Retracted statement without corroboration cannot sustain FERA contravention where documentary evidence contradicts it; technical breach justified reduced penalty.

Retracted statements unsupported by reliable independent documentary corroboration could not sustain findings of contravention under the foreign exchange law; on that basis, the findings under sections 9(1)(a), 14 and 8(1) were set aside. The contravention under section 9(1)(c) was sustained, but the penalty was reduced because the breach was technical, the loan had been received through banking channels, and no mala fide intention was shown.

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Issues: (i) Whether the findings of contravention under sections 9(1)(a), 14 and 8(1) of the Foreign Exchange Regulation Act, 1973 could be sustained on the material relied upon by the adjudicating authority. (ii) Whether the penalty imposed for contravention of section 9(1)(c) of the Foreign Exchange Regulation Act, 1973 required reduction.

Issue (i): Whether the findings of contravention under sections 9(1)(a), 14 and 8(1) of the Foreign Exchange Regulation Act, 1973 could be sustained on the material relied upon by the adjudicating authority.

Analysis: The findings on these charges were based principally on the appellant's statements recorded under sections 39 and 40, along with an inference that imported costly articles had been brought from Singapore and that foreign exchange had been borrowed there. The seized customs documents, however, did not corroborate that version. They indicated that the articles referred to by the adjudicating authority were imported by other persons and on dates unrelated to the appellant's return from Singapore. The retracted statements were therefore not supported by independent material of sufficient weight, and the distinction between admissibility, relevancy, and probative value of evidence had not been properly applied.

Conclusion: The findings of contravention under sections 9(1)(a), 14 and 8(1) were set aside.

Issue (ii): Whether the penalty imposed for contravention of section 9(1)(c) of the Foreign Exchange Regulation Act, 1973 required reduction.

Analysis: The contravention under section 9(1)(c) was upheld, but the circumstances showed that the violation was technical in nature and did not prejudice the object of foreign exchange conservation. The loan was received through banking channels, there was no mala fide intention, and the facts justified treating the lapse as one warranting only limited penal consequence.

Conclusion: The finding of contravention under section 9(1)(c) was sustained, but the penalty was reduced.

Final Conclusion: The appeals succeeded in part by eliminating the findings on three charges and by substantially reducing the monetary penalties on the remaining charge.

Ratio Decidendi: A retracted statement, without reliable independent corroboration from documentary evidence, cannot sustain findings of contravention; where the breach is technical and does not frustrate the statutory object, the penalty may be moderated accordingly.

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