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CS Executive · Setting Up of Business, Industrial and Labour Laws · Setting up of Business outside India and Issues Relating thereto

Mr. Raman, a person resident in India, is suspected by the Authorised Officer of holding an immovable property in Dubai in contravention of section 4 of FEMA. Which action does section 37A(1) allow the Authorised Officer to take, after recording reasons in writing?

The Authorised Officer may, after recording reasons in writing, seize assets situated within India that equal in value the suspected foreign asset. The law does not authorise seizure of the overseas property itself, because that property lies outside India.

  1. ASeize the equivalent value of assets situated within IndiaCorrect
  2. BSeize the Dubai property directly
  3. CArrest Mr. Raman without any further order
  4. DCancel Mr. Raman's resident status

Explanation

Section 37A(1) lets the Authorised Officer, after recording reasons in writing, seize value equivalent, situated within India, of the suspected foreign asset. The asset abroad itself is not seized, since it lies outside India. Seizing the Dubai property directly is therefore wrong.

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