Insufficient corroboration from seized letters and statements fails to prove foreign exchange contravention or support penalty

Seized letters and recorded statements were found insufficient to prove contravention of the Foreign Exchange Regulation Act, 1947, because the letters did not on their face show any unauthorised receipt or remittance of foreign exchange. They referred only to drafts and bank transmission, and the amounts mentioned did not match the sums covered by the notices. The authorities could not fill that gap by conjecture, especially where the letters were relied on only as corroboration of the impugned statements. The court noted that the letters themselves had to disclose incriminating circumstances, and the surrounding facts also indicated that the statements were not voluntary. The penalty and confiscation were therefore not sustainable.

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Issues: Whether the seized letters and the recorded statements, viewed together, were sufficient to establish contravention of the Foreign Exchange Regulation Act, 1947, and sustain the penalty and confiscation.

Analysis: The letters relied upon did not, on their face, show any unauthorised receipt or remittance of foreign exchange. They referred to drafts and bank transmission, and the amounts mentioned in them did not tally with the entire sums covered by the show cause notices. The authorities, therefore, could not bridge the gap by surmise. Since the culpability was sought to be inferred from the letters only as corroboration of the impugned statements, the respondent had to establish that those letters themselves disclosed incriminating circumstances. On the facts, the letters did not do so, and the circumstances also indicated that the statements were not voluntarily made.

Conclusion: The contravention was not proved, and the penalty and confiscation could not be sustained.

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