2009 (7) TMI 783 - HC - FEMA

Guilty of contravention of the provisions of sections 8(1), 8(2) and 9(1)(b) of Foreign Exchange Regulation Act, 1973 (FERA) for purchase and sale of foreign exchange unauthorisedly - penalty imposed Held that - The confessional statement can be acted upon in spite of the retraction. Therefore, the Authorities below rightly acted upon the confessional statement and held the present appellant guilty of the charges. In view of the facts and circumstances of the case, we do not find that the Authorities below committed any error in drawing the conclusions. There is nothing to show that the findings are perverse in any manner. Therefore, no question of law is involved in the present appeal. Appeal dismissed.

Summary

Issues:
- Contravention of provisions of FERA for purchase and sale of foreign exchange without authorization.
- Validity of confessional statements made by the accused and the retraction of the same.
- Burden of proof on prosecution to establish the voluntary nature of confessional statements.
- Requirement of corroboration for retracted confessional statements in quasi-criminal proceedings.

Analysis:
1. The appellant was found guilty of contravening FERA provisions for unauthorized purchase and sale of foreign exchange. The Enforcement Directorate based its case on confessional statements made by the accused and corroborative evidence from searches conducted on premises related to the case.

2. The defense vehemently argued that without the confessional statements, there was insufficient evidence against the appellant. The defense highlighted that both the appellant and another individual retracted their confessions, claiming they were obtained under duress. The defense emphasized the lack of recovery of incriminating evidence during searches.

3. Referring to legal precedents, the Court noted that the burden of proving the voluntary nature of confessions lies with the prosecution. The Court emphasized the need to consider circumstances surrounding the retraction of confessions to determine their admissibility and truthfulness.

4. The Court cited previous judgments to establish that a retracted confession, if found voluntary and truthful, can form the basis for conviction. However, prudence dictates seeking corroboration for retracted confessions from other evidence. General corroboration suffices in such cases.

5. Upon examination of the case, the Court found that the confessional statements made by the appellant and another individual were not coerced. The Court highlighted the delay in retracting the statements and the corroboration provided by the recovery of foreign currencies during searches. The Court concluded that the confessional statements were voluntary and retracted on second thought, allowing them to be relied upon.

6. Ultimately, the Court upheld the decisions of the lower authorities, finding no error in their conclusions. The Court dismissed the appeal, affirming the guilt of the appellant for contravention of FERA provisions based on the admissible confessional statements and corroborative evidence.