9911796707
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Issues involved:
1. Adjournment request due to Director being out of station. 2. Imposition of penalties under Foreign Exchange Regulation Act, 1973. 3. Failure to comply with section 16(1)(a) and implications. 4. Dispensation from pre-deposit of penalty amount. 5. Interpretation of section 16(2) and its relevance. 6. Validity of adjudication proceedings under sections 51 and 50. 7. Applicability of penalties under section 68(1). 8. Final decision and setting aside of the impugned order. Detailed Analysis: 1. The case involved a request for adjournment due to the Director being out of station, following directions from the High Court. The Board rejected the adjournment request and proceeded ex parte against the appellant, as per the court's directions. 2. The appeal was against penalties imposed on the appellant-company and its Director for contravention of section 16(1)(a) of the Foreign Exchange Regulation Act, 1973. The charge was related to delaying the receipt of foreign exchange credited to the company by Argos Electronics, UK. 3. The appellants sought dispensation from pre-deposit of the penalty amount, arguing a prima facie case in their favor. They contended that the adjudicating authority failed to consider the scope of section 16(1)(a) properly. 4. The findings in the impugned order concluded that the appellants did not take steps to bring back the commission amount, leading to the contravention of the Act. However, the Board highlighted the error in not considering section 16(2) which provides for directions by the Reserve Bank in such cases. 5. The Board noted that since the Reserve Bank did not issue any directions under section 16(2), the provisions of section 16(1)(a) were not attracted for initiating adjudication proceedings. Therefore, the requirement of pre-deposit was waived, and the appeal was disposed of on this ground. 6. The Board emphasized that failure to comply with section 16(1)(a) alone would not attract penalties under sections 51 and 50 unless the Reserve Bank issued directions under section 16(2. The Madras High Court's interpretation and consistent FERA Board decisions were referenced to support this view. 7. As no directions were issued by the Reserve Bank under section 16(2), the adjudication proceedings under section 51 were not permissible, rendering the impugned order liable to be set aside on this ground alone. 8. The appellants raised other grounds challenging the allegations under section 16(1)(a), but the Board did not consider those contentions due to the above findings. Consequently, the appeal was allowed, and the impugned order against the appellant-company and its Director was set aside.
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