Suspicion cannot substitute for proof in foreign exchange contravention cases where evidence of debt acknowledgement is absent.

A penalty for contravention of FERA section 9(1)(c) cannot be sustained on mere suspicion where no direct or documentary evidence proves the alleged acknowledgement of debt in favour of a foreign resident. The impugned adjudication rested only on receipt of money and an inferred debt acknowledgement, but no verbal or documentary material supported the charge. In the absence of evidence establishing the foundational allegation, the adverse finding was held unsustainable and the penalty was set aside, reaffirming that suspicion cannot replace proof.

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Issues: Whether the penalty imposed for contravention of section 9(1)(c) of the Foreign Exchange Regulation Act, 1973 could stand in the absence of direct or documentary evidence and on the basis of suspicion and inferred conduct alone.

Analysis: The impugned order proceeded only on the receipt of money by the appellant and on an inference that she must have acknowledged a debt in favour of a foreign resident. No verbal or documentary evidence supported the charge, and the adjudication was founded on grave suspicion and surmise. In the absence of evidence establishing the alleged acknowledgement of debt, the adverse finding could not be sustained.

Conclusion: The penalty was unsustainable and had to be set aside; the appeal was allowed.

Final Conclusion: An adverse penalty order cannot rest on suspicion or conjecture where the alleged contravention is not proved by evidence.

Ratio Decidendi: Suspicion, however strong, cannot substitute for proof, and a penalty for contravention cannot be sustained unless the foundational charge is supported by evidence.

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