2009 (12) TMI 514 - HC - FEMA

Restrictions on dealing in foreign exchange - Petitioners had made export of ball pens to a foreign company

Summary

Issues Involved:
1. Validity of charges framed under Section 56 of FERA for alleged violations of Sections 9(1)(f)(i) and 8(1) of FERA read with Section 64(2) of FERA, 1973.
2. Reliance on retracted confessional statements.
3. Role and involvement of the petitioner, Piyush Saxena, in the alleged contraventions.
4. Admissibility and voluntariness of confessional statements.

Issue-wise Detailed Analysis:

1. Validity of Charges under Section 56 of FERA:
The petitioners challenged the charges framed under Section 56 of FERA for alleged violations of Sections 9(1)(f)(i) and 8(1) read with Section 64(2) of FERA, 1973. The allegations included over-invoicing and unauthorized transfer of foreign exchange. The court examined whether the charges were substantiated by evidence, particularly focusing on the confessional statement of Sudesh Saxena, which was later retracted. The court found that the prosecution's case heavily relied on this retracted statement without substantial corroboration from independent evidence.

2. Reliance on Retracted Confessional Statements:
The court referred to the Supreme Court's rulings in Vinod Solanki v. UOI and Noor Aga v. State of Punjab, emphasizing that retracted confessions must be corroborated by independent and cogent evidence. The court noted that the prosecution failed to provide such corroboration. The judgments highlighted that a retracted confession cannot be the sole basis for conviction unless it is voluntary and corroborated by other evidence. The court observed that the prosecution did not discharge its burden to prove the voluntariness of the retracted confession.

3. Role and Involvement of Piyush Saxena:
Piyush Saxena contended that she was merely a housewife and not involved in the firm's business transactions. The court reviewed the documents and statements, noting that while Piyush Saxena was listed as the proprietor, the day-to-day operations were managed by her husband. The court found that the evidence did not conclusively establish her active involvement in the alleged contraventions. The court left the issue open for further evidence but noted that the prima facie case against her was weak.

4. Admissibility and Voluntariness of Confessional Statements:
The court scrutinized the confessional statement of Sudesh Saxena, which was retracted, and the circumstances under which it was obtained. The court reiterated the legal principle that confessions must be voluntary and free from coercion to be admissible. The court found that the prosecution did not provide evidence to rebut the petitioners' claims of coercion and duress. The court emphasized that the burden of proving the voluntariness of a retracted confession lies with the prosecution, which was not met in this case.

Conclusion:
The court concluded that the order framing charges against the petitioners could not be sustained due to the lack of corroborative evidence and the prosecution's failure to prove the voluntariness of the retracted confession. The revision petitions were allowed, and the charges framed on 30-5-2007 were set aside. The bail bonds of the petitioners were discharged.