Case: Vinod Solanki Vs. Union Of India

2,65,000/- was made. He was thereafter detained. On the next two succeeding dates, i.e., on 26.10.1994 and 27.10.1994, he allegedly made two statements before the Authorities under the Act, disclosing that all the transactions in the name of M/s Sun Enterprises, Ahmedabad and M/s Suraj Enterprises, Bombay relating to import of goods had been made by him and no import of goods had taken place in the name of the said firms. He is stated to have confessed that he was responsible for remittance of the foreign exchange worth US Dollars 11,400 and US Dollars 22,830. In view of the said purported confession, he was arrested for alleged violation of the provisions of Section 8(3) and Section 9(1)(a) of the Act. We are not concerned with the rest of the statements.4. He was produced before the learned Chief Metropolitan Magistrate, Bombay on 28.10.1994. Before the said court, he filed an application retracting his confession,from 26-10-94 evening till today when I am being produced before this Honble Court, I was illegally detained in the office of the Enforcement Directorate, and during my illegal detention my involuntary, untrue and false statements have been recorded by force, coercion, threat and coercion and also threatened to detain under COFEPOSA if I will not write the statements as per their say and hence I retract my said statements as the same are not my true and voluntary statements.I further state that Indian currency seized from me was my legitimate business money and had nothing to do with alleged FERA violation. I further say that I have no connection with any alleged import transactions, opening of bank accounts, or floating of company by name of M/s Sun Enterprises, export control, Bill of Entry and other documents or alleged remittances. I have not been furnished copy of Panchnama, though my signatures have been taken in token of having furnished the copy of the same.I hereby rebut the false averments made in the remand application, Panchnama and in my alleged statements and hereby retract the same as the facts stated therein are not true and voluntary.I pray that my application may be taken on record and copy of the same is annexed for the officer of the Dept.Respondents, however, initiated a proceeding under Section 8(3) of the Act. A show cause notice was issued on or about 25.4.1995, the operative part whereof reads asTHEREFORE, the said Shri Vinod M Solanki is hereby required to show cause in writing (IN DUPLICATE) within 30 days from the date of receipt of this memorandum, why Adjudication Proceedings as contemplated in Section 51 of the Foreign Exchange Regulation Act, 1973 (46 of 1973) should not be held against him for the said contravention of Section 8(3) and 9(1) of the Foreign Exchange Regulation Act, 1973.IN ISSUING this memorandum, reliance is placed inter alia on the list of documents as per Annexure `A the original of the said documents will, on demand, be made available for inspection to the party or his lawyer or other authorized representative at the office of the Deputy Director, Enforcement Directorate, Mittal Chambers, 2nd Floor, Nariman Point Bombay - 400 021 in his office by prior appointment with him on any working day.Pursuant to or in furtherance thereof cause was shown by the appellant, inter alia, contending that no reliance should be placed on the retracted confessional statement unless the same was corroborated substantially in material particulars by some independent evidence.7. By reason of an order dated 19.3.1996, the appropriate authority, inter alia, relying on or on the basis of the confession made by him imposed a consolidated penalty of Rs. 10 lakhs,I have independently gone through the evidence on record too based on which the impugned show cause notice has been issued. The notice has abundantly and clearly explained the documents seized from him. He has also admitted to the offence in his statements recorded u/s 40 of FERA, which to date, stand. These confessional statements are amply corroborated by the material evidence seized from him which is disclosed above. By not contesting the charges, either in reply to the Show-cause Notice or during Personal hearings fixed, these further stand uncontested and thus confirmed and admitted by the notice.12. I have, therefore, no hesitation in confirming the charges in impugned SCN again the notice and accordingly hold him guilty of contravention of Sec. 8(3) to the extent of US $ 34,230/- in as much as he failed to utilize the said Foreign exchange for the purpose it was released to him. Further, he is also held guilty of contravention of charge u/s. 9(1)(a) for the same amount in as much he deposited it in a Foreign bank account without the General or Special exemption from the Reserve Bank of India.Appellant preferred an appeal thereagainst before the Foreign Exchange Regulation and Appellate Board which on repeal of FERA stood transferred to the Appellate Tribunal for Foreign Exchange (for short, "the Tribunal") under the provisions of Foreign Exchange Management Act, 1999. The Tribunal despite noticing the contentions raised on behalf of the appellant that no enquiry had been made by the Department (1) from the bank in which the transactions in question had taken place; (2) as regards the date on which the application was signed and by whom the foreign exchange had been acquired; (3) whether the appellant had acquired the said foreign exchange from authorized dealer on the basis of any forged import documents; (4) whether the alleged documents were not produced by him before any authorized dealer; and (5) whether the impugned order was based on the confessional statement which was retracted on first available opportunity when he was produced before the Chief Metropolitan Magistrate, Mumbai for remand on 28.10.1994, dismissed the appeal,In the present appeal the confessional statement of the appellant is acceptable in evidence. The appellant has not brought out anything to displace his confessional statement to prove its untruthfulness or involuntary nature. Along with his confessional statements, there is seized documentary evidence coupled with attendant circumstantial evidence to demonstrate and prove the charges against the appellant.In arriving at the said finding, the Tribunal placed the onus of proof upon appellant that the confession was obtained from him by threat, coercion or force. The Tribunal held that retraction alone would not make the confession inadmissible and as even retracted confessional statement may be sufficient to hold the proceedee guilty of violation of the provisions of the Act, imposition of penalty was legally permissible.It was furthermoreThe charges under Section 8(3) is proved against the appellant for having acquired foreign exchange by forging import documents and remitting it abroad to foreign nationals particularly when import documents relating to bogus firms along with stamps were recovered from his custody. The appellant has not been able to explain why the names of persons Milan and Anil Verma were told by him to the officers of ED which, on enquiry were found to be wrong and what benefit could be given to him out of his wrong assertion made by him to Enforcement Officers.19. According to confessional statement of the appellant, bogus trading firms were established and run by him where he used to take foreign exchange for remittance to foreign country for the purposes of import of goods but no import took place despite the fact that the foreign exchange was remitted to Hongkong. On the basis of aforesaid discussion we are of the considered opinion that the remittance of foreign exchange was taken by the appellant for purposes of import of goods but no import of goods was made and foreign exchange was credited on the bank account of foreign national abroad where contravention of Section 8(3) and 9(1)(a) of the Foreign Exchange 1973 is clearly made out. Looking towards this situation, we are of the considered opinion that the impugned order withstands judicial scrutiny and is liable to be confirmed and upheld where the appeal is liable to be dismissed.Aggrieved by and dissatisfied therewith, the appellant preferred an appeal before the High Court. Concurring with the judgment of the Tribunal, the High Court,burden is on the person retracting the confessional statement to lead some evidence as to why the confessional statement has to be rejected. No evidence on that count was led. Coupled with the confessional statement wherein some facts were recorded which was personal to the appellant alone, there were other documentary evidence coupled with the attendant circumstantial as noted by the tribunal to demonstrate and prove the charges against theis, thus, before us.

Court's reasoning:
A person accused of commission of an offence is not expected to prove to the hilt that confession had been obtained from him by any inducement, threat or promise by a person in authority. The burden is on the prosecution to show that the confession is voluntary in nature and not obtained as an outcome of threat, etc. if the same is to be relied upon solely for the purpose of securing a conviction. With a view to arrive at a finding as regards the voluntary nature of statement or otherwise of a confession which has since been retracted, the Court must bear in mind the attending circumstances which would include the time of retraction, the nature thereof, the manner in which such retraction has been made and other relevant factors. Law does not say that the accused has to prove that retraction of confession made by him was because of threat, coercion, etc. but the requirement is that it may appear to the court asthe instant case, the Investigating Officers did not examine themselves. The authorities under the Act as also the Tribunal did not arrive at a finding upon application of their mind to the retraction and rejected the same upon assigning cogent and valid reasons therefore. Whereas mere retraction of a confession may not be sufficient to make the confessional statement irrelevant for the purpose of a proceeding in a criminal case or a quasi criminal case but there cannot be any doubt whatsoever that the court is obligated to take into consideration the pros and cons of both the confession and retraction made by the accused. It is one thing to say that a retracted confession is used as a corroborative piece of evidence to record a finding of guilt but it is another thing to say that such a finding is arrived at only on the basis of such confession although retracted at a lateris said to have been arrested on 27.10.1994; he was produced before the learned Chief Metropolitan Magistrate on 28.10.1994. He retracted his confession and categorically stated the manner in which such confession was purported to have been obtained.According to him, he had no connection with any alleged import transactions, opening of bank accounts, or floating of company by name of M/s Sun Enterprises, export control, Bill of Entry and other documents or alleged remittances. He stated that confessions were not only untrue but alsoallegation that he was detained in the Office of Enforcement Department for two days and two nights had not been refuted. No attempt has been made to controvert the statements made by appellant in his application filed on 28.10.1994 before the learned Chief Metropolitan Magistrate. Furthermore, the Tribunal as also the Authorities misdirected themselves in law insofar as they failed to pose unto themselves a correct question. The Tribunal proceeded on the basis that issuance and services of a show cause notice subserves the requirements of law only because by reason thereof an opportunity was afforded to the proceedee to submit its explanation. The Tribunal ought to have based its decision on applying the correct principles of law. The statement made by the appellant before the learned Chief Metropolitan Magistrate was not a bald statement. The inference that burden of proof that he had made those statements under threat and coercion was solely on the proceedee does not rest on any legal principle. The question of the appellants failure to discharge the burden would arise only when the burden was on him. If the burden was on the revenue, it was for it to prove the said fact. The Tribunal on its independent examination of the factual matrix placed before it did not arrive at any finding that the confession being free from any threat, inducement or force could not attract the provisions of Section 24 of the Indian Evidencefind that in the show cause notice there was nothing specific as to the role of the respondents, if any. The arrangements as alleged have not been shown to be within the knowledge or at the behest or with the connivance of the respondents. Independent arrangements were entered into by the respondents with the franchise holder (sic franchiser). On a perusal of the show cause notice the stand of the respondents clearly getsis no allegation of the respondents being parties to any arrangement. In any event, no material in that regard was placed on record. The show cause notice is the foundation on which the department has to build up its case. If the allegations in the show cause notice are not specific and are on the contrary vague, lack details and/or unintelligible that is sufficient to hold that the noticee was not given proper opportunity to meet the allegations indicated in the show cause notice. In the instant case, what the appellant has tried to highlight is the alleged connection between the various concerns. That is not sufficient to proceed against the respondents unless it is shown that they were parties to the arrangements, if any. As no sufficient material much less any material has been placed on record to substantiate the stand of the appellant, the conclusions of the Commissioner as affirmed by the CEGAT cannot be faulted."