Foreign exchange contravention not proved where retracted admission and uncorroborated statements failed to link appellant to the transaction.

Alleged contravention of Section 9(1)(d) of the Foreign Exchange Regulation Act, 1973 was not established because the material did not prove that the appellant made or caused a payment to or for the credit of any person on behalf of a resident outside India. The statements relied upon by the authorities did not create a nexus between the appellant and the foreign exchange transaction, and the statement of Shri Sunil Narang did not implicate the appellant. The appellant's alleged admission had been retracted, and without independent corroboration it could not support guilt. Presumptions and reliance on special knowledge could not cure the absence of connecting evidence, so the penalty could not stand.

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Issues: Whether the appellant had contravened Section 9(1)(d) of the Foreign Exchange Regulation Act, 1973 by making a payment on behalf of a person resident outside India, and whether the penalty sustained by the adjudicating and appellate authorities could stand.

Analysis: The statements relied upon by the authorities did not establish that the appellant made payment to or for the credit of any person on behalf of Smt. Mediratta. The materials on record did not show any nexus between the appellant and the alleged foreign exchange transaction, and the statement of Shri Sunil Narang did not implicate the appellant. The so-called admission of the appellant had been retracted and, in the absence of independent corroboration, could not by itself support a finding of guilt. The reliance placed on special knowledge and presumptions could not cure the absence of material connecting the appellant with the alleged contravention.

Conclusion: The alleged contravention under Section 9(1)(d) of the Foreign Exchange Regulation Act, 1973 was not proved, and the penalty order could not be sustained.

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