IN THE HIGH COURT OF JUDICATURE AT MADRAS DATE: 29-04-2009 CORAM: THE HONOURABLE MRS. JUSTICE PRABHA SRIDEVAN AND THE HONOURABLE MR. JUSTICE T.S. SIVAGNANAM CMA.No.3238 of 2003 & C.M.P.No.20859 of 2003 P.K. Bhanu (deceased) 1. Ricardo Seagal 2. Patrick Bhanu 3. Robin Michael Bhanu (Petitioners 2 and 3 represented by their power agent Ricardo Seagal) ... Petitioners (appellants 2 to 4 brought on record as legal representatives of the deceased sole appellant vide order of Court dated 17-11-2008 made in C.M.P.no.20240 of 2005.) Versus Additional Directorate Enforcement Directorate New Delhi ... Respondent For appellant :: Mr. V.K. Sathyamurthy For respondent :: Mr. M. Dhandapani, SCGSC JUDGMENT Heard Mr.V.K.Sathiamurthy, Learned Counsel for the Appellant and Mr.Dhandapani, Learned Standing Counsel for the Respondent. The above appeal had been filed by one P.K.Bhanu (since deceased) challenging the order passed by the Appellate Tribunal for Foreign Exchange, New Delhi in appeal No. 321 of 1982 dated 4.9.2001, confirming the order dated 12.11.1982 passed by the Respondent herein, the adjudicating authority. 2. The question of law which has been framed for consideration in the above appeal is as follows. "Whether the appellate Tribunal is right in relying on the confessional statement of the appellant dated 02.03.1981, which was retracted by him, in his letter dated 06.03.1981 sent from the Central Prison, Madras, which is inadmissible in law and cannot be used against him for any purpose in view of the retraction at the earliest point of time?" 3. For the purpose of the answering the question of law framed, it is necessary to consider the facts of the case and the relevant facts are stated as hereunder: Shri.P.K.Bhanu the Appellant was issued a show cause notice dated 6.7.1981 by the Respondent herein calling upon him to show cause as to why adjudication proceedings as contemplated in section 51 of the Foreign Exchange Regulation Act, 1973, hereinafter referred to FERA, should not be held against him for acquiring foreign exchange from person other than an authorized dealer without the permission of the Reserve Bank of India which is in contravention of Section 8 (1) of FERA, and as to why the foreign currency of US$40,000/- seized from the Appellant on 2.3.1981 should be confiscated to the Central Government under Section 63 of the Act. 4. The show cause notice stated that, reliance is placed on the following statements and documents. a.Statements of Shri.P.K.Bhanu, L.A.Verma and K.V.Chandran on 3.2.1981 and 3.3.1981. b.Statements of Shri.Subramanian given on 2.3.1981. c.Statement of Shri.S.Hassan Bai given on 22.5.1981 d.Documents seized from: i. the hotel room at Queens Hotel, Madras, occupied by Shri.P.K.Bhanu 2.3.1981. ii. the person and his residential premises of Shri.L.A.Varma on 2.3.1981. iii.the person of Shri.K.V.Chandran on 2.3.1981. iv.the residential premises of Shri.S.Hassan on 22.6.1981. 5. The Appellant was permitted inspection of the documents relied upon by the Department, by himself, his Lawyer or authorized representative from the office of the Respondent Department. The attention of the Appellant was invited to the provisio of Rule 3 to the Adjudication Proceedings and Appeal Rule, 1974 as regards the further procedure to be followed. 6. A reply dated 19.8.1981 was submitted by the appellant through his counsel emphatically denying the allegations in the show cause notice. It was stated in the reply that P.K.Bhanu brought 80,000 US$ from Saudi Arabia on 17.1.1981 when he landed at Bombay Airport and that the same has been endorsed in his passport and a Currency Declaration Form was issued to him signed by the Customs Officer at the Airport. It was further stated when P.K.Bhanu was in Queens Hotel on 2.3.1981 he was carrying with him 40,000US$ out of 80,000US$ brought by him. It was further stated that the officers also removed the passport, original CDF Form and records as detailed in the Mahazar. It was further stated that Mr.P.K.Bhanu was forced, threatened, unduly harassed to write a statement to the dictation of the officer which was not voluntarily given and that this statement was retracted by the Appellant while he was in Central Jail, by his letter dated 6.3.1981 addressed to the Deputy Director of Enforcement despatched on 7.3.1981. It was further stated P.K.Bhanu does not know anything about Hassan Bai, Subramanian, Verma and Chandran nor about their alleged statement. 7. The Adjudicating Authority commenced adjudication and statements of K.B.Chandran, L.A.Verma, Hassan Ibrahim, Mr.B.Kistoor Chand, (Assistant Enforcement Officer) Mr.A.Kalyanasundaram, (Assistant Director (Documents), Tamil Nadu Forensic Science Lab, Mr.P.Avinashi, Welfare Officer, Central Prison, Vellore, were recorded in the presence of the Counsel for P.K.Bhanu and they were all cross examined by the Counsel. 8. The Adjudicating Authority by an order dated 12.11.1982 held that Mr.P.K.Bhanu has not been able to discharge his onus that the Foreign Currency of US $ 40,000 found in possession on 2.3.1981 was acquired by him and was lawfully brought by him from abroad. The Adjudicating Authority held that the statement dated 2.3.1981 given by P.K.Bhanu stating that he had acquired Foreign Exchange from Hassan and others in India cannot be ignored, as it is supported by the statements of L.A.Verma and Hassan and also the notings in the documents seized from L.A.Verma and P.K.Banu. The Adjudicating Authority held that P.K.Bhanu had contravened to the Provisions of Section 8 (1) of FERA and proceeded to impose a penalty of Rs.3,00,000/- on P.K.Bhanu under Section 50 of FERA. The US $ 40,000/- was directed to be confiscated under Section 63 of FERA. In respect of the alleged violation of Section 9 (1) (d) of the Act, the Adjudicating Authority found that the evidence available was inadequate to find P.K.Bhanu guilty of contravention of Section 9 (1) (d) and dropped said the charge. 9. The Appellant being aggrieved by the order of the Adjudicating Authority filed an Appeal under Section 52 of FERA to the Appellate Board. In the Memorandum of appeal, it was stated that that the alleged confession recorded on 2.3.1981, retracted by letter dated 6.3.1981 from the Central Jail, is inadmissible. It was further stated that P.K.Bhanu had brought US $ 80,000/-into India after declaring them to the Customs and obtaining Customs Declaration Form and US $ 40,000 which was seized is only part of the same. In ground 8 of the Memorandum of Grounds it is averred that the Adjudicating Authority without any basis accepted the contention of the Department that the appellant would have taken back to Singapore the foreign exchange which he legally brought to India without any proof as to the same and that the Department did not make any investigation into this aspect of the case though they had all the possible means to do, the obvious reason being that the records of the Customs Department will show that the appellant did not carry any Foreign Currency with him and that would on the face of it falsify the confession. 10. Before the Appellate Tribunal strong reliance was placed on the retraction of the statement recorded by the officers and it was urged that if these retracted statements are taken into consideration, there is no evidence against the Appellant. It was further contended that the burden of proof is on the department and even if onus can be said to have shifted to the Appellant under Section 71 (3) of FERA, the same has been sufficiently discharged by the Appellant by producing the Currency Declaration Form. On behalf of the Department it was contended by the Learned Standing Counsel that the provisions of the Evidence Act are not applicable to the Adjudicating proceedings as they are governed by the Adjudication Proceedings and Appeal Rules, 1974. It was further contended that the burden of proof that P.K.Bhanu came into possession of the seized currency in a lawful manner is on him interms of Section 71 (3) of FERA, which has not been discharged by the Appellant. It was further contended that even a retracted statement can be admitted in evidence if it is found to be true and voluntarily made. On facts it was held that though the appellant had furnished Currency Declaration Form showing that he had brought US $ 80,000/- but he went back to Singapore before coming again to India. When he was apprehended, in his statement, the appellant stated that he took back the US$ to Singapore. In response to the Appellants submission during the adjudication proceedings that he encashed US$40,000/- out of 80,000/- and the seized 40,000/- are balance of the US $ 80,000/- which he brought in India as per the currency declaration form, the adjudicating authority asked the appellants counsel to produce evidence of the encashment of US$40,000/- as claimed by the Appellant. Inspite of opportunities, the appellant did not produce the requisite evidence of encashment of US$40,000/- by the appellant as claimed by him. 11. The Appellant Tribunal after considering the various issues raised, by an order dated 4.9.2001 dismissed the Appeal holding that the Appellant failed to discharge his onus under Section 71 (3) of FERA. It is against this order the above appeal has been preferred by Mr.P.K.Bhanu. During the pendency of the appeal, P.K.Bhanu died and his legal representatives have been brought on record vide order of this Court dated 17.11.2008 made in CMP.No.20240 of 2008. 12. The Learned Counsel appearing for the Appellant strenuously contended that the impugned orders suffers from manifest error and that the Tribunal lost sight of vital facts and the order is liable to be setaside. Principally the Learned Counsel for the appellant submitted that the alleged confessional statement dated 3.2.1981 cannot be relied upon as the same has been retracted by letter dated 6.3.1981 sent from the Central Prison. It was further contended that there is no corroboration of the statements recorded and unless a retracted confiscation is corroborated in material particulars the appellant cannot be held guilty. The Learned Counsel took us through the statements recorded from various persons, the Mazahar the copy of the Currency Declaration Form and other documents filed in the typed set of papers and contended that the passport of Mr.P.K.Bhanu was with the department and they could have verified the contentions raised and the Department could have initiated investigation against the 22 persons who are said to have paid money. The Learned Counsel took strong objection to the finding by the Adjudicating Authority as well as the Appellate Tribunal regarding the question posed to the Learned Counsel as to whether any records can be produced regarding the encashment of the US$ 40,000/-. It was further contended by the Learned Counsel for the Appellant that the retraction was forwarded from the Central Jail and there is presumption that it should have been handed over to the Respondent Department. 13. The Learned Counsel for the Appellant placed reliance upon the following Judgments as regards the evidentiary value of the retracted confession. 1. Puran Vs. The State of Punjab (AIR 1953 S.C. 459 (Vol. 40, C.N. 111)) 2.Muthuswami Vs. State of Madras (AIR 1954 S.C. 4 (Vol. 41, C.N.2)) 3.Pangambam Kalanjoy Singh, Appellant vs. State of Manipur (AIR 1956 S.C. 9 (V. 43 C.3 Jan.)) 4.Sevantilal Karsondas Modi Vs. The State of Maharashtra and another(AIR 1979 Supreme Court 705) 5.Abdulla Mohammed Pagarkar vs. Abdulla ((1980) 3 Supreme Court Cases 10) 6.Kora Ghasi vs. State of Orissa((1983) 2 Supreme Court Cases 251) The Learned Counsel also relied on AIR 1958 Punjab page 440, stating that the effect sending a letter to the post office will in general be regarded as presumptively proved. 14. The Learned Standing Counsel appearing for the Respondent contended that there arises no question of law in the above appeal and as such the appeals is not maintainable under Section 54 of the Act. The Learned Standing Counsel submitted that FERA is a self contained code and the provisions of the Evidence Act has no application to the statements made before the officers and that the confessional statements under Section 40 of FERA can be used for proceedings under the Act. The Learned Standing Counsel for the Respondent further submitted that the Adjudicating proceedings are covered by Adjudicating Proceedings and Appeals Rules, 1974 and the Adjudication in the present case was conducted strictly in accordance with the 1974 Rules. The Learned Counsel for the Respondent relied upon the following Judgments in support of the contentions raised by him. 1.2001 CRI. L.J. 1132 (J.Ibrahim vs. Special Director, Enforcement Directorate, New Delhi). 2.2001 (4) CTC 609 (M/s.Arcot Exports, Amir Mahal, Madras Vs. The Director of Enforcement, Enforcement Directorate, New Delhi) 3.CFC (Ker.) 50 (P.S.Barkathali Vs. Director of Enforcement, New Delhi) 4.CFC (Mad) 301 (Deputy Director, Enforcement Directorate vs. P. Mansoor Mohamed Ali Jinnah) 15. We have carefully considered the submissions made on either side and have gone through the records and documents placed before us. As mentioned above a question of law has been framed by order dated 19.01.2004, when the appeal was admitted. Undoubtedly the question regarding the evidentiary value of a statement recorded by an officer under Section 40 of FERA and the question whether the retracted confessional statement requires corroboration from any other independent evidence are questions of law to be considered in this appeal. Therefore we reject the first contention raised by the Respondent that there is no question of law in the above appeal. Having held so, we proceed to answer the question framed for which certain basis facts are required to be reiterated. 16. What we have to decide is whether under Section 8(1) of the Foreign Exchange Regulation Act restrictions are imposed on dealing in foreign exchange, and no person other than an authorized dealer shall purchase, acquire, borrow from, or sell, transfer otherwise lend or exchange any foreign exchange except with a previous general or special permission of the Reserve Bank. Therefore, it is the possession of the foreign exchange to the extent of 40,000/- dollars that is alleged to be the contravention of the provisions of the Act. The case of the appellant is that the production of the currency declaration form would prove that he had brought it from Saudi Arabia through proper channel and once the currency declaration form is produced and his right to possess 80,000 US$ is proved then it is for the Department to show that he had taken away this 80,000US$ to Singapore and that this 40,000 US $ does not form part of the 80,000US$ shown in the currency declaration form. P.W.2 is one K.V. Chandran. According to him, the statement recorded on 02-03-1981 by the officers of the Department was actually written by him on dictation. He was taken to the office and kept there till 4.00p.m. on the next day viz., 03-03-1981. He was not allowed to go anywhere. During this time only one statement was recorded and that was on the third morning. He had written a letter subsequently retracting the statement recorded on 03-03-1981 as forced statement. When he was cross-examined, he has stated that he did not remember whether a statement was also recorded from him. On 03-03-1981, according to him except the personal details regarding his name, nationality, profession other details are false. According to him, amongst the documents seized, there were some documents mentioning 80,000US$. It was an airport form and he did not exactly remember what it was. This witness is re-examined by the Department. He had stated that P.K. Bhanu is his uncle and he had entered the room at the Queens. hotel and the Directorate Officer is conducting the search. According to him, except the letter of authority given by Mr. P.K. Bhanu for recruitment of persons for job outside India. He has no other business connection with the appellant. He was also searched. Some documents were recovered from him. He signed the mahazar because he was asked to sign. The search and seizure ended in 13 hours on 02-03-1991. Thereafter, he was brought to the Directorate. According to him, the writing of the statement started in the early hours of 03-03-1981. He has denied that he was left free at 5:00p.m.on 02-03-1991. 17. The next person whose statement was recorded was L.A.Verma. He has also stated that except for the details about himself, name, address etc., the other factors are not true. He denied that he knows Hassan Bai or any Subramaniam. According to him, everything was recorded as per dictation of the officers. His statement is almost similar to that of K.V. Chandran. He has admitted that the photo copy of the letter dated 10-07-1979 from Bhanu Corporation to ELCEE Commercial Corporation was given to him by K.V. Chandran with a request to him to find persons for jobs outside India. He has stated that afterwards nothing had happened. 18. Next person whose statement was recorded was Hassan Ibrahim. He has denied that he has given any statement in the name of Subramaniam. According to him he has stated that he was threatened and therefore, he has given the statement. He has stated that he had given a statement in the name of Subramaniam because he was asked to do so. His passport was shown to him and he had admitted the entries regarding his visit to Singapore and Burma. He had not complained to the Magistrate about ill-treatment by the officers. The sheets 4 to 8 and 13 and 14 were admitted as having been seized from his residence but according to him it did not relate to his business transaction. 19. Mr. Kistoorchand was examined next. He had participated in the search. He is the Assistant Enforcement Officer. Mr. A. Kalyana Sundaram, the Assistant Director (Documents), Tamil Nadu Forensic Science Laboratory, Madras  4 had stated that the handwriting of the statement allegedly made by Subramaniam in the writing made by one Hassan was sent to him for comparison and the opinion given is both are similar. 20. Then P. Avanashi, Welfare Officer, Central Prison, Vellore was examined. He has spoken to the fact that on 06-03-1981, the prisoner P.K. Bhanu gave him a letter addressed to the Deputy Director, Enforcement Directorate, Madras. It had been recorded in the "Register of petitions received and disposed of from the prisoners." According to him the letter of P.K. Bhanu was a hand written one. Jeevarathinam, the Chief Enforcement Officer had stated that P.K. Bhanu, L.A. Verma and K.V. Chandran were taken to the Officer of the Enforcement Directorate, Madras and all the statement were given by them voluntarily. In his cross-examination he was shown the customs declaration form and he has admitted that it is a genuine and valid declaration. He was asked whether P.K. Bhanu told him that it was part of the 80000US$ brought inside India. The answer was he did not tell him that 40,000US$ recovered from his brief case form part of the 80000US$ brought from India under the declaration form. According to him, he did not arrest P.K. Bhanu on 02-03-1981. He was asked as to whether he verified from any of the persons in whose names the passports found in Ex-P3 file stand and whether any of them gave money to P.K. Bhanu. He has admitted that he had not done so because he did not have the address. He has stated that the accused did not send the petition on 06-03-1981 in which he had retracted the statement on 02-03-1981. According to him no such petition was received from the accused through jail. He had stated that the declaration form had to be produced if he wanted to take the foreign currency covered in the declaration form outside India. Then a question is asked as, "Did you check up with the Airport Customs authorities whether the accused when leaving India on 13-02-1981 produced this currency declaration form?". This question is asked in the cross-examination. He has denied that the 40,000 US$ form part of 80,000US$ that were seized. 21. Avanashi was also examined before the Additional Chief Metropolitan Magistrate, Egmore. He again represented that P.K.Bhanu gave a letter in which he had retracted the statement. In the statement made on 02-03-1981 which was subsequently retracted, P.K.Bhanu had said that he was recruiting persons from India for employment for a contract in Jeddah. He had referred to the seizure of 40,000US$. He has also referred to the seizure of the currency declaration form. He had stated that this sum of 80,000US$ was also taken by him when he leave for Singapore. This statement also refer to the manner in which he allegedly collected the 40,000US$. This was affirmed on 03-08-1981 but this was retracted. Under the mahazar in addition to the cheque books, the pass books etc., which were seized, they also found a purse in the pocket containing 40US$ and 195 Singapore Dollars, one pocket diary Ex-P4 and one file containing 190 sheets which included photostat copies of passports standing in the names of various persons from the brief case of the accused, Ex-P3 file. These were the documents in the evidence produced before the Tribunal. 22. Now we will refer to the various decisions referred before us. (i) In M/s. Chuni lal Dwarka Nath Vs. Hartford Fire Insurance Co. Ltd., (AIR 1958 Punjab 440) it is held thus: "Section 16, Illustration (a) and S.114 Illustration (f) apply to the course of business followed in public offices as well as in private offices. The effect of sending a letter to the post office will, in general, be regarded as presumptively proved, if the letter be shown to have been handed to or left with the person whose duty it was in the ordinary course of business to carry it to the post office." This was relied on to show that the retraction letter should have been delivered. (ii) In Puran Vs. State of Punjab (AIR 1953 SC 459) it was held that the a retracted confession cannot form the base for the conviction unless it is corroborated in material particulars. (iii) In Muthuswami Vs. State of Madras (AIR 1954 SC 4) it is stated that a confession should not be accepted merely because it contains a wealth of detail which could not have been invented. Unless the main features of the story are shown to be true, it is unsafe to regard mere wealth of uncorroborated detail as a safeguard of truth. (iv) In Pangambam Kalanjoy Singh Vs. State of Manipur (AIR 1956 SC 9) it was held that, "even if a confession is inculpatory, corroboration is necessary if the confession is retracted." (v) In Kora Ghasi Vs. State of Orissa (1983 (2) SCC 251 it was held that the retracted confession made before Magistrate, even if voluntary requires corroboration. (vi) In Rattan Singh Vs. State of Punjab (1981 (4) SCC 481) it was held that the detention is illegal upon the failure of jail authorities to forward detenu's representation to Central Government either directly or through State Government and lying unattended for several months . 23. We have seen from the decisions cited above that even if a confession is inculpatory, corroboration is necessary if the confession is retracted. We will see if there is corroboration in this case. In Deputy Director, Enforcement Directorate Vs. P. Mansoor Mohamed Ali Jinnah (CFC (Mad) 301) a writ of mandamus was filed to forbear the officers of the Directorate from proceeding further under the Foreign Exchange Regulation Act(FERA). The writ petition was allowed. Against that an appeal was filed. The respondent's claim that they were forced and statements were obtained from them. It was held that confessional statement made under Section 40 of the FERA can be used for proceeding under the Act and the respondents are not "accused" persons. The officers of the FERA and Customs Act are not police officers and on facts in that case it was found that the confessional statements of the respondents were not got by any inducement, threat or promise and there the Division Bench suggested that "it would be better if the authorities under the Customs Act and FERA take the statements of the person in his own hands there may not be any complaints