Foreign exchange prosecution and repeal savings: prior adjudication notice, admissible confessions, and saved liability upheld

A prior opportunity to show that the required permission existed under the foreign exchange law need not be repeated immediately before prosecution if effective notice and hearing were already given during adjudication, so the complaint was not vitiated. Confessional statements made before enforcement officers were treated as admissible, and the retractions were rejected because they were unsupported by the custody record; corroboration from seized documents, currency and oral evidence, together with the statutory burden on the accused to disprove culpable mental state and establish permission, justified reversal of acquittals in the connected matters. Offences committed under the repealed foreign exchange statute remained punishable because the later enactment expressly saved past offences.

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Issues: (i) Whether failure to issue a separate opportunity notice before prosecution under the Foreign Exchange Regulation Act, 1973, vitiated the complaint; (ii) whether the acquittals recorded by the trial court were justified in view of the confessional statements, recoveries, and statutory burdens under the foreign exchange law; (iii) whether the repeal of the Foreign Exchange Regulation Act, 1973 by the Foreign Exchange Management Act, 1999 barred conviction or punishment for offences committed under the repealed Act.

Issue (i): Whether failure to issue a separate opportunity notice before prosecution under the Foreign Exchange Regulation Act, 1973, vitiated the complaint.

Analysis: The proviso to section 61(2)(ii) of the Foreign Exchange Regulation Act, 1973 requires that before cognizance is taken of an offence involving contravention of a prohibition against doing an act without permission, the accused must have been afforded an opportunity to show that the requisite permission existed. The opportunity need not necessarily be by a second notice immediately before prosecution if an effective opportunity was already given during adjudication proceedings. The earlier adjudication notices and hearings satisfied the statutory safeguard.

Conclusion: The absence of a separate pre-prosecution notice did not vitiate the prosecution.

Issue (ii): Whether the acquittals recorded by the trial court were justified in view of the confessional statements, recoveries, and statutory burdens under the foreign exchange law.

Analysis: Statements made before enforcement officers were treated as admissible, since such officers were not police officers within the meaning of section 24 of the Indian Evidence Act, 1872. The retractions were rejected because the accused did not complain of ill-treatment when produced for remand and the records did not support prolonged illegal custody. The confessions were corroborated by seized documents, currency recoveries, and other oral evidence. Sections 59 and 71 of the Foreign Exchange Regulation Act, 1973 placed the burden on the accused to disprove culpable mental state and to establish permission where the statute prohibited the act without permission. The accused failed to discharge that burden. The trial court's acquittals were therefore unsustainable, except that one matter involved a charge defect requiring a fresh trial under section 464(2) of the Code of Criminal Procedure, 1973.

Conclusion: The acquittals were set aside insofar as the appeals were allowed and the accused were held guilty, while one case was remitted for a new trial because of the defective charge.

Issue (iii): Whether repeal of the Foreign Exchange Regulation Act, 1973 by the Foreign Exchange Management Act, 1999 barred conviction or punishment for offences committed under the repealed Act.

Analysis: Section 49(4) of the Foreign Exchange Management Act, 1999 expressly saves offences committed under the repealed enactment and directs that they continue to be governed by the repealed Act as if it had not been repealed. The absence of a parallel punishment provision in the new Act did not extinguish liability for past offences. Economic offences of this nature were held to remain punishable under the saved regime.

Conclusion: The accused were not entitled to claim immunity from punishment on the ground of repeal.

Final Conclusion: The prosecution was held maintainable, the substantive findings of guilt under the foreign exchange law were affirmed for the connected matters, and one appeal was allowed only to the extent of remitting the defective-charge case for a fresh trial.

Ratio Decidendi: A prior opportunity to show possession of permission under the foreign exchange law need not be repeated before prosecution if it was already afforded in adjudication, and offences committed under the repealed foreign exchange statute remain punishable by virtue of the saving clause in the later enactment.

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