Page 67 - DCOM404_CORPORATE_LEGAL_FRAMEWORK

Corporate Legal Framework

Notes 9. Foreign Exchange Management (Establishment in India of Branch or Office or other

Place of Business) Regulations 2000. These Regulations govern the establishment by
a resident outside India of branch or office or other place of business in India.

10. Foreign Exchange Management (Export of Goods and Services) Regulations 2000.
These Regulations provide for (i) declaration as regards export of goods and services,
(ii) indication of importer-exporter code number as allotted by the Director General
of Foreign Trade under s. 7 of the Foreign Trade (Development and Regulation) Act,
1992, (iii) submission of evidence in support of the above mentioned declaration,
(iv) manner of payment of export value of goods, (v) period within which export
value of goods, software to be realised, (vi) export on elongated credit term, (vii)
submission of export documents with the authorised dealer, (viii) delay in receipt of
payment, (ix) advance payment against exports.

3.4 Contravention and Penalties [Secs.13 to 15]

3.4.1 Penalties

Sec.13 provides that if any person contravenes any provision of the Act, rules, regulation etc.
or contravenes any condition subject to which the authorization is granted by RBI, he shall be
liable for penalty upon adjudication, which may extend upto thrice the sum involved in such

contravention where such amount is quantifiable or upto two lakh rupees where the amount is

not quantifiable. If the contravention continues, the penalty of ` 500 per day after the fi rst day
during the period in which the contravention continues shall be imposed.
Again, Sec.13 provides that any adjudicating authority may, in addition to the penalty, 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. It may further direct that the foreign
exchange holdings, if any, of the persons committing the contravention or any part thereof, shall
be retained outside India in accordance with the directions made in this behalf.

3.4.2 Enforcement of the Orders of Adjudicating Authority

Sec.14 provides that if a person fails to make full payment of the penalty imposed within a period
of 90 days from the date on which the notice of payment of such penalty is served on him, he shall
be liable to civil imprisonment. However, the defaulter shall not be arrested or detained in civil
prison, unless he has been issued and served a notice by Adjudicating Authority calling upon
him to show cause why he should not be committed to civil prison.
The Adjudicating Authority may issue a warrant for the arrest of a defaulter if it is satisfi ed

by affidavit or otherwise that the defaulter is likely to abscond or leave the local limits of the
jurisdiction of the Adjudicating Authority with the intention of delaying the execution. The arrest
warrant may be issued by the Adjudicating Authority if the defaulter fails to make an appearance
in pursuance of the notice issued by him. The arrest warrant issued by an Adjudicating Authority
may be executed by any other Adjudicating Authority within whose jurisdiction the defaulter
may for the time being be found.

3.4.3 Power to Compound Contraventions

Sec.15 empowers the Directorate of Enforcement or Officers of the Directorate of Enforcement and
Offi cers of the Reserve Bank as may be authorised by the Central Government in this behalf to
compound the offences. Any contravention under Sec.13 may be compounded on an application
made by the person committing such contravention within 180 days from the date of receipt

62 LOVELY PROFESSIONAL UNIVERSITY