Retractions and foreign exchange contraventions: corroborated admissions and documentary evidence sustained the penalty

A retracted confession can support a finding of foreign exchange contravention when it is corroborated by seized documents, diary entries and surrounding circumstances; the maker must show coercion or threat to displace the statement. On the facts, the appellant's admissions about making payments in India at the instruction of a person resident outside India, and making payment to a person resident outside India, were treated as sufficiently proved, establishing contraventions under Section 9(1)(a) and Section 9(1)(d) of the Foreign Exchange Regulation Act, 1973. The penalty was also upheld as proportionate to the gravity of the offence and the appellant's role, and no reduction was warranted on equitable grounds.

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Issues: (i) whether the appellant's retracted confession, read with the seized documents and surrounding circumstances, proved contravention of the restrictions on payments under foreign exchange law; (ii) whether the penalty imposed required interference.

Issue (i): Whether the appellant's retracted confession, read with the seized documents and surrounding circumstances, proved contravention of the restrictions on payments under foreign exchange law.

Analysis: The appellant admitted in his statement that he had made payments to persons in India on the instructions of a person resident outside India and had also made payment to a person resident outside India. The retraction was not supported by any independent material showing coercion or threat. The seized documents and diary entries were treated as corroborative of the admissions, and the surrounding facts showed that the transactions were carried out by the appellant in a substantial and effective role in the firm. The evidence was found sufficient to establish the contraventions.

Conclusion: The contravention under Section 9(1)(a) and Section 9(1)(d) of the Foreign Exchange Regulation Act, 1973 was proved against the appellant.

Issue (ii): Whether the penalty imposed required interference.

Analysis: In view of the proved contraventions, the amount involved, and the appellant's role in the transactions, the penalty was considered proportionate to the gravity of the offence. No basis was found for reduction on sympathetic or equitable grounds.

Conclusion: The penalty was upheld and no interference was warranted.

Final Conclusion: The appeal failed on merits and the adjudication order was affirmed in full.

Ratio Decidendi: A retracted confession may sustain a finding of contravention when it is corroborated by documentary and circumstantial evidence, and the burden to establish coercion lies on the maker of the statement.

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