Retraction and cross-examination rules in foreign exchange proceedings: voluntary admissions and corroborative records sustained confiscation and penalty.

Denial of cross-examination did not vitiate the proceedings where the finding was independently supported by the appellant's own admissions and corroborating documentary evidence. The Court also held that a retracted statement can still be treated as voluntary and reliable when its timing, internal detail, later affirmation, and surrounding circumstances show no inducement, threat, or coercion. On that basis, contravention of foreign exchange restrictions was established, and the confiscation of currency together with the reduced penalty were upheld.

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Issues: (i) Whether denial of cross-examination of the third-party witnesses vitiated the proceedings for breach of natural justice; (ii) Whether the appellant's statements were voluntary and could be relied upon despite retraction; (iii) Whether contravention of the foreign exchange provisions and consequential confiscation and penalty were sustainable.

Issue (i): Whether denial of cross-examination of the third-party witnesses vitiated the proceedings for breach of natural justice.

Analysis: The statements of the third-party witnesses were not the sole basis of the finding. The appellant's own statements contained detailed admissions, and the documentary material recovered during search corroborated those admissions. In such circumstances, the absence of cross-examination did not cause prejudice or amount to denial of a reasonable opportunity. The principle of natural justice does not require cross-examination in every case merely because information from third parties is relied upon.

Conclusion: The challenge based on violation of natural justice failed and was against the appellant.

Issue (ii): Whether the appellant's statements were voluntary and could be relied upon despite retraction.

Analysis: The Court examined the timing and manner of the retractions, the appellant's later affirmation of the earlier statements, and the internal detail and natural flow of the confessional narration. It held that a mere retraction does not by itself make a statement involuntary. The burden remained on the maker to show inducement, threat, or coercion, and the surrounding circumstances did not support the plea that the statements were extracted by force.

Conclusion: The statements recorded on 10-9-90 and 11-9-90 were held to be voluntary and reliable, against the appellant.

Issue (iii): Whether contravention of the foreign exchange provisions and consequential confiscation and penalty were sustainable.

Analysis: On acceptance of the voluntary statements, the seized currency represented the balance of the amounts handled and disbursed by the appellant under instructions from abroad. The corroborative statements of the named recipients and the seized documents supported the conclusion that the appellant had contravened the foreign exchange restrictions. The Court therefore found no basis to interfere with the confiscation of currency or the reduced penalty imposed by the appellate authority.

Conclusion: The contravention was established and the confiscation and penalty were upheld, against the appellant.

Final Conclusion: The appeal failed on all substantial questions considered and the impugned order was sustained in full.

Ratio Decidendi: A retracted confession may be acted upon if, on the surrounding circumstances and corroborative material, the Court is satisfied that it was voluntary and not obtained by coercion, and denial of cross-examination does not vitiate the proceeding where the impugned finding is otherwise supported by reliable direct and documentary evidence.

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