Burden of proving lawful possession of foreign exchange under FERA supported confiscation and penalty where no explanation was shown.

Section 71(3) of the Foreign Exchange Regulation Act placed the burden on a person found in possession of foreign exchange above the prescribed value to prove lawful possession. On the facts recorded, the appellant failed to establish any lawful explanation for the seized currency, and no illegality or infirmity was found in the adjudication order. The penalty and confiscation for contravention of section 8(1) were therefore sustained, and the appeal failed.

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Issues: Whether the penalty and confiscation ordered for contravention of section 8(1) of the Foreign Exchange Regulation Act, 1973 could be sustained in view of section 71(3) of the Foreign Exchange Regulation Act, 1973.

Analysis: The appellant was found in possession of foreign exchange and the seized currency was recovered in the course of the proceedings. The statutory rule in section 71(3) of the Foreign Exchange Regulation Act, 1973 placed the burden on the person found in possession of foreign exchange exceeding the prescribed value to prove lawful possession. The record did not establish any lawful explanation for possession of the seized foreign exchange, and no illegality or infirmity was found in the adjudication order.

Conclusion: The penalty and confiscation were upheld and the appeal failed.

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