Foreign exchange possession by a carrier is not unlawful acquisition where lawful custody and rebuttal of presumption are shown.

Bare physical custody of foreign exchange by a carrier is not the same as "otherwise acquiring" it under section 8(1) of the Foreign Exchange Regulation Act, 1973, because acquisition implies some control, interest, or ability to deal with the currency as one's own. Section 71(3) creates a rebuttable presumption against a person found in possession, but that presumption is displaced where the possession is shown to be lawful, such as holding the currency only for delivery on behalf of another. In that situation, no contravention under section 8(1) is made out and liability does not arise merely from possession alone.

---

---

Issues: Whether mere physical possession of foreign exchange by a carrier, without control or beneficial interest, amounts to "otherwise acquiring" foreign exchange under section 8(1) of the Foreign Exchange Regulation Act, 1973, and whether the presumption under section 71(3) converts such possession into a contravention.

Analysis: Section 8(1) prohibits purchase, acquisition, borrowing, sale, transfer, lending, exchange, and otherwise acquiring foreign exchange without Reserve Bank permission. The provision is to be read with section 71(3), which places the burden on a person found in possession of foreign exchange to prove that the possession was lawful. The scheme of the Act distinguishes bare physical custody from acquisition in the sense of having interest, control, or the ability to deal with the currency as one's own. A carrier who merely holds the currency on behalf of another and establishes that the possession was only for delivery does not, by that fact alone, become an unauthorized acquirer. The presumption of unlawful possession is rebuttable, and if lawful possession is shown, the statutory contravention is not made out.

Conclusion: Mere possession by a carrier does not, by itself, constitute contravention under section 8(1) when the lawful character of the possession is established. The appeal by the State therefore fails and the respondent is exonerated.

Final Conclusion: The impugned order exonerating the respondent was sustained, the State's challenge was rejected, and the penalty directed to be refunded.

Ratio Decidendi: Under section 8(1) of the Foreign Exchange Regulation Act, 1973, bare physical possession of foreign exchange is not synonymous with "otherwise acquisition"; liability arises only where possession is shown to involve unlawful acquisition or where the statutory burden under section 71(3) is not rebutted.

---