Foreign exchange contravention requires clear evidence of foreign exchange dealings and nexus; Indian currency alone was insufficient.

A contravention under the Foreign Exchange Regulation Act, 1973 requires evidence of foreign exchange dealings and a clear nexus between the alleged conduct and the statutory prohibition. The adjudication order was founded mainly on loose sheets recovered from the main accused's residence and the appellant's statement, but the record did not show what investigation was conducted or how any alleged payment in Indian currency established a breach. No evidence proved that the appellant received or made foreign exchange payments, and mere holding or dealing in Indian currency was not treated as a violation. The alleged contravention was therefore not proved and the order could not be sustained against the appellant.

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Issues: Whether the appellant had contravened Section 9(1)(d) of the Foreign Exchange Regulation Act, 1973 on the basis of the material relied upon in the adjudication order.

Analysis: The impugned order rested mainly on loose sheets recovered from the residence of the main accused and on the appellant's statement. The material on record did not disclose what investigations were conducted, how the alleged payment of Indian currency established a contravention under the Foreign Exchange Regulation Act, or any linkage between the appellant, the resident abroad, and the alleged foreign exchange transaction. No evidence was produced to show that the appellant had received or made foreign exchange payments, and mere holding or dealing in Indian currency was held not to amount to a violation of the Act.

Conclusion: The alleged contravention was not proved, and the adjudication order could not be sustained against the appellant.

Final Conclusion: The appeal succeeded and the impugned order was set aside insofar as it concerned the appellant.

Ratio Decidendi: A contravention under the Foreign Exchange Regulation Act requires evidence establishing foreign exchange dealings and a clear evidentiary nexus between the alleged conduct and the statutory prohibition.

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