Receipt of own dues from a non-resident buyer was not contravention under foreign exchange law; confiscation failed.

Receipt by a resident of money already due from a non-resident purchaser was not, by itself, receipt on behalf of or by order of that non-resident under section 9(1)(b) of the Foreign Exchange Regulation Act, 1973. The department was required to prove all ingredients of contravention, including receipt otherwise than through an authorised dealer and receipt on behalf of a person resident outside India. On the accepted facts, the amount represented the appellant's own dues, so the contravention was not established. Once that charge failed, the basis for confiscation under section 63 also fell away, and the penalty and confiscation were set aside with return of the seized and deposited amounts.

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Issues: Whether receipt of the amount by the appellant constituted contravention of section 9(1)(b) of the Foreign Exchange Regulation Act, 1973, and whether the consequent confiscation under section 63 of that Act could be sustained.

Analysis: The appellant received the amount as a balance due from a non-resident purchaser for goods already sold, and the decisive question was whether such receipt was on behalf of, or by order of, the non-resident. For a contravention under section 9(1)(b), the department had to establish all necessary ingredients, including that the payment was received otherwise than through an authorised dealer and that it was received on behalf of a person resident outside India. On the facts accepted by the department itself, the amount was payable to the appellant as his own dues, and receipt of money due to him could not be equated with receiving it on behalf of the non-resident. Once the charge under section 9(1)(b) failed, the basis for confiscation of the seized amount also disappeared.

Conclusion: The charge of contravention was not made out, and the confiscation order was unsustainable.

Final Conclusion: The appeal succeeded and the penalty as well as confiscation were set aside, with consequential directions for return of the seized and deposited amounts.

Ratio Decidendi: Receipt by a resident of money that is already due to him from a non-resident purchaser is not, by itself, receipt on behalf of or by order of that non-resident for the purpose of section 9(1)(b) of the Foreign Exchange Regulation Act, 1973.

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