Mere possession of foreign currency is not enough to prove unlawful acquisition under foreign exchange law.

Mere possession or seizure of foreign currency does not by itself establish that an accused has "otherwise acquired" foreign exchange under the FERA charge; the prosecution must produce material linking the accused to ownership or acquisition of the currency without RBI permission. The article notes that the currency was seized from premises occupied by the petitioner, but no fresh evidence showed that the money belonged to him, and the earlier income-tax finding had already accepted the explanation that it belonged to another person. In the absence of additional incriminating material, the prosecution could not be sustained and discharge was warranted.

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Issues: Whether the petitioner was entitled to discharge in a prosecution under Section 8(1) of the Foreign Exchange Regulation Act, 1973 on the ground that mere possession of foreign currency is not enough to constitute "otherwise acquiring" foreign exchange, and whether the prior finding in the connected income-tax proceedings should govern the present prosecution.

Analysis: The expression "acquire" in the foreign exchange law requires something more than mere possession. On the facts, the currencies had been seized from premises occupied by the petitioner, but there was no fresh material to show that the foreign exchange belonged to him or that he had otherwise acquired it without permission of the Reserve Bank of India. The earlier Division Bench finding in the connected income-tax proceedings had accepted the explanation that the money belonged to another person and had held that the revenue had not produced material to prove exclusive ownership by the petitioner. In the absence of any additional evidence, the prosecution could not be sustained merely on the basis of seizure and the stage of trial could not cure the lack of material needed to attract the charge.

Conclusion: The petitioner was entitled to discharge and the contrary view taken by the court below was incorrect.

Final Conclusion: The revision succeeded, the discharge was ordered, and the petitioner was relieved from standing trial in the FERA case.

Ratio Decidendi: For a charge of "otherwise acquiring" foreign exchange, the prosecution must show more than physical possession and must adduce material connecting the accused with ownership or acquisition of the currency; absent such material, discharge is warranted.

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