Supreme Court Overturns Enforcement Directorate's Decision, Orders Refund of Confiscated Sum

The Supreme Court set aside the High Court's judgment and the actions taken by the Enforcement Directorate against the appellant. The Court ordered the refund of the confiscated sum of Rs. 8,24,900/- and the penalty of Rs. 1,00,000/- imposed on the appellant, concluding that the evidence presented was insufficient to prove the charges beyond a reasonable doubt.

---

---

Issues: Whether the charge under Section 9(1)(b) of the Foreign Exchange Regulation Act, 1973 was proved on the basis of the appellant's retracted statements and the surrounding material.

Analysis: The appellant's alleged earlier statement of 20.4.1989 could not be relied upon because it was not referred to in the memorandum, was not furnished to him, and was not established through cogent evidence. The statements recorded on 25.10.1989 and 26.10.1989 were made during the raid and while in custody, and were promptly retracted. Such retracted statements could not, by themselves, sustain a finding of guilt unless independently corroborated on material particulars. The mahazar and the newspaper sheets proved recovery of currency, but they did not establish that the amount was received from a person resident outside India otherwise than through an authorised dealer. No independent evidence was produced to verify the alleged foreign source, the identity of the alleged sender, or the surrounding facts asserted in the statements.

Conclusion: The charge was not proved, and the confiscation and penalty could not be sustained.

---