The Delhi High Court has held that Indian currency can be seized and confiscated under the provisions of the Foreign Exchange Regulation Act, 1973 (FERA).
A Division Bench comprising Justice Subramonium Prasad and Justice Vimal Kumar Yadav observed that Section 63 of FERA clearly empowers the Court or the Adjudicating Authority to confiscate “any currency, security or other money or property in respect of which the contravention has taken place.” The Bench emphasized that the wording of the provision is wide, precise, and unambiguous, leaving no room for interpretation that would exclude Indian currency from its ambit.
“Nowhere does Section 63 disqualify or prohibit either the Court or Adjudicating Authority from confiscating Indian currency,” the Bench noted, adding that clause (b) of the Explanation to the section 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 bench said.
The ruling came while the Court was deciding an appeal filed by Arjun Patil challenging the orders of the Enforcement Directorate (ED) and the Appellate Tribunal for Foreign Exchange, which had ordered the confiscation of ₹12.31 lakh in Indian currency and imposed a penalty of ₹40,000 for violations under FERA.
The case dates back to February 1997, when the ED conducted a search at Patil’s premises and seized ₹12.31 lakh in cash, US$6,371, four gold biscuits, and various documents. According to the ED, Patil had admitted during investigation that he was engaged in purchasing gold from Nepal using foreign exchange, thereby violating Sections 81, 82, 63, and 64(2) of FERA.
Although Patil later retracted his confession, claiming that it had been extracted under coercion, the Adjudicating Authority in 2003 found him guilty of illegal foreign exchange and gold dealings, ordered confiscation of the seized assets, and imposed a monetary penalty. The Appellate Tribunal upheld this decision in 2006, leading to Patil’s appeal before the High Court.
The Bench clarified that even though FERA has been replaced by the Foreign Exchange Management Act, 1999 (FEMA), the right to appeal before the High Court remains limited to questions of law and not to questions of fact.
“This Court cannot go behind or interfere with the findings on fact arrived at by the Adjudicating Authority or the Appellate Tribunal. The FERA Appellate Tribunal is the final court of facts,” the Bench held, observing that a similar limitation continues under Section 35 of FEMA, which allows appeals to the High Court only on legal grounds.
Addressing Patil’s argument regarding the retraction of his confession, the Court held that a retracted statement can still be relied upon, provided it is established to be voluntary and corroborated by other evidence.
The Court further elaborated on the concept of “attempt” under FERA, ruling that once an individual performs an act with the requisite intention, the offence of attempt is deemed to have commenced.
“The appellant’s conduct and the surrounding circumstances clearly show that he had taken steps for committing the offence and crossed the threshold for ‘attempt’. Therefore, his claim that seizure does not amount to attempt is a facile argument,” the judgment stated.
The Bench added that the recovery of the seized currency, combined with the absence of any lawful explanation and the appellant’s conduct, clearly established an attempt to contravene the provisions of FERA.
Concluding that there was no error in the findings of the lower authorities, the High Court upheld the confiscation order and dismissed Patil’s appeal.
Case Details
Case Title: Arjun Patil Versus UOI
Case No.: CRL.A. 407/2007
Date: 14/10/2025
Counsel For Petitioner: Jaspreet Singh Kapur
Counsel For Respondent: Bharathi Raju
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