speaking entities, particularly having no access to policy-making?
Detenus in most cases are ‘carriers of gold’ or smugglers of other prohibited/restricted goods indulging in it for meagre financial gains. Also, the strenuous nature of processing every application for preventive detention coupled with the resources diverted by government agencies, if streamlined to focus on litigations post-abolition of COFEPOSA/SAFEMA, it would provide a breather to the ideas of equality, fairness, justice and liberty — the very fundamental on which our Constitution is premised.
Most of us born post-Emergency have failed to appreciate the values of democracy and freedom. A causal perusal of every case of preventive detention under this law would not only lead us to the pressing conclusion that COFEPOSA and SAFEMA have outlived their utility (they were not necessary in the first place) and deserve to be repealed in toto.
With enough statutory measures (under the customs, the Prevention of Money-Laundering Act and the Foreign Exchange Management Act) in place for fighting the menace of smuggling and foreign exchange violations, with the enactment of many legislation, including black money and benami laws, there is no need to enact a newer diluted version of COFEPOSA/SAFEMA leading to further expansion of the bureaucracy.
When we rest under the cosy umbrella of our liberal democracy couched in the values of civil liberties, COFEPOSA and SAFEMA remain an ugly and vulgar relic of our socialistic past. Shabby preventive detention legislation, vaguely articulated, contemptuous of liberty and rights, mired in multiple layers of corruption, selectively targeting an under-belly is not just arbitrary and random but is unjust and repugnant in every possible sense.
Arjun Raghavendra M previously worked for the Government of India and is an advocate based out of Delhi. Views are personal.
