Proportional penalty in FERA contravention upheld, with violation retained but monetary sanction reduced

Contravention under section 9(1)(f)(i) of the Foreign Exchange Regulation Act, 1973 was upheld because it was not seriously disputed and no basis was shown to disturb the finding. The penalty, however, was reduced because the amount involved was modest, parallel criminal prosecution had already taken place, and the adjudicatory sanction was considered disproportionate to the circumstances. The appellate board therefore retained the violation but substituted a token monetary penalty to achieve proportionality and the ends of justice.

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Issues: Whether the finding of contravention under section 9(1)(f)(i) of the Foreign Exchange Regulation Act, 1973 required interference, and whether the penalty imposed was excessive and liable to reduction.

Analysis: The contravention finding was not seriously contested, and no ground was made out to disturb it. On the facts, the amount involved was modest, the appellant had already undergone prosecution in parallel criminal proceedings, and the penalty imposed in adjudication was considered disproportionate to the circumstances. The appropriate course was to retain the finding of violation but reduce the monetary penalty to a token amount that would meet the ends of justice.

Conclusion: The finding of contravention was upheld, but the penalty was reduced from Rs. 2,50,000 to Rs. 6,400.

Final Conclusion: The appeal succeeded only to the extent of substantial reduction of penalty while the adjudicated violation remained undisturbed.

Ratio Decidendi: Where contravention is established but the surrounding circumstances and the amount involved show that the adjudicatory penalty is excessive, the penalty may be reduced to a proportionate token amount without disturbing the finding of violation.

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