Foreign exchange contravention requires proof of ownership and holding; a disputed credit note alone cannot sustain liability.

Contravention under section 9(1)(f)(i) of the Foreign Exchange Regulation Act was not sustainable because the alleged payment from Lloyd Steel Industries lacked a proved factual foundation. The charge under section 14 also failed because the only relied-upon material was a disputed credit note, and the record did not establish that the appellant owned and held foreign exchange; the note's genuineness was not proved. The discussion distinguishes a mere right to receive foreign exchange from ownership and holding of foreign exchange for section 14 purposes. On that reasoning, the adjudication and penalty could not stand.

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Issues: (i) Whether the charge of contravention of section 9(1)(f)(i) of the Foreign Exchange Regulation Act, 1973 could be sustained on the alleged payment from Lloyd Steel Industries. (ii) Whether the charge of contravention of section 14 of the Foreign Exchange Regulation Act, 1973 was made out on the basis of the disputed credit note.

Issue (i): Whether the charge of contravention of section 9(1)(f)(i) of the Foreign Exchange Regulation Act, 1973 could be sustained on the alleged payment from Lloyd Steel Industries.

Analysis: The charge rested on the alleged receipt of Rs. 5,84,000 from Lloyd Steel Industries. Since the corresponding payment was not proved in the connected appeals, the factual foundation for attributing the contravention to the appellant failed.

Conclusion: The charge under section 9(1)(f)(i) was not sustainable.

Issue (ii): Whether the charge of contravention of section 14 of the Foreign Exchange Regulation Act, 1973 was made out on the basis of the disputed credit note.

Analysis: The only material relied upon was a disputed credit note. The reasoning distinguished between a right to receive foreign exchange, which may fall within section 16(1)(a), and ownership or holding of foreign exchange for the purpose of section 14. The record did not establish that the appellant owned and held the amount. The genuineness of the credit note was also rejected on the evidence. On that basis, the allegation under section 14 was held to be unproved in law and on facts.

Conclusion: The charge under section 14 was not sustainable.

Final Conclusion: The impugned adjudication could not stand and the appellant was entitled to relief against the penalty imposed.

Ratio Decidendi: A contravention under section 14 of the Foreign Exchange Regulation Act, 1973 cannot be sustained unless ownership and holding of foreign exchange are established by reliable evidence, and a disputed document without proof of genuineness cannot by itself found the charge.

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