Electronic evidence admissible as primary where devices are physically seized; company officers liable under Section 42, penalties reduced.

Electronic data retrieved from a physically seized pen drive and laptop, described in contemporaneous seizure records and accessed in the presence of accused and witnesses, constitutes primary electronic evidence admissible without the statutory certificate for secondary electronic records. Evidence established that a licensed company carried out unauthorized outward transfers and foreign currency dealings through persons conducting its business; consequently the company is liable and, under Section 42, its managing director and director are also liable. Penalties for proved contraventions are sustained but proportionally reduced to fifty percent; penalties under the unsupported financial transaction allegation are deleted, and confiscation of seized currency is upheld.

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Issues: (i) Whether electronic data retrieved from a seized pen-drive/laptop is admissible without a separate certificate under theIndian Evidence Act; (ii) Whether the company and its officers (managing director and director) are liable under the cited provisions of the Foreign Exchange Management Act, 1999 including application of section 42; (iii) Whether penalties and confiscation imposed by the adjudicating authority require modification in quantum.

Issue (i): Admissibility of electronic data from seized pen-drive/laptop without a certificate under the Indian Evidence Act.

Analysis: The pen-drive and laptop were physically seized from the premises and described in the panchanama/mahazar with seizure, sealing and retrieval steps recorded; passwords were provided and printouts were taken in the presence of the accused and independent witnesses. Precedent permits primary electronic material (original device or its seized storage) to be admitted without the statutory certificate required for secondary electronic records; relevance of later case-law addressing certification is considered in light of the fact of physical seizure of the device.

Conclusion: Electronic data retrieved from the seized pen-drive/laptop is admissible as primary evidence and no separate certificate under the Evidence Act was required for its admissibility.

Issue (ii): Liability of the company and its officers under sections 3(a), 3(b), 3(c), 3(d), 4, 10(4), 10(5), 11(1) of FEMA, 1999 and applicability of section 42.

Analysis: Contemporaneous statements, electronic records and corroborating material demonstrate that the transactions were carried out through the licensed company and by persons acting in charge of its affairs; the company acted through natural persons who managed its operations and no separate licence existed for the individual apart from the company. Section 42 deems persons in charge of conduct of business of a company liable where the company commits contraventions; evidence established unauthorized outward transfers, receipt and distribution of funds and unauthorized purchase/sale of foreign currency for periods and amounts identified in seized records. Limited factual gaps were found in relation to the specific financial-transaction element alleged under the financial-transaction provision.

Conclusion: Liability is established against the company and, consequentially under section 42, against its managing director and director for contraventions under sections 3(a), 3(b) and 3(c) and related provisions; findings under section 3(d) are deleted where specific factual basis was not demonstrated.

Issue (iii): Appropriateness and quantum of penalties and confiscation ordered by the adjudicating authority.

Analysis: The adjudicating authority imposed substantial penalties and ordered confiscation of seized Indian and foreign currency. The factual findings supporting contraventions are sufficient to sustain penalties and confiscation but mitigation considerations apply because appellants acted as conduits and were not shown to be ultimate beneficiaries; proportional reduction of penalty quantum is considered appropriate while leaving confiscation undisturbed where no specific relief was sought challenging seizure.

Conclusion: Penalties imposed for proved contraventions are sustained but reduced to fifty percent of the amounts originally levied; penalties under the financial-transaction provision are deleted for lack of specific findings; confiscation of the seized Indian and foreign currency is not interfered with.

Final Conclusion: The appeals are partly allowed in that penalties for certain contraventions are reduced (to 50% of original quantum) and penalties under section 3(d) are deleted; otherwise the adjudicating authority's findings of contravention and orders of confiscation are upheld.

Ratio Decidendi: Where electronic storage media are physically seized and properly described in contemporaneous seizure records with retrieval conducted in presence of relevant persons, the contents constitute primary electronic evidence admissible without the statutory certificate for secondary electronic records; where a company commits contraventions, persons in charge of its affairs are liable under section 42, and penalty quantum may be mitigated on proportionality grounds though confiscation of tainted currency may be sustained.

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