Resident outside India and foreign-exchange contravention: Indian currency received at his instance supported confiscation.

Contemporaneous statements, a Singapore address on the visiting card, and surrounding circumstances showed that Shri Kader was resident outside India despite his Indian partnership connection, bringing the matter within the prohibitions in section 9 of the Foreign Exchange Regulation Act, 1973. Receipt and repayment of Indian currency through Associated Travel Agency (P.) Ltd. at his instance therefore amounted to contravention of section 9(1)(b). The currency seized was found directly linked to the prohibited transaction, so confiscation under section 63 was held legally sustainable, and the adjudication order was affirmed.

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Issues: (i) whether Shri Kader was a person resident outside India at the relevant time so as to attract contraventions under sections 9(1)(a) and 9(1)(b) of the Foreign Exchange Regulation Act, 1973; (ii) whether the receipt and payment of Rs. 1 lakh through Associated Travel Agency (P.) Ltd. amounted to contravention of section 9(1)(b); and (iii) whether confiscation of Rs. 99,800 under section 63 of the Foreign Exchange Regulation Act, 1973 was justified.

Issue (i): whether Shri Kader was a person resident outside India at the relevant time so as to attract contraventions under sections 9(1)(a) and 9(1)(b) of the Foreign Exchange Regulation Act, 1973

Analysis: The relevant statements, the visiting card showing a Singapore address, and the surrounding circumstances indicated that Shri Kader was based in Singapore and came to India only temporarily. His connection with an Indian firm as a partner did not displace the inference that he was resident outside India. The documentary material relied upon by the appellants, including the affidavit and power of attorney, was found insufficient to rebut the contemporaneous statements and surrounding evidence.

Conclusion: The finding that Shri Kader was a person resident outside India was upheld, against the appellants.

Issue (ii): whether the receipt and payment of Rs. 1 lakh through Associated Travel Agency (P.) Ltd. amounted to contravention of section 9(1)(b)

Analysis: The evidence showed that the amount was received and repaid under the instructions of Shri Kader. Since the transaction was effected at the instance of a person resident outside India, the receipt of Indian currency in the manner proved on record fell within the prohibition in section 9(1)(b). The authorities relied upon by the appellants were held inapplicable on the facts.

Conclusion: The contravention under section 9(1)(b) was proved against Associated Travel Agency (P.) Ltd., against the appellants.

Issue (iii): whether confiscation of Rs. 99,800 under section 63 of the Foreign Exchange Regulation Act, 1973 was justified

Analysis: The confiscated amount was found to be directly involved in the contravention. The adjudicating authority had applied its mind to the nexus between the seized currency and the unauthorised transaction, and the confiscation order was held to be legally sustainable.

Conclusion: The confiscation of Rs. 99,800 was upheld, against the appellants.

Final Conclusion: The adjudication order was affirmed in full, and the appeals were rejected after upholding the findings on contravention and confiscation.

Ratio Decidendi: Where contemporaneous statements and surrounding circumstances establish that payment or receipt of Indian currency was made at the instruction of a person resident outside India, the transaction attracts the prohibitions under section 9 of the Foreign Exchange Regulation Act, 1973, and currency involved in such contravention is liable to confiscation under section 63.

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