Retracted confession and corroborative documents can prove foreign exchange contravention, while penalty may be moderated on circumstances.

A retracted confession may still establish contravention of foreign exchange law where it is found voluntary, true and corroborated by seized documents. Here, the appellant's statement admitting receipt and payment of amounts connected with persons resident outside India was supported by coded documentary material, and the belated retraction did not undermine its reliability. The defence that no specific names were mentioned and no actual remittance was proved was rejected, so contravention of section 9(1)(b) and section 9(1)(d) of the Foreign Exchange Regulation Act, 1973 was established. The penalty was nevertheless moderated in view of the circumstances, including the personal use of the amounts and the absence of a money-spinning racket.

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Issues: (i) Whether the appellant's contravention of section 9(1)(b) and section 9(1)(d) of the Foreign Exchange Regulation Act, 1973 was established on the basis of the confessional statement and seized documents; (ii) whether the penalty imposed required reduction.

Issue (i): Whether the appellant's contravention of section 9(1)(b) and section 9(1)(d) of the Foreign Exchange Regulation Act, 1973 was established on the basis of the confessional statement and seized documents.

Analysis: The appellant's statement recorded on 16-6-1988 ed receipt and payment of amounts connected with persons resident outside India. The statement was found to be corroborated by seized documents written in coded language. The retraction was not immediate, and the record did not disclose any reason to discard the statement as involuntary or untrue. The defence based on lack of specific names and absence of actual remittance was not accepted.

Conclusion: The contravention under section 9(1)(b) and section 9(1)(d) was proved against the appellant.

Issue (ii): Whether the penalty imposed required reduction.

Analysis: The amounts involved were used for personal purposes and the matter did not involve a money-spinning racket. The appellant was an agriculturist in Punjab, and the prevailing circumstances were taken into account in assessing the severity of the penalty.

Conclusion: The penalty was reduced from Rs. 12,500 to Rs. 7,500.

Final Conclusion: The appeal failed on merits as to contravention, but the monetary penalty was interfered with and reduced.

Ratio Decidendi: A retracted confession may be relied upon when it is found voluntary, true, and corroborated by surrounding documentary evidence, and the penalty may be moderated on consideration of the circumstances of the case.

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