2007 (10) TMI 273 - SC - Customs

Whether a Special Director appointed under the Foreign Exchange Regulation Act, 1973 himself can prefer an appeal before the High Court against an order passed by the Foreign Exchange Regulation Appellate Board as per Explanation to Section 54 of the Foreign Exchange Regulation Act 1973, only the Central Government can file and prosecute an appeal against the order of the Appellate Board, and not any other authority - impugned judgment of HC cannot be sustained hence it is set aside

Summary

Issues Involved:
1. Maintainability of the appeal by the Special Director under the Foreign Exchange Regulation Act, 1973.
2. Jurisdiction of the High Court to interfere with the findings of fact by the Foreign Exchange Regulation Appellate Board.
3. Consideration of retraction of confession by the appellant.

Issue-wise Detailed Analysis:

1. Maintainability of the Appeal by the Special Director:
The central issue was whether a Special Director appointed under the Foreign Exchange Regulation Act, 1973 (the Act) could prefer an appeal before the High Court against an order passed by the Foreign Exchange Regulation Appellate Board (the Board). The appellant was served a show cause notice by the Enforcement Directorate for alleged contravention of the Act's provisions. The Special Director adjudicated the matter and imposed a penalty, which was later overturned by the Board. The respondents (Enforcement Directorate) appealed to the High Court, which upheld the appeal's maintainability, stating that the Special Director had the authority to enforce the Act's provisions and thus could file an appeal. However, the Supreme Court disagreed, emphasizing that only the Central Government could file such an appeal, and the Special Director was not specifically authorized to do so. The Court cited previous judgments from the Madras High Court and the Punjab & Haryana High Court, which supported this view.

2. Jurisdiction of the High Court to Interfere with the Findings of Fact by the Board:
The appellant contended that the High Court could not interfere with the Board's factual findings. The High Court had opined that the Board's order was erroneous both on facts and in law, and restored the adjudicating authority's order. However, the Supreme Court held that the High Court's jurisdiction was limited to questions of law, not facts. The Board had found no evidence of actual remittance of amounts from abroad, and this factual finding should not have been interfered with by the High Court unless it was perverse or ignored legal principles.

3. Consideration of Retraction of Confession by the Appellant:
The appellant argued that the High Court failed to consider his retraction of the confession. The Supreme Court emphasized that a confession of a co-accused cannot be treated as substantive evidence and requires corroboration from independent sources. The Court cited several precedents highlighting that confessions need to be scrutinized closely and must be voluntary and free from pressure. The High Court should have taken into account the retraction and sought corroboration before relying on the confession.

Conclusion:
The Supreme Court set aside the High Court's judgment, holding that the appeal by the Special Director was not maintainable and that the High Court had overstepped its jurisdiction by interfering with the Board's factual findings. The Court also underscored the necessity of considering the retraction of the confession and seeking corroboration. The appeal was allowed, and the impugned judgment was not sustained.