JUDGMENT K.M. Natarajan, J. 1. This Civil Miscellaneous Appeal has been preferred under Section 54 of the Foreign Exchange Regulation Act, 1973 (hereinafter referred to as "the Act") against the order of the Foreign Exchange Regulation Appellate Board, Madras, confirming the order of the Deputy Director, levying penalty of Rs. 1,000/- for contravening the provisions [of] Section 9(1)(b) of the Act and also confiscating a sum of Rs. 15,000/- under Section 63 of the said Act. 2. The short facts which are necessary for the disposal of the appeal are briefly as follows: On reliable information the premises of the appellant at Koothanallur village were searched by the officers of the department on 21.3.1974 and a sum of Rs. 15,000/- in Indian currency was recovered along with two bunches of balance sheets of foreign companies. The appellant is alleged to have given a statement wherein he admitted that an unknown person called on him and delivered the amount of Rs. 15,000/- during the second week of March, 1974 as per instruction of one of his friends who lived in Malaysia. He left Malaysia earlier. A show-cause notice was also issued, to which he sent a reply. He appeared before the Deputy Director and also gave a reply. He retracted the statement already given and said it was not voluntary. On the basis of the statement given by the appellant, the Deputy Director ordered confiscation and levied the penalty as stated already. The Foreign Exchange Regulation Appellate Board confirmed the same in Appeal No. 339 of 1975 and the appeal was dismissed. Aggrieved by the same, this appeal is filed. 3. Learned Counsel for the appellant mainly submitted that the main ingredient of the offence under Section 9(1)(b) of the Act cannot be said to have been proved, unless it is clearly established that the alleged payment was on behalf of a person resident outside India, within the meaning of the Act, and the burden is on the Department to prove every ingredient of the offence under Section 9(1)(b) of the Act. He contended that even the alleged seizure of the Indian currency or the statement also to have (sic) been given by the appellant, which are relied on against the appellant, does not disclose any particulars with regard to non-resident person on whose behalf the payment was made. He contended that even the alleged seizure of the Indian currency or the statement also to have (sic) been given by the appellant, which are relied on against the appellant, does not disclose any particulars with regard to non-resident person on whose behalf the payment was made. The said statement does not incriminate the appellant in any manner and in the absence of any other material to prove that the alleged payment was made on behalf of a particular person who is non-resident of India, confiscation of the amount as well as levying the penalty, are not sustainable especially when the main ingredient of the offence has not been proved. It is further submitted that the proceedings under the provisions of this Act are criminal in nature and the fundamental principles of criminal jurisprudence are to be followed in deciding this matter. 4. The question that arises for consideration, is whether there is contravention of the provisions of Section 9(1)(b) of the Act or not. 5. As per Section 9(1)(b) of the Act no person in, or resident in India shall receive, otherwise than through an authorised dealer, any payment by order or on behalf of any person resident outside India. Section 2(b) of the Act defines "a person resident in India" and Section 2(q) of the Act defines "person resident outside India". It has been observed in Shanti Prasad v. Director of Enforcement by the Supreme Court as follows: But it is only right to observe, that the proceedings under the Act are quasi-criminal in character and it is the duty of the respondents as prosecutor to make out beyond all reasonable doubt that there has been a violation of the law. Vide the decision In re. H.P.C. Productions Ltd. 1962-2 WLR 51, cited for the appellant. The learned Attorney-General did not contest this position. In Union of India v. Marcel Nevens [1978 II MLJ 122 : CFC (Mad) 152], it was held as follows: (CFC (Mad) page 156) Speculations certainly should be avoided, particularly when orders of confiscation and imposition of penalty are to be made. The provision is of a penal nature. The degree of proof that is required for penalty to be imposed is that which is required in a criminal case. There must be some material on the basis of which a reasonable conclusion is possible. The provision is of a penal nature. The degree of proof that is required for penalty to be imposed is that which is required in a criminal case. There must be some material on the basis of which a reasonable conclusion is possible. In fact the conclusion must not only be a possible conclusion but must be the only conclusion that could be reached on the material before the authorities". Thus it is clearly laid down in the above said decision that the proceedings under the Act are quasi-criminal in nature and the burden is on the department to prove ingredient of the offence in spite of the violation of any rule or the provisions of the Act to levy a penalty or order confiscation degree of proof required same as in a criminal case. Division [Bench] of this Court in K. Narayanaswamy v. Dy. Director, Enforcement Directorate, Madras This appears to reference to A.K.L. Labbai Thambi Maraicar v. Government of India Enforcement Directorate and Ors. : Compendium of FERA Cases (Mad) 171-Ed, considered the similar violation under the Foreign Exchange Regulation Act (7 of 1947), Section 5(1)(aa) now equivalent to Section 9(1)(b) of the Act, in respect of receipt of amount by a resident in India on instruction of or on behalf of a person resident outside India. In paragraph 5 of the above judgment it has been observed as follows: [Page 173 in CFC (Mad) 171] Before it could be found that there is [a] contravention of Section 5(1)(aa) of the Act, we must know as to who is the person on whose instructions or on whose behalf the amount was received and whether he is resident outside India. In this case, we know the person who has received the amount. But, we do not know the person resident outside India on whose instructions and on whose behalf the amount is said to have been received. Again in paragraph 6 of the above judgment it was observed as follows: A person resident outside India has a definite connotation and a mere visitor cannot be taken to be a resident outside India. In this ease, the department has not established that the slip which has been referred to in the statement, if from a specified person outside India. In this ease, the department has not established that the slip which has been referred to in the statement, if from a specified person outside India. As a matter of fact, the Department is not able to name the person resident outside India from whom instructions had been received by Manickam Reddiar. In this view of the matter, it is not possible to say that the Department has established any nexus between the appellant and the person resident outside India, who is said to have instructed the appellant or Manickam Reddiar to receive the amount. Therefore, on the materials on record, we cannot say that the contravention of Section 5(1)(aa) of the Act has been established as against the appellant. Accordingly, the appeal is allowed. That was also a case where consequent to a raid one Manickam Reddiar's house statement without any corroboration the penalty was levied and confiscation was ordered and in these circumstances it was held as stated above (sic). Applying the ratio to the facts of this case even accepting the statement given by the appellant which is voluntary but retracted and also not corroborated yet there is nothing to spell out the person who is alleged to have given instructions in Singapore, is a non-resident, and he is resident outside India. The statement simply reads to the effect that one of his friends met him before the departure from Malaysia and informed him that he would ask to keep the same and handed over to them when they called on him in India and accordingly a person unknown to him who is resident of India called on him and delivered the amount of Rs. 15,000/- and the said amount has been seized by the officer, as a result of the searched premises. It is clear that not only the name of the person has not been mentioned but there is nothing to show that the said friend is a non-resident of India, as rightly observed in the judgment of the Division Bench of this Court. A mere visitor to a foreign country cannot be taken as a person resident outside India as defined in the Act. In this case also the Department has not been able to name the person outside India from whom instructions were received and also not placed any material to hold that the said person is a resident outside India. 6. A mere visitor to a foreign country cannot be taken as a person resident outside India as defined in the Act. In this case also the Department has not been able to name the person outside India from whom instructions were received and also not placed any material to hold that the said person is a resident outside India. 6. Learned Counsel for the respondent submitted that the said person who gave instructions at Singapore, that the particulars of appellant's friend who gave instructions to the appellant at Malaysiais only within the special knowledge of the appellant and it is too much to expect the department to establish the same. We do not find any merit in the said contention. It is for the department to investigate the same and to find out as to whether the person who have (sic gave?) instructions is a nonresident of India. When once it is held that proceedings are criminal in nature and the burden is on the respondent-department to prove conclusively beyond reasonable doubt. It is not open to the Department to contend that they are not bound to do so in view of the statement of the appellant and his knowledge of alleged non-resident. It is for the department to establish any nexus between the appellant and the person resident outside India, who is said to have instructed the appellant to receive the amount and in particular the person who gave instructions is a resident outside India. If there is anything to spell out from the statement the person who gave the instructions is the resident outside India. Certainly it is open to the Department to rely on the same. When once it is held the statement is voluntary and can be relied upon and there was circumstance to corroborate the same even if retracted. Though it is in the order of the Foreign Exchange Regulation Appellate Board that there cannot be any quarrel with the general proposition that a retracted confession should be corroborated before it could be acted upon, there is absolutely nothing to show that any circumstantial evidence to corroborate the same. The circumstance leading to the retraction cannot be taken as a corroboration. The circumstance leading to the retraction cannot be taken as a corroboration. There is absolutely nothing to show that any corroboration materially was pointed out by the Board besides stating that the statement that the retraction is invented only an after thought and intended for the purpose of levying a charge. 7. Learned Counsel for the respondent Mr. Veeraraghavan, mainly relied on Section 71 of the Act and submitted that the burden of proof is on the appellant and not on the respondent Department. On a careful reading of the above provision we find that the said provision is not helpful to the case of the respondent. It is the fundamental principle that in a criminal trial when once it is held that the proceedings under this Act is quasi-criminal in nature, it is fundamental principle in the trial the burden lies upon the prosecution to establish the charge against the accused beyond reasonable doubt. This principle is enacted in Section 101 of the Evidence Act and Illustration(a) to that section, read with the definition of "proved" in Section 3 of the Evidence Act. At the risk of repetition it is to be stated that in a criminal trial the burden of proving everything essential to the establishment of the charge against the accused lies upon the prosecution, and that burden never changes. It is obligatory on the part of the respondent to prove that the necessary ingredient for violation of the contravention of any of the provisions and if the person who contravened wants justified (sic) the same that he did it with some lawful and valid permission, he is expected to prove the same. But that is not the case here. The appellant completely denies that he received any instructions from a non-resident at Singapore and in pursuance of the same he received the amount from a person in India. It is no excuse for the department to say that it is very difficult for the respondent to establish that the person who gave instructions was non-resident. Learned Counsel also relied on a decision in C.M.A. 348 of 1981 rendered by the Division Bench of this Court. That decision is not helpful to the respondent. That was admitted case that the amount was received on instructions from a person residing in Singapore. Learned Counsel also relied on a decision in C.M.A. 348 of 1981 rendered by the Division Bench of this Court. That decision is not helpful to the respondent. That was admitted case that the amount was received on instructions from a person residing in Singapore. It has been so stated in the statement recorded from the appellant that the amount has been received on instructions from the person residing in Singapore even though the name has not been mentioned. In the circumstances it was held that the circumstantial evidence predominantly leads to the only conclusion that the local payment was being made at the behest of a non-resident outside the country about whom contravener himself having disclosed failure to mention that name of the non-resident in show-cause would not validate the charge under Section 9(1)(aa) of the Act. Further in matters arising under this Act, if the circumstances are eloquent enough to conclude that the amounts in the possession of contravener are traceable to the dictates and directions of a person from outside the country, then undoubtedly the contravener would be guilty under the said charge. But in these circumstances of the case as already stated that there is nothing to show that the amount was received on instructions from the person residing at Singapore. But only stated a friend of the appellant gave the instructions. Hence we do not find any merit in the said contention. 8. The finding of both the authorities below that the contravention of Section 9(1)(b) of the Act, by the appellant has been established in the instant case is erroneous and not in accordance with the principles laid down by this Court and that of the Supreme Court. Thus on the materials on record we are of the view that it cannot be said that the contravention of the said Act has been established as against the appellant. 9. In the result the appeal is allowed and orders of the Deputy Director, Enforcement Directorate as also the Appellate Board are hereby set aside. However, in the circumstances of the case, there is.[Illegible]