Authorised government appeals and foreign-exchange contravention turn on proper delegation and proof of unauthorised dealing.

An appeal under the Foreign Exchange Regulation Act filed by the Union of India through the Director of Enforcement was held maintainable because the Government had authorised the officer to sign, verify and act in judicial proceedings; any defect was treated as one of form, not substance. On the foreign currency, the Court accepted that possession by authorised representatives did not by itself prove contravention, and the finding of no violation was left undisturbed. On discharged travellers cheques, the surrounding circumstances and absence of supporting documents were sufficient to establish unauthorised dealing, so the adverse finding was restored and the penalty and interest directions were adjusted accordingly.

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Issues: (i) Whether an appeal under the Foreign Exchange Regulation Act, 1973 filed by the Union of India represented by the Director of Enforcement was maintainable. (ii) Whether the seized foreign currency and discharged travellers cheques showed contravention of the Foreign Exchange Regulation Act, 1973, and what consequential relief and penalty followed.

Issue (i): Whether an appeal under the Foreign Exchange Regulation Act, 1973 filed by the Union of India represented by the Director of Enforcement was maintainable.

Analysis: The appellate challenge was examined in the light of the statutory scheme under sections 35 and 54 of the Foreign Exchange Regulation Act, 1973 and the notifications and authorisations produced by the Revenue authorities. The record showed that the decision to appeal had been taken on behalf of the Central Government and that the Director of Enforcement was empowered to sign, verify, and act for the Government in judicial proceedings. The defect, if any, was treated as one of form and not substance, and the earlier authorities relied on by the respondents were distinguished on the footing that there the Central Government was not impleaded or represented in the same manner.

Conclusion: The appeals were held to be maintainable.

Issue (ii): Whether the seized foreign currency and discharged travellers cheques showed contravention of the Foreign Exchange Regulation Act, 1973, and what consequential relief and penalty followed.

Analysis: On the foreign currency, the Court accepted that the employees of the money-changer were authorised representatives whose possession of currency was not, by itself, unlawful. The material did not conclusively establish an unauthorised transfer or an attempt sufficiently proximate to the commission of an offence, and the finding of no contravention regarding the foreign currency was not disturbed. On the travellers cheques, however, the Court found that the surrounding circumstances, absence of supporting documents such as BTQ applications or a contemporaneous destruction certificate, and the unexplained possession of a large number of discharged travellers cheques supported the departmental case of unauthorised dealing. The Court therefore interfered to that extent and also adjusted the penalty and consequential interest directions.

Conclusion: The order of the Tribunal was affirmed for the foreign currency, set aside for the travellers cheques, and the penalty was reduced accordingly.

Final Conclusion: The decision upheld the Government's right to pursue the appeal, sustained the favourable finding on the foreign currency, restored the confiscatory consequence for the travellers cheques, and granted only limited monetary relief by revising the penalty and directing interest on the refundable amounts.

Ratio Decidendi: An appeal filed in the name of the Union of India through an officer duly authorised to act for the Government is maintainable, and in foreign-exchange contraventions mere possession by an authorised representative does not establish illegal acquisition or transfer unless the surrounding material shows a proximate and substantiated unauthorised dealing.

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