Retracted confessional statement alone cannot sustain FERA penalty without corroborative evidence.

Penalty for alleged contravention under FERA section 9(1)(b) could not rest solely on the appellant's statement recorded under section 40, because no independent evidence proved receipt of the alleged amount from a person resident outside India. The statement was also retracted, and the Board applied the settled principle that a person cannot be held guilty on a bare confessional statement, particularly a retracted one, unless corroborated by other material. As the investigation itself was not supported by any verified source or corroborative record, the penalty was not sustained and the appeal was allowed.

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Issues: Whether penalty under section 9(1)(b) of the Foreign Exchange Regulation Act, 1973 could be sustained solely on the basis of the appellant's confessional statement recorded under section 40 of the said Act without corroborative evidence.

Analysis: The finding of contravention rested only on the appellant's statement recorded under section 40. No independent evidence was brought on record to prove that the appellant had actually received the alleged amount from a person resident outside India. The statement was also stated to be retracted, and the settled position applied by the Board was that a person cannot be held guilty merely on the basis of a confessional statement, particularly a retracted one, unless it is supported by other evidence. The material said to have led to the investigation was also not backed by any verified source or corroborative record.

Conclusion: The impugned penalty could not be sustained and the appeal was allowed.

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