Foreign exchange contravention proven by corroborated statements and documents; retraction and no cross-examination did not defeat the case

Receiving foreign-directed payments in India can constitute contravention of Section 9(1)(b) of the Foreign Exchange Regulation Act, 1973 when seized documents, co-noticee statements and the appellant's own admissions together show receipt otherwise than through an authorised dealer. A retracted inculpatory statement may still be acted upon if the retraction is unsupported and the statement appears voluntary, particularly where surrounding documentary and oral evidence corroborate it. Denial of cross-examination does not automatically vitiate proceedings when the material already sufficiently establishes the charge. On this reasoning, the evidence was treated as adequate and the penalty order was sustained.

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Issues: (i) Whether the appellant had contravened Section 9(1)(b) of the Foreign Exchange Regulation Act, 1973 by receiving foreign-directed payments in India, and whether the charge stood proved on the basis of the seized documents, co-noticee statements and the appellant's own statements; (ii) Whether the retracted confessional statements and denial of cross-examination vitiated the adjudication.

Issue (i): Whether the appellant had contravened Section 9(1)(b) of the Foreign Exchange Regulation Act, 1973 by receiving foreign-directed payments in India, and whether the charge stood proved on the basis of the seized documents, co-noticee statements and the appellant's own statements.

Analysis: The record showed recovery of incriminating documents from Prithviraj Sheth, identification of the appellant from those documents, and statements of Babulal Bisnoi and Ramlal Bisnoi supporting delivery of cash to the appellant. The appellant's own statements admitted receipt of amounts arranged through a person resident outside India and, read with the documentary and oral material, corroborated the allegation that he received the money otherwise than through an authorised dealer. The tribunal held that the contradiction suggested in the amount received did not survive the appellant's own admissions and that the evidentiary material established the nexus and contravention.

Conclusion: The charge under Section 9(1)(b) of the Foreign Exchange Regulation Act, 1973 was proved against the appellant.

Issue (ii): Whether the retracted confessional statements and denial of cross-examination vitiated the adjudication.

Analysis: The retraction was found to be unsupported by credible material and was made after delay. The appellant failed to establish coercion, inducement or threat, and the statements were treated as voluntary in light of the surrounding circumstances and corroborative evidence. As to cross-examination, the tribunal held that refusal to allow it did not amount to a breach of natural justice in the facts of the case, especially when the statements and documents already furnished sufficient corroboration.

Conclusion: The retracted statements remained usable, and the refusal of cross-examination did not invalidate the proceedings.

Final Conclusion: The evidence as a whole supported the adjudicating authority's finding, and the penalty order was sustained.

Ratio Decidendi: A retracted inculpatory statement can be relied upon when it is found voluntary and is sufficiently corroborated by surrounding documentary and oral evidence; denial of cross-examination does not necessarily violate natural justice where the material already establishes the charge.

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