Admissibility of co-accused statements, burden of proof, and sufficiency of evidence for framing charges under FERA.

1. By the present petition, the Petitioner challenges the order dated 19th March, 2007 directing framing of charge and charge framed against the Petitioner for offence under Section 8(1) of the Foreign Exchange Regulation Act, 1973 (in short ‘FERA’) punishable under Section 56 of the FERA in complaint case No. 54/1/1996 titled as “Shri M.G. Attri Vs. S.K. Jain and Anr”.

2. Learned counsel for the Petitioner contends that the foreign exchange was not recovered from the Petitioner. The foreign exchange allegedly recovered from the co-accused does not belong to the Petitioner. The statement of co-accused has been manipulated. Further the statement of the co-accused cannot be used against the Petitioner as it is not a confession. Even if it is said to be a confession made by the co-accused J.K. Jain, since it is exculpatory qua J.K. Jain, the same cannot be used in evidence against the Petitioner in terms of Section 30 of the Evidence Act. Further, even if this Court comes to the conclusion that it is a confession of the co-accused and admissible against the Petitioner, there is no evidence on record against the Petitioner except the said confession and the same not being substantive evidence, no charge can be framed against the Petitioner merely on the basis of the confession of the co-accused. Reliance is placed on Pakala Narayan Swami Vs. Emperor AIR 1939 Privy Council 47, Bhuboni Sahu Vs. The King AIR (36) 1949 PC 257, Haricharan Kurmi Vs. State of Bihar AIR 1964 SC 1184 (V 51 C 149), Shri Chand Gupta Vs. Santosh Kumari & Anr. 2008 (2) JCC 1040 and Union of India Vs. Bal Mukund & Ors. 2009 (2) JCC Narcotics 76 (SC).

3. Learned counsel for the Respondent on the other hand contends that in terms of Section 71(1)(2) & (3) of the FERA, the burden of proof of the acquisition is on the person from whose possession it is recovered. Further when a person is prosecuted for the contravention of any provision, the burden of proving that he has the requisite permission lies on the said person. Despite opportunity notice being given, the Petitioner failed to give any explanation. The statement of J.K. Jain recorded by the Respondent is not exculpatory as only a part of the statement is being looked into by the Petitioner. A comprehensive reading of the entire statement of J.K. Jain shows that he admits recovery of the foreign exchange from his possession and also confesses about his writings in the diary. He only states that the foreign currency, Indian currency and Indira Vikas Patra were owned by the Petitioner. Thus, it is a confession, which is not exculpatory in nature. Since the statement inculpates the maker i.e. J.K. Jain also, the same is admissible against the Petitioner under Section 30 of the Evidence Act as both of them are being tried together for the same offences. Besides the confession of the co-accused, there are other pieces of evidence in the form of recovery of the foreign exchange and the seizure memo. This being not the only evidence, prima facie there is sufficient evidence at this stage to raise a strong suspicion against the Petitioner of having committed the offence and the veracity of the evidence and whether a conviction can be based thereon would be decided during the trial. Further, Section 71(3) FERA casts a burden on the Petitioner to prove that the possession by the co-accused on behalf of the Petitioner was lawful. Further in terms of Section 106 of the Evidence Act also since the facts are in the special knowledge of the Petitioner, he was bound to disclose the same. Reliance is placed on Sarbananda Sonowal v. Union of India And Anr. AIR 2005 SC 2920. Both the Petitioner and J.K. Jain admit that they have an employer-employee relationship and thus an inference can be drawn that J.K. Jain was holding the foreign currency on behalf of the S.K. Jain, the Petitioner herein. Referring to Union of India Vs. Bal Mukund & Ors. 2009 (2) JCC Narcotics 76 it is contended that though the decision impliedly