Retracted confession in a quasi-criminal FERA case needs independent corroboration before liability, confiscation, or penalty can stand.

A retracted inculpatory statement, especially one alleged to have been made under coercion, could not by itself sustain liability in a quasi-criminal proceeding under FERA. The court noted that the alleged corroborative material was not properly proved, the relevant third parties were not examined, and no independent evidence supported the admission. In the absence of trustworthy corroboration, the retracted confession was not reliable proof of contravention, and the consequential confiscation and penalty were unsustainable. The adjudication and appellate orders were therefore set aside and the appellant was exonerated with refund consequences.

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Issues: Whether a retracted inculpatory statement, unsupported by independent corroboration and made under alleged coercion, could sustain the charge of contravention under Section 9(1)(b) of the Foreign Exchange Regulation Act, 1973 and the consequential confiscation and penalty.

Analysis: The statement relied on by the enforcement authority was retracted at the earliest opportunity. The material said to have been seized from a third party was neither disclosed to the appellant nor proved through the person from whose premises it was allegedly recovered. The alleged recipient and the person said to have acted on his instructions were also not examined, and no independent evidence corroborated the alleged admission. In a proceeding of quasi-criminal character, a retracted confession cannot safely be acted upon unless it is supported by trustworthy corroborative evidence. In the absence of such evidence, the adverse inference was drawn in favour of the appellant.

Conclusion: The retracted statement could not be treated as reliable proof of contravention, and the charge, confiscation, and penalty were not sustainable.

Final Conclusion: The appeal succeeded, the adjudication and appellate orders were set aside, and the appellant was exonerated with consequential refund of the penalty and confiscated amount.

Ratio Decidendi: A retracted confession in a quasi-criminal proceeding cannot by itself found liability unless it is substantially corroborated by independent and trustworthy evidence.

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