DROPTI DEVI AND ANR. V. UNION OF INDIA AND ORS.

This case confirms that COFEPOSA still works even after FERA was replaced by FEMA. The Supreme Court held that preventive detention may be used against illegal activities like hawala that harm the nation’s foreign exchange system, even if those acts are not labelled as criminal offences with punishment under FEMA. The Court also refused to cancel the detention order because the detenu himself avoided its execution.

1. Is Section 3(1) COFEPOSA constitutionally valid after FERA was repealed and replaced by FEMA?
2. Can the State use preventive detention for activities that are not criminal offences and carry no punishment under FEMA?

• Preventive detention can target illegal activities that threaten State security or public order, even if no criminal punishment exists.
• Replacing FERA with FEMA does not reduce the Government’s control over foreign exchange.
• If a detention order remains unexecuted due to the detenu’s own evasion, the detenu cannot claim that the order lapsed with time.

The Supreme Court rejected the writ and the criminal miscellaneous application. It held that COFEPOSA remains constitutionally valid post-FERA repeal. FEMA and FERA differ in approach, but the Government’s control over foreign exchange is substantively the same. Preventive detention may apply to illegal, prejudicial activities even when no penal provision exists. The detention order did not lapse; evasion by the detenu cannot defeat the order.

• Continuity Principle: FEMA does not dilute sovereign control over foreign exchange; COFEPOSA’s preventive purpose survives.
• Preventive vs Punitive: Absence of a penal offence does not block preventive detention where conduct is illegal and prejudicial.
• No Advantage from Wrong: A detenu cannot rely on his own absconding to claim expiry of the detention order.

For students and practitioners, the case is a clear statement that preventive detention addresses risk to the economy and security, not just crimes. It also clarifies that procedural delays caused by the detenu will not defeat a valid detention order.

Mnemonic — “C-O-I-N”

• Continuity of control (FEMA keeps control alive)
• Offence not needed (illegal + prejudicial is enough)
• Intent is preventive (not punitive)
• No benefit from evasion (absconding ≠ lapse)

3-Step Hook:

1. Ask: Is the act harmful to foreign exchange security?
2. Check: Even if not an offence, is it illegal/prejudicial?
3. Apply: COFEPOSA can be used; evasion won’t help the detenu.

COFEPOSA

Law allowing preventive detention to protect foreign exchange and prevent smuggling.

FERA

Older foreign exchange law; replaced by FEMA in 1999.

FEMA

Current foreign exchange management law; more regulatory than penal.

Preventive Detention

Detention to stop anticipated harm, not to punish past conduct.

Contumacious

Stubbornly disobedient; willfully avoiding legal process.