Attempted foreign exchange contravention deemed unlawful, while penalty was reduced as excessive in the circumstances.

An attempted receipt of foreign exchange through a cheque sent by a person resident outside India was treated as contravention, even though the cheque was not realised, because an attempt to contravene a prohibited transaction is deemed a contravention under section 64(2). The finding of liability was therefore upheld. However, the penalty was held disproportionate in light of the fact that the amount was not ultimately received and was intended for family use, so the punishment was reduced from Rs. 1,500 to Rs. 500, with consequential refund relief.

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Issues: (i) whether receipt of a cheque sent by a person resident outside India, though not actually realised, amounted to contravention of the foreign exchange law by reason of an attempted contravention; (ii) whether the penalty imposed was excessive and required reduction.

Issue (i): whether receipt of a cheque sent by a person resident outside India, though not actually realised, amounted to contravention of the foreign exchange law by reason of an attempted contravention.

Analysis: The amount of Rs. 13,000 was sent by a person other than an authorised dealer and was deposited for encashment, but the bank returned it without realisation. Even though the amount was not actually received, the factual position showed an attempt to receive the money in a manner prohibited by section 9(1)(b). By virtue of section 64(2), an attempt to contravene a provision is deemed to be a contravention for the purposes of the Act.

Conclusion: The finding of contravention was upheld against the appellant.

Issue (ii): whether the penalty imposed was excessive and required reduction.

Analysis: The amount was meant for the appellant's family and was not ultimately realised. In the circumstances, the monetary penalty imposed was considered disproportionate, and a lesser penalty was sufficient to meet the ends of justice.

Conclusion: The penalty was reduced from Rs. 1,500 to Rs. 500 in favour of the appellant.

Final Conclusion: The adverse finding on liability remained undisturbed, but the punishment was substantially reduced, and consequential refund relief followed.

Ratio Decidendi: An attempted contravention of a provision of the Foreign Exchange Regulation Act is deemed to be a contravention under section 64(2), and the penalty may be reduced where the circumstances show that the amount was not actually realised and the original penalty is excessive.

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