ACT NO. 42 OF 1999  

 [29th December, 1999.]

   An  Act  to  consolidate and amend the law  relating  to  foreign  exchange  with  the objective of facilitating external trade  and  payments   and   for  promoting   the  orderly  development   and  maintenance of foreign exchange market in India.    BE  it enacted by Parliament in the Fiftieth Year of the Republic of India as follows:-  


(1).   Short title, extent, application and commencement.-(1)  This  Act may be called the Foreign Exchange Management Act, 1999.  

(2) It extends to the whole of India.

(3)  It  shall also apply to all branches, offices  and  agencies  outside  India owned or controlled by a person resident in  India  and also to any contravention thereunder committed outs ide India  by any person to whom this Act applies .  

 (4)  It  shall  come  into  force on such  date  as  the  Central  Government may, by notification in the Official Gazette, appoint:  Provided  that  different  dates may be appointed  for  different  provisions of this Act and any reference in any such provision to  the commencement of this Act shall be construed as a reference to  the coming into force of that provision.     

2.    Definitions.      

2.   Definitions.-In  this  Act,  unless  the  context  otherwise  requires,-  

(a)  "Adjudicating  Authority"   means  an   officer  authorized under sub-section (1) of section 16

 (b) "Appellate Tribunal" means the Appellate Tribunal for Foreign  Exchange established under section 18;

 (c)  "authorized  person"  means  an  authorized  dealer,   money  changer,  off-shore banking unit or any other person for the time  being  authorized under sub-section (1) of section 10 to deal  in  foreign exchange or foreign securities;

 (d) "Bench" means a Bench of the Appellate Tribunal;

 (e)  "capital  account  transaction" means  a  transaction  which  alters   the   assets  or   liabilities,   including   contingent  liabilities, outside India of persons resident in India or assets  or  liabilities  in India of persons resident outside India,  and  includes  t ansactions referred to in sub-section (3) of  section  6;
 (f)   "Chairperson"  means  the   Chairperson  of  the  Appellate  Tribunal;

 (g)  "chartered accountant" shall have the meaning assigned to it  in  clause  (b) of sub-section (1) of section 2 of the  Chartered  Accounts Act, 1949 (38 of 1949);

(h)  "currency" includes all currency notes, postal notes, postal  orders, money orders, cheques, drafts, travelers cheques, letters  of  credit, bills of exchange and promissory notes, credit  cards  or  such  other  similar instruments, as may be notified  by  the  Reserve Bank;      (i) "currency notes" means and includes cash in the form of coins  and bank notes;
(j)  "current account transaction" means a transaction other than  a  capital  account  transaction  and without  prejudice  to  the  generality of the foregoing such transaction includes,-
 (i)  payments due in connection with foreign trade, other current  business,  services, and short-term banking and credit facilities  in the ordinary course of business,
 (ii)  payments  due as interest on loans and as net  income  from  investments,    (iii)  remittances  for  living expenses of parents,  spouse  and  children residing abroad, and    (iv)  expenses  in connection with foreign travel, education  and  medical care of parents, spouse and children;

 (k)  "Director of Enforcement" means the Director of  Enforcement  appointed under sub-section (1) of section 36;
(l)  "export",  with  its   grammatical  variations  and  cognate  expressions,  means-    (i) the taking out of India to a place outside India any goods,    (ii)  provision  of  services from India to  any  person  outside  India;
(m)  "foreign  currency"  means any currency  other  than  Indian  currency;    (n) "foreign exchange" means foreign currency and includes,-    (i)  deposits,  credits  and  balances  payable  in  any  foreign  currency,    (ii)  drafts,  travelers cheques, letters of credit or  bills  of exchange,  expressed  or drawn in Indian currency but payable  in  any foreign currency,    (iii)  drafts,  travelers cheques, letters of credit or bills  of  exchange  drawn by banks, institutions or persons outside  India,  but payable in Indian currency;  

(o) "foreign security" means any security, in the form of shares,  stocks,  bonds, debentures or any other instrument denominated or  expressed  in foreign currency and includes securities  expressed  in  foreign currency, but where redemption or any form of re  urn  such as interest or dividends is payable in Indian currency;  

 (p)  "import",  with  its   grammatical  variations  and  cognate  expressions, means bringing into India any goods or services;  

 (q)  "Indian currency" means currency which is expressed or drawn  in  Indian  rupees  but does not include special bank  notes  and  special  one rupee notes issued under section 28A of the  Reserve  Bank of India Act, 1934 (2 of 1934);    

 (r) "legal practitioner" shall have the meaning assigned to it in  clause  (i) of sub-section (1) of section 2 of the Advocates Act,  1961 (25 of 1961);  

 (s)  "Member"  means  a  Member of  the  Appellate  Tribunal  and  includes the Chairperson thereof;    (t)  "notify"  means  to notify in the Official Gazette  and  the  expression "notification" shall be construed accordingly;    (u) "person" includes-    (i) an individual,    (ii) a Hindu undivided family,    (iii) a company,    (iv) a firm,    (v)  an association of persons or a body of individuals,  whether  incorporated or not,    (vi) every artificial juridical person, not falling within any of  the preceding sub-clauses, and    (vii)  any  agency, office or branch owned or controlled by  such  person;    (v)  "person  resident in India" means- (i) a person residing  in  India  for  more than one hundred and eighty-two days during  the  course of the preceding financial year but does not include-  

 (A)  a  person  who has gone out of India or  who  stays  outside  India, in either case-    (a) for or on taking up employment outside India, or    (b)  for carrying on outside India a business or vocation outside  India, or    (c)  for  any  other  purpose, in  such  circumstances  as  would  indicate  his  intention to stay outside India for  an  uncertain  period;  

 (B)  a person who has come to or stays in India, in either  case,  otherwise than-    (a) for or on taking up employment in India, or    (b) for carrying on in India a business or vocation in India, or    (c)(i)  for  any  other purpose, in such circumstances  as  would  indicate his intention to stay in India for an uncertain period;    (ii)  any person or body corporate registered or incorporated  in  India,    (iii) an office, branch or agency in India owned or controlled by  a person resident outside India,    (iv)  an  office,  branch  or   agency  outside  India  owned  or  controlled by a person resident in India;  

 (w)  "person  resident outside India" means a person who  is  not  resident in India;  

 (x) "prescribed" means prescribed by rules made under this Act;  

 (y)  "repatriate to India" means bringing into India the realized  foreign exchange and-  
 (i)  the selling of such foreign exchange to an authorized person  in India in exchange for rupees, or
   (ii)  the  holding  of  realized amount in  an  account  with  an  authorized  person in India to the extent notified by the Reserve  Bank,  and includes use of the realized amount for discharge of a  debt  or  liability  denominated  in  foreign  exchange  and  the  expression "repatriation" shall be construed accordingly;  

   (z)  "Reserve  Bank" means the Reserve Bank of India  constituted  under  sub-section (1) of section 3 of the Reserve Bank of  India  Act, 1934 (2 of 1934);    (za)  "security"  means  shares, stocks,  bonds  and  debentures,  Government securities as defined in the Public Debt Act, 1944 (18  of  1944),  savings certificates to which the Government  Savings  Certificates  Act, 1959 (46 of 1959) applies, deposit receipts in  espect  of deposits of securities and units of the Unit Trust  of  India  established under sub-section (1) of section 3 of the Unit  Trust  of India Act, 1963 (52 of 1963) or of any mutual fund  and  includes  certificates  of title to securities, but does  not  in  lude  bills of exchange or promissory notes other than Government  promissory  notes or any other instruments which may be  notified  by the Reserve Bank as security for the purposes of this Act;    (zb)  "service"  means service of any description which  is  made  available  to  potential  users  and includes  the  provision  of  facilities  in  connection  with banking,  financing,  insurance,  medical  assistance,  legal assistance, chit fund,  real  estate,  transport,  processing,  supply  of electrical or  other  energy,  boarding  or  lodging  or both, entertainment, amusement  or  the  purveying  of news or other information, but does not include the  rendering  of  any service free of charge or under a contract  of  personal servic ;    (zc)  "Special  Director  (Appeals)" means an  officer  appointed  under section 18;    (zd)  "specify"  means to specify by regulations made under  this  Act   and   the  expression   "specified"  shall   be   construed  accordingly;    (ze)  "transfer"  includes  sale, purchase,  exchange,  mortgage,  pledge, gift, loan or any other form of transfer of right, title,  possession or lien.                           

  CHAPTER II           

 3.   Dealing in foreign exchange, etc.-Save as otherwise provided  in  this  Act, rules or regulations made thereunder, or with  the  general  or  special  permission of the Reserve Bank,  no  person  shall-    (a)  deal in or transfer any foreign exchange or foreign security  to any person not being an authorized person;    (b)  make any payment to or for the credit of any person resident  outside India in any manner;    (c)  receive otherwise through an authorized person, any  payment  by order or on behalf of any person resident outside India in any  manner.   Explanation.-For the purpose of this clause, where  any  person in, or resident in, India receives any payment by order or  on  behalf of any person resident outside India through any other  person  (including an authorized person) without a  corresponding  inwa d remittance from any place outside India, then, such person  shall  be  deemed  to have received such payment  otherwise  than  through an authorized person;    (d)   enter   into  any  financial   transaction  in   India   as  consideration  for or in association with acquisition or creation  or transfer of a right to acquire, any asset outside India by any  person.  

Explanation.-For the purpose of this clause, "financial  transaction"  means  making any payment to, or for the credit  of  any  person, or receiving any payment for, by order or on  behalf  of  any  person, or drawing, issuing or negotiating any  bill  of  exchange  r  promissory  note, or transferring  any  security  or  acknowledging any debt.  

4.   Holding of foreign exchange, etc.-Save as otherwise provided  in  this  Act, no person resident in India shall  acquire,  hold,  own,  possess or transfer any foreign exchange, foreign  security  or any immovable property situated outside India.

 5.   Current  account transactions.-Any person may sell  or  draw  foreign  exchange to or from an authorized person if such sale or  drawal  is  a  current account transaction:   Provided  that  the  Central  Government  may, in public interest and in  consultation  with  the  Reserve Bank, impose such reasonable restrictions  for  current account transactions as may be prescribed.

 6.  Capital account transactions.  -

(1) Subject to the provisions  of  sub-section

(2), any person may sell or draw foreign exchange  to   or  from  an  authorized   person  for  a  capital   account  transaction.    (2)  The  Reserve  Bank  may, in consultation  with  the  Central  Government, specify-    (a)  any  class or classes of capital account transactions  which  are permissible;    (b)  the  limit up to which foreign exchange shall be  admissible  for  such transactions:  Provided that the Reserve Bank shall not  impose  any  restriction  on the drawal of foreign  exchange  for  payments  due  on  account  of   amortization  of  loans  or  for  depreciation  of  direct  investments in the ordinary  courts  of  business.    

(3)  Without  prejudice  to the generality of the  provisions  of  sub-section  (2), the Reserve Bank may, by regulations, prohibit,  restrict or regulate the following-    (a)  transfer  or  issue  of any foreign  security  by  a  person  resident in India;    (b)  transfer  or  issue  of any security by  a  person  resident  outside India;    (c)  transfer or issue of any security or foreign security by any  branch,  office  or agency in India of a person resident  outside  India;    (d)  any  borrowing or lending in rupees in whatever form  or  by  whatever name called;    (e)  any  borrowing or lending in rupees in whatever form  or  by  whatever  name  called between a person resident in India  and  a  person resident outside India;    (f)  deposits  between  persons  resident in  India  and  persons  resident outside India;    (g) export, import or holding of currency or currency notes;    (h)  transfer  of immovable property outside India, other than  a  lease not exceeding five years, by a person resident in India;    (i) acquisition or transfer of immovable property in India, other  than  a  lease  not exceeding five years, by  a  person  resident  outside India;    (j)  giving  of  a guarantee or surety in respect  of  any  debt,  obligation or other liability incurred-    (i)  by a person resident in India and owed to a person  resident  outside India;  or    (ii) by a person resident outside India.    

(4)  A person resident in India may hold, own, transfer or invest  in  foreign currency, foreign security or any immovable  property  situated outside India if such currency, security or property was  acquired,  held  or  owned by such person when  he  was  resident  outside India or inherited from a person who was resident outside  India.    

(5)  A  person resident outside India may hold, own, transfer  or  invest  in  Indian currency, security or any  immovable  property  situated  in  India  if such currency, security or  property  was  acquired,  held  or owned by such person when he was resident  in  India or inherited from a person who was resident in India.  

 (6)  Without  prejudice  to the provisions of this  section,  the  Reserve  Bank may, by regulation, prohibit, restrict, or regulate  establishment  in  India  of a branch, office or other  place  of  business  by a person resident outside India, for carrying on any  activity  relating  to  such  branch, office or  other  place  of  business.  

(7).   Export  of goods and services.-
(1) Every exporter  of  goods  shall-    (a)  furnish  to  the Reserve Bank or to such other  authority  a  declaration  in such form and in such manner as may be specified,  containing  true and correct material particulars, including  the  amount  representing the full export value or, if the full export  value  of  the goods is not ascertainable at the time of  export,  the  value  which the exporter, having regard to  the  prevailing  market conditions, expects to receive on the sale of the goods in  a market outside India;    (b)  furnish to the Reserve Bank such other information as may be  required  by  the  Reserve Bank for the purpose of  ensuring  the  realization of the export proceeds by such exporter.    

(2)  The  Reserve Bank may, for he purpose of ensuring  that  the  full export value of the goods or such reduced value of the goods  as  the Reserve Bank determines, having regard to the  prevailing  market  conditions,  is received without any delay, direct any  e  porter to comply with such requirements as it deems fit.    

(3)  Every exporter of services shall furnish to the Reserve Bank  or  to  such other authorities a declaration in such form and  in  such  manner as may be specified, containing the true and correct  material particulars in relation to payment for such services

 8.   Realisation  and repatriation of foreign  exchange.-Save  as  otherwise  provided  in  this Act, where any  amount  of  foreign  exchange  is due or has accrued to any person resident in  India,  such  person  shall  take  all reasonable steps  to  realize  and  repatriate  to India such foreign exchange within such period and  in such manner as may be specified by the Reserve Bank.

 9.  Exemption from realization and repatriation in certain cases.  -The  provisions  of  sections  4 and 8 shall not  apply  to  the  following, namely:-    (a) possession of foreign currency or foreign coins by any person  up to such limit as the Reserve Bank may specify;    (b)  foreign currency account held or operated by such person  or  class  of persons and the limit up to which the Reserve Bank  may  specify;    (c)  foreign exchange acquired or received before the 8th day  of  July,  1947 or any income arising or accruing thereon which is he  ld  outside India by any person in pursuance of a general or spec  ial permission granted by the Reserve Bank;    (d)  foreign exchange held by a person resident in India up to su  ch  limit as the Reserve Bank may specify, if such foreign exchan  ge  was acquired by way of gift or inheritance from a person refe  rred to in clause (c), including any income arising therefrom;    (e)  foreign exchange acquired from employment, business,  trade,  vocation,  services, honorarium, gifts, inheritance or any  other  legitimate  means up to such limit as the Reserve Bank may specif  y;  and    (f)  such other receipts in foreign exchange as the Reserve  Bank  may specify.                              

CHAPTER III                         

10.   Authorised  person.-

(1)  The  Reserve   Bank  may,  on   an  application made to it in this behalf, authorize any person to be  known  as  authorized  person to deal in foreign exchange  or  in  foreign  securities,  as an authorized dealer, money  changer  or  off-shore anking unit or in any other manner as it deems fit.  

 (2)  An authorization under this section shall be in writing  and  shall be subject to the conditions laid down therein.  

 (3) An authorization granted under sub-section (1) may be revoked  by  the Reserve Bank at any time if the Reserve Bank is satisfied  that-    (a) it is in public interest so to do;  or    (b) the authorized person has failed to comply with the condition  subject to which the authorization was granted or has contravened  any  of  the  provisions  of the Act  or  any  rule,  regulation,  notification, direction or order made thereunder:    Provided  that  no  such authorization shall be  revoked  on  any  ground referred to in clause (b) unless the authorized person has  been given a reasonable opportunity of making a representation in  the matter.    

(4)  An  authorized person shall, in all his dealings in  foreign  exchange or foreign security, comply with such general or special  directions  or orders as the Reserve Bank may, from time to time,  think fit to give, and, except with the previous permission f the  Reserve  Bank,  an  authorized  person shall not  engage  in  any  transaction  involving  any foreign exchange or foreign  security  which  is  not in conformity with the terms of his  authorization  under this section.  

 (5)   An   authorized  person   shall,  before  undertaking   any  transaction  in foreign exchange on behalf of any person, require  that person to make such declaration and to give such information  as  will  reasonably  satisfy him that the transaction  will  not  involve  and is not designed for the purpose of any contravention  or  evasion  of  the  provisions  of this Act  or  of  any  rule,  regulation, notification, direction or order made thereunder, and  where the said person refuses to comply with any such requirement  or  make only unsatisfactory compliance therewith, the authorized  person  shall refuse in writing to undertake the transaction  and  shall, if he has reason to believe that any such contravention or  evasion  as  aforesaid is contemplated by the person, report  the  mat er to the Reserve Bank.  

 (6) Any person, other than an authorized person, who has acquired  or  purchased  foreign exchange for any purpose mentioned in  the  declaration  made  by him to authorized person under  sub-section  (5)  does not use it for such purpose or does not surrender it  o  authorized person within the specified period or uses the foreign  exchange so acquired or purchased for any other purpose for which  purchase  or  acquisition or foreign exchange is not  permissible  under  the  provisions of the Act or the rules or regulations  or  direction  or  order  made  thereunder shall be  deemed  to  have  committed  contravention  of  the provisions of the Act  for  the  purpose of this section.  

 11.   Reverve  Bank's  powers to issue directions  to  authorized  person.-(1)  The  Reserve Bank may, for the purpose  of  securing  compliance  with  the  provisions of this Act and of  any  rules,  regulations, notifications or directions made thereunder, give to  the  a  thorized  persons any direction in regard  to  making  of  payment  or  the doing or desist from doing any act  relating  to  foreign exchange or foreign security.    (2)  The  Reserve  Bank  may, for the  purpose  of  ensuring  the  compliance  with  the  provisions  of this Act or  of  any  rule,  regulation,  notification,  direction or order  made  thereunder,  direct any authorized person to furnish such information, in such  manner, a it deems fit.    (3)  Where any authorized person contravenes any direction  given  by the Reserve Bank under this Act or fails to file any return as  directed  by the Reserve Bank, the Reserve Bank may, after giving  person  a penalty which may extend to ten thousand rupees and  in  the  case of continuing contravention with an additional  penalty  which  may  extend  to two thousand rupees for every  day  during  which  such  contravention continues.  reasonable opportunity  of  being heard, impose on the author sed

 12.   Power of Reserve Bank to inspect authorised person.-(1) The  Reserve Bank may, at any time, cause an inspection to be made, by  any  officer of the Reserve Bank specially authorised in  writing  by  the  Reserve  Bank in this behalf, of the business of  any  a  thorised  person as may appear to it to be necessary or expedient  for the purpose of-    (a)  verifying  the correctness of any statement, information  or  particulars furnished to the Reserve Bank;    (b)   obtaining  any  information  or  particulars   which   such  authorised  person has failed to furnish on being called upon  to  do so;    (c) securing compliance with the provisions of this Act or of any  rules, regulations, directions or orders made thereunder.    (2)  It  shall be the duty of every authorised person, and  where  such  person  is a company or a firm, every director, partner  or  other  officer  of such company or firm, as the case may  be,  to  produce  to  any officer making an inspection  under  sub-section  (1),  such books, accounts and other documents in his custody  or  power and to furnish any statement or information relating to the  affairs  of such person, company or firm as the said officer  may  require within such time and in such manner as the said officer m  y direct.                            

CHAPTER IV                    

 13.   Penalties.-(1)  If any person contravenes any provision  of  this  Act,  or  contravenes any rule,  regulation,  notification,  direction  or  order issued in exercise of the powers under  this  Act,   or  contravenes  any  condition   subject  to   which   an  authorization  s  issued  by  the Reserve Bank,  he  shall,  upon  adjudication,  be  liable  to  a penalty up  to  thrice  the  sum  involved in such contravention where such amount is quantifiable,  or  up  to two lakh rupees where the amount is not  quantifiable,  and where such contrav ntion is a continying one, further penalty  which  may extend to five thousand rupees for every day after the  first day during which the contravention continues.    (2)  Any Adjudicating Authority adjudging any contravention under  sub-section (1), may, if he thinks fit in addition to any penalty  which  he  may  impose  for such contravention  direct  that  any  currency,  security or any other money or property in respect  of  hich  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.  

 Explanation.-For  the purposes of this sub-section, "property" in  respect of which contravention has taken place, shall include-    (a) deposits in a bank, where the said property is converted into  such deposits;    (b)  Indian  currency, where the said property is converted  into  that currency;  and    (c)  any other property which has resulted out of the  conversion  of that property.    

 14.    Enforcement of te orders of Adjudicating Authority.      

14.   Enforcement  of the orders of  Adjudicating  Authority.-

(1)  Subject  to  the provisions of sub-section (2) of section 19,  if  any  person fails to make full payment of the penalty imposed  on  him under section 13 within a period of ninety days from the date  n  which the notice for payment of such penalty is served on him,  he shall be liable to civil imprisonment under this section.  

 (2)  No  order for the arrest and detention in civil prison of  a  defaulter  shall  be made unless the Adjudication  Authority  has  issued and served a notice upon the defaulter calling upon him to  appear before him on the date specified in the notice and to sh w  cause  why  he should not be committed to the civil  prison,  and  unless  the  Adjudicating Authority, for reasons in  writing,  is  satisfied-    (a)  that the defaulter, with the object or effect of obstructing  the  recovery  of penalty, has after the issue of notice  by  the  Adjudicating  Authority,  dishonestly transferred, concealed,  or  removed any part of his property, or    (b)  that  the  defaulter has, or has had since  the  issuing  of  notice  by  the  Adjudicating  Authority, the means  to  pay  the  arrears  or some substantial part thereof and refuses or neglects  or has refused or neglected to pay the same.    

(3)  Notwithstanding  anything  contained in sub-section  (1),  a  warrant  for  the  arrest of the defaulter may be issued  by  the  Adjudicating   Authority  if  the   Adjudicating   Authority   is  satisfied,  by  affidavit or otherwise, that with the  object  or  effect of dela ing the execution of the certificate the defaulter  is  likely  to  abscond  or  leave   the  local  limits  of   the  jurisdiction of the Adjudicating Authority.    

(4)  Where appearance is not made pursuant to a notice issued and  served  under  sub-section  (1), the Adjudicating  Authority  may  issue a warrant for the arrest of the defaulter.    

(5)  A  warrant  of arrest issued by the  Adjudicating  Authority  under  sub-section (3) or sub-section (4) may also be executed by  any  other  Adjudicating Authority within whose jurisdiction  the  defaulter may for the time being be found.  

 (6)  Every  person arrested in pursuance of a warrant  of  arrest  under  this  section  shall be brought  before  the  Adjudicating  Authority  issuing the warrant as soon as practicable and in  any  event  within  twenty-four hours of his arrest (exclusive of  the  time equired for the journey):    Provided  that,  if the defaulter pays the amount entered in  the  warrant  of  arrest  as due and the costs of the  arrest  to  the  officer arresting him, such officer shall at once release him.    Explanation.-For  the  purposes  of this sub-section,  where  the  defaulter is a Hindu undivided family, the karta thereof shall be  deemed to be the defaulter.    

(7)  When  a defaulter appears before the Adjudicating  Authority  pursuant  to  a  notice to show cause or is  brought  before  the  Adjudicating  Authority  under  this  section,  the  Adjudicating  Authority  shall give the defaulter an opportunity showing  cause  why  he hould not be committed to the civil prison. 

(8)  Pending  the conclusion of the inquiry, the Adjudicating Authority may, in  his discretion, order the defaulter to be detained in the custody  of  such  officer as the Adjudicating Authority may think fit  or  release him on his furnishing the security to t e satisfaction of  the  Adjudicating  Authority  for  his  appearance  as  and  when  required.    

(9)  Upon  the  conclusion  of   the  inquiry,  the  Adjudicating  authority may make an order for the detention of the defaulter in  the civil prison and shall in that event cause him to be arrested  if he is not already under arrest:  Provide that in order to give  a  defaulter  an  opportunity  of  satisfying  the  arrears,  the  Adjudicating Authority may, before making the order of detention,  leave  the defaulter in the custody of the officer arresting  him  or  of  any  other officer for a specif ed period  not  exceeding  fifteen  days,  or release him on his furnishing security to  the  satisfaction  of the Adjudicating Authority for his appearance at  the  expiration  of the specified period if the arrears  are  not  satisfied.  

 (10)  When  the Adjudicating Authority does not make an order  of  detention  under  sub-section (9), he shall, if the defaulter  is  under arrest, direct his release.    

(11)  Every  person detained in the civil prison in execution  of  the certificate may be so detained,-    (a)  where the certificate is for a demand of an amount exceeding  rupees one crore, up to three years, and    (b) in any other case, up to six months:    Provided  that  he shall be released from such detention  on  the  amount  mentioned in the warrant for his detention being paid  to  the officer-in-charge of the civil prison.  

 (12) A defaulter released from detention under this section shall  not,  merely  by  reason of his release, be discharged  from  his  liability  for  the  arrears, but he shall not be  liable  to  be  arrested  under  the  certificate in execution of  which  he  was  detaine in the civil prison.  

 (13)  A detention order may be executed at any place in India  in  the  manner provided for the execution of warrant of arrest under  the Code of Criminal Procedure, 1973 (2 of 1974).  

15.  Power to compound contravention.-(1) Any contravention under  section  13 may, on an application made by the person  committing  such  contravention, be compounded within one hundred and  eighty  days  from  the date of receipt of application by the Director of  Enforcement  or  such  other  officers   of  the  Directorate  of  Enforcement and officers of the Reserve Bank as may be authorised  in this behalf by the Central Government in such manner as may be  prescribed.    (2)  Where a contravention has been compounded under  sub-section  (1),  no  proceeding or further proceeding, as the case  may  be,  shall  be initiated or continued, as the case may be, against the  person  committing  such contravention under that section, in  re  pect of the contravention so compounded.                                 

CHAPTER V                      

16.   Appointment of Adjudicating Authority.-(1) For the  purpose  of  adjudication under section 13, the Central Government may, by  an  order  published  in the Official Gazette,  appoint  as  many  officers  of  the Central Government as it may think fit, as  the  Adj  dicating  Authorities for holding an inquiry in  the  manner  prescribed  after  giving  the person alleged to  have  committed  contravention under section 13, against whom a complaint has been  made  under sub-section (3) (hereinafter in this section referred  to a the said person) a reasonable opportunity of being heard for  the purpose of imposing any penalty:    Provided that where the Adjudicating Authority is of opinion that  the said person is likely to abscond or is likely to evade in any  manner, the payment of penalty, if levied, it may direct the said  person  to furnish a bond or guarantee for such amount an subject  to such conditions as it may deem fit.    (2)   The   Central  Government   shall,  while  appointing   the  Adjudicating  Authorities under sub-section (1), also specify  in  the  order  published in the Official Gazette,  their  respective  jurisdictions.    (3)  No  Adjudicating  Authority  shall  hold  an  enquiry  under  sub-section  (1)  except upon a complaint in writing made by  any  officer  authorised by a general or special order by the  Central  Government.    (4)  The  said  person may appear either in person  or  take  the  assistance  of a legal practitioner or a chartered accountant  of  his  choice  for  presenting  his case  before  the  Adjudicating  Authority.    (5)  Every Adjudicating Authority shall have the same powers of a  civil  court which are conferred on the Appellate Tribunal  under  sub-section (2) of section 28 and-    (a)  all  proceedings  before it shall be deemed to  be  judicial  proceedings  within  the meaning of sections 193 and 228  of  the  Indian Penal Code (45 of 1860);    (b)  shall  be  deemed to be a civil court for  the  purposes  of  sections  345 and 346 of the Code of Criminal Procedure, 1973  (2  of 1974).    (6)  Every  Adjudicating Authority shall deal with the  complaint  under  sub-section (2) as expeditiously as possible and  endeavor  shall be made to dispose of the complaint finally within one year  from the date of receipt of the complaint:    Provided  that  where the complaint cannot be disposed of  within  the   said  period,  the   Adjudicating  Authority  shall  record  periodically  the  reasons  in writing for not disposing  of  the  complaint within the said period.  

17.   Appeal  to  Special  Director  (Appeals).-(1)  The  Central  Government  shall,  by notification, appoint one or more  Special  Directors  (Appeals)  to hear appeals against the orders  of  the  Adjudicating  Authorities  under  this  section  and  shall  also  specify  in  t  e  said notification the  matter  and  places  in  relation  to  which the Special Director (Appeals)  may  exercise  jurisdiction.    (2)  Any  person aggrieved by an order made by  the  Adjudicating  Authority, being an Assistant Director of Enforcement or a Deputy  Director  of  Enforcement,  may prefer an appeal to  the  Special  Director (Appeals).    (3)  Every  appeal  under sub-section (1) shall be  filed  within  forty-five days from the date on which the copy of the order made  by the Adjudicating Authority is received by the aggrieved person  and  it  shall  be in such form, verified in such manner  and  be  ccompanied by such fee as may be prescribed:    Provided  that  the Special Director (Appeals) may  entertain  an  appeal after the expiry of the said period of forty-five days, if  he is satisfied that there was sufficient cause for not filing it  within that period.    (4)  On  receipt of an appeal under sub-section (1), the  Special  Director  (Appeals) may after giving the parties to the appeal an  opportunity  of being heard, pass such order thereon as he thinks  fit,  confirming,  modifying or setting aside the  order  appeale  against.    (5)  The  Special Director (Appeals) shall send a copy  of  every  order  made by him to the parties to appeal and to the  concerned  Adjudicating Authority.    (6)  The Special Director (Appeals) shall have the same powers of  a civil court which are conferred on the Appellate Tribunal under  sub-section (2) of section 28 and-    (a)  all  proceedings before him shall be deemed to  be  judicial  proceedings  within  the meaning of sections 193 and 228  of  the  Indian Penal Code (45 of 1860);    (b)  shall  be  deemed to be a civil court for  the  purposes  of  sections  345 and 346 of the Code of Criminal Procedure, 1973  (2  of 1974).  

18.   Establishment of Appellate Tribunal.-The Central Government  shall,  by  notification, establish an Appellate Tribunal  to  be  known  as  the  Appellate Tribunal for Foreign Exchange  to  hear  appeals  against  the orders of the Adjudicating Authorities  and  the pecial Director (Appeals) under this Act.  

 19.   Appeal  to  Appellate  Tribunal.-(1) Save  as  provided  in  sub-section  (2), the Central Government or any person  aggrieved  by  an order made by an Adjudicating Authority, other than  those  referred  to  in  sub-section (1) of section 17, or  the  Special  Director  (Appeals),  may  prefer  an   appeal  to  the  Appellate  Tribunal:    Provided  that  any  person appealing against the  order  of  the  Adjudicating  Authority or the Special Director (Appeals) levying  any penalty, shall while filing the appeal, deposit the amount of  such  penalty with such authority as may be notified by the  Central Government:    Provided further that where in any particular case, the Appellate  Tribunal is of the opinion that the deposit of such penalty would  cause  undue hardship to such person, the Appellate Tribunal  may  dispense  with  such deposit subject to such conditions as i  may  deem fit to impose so as to safeguard the realisation of penalty.    (2)  Every  appeal under sub-section (1) shall be filed within  a  period  of  forty-five days from the date on which a copy of  the  order  made by the Adjudicating Authority or the Special Director  (Appeals)  is received by the aggrieved person or by the  Central  Government  and it shall be in such form, verified in such manner  and  be accompanied by such fee as may be prescribed :   Provided  that  the  Appellate Tribunal may entertain an appeal  after  the  expiry  of the said period of forty-five days if it is  satisfied  that  there  was sufficient cause for not filing it  within  that  period.    (3)  On receipt of an appeal under sub-section (1), the Appellate  Tribunal  may,  after  giving  the   parties  to  the  appeal  an  opportunity of being heard, pass such orders thereon as it thinks  fit,  confirming,  modifying or setting aside the order  appealed  agai st.    (4)  The Appellate Tribunal shall send a copy of every order made  by  it  to  the  parties  to the  appeal  and  to  the  concerned  Adjudicating  Authority or the Special Director (Appeals), as the  case may be.    (5)  The  appeal  filed  before   the  Appellate  Tribunal  under  sub-section  (1)  shall be dealt with by it as  expeditiously  as  possible  and  endeavour  shall be made by it to dispose  of  the  appeal  finally within one hundred and eighty days from the  date  of receipt of the appeal:    Provided  that  where any appeal could not be disposed of  within  the  said  period of one hundred and eighty days,  the  Appellate  Tribunal  shall  record its reasons in writing for not  disposing  off the appeal within the said period.    (6)  The Appellate Tribunal may, for the purpose of examining the  legality,  propriety  or  correctness of any order  made  by  the  Adjudicating  Authority  under  section  16 in  relation  to  any  proceeding,  on its own motion or otherwise, call for the records  of  su h proceedings and make such order in the case as it thinks  fit.  

20.   Composition  of  Appellate   Tribunal.-(1)  The   Appellate  Tribunal  shall  consist  of  a Chairperson and  such  number  of  Members as the Central Government may deem fit.    (2) Subject to the provisions of this Act,-    (a)  the jurisdiction of the Appellate Tribunal may be  exercised  by Benches thereof;    (b)  a  Bench may be constituted by the Chairperson with  one  or  more Members as the Chairperson may deem fit;    (c) the Benches of the Appellate Tribunal shall ordinarily sit at  New Delhi and at such other places as the Central Government may,  in consultation with the Chairperson, notify;    (d)  the Central Government shall notify the areas in relation to  which  each  Bench  of  the   Appellate  Tribunal  may   exercise  jurisdiction.    (3)  Notwithstanding  anything contained in sub-section (2),  the  Chairperson  may  transfer  a Member from one  Bench  to  another  Bench.    (4)  If  at  any stage of the hearing of any case  or  matter  it  appears to the Chairperson or a Member that the case or matter is  of  such a nature that it ought to be heard by a Bench consisting  of  two Members, the case or matter may be transferred by the  Ch  irperson or, as the case may be, referred to him for transfer, to  such Bench as the Chairperson may deem fit.    Qualifications for appointment of Chairperson, Member andSpecial Director  (Appeals).  

 21.   Qualifications  for appointment of Chairperson, Member  and  Special  Director (Appeals).-(1) A person shall not be  qualified  for appointment as the Chairperson or a Member unless he-    (a)  in the case of Chairperson, is or has been, or is  qualified  to be, a Judge of a High Court;  and    (b)  in the case of a Member, is or has been, or is qualified  to  be, a District Judge.    (2)  A person shall not be qualified for appointment as a Special  Director (Appeals) unless he-    (a)  has been a member of the Indian Legal Service and has held a  post in Grade I of that Service;  or    (b)  has been a member of the Indian Revenue Service and has held  a  post  equivalent  to a Joint Secretary to  the  Government  of  India.    

22.  Term of office.-The Chairperson and every other Member shall  hold  office  as such for a term of five years from the  date  on  which he enters upon his office:  Provided that no Chairperson or  other Member shall hold office as such after he has attained,-    (a) in the case of the Chairperson, the age of sixty-five years;    (b) in the case of any other Member, the age of sixty-two years.  

23.   Terms and conditions of service.-The salary and  allowances  payable  to and the other terms and conditions of service of  the  Chairperson,  other  Members and the Special  Director  (Appeals)  shall be such as may be prescribed:    Provided  that  neither the salary and allowances nor  the  other  terms  and  conditions of service of the Chairperson or a  Member  shall be varied to his disadvantage after appointment.  

24.   Vacancies.-If, for reason other than temporary absence, any  vacancy  occurs in the office of the Chairperson or a Member, the  Central  Government  shall appoint another person  in  accordance  with  the provisions of this Act to fill the vacancy and the  pro  eedings  may be continued before the Appellate Tribunal from  the  stage at which the vacancy is filled.    

25.   Resignation  and removal.-(1) The Chairperson or  a  Member  may, by notice in writing under his hand addressed to the Central  Government, resign his office:    Provided  that  the Chairperson or a Member shall, unless  he  is  permitted  by  the  Central Government to relinquish  his  office  sooner,  continue to hold office until the expiry of three months  from  the  date of receipt of such notice or until a person  duly  app  inted  as his successor enters upon his office or until  the  expiry of term of office, whichever is the earliest.    (2)  The  Chairperson or a Member shall not be removed  from  his  office except by an order by the Central Government on the ground  of  proved  misbehaviour or incapacity after an inquiry  made  by  such  person as the President may appoint for this purpose in whi  h  the Chairperson or a Member concerned has been informed of the  charges  against him and given a reasonable opportunity of  being  heard in respect of such charges.

 26.   Member to act as Chairperson in certain  circumstances.-(1)  In  the  event of the occurrence of any vacancy in the office  of  the Chairperson by reason of his death, resignation or otherwise,  the senior-most Member shall act as the Chairperson until the ate  on  which  a  new Chairperson, appointed in accordance  with  the  provisions  of  this  Act to fill such vacancy, enters  upon  his  office.    (2)  When  the Chairperson is unable to discharge  his  functions  owing  to  absence, illness or any other cause,  the  senior-most  Member shall discharge the functions of the Chairperson until the  date on which the Chairperson resumes his duties.  

 27.    Staff   of  Appellate   Tribunal  and   Special   Director  (Appeals).-(1) The Central Government shall provide the Appellate  Tribunal  and  the Special Director (Appeals) with such  officers  and employees as it may deem fit.    (2)  The  officers  and employees of the Appellate  Tribunal  and  office  of  the Special Director (Appeals) shall discharge  their  functions  under  the general superintendence of the  Chairperson  and the Special Director (Appeals), as the case may be.    (3)  The salaries and allowances and other conditions of  service  of  the  officers  and employees of the  Appellate  Tribunal  and  office  of the Special Director (Appeals) shall be such as may be  prescribed.  

 28.   Procedure  and  powers of Appellate  Tribunal  and  Special  Director  (Appeals).-(1)  The Appellate Tribunal and the  Special  Director  (Appeals) shall not be bound by the procedure laid down  by  the  Code of Civil Procedure, 1908 (5 of 1908), but shall  be  guid  d by the principles of natural justice and, subject to  the  other  provisions  of  this Act, the Appellate Tribunal  and  the  Special  Director (Appeals) shall have powers to regulate its own  procedure.    

(2)  The  Appellate Tribunal and the Special  Director  (Appeals)  shall  have, for the purposes of discharging its functions  under  this  Act,  the same powers as are vested in a civil court  under  the Code of Civil Procedure, 1908 (5 of 1908) while trying a suit  in respect of the following matters, namely:-    (a)  summoning  and  enforcing the attendance of any  person  and  examining him on oath;    (b) requiring the discovery and production of documents;    (c) receiving evidence on affidavits;    (d)  subject  to  the provisions of sections 123 and 124  of  the  Indian  Evidence Act, 1872 (1 of 1872), requisitioning any public  record  or  document or copy of such record or document from  any  office;    (e)  issuing  commissions  for the examination  of  witnesses  or  documents;    (f) reviewing its decisions;    (g)  dismissing  a  representation of default or deciding  it  ex  parte;    (h)  setting  aside any order of dismissal of any  representation  for default or any order passed by it ex parte;  and    (i)  any  other  matter which may be prescribed  by  the  Central  Government.    

(3)  An  order  made  by the Appellate Tribunal  or  the  Special  Director  (Appeals)  under  this Act shall be executable  by  the  Appellate  Tribunal or the Special Director (Appeals) as a decree  of  civil court and, for this purpose, the Appellate Tribunal and  the  pecial  Director  (Appeals) shall have all the powers  of  a  civil court.  

 (4)  Notwithstanding  anything contained in sub-section (3),  the  Appellate Tribunal or the Special Director (Appeals) may transmit  any  order made by it to a civil court having local  jurisdiction  and  such  civil  court shall execute the order as if it  were  a  ecree made by that court.  

 (5) All proceedings before the Appellate Tribunal and the Special  Director  (Appeals)  shall be deemed to be  judicial  proceedings  within  the  meaning of sections 193 and 228 of the Indian  Penal  Code  (45 of 1860) and the Appellate Tribunal shall be deemed  to  be  a civil court for the purposes of sections 345 and 346 of the  Code of Criminal Procedure, 1973 (2 of 1974).  

 29.   Distribution of business amongst Benches.-Where Benches are  constituted,  the  Chairperson  may,  from   time  to  time,   by  notification,  make  provisions  as to the  distribution  of  the  business  of the Appellate Tribunal amongst the Benches and  also  provide fo the matters which may be dealt with by each Bench.  

30.   Power of Chairperson to transfer cases.-On the  application  of  any of the parties and after notice to the parties, and after  hearing  such of them as he may desire to be heard, or on his own  motion  without such notice, the Chairperson may transfer any ase  pending before one Bench, for disposal, to any other Bench.  Decision to be by majority.  

 31.   Decision  to  be  by majority.-If the Members  of  a  Bench  consisting  of  two Members differ in opinion on any point,  they  shall  state the point or points on which they differ, and make a  reference  to the Chairperson who shall either hear the point  or  poi  ts  himself or refer the case for hearing on such  point  or  points  by  one  or more of the other Members  of  the  Appellate  Tribunal  and such point or points shall be decided according  to  the  opinion  of  the majority of the Members  of  the  Appellate  Tribunal who have heard the case, including those who first heard  it.  Right of appellant to take assistance of legal practitioner orchartered  accountant and of Government, to appoint presentingofficers.    

32.   Right of appellant to take assistance of legal practitioner  or  chartered accountant and of Government, to appoint presenting  officers.-(1)  A  person  preferring an appeal to  the  Appellate  Tribunal  or the Special Director (Appeals) under this Act may ei  her  appear  in  person  or  take   the  assistance  of  a  legal  practitioner  or a chartered accountant of his choice to  present  his  case  before the Appellate Tribunal or the Special  Director  (Appeals), as the case may be.    (2)  The  Central  Government  may authorise one  or  more  legal  practitioners  or chartered accountants or any of its officers to  act  as  presenting officers and every person so  authorised  may  present  the case with respect to any appeal before the Appellate  Trbunal or the Special Director (Appeals), as the case may be.  

33.   Members,  etc.,  to be  public  servants.-The  Chairperson,  Members  and  other  officers  and  employees  of  the  Appellate  Tribunal,  the  Special  Director (Appeals) and  the  Ajudicating  Authority  shall  be  deemed  to be public  servants  within  the  meaning of secti n 21 of the Indian Penal Code (45 of 1860).  

34.   Civil court not to have jurisdiction.-No civil court  shall  have  jurisdiction to entertain any suit or proceeding in respect  of  any  matter which an Adjudicating Authority or the  Appellate  der  this Act to determine and no injunction shall be granted  by  any court or other authority in respect of any action taken or to  be  taken  in pursuance of any power conferred by or  under  this  Act.   Tribunal or the Special Director (Appeals) is empowered by  or u  

35.   Appeal to High Court.-Any person aggrieved by any  decision  or order of the Appellate Tribunal may file an appeal to the High  Court  within  sixty days from the date of communication  of  the  decision  or order of the Appellate Tribunal to him on any  quest  on of law arising out of such order:    Provided  that  the High Court may, if it is satisfied  that  the  appellant  was  prevented  by sufficient cause  from  filing  the  appeal  within  the  said period, allow it to be filed  within  a  further period not exceeding sixty days.  

 Explanation.-In this section "High Court" means-    (a) the High Court within the jurisdiction of which the aggrieved  party  ordinarily  resides or carries on business  or  personally  works for gain;  and    (b) where the Central Government is the aggrieved party, the High  Court  within  the jurisdiction of which the respondent, or in  a  case  where  there  are  more than one  respondent,  any  of  the  respondents,  ordinarily  resides  or   carries  on  business  or  personall works for gain.                            

CHAPTER VI                     

 36.  Directorate of Enforcement.-(1) The Central Government shall  establish  a Directorate of Enforcement with a Director and  such  other  officers or class of officers as it thinks fit, who  shall  be called officers of Enforcement, for the purposes of this A t.    (2)  Without prejudice to the provisions of sub-section (1),  the  Central  Government may authorise the Director of Enforcement  or  an  Additional  Director of Enforcement or a Special Director  of  Enforcement  or a Deputy Director of Enforcement to appoint  offi  ers  of  Enforcement below the rank of an Assistant  Director  of  Enforcement.    (3)  Subject  to such conditions and limitations as  the  Central  Government may impose, an officer of Enforcement may exercise the  powers and discharge the duties conferred or imposed on him under  this Act.  

37.   Power  of  search,  seizure,   etc.-(1)  The  Director   of  Enforcement and other officers of Enforcement, not below the rank  of  an  Assistant Director, shall take up for  investigation  the  contravention referred to in section 13.    (2)  Without prejudice to the provisions of sub-section (1),  the  Central  Government  may  also, by  notification,  authorise  any  officer  or  class of officers in the Central  Government,  State  Government  or  the Reserve Bank, not below the rank of an  Under  Secre  ary  to  the  Government  of  India  to  investigate   any  contravention referred to in section 13.    (3)  The  officers referred to in sub-section (1) shall  exercise  the  like  powers which are conferred on  income-tax  authorities  under  the  Income-tax Act, 1961 (43 of 1961) and shall  exercise  such  powers, subject to such limitations laid down under that  Act.  

38.   Empowering other officers.-(1) The Central Government  may,  by  order  and subject to such conditions and limitations  as  it  thinks  fit  to impose, authorise any officer of customs  or  any  central excise officer or any police officer or any other officer  o  the Central Government or a State Government to exercise  such  of the powers and discharge such of the duties of the Director of  Enforcement or any other officer of Enforcement under this Act as  may be stated in the order.    (2)  The  officers referred to in sub-section (1) shall  exercise  the like powers which are conferred on the income-tax authorities  under  the  Income-tax  Act, 1961 (43 of 1961), subject  to  such  conditions and limitations as the Central Government may impose.                              

CHAPTER VII                           

39.   Presumption  as  to documents in certain  cases.-Where  any  document-    (i)  is  produced or furnished by any person or has  been  seized  from  the custody or control of any person, in either case, under  this Act or under any other law;  or    (ii)  has  been  received  from any  place  outside  India  (duly  authenticated  by such authority or person and in such manner  as  may  be  prescribed)  in  the  course  of  investigation  of  any  contravention  under  this Act alleged to have been committed  by  any person, and such document is tendered in any proceeding under  this  Act  in evidence against him, or against him and any  other  person  who  is proceeded against jointly with him, the court  or  the Adjudicating Authority, as the case may be, shall-    (a)  presume,  unless the contrary is proved, that the  signature  and every other part of such document which purports to be in the  handwriting  of  any  particular person or which  the  court  may  reasonably assume to have been signed by, or to be in the handwri  ing  of, any particular person, is in that person's  handwriting,  and  in the case of a document executed or attested, that it  was  executed  or  attested by the person by whom it purports to  have  been so executed or attested;    (b) admit the document in evidence notwithstanding that it is not  duly  stamped,  if  such  document  is  otherwise  admissible  in  evidence;    (c)  in a case falling under clause (i), also presume, unless the  contrary is proved, the truth of the contents of such document.  

40.   Suspension  of  operation of this Act.-(1) If  the  Central  Government  is satisfied that circumstances have arisen rendering  it  necessary that any permission granted or restriction  imposed  by this Act should cease to be granted or imposed, or if it consi  ers  necessary  or  expedient so to do in  public  interest,  the  Central Government may, by notification, suspend or relax to such  extent either indefinitely or for such period as may be notified,  the operation of all or any of the provisions of this Act.    (2)  Where  the operation of any provision of this Act has  under  sub-section  (1)  been  suspended or relaxed  indefinitely,  such  suspension  or relaxation may, at any time while this Act remains  in force, be removed by the Central Government by notification.    (3)  Every notification issued under this section shall be  laid,  as  soon  as  may  be after it is issued, before  each  House  of  Parliament,  while it is in session, for a total period of thirty  days  which  may  be comprised in one session or in two  or  more  succe  sive  sessions, and if, before the expiry of  the  session  immediately  following  the  session or the  successive  sessions  aforesaid,  both  Houses agree in making any modification in  the  notification  or  both Houses agree that the notification  should  not be issu d, the notification shall thereafter have effect only  in  such  modified form or be of no effect, as the case  may  be;  so,  however,  that any such modification or annulment  shall  be  without  prejudice  to the validity of anything  previously  done  under that not fication.  

41.   Power  of  Central Government to give  directions.-For  the  purposes  of  this Act, the Central Government may, from time  to  time, give to the Reserve Bank such general or special directions  as it thinks fit, and the Reserve Bank shall, in the discharge of  its functions under this Act, comply with any such directions.    

42.   Contravention by companies.-(1) Where a person committing a  contravention  of  any  of the provisions of this Act or  of  any  rule,  direction  or  order made thereunder is a  company,  every  person  who, at the time the contravention was committed, was  in  char eof, and was responsible to, the company for the conduct of  the  business  of  the company as well as the company,  shall  be  deemed  to be guilty of the contravention and shall be liable  to  be proceeded against and punished accordingly:    Provided  that nothing contained in this sub-section shall render  any  such  person  liable  to punishment if he  proves  that  the  contravention  took  place  without  his  knowledge  or  that  he  exercised due diligence to prevent such contravention.  

 (2)  Notwithstanding anything contained in sub-section (1), where  a  contravention  of any of the provisions of this Act or of  any  rule,  direction or order made thereunder has been committed by a  company  and it is proved that the contravention has taken pla  e  with  the  consent  or connivance of, or is attributable  to  any  neglect on the part of, any director, manager, secretary or other  officer  of  the  company, such director, manager,  secretary  or  other  officer shall also be deemed to be guilty of the contravention  and  shall  be liable to be proceeded against  and  punished  accordingly.    

Explanation.-For the purposes of this section-  

 (i)  "company"  means any body corporate and includes a  firm  or  other association of individuals;  and    

(ii)  "director",  in relation to a firm, means a partner in  the  firm.    

43.  Death or insolvency in certain cases.-Any right, obligation,  liability,  proceeding  or  appeal  arising in  relation  to  the  provisions  of  section 13 shall not abate by reason of death  or  insolvency  of the person liable under that section and upon such  de  th or insolvency such rights and obligations shall devolve on  the  legal representative of such person or the official receiver  or the official assignee, as the case may be:    Provided  that  a legal representative of the deceased  shall  be  liable  only  to the extent of the inheritance or estate  of  the  deceased.  

 44.   Bar  of  legal proceedings.-No suit, prosecution  or  other  legal  proceeding shall lie against the Central Government or the  Reserve  Bank or any officer of that Government or of the Reserve  Bank  or any other person exercising any power or discharging any  functions  or performing any duties under this Act, for  anything  in  good faith done or intended to be done under this Act or  any  rule,   regulation,  notification,  direction   or   order   made  thereunder.

 45.   Removal  of difficulties.-(1) If any difficulty  arises  in  giving  effect  to  the  provisions  of  this  Act,  the  Central  Government  may, by order, do anything not inconsistent with  the  provisions   of  this  Act  for   the  purpose  of  removing  the  difficulty:  Provided that no such order shall be made under this  section  after  the expiry of two years from the commencement  of  this Act.    (2) Every order made under this section shall be laid, as soon as  may be after it is made, before each House of Parliament.  

 46.   Power  to  make rules.-

(1) The Central Government  may,  by  notification, make rules to carry out the provisions of this Act.  

 (2)  Without prejudice to the generality of the foregoing  power,  such rules may provide for,-    (a)  the imposition of reasonable restrictions on current account  transactions under section 5;    (b) the manner in which the contravention may be compounded under  sub-section (1) of section 15;    (c)  the  manner  of  holding  an  inquiry  by  the  Adjudicating  Authority under sub-section (1) of section 16;    (d)  the  form  of appeal and fee for filing  such  appeal  under  sections 17 and 19;    (e)  the salary and allowances payable to and the other terms and  conditions of service of the Chairperson and other Members of the  Appellate  Tribunal  and  the Special  Director  (Appeals)  under  section 23;    (f)  the salaries and allowances and other conditions of  service  of  the officers and employees of the Appellate Tribunal and  the  office of the Special Director (Appeals) under sub-section (3) of  section 27;    (g)  the  additional  matters in respect of which  the  Appellate  Tribunal  and  the  Special Director (Appeals) may  exercise  the  powers  of  a civil court under clause (i) of sub-section (2)  of  section 28;    (h)  the authority or person and the manner in which any document  may be authenticated under clause (ii) of section 39;  and    (i)  any  other  matter  which  is required to  be,  or  may  be,  prescribed.

47.   Power  to  make regulations.-(1) The Reserve Bank  may,  by  notification,  make  regulations to carry out the  provisions  of  this Act and the rules made thereunder.

   (2)  Without prejudice to the generality of the foregoing  power,  such regulations may provide for,-    (a)  the permissible classes of capital account transactions, the  limits   of   admissibility   of   foreign  exchange   for   such  transactions,  and the prohibition, restriction or regulation  of  certain capital account transactions under section 6;    (b)  the  manner and the form in which the declaration is  to  be  furnished under clause (a) of sub-section (1) of section 7;    (c)  the  period within which and the manner of  repatriation  of  foreign exchange under section 8;    (d) the limit up to which any person may possess foreign currency  or foreign coins under clause (a) of section 9;    (e)  the  class  of  persons and the limit up  to  which  foreign  currency  account  may  be held or operated under clause  (b)  of  section 9;    (f)  the  limit  up  to which foreign exchange  acquired  may  be  exempted under clause (d) of section 9;    (g)  the  limit  up  to which foreign exchange  acquired  may  be  retained under clause (e) of section 9;    (h)  any  other  matter  which  is required to  be,  or  may  be,  specified.  

48.   Rules  and regulations to be laid before  Parliament.-Every  rule and regulation made under this Act shall be laid, as soon as  may  be after it is made, before each House of Parliament,  while  it  is  in session for a total period of thirty days which may  b  comprised  in one session or in two or more successive  sessions,  and  if,  before the expiry of the session immediately  following  the  session  or the successive sessions aforesaid,  both  Houses  agree  in making any modification in the rule or regulation, or b  th  Houses agree that the rule or regulation should not be  made,  the  rule or regulation shall thereafter have effect only in such  modified  form  or  be  of no effect, as the case  may  be;   so,  however, that any such modification or annulment shall be without  p  ejudice to the validity of anything previously done under that  rule or regulation.  

49.   Repeal and saving.-(1) The Foreign Exchange Regulation Act,  1973  (46  of  1973) is hereby repealed and the  Appellate  Board  constituted  under sub-section (1) of section 52 of the said  Act  (hereinafter referred to as the repealed Act) shall stand dissolv  d.  

 (2)  On  the dissolution of the said Appellate Board, the  person  appointed  as  Chairman  of the Appellate Board and  every  other  person appointed as Member and holding office as such immediately  before  such date shall vacate their respective offices and no su  h  Chairman  or  other  person shall be  entitled  to  claim  any  compensation  for  the premature termination of the term  of  his  office or of any contract of service.    

(3)  Notwithstanding anything contained in any other law for  the  time being in force, no court shall take cognizance of an offence  under  the  repealed Act and no adjudicating officer  shall  take  notice  of any contravention under section 51 of the repealed A t  after  the  expiry of a period of two years from the date of  the  commencement of this Act.  

 (4)  Subject  to the provisions of sub-section (3)  all  offences  committed under the repealed Act shall continue to be governed by  the  provisions  of the repealed Act as if that Act had not  been  repealed.  

 (5) Notwithstanding such repeal,-    (a)  anything done or any action taken or purported to have  been  done or taken including any rule, notification, inspection, order  or  notice  made  or issued or any appointment,  confirmation  or  declaration  made or any licence, permission, authorization or  e  emption  granted  or any document or instrument executed  or  any  direction given under the Act hereby repealed shall, in so far as  it is not inconsistent with the provisions of this Act, be deemed  to  have been done or taken under the corresponding provision  of  this Act;    (b) any appeal preferred to the Appellate Board under sub-section  (2)  of section 52 of the repealed Act but not disposed of before  the commencement of this Act shall stand transferred to and shall  be  disposed  of by the Appellate Tribunal constituted unde  this  Act;    (c)  every  appeal  from any decision or order of  the  Appellate  Board  under sub-section (3) or sub-section (4) of section 52  of  the  repealed Act shall, if not filed before the commencement  of  this Act, be filed before the High Court within a period of sixty  days of such commencement :    Provided  that the High Court may entertain such appeal after the  expiry  of the said period of sixty days if it is satisfied  that  the  appellant was prevented by sufficient cause from filing  the  appeal within the said period.  

 (6) Save as otherwise provided in sub-section (3), the mention of  particular  matters in sub-sections (2), (4) and (5) shall not be  held  to prejudice or affect the general application of section 6  of  the General Clauses Act, 1897 (10 of 1897) with regard to the  effect of repeal.     

RAGHBIR SINGH, the Govt.  of India.   

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