Retraction, corroboration and cross-examination in foreign exchange adjudication: liability upheld, but penalty reduced.

A retracted confessional statement can support liability when it is corroborated by a co-noticee's statement, diary entries, and other circumstantial evidence, and the burden of showing coercion or duress in recording the statement remains on the person making that allegation. On that basis, contravention of the foreign exchange restrictions was proved. Refusal to allow cross-examination did not vitiate the adjudication where the surrounding evidence sufficiently supported the finding and no absolute right to such examination arose on the facts. The penalty was then moderated because it was considered excessive in the circumstances.

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Issues: (i) Whether the appellant's contravention of sections 8(1) and 8(2) of the Foreign Exchange Regulation Act, 1973 was proved on the basis of his statement, the co-noticee's statement and the surrounding evidence; (ii) Whether denial of cross-examination of the co-noticee vitiated the adjudication for breach of natural justice; (iii) Whether the penalty imposed was excessive and liable to be reduced.

Issue (i): Whether the appellant's contravention of sections 8(1) and 8(2) of the Foreign Exchange Regulation Act, 1973 was proved on the basis of his statement, the co-noticee's statement and the surrounding evidence.

Analysis: The appellant's statement admitting sale of foreign exchange was treated as a retracted confessional statement, but it was supported by the co-noticee's inculpatory statement, seized diary entries, and attendant circumstantial material. The burden to establish coercion or duress in recording the statement was not discharged. The evidence was found sufficient to connect the appellant with illegal purchase and sale of foreign exchange in contravention of the statutory restrictions.

Conclusion: The contravention was proved against the appellant.

Issue (ii): Whether denial of cross-examination of the co-noticee vitiated the adjudication for breach of natural justice.

Analysis: The request for cross-examination was not treated as an absolute right in the facts of the case. Since the appellant's own statement stood corroborated by documentary and circumstantial evidence, and the co-noticee's statement was relied upon as substantive evidence, refusal to permit cross-examination was held not to amount to violation of natural justice in the circumstances.

Conclusion: The adjudication was not vitiated on the ground of denial of cross-examination.

Issue (iii): Whether the penalty imposed was excessive and liable to be reduced.

Analysis: While upholding guilt, the Tribunal found that the penalty imposed was excessive in the circumstances, including the age of the matter and the facts of the case. The quantum was therefore reassessed to do justice between the parties.

Conclusion: The penalty was reduced from Rs. 92,500 to Rs. 60,000.

Final Conclusion: The finding of contravention was sustained, but the monetary penalty was moderated, resulting in partial relief to the appellant.

Ratio Decidendi: A retracted confessional statement may sustain liability when corroborated by documentary and circumstantial evidence, and refusal of cross-examination does not by itself vitiate adjudication where no sufficient basis for such cross-examination is shown.

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