Uncorroborated confession and denied cross-examination cannot sustain foreign exchange penalty without independent evidence.
A penalty for alleged contravention of foreign exchange law cannot stand on an uncorroborated statement alone; independent evidence is required to prove receipt of foreign funds and the surrounding material must support the confession. Here, the seized currency and envelope did not provide sufficient corroboration, so the contravention was not proved and the penalty was set aside. The refusal to allow cross-examination of the police officer who attended the search and apprehension also denied a fair opportunity to test the prosecution version, vitiating the adjudication. The seized amount was left to be dealt with under directions concerning possible income-tax action.
Issues: (i) Whether the penalty for contravention of section 9(1)(b) of the Foreign Exchange Regulation Act, 1973 was sustainable on the basis of the appellant's statement and the surrounding material; (ii) Whether the denial of an opportunity to cross-examine the relevant police officer vitiated the adjudication.
Issue (i): Whether the penalty for contravention of section 9(1)(b) of the Foreign Exchange Regulation Act, 1973 was sustainable on the basis of the appellant's statement and the surrounding material.
Analysis: The seized currency by itself did not establish contravention under the Act. The adjudication rested principally on the appellant's own statement, but there was no independent evidence proving receipt of foreign funds at the instance of the non-resident brother. The envelope recovered from the residence did not constitute corroboration of the alleged remittance, and the surrounding circumstances did not supply material particulars necessary to support the confession.
Conclusion: The charge of contravention was not proved and the penalty could not be sustained.
Issue (ii): Whether the denial of an opportunity to cross-examine the relevant police officer vitiated the adjudication.
Analysis: The appellant had sought to cross-examine the police officer present at the time of apprehension and search to challenge the timing and preparation of the mahazar and statement. That request was not considered in the adjudication. In the circumstances, the refusal of this opportunity deprived the appellant of a fair chance to test the prosecution version and undermined the adjudicatory process.
Conclusion: The denial of cross-examination vitiated the proceedings.
Final Conclusion: The finding of contravention and the resulting penalty were set aside, while the seized amount was left to be dealt with in accordance with the directions regarding possible action by the income-tax authorities.
Ratio Decidendi: A penalty for contravention under foreign exchange law cannot rest on an uncorroborated confession and must be supported by independent evidence, especially where a requested opportunity to test the evidence through cross-examination has been denied.
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