Foreign exchange remittance contravention requires proof of foreign-to-India transfer through a prohibited channel, not merely related payments.

A contravention of section 9(3) of the Foreign Exchange Regulation Act, 1973 is made out only where the evidence proves remittance from a foreign country into India otherwise than through an authorised dealer. Here, the show-cause allegations described a domestic payment with a corresponding foreign exchange payment abroad, which did not satisfy that statutory requirement. The receipts relied on did not show that the funds were received for Wimpy India (P.) Ltd. or that the money was paid on the appellant's instructions, and the section 40 statements contained no admission of such remittance. The finding of contravention was therefore unsustainable.

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Issues: Whether the appellant had contravened section 9(3) of the Foreign Exchange Regulation Act, 1973 by remitting or causing to be remitted any amount from a foreign country into India otherwise than through an authorised dealer, and whether the finding of contravention was supported by the allegations and evidence on record.

Analysis: Section 9(3) applies only where it is first established that an amount has been remitted from a foreign country into India and received in India otherwise than through an authorised dealer. The allegations in the show-cause notice did not satisfy these ingredients, because they described a payment in India by one person and a corresponding payment abroad in foreign exchange, which is not the same as remittance from abroad into India. The receipts relied upon by the adjudicating authority showed payments received from Resham Singh Mandeer for share application money in other Wimpy companies and not for Wimpy India (P.) Ltd., and they did not support the inference that the money was paid on the appellant's instructions. The appellant's section 40 statements also did not contain an admission that he had instructed such remittance or that he had paid equivalent foreign exchange in London.

Conclusion: The charge of contravention of section 9(3) was not made out on the facts alleged or substantiated by the evidence, and the finding against the appellant could not stand.

Ratio Decidendi: A contravention under section 9(3) is established only when the evidence proves remittance from a foreign country into India through a prohibited channel, and a finding based on allegations or receipts that do not satisfy those statutory ingredients is unsustainable.

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