Corroboration of seized currency explanations: retracted statements stand unless credible evidence proves a lawful source and purpose.

A retracted statement will not be displaced by a bare denial unless the appellant produces credible corroborative evidence of a lawful source and purpose for the seized money. In the absence of original passports, visa applications, account records, receipt books, or bank records, photocopies and lists were treated as insufficient to explain possession of the currency. The text further states that contravention under section 9(1)(d) was supported only to the extent of the amount actually proved by reliable evidence, so uncorroborated larger figures could not stand and the penalty had to be reduced proportionately.

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Issues: (i) whether the appellant's contravention of section 9(1)(b) of the Foreign Exchange Regulation Act, 1973 was proved on the evidence relating to the seized currency and the explanation offered for its possession; (ii) whether the contravention of section 9(1)(d) of the Foreign Exchange Regulation Act, 1973 was proved to the extent of the alleged payments and whether the penalties required reduction.

Issue (i): whether the appellant's contravention of section 9(1)(b) of the Foreign Exchange Regulation Act, 1973 was proved on the evidence relating to the seized currency and the explanation offered for its possession.

Analysis: The explanation that the seized currency represented amounts collected from visa aspirants was not accepted, as no credible supporting material such as original passports, visa applications, account records, receipt books, or bank records was produced. The list and photocopies relied upon were found insufficient to establish the claimed business or the source and purpose of the money. The appellant's retraction did not displace the evidentiary value of the statement and surrounding material, and the possession of the seized amount remained unexplained in a manner consistent with lawful receipt.

Conclusion: The finding of contravention under section 9(1)(b) was upheld, but only in relation to the proved amount connected with the seized currency.

Issue (ii): whether the contravention of section 9(1)(d) of the Foreign Exchange Regulation Act, 1973 was proved to the extent of the alleged payments and whether the penalties required reduction.

Analysis: The material supported only the receipt of Rs. 10,000 in relation to Muthayamma, while the alleged further amounts were not corroborated by reliable evidence. Since the confiscated amount represented receipt in violation of the Act and not the amount already distributed, confiscation was sustained. However, the evidentiary basis for the larger figure attributed under section 9(1)(d) was not established, so the penalty required proportional reduction.

Conclusion: The contravention under section 9(1)(d) was confined to Rs. 10,000, and the penalty was reduced accordingly.

Final Conclusion: The appeal succeeded only to the extent of reducing the penalties, while the substantive findings of contravention and confiscation were otherwise maintained.

Ratio Decidendi: A retracted statement will not be displaced by a mere denial unless the appellant produces credible, corroborative evidence showing a different lawful source and purpose for the seized money; uncorroborated explanations are insufficient to defeat a proved contravention.

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