Broad construction of foreign exchange transfer and acquisition upheld; attempt charge failed and penalty was reduced.

In foreign exchange contravention matters, "transfer" and "acquire" under FERA are construed broadly: handing over currency for use when required amounts to transfer and receipt into possession amounts to acquisition, so the acquisition charge was proved. Bare allegations of coercion and a vague partial retraction do not displace recorded statements where material parts are corroborated, so those admissions were relied upon. Mere intention or preparatory conduct is insufficient for attempt to sell or convert foreign exchange, so that charge failed. A composite penalty was reduced because only one contravention survived, and confiscation was upheld as proceedings in rem despite a third-party ownership claim.

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Issues: (i) Whether the handing over of foreign exchange by one person to another for use when required constituted transfer and acquisition under section 8(1) of the Foreign Exchange Regulation Act, 1973; (ii) whether the statements recorded from the appellants could be relied upon despite the alleged coercion and partial retraction; (iii) whether the charge of attempt to sell and convert foreign exchange was made out; (iv) whether the penalty imposed on one appellant required reduction where only one of several charges survived; and (v) whether confiscation of the foreign exchange was vitiated for want of hearing to a third-party claimant.

Issue (i): Whether the handing over of foreign exchange by one person to another for use when required constituted transfer and acquisition under section 8(1) of the Foreign Exchange Regulation Act, 1973.

Analysis: The expression 'acquire' was held to bear a generic meaning, namely, to receive or come into possession of foreign exchange, and the corresponding expression 'transfer' was likewise to be read widely so as to include handing over of currency by one person to another. The admitted position was that the foreign exchange was left with the father with authority to use it if needed, and the subsequent statement of the father confirmed receipt of the currency from the son for expenses. The arrangement was not treated as a mere custody or a gift.

Conclusion: The charge of transfer by the son and acquisition by the father was proved, and the finding was against the assessee.

Issue (ii): Whether the statements recorded from the appellants could be relied upon despite the alleged coercion and partial retraction.

Analysis: A bald allegation of pressure was held insufficient to displace the evidentiary value of the statements, particularly when the retraction was vague and did not assert that the entire statement was involuntary or incorrect. Material portions of the statement of the son were corroborated by the statement of the father, and the surrounding circumstances did not show that the retraction was made at the earliest effective opportunity in a manner that would destroy reliance on the admissions.

Conclusion: The statements were admissible and could be relied upon, and this issue was decided against the assessee.

Issue (iii): Whether the charge of attempt to sell and convert foreign exchange was made out.

Analysis: Mere intention or preparatory conduct was held insufficient to constitute an attempt. The material showed only that the father made calculations on possible exchange rates and spoke of prospective sale, but there was no clear step toward execution, no concrete details of any proposed sale, and no link showing that the offence would have been completed but for outside intervention. The necessary proximity between intention and commission was absent.

Conclusion: The charge of attempt to sell and convert foreign exchange was not proved, and this issue was in favour of the assessee.

Issue (iv): Whether the penalty imposed on one appellant required reduction where only one of several charges survived.

Analysis: Since the adjudicating authority had imposed a composite penalty without apportioning it among distinct charges, the penalty could not properly stand in the original amount once only the acquisition charge survived. In the circumstances, the penalty was scaled down to correspond to the single established contravention.

Conclusion: The penalty was reduced from Rs. 75,000 to Rs. 25,000, and this issue was partly in favour of the assessee.

Issue (v): Whether confiscation of the foreign exchange was vitiated for want of hearing to a third-party claimant.

Analysis: Confiscation proceedings were treated as proceedings in rem, enforceable against the goods irrespective of ownership disputes. Since the currency was found to be the subject of a proved contravention and the record showed admissions connecting it with the appellants, the absence of separate adjudication on the claimant's ownership did not invalidate confiscation or establish breach of natural justice.

Conclusion: The confiscation was upheld and this issue was against the claimant.

Final Conclusion: The transfer and acquisition of foreign exchange were upheld, the attempt charges failed, the monetary penalty was substantially reduced, and the confiscation order was maintained.

Ratio Decidendi: In foreign exchange contravention cases, the expressions 'transfer' and 'acquire' are to be construed in their generic sense, while an attempt requires a proximate step toward commission beyond mere intention; confiscation of the offending currency may be ordered as proceedings in rem.

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