Retracted confession and limited cross-examination in foreign exchange enforcement, with penalty reduced on overall circumstances.

A retracted confessional statement may still be relied upon where the maker fails to prove coercion or threat and the statement is independently corroborated by seized documents and surrounding circumstances; on that basis, liability for contravention was sustained. Denial of cross-examination of a co-noticee does not, by itself, amount to breach of natural justice unless a sufficient need for such examination is shown; the adjudication was therefore not vitiated. Although contravention of section 9(1)(b) of the Foreign Exchange Regulation Act, 1973 was upheld, the penalty was reduced in light of the long pendency and overall circumstances.

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Issues: (i) whether the appellant's retracted confessional statement could be relied upon when corroborated by seized documents and surrounding circumstances; (ii) whether denial of cross-examination of the co-noticee violated natural justice; and (iii) whether the penalty imposed for contravention of section 9(1)(b) of the Foreign Exchange Regulation Act, 1973 required reduction.

Issue (i): whether the appellant's retracted confessional statement could be relied upon when corroborated by seized documents and surrounding circumstances.

Analysis: The statement was retracted on the same day, but the retraction was unsupported by any evidence showing coercion or threat. The burden to establish duress lay on the maker of the statement. The statement was corroborated by documents seized from the co-noticee, the co-noticee's own statements, and the surrounding circumstances, including the appellant's name and telephone number appearing in the recovered material. A retracted confession can be acted upon when it is found to be voluntary and is supported by corroboration.

Conclusion: The retracted confessional statement was admissible and reliable, and the finding of contravention was upheld.

Issue (ii): whether denial of cross-examination of the co-noticee violated natural justice.

Analysis: Cross-examination is not an automatic right and is not to be granted merely on demand. The appellant did not establish sufficient grounds requiring such cross-examination. In the circumstances, refusal to permit cross-examination did not amount to violation of natural justice.

Conclusion: The denial of cross-examination did not vitiate the adjudication.

Issue (iii): whether the penalty imposed for contravention of section 9(1)(b) of the Foreign Exchange Regulation Act, 1973 required reduction.

Analysis: The contravention stood proved, but the quantum of penalty was examined in light of the long pendency of the matter and the overall circumstances. On that basis, the penalty was considered excessive and was reduced to achieve the ends of justice.

Conclusion: The penalty was reduced from Rs. 1,80,000 to Rs. 1,50,000.

Final Conclusion: The contravention finding was sustained, but the punishment was modified by reducing the penalty, resulting in only partial relief to the appellant.

Ratio Decidendi: A retracted confession may sustain liability when the maker fails to prove coercion and the statement is independently corroborated by documents and circumstances, and denial of cross-examination does not violate natural justice absent a demonstrated need.

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