Delhi High Court cancels ₹20 lakh FERA penalties due to lack of corroborated evidence, inadmissible documents, and unproven recovery. The ruling reinforces strict scrutiny of prosecution evidence under legacy forex laws.
Delhi HC Quashes ₹20 Lakh FERA Penalty for Unproven Recovery
The Delhi High Court has set aside a penalty of ₹20 lakh imposed under the Foreign Exchange Regulation Act (FERA), holding that the prosecution failed to establish contravention through reliable and admissible evidence. The court found that the alleged recovery of foreign exchange was not substantiated, and crucial documents relied upon—such as loose sheets—were inadmissible and uncorroborated.
The adjudicating authority had earlier imposed the penalty based on statements by officials and unverified documentation. The High Court observed that reliance on retracted statements without independent corroboration violates principles of natural justice and evidentiary standards.
"The mere presence of loose sheets signed by officials, without verification or supporting records, cannot form the basis of a penalty under FERA,"the court held, emphasizing the necessity for forensic reliability and documentary integrity.
This decision underscores the importance of evidentiary rigor in enforcement actions under FERA, particularly in legacy cases where documentary practices were less standardized. Practitioners must ensure that penalties are based on authenticated records and not on hearsay or unverified assertions, especially when rights to property and liberty are at stake.
