Corroborative foreign exchange evidence sustained liability, while penalty was reduced on hardship and medical grounds.

Recovered documents from the appellant's premises, read with his own statement, the employee's statement and other connected statements, were treated as mutually corroborative evidence of contravention of foreign exchange prohibitions. The challenge that the documents lacked evidentiary value because of retraction was rejected, as the surrounding material supported their use. The objection that relied-upon documents had not been supplied was also rejected as vague, since the record showed supply on more than one occasion and no specific document was identified as withheld. Liability was therefore maintained, but the penalty was moderated on equitable grounds, including financial hardship and medical condition, and reduced to 25% of the original amount.

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Issues: (i) Whether the material recovered from the appellant's premises, together with the statements recorded under the foreign exchange law, established contravention of the prohibitory provisions relating to dealing in foreign exchange. (ii) Whether the penalty imposed required interference on the ground of inadequacy of supply of relied-upon documents or otherwise, and whether any leniency was justified in the quantum of penalty.

Issue (i): Whether the material recovered from the appellant's premises, together with the statements recorded under the foreign exchange law, established contravention of the prohibitory provisions relating to dealing in foreign exchange.

Analysis: The recovered documents were treated as material evidence because the appellant did not specifically deny their recovery or authorship, and the record showed that the contents were explained by him in relation to foreign currency dealings. The appellant's statement, the statement of his employee, and the statements of connected persons were treated as mutually corroborative. The plea that the statements were retracted and that the documents lacked evidentiary value was not accepted in view of the surrounding material and corroboration.

Conclusion: The contravention was held to be established against the appellant.

Issue (ii): Whether the penalty imposed required interference on the ground of inadequacy of supply of relied-upon documents or otherwise, and whether any leniency was justified in the quantum of penalty.

Analysis: The objection regarding non-supply of relied-upon documents was rejected as vague, since the record indicated supply on more than one occasion and no specific document was identified as withheld. On merits, the finding of liability was maintained, but the appellant's financial hardship and medical condition were considered relevant for moderation of the penalty.

Conclusion: The penalty was sustained in principle, but reduced to 25% of the original amount.

Final Conclusion: The appeal failed on merits as to liability, but the punishment was softened by a substantial reduction in penalty.

Ratio Decidendi: Where recovery of incriminating documents is supported by corroborative statements and the challenge to supply of relied-upon material is vague and unspecified, the finding of contravention may be sustained, while the quantum of penalty may still be moderated on equitable considerations.

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