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

Under section 37A of FEMA, a person whose equivalent assets in India were seized discloses the overseas property during proceedings and brings it back into India. What may the Competent Authority or Adjudicating Authority do on his application?

The authority may pass an appropriate order as it deems fit, including setting aside the seizure, after hearing the aggrieved person and the Directorate of Enforcement's representatives. This follows from the proviso to section 37A(4) when the person discloses the overseas asset and brings it back into India.

  1. ANothing, because a confirmed seizure can never be reversed
  2. BPass an appropriate order as it deems fit, including setting aside the seizure, after hearing the aggrieved person and the Directorate of EnforcementCorrect
  3. COnly reduce the seizure by half without hearing the Directorate of Enforcement
  4. DRefer the matter to the Reserve Bank, which alone can set aside the seizure

Explanation

The proviso to section 37A(4) says that if, at any stage, the aggrieved person discloses the foreign asset and brings it back into India, the authority may, after hearing both the person and the Enforcement Directorate representatives, pass an appropriate order, including setting aside the seizure. The other options contradict this: the seizure is reversible, a hearing is required and the Reserve Bank has no such role.

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