Retracted statement needs corroboration before foreign exchange penalty can stand; unproved allegations fail.

A penalty for alleged contravention of foreign exchange law cannot be sustained on a promptly retracted custody statement unless the allegation is independently corroborated by reliable evidence. The record did not reliably prove transfer of foreign exchange to the United Kingdom or purchase of overseas property, as the brother-in-law's account lacked specificity, there were no supporting bank records or documentary proof, and the alleged power of attorney and the father's statement were insufficient. The seized Indian currency by itself did not establish the foreign exchange violation. The contravention was therefore not proved and the impugned penalty order was unsustainable.

---

---

Issues: Whether the alleged contravention of the Foreign Exchange Regulation Act, 1973, in relation to transfer of foreign exchange and purchase of property abroad was proved by reliable evidence, and whether the penalty order could stand on the basis of a retracted statement and other uncorroborated material.

Analysis: The appellant's statement recorded in custody was retracted on the next day, and the retraction was prompt. A retracted statement may be acted upon only if supported by corroborative material. The record did not contain dependable evidence to establish transfer of 70,000 pounds to the United Kingdom or purchase of a house by the appellant. The brother-in-law's version was not specific and was unsupported by bank records or other documentary proof. The alleged power of attorney and the statement of the appellant's father were not sufficient to prove the charge, particularly when the latter was hearsay in nature and the former was not duly proved. The amount seized in Indian currency did not establish the foreign exchange violation.

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

Final Conclusion: The impugned order was unsustainable for want of proof of violation under the Act, and the appellant succeeded in the challenge.

Ratio Decidendi: A penalty for contravention of foreign exchange law cannot be upheld on a retracted statement unless the allegation is independently corroborated by reliable evidence proving the unlawful transfer or transaction.

---