Retracted FERA statement remains usable where voluntariness and corroboration are established, despite no counsel during examination.

A statement recorded under Section 40(3) of the Foreign Exchange Regulation Act, 1973 is not treated like a judicial confession under Section 164 CrPC; even if retracted, it may still be relied on if the court is satisfied about voluntariness, truthfulness, and corroboration from surrounding materials. Here, the seized visiting card and diary entries provided corroboration, and the absence of other participants as witnesses did not defeat that support. The claim that the statement was involuntary because no advocate was present was rejected, as there was no right to counsel at that stage. The retracted statement was therefore admissible and the conviction was restored.

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Issues: Whether a statement recorded under Section 40(3) of the Foreign Exchange Regulation Act, 1973, if retracted, could be relied upon for conviction when corroborated by surrounding materials, and whether absence of an advocate at the time of examination rendered the statement involuntary.

Analysis: A statement recorded from a person summoned under Section 40(3) of the Foreign Exchange Regulation Act, 1973 stands on a different footing from a judicial confession under Section 164 of the Code of Criminal Procedure, 1973. The statutory scheme obliges the person summoned to state the truth, and the investigation is treated as a judicial proceeding under Section 40(4). A retracted statement is not excluded from consideration merely because it is later denied; the court must examine voluntariness, truthfulness, and whether surrounding circumstances provide assurance of reliability. The materials seized from the respondent, including the visiting card and diary entries, furnished corroboration of the statement, and the absence of independent witnesses such as other participants did not displace that corroboration. The claim that the statement was involuntary because no advocate was present was rejected, since a person summoned for interrogation under FERA was not entitled as of right to the presence of counsel.

Conclusion: The retracted statement was admissible and sufficiently corroborated, and the acquittal recorded by the appellate court was unsustainable; the conviction was restored with modification of sentence in favour of the prosecution.

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