2008 (12) TMI 31 - SC - FEMA

Appeal allowed: authorities' findings on retracted FERA confession set aside; revenue must prove voluntariness, burden misapplied

VINOD SOLANKI Versus UNION OF INDIA & ANR.

SC allowed the appeal, set aside the Tribunal's and authorities' orders, and remitted findings related to levy under FERA. The Court held that the ... Effect of a retracted confession for the purpose of levy of penalty under FERA, 1973 - violation of Section 8(3) and 9(1)(a) - remittance of the foreign exchange worth US Dollars - HELD THAT:- In the instant case, the Investigating Officers did not examine themselves. The authorities under the Act as also the Tribunal did not arrive at a finding upon application of their mind to the retraction and rejected the same upon assigning cogent and valid reasons therefor. Whereas mere retraction of a confession may not be sufficient to make the confessional statement irrelevant for the purpose of a proceeding in a criminal case or a quasi criminal case but there cannot be any doubt whatsoever that the court is obligated to take into consideration the pros and cons of both the confession and retraction made by the accused. It is one thing to say that a retracted confession is used as a corroborative piece of evidence to record a finding of guilt but it is another thing to say that such a finding is arrived at only on the basis of such confession although retracted at a later stage. No attempt has been made to controvert the statements made by appellant in his application filed on 28.10.1994 before the learned Chief Metropolitan Magistrate. Furthermore, the Tribunal as also the Authorities misdirected themselves in law insofar as they failed to pose unto themselves a correct question. The statement made by the appellant before the learned Chief Metropolitan Magistrate was not a bald statement. The inference that burden of proof that he had made those statements under threat and coercion was solely on the proceedee does not rest on any legal principle. The question of the appellant's failure to discharge the burden would arise only when the burden was on him. If the burden was on the revenue, it was for it to prove the said fact. The Tribunal on its independent examination of the factual matrix placed before it did not arrive at any finding that the confession being free from any threat, inducement or force could not attract the provisions of Section 24 of the Indian Evidence Act. The order of the Tribunal and consequently the impugned judgment and order cannot be sustained. They are set aside accordingly. This appeal is allowed. Issues Involved:1. Effect of a retracted confession on the levy of penalty under the Foreign Exchange Regulation Act, 1973.2. Burden of proof regarding the voluntariness of the confession.3. Legality of imposing a consolidated penalty based on a retracted confession.Detailed Analysis:1. Effect of a Retracted Confession on the Levy of Penalty under FERA:The primary issue was whether a retracted confession could be used to levy a penalty under the Foreign Exchange Regulation Act, 1973. The appellant had retracted his confession made to the Enforcement Directorate, alleging that it was obtained under duress. The Tribunal and the High Court upheld the penalty, relying on the confession despite its retraction.2. Burden of Proof Regarding the Voluntariness of the Confession:The appellant argued that the burden of proof was wrongly placed on him to prove that the confession was involuntary. The court observed that a confession made by an accused falls under Section 24 of the Indian Evidence Act, which states that a confession caused by inducement, threat, or promise is irrelevant in criminal proceedings. The court emphasized that the initial burden to prove that the confession was voluntary lies with the Department. The court cited previous judgments, including Noor Aga vs. State of Punjab & Anr., which held that evidences brought on record by way of confession must be substantially corroborated by other independent and cogent evidences.3. Legality of Imposing a Consolidated Penalty Based on a Retracted Confession:The court noted that the Tribunal and the authorities did not properly consider the appellant's retraction and failed to provide cogent reasons for rejecting it. The court highlighted that the retraction was not a bald statement and included specific allegations of coercion. The court also pointed out that the authorities did not refute the appellant's claim of being detained illegally. The court concluded that the authorities misdirected themselves in law by placing the burden of proof solely on the appellant and not considering the retraction properly.Conclusion:The Supreme Court set aside the orders of the Tribunal and the High Court, stating that the burden of proving the voluntariness of the confession was on the Department. The court held that the confession, being retracted and not properly corroborated by independent evidence, could not be the sole basis for imposing a penalty. The court ordered the refund of Rs. 2,65,000/- to the appellant and allowed the appeal, emphasizing the need for proper consideration of retracted confessions and the burden of proof in such cases.