Foreign exchange contravention can rest on an unretracted statement, but confiscation must be proportionate to the proven violation.

A later denial that does not allege coercion or duress may not amount to an effective retraction of an inculpatory statement, so the initial statement can be relied on with surrounding material to sustain a finding of contravention under foreign exchange law. At the same time, confiscation must remain proportionate to the money actually found involved in the contravention, and automatic forfeiture of the entire seized amount is not justified on these facts. The adverse finding and penalty were affirmed, while confiscation was reduced to the amount linked to the violation and the balance was ordered to be returned.

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Issues: Whether the appellant's guilt under the foreign exchange law could be sustained on the basis of the statement and surrounding material, and whether confiscation of the entire seized amount was justified.

Analysis: The appellant's later letter did not amount to a true retraction, as it did not allege coercion or duress. The initial statement, together with the seized chits, telephone numbers and the co-accused's statement, was sufficient to sustain the finding of contravention under the foreign exchange law. However, confiscation of the whole seized amount was held to be excessive. The power of confiscation was treated as not requiring automatic forfeiture of the entire amount where the facts indicated that only part of the money was involved in the contravention.

Conclusion: The finding of contravention and the penalty were upheld, but confiscation was restricted to Rs. 1 lakh and the balance amount was directed to be returned to the appellant.

Final Conclusion: The appeal succeeded only to the extent of reducing the confiscation, while the adverse finding and penalty otherwise stood affirmed.

Ratio Decidendi: A later denial that does not allege coercion or duress may not constitute a retraction sufficient to displace an initial inculpatory statement, but confiscation under the foreign exchange law must be proportionate to the amount actually found involved in the contravention.

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