Retracted confession and corroboration standards govern whether FERA penalty can stand on an inculpatory statement alone.

A penalty for contravention under FERA cannot safely rest on a retracted confessional statement unless the authority first satisfies itself that the statement was voluntary, free from threat or coercion, and supported by adequate corroboration. Where the record does not show proper scrutiny of voluntariness or due consideration of the retraction, reliance on the inculpatory portion is unsafe. On the facts noted, the adjudicating authority failed to demonstrate these safeguards and there was no independent material sufficient to sustain the alleged contravention; the impugned order was therefore liable to be set aside.

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Issues: Whether the penalty for contravention of section 9(1)(d) of the Foreign Exchange Regulation Act, 1973 could be sustained on the basis of a retracted confessional statement without adequate consideration of its voluntariness and corroboration.

Analysis: A statement recorded under the Act may be relied upon, but only if it is voluntary and survives judicial scrutiny after retraction. Prudence requires the authority to examine whether the statement was obtained by threat, coercion or other improper means and to apply its mind to the subsequent retraction before treating the inculpatory portion as reliable. Where the record does not show such consideration, reliance on the retracted confession is unsafe. In the present matter, the adjudicating authority did not demonstrate compliance with these requirements, and the finding was also unsupported by independent material sufficient to sustain the alleged contravention.

Conclusion: The penalty could not be sustained on the basis of the retracted confessional statement and the impugned order was liable to be set aside.

Ratio Decidendi: A retracted confession can support liability only if the authority independently satisfies itself that the statement was voluntary and sufficiently corroborated before acting on it.

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