Foreign exchange custody is not acquisition under FERA when no proprietary interest is transferred.

The phrase "buy or otherwise acquire" in Section 4(1) of the Foreign Exchange Regulation Act, 1947 requires acquisition of an interest in the foreign exchange, not mere physical custody or carriage. A carrier or bailee who only holds foreign exchange for delivery, without any proprietary interest or capacity for appropriation, does not "otherwise acquire" it. On the facts stated, there was no evidence that the respondent acquired any interest in the seized foreign exchange, so the penalty and confiscation were not sustainable and the appellate authority's order was upheld.

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Issues: Whether mere custody or carriage of foreign exchange by a person, without any transfer of interest in it, amounts to "otherwise acquire" within Section 4(1) of the Foreign Exchange Regulation Act, 1947.

Analysis: The statutory expression "buy or otherwise acquire" was read in context with the accompanying words "buy" and "borrow", indicating that the expression covers acquisition of some interest in the property and not mere physical possession. A carrier who merely takes goods for delivery, or a bailee who has custody without any proprietary interest or capacity for appropriation, does not thereby acquire the foreign exchange within the meaning of the provision. On the facts found, there was no evidence that the respondent acquired any interest in the seized foreign exchange.

Conclusion: Mere possession or carriage of foreign exchange, without acquisition of an interest in it, does not attract Section 4(1) of the Foreign Exchange Regulation Act, 1947; the penalty and confiscation were not sustainable.

Final Conclusion: The appellate authority's decision setting aside the adjudication was upheld and the appeal failed.

Ratio Decidendi: The expression "otherwise acquire" in Section 4(1) requires acquisition of an interest in the foreign exchange; bare custody or carriage without such interest is insufficient.

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