1996 (2) TMI 392 - HC - Companies Law

Summary

Issues Involved:
1. Validity of the confessional statement dated January 24, 1985.
2. Allegations of coercion and torture during the extraction of the confessional statement.
3. Immediate retraction of the confessional statement.
4. Lack of corroborating evidence for the confessional statement.
5. Procedural lapses by the Enforcement Officer.

Issue-wise Detailed Analysis:

1. Validity of the Confessional Statement Dated January 24, 1985:
The appellant was charged with contravention under section 9(1)(b) of the Foreign Exchange Regulation Act, 1973, based on a confessional statement dated January 24, 1985. The Adjudicating Officer and the Appellate Board relied on this statement, concluding it was voluntary and contained details within the special knowledge of the appellant. The statement admitted that Rs. 60,000 was received from a person in India under instructions from a relative in Singapore. However, the appellant retracted this statement the next day, claiming it was not voluntary and was obtained under coercion.

2. Allegations of Coercion and Torture During the Extraction of the Confessional Statement:
The appellant alleged that the confessional statement was obtained through coercion and torture by the Enforcement Officer and three other officers. He detailed the ill-treatment in a letter dated January 25, 1985, and supported his claims with an accident register and injury report from a Government hospital, which noted injuries consistent with his allegations. The Enforcement Officer did not respond to these allegations, and no affidavit or examination was conducted to refute the claims.

3. Immediate Retraction of the Confessional Statement:
The appellant retracted the confessional statement on January 25, 1985, through a telegram and a registered letter, stating that the statement was not voluntary. The Appellate Board acknowledged the retraction but deemed the injuries could be self-inflicted or caused otherwise, thus maintaining the statement's validity. However, the court found this reasoning unsound, especially since the Enforcement Officer did not respond to the retraction letter or provide the promised copy of the confessional statement promptly.

4. Lack of Corroborating Evidence for the Confessional Statement:
The court emphasized that the confessional statement lacked corroborating evidence. The Appellate Board's reliance on the presence of small foreign currencies was not mentioned in the show-cause notice or by the first authority. The court cited precedents indicating that a confession obtained under coercion and without corroboration is unreliable. The court found no intrinsic truth in the statement and deemed it unsafe to rely on uncorroborated details.

5. Procedural Lapses by the Enforcement Officer:
The court noted significant procedural lapses by the Enforcement Officer. The officer did not respond to the appellant's retraction letter, did not provide a copy of the confessional statement promptly, and did not issue fresh summons as promised. These lapses further undermined the validity of the confessional statement and the subsequent proceedings.

Conclusion:
The court found that both the Adjudicating Officer and the Appellate Board erred in law by solely relying on the confessional statement, which was immediately retracted and lacked corroboration. The serious allegations of ill-treatment were not addressed by the Enforcement Officer, and significant procedural lapses were evident. Consequently, the impugned orders were set aside, and the appeal was allowed without any order as to costs.