Voluntary Enforcement Directorate statements can support foreign exchange penalties without section 164 safeguards or automatic corroboration requirements.

Statements recorded by the Enforcement Directorate under section 40 of the Foreign Exchange Regulation Act, 1973 were examined under the confession rules in sections 24 to 30 of the Indian Evidence Act, 1872. The Tribunal treated Enforcement Directorate officers as distinct from police officers for the purposes of sections 25 and 26, and held that such statements are not inadmissible merely because they were not recorded under section 164 of the Code of Criminal Procedure, 1973. On the facts found, the statement was treated as voluntary, and reliance on the connected material was accepted without requiring independent corroboration as a bar. The adjudication order was found free from legal infirmity, and the penalty was sustained.

---

---

Issues: Whether the appellant's statement and the connected material could be relied upon to uphold the penalty for contravention of section 9(1)(b) and section 9(1)(d) of the Foreign Exchange Regulation Act, 1973, and whether statements recorded by the Enforcement Directorate were inadmissible on the footing that they were confessional statements recorded without the safeguards applicable to section 164 of the Code of Criminal Procedure, 1973.

Analysis: The statutory scheme governing confessions under sections 24 to 30 of the Indian Evidence Act, 1872 was applied to distinguish between inadmissible confessions obtained by inducement, threat, or promise and statements that remain usable in evidence. The officers of the Enforcement Directorate were treated as distinct from police officers for the purposes of sections 25 and 26 of the Indian Evidence Act, 1872. The statement recorded under section 40 of the Foreign Exchange Regulation Act, 1973 was not treated as a confession recorded under section 164 of the Code of Criminal Procedure, 1973. On the facts found, the statement was treated as voluntary, and the need for independent corroboration was not accepted as a bar to reliance on the material. The Tribunal therefore found no legal infirmity in the adjudication order.

Conclusion: The penalty was upheld and the appeal failed.

Ratio Decidendi: A statement recorded by the Enforcement Directorate under section 40 of the Foreign Exchange Regulation Act, 1973 is not, by that fact alone, inadmissible as a confession under the law governing police-custody confessions; where the statement is voluntary, it may be relied upon to sustain adjudicatory action.

---