 "Indian currency liable for seizure under Fera, says Delhi High Court")
The Delhi High Court has ruled that Indian currency can be seized under the Foreign Exchange Regulation Act, 1973 (Fera), according to a report by Bar and Bench.
The observations were made while hearing an appeal filed by Arjun Patil against orders of the Enforcement Directorate (ED) and the Appellate Tribunal for Foreign Exchange. The authorities had confiscated ₹12.31 lakh in Indian currency and imposed a penalty of ₹40,000 on Patil for offences under Fera.
Section 63 empowers confiscation of Indian currency
A division bench comprising Justices Subramonium Prasad and Vimal Kumar Yadav observed that Section 63 of Fera clearly empowers the court or adjudicating authority to confiscate “any currency, security or other money or property in respect of which the contravention has taken place.”
Case history
The ED had searched Patil’s premises in February 1997, seizing ₹12.31 lakh, $6,371, four gold biscuits, and documents. Patil allegedly admitted to purchasing gold from Nepal using foreign exchange, thereby violating Sections 81, 82, 63, and 64(2) of Fera. He later withdrew his statement, alleging that it had been obtained under coercion and torture.
The bench emphasised that the scope of Section 63 is wide enough to cover Indian currency and that its language is unambiguous, and precise in its object.
“Nowhere does the section disqualify or prohibit either the court or adjudicating authority from confiscating Indian currency. In fact, a perusal of clause (b) of the explanation to Section 63 makes it abundantly clear that property with respect to which contravention has taken place includes Indian currency, where the said property is converted into that currency,” the court noted.
Fera has since been replaced by the Foreign Exchange Management Act, 1999 (Fema), which came into effect in June 2000.
Limited scope of appeals
In its October 14 judgment, the bench clarified that the right to appeal before the high court under Fera is confined to questions of law, while matters of fact fall within the jurisdiction of the adjudicating authority and the Appellate Tribunal.
"This court cannot go behind or interfere with the findings on fact arrived at by them. The Fera Appellate Tribunal is the final court of facts. This circumscribed right to appeal has been retained under Fema, the successor legislation to Fera," the Delhi High Court stated.
Corroborated statements admissible
In 2003, the adjudicating authority found Patil guilty of illegal transactions in gold and foreign exchange, imposed a penalty, and ordered confiscation. The Appellate Tribunal upheld the order in 2006, prompting Patil to approach the Delhi High Court.
After reviewing the case, the high court held that a statement may be relied upon even if retracted, provided it is voluntary and corroborated by other evidence.