Foreign exchange contravention requires proof of acquisition, not mere possession, where contemporaneous evidence rebuts the allegation.

Mere possession of foreign exchange is not enough to establish that a person has "otherwise acquired" it in contravention of FERA. On the facts, the appellant's contemporaneous statement, declaration form for US$ 82,000, and sworn affidavit consistently indicated that the currency belonged to another person and had been left in safe custody. In the absence of positive material showing the declaration was false, forged, or unreliable, the adverse findings were treated as perverse because they rested on conjecture rather than evidence. The statutory presumption of culpable mental state was rebutted, and contravention under section 8(1) was not proved.

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Issues: Whether the appellant had "otherwise acquired" foreign exchange in contravention of section 8(1) of the Foreign Exchange Regulation Act, 1973, and whether the adverse findings recorded by the adjudicating authority and appellate tribunal could stand in the face of the declaration, affidavit, and surrounding circumstances relied upon by the appellant.

Analysis: The decisive question was whether the proved facts established acquisition of foreign exchange, since mere possession is not the same as acquisition. The appellant's contemporaneous statement under section 40, the declaration form for US$ 82,000, and the sworn affidavit of Dr. N.S. Anand consistently supported the case that the foreign currency belonged to Dr. Anand and had been left in safe custody. The Court held that the respondents had not shown the declaration to be false, forged, or unreliable, and that the rejection of the appellant's explanation rested on assumptions rather than evidence. In the absence of positive material showing that the appellant had otherwise acquired the currency, the statutory presumption regarding culpable mental state stood rebutted. The findings below were treated as perverse because they proceeded on conjecture and failed to apply the correct legal distinction between possession and acquisition.

Conclusion: The appellant had not been proved to have otherwise acquired the foreign exchange, and the finding of contravention under section 8(1) could not be sustained.

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