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Business Environment

Notes Departmental Adjudication

The Central Government can authorise certain officers as 'Adjudicating Authority' under Section
16(1). Their jurisdiction will be prescribed by the Central Government [Section16 (2)]. They can
adjudicate cases in respect of violation of FEMA. These officers are quasi- judicial and have to
follow the principle of natural justice by giving the opportunity of making representation. The
Adjudicating Authority can hold an enquiry only upon receiving a complaint from an authorised
officer [Section 16 (3)].

Powers of Adjudicating and Appellate Authorities

The adjudicating authority, Special Director (Appeals) and Appellate Tribunal have the following
powers of the civil court:
1. Summoning witnesses and enforcing attendance of any person and examining them on
oath.

2. Requiring discovery and production of any document.
3. Receiving evidence on affidavits.
4. Requisition of any public record or document or copy of such record/document from any
office (subject to sections 123 and 124 of the Indian Evidence Act).
5. Reviewing its decisions.
6. Dismissing a representation of default or deciding it ex parte.
7. Setting aside any order of any representation for default or any order passed by it ex parte.

8. Any other matter as may be prescribed by the Central Government.

Penalties

If any person contravenes any provision of the Act, he shall be liable for a penalty upto thrice the
sum involved in such contravention where such amount is quantifiable, or up to two lakhs
rupees where the amount is not quantifiable, and where such contravention is a continuing one.
Further penalty may extend to five thousand rupees for every day after the first day during
which the contravention continues.
Any Adjudicating Authority adjudging any contravention under sub-section (1) may, if he thinks
fit, in addition to any penalty that he may impose for such contravention, direct that any currency,
security or any other money or property in respect of which the contravention has taken place,
shall be confiscated to the Central Government and further direct that the foreign exchange
holdings, if any, of the persons committing the contraventions or any part thereof, shall be
brought back into India or shall be retained outside India in accordance with the directions
made in this behalf.

9.3 Summary

FERA is an Act to consolidate and amend the law regulating certain payments, dealings in
foreign exchange and securities, transactions indirectly affecting foreign exchange and the
import and export of currency, for the conservation of the foreign exchange resources of
the country and the proper utilisation thereof in the interests of the economic development
of the country.

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