Retraction and corroboration in foreign exchange penalty proceedings: voluntary confession upheld as reliable evidence of contravention.

A penalty for contravention of foreign exchange law was upheld where the appellant's retracted inculpatory statement, recorded under Section 40 of the Foreign Exchange Regulation Act, 1973, was found voluntary and reliable. The tribunal considered the statement together with seized documents and surrounding circumstances, and noted that the retraction was unsupported by any material showing coercion or threat. The admitted contents of the seized papers and the sequence of events corroborated the admission that payments were made in India on behalf of a person resident outside India without Reserve Bank of India permission. A retracted confession can sustain liability when voluntariness and corroboration are established.

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Issues: Whether the penalty for contravention of Section 9(1)(d) of the Foreign Exchange Regulation Act, 1973 was liable to be set aside on the ground that the appellant's inculpatory statement was allegedly involuntary and uncorroborated.

Analysis: The statement recorded under Section 40 of the Foreign Exchange Regulation Act, 1973 was examined along with the seized documents and surrounding circumstances. The retraction was unsupported by any documentary material or other evidence showing coercion or threat. The admitted contents of the seized papers and the sequence of events furnished corroboration to the admission that payments were made in India on behalf of a person resident outside India without permission of the Reserve Bank of India. A retracted confession can form the basis of liability when its voluntariness is established and it is corroborated by evidence.

Conclusion: The statement was voluntary and reliable, the contravention stood proved, and the penalty was rightly sustained.

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