Foreign exchange contravention requires proof of receipt on behalf of a person resident outside India; mere local instructions are insufficient.

Contravention of Section 5(1)(aa) of the Foreign Exchange Regulation Act was not proved because the evidence showed only that the appellant received money on the instructions of a person resident in India. The prosecution failed to identify any person resident outside India on whose instructions or on whose behalf the payment was received, and the alleged Singapore slip did not establish such a nexus. As the essential statutory ingredient was missing, the finding of contravention could not stand and the confiscation and penalty orders were set aside.

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Issues: Whether the appellant had contravened Section 5(1)(aa) of the Foreign Exchange Regulation Act, 1947 on the basis of his statement and the accompanying circumstances.

Analysis: Section 5(1)(aa) prohibits receipt in India, otherwise than through an authorised dealer, of payment by order or on behalf of a person resident outside India. The material relied upon showed only that the appellant received money on the instructions of Manickam Reddiar, who was admittedly resident in India. The statement did not identify the person resident outside India on whose instructions or on whose behalf the amount was received. The reference to a letter or slip from Singapore did not establish that it emanated from a person resident outside India, and no nexus between the appellant and such a person was proved. On the record, the essential ingredient of the contravention was not established.

Conclusion: The alleged contravention was not proved and the finding against the appellant could not stand.

Final Conclusion: The appeal succeeded and the orders of confiscation and penalty were set aside.

Ratio Decidendi: A contravention under Section 5(1)(aa) is not established unless the prosecution proves that the receipt was on the instructions of, or on behalf of, a person resident outside India; receipt on the instructions of a person resident in India is insufficient.

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