Foreign currency confiscation fails where no positive evidence shows acquisition by the appellant and possession alone is insufficient.

Confiscation of foreign currency and penalty under FERA could not be sustained where the record consistently showed that the currency belonged to the appellant's mother and no positive evidence established acquisition by the appellant. The statement at seizure and the defence taken later were found to be consistent, so mere possession of the currency was insufficient to prove acquisition. In the absence of material explaining how the foreign exchange was acquired, the confiscation and penalty orders lacked support, and the authorities' appreciation of evidence was held to be perverse. The challenge therefore succeeded in favour of the appellant.

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Issues: Whether the confiscation of foreign currency and the penalty imposed under the Foreign Exchange Regulation Act, 1973 could be sustained when the material on record showed consistent assertion that the currency belonged to the appellant's mother and no positive evidence established acquisition by the appellant.

Analysis: The statement recorded at the time of seizure and the defence taken on record did not show any real variance. The consistent stand was that the foreign exchange belonged to the mother, and the appellant's mere possession of the currency could not by itself amount to acquisition. In the absence of any positive material showing how the foreign exchange was acquired, the confiscation and penalty orders were unsupported. The appreciation of evidence by the authorities below was found to be perverse.

Conclusion: The confiscation and penalty could not be sustained and the challenge succeeded in favour of the appellant.

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