Full Judgment
1. This appeal is directed against Adjudication Order No. AD/MAS/58/93 (MJ), dated 31-5-1993 under which a penalty of Rs. 45,000 has been imposed on the appellant for contravention of section 9(1)(b) of the Foreign Exchange Regulation Act, 1973. The seized amount of Rs. 5,000 has been ordered to be adjusted towards the recovery of the amount of penalty leaving a balance of Rs. 40,000 yet to be paid. 2. After hearing the parties, I am satisfied that it would cause undue hardship to the appellant if he is required to pre-deposit the balance amount of penalty. I, therefore, waived the requirement of pre-deposit of the balance amount of Rs. 40,000 and proceeded to hear the appeal on merits. 3. The facts briefly are that on 4-12-1991 the officers of the Enforcement Directorate, Hyderabad, searched the residential premises of the appellant and recovered and seized a sum of Rs. 5,000. The appellant was examined under section 40 of the Act on the same day in respect of the seized Indian currency. He stated that his father B. Pentiah is employed in a private company in Abu Dhabi, UAE; that his father normally used to send money by bank draft directly from Abu Dhabi in his mothers name and his mother used to encash the same through S.B. A/c No. 2419 with Indian Bank. He further stated on one occasion that his father sent a sum of Rs. 45,000 in cash for the marriage expenses of his elder sister which was fixed for 27-11-1991; that his father sent a telegram in the first week of November, 1991; informing that he would be sending an amount of Rs. 45,000 in cash; that in the second week of November, an unknown person paid an amount of Rs. 45,000 in cash to him and took away his fathers telegram and his signature in token of having received the money; that he handed over the entire money to his mother who has spent Rs. 40,000 towards expenses, such as purchase of jewels, clothes, etc., in connection with the marriage and the balance Rs. 5,000 was kept in the house for further expenses at the time of marriage and that the said amount of Rs. 5,000 was seized on 4-12-1991. He also added that he had not received any amount except the above-mentioned sum of Rs. 45,000 in cash from persons in India. It is seen from the perusal of the impu- gned order that the appellant had been found guilty of contravention on the sole evidence of his statement dated 4-12-1991 as the seized amount being Indian currency cannot in itself be prima facie considered to be tainted money. The appellant has claimed that the statement was not voluntarily made and is not true insofar as it relates to the receipt of the amount of Rs. 45,000 on the instructions of his father. On his part, the appellant produced the pass book of his mothers bank account showing a withdrawal of Rs. 5,000 on 3-12-1991, i.e., a day prior to the date of search and seizure. The learned Adjudicating Officer also noted from the pass book on 16-11-1991, an amount of Rs. 35,000 was credited to that account and prior to that date, the balance in the account was Rs. 150. It was contended on behalf of the appellant that the entries in the pass book would show that an amount of Rs. 5,000 was withdrawn out of the amount of Rs. 35,000 credited on 16-11-1991. The learned Adjudicating Officer did not accept the explanation that the amount of Rs. 35,000 credited to the account on 16-11-1991 was the amount raised by her mother for his sisters marriage on the ground that the marriage was fixed for 27-12-1991 and, therefore, the alleged withdrawal of Rs. 5,000 had no connection with the sisters marriage. 4. In my opinion, the reasoning of the learned Adjudicating Officer is not sound and logical. I do not find adequate evidence on record on which the charge can be sustained. The department has not made any investigation as to whether the statement that the appellants father was normally sending the remittances from abroad through Bank drafts were correct or not. If he was sending the money in the prescribed manner why should he arrange to deliver the amount of Rs. 45,000 to the appellant in violation of law. One can understand the reason that mother being the lady, the amount was delivered to the appellant but in that event the money would be treated as having been received by mother and not by the appellant. It is not a mere physical act of receiving the money that can constitute contravention of section 9(1)(b). There is another reason for which the appellants statement under section 40 is not likely to be true. As accepted by the learned Adjudicating Officer, the appellants father had been sending the money through normal banking channels. This shows that he knows the law that that is the legal way of sending the remittances from abroad. In view thereof it cannot be believed that he will send the message for sending the money through havala under a telegram which can be read by anybody. He could have sent the intimation under a letter or through the person who alleged to have delivered the amount. In my opinion, the case is built up on the basis of the appellants retracted statement which is neither supported by any corroborative evidence nor can it be believed to be true statement. 5. In the circumstances, the appeal is allowed and the impugned order set aside. The respondent shall refund to the appellant, within 45 days of the receipt of the order, the said amount of Rs. 5,000 adjusted towards the amount of penalty.