UNION OF INDIA Vs. N ANNAMALAI

JUDGEMENT

(1.) The appeal is preferred against an order imposing a penalty of Rs. 3,000 on the appellant for the contravention of Section 5(1)(aa) of the Foreign Exchange Regulation Act, 1947. Initially the first authority imposed a penalty of Rs. 5,000 and also confiscated the amount of Rs. 30,000 which was seized from the custody of the appellant, under Section 23(1B) of the said Act. On appeal, the order of confiscation was confirmed ; but the penalty alone was reduced to Rs. 3,000.

(2.) It was claimed that the appellant had received a sum of Rs. 30,000 on 4-9-1971 from an unknown person in India by order of his friend, Ramu Thevar from Singapore without the permission of the Reserve Bank of India. When the appellant's premises was searched on 8-9-1971, the amount of Rs. 30,000 in Indian currency was seized along with a foreign aerogram dated 21-8-1971. He also gave a statement on 8-9-1971 disclosing the manner in which the amount had come into his hands from Ramu Thevar. Acting on this statement, the appellant was found guilty of having contravened Section 5(1)(aa) of the Act. No doubt an attempt was made to show that he had borrowed this amount under two loans from two different persons; but in the appellate stage, this defence was not put forth. The statement made by him having remained unretracted for more than five months and evidently realising that the evidence adduced had clearly shown that he had received the said amount without the prior permission of the Reserve Bank of India, in this appeal it is contended that the main impact, is confined to the order passed under Section 23(1B).

(3.) Therefore, the substantial question of law advanced by the learned Counsel for the appellant is that when Section 23(IB) gives a discretion to the authority to either confiscate or not, were not the authorities below in error in not giving the reasons for ordering confiscation ?