Foreign exchange contravention and retracted confession upheld with penalty moderated on equitable facts.

The commentary explains that receipt of payment in India on instructions of a person resident outside India, without Reserve Bank permission, was treated as a contravention of section 9(1)(b) of the Foreign Exchange Regulation Act, 1973. It notes that a retracted inculpatory statement may still be relied on when supported by seized documents and surrounding circumstances, and that the breach was treated as a regulatory violation attracting liability without proof of guilty intention. The discussion also records that penalty may be moderated on equitable facts, including the appellant's status, the age of the matter, and prior adjustment of the amount from blocked funds.

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Issues: (i) Whether the appellant had contravened section 9(1)(b) of the Foreign Exchange Regulation Act, 1973 by receiving payment in India on the instructions of a person resident outside India without the Reserve Bank of India's permission; (ii) Whether the penalty required reduction on the facts and circumstances of the case.

Issue (i): Whether the appellant had contravened section 9(1)(b) of the Foreign Exchange Regulation Act, 1973 by receiving payment in India on the instructions of a person resident outside India without the Reserve Bank of India's permission.

Analysis: The appellant's retraction of the inculpatory statement was found unsupported by any material. The seized documents, including correspondence from her husband, and the surrounding circumstances were treated as corroborative evidence. The statement and record established receipt of money in India on instructions of a person resident outside India without permission of the Reserve Bank of India. The contravention was treated as a regulatory breach attracting liability, and the plea that it was merely technical was rejected.

Conclusion: The contravention was proved and the finding of guilt was sustained.

Issue (ii): Whether the penalty required reduction on the facts and circumstances of the case.

Analysis: While upholding the contravention, the Tribunal took into account that the appellant was a housewife, the matter was extremely old, the amount had already been adjusted from the blocked funds, and the penalty appeared excessive in the circumstances. Relief was therefore confined to moderation of the penalty already imposed and appropriated.

Conclusion: The penalty was reduced to the amount already adjusted from the blocked amount.

Final Conclusion: The appeal succeeded only to the limited extent of reduction of the penalty, while the finding of contravention under the foreign exchange law was maintained.

Ratio Decidendi: Once contravention of a regulatory obligation under foreign exchange law is established, penalty follows without requiring proof of guilty intention, and a retracted confession can be relied upon when corroborated by surrounding evidence.

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