Delhi High Court Upholds Confiscation of Currency in FERA Violation Case

Arjun Patil's appeal dismissed; Court confirms confiscation of Rs. 12,31,000 and foreign currency in alleged illegal trade operations.

In a significant ruling, the Delhi High Court has dismissed the appeal filed by Arjun Patil against the confiscation of Indian currency amounting to Rs. 12,31,000 under the Foreign Exchange Regulation Act, 1973 (FERA). The Division Bench comprising Justices Subramonium Prasad and Vimal Kumar Yadav upheld the orders of the Adjudicating Authority and the Appellate Tribunal, which found Patil guilty of contravening provisions of FERA through illegal foreign exchange transactions.

The case stems from a 1997 operation where the Enforcement Directorate conducted a search at Patil's business premises in Karol Bagh, New Delhi. The search led to the recovery of substantial sums of Indian and foreign currency, gold biscuits, and incriminating documents. Two Nepalese nationals and another individual, who entered the premises during the search, were also found in possession of foreign currency and gold, further implicating Patil.

Patil's appeal was grounded on the claim that his confessional statement was obtained under duress and should not have been relied upon. However, the High Court noted that the statement was corroborated by other evidence, including the seizure of unaccounted currency and gold, and the statements of the co-accused and witnesses. The Court emphasized the principle that a retracted confession could be considered if corroborated and voluntary.

The Court also addressed Patil's contention that there was no legal basis for confiscating the Indian currency. It clarified that under Section 63 of FERA, the Adjudicating Authority was empowered to confiscate currency involved in contravention of the Act. The burden of proof had shifted to Patil to demonstrate lawful possession, which he failed to do satisfactorily.

Moreover, the High Court dismissed Patil's argument that his actions did not constitute an "attempt" to violate FERA provisions. It explained that the conduct and surrounding circumstances established that Patil had crossed the threshold from preparation to attempt, given the possession of illegal currency and the intent to engage in prohibited transactions.

The judgment reiterates the legal stance that once foundational facts are established, the burden shifts to the accused to disprove the allegations. Patil's inability to provide a lawful explanation for the seized currency reinforced the inference of contravention, leading to the dismissal of his appeal.

Bottom Line:

Foreign Exchange Regulation Act, 1973 (FERA) - Confiscation of Indian currency and foreign exchange - A retracted confession can be relied upon if corroborated by other evidence and proven to be voluntary.

Statutory provision(s): Foreign Exchange Regulation Act, 1973 Sections 63, 64(2); Indian Evidence Act, 1872 Section 106.

Arjun Patil v. UOI, (Delhi)(DB) : Law Finder Doc Id # 2796477