Notification No. 14 dated 3^rd May 2000

GSR 397(E), dated 3.5.2000: In exercise of the power conferred by section 47 of the Foreign Exchange Management Act, 1999 (42 of 1999), the Reserve Bank of India makes the following regulations in respect of the manner of receipt and payment in foreign exchange, namely:

(i)������� These regulation may be called the Foreign Exchange Management (Manner of Receipt and Payment) Regulations, 2000.

(ii)������ They shall come into effect on 1^st day of June 2000.

In these Regulations, unless the context requires otherwise, -

(i)������� �Act � means the Foreign Exchange Management Act, 1999 (42 of 1999);

(ii)������ �authorised dealer� means a person authorised as an authorised dealer under sub-section (1) of section 10 of the Act;

(iii)������ �authorised bank� means a bank, other than an authorised dealer, authorised by the Reserve Bank to accept deposits from persons resident outside India;

(iv)������ �FCNR/ NRE account� means an FCNR or NRE account opened and maintained in accordance with the Foreign Exchange Management (Deposits) Regulations, 2000;

(v)������� �Permitted currency� means a foreign currency, which is freely convertible;

(vi)������ the words and expressions used but not defined in these Regulations shall have the same meaning respectively assigned to them in the Act.

(1)������ Every receipt in foreign exchange by an authorised dealer, whether by way of remittance from a foreign country (other than Nepal and Bhutan) or by way of reimbursement from his branch or correspondent outside India against payment for export from India, or against any other payment, shall be as mentioned below:

Group	Manner of receipt of foreign exchange
(1) member countries in the Asian clearing Union (except Nepal) namely, Bangladesh, Islamic Republic of Iran, Myanmar, and Sri Lanka	(a) payment for all eligible current transactions by debit to the Asian Clearing Union����� dollar account in India of a bank of the member country in which the other party to the transaction is resident or by credit to the Asian Clearing Union dollar account of the authorised dealer maintained with the correspondent bank in the member country; and
	(b) payment in any permitted currency in all other cases
(2) all countries other than those mentioned in (1)	(a) payment in rupees from the account of a bank situated in any country other than a member country of Asian Clearing Union or Nepal or Bhutan; or
	(b) payment in any permitted currency

(2)������ In respect of an export from India, payment shall be received in a currency appropriate to the place of final destination as mentioned in the declaration form irrespective of the country of resident of the buyer.

Notwithstanding anything contained in Regulation 3, payment for export may also be received by the exporter as under, namely:

(i)������� in the form of bank draft, cheque, pay order, foreign currency notes/ travellers cheque from a buyer during his visit to India, provided the foreign currency so received is surrendered within the specified period to the authorised dealer of which the exporter is a customer;

(ii)������ by debit to FCNR/ NRE account maintained by the buyer with an authorised dealer or an authorised bank in India;

(iii)������ in rupees from the credit card servicing bank in India against the charge slip signed by the buyer where such payment is made by the buyer through a credit card;

(iv)������ from a rupee account held in the name of an Exchange House with an authorised dealer if the amount does not exceed two lakhs rupees per export transaction;

(v)������� in accordance with the directions issued by the Reserve Bank to authorised dealers, where the export is covered by the arrangement between the Central Government and the Government of foreign country or by the credit arrangement entered into by the Exim Bank with a financial institution in a foreign state.

(1)������ A payment in foreign exchange by an authorised dealer, whether by way of remittance from India or by way of reimbursement to his branch or correspondent outside India (other than Nepal and Bhutan) against payment for import into India, or against any other payment, shall be as mentioned below;

Group	Manner of payment
(1) member countries of Asian Clearing Union (except Nepal) namely, Bangladesh, Islamic Republic of Iran, Myanmar, Pakistan and Sri Lanka	(a) payment for all eligible current transactions by credit to the Asian Clearing Union dollar account in India of a bank of the member country in which the other party to the transaction is resident or by debit to the Asian Clearing Union dollar account of an authorised dealer with the correspondent bank in the member country; and
	(b) payment in any permitted currency in other cases
(2) all countries other than those mentions in(1)	(a) payment in rupees to the account of a resident of any country other than a member country of Asian Clearing Union or Nepal or Bhutan; or
	(b) payment in any permitted currency

(2)������ In respect of import into India,

(a)����� where the goods are shipped from a member country of Asian Clearing Union (other than Nepal) but the supplier is resident of a country other than a member country of Asian Clearing Union, payment may be made in a manner specified for countries in Group (2) of Regulation 5;

(b)��������� in all other cases, payment shall be made in a currency appropriate to the country of shipment of goods.

Notwithstanding anything contained in Regulation 5-

(1)������ where an import is covered by the special arrangement between the Central Government and the Government of a foreign state, the payment for import shall be made in accordance with the directions issued by the Reserve Bank to authorised dealer;

(2)������ subject to the provisions of sub-regulation (1), a person resident in India may make payment in foreign exchange through an international card held by him:

Provided that �

���������������� (a) the transaction for which the payment is so made is in conformity with the provisions of the Act, rules and regulations made thereunder; and

���������������� (b) in the case of import for which the payment is so made, the import is also in conformity with the provisions of the Export-Import Policy for the time being in force.

Allied Acts and Rules

[49 of 1976]

An Act to regulate the acceptance and utilisation of foreign contribution or foreign hospitality by certain persons or associations, with a view to ensuring that parliamentary institutions, political associations and academic and other voluntary organisations as well as individuals working in the important areas of national life may function in a manner consistent with the values of a sovereign democratic republic, and for matters connected therewith or incidental thereto.

BE IT ENACTED BY PARLIAMENT IN THE TWENTY-SEVENTH YEAR OF THE REPUBLIC OF INDIA AS FOLLOWS: -

(1)������ This Act may be called the Foreign Contribution (Regulation) Act, 1976.

(2)������ It extends to the whole of India, and it shall also apply to-

���������� (a)������ citizens of India outside India; and

���������� (b)������ associates, branches or subsidiaries, outside India, of companies or bodies corporate, registered or incorporated in India.

(3)������ It shall come into force on such date as the Central Government may, be notification in the Official Gazette, appoint.

(1)������ In this Act, unless the context otherwise requires, -

(a)����� �association� means an association of individuals, whether incorporated or not having an office in India and includes a society, whether registered under the Societies Registration Act, 1860 (21 of 1860), or not, any other organisation by whatever name called;

���������� (b)������ �candidate for election� mean a person who has been duly nominated as a candidate for election to any legislature;

���������� (c)������ �foreign contribution� means the donation, delivery or transfer made by any foreign source, -

������������������������������� (i)������� of any article, not being an article given to a person as a gift for his personal use, if the market value, in India, of such article, on the date of such gift, does not exceed one thousand rupees;

��������������������� (ii)������ ����� of any currency, whether Indian or foreign;

��������������������� (iii)����� of any foreign security as defined in clause (i) of section 2 of the Foreign Exchange Regulation Act, 1973 (46 of 1973).

���������������� (d) �foreign hospitality� means any offer, not being a purely casual one, made by a foreign source for providing a person with the costs of travel to any foreign country or territory or with free board, lodging, transport or medical treatment;

���������� (e)������ �foreign source� includes-

��������������������� (i)������������������ the Government of any foreign country or territory and any agency of such Government,

������������������������������������������ (ii)������ any international agency, not being the United Nations or any of its specialised agencies, the World Bank, International Monetary Fund or such other agency as the Central Government may, by notification in the Official Gazette, specify in this behalf,

��������������������� (iii)������ a foreign company within the meaning of section 591 of the Companies Act, 1956 (1 of 1956), and also includes-

������������������������������������������ (a)������ a company which is a subsidiary of a foreign company, and

������������������������������������������ (b)������ a multi-national corporation within the meaning of this Act,

��������������������� (iv)������ a corporation, not� being a foreign company, incorporated in a foreign country or territory,

��������������������� (v)����������������� a multi-national corporation within the meaning of this Act,

��������������������� (vi)������ a company within the meaning of the Companies Act,1956 (1 of 1956), if more than one-half of the nominal value of its share capital is held, either singly or in the aggregate, by one or more of the following, namely:-

������������������������������������������ (a)������ Government of a foreign country or territory,

������������������������������������������ (b)������ citizens of a foreign country or territory,�����

������������������������������������������ (c)������ corporations incorporated in a foreign country or territory,

����������������������������������������������������� ������������������� (d)���� ��������� trusts, societies or other associations of individuals (whether incorporated or not ), formed or registered in a foreign country or territory,

��������������������� (vii)����� a trade union in any foreign country or territory, whether or not registered in such country or territory,

������������������������������������������ (viii)���� a foreign trust by whatever name called, or a foreign foundation which is either in the nature of trust or is mainly financed by a foreign country or territory,

��������������������� (ix)������ a society, club or other association of individuals formed or registered outside India,

(x)                        a citizen of a foreign country,

but does not include any foreign institution which has been permitted by the Central Government, by notification in the Official Gazette, to carry on its activities in India;

���������� (f)������� �Legislature� means-

��������������������� (i)������������������ either House of Parliament,

������������������������������������������ (ii)������ the Legislative Assembly of a State, or in the case of a State having a Legislative Council, either House of the Legislature of the state,

��������������������� (iii)������ Legislative Assembly of a Union territory constituted under the Government of Union Territories Act, 1963 (20 of 1963),

��������������������� (iv)������ the Metropolitan Council of Delhi constituted under section 3 of the Delhi Administration Act, 1966 (19 of 1966),

��������������������� (v)����������������� Municipal Corporations in metropolitan areas as defined in the Code of Criminal Procedure, 1973 (2 of 1974).

��������������������� (vi)������ District Councils and Regional Councils in the State of Assam and Meghalaya and in the Union Territory of Mizoram as provided in the Sixth Schedule to the Constitution, or

��������������������� (vii)����� any other elective body as may be notified by the Central Government, as the case may be;

���������� (g)������ �political party� means-

��������������������� (i)������������������ an association or body of individual citizens of India-

����������������������������������������������������� ������������������ (1)��� which is, or is deemed to be, registered with the Election Commission of India as a political party under the Election Symbols (Reservation and Allotment) Order, 1968, as in force for the time being ; or

����������������������������������������������������� ������������������� (2)�� which has set up candidates for election to any Legislature, but is not so registered or deemed to be registered under the Election Symbols (Reservation and Allotment ) Order, 1968;

������������������������������������������ (ii)������ a political party mentioned in Column 1 of Table� I to the notification of the Election Commission of India No. 56/ J&K/ 84,� dated the 27^th September, 1984, as in force for the time being ;]

���������� (h)������ �prescribed� means prescribed by rules made under this Act;

���������� (i)������� �registered newspaper� means a newspaper registered under the Press and Registration of Books Act, 1867(25 of 1867);

���������� (j)������� �Subsidiary � and �associate� have the meanings, respectively, assigned to them in the Companies Act, 1956 (1 of 1956);

���������� (k)������ �trade union � means a trade union registered under the Trade Unions Act, 1926 (16 of 1926).

(2)������ Words and expression used herein and not defined but defined in the Foreign Exchange Regulation Act, 1973 (46 of 1973), have the meanings respectively assigned to them in that Act.

(3)������ Words and expressions used herein and not defined in this Act or in the Foreign Exchange Regulation Act, 1973 (46 of 1973), but defined in the Representation of the People Act, 1950 (43 of 1950), or the Representation of the People Act, 1951(43 of 1951), have the meanings respectively assigned to them in such Act.

The provisions of this Act shall be in addition to, and not in derogation of, any other law for the time being in force.

 

(1)������ No foreign contribution shall be accepted by any �

���������� (a)������ candidate for election,

���������� (b)������ correspondent, columnist, cartoonist, editor, owner, printer or publisher of a registered newspaper,

���������� (c)������ judge, Government servant or employee of any corporation,

���������� (d)������ member of any Legislature,

���������� (e)������ political party or office-bearer thereof.

(2)��� (a)��������� No person, resident in India, and no citizen of India resident outside India, shall accept any foreign contribution, or acquire or agree to acquire any currency from a foreign source, on behalf of any political party, or any person referred� to in sub-section(1),or both.

������� (b)��������� No person, resident in India, shall deliver any currency, whether Indian or foreign, which has been accepted from any foreign source, to any person if he knows or has reasonable cause to believe that such other person intends, or is likely, to deliver such currency to any political party or any person referred to in sub-section (1), or both.

������� (c)���������� No citizen of India resident outside India shall deliver any currency, whether Indian or foreign, which has been accepted from any foreign source, to �

��������������������� (i)������������������ any political party or any person referred to in sub-section (1) or both, or

������������������������������������������ (ii)������ any other person, if he knows or has reasonable cause to believe that such other person intends, or is likely, to deliver such currency to political party or to any person referred to in sub-section (1), or both.

(3)������ No person receiving any currency, whether Indian or foreign, from a foreign source on behalf of any association, referred to in sub-section (1) of section 6, shall deliver such currency �

(i)                to any association or organisation other than the association for which it was received, or

(ii)               to any other person, if he knows or has reasonable cause to believe that such other person intends, or is likely, to deliver such currency to an association other than the association for which such currency was received.

(1)������ No organisation of a political nature, not being a political party, shall, accept any foreign contribution except with the prior permission of the Central Government.

(2)������ (a)������ Except with the prior permission of the Central Government, no person, resident in India, and no citizen of India, resident outside India, shall accept any� foreign contribution, or acquire or agree to acquire any foreign currency, on behalf of an organisation referred to in sub-section(1).

���������� (b)������ Except with the prior permission of the Central Government, no person, resident in India, shall deliver any foreign currency to any person if he knows or has reasonable cause to believe that such other person intends, or is likely, to deliver such currency to an organisation referred to in sub-section (1).

���������� (c)������ Except with the prior approval of the Central Government, no citizen of India, resident outside India, shall deliver any currency, whether Indian or foreign, which has been accepted from any foreign source, to �

(i)��� any organisation referred to in sub-section (1),or

(ii)������ any person, if he knows or has reasonable cause to believe that such person intends, or is likely, to deliver such currency to an organisation referred to in subsection(1).

(1)������ No association other than an organisation referred to in sub-section (1) of section 5 having a definite cultural, economic, educational, religious or social programme shall accept foreign contribution unless such association, -

���������� (a)������ registers itself with the Central Government in accordance with the rules made under this Act; and

(a)            agrees to receive such foreign contributions only through such one of the branches of a bank as it may specify in its application for such registration,

and every association so registered shall give, within such time and in such manner as may be prescribed, an intimation to the Central Government as to the amount of each foreign contribution received by it, the source from which and the manner in which such foreign contribution was received and the purposes for which and the manner in which such foreign contribution was utilised by it :

Provided that where such association obtains any foreign contribution through any branch other than the branch of the bank through which it has agreed to receive foreign contribution or fails to give such intimation within the prescribed time or in the prescribed manner, or gives any intimation which is false, the Central Government may, by notification in the Official Gazette, direct that such association shall not, after the date of issue of such notification, accept any foreign contribution without� the prior permission of the Central Government.

(1A)���� Every association referred to in sub-section (1) may, if it is not registered with the Central Government under the sub-section, accept any foreign contribution only after obtaining the prior permission of the Central Government and shall also give within such time and in such manner as may be prescribed, an intimation to the Central Government as to the amount of foreign contribution received by it, the source from which and the manner in which such foreign contribution was received and the purposes for which and the manner in which such foreign contribution was utilised by it .

(2)������ Every candidate for election, who had received any foreign contribution, at any time within one hundred and eighty days immediately preceding the date on which he is duly nominated as such candidate, shall give, within such time and in such manner as may be prescribed, an intimation to the Central Government as to the amount of foreign contribution received by him, the source from which and the manner in which such foreign contribution was received and the purposes for which, and the manner in which, such foreign contribution was utilised by him.

(1)������ Every citizen of India receiving any scholarship, stipend or any payment of a like nature from any foreign source shall give, within such time and in such manner as may be prescribed, an intimation to the Central Government as to the amount of the scholar ship, stipend or other payment received by him and the foreign source from which, and the purpose for which, such scholarship, stipend or other payment has been, or is being, received by him.

(2)������ Where any recurring payments are being received by any citizen of India from any foreign source by way of scholarship, stipend or other payment, it shall be sufficient if the intimation referred to in sub-section (1) includes a precise information as to the intervals at which, and the purpose for which, such recurring payments will be received by such citizen of India.

(3)������ It shall not be necessary to give such intimation as is referred to in sub-section (1) or sub-section (2) in relation to scholarships, stipends, or payments of a like nature, if the annual value of such scholarships, stipends or other payments does not exceed such limits as the Central Government may, by rules made under this Act, specify in this behalf.

Nothing contained in section 4 shall apply to the acceptance, by any person specified in that section, of any foreign contribution, where such contribution is accepted by him, subject to the provisions of section 10, -

(a)������ by way of salary, wages or other remuneration due to him or to any group of persons working under him, from any foreign source or by way of payment in the ordinary course of business transacted in India by such foreign source ;or

(b)������ by way of payment, in the course of international trade or commerce, or in the ordinary� course of business transacted by him outside India; or

(c)������ as an agent of a foreign source in relation to any transaction made by such foreign source with Government; or

(d)������ by way of a gift or presentation made to him as member of any Indian delegation, provided that such gift or present was accepted in accordance with the regulations made by the Central Government with regard to the acceptance or retention of such gift or presentation; or

(e)������ from his relative when such foreign contribution has been received with the previous permission of the Central Government :

Provided that no such permission shall be required if the amount of foreign contribution received by him from his relative does not exceed, in value, eight thousand rupees per annum and an intimation is given by him to the Central Government as to the amount received, the source from which and the manner in which it was received and the purpose for which and the manner in which it was utilised by him:

(f)������� by way of remittance received, in the ordinary course of business, through any official channel, post office, or any authorised dealer in foreign channel, under Foreign Exchange Regulation Act, 1973 (46 of 1973).

No member of a legislature, office-bearer of a political party, Judge, Government servant or employee of any corporation shall, while visiting any country or territory outside India, accept, except with the prior permission of the Central Government, any foreign hospitality:

Provided that it shall not be necessary to obtain any such permission for an emergent medical aid needed on account of sudden illness contracted during a visit outside India, but, where such foreign hospitality has been received, the person receiving such hospitality shall give, within one month from the date of receipt of such hospitality, an intimation to the Central Government as to the receipt of such hospitality and the source from which, and the manner in which, such hospitality was received by him.

The Central Government may-

(a)������ prohibit any association, not specified in section 4, or any person, from accepting any foreign contribution;

(b)������ without prejudice to the provisions of sub-section (1) of section 6, require any association specified in that sub-section, to obtain prior permission of the Central Government before accepting any foreign contribution;

(c)������ require any person or class of persons or any association, not being an association specified in section� 6, to furnish intimation, within such time and in such manner as may be prescribed as to the amount of any foreign contribution received by such person or class of persons or association, as the case may be, and the source from which and the manner in which such contribution was received and the purpose for which and the manner in which such foreign contribution was utilised� ;

(d)������ require any person or class of persons, not specified in section 9, to obtain prior permission of the Central Government before accepting any foreign hospitality;

(e)������ require any person or class of persons, not specified in section 9, to furnish intimation, within such time and in such manner as may be prescribed, as to the receipt of any� foreign hospitality, the source from which and the manner in which such hospitality was received:

Provided that no such prohibition or requirement shall be made unless the Central Government is satisfied that the acceptance of foreign contribution by such association or person or class of persons, as the case may be, the acceptance of foreign hospitality by such person, is likely to affect prejudicially�

���������� (i)������� the sovereignty and integrity of India; or

���������� (ii)������ the public interest; or

���������� (iii)������ freedom or fairness of election to any Legislature; or

���������� (iv)������ friendly relations with any foreign State; or

���������� (v)������� harmony between religious, racial, linguistic or regional groups, castes or communities.

(1)������ Every individual, association, organisation or other person, who is required by or under this Act to obtain the prior permission of the Central Government to accept any foreign contribution or foreign hospitality, shall, before the acceptance of any such contribution or hospitality, make an application for such permission to the Central Government in such form and in such manner as may be prescribed.

(2)������ If an application referred to in sub section (1) is not disposed of within ninety days from the date of receipt of such application, the permission prayed for in such application shall, on the expiry of the said period of ninety days, be deemed to have been granted by the Central Government:

Provided that where, in relation to an application, the Central Government has informed the applicant the special difficulties by reason of which his application cannot be disposed of within the said period of ninety days, such application shall not, until the expiry of a further period of thirty days, be deemed to have been granted by the Central Government.

Where the Central Government is satisfied, after making such inquiry as it may deem fit, that any person has in his custody or control any article or currency, whether Indian or foreign, which has been accepted by such person in contravention of any of the provisions of this Act, it may, by order in writing, prohibit such person from paying, delivering, transferring or otherwise dealing with, in any manner whatsoever, such article or currency save in accordance with the written orders, of the Central Government and a copy of such order shall be served upon the person so prohibited in the prescribed manner, and thereupon the provisions of subsections.(2), (3), (4) and (5) of section 7 of the Unlawful Activities (Prevention)Act, 1967 (37 of 1967) shall, so far as may be� apply to, or in relations to, such article or currency and references in the said sub-sections to moneys, securities� or credits shall be construed� as references to such article or currency.

Every association, referred to in section 6, shall maintain, in such form and in such manner as may be prescribed, -

(a)������ an account of any foreign contribution received by it, and

(b)������ a record as to the manner in which such contribution has been utilised by it.

If the Central Government has, for any reason, to be recorded in writing, any ground to suspect that any provision of this Act has been, or is being, contravened by

(a)������ any political party, or

(b)������ any person, or

(c)������ any organisation, or

(d)������ any association,

it may, by general or special order, authorise such gazetted officer, holding a Group A post, as it may think fit (hereinafter referred to as the authorised officer), to inspect any account or record maintained by such political party, person, organisation or association, as the case may be, and thereupon every such authorised� official shall have the right to enter in or upon any premises at any reasonable hour, before sunset and after sunrise, for the purpose of inspecting the said account or record:

Provided that no gazetted officer shall be authorised to inspect the account or record maintained by a political party, unless he has been holding a Group A post in connection with the affairs of the Union, or a State, for not less than ten years.

If, after inspection of an account or record referred to in section 14, the authorised officer has any reasonable cause to believe that any provision of this Act or of any other law relating to foreign exchange has been, or is being, contravened, he may seize such account or record and produce the same before the court in which any proceeding is brought for such contravention:

Provided that the authorised officer shall return such account or record to the person from whom it was seized if no proceeding is brought within six months from the date of such seizure for the contravention disclosed by such account or record.

Where any organisation or association fails to furnish any returns under this Act within the time specified therefore or the returns so furnished are not in accordance with law or if, after inspection of such returns, the Central Government has any reasonable cause to believe that any provision of this Act has been, or is being, contravened, that Government may, by general or special order, authorise such gazetted officer, holding a Group A post, as it may think fit, to audit any books of account kept or maintained by such organisation or association, as the case may be, and thereupon every such officer shall have the right to enter in or upon any premises at any reasonable hour, before sunset and after sunrise, for the purpose of auditing the said books of account:

Provided that any information obtained from such audit shall be kept confidential and shall not be disclosed except for the purpose of this Act.

If any gazetted officer, authorised in this behalf by the Central Government, by general or special order, has any reason to believe that any person has in his possession or control any article exceeding rupees one thousand in value, or currency, whether Indian or foreign, in relation to which any provision of this Act has been or is being contravened, he may seize such article or currency.

Every seizure made under this Act shall be made in accordance with the provisions of section 100 of the Code of Criminal Procedure, 1973 (2 of 1974).

Any article or currency, which is seized under section 16, shall be liable to confiscation if such article or currency has been adjudged under section 19 to have been received or obtained in contravention of this Act.

Any confiscation referred to in section 18 may be adjudged-

(a)������ without limit, by the Court of Session within the local limits of whose jurisdiction the seizure was made; and

(b)������ subject to such limits as may be prescribed, by such officer, not below the rank of an Assistant Sessions Judge, as the Central Government may, by notification in the Official Gazette, specify in this behalf .

No order of adjudication of confiscation shall be made unless a reasonable opportunity of making a representation against such confiscation has been given to the person from whom any article or currency has been seized.

(1)������ Any person aggrieved by any order made under section 19 may prefer an appeal, -����

���������� (a)������ where the order has been made by the Court of Session, to the High Court to which such Court is subordinate ; or

(b)            where the order has been made by any officer specified under clause (b) of section 19, to the Court of Session within the local limits of whose jurisdiction such order of adjudication of confiscation was made,

within one month from the date of communication to such person of the order:

Provided that the appellate court may, if it is satisfied that the appellant was prevented by sufficient cause from preferring the appeal within the said period of one month, allow such appeal to the preferred within a further period of one month, but not thereafter.

(2)������ Any organisation referred to in section 5, or any person or association referred to in section 9 or section 10, aggrieved by an order made in pursuance of the Explanation to sub-section (1) of section (5) or by an order of the Central Government refusing to give permission, or by any order made by the Central Government, under section 5 or section 9 or section 10, as the case may be, may within sixty days from the date of such order prefer an appeal against such order to the High Court within the local limits of whose jurisdiction the appellant ordinarily resides or carries on business or personally works for gain, or, where the appellant is an organisation or association, the principal office of such organisation or association is located.

(3)������ Every appeal preferred under this section shall be deemed to be an appeal from an original decree and the provisions of Order XLI of the First Schedule to the Code of Civil Procedure, 1908 (5 of 1908), shall, as far as may be, apply thereto as they apply to an appeal from an original decree.

If any person, on whom any prohibitory order has been served under section 12, pays, delivers, transfers or otherwise deals with, in any manner whatsoever, any article or currency, whether Indian or Foreign, in contravention of such prohibitory order, he shall be punished with imprisonment for a term which may extend to three years or with fine, or with both; and not withstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), the court trying such contravention may also impose on the person convicted an additional fine equivalent to the market value of the article or the amount of the currency in respect of which the prohibitory order has been contravened by him or such part thereof as the court may deem fit.

(1)������ Whoever accepts, or assist any person, political party or organisation in accepting any foreign contribution or any currency from a foreign source, in contravention of any provision of this Act or any rule made there under, shall be punished with imprisonment for a term which may extend to five years, or with fine, or with both.

(2)������ Whoever accepts any foreign hospitality in contravention of any provision of this Act or any rule made there under, shall be punished with imprisonment for a term which may extend to three years, or with fine, or with both.

Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), the court trying a person, who, in relation to any article or currency, whether Indian or foreign, does or omits to do any act which act or omission would render such article or currency liable to confiscation under this Act, may, in the event of the conviction of such person for the act or omission aforesaid, impose on such person a fine not exceeding five times the� value of the article or currency or one thousand rupees, whichever is more, if such article or currency is not available for confiscation, and the fine so imposed shall be in addition to any other fine which may be imposed on such person under this Act.

Whoever fails to comply with any provision of this Act for which no separate penalty has been provided in this Act shall be punished with imprisonment for a term which may extend to one year, or with fine not exceeding one thousands rupees, or with both.

Notwithstanding anything contained in this Act, whoever, having been convicted of any offence under sub-section (1) of section 23 or section 25, in so far as such offence relates to the acceptance or utilisation of foreign contribution, is again convicted of such offence shall not accept any foreign contribution for a period of three years from the date of the subsequent conviction.

(1)������ Where an offence under this Act or any rule made thereunder has been committed by a company, every person who, at the time the offence was, committed, was in charge of, 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 offence and shall be liable to the proceeded against and punished accordingly:

Provided that nothing contained in this sub-section shall render such person liable to any punishment if he proves that the offence was committed without his knowledge or that he had exercised all due diligence to prevent the commission of such offence.

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

No court shall take cognisance of any offence under this Act, except with the previous sanction of the Central Government or any officer authorised by that Government in this behalf.

Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), any offence punishable under this Act may also be investigated into by such authority as the Central Government may specify in this behalf and the authority so specified shall have all the powers which an officer-in-charge of a police station has while making an investigation into a cognisable offence.

No suit or other legal proceedings shall lie against the Central Government in respect of any loss or damage caused or likely to be caused by anything which is in good faith done or intended to be done in pursuance of the provisions of this Act or any rule or order made thereunder.

(1)������ The Central Government may, notification in the Official Gazette, make rules for carrying out the provision of this Act.

(2)������ In particular, and without prejudice to the generality of the foregoing power, such rules may provide for all or any of the following matters, namely: -

���������������� (a) the time within which, and the manner in which, intimation is to be given by an association referred to in section 6, with regard to the foreign contributions received by it;

���������������� (b) the limits up to which receipt of scholarships, stipends or payments of a like nature need not be intimated to the Central government;

���������������� (c) the time within which, and the manner in which, intimation is to be given by persons receiving any scholarship, stipend or any payment of a like nature from a foreign source;

���������������� (d) the time within which, and the manner in which a candidate for election should give intimation as to the amount of foreign contribution received by him at any time within one hundred and eighty days from the date when he became such candidate;

���������������� (e) the form and manner in which an application shall be made for obtaining prior permission of the Central Government to receive foreign contribution or foreign hospitality;

���������� (f)������� the manner of service of the prohibitory order made under section 12;

���������� (g)������ the form and� manner in which account or record referred to in section 13 shall be maintained;

���������� (h)������ the limits up to which an officer, not below the rank of an Assistant Session Judge, may make adjudication of confiscation;

���������� (i)������� any other matter which is required to be, or may be, prescribed.

(3)������ Every rule made by the Central Government 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 be 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 both Houses agree that the rule should not be made, the rule 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 rule.

If the Central Government is of opinion that it is necessary or expedient in the interests of the general public so to do, it may, by order and subject to such conditions as may be specified in the order, exempt any association (not being a political party), organisation or any individual (not being a candidate for election) from the operation of all or any of the provisions of this Act and may as often as may be necessary, revoke or modify such order.

Nothing contained in this Act shall apply to any transaction between the Government of India and the Government of any foreign country or territory.

 

 

 

GSR 756 (E), dated 5.8.1976: In exercise of the powers conferred by section 30 of the Foreign Contribution (Regulation) Act, 1976 (49 of 1976), the Central Government hereby makes the following rules, namely: -

(1)������ These rules may be called the Foreign Contribution (Regulation) Rules, 1976.

(2)������ They shall come into force on the 5^th day of August 1976.

In these rules, unless the context otherwise requires, -

(a)������ �Act� means the Foreign Contribution (Regulations) Act, 1976,

(b)������ �Form� means a form appended to these rules;

(c)������ �Section� means a section of the Act;

(d) ����� �Year� means the accounting year commencing from the 1^st day of April and ending on 31^st day of March of the next calendar year.

An application for obtaining prior permission of the Central Government to �

(a)������ receive foreign contribution under sub-section (1) of section 5, or clause (a) of sub-section (2) of that section, shall be made in Form FC-1;

(aa) ���� receive foreign contribution under proviso to sub-section (1) of section 6, or under sub-section (1A) of that section or clause (b) of section 10, shall be made in Form FC-1A;

(b)������ accept foreign hospitality under section 9, or clause (d) of section 10, shall be made in Form FC-2.

An application for registration of an association referred to in sub-section (1) of section 6 for acceptance of foreign contribution shall be made in Form FC-8.

An intimation as to the receipt of-

(a)��� foreign contribution by an association referred to in sub-sections (1) and (1A) of section 6 shall be given every year beginning on the 1^st day of April in Form FC-3 in duplicate within four months of the closure of the year:

Provided that a nil report shall also be furnished. The intimation to be furnished for the year beginning on the 1^st day of April, 1991 shall also include the receipt and utilisation of foreign contribution during the period commencing from January 1,1991 and ending March 31, 1991;

(b)������ foreign contribution by a candidate for election, referred to in sub-section (2) of the section 6, shall be given in Form FC-4 within fifteen days form the date on which� he is duly nominated as a candidate for election;

(c)������ any scholarship, stipend or any payment of a like nature, from any foreign source in relation to which an intimation is required to be given under sub-section (1) of section 7, shall be given in Form FC-5, within thirty days of receipt of such scholarship, stipend or payment of a like nature:

Provided that where the person receiving the scholarship, stipend or any payment of a like nature is residing outside India, the intimation shall be given within sixty days from the date of receipt of such scholarship, stipend or other payment of a like nature;

(d)������ foreign hospitality, referred to in the proviso to section 9, shall be given on plain paper within thirty days form the date of receipt of such hospitality specifying the particulars as to the receipt of such hospitality and the source from which and the manner in which such hospitality was received.

It shall not be necessary for a citizen of India to give any intimation under section 7 regarding receipt of scholarship, stipend or any payment of a like nature from any foreign source, if the value of such scholarship, stipend or other payment does not exceed, during an academic year, rupees thirty sixty thousand.

Any application or intimation referred to in rule 3, rule 3A or rule 4, as the case may be, shall be made or given to the Secretary to the Government of India in the Ministry of Home Affairs, New Delhi, and such application or intimation shall be sent by registered post.

A prohibitory order under section 12 or any other order or direction made or issued under the Act, shall be served on the person concerned in the following manner, that is to say, -

(a)������ by delivering or tendering it to that person or to his duly authorised agent; OR

(b)������ by sending it to him by registered post with acknowledgement due to the address of his last known place of residence or the place where he carries on, or is known� to have last carried on, business, or the place where he personally works for gain or is known to have last worked for gain, and in case the person is an� organisation or an association, to the� last known address of the office of such organisation or association;

(c)������ if it cannot be served in any of the manner aforesaid, by affixing it on the outer door or some other conspicuous part of the premises in which that person resides, or carries on, or is known to have last carried on, business or personally works for gain, or is known to have worked personally for gain, and in case the person is an organisation or an association, on the outer door or some other conspicuous part of the premises in which the office of that organisation or association is located, or is known to have been last located, and the written report whereof should be witnessed by at least two persons.

(1)������ A separate set of accounts and records shall be maintained, exclusively for foreign contribution received and utilised, -

���������������� (a) in Form FC-6, where the foreign contribution relates only to articles as referred to in item (i) of sub-clause (c) of clause (1) section 2;

���������������� (b) in the cash book and ledger account on double entry basis, where the foreign contribution relates to currency received and utilised, and a� separate bank account shall be maintained in respect of such contribution;

���������� (c)������ in Form FC-7, where the foreign contribution relates to foreign securities.

(2)������ Every account specified in sub-rule (1) shall be maintained on an yearly basis, commencing on the 1^st day of April each year and every such yearly account, duly certified by a chartered accountant in Form FC-3 alongwith a balance sheet and statement of receipt and payment shall be furnished, in duplicate, to the Secretary to the Government of India, in the Ministry of Home Affairs, New Delhi, within four months of the closure of the year.

An officer referred to in clause (b) of section 19 may adjudge confiscation in relation to any article or currency seized under section 16, if the value of such article or the amount of such currency exceeds one thousand rupees but does not exceed fifty thousand rupees.

Form FC-1 [See rule 3(a)]

Application for seeking prior permission of the Central Government for accepting foreign contribution by or on behalf of an organisation of political nature not being a political party

[Section 5(1) and 5(2) (a) of the Foreign Contribution (Regulation) Act, 1976]

1.

(a) Particulars of the organisation (Full name in block letters, and address)�������� :

(b) Address of the principal/ head office of the organisation������������������������������ :�

 

2. Full particulars of the persons applying on behalf of the organisation��������������������� :

(a) Name in full (in the block letters) ������������������������������������������������������������� :

(b) Name of father������������������������������������������������������������������������������������� :

(c) Occupation ����������������������������������������������������������������������������������������� :

(d) Residential address ����������������������������������������������������������������������������� :

(e) If an office bearer, the office held in the organisation� ���������������������������������� :

3. Reference of the order published by the Central Government in the Official ������������� :

��� Gazette specifying the organisation as an �organisation of political nature,

��� not being a political party��������������������������������������������������������������������������������� :

4. Nature and full details of contribution including value, to be received���������������������� :

5. The Mode /channel of receipt��������������������������������������������������������������������������� :

6. Purpose for which foreign contribution is proposed to be received������������������������� :

7. Particulars of the foreign source form which contribution to be received������������������ :

(a)    If an individual, his personal particulars including name, present address,���� :

�permanent address, nationality, profession

(b)    If an organisation/ institution/ association/ trust/ foundation/ trade union, etc., :

full particulars thereof including: -

(i) Full name and complete address ������������������������������������������������������������ :

(ii) Address of head office/ principal office ����������������������������������������������������� :

(iii) Aims and objects��������������������������������������������������������������������������������� :�

(iv) Particulars of important office bearers ����������������������������������������������������� :

8. Nature of connection/ dealings with the foreign source����������������������������������������� :

9. Any other information of significance, which the applicant may like to furnish������������ :

 

Declaration

I hereby declare that the above particulars furnished by me are true and correct.

 

Place ________________�������������������������������������������������������������������������������������������������������������������������������������������������

Date _________________

Signature of the Applicant ________________

Note: In case of application by an organisation it should be signed by the chief functionary.

**********************************************************************************

FORM FC-IA [See rule 3(aa)]

Form of application for seeking prior permission from the Central Government under the Foreign Contribution (Regulation) Act, 1976 (hereinafter referred to as �the Act�), for the acceptance of foreign contribution by an association having a definite cultural, economic, educationAL, religious or social programme

No. __________________________����������������������������������������������������������������������������������������������������������������������������������� �������������������������������

Date _____________

 

To,

The Secretary to the Government of India,

�Ministry of Home Affairs, Lok Nayak Bhavan,

Khan Market,

New Delhi �100 003

Subject: Application for seeking the prior permission of the Central Government under the Foreign Contribution (Regulation) Act, 1976, for acceptance of foreign contribution

Sir,

I ____________________________________________ on behalf of the association named hereafter, apply for seeking prior permission of the Central Government for the acceptance of foreign contribution under proviso to sub-section (1) of section 6 or under sub-section (1A) of that section or clause (b) of section 10 of the Act.

1.������� (i) Name of the association and its complete postal address:

Name����������������������������������������������������������������������������� :���������������������������������������������������������������

Address�������������������������������������������������������������������������� :

Town/ city������������������������������������������������������������������������ :

State��������������������������������������������������������� ��������������������� :

District���������������������������������������������������������������������������� :

Pin Code������������������������������������������������������������������������ :

(ii) If the association is a registered trust or society please

indicate its-������������������������������������������������������������������������� :

(a) Registration number ���������������������������������������������������� :

(b) Place of registration ����������������������������������������������������� :

(c) Date of registration (certified copy of the registration ���������� :

certificate to be attached)

(iii) Nature of association������������������������������������������������������ :

(a) Religious (b) cultural (c) economic (d) educational (e) social

Note: If a religious association, then state whether (a) Hindu (b) Sikh (c) Muslim (d) Christian (e) Buddhist (f) others.

(iv) Please indicate the main aim(s) and object(s) of the ������������ :

association (enclose copy of the memorandum of association

and / or the articles of association, if applicable).

(v) Please furnish the names and address of the members of the Executive Committee/ Governing Council, etc. of the association, including the Chief Functionary in the following manner:

Sl. No	Name	Name of father / husband	Nationality	Occupation	Office held in the association, if any	Relation with other office bearers, if any	Address
(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)

 

2. Please indicate whether any member of the Executive Committee/ Governing Council, etc. of the association, including the Chief Functionary has, in the discharge of his /her official functions-

(a) been convicted by any court of law;

(b) a prosecution for any offence pending against him/her;

(c) been found guilty of diversion or mis-utilisation of funds of the association or any other association in the past

________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

3. Please indicate whether the applicant association-

(a) is a branch/ unit/ associate of foreign based organisation or another association already registered under the Act. If so, name and address of the parent organisation should be furnished;

(b) has been directed by the Central Government in terms of the proviso to sub-section (1) of section 6 of the Act to seek prior permission. If so, the number and date of the relevant order should be furnished;

(c) has been directed by the Central Government in terms of section 10 of the Act to seek prior permission. If so, the number and date of the relevant order should be furnished.

________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

4. Please indicate-������������������������������������������������������������

(i) whether the association ever applied for registration under the Act in the past, if so,

(a) the date of submission of application for registration;

(b) the number and date of last reference, if any, received from the Ministry:

(c) whether registration was refused;

(d) whether the application for registration is still pending.

(ii) whether� the association has close links with another association, or its unit or branch which has been-

(a) refused registration under the Act,

(b) prohibited from accepting foreign contribution.

________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

5. Please indicate-

(i) whether the association was,-

(a) granted prior permission to receive foreign contribution under the Act in the past. If so, the number and date of the letter granting prior permission should be furnished ;

(b) whether the account of the receipt and utilisation of the foreign contribution received above was sent� to the Central Government in the prescribed form. If so, the date of submission of the accounts should be furnished;

(c) if the prior permission was granted in the current year, details of the foreign contribution received and utilised,� purpose-wise, showing the unspent balance should be annexed.

________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

(ii) whether the association has received foreign contribution without the prior permission of the Central Government, in the past. If so, -

(a) full particulars of the foreign contribution received, address of the branch of the bank and account number� in which deposited should be furnished ;

(b) whether� the said violation has been condoned by the Central Government ;

(c) Whether the association has been prohibited from accepting foreign contribution under the Act.

________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

6. Please indicate whether the association is owner / printer / publisher, editor of a publication which is a �registered newspaper� under the Press and Registration of Books Act, 1867.

________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

7. Please furnish-

(i) details of the activities of the association during the past three years;

(ii) copies of the audited statement of accounts of the association for the past three years

________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

8.������� (i) Please indicate-

(a) the nature and� value of foreign contribution to be received(a copy of the latest commitment letter from the donor should be furnished);

(b) the purpose for which the foreign contribution� is proposed to be received and utilised indicating also the geographical area(s) to be covered.

________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

���������� (ii) a copy of the proposal/ project which has been approved by the foreign� source for� funding,� including projected outlay/ budget break-up should be enclosed.

���������� (iii) a copy of the proposal/ project which has been approved for funding out of the foreign contribution should be enclosed.(This column applies only� to subsequent recipients).

9. Please indicate-

(i) the name of the bank and address of the� branch through which the foreign contribution is proposed to be received;

(ii) the account number in the said branch of the bank.

________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

10. Please indicate the particulars of the foreign source or the sources* from which the foreign contribution* is proposed to be received: -

(a) If an individual, his personal particulars including name, present address, permanent address, nationality, profession;

(b) If an organisation/ institution/ association/ trust/ trade union, etc. full particulars thereof, including-

(i) Full name and complete address:

(ii) Address of the head office/ principal office.

(iii) Particulars of Chief Functionary and important office-bearers.

�(c) Please indicate whether the foreign source is a Government of a foreign country or agency thereof.

________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

�

10A. Whether a recommendation certificate from the competent authority is attached (Yes/No)

11. Any other information, which the association may like to furnish.

Yours faithfully,

 

 

Signature of the applicant

Name of the Chief Functionary or authorised office-bearer (with seal of the association)

Declaration

I hereby declare that the above particulars furnished by me are true and correct.

Place:

Date:

Signature of the applicant

Name of the Chief Functionary or authorised office-bearer (with seal of the association)

*If the foreign contribution, whether currency or article is to be received from any person or association who has received the same as first, second or subsequent recipient, particulars of such persons or association should be given against column 10 above.

Notes:

1.������� An incomplete application i.e. without necessary documents/ details/ explanation is likely to be rejected summarily.

2.������� In case the space against any column is insufficient, separate annexure should be attached.

3.������� Please use Capital Letters.

4.������� The application should be signed by the Chief Functionary or authorised office bearer of the association.

Certificate

(To be submitted alongwith the application)

1. This is to certify that the __________________________________________ (name of the association) having its registered office at _______________________________ (address) has been formed for undertaking activities in its chosen ____________________________ (economic, educational cultural, religious and social*) field of activity.� The antecedents of the organisation have been verified and there is nothing adverse against them.

2.� Its proposed project shall be undertaken in the _______________________________________________� (District) of ______________________________________ (State), the said project will be beneficial to the people living in the area.

3. The grant of prior permission to the aforementioned association to accept foreign contribution amounting to� ______________________ (currency/ amount) from ___________________________________________________________________________________________� (name and address of foreign donor) under the Foreign Contribution (Regulation) Act, 1976, for the said project is recommended.

 

 

(Recommending authority** with seal)

 

*Strike out whichever is not applicable.

**Any concerned-

(1)������ Collector of District;

(2)������ Department of the State Government.

(3)������ Ministry/ Department of the Government of India.���

****************************************************************************************

FORM FC-2 [See rule 3(b)]

Application for seeking prior permission of the Central Government to accept foreign hospitality

[Section 9, read with sections 10(d) and 11(1) of the Foreign Contribution (Regulation) Act, 1976]

�

1. Name in full (in block letters)������������������������������������������������������ :

2. Date of birth���������������������������������������������������������������������������� :

3. Name of father/ husband����������������������������������������������������������� :

4. Present address���������������������������������������������������������������������� :

5. Permanent address����������������������������������������������������������������� :

6. Passport particulars (if already in possession)����������������������������� :

7. Status����������������������������������������������������������������������������������������������� :

(a) Member of Legislature�

(b) Office-bearer of a political party

(c) Judge of Supreme Court/ High Court�

(d) Government Servant

(e) Employee of a Company/ Corporation�

(f) Any person or class of persons not specified in section 9

8. Name of countries/places to be visited with duration of stay������������� :

9. The countries and places where foreign hospitality is to be accepted :

10. Duration and purpose of visit to the country (ies)/ places (s) ���������� :

�mentioned in Column 9 with specific dates

11. Particulars of host(s): -

(a) If an individual, his personal particulars including name, present address, permanent address, nationality, profession

________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

(b) If an organisation/ Institution/ Association/ Trust/ Foundation/ Trade Union, etc., full particulars thereof including:

(i) Full name and complete address�

(ii) Address of Head Office/ Principal Office�

(iii) Aims and objects�

(iv) Particulars of important office-bearers

________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

12. *Full particulars, as in serial II (a) and (b) of the foreign source in case the actual source extending the hospitality is located in a country other than actually proposed to be visited.

________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

13. Nature and duration of foreign hospitality proposed to be accepted with specific dates and with specific details

________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

14. Nature of connection/ dealings with the host and/ or foreign source extending the hospitality

________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

15. Approximate expenditure to be incurred on hospitality������������������� :

16. Any other information of significance, which the applicant may like to furnish.

________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

Declaration

I hereby declare that the above particulars furnished by me are true and correct.

Place _______________

Date ________________�����

Signature of the applicant

*Delete if not applicable.

��Foreign hospitality� means any offer, not being a purely casual one, made by a foreign source for providing a person with the cost of travel to any foreign country or territory or with free board, lodging, transport or medical treatment.

*******************************************************************************************

FORM FC-3

Account of Foreign Contribution of the year ending on 31^st March _________�

1.� Association�s details

(i) Name and address (in capital letters)������������������������������������������������������������������ :

(ii) Registration number and date [under Foreign Contribution (Regulation) Act, 1976]����� :

(iii) Prior permission number and date, if not registered���������������������������������������������� :

(iv) Nature of association �������������������������������������������������������������������������������������� :

(1) Cultural (2) Economic (3) Educational (4) Religious (5) Social

(v) Denomination in case of religious associations ��������������������������������������������������� :

(a) Hindu (b) Sikh (c) Muslim (d) Christian (e) Buddhist (f) Others

2. Purpose(s) for which foreign contribution has been received and utilised��������������������������� :

������������������������������������������������������������������������������������������������������������������������������������������� (In Rupees)

Sl No.	Purpose	Previous balance		Receipt during the year					Utilised		Balance
				As first recipient		As second subsequent recipient
		In cash	In kind (Value)	In cash	In kind (value)	In cash	In kind (value)	Total	In cash	In kind (value)	In cash	In Kind (Value)
(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)	(9) (5+6+7+8)	(10)	(11)	(12)	(13)
1.	Theatre/films, etc.����� �������������������������������������������
2	Maintenance of places of historical and cultural� importance.
3	Agricultural� activities.
4	Animal husbandry.
5	Rural Development.
6	(a)Construction /extension (b)Repair /maintenance of school / college building.
7	(a)Construction /extension (b)Repair /maintenance of other buildings (please specify).
8	Research.
9	Stipend/ scholarship.
10	Education/ Literacy programme.
11	Vocational/technical training.
12	Seminars/ conferences/ meetings.
13	(a)Construction/ extension: (b)Repair/ Maintenance of places of worship.�
14	Publication of religious literature.
15.	Education of� priests and preachers
16	Religious functions
17	Care of orphans.
18	Help for poor, aged and destitutes.
19	Health care and family welfare
20	Welfare of the scheduled castes.
21	Welfare of the scheduled tribes.
22	Welfare of other backward classes.
23	Relief for natural calamities.
24	Welfare of women and children.
25	Environmental programme.
26	Establishment expenses.
27	Activities other than those mentioned above (with specific details).
	Total:

Caution: Submission of false information or concealment of material facts shall attract the relevant provisions of the Foreign Contribution (Regulation) Act, 1976, warranting appropriate action.

3. Name and address of the designated branch of the bank and account number (as specified in the application for registration/ prior permission or permitted by the Central Government).

Account No. ______________________________________

Bank ___________________________________________

Branch _________________________________________

Address _________________________________________________________________________________________

���������� PIN _________________________

4. Donor-wise receipts of foreign contribution:

������������������������������������������������������������������������������������������������������������������������������������������� (in Rupees)

Sl. No	Institutional/ individual/ other donors	Name(s) and address (es)	Purpose(s)	Date and Month of receipt	Amount
(1)	(2)	(3)	(4)	(5)	(6)
	(i) Institutional donors:
	(ii) Individual donors above rupees one lakh:
	(iii) Individual donors below rupees one lakh (only columns 4 and 6 need to be filled)
	Total

5. Country-wise receipts of foreign contribution:

������������������������������������������������������������������������������������������������������������������������������������������� (In Rupees)

Sl. No.	Name of the country	Amount
(1)	(2)	(3)
	���������� �Total

Declaration

I hereby declare that the above particulars furnished by me are true and correct. I also affirm that the foreign contribution has been utilised for the purpose(s) for which the association has been registered/ prior permission obtained. To the best of my knowledge, I have not concealed or suppressed any fact.�

Place ____________________

Date _____________________

Signature of the Chief Functionary (Name of the Chief Functionary and the seal of the association)

Certificate

(To be given Chartered Accountant)

I/ we have audited the account of __________________________________________________________ (name of association and its full address including State, District and Pin Code, if registered society, its registration number and state registration, for the year ending 31^st March, _____ and examined all relevant books and vouchers and certify that according to the audited account:

(i)������� the brought forward foreign contribution at the beginning of the year was Rs _________________________

(ii)������ foreign contribution of/ worth Rs _______________ was received by the association during the year __________� was Rs ___________________ .

(iii)������ the balance of unutilised foreign contribution with the association at the end year _________ was Rs. ______________________ .

(iv)������ Certified that the association has maintained the account of foreign contribution and records relating thereto in the manner specified in section 13 of the Foreign Contribution (Regulation) Act, 1976, read with sub-rule (1) of rule 8 of the Foreign Contribution (Regulation) Rules, 1976.

(v)������� The information furnished in this certificate and in the enclosed balance sheet and statement of receipt and payment is correct as checked by me/ us.

Place _______________

Date ________________

Signature of Chartered Accountant with seal, address and registration number

**************************************************************************************

FORM FC-4 [See Rule 4(b)]

Intimation to the Central Government of receipt of foreign contribution received by a candidate for election

[Section 6 (2) of the Foreign Contribution (Regulation) Act, 1976]

1. Name in full (in block letters)������������������������������������������� :

2. Date of birth ����������������������������������������������������������������� :

3. Name of father ������������������������������������������������������������� :

4. Present address����������������������������������������������������������� :

5. Permanent address������������������������������������������������������ :

6. Date on which duly nominated as a candidate for election to� :

a Legislature and particulars of Legislature

(see section 2(1)(b) and 2(1)(f) of the Act]

7. Full particulars of foreign contribution received within 180���� :

days immediately preceding the date on which duly nominated

as a candidate for election to the Legislature

8. Nature and full details of the contribution including value ����� :

9. The mode/ channel of receipt������������������������������������������ :

10. Purpose for which contribution was received ������������������� :

11. Particulars of the foreign sources from which contribution received:

(a) If an individual, his personal particulars including name, ���� :

present address, permanent address, nationality, profession�� :

(b) If an organisation/ institution/ association/ trust / foundation/

trade union, etc., full particulars thereof including-

(i) Full name and complete address����������������������������� :

(ii) Address of head office/principal office���������������������� :

(iii) Aims and objects������������������������������������������������� :

(iv) Particulars of important office bearers ��������������������� :

12. Nature of connection/ dealings with the foreign sources����� :

13. Details of actual utilisation of the contribution������������������� :

(a) Specific purposes for which utilised ������������������������ :

(b) Full description of the manner in which utilised���������� :

14. Any other information of significance, which the applicant may like to furnish.

____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

Declaration

I hereby declare that the above particulars furnished by me are true and correct.

Place _______________

Date ________________

Signature of the candidate

Certified that the above declaration was signed by Shri _____________________ S/o ___________________ resident of __________________________________________________________________ a candidate for election to (*) ________________________________________________ before me on this ________________________ day of� __________________ .

 

 

Signature

Name in block letters _________________________________________�

Designation ________________________________________________

[To be signed by a Class I Gazetted Officer or a 1^st Class Magistrate]

*********************************************************************************************

FORM FC-5� [See Rule 4(c)]

Intimation to the Central Government of receipt of scholarship, stipend or any payment of a like nature from a foreign source

[Section 7(1) and 7(2) of the Foreign Contribution (Regulation) Act, 1976

1. Name in full (in block letters)������������������������������������������� :

2. Date of birth ����������������������������������������������������������������� :

3. Name of father�������������������������������������������������������������� :

4. Present address����������������������������������������������������������� :

5. Permanent address������������������������������������������������������ :

6. Passport particulars������������������������������������������������������ :

7. Specific details of occupation/ profession�������������������������� :

8. Particulars of the foreign sources from which scholarship, stipend or payment of a like nature was received:

________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

(a) If an individual, his personal particulars including name, present address, permanent address, nationality, profession:

________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

(b) If an organisation/institution/association/ trust / foundation/ trade union, etc., full particulars thereof including-

(i) Full name and complete address����������������������������� :

(ii) Address of head office/ principal office���������������������� :

(iii) Aims and objects������������������������������������������������� :

(iv) Particulars of important office bearers ��������������������� :

9. Nature and full details of details of scholarship, stipend or any payment of a like nature received from foreign source, indicating (a) total amount and its break-up under various heads like cost of journey, equipment, clothing, maintenance, tuition fees, residence fees, books, etc., and (b) mode/ channel of receipt

____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

10. Purpose of the scholarship, stipend or any payment of a like nature with specific details of course attended/ to be attended

____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

11. Duration of stay abroad with dates���������������������������������� :

12. Any other information of significance, which the applicant may like to furnish:

____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________�

 

Declaration

I hereby declare that the above particulars furnished by me are true and correct.

Place __________________

Date ___________________

Signature of the applicant

FORM FC-6 [See rule 8(a)]

Foreign Contribution (Articles) Account

DESCRIPTION OF THE ARTICLE

Receipt							Utilisation / Disposal
Date	Name and address of the� person from whom received	Mode of receipt	Purpose of receipt	Quantity received	Appro-ximate� value of articles received	Date of intima- tion sent to the Central Govern-ment	Date	Name and address of the person to whom issued sold or other- wise transf-erred	Purpose for which issued or other- -wise �trans- ferred	Quantity				Reference to entry in the Foreign Contri- bution� (Currency) Account	Bal- ance in stock
										Utilised by the organ- isation	Sold	Other-wise� trans- ferred	If sold, the amount for which sold
1	2	3	4	5	6	7	8	9	10	11	12	13	14	15	16

Declaration

I hereby declare that the above particulars furnished by me are true and correct.

 

(Signature) ________________________

FORM FC-7 [See rule 8(c)]

Foreign Contribution (Securities) Account

(1) Name of securities������������������������������������������������������� :

(2) Nominal value of each security��������������������������������������� :

Date	Name and address of the person from whom received	Distinguishing number of each security	Total securities	Total nominal value of securities		Particulars of permission of the Reserve Bank of India to acquire or to hold foreign securities	Particulars of intimation sent to the Central Government	Date	Dividend �or interest received	Date up to which dividend Or �interest has been received
1	2	3	4	5		6	7	8	9	10

 

DETAILS OF DIVIDENDS/ INTEREST RECEIVED

Reference to the credit entry in the Foreign Contribution� (Currency) Account	Date	Name and address of the person to whom sold / transferred	Total No. of securities sold / transferred	Distinguishing number of each security transferred	Total amount for which sold / transferred	Particulars of permission of the Reserve Bank of India to sell / transfer securities	Particulars of intimation sent to the Central Government	Reference to the entry in the Foreign Contribution (Currency Account)
11	12	13	14	15	16	17	18	19

Declaration

I hereby declare that the above particulars furnished by me are true and correct.

 

(Signature) __________________________________

 

FROM FC-8 [See rule 3A]

Form of application for seeking registration with the Central Government under the Foreign Contribution (Regulation) Act, 1976 (hereinafter referred to as �the Act� for the acceptance of foreign contribution by an association having a definite cultural, economic, educational religious or social programme

No _______________________________ �������������������������������������������������������������������������������������������������������������������������� �������������������������������

Date _____________

 

To,

The Secretary to the Government of India,

Ministry of Home Affairs, Lok Nayak Bhavan,

Khan Market,

New Delhi-110 003

Sub: Application for registration under the Foreign Contribution (Regulation) Act, 1976, for the acceptance of foreign contribution

Sir,

I ___________________________________________ on behalf of the association named hereafter apply for registration of the association under clause (a) of sub-section (1) of section 6 of the Act for the acceptance of foreign contribution.

1.

(i) Name of the association and its complete postal address

Name������������������������������������������������������� :

Address���������������������������������������������������� :

Town/ City�������������������������������������������������� :

District������������������������������������������������������ :

State��������������������������������������������������������� :

Pin Code��������������������������������������������������� :

���������� (ii) If the Association is a registered trust or society please indicate its: -

(a) registration number�������������������������������� :

(b) place of registration�������������������������������� :

(c) date of registration���������������������������������� :

(Certified copy of the registration certificate to be attached)

(iii) Nature of association��������������������������������� :

(a) Religious (b) cultural (c) economic (d) educational (e) social

Note: If a religious association, state whether (a) Hindu (b) Sikh (c) Muslim (d) Christian (e) Buddhist (f) Other.

(iv) Please indicate-

(a) the main aim(s) and object(s) of the association (enclose a copy of the memorandum of association and/ or the articles of association, if applicable):

________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

(b) the main object(s) and definite programme(s) for which the foreign contribution is to be accepted/ utilised.

________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

(v) Please furnish the names and addresses of the members of the Executive Committee/ Governing Council, etc. of the association, including the Chief functionary in the following manner:

S. No	Name	Name of father/ husband	Nation-ality	Occupation	Office held in the assoc- iation, if any	Relation- ship with office- bearers if any	Address
(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)

2.������� Please indicate whether any member of the Executive Committee/ Governing Council, etc. of the association, including the Chief Functionary has in the discharge of his /her official functions-

(a) been convicted by any court of law;

(b) a prosecution for any offence pending against him /her;

(c) been found guilty of diversion or mis-utilisation of funds of the association or any other association in the past

________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

3.������� Please indicate whether the applicant association is a branch/ unit/ associate of foreign-based organisation or another association already registered under the Act. If so, the name and address of the parent organisation.

________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

4.������� Please indicate, -

(i) whether the association was, -

(a) granted prior permission to receive foreign contribution under the Act in the past. If so, the number and date of� the letter granting prior permission should be furnished ;

(b) whether the account of the receipt and utilisation of the foreign contribution received above was sent to the Central Government in the prescribed form. If so, the date of submission of the accounts should be furnished.

________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

(ii) whether, -

(a) the association has received foreign contribution without the prior permission under Act in the past. If so, full particulars of the foreign contribution received alongwith complete address of the bank branch and bank account number in which deposited should be furnished;

(b) the said violation has been condoned by the Central Government;

(c) the association has been prohibited from accepting foreign contribution under the Act.

________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

5.������� Please indicate whether the association is functioning as editor, owner, printer or publisher of a publication required to be registered as �newspaper� under the Press and Registration of Books Act, 1867. If so, the details thereof.

________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

 

6.������� Please indicate, -

(i) whether the association ever applied for registration under the Foreign Contribution (Regulation) Act, 1976, if so, -

(a) the date of submission of application for registration;

(b) the number and date of the last communication, if any, received from the Ministry;

(c) whether registration was refused;

(d) whether application for registration is still pending.

________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

���������� (ii) whether the association has close links with another association, or its unit or branch which has been �

(a) refused registration under the Act ;

(b) prohibited from accepting� foreign contribution.

________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

7.������� Please furnish, -

(i) details of the activities of the association during the past three years.

(ii)����� copies of� the audited statement of accounts of� the association for the past three years.

(iii)             details of the area(s) of operation.

________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

8.������� Please indicate whether the association has been specified as an organisation of a political natural, not being a political party, under section 5 of the Act. If so, the details of the notification should be furnished.

________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

9.������� Please indicate.-

(i) the name and address of the branch of the bank through which the foreign contribution shall be received;

(ii) please specify the account number in the said branch of the bank

________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

9A.������ Whether a recommendation certificate from the competent authority is attached (Yes/ No)

10.������ Any other information, which the association may like to furnish.

 

Yours faithfully,

Chief Functionary for and on behalf of the association ________________________________________

(Name of the association) _____________________________________________________________

 

Declaration and Undertaking

The association named hereinabove affirms that the information furnished above is correct and undertakes: -

(i)������� to inform the Central Government (Ministry of Home Affairs) within thirty days, if any change takes place in regard to the name of the association, its address, its registration, its nature, its aims and objects with documentary evidence effecting the change;

(ii)������ to obtain prior permission for change of office bearer(s), if, at any point of time such change causes replacement of 50 percent or more of the office bearers as were mentioned in the application for registration under the Foreign Contribution (Regulation) Act, 1976, and undertakes further not to accept any foreign contribution except with prior permission till the permission to replace the office bearer(s) has been granted;

(iii)������ not to change the bank or branch of the bank without prior permission of the Central Government. The reasons for change of bank or branch of the bank shall have to be relevant and justifiable; and

Certificate

(To be submitted alongwith the application)

This is to certify that the ______________________________� (name of the association) having its registered office at _________________________________________ (address) has been engaged in economic, education, cultural, religious and social* activities in the _______________� (District) of _________� (State for the last __________________ years.

2.������� It has undertaken welfare activities in the area and has incurred expenditure (excluding administrative expenditure) amounting to ____________________� (amount in rupees) during the last three year on its chosen (economic, educational, cultural, religious and social) field of activity.

3.������� The antecedents of the organisation have been verified and there is nothing adverse against them.

4.������� The grant of registration to the aforesaid association to accept foreign contribution under the Foreign Contribution (Regulation) Act, 1976, is recommended.

 

 

(Recommending authority** With Seal)

*Strike out whichever is not applicable.

**Any concerned �

(1)������ Collector of District;

(2)������ Department of the State Government;

(3)������ Ministry/ Department of the Government of India

(iv)������ not to accept any foreign contribution unless it has obtained either the registration number, as applied for hereinabove, or prior permission of the Central Government under sub-section (1A) of section 6 of the Foreign Contribution(Regulation) Act, 1976.

 

 

Chief Functionary for and on behalf of the association ___________________________________

Name of the association _________________________________________________________

Notes:

(i)������� The receipt of application for registration is not a commitment for grant of registration by the Central Government;

(ii) ������ An incomplete application, i.e., without the required document/ details/ explanations is likely to be rejected summarily;

(iii)������ In case the space provided against any column is insufficient separate sheets should be attached; and

(iv)������ Please use CAPITAL LETTERS.

FORM FC-9

[Omitted by the Foreign Contribution (Regulation) Amendment Rules 1991 w.e.f. 1-4-1991.]

SO 402 (E), dated 22.6.1978: In pursuance of clause (d) of section 8 of the Foreign Contribution (Regulation) Act, 1976 (49 of 1976), the Central Government hereby makes the following regulations with regard to the acceptance or retention of foreign contribution by way of a gift or presentation made to any person specified in section 4 as a member of any Indian delegation, namely: -

(1)������ These regulations may be called the Foreign Contribution (Acceptance or Retention of Gifts or Presentation) Regulations, 1978.

(2)������ They shall come into force on the date of their publication in the Office Gazette.

In these regulation, unless the context otherwise requires, -

(a)������ �Act � means the Foreign Contribution (Regulation) Act, 1976 (49 of 1976);

(b) ����� Words and expressions used in these regulations and not defined but defined in the Act shall have the meanings respectively assigned to them in the Act.

(1)������ Any person specified in section 4 of the Act who is a member of any Indian delegation may accept any foreign contribution by way of a gift or presentation made to him as a member of such delegation (hereinafter referred to as such person), subject to the provisions of this regulation:

Provided that a Minister may retain a gift or presentation made to him / her provided the value of the gift assessed under sub-regulation (5) does not exceed five thousand rupees.

(2)������ Where such person receives any foreign contribution by way of gift or presentation, he shall, within thirty days of the receipt thereof, intimate to the leader of the Indian delegation], the Secretary to the Government of India in the Ministry of Home Affairs, Ministry of External Affairs and the Ministry of the Department of the Government of India sponsoring the delegation of which he is a member, in writing, -

(a)   the fact of his having received such gift or presentation,

(b)   the foreign source from which it is received,

(c)    its approximate market value in the country of origin,

(d)   the place in which, and the date on which, it is received, and

(e)   such other details relating thereto as he may, in the circumstances, consider appropriate:

Provided that in a case where such person received such gift or presentation while he is visiting any foreign country or territory outside India, such intimation may be made by him within thirty days from the date of his return to India:

Provided further that the requirements contained in these regulations shall be complied with by such person if the leader of the Indian delegation is of the opinion that the market value, in India, of such gift(s) or presentation(s) exceeds Rs. 1,000 and the said leader directs in writing to such person to comply with such of the requirements of these regulations, as may be applicable, in his case.

(3)������ Every gift or presentation received by such person from any foreign source shall be deposited by him with the Secretary to the Government of India in the Ministry or the Department, which had sponsored the delegation of which he was the member, within thirty days from the date of intimation by him of such receipt under sub-regulation (2).

(4)������ The Secretary to the Government of India, referred to in sub-regulation (3), shall forward every such gift or presentation deposited with him to the Toshakhana in the Ministry of External Affairs for assessment of its market value in the country of origin.

(5)������ Such assessment shall be made within thirty days from the date of receipt of the gift or presentation in the Toshakhana, in accordance with the rules applicable, for the being in force, to the valuation of articles in the Toshakhana, and such person shall be intimated in writing of such assessment forthwith.

(6)������ If any question arises relating to the assessment so made under sub- regulation (5) it shall be referred to the Central Government who shall decide the same.

(7)������ Every such gift or presentation, the market value in the country of origin of which, as assessed under sub-regulation (5), does not exceed three thousand rupees, shall be returned to such person for retention by him:

Provided that where more than one such gift or presentation is received by such person while he is in one delegation, such person be entitled to retain only one such gift or presentation:

Provided further that where more than one gift or presentation has been received by such person, while he is in one delegation, and the aggregate market value in India, of all such gifts or presentation, does not exceed Rs. 1,000 as determined by the leader of the Indian delegation, such may retain all such gifts / presentation.

(8)������ Every such gift or presentation, the market value in the country of origin of which, as assessed under sub-regulation (5), exceeds three thousand rupees shall be retained in the Toshakhana:

Provided such person shall have the option, that exercised by him within thirty days from the dated of receipt by him of the intimation under sub-regulation (5), to purchase such gift or presentation on payment of the difference between the market value in the country of origin of such gift presentation, as assessed under sub-regulation (5) and three thousand rupees.���������������������������������������������

Provided further that the option once exercised under this sub-regulation shall be final.

 

 

SO 179 (E), dated 18.2.1977: In exercise of the powers conferred by sub-section (7) of section 12 of the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 (13 of 1976), the Appellate Tribunal for Forfeited Property hereby makes the following rules, namely: -

(1)������ These rules may be called the Smugglers and Foreign Exchange Manipulators (Appellate Tribunal for Forfeited Property) Rules, 1977

(2)������ They shall come into force on the date of their publication in the Official Gazette.

In these rules, unless the context otherwise requires, -

(i)������� �Act� means the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 (13 of 1976);

(ii)������ �appeal� means a memorandum of appeal to the Tribunal filed under sub-section (4) of section 12;

(iii)������ �appellant� means a person who, being aggrieved by an order made by the competent authority, prefers an appeal to the Tribunal, and includes the authorised representative of the appellant;

(iv)������ �authorised representative� means,-

���������������� (a) in relation to an appellant, any person being a relative of, or a person who is, or was, regularly employed by the appellant and authorised by the appellant in writing to attend before the Tribunal; or

���������� (b)������ a legal practitioner entitled to practise in any civil court in India, who is authorised by the appellant; or

���������������� (c) an accountant, being an Associate or Fellow Member of the Institute of Chartered Accountants of India or the Institute of Cost and Works Accountants of India, who is authorised by the appellant; or

���������������� (d) in relation to a competent authority who is a party to any proceeding before the Tribunal, a standing counsel to the Government or a person duly appointed by the Government by notification in the Official Gazette as the authorised representative or any other person acting on behalf of the person so appointed;

(v)������� �Bench� means of the Tribunal constituted under sub-section (6) [or (6A)] of section 12;

(vi)������ �Chairman� means the Chairman of the Tribunal;

(vii)����� �legal representative� means a person who in law represents the estate of a deceased person, and includes any person or persons treated by the Tribunal as representing the deceased person in the proceedings pending before the Tribunal, unless a competent court holds otherwise and its order is brought to the notice of the Tribunal;

(viii)���� �member� means a member of the Tribunal;

(ix)������ �party� in relation to an appeal, means an appellant or the respondent and the expression �parties� shall be construed to mean the appellant and the respondent as the context may require;

(x)������� �Registrar� means such Administrative Officer of the Tribunal as the Tribunal may appoint for discharging the functions of its Registrar;

(xi)������ �section� means a section of the Act;

(xii)����� �Tribunal� means the Appellate Tribunal for Forfeited Property, constituted by the Central Government under sub-section (1) of section 12.

(1)������ All pleadings before the Tribunal may, at the option of the appellant, be in English or in Hindi.

(2)������ All orders and other proceedings of the Tribunal may, at the option of the Tribunal, be in English or in Hindi.

(1)������ The headquarters of the Tribunal shall be at New Delhi.

(2)������ All appeals and petitions shall ordinarily be heard at the headquarters but may, at the discretion of the Chairman, be heard at Bombay, Madras, Calcutta or any other place in the public interest.

(3)������ The officer of the Tribunal shall observe such public and other holidays as are observed by the offices of the Central Government.

(1)������ Any person aggrieved by an order of the competent authority under section 7 or sub section (1) of section 9 or section 10 of the Act may prefer an appeal to the Tribunal.

(2)������ A memorandum of appeal shall be in Form A annexed hereto and shall be in English or in Hindi and shall set forth, concisely and under distinct heads, the grounds of appeal without any argument or narrative, and such grounds shall be numbered consecutively.

(3)��� (a)��������� Every memorandum of appeal shall be presented by the appellant in person or by his authorised representative to the Registrar at the office of the Tribunal or to an officer authorised in this behalf by the Chairman(hereinafter referred to as the authorised officer) or shall be sent by registered post, acknowledgment� due, addressed to the Registrar or to such authorised officer :

Provided that where there are more appellants than one, it shall be sufficient if the appeal is presented by one of the appellants or by the authorised representative of all the appellants.

������� (b)��������� Where the memorandum of appeal is sent by registered post, the date of receipt of the memorandum of appeal at the office of the Tribunal alone shall be considered as the date of filling of the appeal.

������� (c)���������� The Registrar or the authorised officer shall endorse on every memorandum of appeal the date on which it is presented or received at the office of the Tribunal and shall sign the endorsement.

(4)������ Every memorandum of appeal shall be in quadruplicate and shall be accompanied by four copies of the order appealed against (one of the copies shall be a certified copy).

(5)������ In every appeal, the competent authority shall be impleaded as one of the respondents.

(6)������ Any petition presented under these rules shall be in quadruplicate and shall be accompanied by an affidavit as also such documents as are relied upon in the memorandum of appeal.

(1)������ Every memorandum of appeal, filed within forty-five days of service of the order of the competent authority, being in Form A annexed hereto and otherwise in order, shall be registered and numbered by the Registrar who shall intimate the appellant or his authorised representative accordingly.

(2)��� (a)��������� The Registrar may return a memorandum of appeal filed within a period of forty-five days, if it is not in the prescribed form or not otherwise in order, for its being amended within such period, before the expiry of the said period of forty-five days as he may specify, or within such further period as may be extended by him (not being a period beyond the said period of forty-five days).

������� (b)��������� Where the memorandum of appeal is filed after amendment, within the period of forty-five days, the Registrar shall be competent to register the appeal under sub-rule (1).

(3)��� (a)��������� Where the memorandum of appeal, returned under sub-rule (2), is refiled after the expiry of the period of forty-five days referred to in sub-rule (1), it shall be accompanied by a petition for condonation of delay and also an affidavit explaining the reasons for the delay. Thereafter, it shall be posted for hearing before the Tribunal for determination of the question as to whether the appeal should be entertained and the order of the Tribunal in this regard shall be final.

������� (b)��������� Where the appeal is allowed to be entertained, the Registrar shall follow the procedure specified in sub-rule (1) in respect of its registration.

(4)��� (a)��������� Where a memorandum of appeal is filed beyond the period of forty-five days but within a period of sixty days from the date of service of the order of the competent authority, it shall not be accepted unless it is accompanied by a petition for condonation� of� delay and also an affidavit explaining the reasons for the delay.

������� (b)��������� The petition for condonation of delay shall be posted for hearing before the Tribunal in the same manner in which an appeal is posted for hearing, and the order of the Tribunal in this regard shall be final.

������� (c)���������� Where the petition for condonation of delay is allowed, the Registrar shall follow the procedure specified in sub-rule (1) or sub-rule (2), as the case may be in respect of the registration of the memorandum of appeal.

(5)������ Where �

(a) a memorandum of appeal is filed beyond the period of forty-five days but within a period of sixty days and is not accompanied by a petition for condonation of delay and also an affidavit explaining the reasons for the delay, or

(b) a memorandum of appeal is filed after the expiry of sixty days from the� date of service of the order of the competent authority,

���������� the Registrar shall in either case place the case before the Chairman for orders and the Chairman shall,-

������� (i) in a case falling under clause (a), direct the matter to be posted for hearing before the Tribunal after giving notice to the parties, and;

���������� (ii)������ in a case falling under clause (b), direct the appeal to be posted before the Tribunal for being rejected as time-barred.

(6)������ Where a memorandum of appeal referred to in clause (a) of sub-rule (5) is allowed to be entertained, the Registrar shall follow the procedure specified in sub-rule (1) or sub-rule (2) in respect of its registration.

(1)������ After an appeal is registered, one copy of the memorandum of appeal and annexures thereto shall be served as soon as possible on the competent authority either by registered post, acknowledgement due, or by delivering or tendering them to the said authority through messenger.

(2)������ The parties shall be informed of the date and place of hearing of the appeal either by registered post, acknowledgement due, or by notice served on them through messenger:�

���������� Provided that where the parties are present before the Tribunal, it may inform them the date an place of hearing of the appeal.

(3)������ Any petition for summoning witnesses or documents, or the like, filed by a party may be heard, if necessary, after giving notice to the other party.

(4)������ Every requisition, direction, letter, authorisation, or written notice to be issued by the Tribunal shall be signed the Registrar or any other officer authorised by the Chairman in this behalf and shall be sent by registered post, acknowledgement due.

The Tribunal shall have all the powers of civil court as specified in section 15.

In a case where two or more appeals are filed against an order or orders of the competent authority, such of the appeals as may be heard and disposed of together may be disposed of by a single order.

The appellant shall not, except with the leave of the Tribunal, urge or be heard in support of any ground not set forth in the memorandum of appeal, but the Tribunal, in deciding the appeal, shall not be confined to the grounds set forth in the memorandum of appeal or taken with the leave of the Tribunal under this rule:

Provided that the Tribunal shall not rest its decision on any ground other than the grounds set forth in the memorandum of appeal unless the party which may be affected thereby has had a reasonable opportunity of being heard on that ground.

The Tribunal may adjourn the hearing of any case to any other date and inform the parties of the next date and place of hearing of the case.

Where on the day fixed for hearing or on any other day to which the hearing may be adjourned, the appellant does not appear when the appeal is called on for hearing, the Tribunal may either proceed ex parte or dismiss the appeal for default:

Provided that where the appeal has been dismissed for default or proceeded with ex parte and the appellant appears thereafter and satisfies the Tribunal that there was sufficient cause for his non-appearance when the appeal was called on for hearing, the Tribunal shall after giving notice to the respondent, make an order setting aside the dismissal order or the ex parte proceedings and restoring the appeal to its original number.

An appeal shall not abate on the death of an appellant or on the adjudication of the appellant as an insolvent or, in the case of a company, on its being wound up and the executor, administrator or other legal representative of the appellant may apply to be brought on record as appellants.

(1)������ Where the competent authority has disposed of any matter upon a preliminary point and the decision of the competent authority is reversed in appeal, the Tribunal may, if it thinks fit, by order, remand the case, and may further direct what issue or issues shall be determined in the matter so remanded, and shall send a copy of its order to the competent authority, with directions to re-admit the matter under its original number in the register of the competent authority and proceed to determine the matter; and the evidence, if any, recorded during the original hearing of �the matter shall, subject to all just exceptions be evidence during the hearing of the matter after remand.

(2)������ Where the competent authority has omitted to frame or try any issue or to determine any question which appears to the Tribunal to be essential to the right decision of the case upon the merits, the Tribunal may, if necessary, keep the appeal pending, frame issues and refer the same for trial to the competent authority; and in such case shall direct the competent authority to take the additional evidence required and thereupon the competent authority shall proceed to decide such issues and shall return the evidence to the Tribunal together with its findings thereon and the reasons therefore.

(3)������ Such evidence and finding shall form part of the record in the case and either party may, within a period to be fixed by the Tribunal, present a memorandum of objections to any finding.

(4)������ After the expiry of the period so fixed for presenting any memorandum of objections, the Tribunal shall proceed to hear and dispose of the appeal.

Save as otherwise provided in these rules, the parties to the appeal shall not be entitled to produce additional evidence, oral or documentary, before the Tribunal:

Provided that if the Tribunal-

(a)������ requires any documents to be produced or any witness to be examined or any affidavit to be filed to enable it to pass orders or for any other substantial cause, or

(b)������ is satisfied that the competent authority has decided the case without giving reasonable opportunity to the appellant to adduce evidence on points specified by him or not specified by him,

the Tribunal may allow such documents to be produced or witness to be examined or affidavit to be filed or may allow such evidence to be adduced or direct the� competent authority to record such evidence and submit its report alongwith the record.

The places in which the Tribunal sits for the purpose of hearing appeals shall be deemed to be an open court, to which the public generally may have access so far as the same can conveniently contain them:

Provided that the Tribunal may, if it thinks fit, order at any stage of the hearing of an appeal, that the public generally, or any particular person, shall not have access to, or be or remain in, the room or building used by the Tribunal.

(1)������ The Tribunal may, after final hearing, reserve its order. Where any order is so reserved, the Tribunal may suo motu or at the instance of the parties for good and sufficient reasons, furnish in writing, re-post the appeal for hearing before the final order is passed.

(2)������ After final hearing, the Tribunal shall deliver its final order.

Every order of the Tribunal shall being in writing and every final order of the Tribunal shall be communicated by the Registrar to the parties as early as possible.

(1)������ (a)������ Where the decision of the Tribunal is unanimous, a common order shall be signed by all the member of the Tribunal.

���������������� (b) Where there is a difference of opinion, the decision shall be in accordance with the decision of the majority of the members of the Tribunal

���������� (c)������ The dissenting member may write his own order on the point or points on which he dissents.

���������� (d)������ The decision of the majority shall be reduced to writing and signed by all the members, including the dissenting member.

(2)������ Where the appeal or petition is heard by a Bench and one of the members is unavoidably absent, its record shall be placed before the other members, and such members may, after examining the record and mutual discussion, pass final orders on the appeal or petition:

Provided that where there is a difference of opinion among the members, the record shall be placed before the third member for hearing and the decision of the majority shall be reduced to writing and signed by all the members including the dissenting member.

(1)������ A petition for the rectification of an order of the Tribunal shall lie if there is a mistake apparent from the record.

(2)������ No petition for rectification of the order of the Tribunal shall be entertained after the expiry of a period of one year from the date of the order.

Any petition filed by an appellant regarding the preservation of forfeited property during the pendency of the appeal may be disposed of with such directions as the Tribunal may think fit.

(1)������ Copying fees for supply of copies shall be rupee two per page or part thereof.

(1A)���� Copying fees for supply of Photostat copies shall, however, be the actual expenses incurred by the Tribunal for such copies.

(2)������ A fee of two rupees shall be levied for authenticating a copy to be a true copy.

(3)������ Copying fees shall be recovered in advance in cash.

(4)������ Where a party applies for immediate delivery of a copy of evidence taken down by a stenographer, the fee chargeable shall be 2� times of those prescribed by sub-rule (1); in such case, fifty per cent of the fees prescribed by sub-rule (1) shall be paid to the stenographer.

(5)������ When the copy is sent by post the petitioner will also be charged with the actual postal charges, which shall be recovered in advance in cash.

(1)������ Fees for inspecting records and registers of the Tribunal shall be charged as follow: -

(a)������ For the first hour or part thereof	1 rupee
(b)������ For every additional hour or part thereof	50 paise

(2)������ Fees for inspection shall be paid in cash.

 

FORM - A [See rule 5]

(Before The Appellate Tribunal for Forfeited Property, New Delhi)

Memorandum of appeal

[Section 12 of the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976]

No. __________________________ /19_______

(To be filled up by the Office of Appellate Tribunal)

 

IN THE MATTER OF

Appellant� _________________________________________________________________________________________________________________________���������������������������������������������������������������������

Respondent:��� Competent Authority, New Delhi/ Bombay/ Calcutta/ Madras.

1. Authority passing the order appealed against: Competent Authority, New Delhi/ Bombay/ Calcutta / Madras.

2. Date of the order:�����������������������������������������������������������������

3. Date of service of the order:

4. Whether a hearing in person or through an authorised representative is desired: ������������������ Yes/ No

5. The address to which communications may be sent to the appellant: ����������������������������������

6. Address of the respondent: Competent Authority

7. Section or sub-section of the section of the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976, under which the competent authority passed the order and which is appealed against ______________________________________________________________________________________________________________ ������

8. Relief claimed:

(i) Whether the entire order is disputed:

(ii) if only certain items of properties are disputed, enumerate them in an Annexure: ����������� Yes/ No

9. Ground of appeal (annex a separate sheet if space is not sufficient):������������������������������������

 

Signature of Appellant ____________________________

 

Signature of Authorised representative, if any ____________________________________

 

Verification

I ________________________________________________________ the appellant do hereby declare that what is stated above is true to the best of my information and belief.

Verified today the __________ days of ____________________________ 19______________.

 

Signature of Appellant ___________________________

Notes:

1.������� The appeal should be filed in quadruplicate accompanied by four copies of orders appealed against (one of which will be a certified copy). Any enclosure will also be in quadruplicate.

2.������� The appeal should be written in English or in Hindi and should set forth concisely and under distinct heads the grounds of appeal and should be without any argument or narrative and such grounds should be numbered consecutively.

3.������� It is enough if the memorandum of appeal is signed either by the appellant or the authorised representative. Where it is signed by the authorised representative, it should be accompanied by an authorisation of the appellant in his favour.

4.������� For further details, see the Smugglers and Foreign Exchange Manipulators (Appellate Tribunal for Forfeited Property) Rules, 1977.���

�

SO 1547, dated 14.4.1986: In exercise of the powers conferred by sub-section (7) of section 12 of the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 (13 of 1976), the Appellate Tribunal for Forfeited Property hereby makes the following rules, namely: -

(1)������ These rules may be called the Appellate Tribunal for Forfeited Property (Procedure) Rules, 1986.

(2) ����� They shall come into force at once.

In these rules, unless the context otherwise requires, -

(a)������ �Act� mean the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 (13 of 1976);

(b)������ �appeal� means an appeal under sub-section (4) of section 12;

(c)������ �appellant� means a person who, being aggrieved by an order made by the competent authority, prefers an appeal to the Tribunal, and includes the authorised representative of the appellant;

(d)������ �authorised representative� means-

���������� (i)�� in relation to an appellant,

(A) any person being a relative of, or a person who is, or was, regularly employed by the appellant and authorised in writing by the appellant to attend before the Tribunal; OR

��� (B) a legal practitioner entitled to practise in any civil court in India, who is authorised in writing by the appellant to attend before the Tribunal; OR�����

(C) an accountant, being a member of the Institute of Chartered Accountants of India constituted under section 3 of the Chartered�� Accountants Act, 1949 (38 of 1949) or the Institute of Cost and Works Accountants of India constituted under section 3 of the Cost and Work Accountants Act, 1959 (23 of 1959), who is authorised in writing by the appellant to attend before the Tribunal, OR�

���������� (ii)�� in relation to a competent authority who is a party to any proceedings before the Tribunal:

(A)    a Law Officer of the Central Government;

(B)   a Government Pleader or Standing Counsel to the Central Government by whatever name called;

(C)   any Officer of the Central Government notified in this behalf by the Central Government by notification in the Official Gazette;

(D)   any legal practitioner or Officer of the Central Government authorised in this behalf by the Central� Government or the competent authority;

(E)   any other legal practitioner or Officer of the Central Government acting on behalf of the person so notified or authorised;

(e)����� �Bench� means a Bench of the Tribunal constituted under sub-section (6) or (6A) of section 12;

(f) ����� �Chairman� means the Chairman of the Tribunal;

(g) ���� �competent authority� means a competent authority as defined in clause (b) of� sub-section (1) of section 3;

(h)����� �legal representative� means a person who in law represents the estate of� a deceased person in the person, and includes any person treated by the Tribunal as representing the deceased person in the proceedings pending before the Tribunal;

(i)������ �member� means a member of the Tribunal and includes� the Chairman;

(j)������ �party� in relation to an appeal, means an appellant or the respondent and the expression �parties� shall be construed to mean the appellant and the respondent;

(k)����� �Registrar� means the Registrar of the Tribunal and includes such other officer who is authorised by the Chairman to perform the functions of the Registrar;

(l)������ �section� means a section of the Act;

(m)���� �Tribunal� means the Appellate Tribunal for Forfeited Property, constituted by the Central Government under sub-section (1) of section 12.

(1)����� The pleadings before the Tribunal may, at the option of the respective parties, be in English or in Hindi.

(2)����� All orders and other proceedings of the Tribunal may, at the option of the Tribunal, be in English or in Hindi.

(1)����� The headquarters of the Tribunal shall be at New Delhi.

(2)����� Appeals and petitions may be heard at the headquarters or at the discretion of the Chairman at Bombay, Madras, Calcutta, Ahmedabad, or any other place.

(3)����� The office of the Tribunal shall observe such public and other holidays as are observed by the officers of the Central Government.

(1)������ Any person aggrieved by an order of the competent authority made under section 7 or sub-section (1) of section 9 or section 10 of the Act may prefer an appeal to the Tribunal and every memorandum of appeal shall be in the form annexed to these rules.

(2)������ A memorandum of appeal shall be in English or in Hindi and shall set forth concisely and under distinct heads the grounds of appeal without any argument or narrative and such grounds shall be numbered consecutively.

(3)������ Every memorandum of appeal or petition shall be in quadruplicate and in the case of a memorandum of appeal, it shall be accompanied by four copies of the order appealed against and one of such copies shall be a certified copy of such order, or the order served on the appellant.

(4)������ The address given at serial number 5 of the form appended to these rules as referred to in sub-rule (1) shall be called the �registered address� of the appellant and shall until duly changed by an application to the Tribunal be deemed to be the address of the appellant for the purpose of the service of all notices, processes and other communications in the appeal and other connected proceedings till the final determination of the appeal and a period of two years thereafter.

(5)������ In every appeal, the competent authority, which passed the order appealed against, shall be impleaded as one of the respondents.

(6)������ A memorandum of appeal shall be presented by appellant in person or when there are more appellants than one by any one of them or by his authorised representative to the Registrar or such other officer as may be authorised in this behalf by the Chairman or may be sent by registered post addressed to the Registrar.

(7)������ When a memorandum of appeal is sent by registered post, the date of receipt of the said memorandum at the office of the Tribunal shall be the date of filing of the appeal and the Registrar shall on every memorandum of appeal, endorse the date on which it is presented or received at the office of the Tribunal and shall sign the endorsement.

(8)������ When an appeal is presented after the expiry of forty five days of the receipt of the order served upon the appellant but not after sixty days, it shall be accompanied by an application supported by an affidavit setting forth the facts on which the appellant relies to satisfy the Tribunal that he had sufficient cause for not preferring the appeal within forty-five days.

(9)������ Every petition presented to the Tribunal including a petition for stay other than petitions of a formal or routine character, shall be accompanied by an affidavit as also copies of such documents as are relied on in support of the petition.

(1)������ Every memorandum of appeal filed within forty-five days of service of the order of the competent authority, being in the form annexed to these rules and otherwise in order shall be registered in a book kept for the purpose called the Register of Appeals and the Registrar shall intimate the appellant or his authorised representative accordingly.

(2)������ If a memorandum of appeal filed under sub-rule (1) is defective, but the defects are minor or technical in character, the Registrar may register the appeal provisionally and call upon the appellant to remove the defects within such time as may be specified and upon the defects being removed within such specified time, the registration shall cease to be provisional and the appeal shall be deemed to have been regularly registered under sub-rule (1).

(3)������ When the memorandum of appeal is presented after the expiry of forty-five days but within a period of sixty days after the date of service of the order of the competent authority, and is otherwise in order, and is accompanied by a petition for condonation of delay, it shall be numbered and registered provisionally subject to the delay being condoned by the Tribunal after notice to the respondent and after hearing the parties, if the Tribunal considers that the appellant was prevented by sufficient cause from filing the appeal in time and condones the delay, the registration shall cease to be provisional and the appeal dealt with as though it had been registered under sub-rule(1).

(4)������ When the memorandum of appeal is presented after the expiry of forty-five days but within a period of sixty days after the date of service of the order of the competent authority, and is not accompanied by a petition for condonation of delay, the Registrar may register the appeal provisionally and call upon the appellant to file a petition for condonation of delay within such time as may be specified and in the event of such a petition being received, it shall be treated as having been received alongwith the memorandum of appeal and the appeal dealt within the manner prescribed in sub-rule (3).

(5)������ When the defects are not removed or a petition for condonation of delay is not filed within the time specified in that behalf, the matter shall be placed before the Tribunal for its orders.

(6)������ Where a memorandum of appeal is defective in material particulars, the Registrar may specify the defects and return it for being amended and represented after remedying them and when the memorandum of appeal is represented, it shall be dealt within accordance with these rules.

(7)������ When a memorandum of appeal on the face of its appears to have been filed more than sixty days after the date of service of the order of the competent authority on the appellant, the appeal shall not be registered but the appellant shall be called upon by the Registrar to show cause why the appeal should not be dismissed as being out of time.

(8)������ Every petition for condonation of delay and every memorandum of appeal filed out of time shall be placed before the Chairman who may direct the petition/ appeal to be posted before the Tribunal for its orders.

(1)������ After an appeal is registered, one copy of the memorandum of appeal and annexures thereto shall be served, as soon as possible, on the competent authority either by registered post acknowledgement due, or through a messenger and the parties shall be called upon to file their paper books within a period of thirty days from the date of receipt of the notice or such further time as may be allowed.

(2)������ Each party shall file four copies of his paper book which shall-

���������� (i)������� be legibly typed or otherwise reproduced by mechanical means;

���������� (ii)������ contain all documents upon which a party proposes to rely during the course of hearing:

���������� (iii)������ contain only such documents and material as have been referred to, produced or relied upon before the competent authority;

���������� (iv)������ have pages numbered serially; and

���������� (v)������� contain a full index or table of contents.

(3)������ If the paper book referred to in sub-rule (2) contains any document in a language other than English or Hindi, a true translation thereof in English or Hindi shall be added.

(4)������ The parties shall be informed of the date and place of hearing of the appeal either by registered post acknowledgment due or by notice served on them through messenger:

Provided that where the parties are present before the Tribunal, it may inform them orally of the date and place of hearing of the appeal.

(5)������ Any petition for summoning witnesses or documents filed by a party may be heard, if necessary, after giving notice to the other party.

(6)������ Every requisition, direction, letter, authorisation, or written notice to be issued by the Tribunal shall be singed by the Registrar and shall be sent by registered post acknowledgement due or through a messenger.

The Tribunal may, whenever it considers necessary or expedient to do so, hear one or more appeals together and dispose of them by a common order.����������

The appellant shall not, except with the leave of the Tribunal, urge or be heard in support of any ground not set forth in the memorandum of appeal, but the Tribunal, in deciding the appeal, shall not be confined to the grounds set forth in the memorandum of appeal or taken with the leave of the Tribunal under this rule:

Provided that the Tribunal shall not rest its decision on any ground other than the grounds set forth in the memorandum of appeal unless the party which may be affected thereby has had a reasonable opportunity of being heard on that ground.

The Tribunal may adjourn the hearing of any case to any other date and inform the parties of the next date and place of hearing of the case.

Where on the day fixed for hearing or on any other day to which the hearing may be adjourned, the appellant does not appear when the appeal is called on for hearing, the Tribunal may either dismiss the appeal for default or proceed ex parte:

Provided that where the appeal has been dismissed for default or proceeded with ex parte and the appellant appears thereafter and satisfies the Tribunal that there was sufficient cause for his non-appearance when the appeal was called on for hearing, the Tribunal shall, after giving notice to the respondent make an order setting aside the dismissal order or the ex parte proceedings and restoring the appeal to its original number.

(1)������ An appeal shall not abate by reason only of the death of an appellant or on his adjudication as an insolvent.

(2)������ The Tribunal may on an application made in this behalf by the legal representative of the deceased appellant make him a party and proceed with the appeal.

(3)������ Where no application is made within ninety days of the death of an appellant or within such further time as the Tribunal may allow for bringing his legal representative on record, the appeal shall abate.

(4)������ On the insolvency of an appellant, the appeal may be continued by the assignee or the receiver for the benefit of creditors and if the assignee or the receiver fails to continue the appeal, the Tribunal may, on its own motion or on the application of the respondent, dismiss the appeal.

(1)������ The Tribunal may, wherever it considers it necessary, set aside an order of the competent authority and remand the case to the competent authority for fresh determination in the light of such directions as it may give.

(2)������ The Tribunal may, if it considers necessary at any stage of the proceedings, call for a report or finding from the competent authority on such matters as its may specify.

(3)������ A copy of any such report or finding referred to under sub-rule (2) shall be furnished to the parties and they shall be heard thereon before the Tribunal pronounces final orders.

(1)������ The parties to an appeal shall not be entitled to produce additional evidence, whether oral or documentary, before the Tribunal, but however, where-

���������������� (a) the competent authority, from whose order the appeal is preferred, has refused to admit evidence which ought to have been admitted, or

���������������� (b) the party seeking to produce additional evidence, establishes that notwithstanding the exercise of due diligence, such evidence was not within his knowledge or could not, after the exercise of due diligence, be produce by him at the time when the order appealed against was passed, or

���������������� (c) the Tribunal requires any document to be produced or any witness to be examined to enable it to pronounce orders, or for any other substantial cause, or

(d)��������� the Tribunal is satisfied that the competent authority has decided the case without giving a reasonable opportunity to the appellant to adduce evidence on any point,

���������� it may allow such evidence or document to be produced, or witness to be examined.

(2)������ Whenever additional evidence is allowed to be produced by the Tribunal, it shall record the reason for its admission.

The places in which the Tribunal sits for the purpose of hearing appeals shall be deemed to be an open court, to which the public generally may have access so far as the same can conveniently contain them:

Provided that the Tribunal may, if it thinks fit, order at any stage of the hearing of an appeal, that the public generally, or any particular person, shall not have access to, or be or remain in, the room or building used by the Tribunal.

After the hearing is over, the Tribunal may pronounce its orders forthwith or it may reserve its orders and if the orders are reserved, the Tribunal may at any time before final orders are pronounced either on its own motion or on the application of a party order that the appeal or petition be reheard.

Every order of the Tribunal shall be in writing and a copy of every final order of the Tribunal certified as a true copy by the Registrar shall be supplied free of cost to the parties as early as possible.

(1)������ Where the decision of the Tribunal is unanimous, a common order shall be signed by all the members of the Tribunal.

(2)������ Where there is a difference of opinion, the decision shall be in accordance with the decision of the majority of the members of the Tribunal

(3)������ A member who does not concur with the decision of the majority may deliver a dissenting order.

(4)������ The decision of the majority shall be reduced to writing and signed by all the members including the dissenting member.

Such of the orders of the Tribunal as are deemed fit for publication in any authoritative report or the press may be released for such publication on such terms and conditions as the Tribunal may lay down.

Notwithstanding anything contained in these rules, the Tribunal may make such orders or give such directions, as may be necessary or expedient to give effect to its orders or to prevent abuse of its process or to secure the ends of justice.

(1)������ The Smugglers and Foreign Exchange Manipulators (Appellate Tribunal for Forfeited Property) Rules, 1977, are hereby repealed.

(2)������ Notwithstanding such repeal, anything done or any action taken under the provisions of any of the rules referred to in sub-rule (1), shall be deemed to have been done or taken under the corresponding provisions of the Appellate Tribunal for Forfeited Property (Procedure) Rules, 1986.���

 

FORM [See rules 5 and 6]

(Before The Appellate Tribunal for Forfeited Property, New Delhi)

Memorandum of appeal

[Section 12 of the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976]

F.P.A. No. __________________________ / M.P.No. ___________________________ of 19_______

(To be filled up by the Office of Appellate Tribunal)

 

IN THE MATTER OF

APPELLANT: Shri/ Smt.� _________________________________________________________________

Versus

RESPONDENT: Competent Authority, New Delhi/ Bombay/ Calcutta/ Madras/ Ahemdabad.

Other Respondents, if any:�������������������������������������������������������

1. Authority passing the order appealed against: Competent Authority, New Delhi/ Bombay/ Calcutta / Madras/ Ahemdabad

2. Date of the order:�����������������������������������������������������������������

3. Date of service of the order:

4. Specify whether a hearing in person or through an authorised representative is desired: �������� �

5. Registered address of the appellant (including telephone No. if any) for the service of all notices, processes and communication:

___________________________________________________________________________________________________________________________________________

6. Address of the respondent: (i) Competent Authority, New Delhi/ Bombay/ Calcutta/ Madras/ Ahemdabad.

(ii) Other Respondents, if any ____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

7. Section or sub-section of the section of the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976, under which the competent authority passed the order and which is appealed against ______________________________________________________________________________________________________________ ������

8. Relief claimed:

(i) Specify whether the entire order is disputed:

(ii) if only certain items of properties are disputed, enumerate them in an annexure: ����������� �

9. Ground of appeal (annex a separate sheet if space is not sufficient):������������������������������������

 

Signature of Appellant ____________________________

 

Signature of Authorised representative, if any ____________________________________

 

Verification

I ________________________________________________________ the appellant/ authorised representative of the appellant do hereby declare that what is stated above is true to the best of my knowledge, information and belief.

Verified today the __________ days of ____________________________ 19______________.

 

Signature of Appellant or his authorised representative ___________________________

*Strike out whatever is inapplicable.

Notes:

1.������� The appeal should be filed in quadruplicate accompanied by four copies of orders appealed against (one of which shall be a certified copy of the order appealed against or the original copy of it served on the appellant). Any enclosure will also be in quadruplicate.

2.������� The memorandum of appeal should be written in English or in Hindi and should set forth concisely and under distinct heads the grounds of appeal and should be without any argument or narrative and such grounds should be numbered consecutively.

3.������� It is enough if the memorandum of appeal is signed either by the appellant or the authorised representative. Where it is signed by the authorised representative, it should be accompanied by an authorisation of the appellant in his favour.

4.������� For further details, see the Appellate Tribunal for Forfeited Property (Procedure) Rules, 1986.�

SO 1035 (E), dated 2.12.1987: In exercise of the powers conferred by clause (aa) of sub- section (2) of section 26 of the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act 1976 (13 of 1976) the Central Government hereby makes the following rules, namely: -

(1)������ These rules may be called the Appellate Tribunal for Forfeited Property (Fees) Rules, 1987.

(2)������ They shall come into force on the date of their publication in the Official Gazette.

(1)������ The fees, which shall be paid for the inspection of the records and registers of the Appellate Tribunal shall be the following, namely: -

���������� (a)������ for the first hour of inspection or part thereof -1 Rupee;

���������� (b)������ for every additional hour of inspection or part there of� - 50 paise.

(2)������ Fees for said inspection shall be paid in cash.

(1)������ Copying fees for supply of copies shall be rupees two per page or part there of.

(2)������ Copying fees for supply of photostat copies shall, however, be the actual expenses incurred by the Appellate Tribunal for such copies.

(3)������ A fee of two rupees shall be levied for authenticating a copy to be a true copy.

(4)������ Copying fees shall be recovered in advance in cash.

(5)������ Where a party applies for immediate delivery of a copy of evidence taken down by a stenographer, the fee chargeable shall be 2 � times of those specified by sub-rule (1); in such case, fifty per cent of the fees specified by sub-rule (1) shall be paid to the stenographer.

(6)������ When a copy is sent by post, the applicant shall also be charged with the actual postal charges, which shall be recovered in advance in cash.

Nothing in these rules shall enable any person to inspect or to obtain a copy of any register or document to which he is not otherwise entitled by or under any law or order of the Appellate Tribunal.

Government of India have been permitting Indian companies to issue Equity and Equity related instruments to international investors in the form of Global Depository Receipts (GDRs) and Convertible Bonds. A detailed Notification was also issued on November 12, 1993 outlining the scheme for the issue of Foreign Currency Convertible Bonds (FCCBs) and ordinary shares (through Depository Receipt Mechanism). Government have since reviewed the working of the scheme and the following further guidelines have been formulated in this regard:

(a)������ For the present it is proposed to follow a restrictive policy towards Foreign Currency Convertible Bonds since such Bonds form part of the country�s external debt till their conversion into equity, However, companies will be allowed in merits to issue FCCBs as part of a programme of restructuring of external debt which help to lengthen maturity and soften terms.

(b)������ Euro Issues will be treated as direct foreign investments. Accordingly, a company contained in Annexure III of the New Industrial Policy of 1991 whose direct foreign investment after a proposed Euro Issue is likely to exceed 51%, or which is implementing projects not predominantly contained in Annexure III, would need to obtain prior FIPB clearance before final approval for the Euro Issue is given by the Finance Ministry.

�(c)������ For the purpose of ensuring that as many companies as possible avail of this scheme, only one issue per company in a financial year will be permitted with a minimum gap of twelve months between two issue by the same company and not more than two issues will be permitted for any group of companies in a financial year.

(d)������ Both the in-principle and final approvals will be valid only for three months from the dates of their respective issue.

(e)������ Requests for retention of the Issue proceeds abroad will be considered on specific application, for import of capital goods, retiring foreign currency debts, capitalising Indian joint ventures, etc, and projects abroad.

(f)������� GDR issue would be permitted only for the following end �use to be incurred within one year from the date of issue:

���������� (i)������� Financing capital goods imports;

���������� (ii)������ Financing domestic purchase / installation of plant, equipment and buildings;

���������� (iii)������ Prepayment or scheduled repayment of earlier external borrowing;

���������� (iv)������ Making investment abroad where these have been approved by competent authorities;

���������� (v)������� A margin of 15% of the total proceeds of an issue for other general corporate restructuring uses;

(g)������ Companies would be required to submit quarterly statement of utilization of funds duly certified by their auditors;

(h)������ The policy and guidelines for Euro Issues will be subject to review every three months.

The guidelines for Euro Issue-1994-95 were announced by the Government of India on 11^th May, 1994. At that time was indicated that the guidelines would be reviewed periodically. During the first half of the Fiscal Year Indian companies have mobilized in excess of US $ 1 billion through issue of GDRs and Euro Convertible Bonds. This indicated a healthy and sustained interest by overseas investors. The guidelines have been reviewed on the basis of experience in this period and various representations received. The following modifications are being made:

(a)������ The guidelines had stipulated that Euro Issues would be permitted only for certain specific end-uses to be incurred within one year from the date of issue. Several representations have been received by the Government requesting review of the stipulation that the Euro Issue proceeds should be utilised for the approved end uses within a period of one year from the date of issue on the plea that capital expenditure projects often have a long gestation period and that it would be difficult for companies to comply with the one year restriction. These representations have been considered and the guidelines are being modified to remove the stipulation that Euro Issue proceeds should be utilised for the approved end- uses within a period of one year from the date of issue. Instead, issuing companies would be required mandatory to retain the Euro Issue proceeds abroad to be repatriated as and when expenditure for the approved end-uses (including up to 15 % earmarked for general corporate restructuring uses) are incurred. This will enable companies to tap market abroad for approved purposes while also avoiding monetary expansion as a consequence of Euro Issue inflows in advance of the need for funds. This requirement will be added to all final approvals given henceforth. Information regarding periodic repatriation of Euro Issue proceeds into the country and the manner of their deployment for the approved end-uses should be furnished in detail in the quarterly statements that the issuing companies are required to submit to the Government at the end of every calendar quarter duly vetted by the auditors.

(b)������ A relaxation of the approved end-use criteria will be allowed to enable select All India Financial Institutions to access the Euro market considering the multiplier effect and generally beneficial impact for small and medium industries who are unable themselves to access the Euro market.

(c)������ Companies will not be permitted to issue warrants alongwith their Euro Issue.

Guidelines for Euro Issue for 1994-95 were announced by the Government of India on 11-5-1994, followed by certain amendments on 28-10-1994. In terms of the guidelines dated 28-10-1994, issuing companies were required mandatorily to retain the Euro Issue proceeds abroad to be repatriated as and when expenditure for the approved end�uses (including up to a maximum of 15 per cent of funds earmarked for general corporate restructuring uses) were incurred. It has now been decided to permit the issuing companies to also retain the Euro Issue proceeds as foreign currency deposits with Banks and Public Financial Institutions in India, which can be converted into Indian Rupees only as and when expenditure for the approved end-uses (including up to a maximum 15 percent of funds earmarked for general corporate restructuring uses) are incurred. The interim deployment of funds retained abroad or as foreign currency deposits with banks and public financial institutions in India, should conform to the manner of deployment that will be indicated by RBI in their approval letter.

Government of India had notified a Scheme in November 1993, for issue of Foreign Currency Convertible Bonds and Ordinary Shares through Depository Receipt Mechanism. Revision/modifications in the operative guidelines are being announced from time to time. On the basis of the periodic review and assessment of current situation, the following modifications are announced to the existing Euro issue guidelines:

(i)������� The guidelines of 28-10-1994 provided that the Euro Issue proceeds were to be mandatorily retained abroad by issuer companies to be repatriated as and when expenditure on approved project/ end uses were incurred. This requirement was partially modified through a press release dated 24-5-1995 providing option to the issuing companies to also keep funds in foreign currency deposits with Banks and Public Financial Institutions in India to be converted into Indian rupees as and when expenditure on approved end uses were incurred. In relaxation of the above requirement, companies will now be permitted to remit funds into India in anticipation of use of funds for approved end uses.

(ii)������ The existing ceiling for use of issue proceeds for general corporate restructuring including working capital requirement is revised from 15 per cent to 25 per cent of the GDR issue.

(iii)������ At present only companies having a consistent track record of good performance (financial or otherwise) for a minimum period of three years are allowed to issue GDRs/ FCCBs. In view of the importance of the infrastructure projects, and the need to encourage equity financing of such projects, the three year track record will be relaxed in case of companies seeking GDR/ FCCB issues to finance investment in infrastructure industries such as power generation, telecommunication, petroleum exploration and refining, ports, airports, roads.

(iv)������ Currently corporates are permitted to access foreign capital market for External Commercial Borrowing through instruments like FRN and fixed rate bonds. In order to enable corporates to tap a wider spectrum of the market, they would also be permitted to structure their borrowings as a FCCB. The end use of funds through a FCCB should conform to the norms prescribed by Government for ECB from time to time. While the time frame for conversion of FCCB is flexible, the non-converted portion should have a minimum average tenor of five years.

1.������� At present Indian companies going in for Euro Issue, viz. global depositary receipts/ foreign currency convertible bonds (GDRs/ FCCBs) are required mandatorily to retain the proceeds of such issues abroad to be repatriated to India as and when the expenditure for the approved end uses is incurred. Such funds could be kept abroad either with foreign banks which are rated for short-term obligations as A1+ by Standard & Poor or P1 by Moody�s or branches of Indian banks as deposits or invested in treasury bills and other monetary instruments with maturities not exceeding one year.

2.������� In terms of the revised �Guidelines for Euro Issues� by Government of India on 24^th May, 1995 the companies going for Euro Issues will now have the option of retaining the proceeds of Euro Issues abroad as indicated in paragraph 1 above or keeping the issue proceeds in foreign currency deposits with authorised dealers and / or public financial institutions in India holding authorisation from Reserve Bank to deal in foreign exchange.

3.������� Accordingly, it would be in order for authorised dealers/ public financial institutions to accept foreign currency deposits from Indian companies out of Euro Issue proceeds subject to the following conditions:

���������� (i)������������������ The foreign currency deposits would carry interest at a rate not exceeding LIBOR for the respective period for which the deposit is accepted.

���������� (ii)������ The authorised dealers / public financial institutions with whom the foreign currency deposits are kept should not swap the foreign currency for rupees but use the�� amounts for lending in foreign currency to eligible clients.

(iii)��������� The authorised dealers may also invest surplus foreign currency out of such Euro issue proceeds at permitted in paragraph 5B.9 of the Exchange Control Manual subject to the condition indicated in (ii) above.

(iv)��������� The authorised sealers / public financial institutions accepting the foreign currency deposits would be eligible to charge interest at the rate not exceeding 2.5 per cent over six months LIBOR for lending out of such funds.

���������� (v)������� The authorised dealers will be required to maintain a cash reserve ratio of 7.5 per cent on such deposits.

(vi)��������� The deposits can be converted into Indian rupees only as and when expenditure of approved enduses (including up to maximum of 15 per cent of the proceeds earmarked for general corporate restructuring uses) are incurred by the issuer company.

(vii)�������� The authorised dealers/ public financial institutions accepting such deposits as also the issuer company, as the case may be, should also comply with the conditions stipulated by Government of India in their approval letters for such issues.

1.������� A Scheme for Issue of Foreign Currency Convertible Bonds and Ordinary Shares (Thorough Depository Receipt Mechanism) was notified by the Government of India in November 1993. Revisions /modifications in the operative guidelines for Euro Issues are announced from time to time.

2.������� On the basis of the periodic review and assessment of the current situation, the following Euro Issue guidelines, in continuation of the notification of November 1993 shall come into effect for approvals granted on or after the date of issue of these guidelines in suppression of all the previous guidelines on the subject.

3.������� Track Record: An issuing company seeking permission for raising foreign funds by Euro Issues having a consistent track record of good performance (financial or otherwise) for a period of three years shall be allowed to issue GDRs/ FCCBs.

4.������� In view of the importance of the infrastructure project, and the need to encourage equity financing of such projects, the three year track record requirement would be relaxed in the case of companies seeking GDR/ FCCB issues to finance investments in infrastructure industries such as power generation, telecommunication, petroleum exploration and refining, ports, airports and roads.

5.������� Approvals: Euro Issues shall be treated as direct foreign investment (subject to extant policies governing direct foreign investments) in the issuing company. Accordingly, a company which is implementing projects not predominantly contained in Annexure III of the New Industrial Policy of 1991, or a company which undertakes a project contained in Annexure III but whose direct foreign investment after the proposed Euro-Issue is likely to exceed 51 per cent of the post-issue subscribed capital, will need to obtain prior FIPB clearance before final approval to the Euro Issue is given by the Finance Ministry.

6.������� Number of issues: Some restrictions had been imposed previously on the number of issues that could be floated by an individual company or a group of companies during a financial year. There will henceforth be no restrictions on the number of Euro Issue to be floated by a company or a group of companies in a financial year.

7.������� End-use: GDRs: In relaxation of earlier guidelines, GDR end-uses will include �

�������� -financing capital goods imports;

-capital expenditure including domestic purchase / installation of plant, equipment and buildings and investments in software development;

�������� -pre-payment of scheduled repayment of earlier external borrowings;

�������� -investments abroad where these have been approved by competent authorities;

�������� -equity investment in JVs/ WOSs in India.

8.������� However, investments in stock markets and real estate will not be permitted.

9.������� Within this framework, GDR raising companies will be allowed full flexibility in deploying the proceeds.

10.������ Up to maximum of 25 per cent of the total proceeds may be used for general corporate restructuring, including working capital requirements, of the company raising the GDR.

11.������ However banks, FIs, and Non-banking Finance Companies (NBFCs) registered with RBI will be eligible for GDR issues without reference to the end-use criteria mentioned in paragraphs 7 to 10 above with the restriction that investments in stock markets and real estate will not be permitted.

12.������ A company shall be required to specify the proposed end-uses of the issue proceeds at the time of making their application, and will be required to submit quarterly statement of utilisation of funds for the approved end-uses, duly certified by their auditors.

13.������ Ends-use-FCCBs: Currently, companies are permitted to access foreign capital market through Foreign Currency Convertible Bonds for the restructuring of external debt which helps to lengthen maturity and soften terms, and for end-use of funds which conform to the norms prescribed by the Government for External Commercial Borrowings (ECBs) from time to time. In addition to these, not more than 25 per cent of FCCB issue proceeds may be used for general corporate restructuring including working capital requirements.�

14.������ FCCB pricing: FCCBs are available and accessible more freely as compared to external debt, and the expectation of the Government is that FCCBs should have a substantially finer spread than ECBs. Accordingly, the all in cost for FCCBs should be significantly better than the corresponding debt instruments (ECBs).

15.������ Companies will not be permitted to issue warrants alongwith their Euro Issue.

16.������ Repatriation of Proceeds: Companies may retain the proceeds abroad or may remit funds into India in anticipation of the use of funds for approved end-uses.

17.������ Validity: Both the in-principle and final approvals will be valid for three months from the date of their respective issue.

18.������ Review: The policy and guidelines for Euro-Issues will be subject to review periodically.

The Government has made certain modifications in respect of Euro/ ADR issues by the companies. This has been done on the basis of the periodic review of comprehensive guidelines for Euro issues, which is done from time to time and assessment of the current situation.

1�������� Track record requirement: Considering the funding requirements of unlisted companies, it has been decided to permit all unlisted companies to float Euro/ ADR issues provided they fulfil 3 years� track record eligibility requirement. However, the current provisions for relaxing the 3 years� track record requirement in the case of companies seeking GDR/ ADR/ FCCB issues to finance investments in infrastructure industries such as power generation, telecommunication, petroleum, petroleum exploration and refining, ports, airports and roads will continue.

These unlisted companies floating GDR/ ADR/ FCCB issues would, however, need to comply with the standard listing requirement of listing on the domestic stock exchanges within 3 years of having started making profit. At present, only listed companies are being permitted to issue GDRs/ ADRs/ FCCBs subject to the fulfilment of the track record requirement of good performance (financial or otherwise for a period of 3 years).

The following modifications are also made specifically for ADR/ GDR issues:

2.������� Validity: The guidelines issued on 19^th June, 1996 had provided that both the �in the principle� and final approval will be valid for 90 days from the date of their respective issue,

In partial modification, the 90 days validity period for final approval for GDRs and ADRs is being withdrawn.

End uses: GDRs/ ADRs are equity instruments and there is no repayment liability on the issuing company. Unlike a commercial borrowing or a foreign currency convertible bond, which carries a repayment liability on the company, GDRs/ ADRs are full risk equity. It has, therefore, been decided that all end-use restrictions on GDR/ ADR issue proceeds be removed.

The existing ban on investment of GDR/ ADR issue proceeds in real estate and stock markets will, however, continue.

These modifications shall come into effect for approvals granted on or after the date of issue of these guidelines.

The Policy and Guidelines for Euro Issue will be subject to review periodically.

In his Budget speech 1998-99, the Finance Minister, Shri Yashwant Sinha announced a special stock option scheme for Indian software companies linked with ADR/ GDR offerings by these companies as an instrument to enable these companies to provide incentives to retain their high skilled professionals. The scheme would enable Indian software companies to offer terms comparable to the packages offered by international companies in the field.

The scheme would be governed by the following guidelines:

(i)������� A software company which has already floated ADR/ GDR or a company which is proposing to float ADR /GDR would be entitled to issue ADR/ GDR linked stock options to its employees.

A software company which proposes to issue GDR/ ADR linked stock option to its employees should clearly includes such proposal as part of its application for GDR/ ADRs, while DEA approval will be for total issue size inclusive of stock option, the GDRs/ ADRs earmarked for the employees upto the specified limit will be issued by the company as and when an employee exercise his stock option. Accordingly, the company shall never exceed the approved level of GDRs/ ADRs to be issued.

In the case of software companies, which have already issued GDRs/ ADRs, such companies may seek permission for issue of stock options related to the existing GDR/ ADR issue observing the general parameters of the guidelines.

(ii)������ The scheme would be available to listed and unlisted software Indian companies which fulfil the performance track record eligibility and other requirements under ADR/ GDR guidelines.

(iii)������ A software company would be defined as a company engaged in manufacture or production of software where not less than 80 percent of the company�s turnover is from software activities.

The software company applying for issue of GDR/ ADR linked stock options shall be required to submit relevant documents certified by a Chartered Accountant, establishing that they are a software company conforming to the stipulation indicated above. The relevant documents shall also be submitted to RBI while applying for permission of foreign currency for acquisition of GDRs/ ADRs in exercise of the stock option.

(iv)������ The stock options shall be available to non-resident and resident permanent employees (including Indian and overseas working directors) of the company. The stock options shall not be available to the promoters and their relatives (as defined under the Companies Ac).

(v)������� The general FERA permission for resident employees of software companies under the ADR/ GDR linked Stock Option Scheme shall be granted by RBI. Requisite notification for this purpose will be issued by RBI. This would entitle resident employees to acquire and /or hold ADR/ GDR linked stock option, acquire ADR/ GDR on exercise of the option, remit funds upto a limit of $50,000 in a block of five years for acquisition of ADRs / GDRs and to retain or continue holding ADRs/ GDRs so acquired. The resident employee upon liquidation of ADR / GDR holding would need to repatriate the proceeds to India unless a general / specific permission from RBI is obtained for its retention or use abroad.

(vi)������ Issue of stock options shall require a special resolution as applicable for preferential allotment of shares. The allotment of stock options shall be done by a committee of the Board of Directors of the company. The Committee of Directors shall have a minimum of two non-executive members of the Board as its members.

(vii)����� The issuing company would be entitled to issue options not exceeding 10 per cent of its issued and paid up equity capital.

(viii)���� The stock options may be issued at a discount of not more than 10 per cent to the market price at the time of the issue of the stock option.

(ix)������ While GDRs/ ADRs acquired in exercise of the stock option shall be freely transferable, the stock option themselves shall be non-transferable.

(x)������� Full disclosure should be made in the Directors report or in an annexure to the Directors report of the details of the stock option scheme by the company.

(xi)������ ADRs/ GDRs acquired on exercise of stock option would be eligible for concessional tax treatment under section 115AC of the Income-tax Act, 1961, Necessary amendment under section 115AC of the Income- tax Act, 1991 shall be notified by the Department of Revenue separately.

1.������� Indian companies are permitted to access the international capital markets through issue of GDRs/ ADRs under the provisions of the �Issue of Foreign Currency Convertible Bonds and Ordinary Shares (Through Depository Receipt Mechanism) Scheme, 1993� and subsequent guidelines on Euro Issues publicised through Press Notes by the Government of India, Ministry of Finance, Department of Economic Affairs. Under the Scheme, GDRs/ ADRs are issued by overseas depositories against ordinary shares issued and placed with the domestic custodian by Indian companies.

2.������� Representations have been received from issuer companies seeking clarification on the eligibility/ entitlement of GDR/ ADR holders to the rights and bonus issues made by the company and on entitlements of GDR/ ADR holders in cases of business reorganisation / mergers/ de-mergers.

3.������� It is clarified that under the Scheme, a GDR/ ADR holder is entitled to hold or transfer GDRs/ ADRs, or redeem them into underlying ordinary shares with the option to continue holding underlying shares, and thus has a right to the ordinary shares underlying the GDRs / ADRs. Therefore, if an ordinary shareholder of the issuing company acquires a right or entitlement by virtue of ownership of ordinary shares, the GDR/ ADR holder also matures the same rights or entitlement owing to his rights over underlying ordinary shares. GDR / ADR holders, therefore, are entitled to same bonus and rights issue of shares as any ordinary shareholders of company. Similarly, if ordinary shareholders of a company �A� become entitled to shares of another company �B� as a consequence of a genuine business reorganisation, and which is duly approved by the High Court under section 391/ 394 of the Indian Companies Act, then the GDR / ADR holders of company �A� also mature the same entitlement to shares of company �B�

4.������� Furthermore, when GDR/ ADR holders mature an entitlement to shares in a company, the company would need to issue and place ordinary shares with the domestic custodian against which the overseas depository would issue corresponding GDRs/ ADRs to the ADR/ GDR holders.

5.������� It has, therefore, been decided to allow Indian companies to issue GDRs/ ADRs in cases of bonus or right issue of shares or genuine business reorganisations duly approved by the High Court, in accordance with the provisions of the Scheme and the guidelines issued thereunder. Indian companies would be required to apply to the Department of Economic Affairs for obtaining approval for issue of GDRs/ ADRs in all these cases. The Department of Economic Affairs would consider such requests on the basis of necessary supporting documents to assess that the proposed GDRs/ ADRs issue is on account of the entitlements of GDR/ ADR holders as stated above.

1.������� It has now been decided to grant general permission for sale/ transfer of underlying shares obtained after conversion of Global Depository Receipts (GDRs)/ American Depository Receipts (ADRs) by persons not resident in India if the sale is proposed to be made through a stock exchange or when the underlying shares are being sold in terms of an offer made under the Securities and Exchange Board of India (Substantial Acquisition of Shares and Take-overs) Regulations, 1997. All other cases of sale of shares underlying the GDRs/ ADRs will have to be referred to the Reserve Bank of India for necessary permission.

2.������� The scheme for issue of ordinary shares through depository receipt mechanism provides that the holders of the GDRs/ ADRs may ask the overseas depository to redeem the GDRs/ ADRs. The overseas depository then requests the domestic custodian bank to get the corresponding underlying shares released in favour of the non-resident investor for being sold in India. The non-resident holder, so far, had to approach the Reserve Bank of India for necessary permission under Foreign Exchange Regulation Act, 1973, for sale of the shares. It was pointed out by several investors that there was a risk that markets may move against the sellers during the time needed for obtaining necessary RBI approval for sale.

1.������� Guidelines were issued through a Press Note dated 23-6-1998 facilitating issue of GDR/ ADR linked stock option to its employees by companies engaged in manufacture or production of software where not less than 80 percent of the company�s turnover is from software activities.

2.������� A Notification was issued on 25-7-1998 by the Planning Commission announcing the recommendations made in the Information Technology Action Plan of the Prime Minister�s National Task Force on Information Technology and Software Development. Among others, the Task Force had recommended that the ADR/ GDR linked stock option scheme for software companies be modified to include all companies engaged in Information Technology Software and Information Technology Services as defined in recommendation No. 19(a) and (b) of the Planning Commission Notification dated 25-7-1998.

3.������� Taking in view the recommendations, it has been decided by the Government to extend the facility for issue of ADR/ GDR linked stock options to all companies engaged in the IT software and IT Services as defined in the Notification referred to in para 2 above. All other parameters/ requirements indicated in the Euro issue guidelines dated 23-6-1998 would continue to be applicable.

4.������� These guidelines come into force with immediate effect.

Group on Hi-Tech IT Habitats to be setup by the Task Force

(19) (a) Definition: ��IT� Software� means any representation of instructions, data, sound or image, including sources code and object code, recorded in a machine readable form, and capable of being manipulated or providing interactivity to a user, by means of an automatic data processing machine falling under heading �IT Products�, but does not include �non-IT products�. �IT service� is defined as any service, which results from the use of any IT software over a system of IT products for realising value addition. The term �IT Industry� shall cover development, production and services related to IT products. The term �IT Software� shall be substituted in place of �Computer Software� in all notifications.

���������� (b) Finance Ministry (CBEC) shall introduce a new classification called �Information Technology/ IT Products� including Computer. Digital/ Data Communication and Digital/ Data Broadcasting products, by recognising the progressive technological convergence of these three categories including all items in the classification list in Attachment A (Section I and Section II ) of the WTO (ITA) Agreement and, additionally, Data Communication equipment.

���������� (c) IT Software shall be entitled for zero customs duty and zero excise duty.

(20) A revised Notification giving the following new schedule for the Government of India acceding to the WTO- ITA Ministerial Declaration of 13^th December 1996 at Singapore shall be issued by the Ministry of Finance:

In Attachment A. Sections I and II of WTO-ITA:

(a) Duty shall be brought down to zero by 1^st January, 1999 on the following items:

Parts and Components excluding populated PCBs in HSN 8473.30,

All storage devices in HSN 8471.70,

ICs above Rs. 1,000 in HSN 8542,

Stepper Motors in HSN 8501.10,

Colour Graphic Display Tube in HSN 8540.40 and ;

Deflective components for Colour monitor in HSN 8504.

(b) Out of the 217 items listed in ITA-I, 94 which were proposed earlier for zero duty by 1^st January, 2000 shall now be advanced to 1^st January, 1999

At the meeting of the Working Group held on July 17, 1998, it was decided that delivery of undertaking shares of GDRs/ ADRs shall compulsorily be in dematerialised form. The matter was referred to Reserve Bank of India (RBI). The RBI has issued two notifications on the subject permitting:

(a)������ a non-resident holder of ADRs/ GDRs issued by a company registered in India, to acquire, upon surrendering ADRs/ GDRs, the underlying shares when such shares are released by the Indian custodian of the ADR/GDR issue, and

(b)������ the company whose shares are so released, or a depository defined in clause (2) of sub-section (1) of section 2 of the Depositories Act, 1996 to enter in its register or books, in which securities are registered or inscribed, an address outside India of the non-resident holder of shares.

RBI has further clarified that there would not be any obstacle from FERA angle in the process of dematerialisation as the abovementioned notifications have issued to take care of the same. Copies of the notifications are enclosed herewith.

It has therefore been decided that henceforth delivery of underlying shares of ADRs/GDRs shall compulsorily be in dematerialised form. Stock Exchanges shall not accept delivery of underlying shares of ADRs /GDRs in physical form.

In exercise of the powers conferred by clause (b) of sub-section (1) of section 29 and clause (b) of sub-section (4) of section 19 of the Foreign Exchange Regulation Act, 1973 (46 of 1973), the Reserve Bank hereby permits:

(a)������ a non-resident holder of ADRs /GDRs issued by a company registered in India, to acquire, upon surrendering ADRs /GDRs, the underlying shares when such� shares are released by the Indian Custodian of the ADR/GDR issue, and

(b)������ the company whose shares are so released, or a depository defined in clause (2) of sub-section (1) of section 2 of the Depositories Act, 1996 to enter in its register or books, in which securities are registered or inscribed, an address outside India of the non-resident holder of shares.

In exercise of the powers conferred by sub-section (6) of section 19 of the Foreign Exchange Regulation Act, 1973 (46 of 1973), the Reserve Bank, being of the opinion that it is necessary and expedient in the public interest to do so, directs that its Notification No. FERA 185/98-RBI, dated 19 th August, 1998 shall be amended in the following manner, namely:

In the said Notification No. FERA 185 for the words �underlying ADR/ GDR issue of a company registered in India� the words �acquired on surrendering GDRs/ADRs issued by a company registered in India� shall be substituted.

1.������� A scheme for issue of Foreign Currency Convertible Bonds and Ordinary Shares (Through Depository Receipts Mechanism) was notified by the Government of India in November, 1993.� Revisions/modifications in the operative guidelines for Euro-issues are announced from time to time.

2.������� With a view to further liberalising the operational guidelines and in particular track record scrutiny of the ADR/ GDR proposals and approval mechanism various options were considered by the Government.� Given the fact that investments through ADR/GDR being risk capital, it has been decided that the track record scrutiny process for ADR/ GDR issues and the two stage approval by the Ministry of Finance, Department of Economic Affairs could be dispensed with.

3.������� The following guidelines for ADR/GDR issues, in continuation of the Notification of November 1993 (amended in November, 1999) shall come into effect from the date of issue of these guidelines. These guidelines will also extend to proposals which have already been filed with the Ministry of Finance as also in cases where an �in principle� approval has been issued by the Ministry of Finance, Department of Economic Affairs. These modified guidelines will, however, not extend to Foreign Currency Convertible Bond (FCCB) issues, which will continue to be governed by existing guidelines.� Further, the issue of ADRs/GDRs under the liberalised guidelines would be only against expansion of the existing capital base through issuance of fresh equity shares as underlying shares for ADRs/GDRs.

4.������� ADR/ GDR are reckoned as part of Foreign Direct Investment (FDI).� Accordingly, such issues would need to conform to the existing FDI policy and only in areas where FDI is permissible.

5.������� Approvals

5.1������ Indian Companies raising money through ADRs/GDRs through registered exchanges would henceforth be free to access the ADR/GDR markets through an automatic route without the prior approval of the Ministry of Finance, Department of Economic Affairs. Private placement of ADRs/ GDRs would also be eligible for the automatic approval provided the issue is lead managed by an investment banker.� (For the purpose of this scheme, an Investment Banker would be defined as an Investment Banker registered with the Securities and Exchange Commission in the USA, or under Financial Service Act in U.K., or the appropriate regulatory authority in Europe, Singapore or in Japan). The track record condition will not be operative for ADR/ GDR issues.

5.2������ Automatic route for ADR/ GDR issue would also cover issue of Employee Stock Options by Indian Software Companies/ Companies in the IT Sector in conformity with the guidelines dated 23-6-1998 and 16-9-98 issued for ADR/ GDR linked employees stock options by Indian Software Companies/ Companies in the IT Sector, subject to other approval requirements, as indicated in para 6 below.

5.3������ Issue of ADRs/ GDRs arising out of business reorganisation/ merger/ de-merger would also be governed by Automatic route subject to the guidelines issued by this Department on 17^th August 1998.

6.������� Mandatory Approval Requirements

6.1������ In all cases of automatic approval mentioned above, the mandatory approval requirement under FDI policy, approvals such as under the Companies Act, approvals for overseas investments/ business acquisition (where ADR/ GDR proceeds are utilised for overseas investments) etc., would need to be obtained by the company prior to the ADR/ GDR issues.

6.2������ The issuer company would need to obtain RBI approval under the provisions of FERA/ FEMA prior to the overseas issue.

6.3������ Reserve Bank of India will be issuing necessary guidelines

7.������� Option for retention of funds abroad / repatriation

7.1������ Existing guidelines on Euro issues providing for the option of retention of issue proceeds abroad or repatriation of funds into the country in anticipation of deployment towards the purposes for which the funds have been raised would continue to be applicable.

7.2������ Retention and deployment of funds abroad would be as prescribed by RBI.

8.������� End uses

While no detailed end uses are specified, the existing bar on investments in stock markets and real estate would continue to be operative.

9.������� Issue related expenses

The issue related expenses (covering both fixed expenses like underwriting commissions, lead managers charges, legal expenses and other reimbursable expenses) shall be subject to a ceiling of 4% in the case of GDRs and 7% in the case of listing on US Exchange. Issue expenses beyond the ceiling would need the approval of RBI.

10.������ Reporting

After completing the transactions, the companies would be required to furnish full particulars thereof including amount of ADRs/ GDRs issued, number of underlying fresh equity shares issued, percentage of foreign equity level in the Indian company on account of issue of ADRs/GDRs (stating whether under automatic route or with FIPB approval), detailed issue parameters to the Ministry of Finance, Department of Economic Affairs and the Exchange Control Department of the Reserve Bank of India, Central Office, Mumbai within 30 days of completion of such transactions.

1.������� Under the existing guidelines for overseas investments by the Indian Companies, one of the automatic approval route available without reference to RBI / Government is where:

���������������� (i)� such overseas investments are funded upto a maximum of 50% out of the proceeds of American Depository Receipts/ Global Depository Receipts (ADRs/ GDRs raised; and

���������� (ii)������ floating of ADR/ GDR issue has been approved by the Government.

Proposals not conforming to the criteria stipulated above are required to be referred to RBI or the Special Committee constituted under RBI as the case may be for consideration and approval.

2.������� Considering the increasing opportunities presenting before the Indian Software Companies for expanding globally and making an international presence and to transform into Multinational Companies through acquisition abroad, it has been decided to liberalise the operational norms governing overseas investments and mode of financing acquisitions of overseas software companies.

3.������� Coverage

The liberalised norms will cover acquisition of overseas software companies only by Indian Software Companies, which have been defined as those registered in India and engaged in manufacturing or production of software where 80 % of the turnover is from software activities in the three previous financial years,

4.������� The eligibility for automatic approval will be operative only in respect of those Indian Software Companies, which have already floated an ADR/ GDR issue and are currently listed in the overseas exchange. In addition, companies who obtain one time � Blanket Approval� from the Special Composite Committee would also be eligible for automatic approval.

5.������� Limit for acquisition

Financial limit specified in paras 6(A) and (B) below.

6.������� Approval mechanism�

Overseas acquisition of software companies by Indian software companies would be governed by the following guidelines:

(A)������ Business Acquisition abroad by Indian software companies upto the value limit of US $100 million

���������������� (i)� Indian Software Companies which have already floated an ADR/ GDR issue and are currently listed in the overseas exchange, would be eligible to acquire overseas software companies and issue ADRs/ GDRs of the value of the cost of acquisition, on a back to back basis, on an automatic basis without reference either to the Government or the RBI

���������������� (ii) In addition, Indian software companies not covered by (i) above, may obtain a one time �Blanket Approval� from the Special Composite Committee, by an application made to RBI, and would thereafter be eligible for automatic approval as in the case of Indian software companies which have already floated an ADR / GDR issue and are currently listed in the overseas exchange.

���������������� (iii)���������� Such transaction would be exempt from the prior approval requirement either from the Government or form the Reserve Bank of India subject to the condition that the cost of acquisition is met with ADRs/ GDRs realisation / stock swaps on a back to back basis.

���������������� (iv)���������� At present, ADR/ GDR offerings require a two stage approval by the Department of Economic Affairs-an �in principle� approval based on track record requirement and the final approval for issue parameters. The two stage approval requirement will not be required for ADR/GDR offerings/ stock swap which are being raised / issue specifically for the purpose of overseas business acquisition by the Indian software companies as defined above.

���������������� (v) The existing limit of use of upto 50% of the ADR/GDR proceeds for overseas investment is also removed. Under the revised norms, limited to such acquisition, upto 100% of the ADR/ GDR proceeds may be utilised for such business acquisition.

���������������� (vi)���������� The value limit of US $ 100 million under the above ADR/ GDR stock swap would be an annual limit for each company for one or more acquisitions.

(B)������ Overseas Business acquisition beyond $100 million

In the case of proposals which do not meet the condition at (A) above and where the cost involved in the transaction/ overseas business acquisition exceeds $100 million, the Indian software company would need to send the proposal to RBI for consideration by a Special Composite Committee on overseas investment and ADR/ GDR approvals. The Committee would consider according a composite approval, prescribing a ceiling for overseas acquisition under the above scheme. The company would, thereafter, report to the committee after finalising the acquisition, of the details of the transaction.

7.������� Criteria for automatic approval

The liberalised approval mechanism is subject to the following norms:

(i)������� The existing foreign equity including on account of any existing ADR/ GDR offering and the proposed ADR/ GDR issue / stock swap in the expanded capital base is within the limit operative for RBI automatic approval for FDI in the software sector. No FIPB approval would be required in such cases even if the ADRs/ GDRs are issued otherwise than in cash.

(ii)������ The proposed ADR/ GDR stock swap for purposes of acquisition of business abroad is by way of expansion in the capital base or to be precise by way of issue of fresh underlying shares.

(iii)������ The present ADR/ GDR guidelines provides for redemption of the ADRs/ GDRs into the underlying rupee denominated shares of the Indian company, sale in the domestic market, and full repatriation of sale proceeds subject to payment of prescribed tax. The same provision would extend to ADR/ GDR holders of the acquired company. Reconversion of the underlying shares into ADRs/ GDRs is not permissible.

(iv)������ The proposal would have to conform to the following valuation norms:

���������� (a)������ The valuation of the transaction and of the overseas company shall be as per the recommendation of an Investment Banker;

���������������� (b) In the case of a listed overseas company, the valuation will be based on the current market capitalisation of the overseas company (based on the monthly average trading on the overseas exchange, for the three months preceding the month in which the acquisition is committed to) and premium, if any, as per the recommendations of the Investment Banker in the due diligence reports;

���������� (c)������ In the case of an unlisted overseas company, the valuation will be based on the recommendations of the Investment Banker.

(v)������� The proposal being in conformity with all provisions of the Companies Act, 1956.

(vi)������ The companies are required to report full details of the transaction including value of the transaction / acquisition cost, foreign equity level in the Indian software company on account of issue of ADRs /GDRs, as detailed in paragraph 8 below.

(vii)����� Compliance with RBI Regulations.

(viii)���� Other clearances as applicable being obtained by the Company.

(For the purpose of this scheme, an Investment Banker would be defined as an Investment Banker registered with the Securities and Exchange Commission in the USA, or under Financial Services Authority in U.K or the appropriate regulatory authority in Germany, France, Singapore or in Japan).

8. ������� Reporting

After completing the transactions/ acquisitions, Indian companies should furnish full particulars thereof including amount of ADRs / GDRs issued, percentage of foreign equity level in Indian company or account of such issue, name/s of the overseas company/ ies acquired, cost of acquisition, percentage of holding of Indian company in the foreign company, details of its line of activity, country of location, etc., together with relevant documents like valuation report by the investment banker to the Ministry of Finance, Department of Economic Affairs and Reserve Banks of India, Exchange Control Department, Overseas Investment Division, Mumbai within 30 days of completion of such transactions. On receipt of these particulars, Reserve Bank will issue specific identification number in respect of each overseas company acquired and Indian companies will have to comply with the existing requirement regarding submission of Annual Performance Reports, repatriation of entitlement from the overseas concerns, etc.

9.������� Format of the application

The application will have to be submitted to the Reserve Bank of India in the existing forms of overseas investment and for ADR/ GDR together by an applicant, for the time being, who will have the option to supplement the information.

10. This scheme is in addition to the existing routes available for overseas investment including the automatic approval route.

The Government has decided to liberalise the operational norms governing overseas investments and mode of financing acquisitions by software companies. With a view to providing a flexible and automatic route for Indian software companies to acquire overseas software companies as a part of their business strategy, funded through the issue of ADR/ GDR, it has been decided to provide an automatic route only for the purpose of acquisition of software companies abroad. It will not require either the approval of the special committee for overseas investment or of the Government of India for accessing the ADR/GDR route for such purposes and up to 100 per cent of ADR / GDR proceeds would be used for acquisition.

The basic features of the scheme are:

(i)������� This automatic facility would be available only to those companies, which have already floated ADRs/ GDRs and have thus had their track record reviewed.

(ii)������ Those companies, which have not floated ADR/ GDRs, would be eligible to obtain �one time blanket approval� from the special composite committee explained below and thereafter be eligible for availing of the automatic facility.

(iii)������ The value limit for the scheme would be US $ 100 million, which would be an annual limit for each company for one or more acquisitions.

(iv)������ Cases involving business acquisition exceeding $100 million would be considered by a special composite committee, which would be a composite committee both for the purposes of overseas investments as well as for approving ADR/ GDR floatation. Such a committee would, while examining the merits of the proposal, also take into account the confidentiality of the proposal and if necessary, would provide flexibility for negotiations within certain parameters.

(v)������� Applications for the consideration of the special composite committee for categories under (ii) and (iv) above, would have to be made to the Reserve Bank of India in the existing forms for overseas investment and for ADR/ GDR, together by an application, for the time being, who will have the option to supplement the information.

(vi)������ The ADRs/ GDRs to be issued under the scheme would be by way of expansion in the capital base, i.e., by issue of fresh underlying shares of the company.�������������������

(iv)������ The acquisition of shares of foreign companies will be done by giving adequate GDR/ ADR so as to cover the cost of acquisition.

(vii)����� The proposal would have to conform to the valuation norms as per the recommendations of an investment banker; which in the case of a listed overseas company will be based on the current market capitalisation of the overseas company (based on the monthly average trading on the overseas exchange, for the three months preceding the month in which the acquisition is committed to) and premium, if any, as per the recommendations of the investment banker in the due-diligence reports. (For the purpose of this scheme, an investment banker would be defined as an investment banker registered with the Securities and Exchange Commission in the USA, or under the Financial Services Authority in the U.K., or the appropriate regulatory authority in Germany, France, Singapore or in Japan).

(viii)���� Full details of the transaction / acquisition would be required to be reported to the RBI and the Ministry of Finance within a period of 30 days of completion of such transaction.

It is hoped that by proving flexibility in the regulatory framework, the Government would be encouraging the Indian software industry to fully exploit their inherent strengths to become global players.

Under the existing guidelines for overseas investments by the Indian companies, one of the automatic approval routes available without reference to RBI/ Government is where:

���������� (i) such overseas investments are funded up to maximum of 50 per cent out of the proceeds of American Depository Receipts, Global Depository Receipt (ADRs / GDRs) raised; and

(ii) floating of ADR / GDR issue has been approved by the Government. Cases not conforming to the criteria stipulated above are required to be referred to the RBI or the special committee constituted under the RBI as the case may be for consideration and approval Issue of ADR/ GDR is required to be approved by the Government in all cases.

In order to further simplify the procedure, the Reserve Bank of India has today granted general permissions under the Foreign Exchange Regulation Act, 1973 (FERA to Indian Companies to make an international offering of Rupee denominated equity shares of the company by way of issue of American Depository Receipts / Global Depository Receipts (ADRs/ GDRs). Besides, the necessary permissions under FERA, 1973 for issue and export of ADRs/ GDRs by the Indian company and acquisition of ADRs/ GDRs by foreign investors have also been granted. Various other permissions necessary for launching an ADR/ GDR issue have also been granted to the issuing companies. Recently, the Government of India has made certain changes in the guidelines for ADR / GDR issues by the Indians companies in terms of which Indian companies issuing ADRs / GDRs need not approach Ministry of Finance, Government of India for prior approval, subject to the Reserve Bank of India�s (RBI) approval under FERA, 1973. These changes seek to further liberalise the operational procedures by dispensing with the track record scrutiny process and, the two-stage approval by the Ministry of Finance, Department of Economic Affairs for ADR/ GDR issues.

Issuing companies may now enter into agreements in respect of or ancillary to the offer including but not limited to the Subscription Agreements and Deposit Agreement and to provide the necessary warranties and indemnities in accordance with international practices.

Depositories may remit the dividends by purchasing foreign currency at the prevailing market rates through an authorised dealer in foreign exchange.

Central Government hereby notifies following Scheme, for facilitating Issue of Foreign Currency Convertible Bonds and Ordinary Shares Through Global Depositary Mechanism by Indian Companies, namely: -

(1)������ This Scheme may be called the Issue of Foreign Currency Convertible Bonds and Ordinary Shares (Through Depositary Receipt Mechanism) Scheme, 1993.

(2)������ It shall be deemed to have come into force with effect from the first day of April 1992

In this Scheme, unless the context otherwise requires: -

(a)������ �Domestic Custodian Bank� means a banking company, which acts as a custodian for the ordinary shares or foreign currency convertible bonds of an Indian company which are issued by it against global depositary receipts or certificates;��

�(b)����� �Foreign Currency Convertible Bonds� means bonds issued in accordance with this scheme and subscribed by a non-resident in foreign currency and convertible into ordinary shares of the issuing company in any manner, either in whole, or in part, on the basis of any equity related warrants attached to debt instruments;

(c)������ �Global Depositary Receipts� means any instrument in the form of a depositary receipt or certificate (by whatever name it is called) created by the Overseas Depositary Bank outside India and issued to non-resident investors against the issue of ordinary shares or Foreign Currency Convertible Bonds of issuing company;

(d)������ �Issuing Company� means an Indian company permitted to issue Foreign Currency Convertible Bonds or ordinary shares of that company against Global Depositary Receipts;�����

(e)������ �Overseas Depositary Bank� means a bank authorised by the issuing company to issue global depositary receipts against issue of Foreign Currency Convertible Bonds or ordinary shares of the issuing company;

(f)������� the words and expressions not defined in the Scheme, but defined in the Income-tax Act, 1961 (43 of 1961), or the Companies Act, 1956 (1 of 1956) or the Securities and Exchange Board of India Act, 1992 (15 of 1992), or the Rules and Regulations framed under these Acts, shall have meaning respectively assigned to them, as the case may be in the Income-tax Act or the Companies Act, or the Securities and Exchange Board of India Act;

(g)������ �a software company� means a company engaged in manufacture or production of software where not less than 80% of the company�s turnover is from software activities;

(h)������ �information technology software and information technology services� means the companies which deal with such activities as defined in recommendation No. 19(a) and (b) of the notification dated 25^th� July, 1998, issued by the Planning Commission.

(1)������ An issuing company desirous of raising foreign funds by issuing Foreign Currency Convertible Bonds or ordinary shares for equity issues through Global Depositary Receipt is required to obtain prior permission of the Department of Economic Affairs, Ministry of Finance Government of India.

(2)������ An issuing company seeking permission under sub-paragraph (1) shall have a consistent track record of good performance (financial or otherwise) for a minimum period of three years, on the basis of which an approval for finalising the issue structure would be issued to the company by the Department of Economic Affairs, Ministry of Finance.

(3)������ On the completion of finalisation of issue structure in consultation with the Lead Manager to the issue, the issuing company shall obtain the final approval for proceeding ahead with the issue from the Department of Economic Affairs.

(4)������ The Foreign Currency Convertible Bonds shall be denominated in any convertible foreign currency and the ordinary shares of an issuing company shall be denominated in Indian rupees.

(5)������ When an issuing company issues ordinary shares or bonds under this Scheme, that company shall deliver the ordinary shares or bonds to a Domestic Custodian Bank who will, in terms of agreement, instruct the Overseas Depositary Bank to issue Global Depositary Receipt or Certificate to non-resident investors against the shares or bonds held by the Domestic Custodian Bank.

(6)������ A Global Depositary Receipt may be issued in the negotiable form and may be listed on any international stock exchanges for trading outside India.

(7)������ The provisions of any law relating to issue of capital by an Indian company shall apply in relation to the issue of Foreign Currency Convertible Bonds or the ordinary shares of an issuing company and the issuing company shall obtain the necessary permission or exemption from the appropriate authority under the relevant law relating to issue of capital.

Indian companies engaged in Information Technology Software and Information Technology Services, are eligible to offer to their non-resident/resident permanent employees (including Indian and Overseas working directors) global depository receipts against the issue of ordinary shares under the scheme subject to the operational guidelines/ conditions issued from time to time by the Government.

The ordinary shares and Foreign Currency Convertible Bonds issued against the Global Depositary Receipts shall be treated as direct foreign investment in the issuing company. The aggregate of the foreign investment made either directly or indirectly (through Global Depositary Receipts Mechanism) shall not exceed 51 per cent of the issued and subscribed capital of the issuing company:

Provided that the investments made through Offshore Funds or by Foreign Institutional Investors will not form part of the limit laid down in this paragraph.

(1)������ A Global Depositary Receipt may be issued for one or more underlying shares or bond held with the Domestic Custodian Bank.

(2)������ The Foreign Currency Convertible Bonds and Global Depositary Receipts may be denominated in any freely convertible foreign currency.

(3)������ The ordinary shares underlying the Global Depositary Receipts and the shares issued upon conversion of the foreign Currency Convertible Bonds will be denominated only in Indian currency.

(4)������ The following issues will be decided by the issuing company with the Lead Manager to the issue, namely: -

���������� (a)������ public or private placement;

���������� (b)������ number of Global Depositary Receipts to be issued;

���������� (c)������ the issue price;

���������� (d)������ the rate of interest payable on Foreign Currency Convertible Bonds; and

���������� (e)������ the conversion price, coupon, and the pricing of the conversion options of the Foreign Currency Convertible Bonds.

(5)������ There would be no lock-in-period for the Global Depositary Receipts issued under this Scheme.

The Global Depositary Receipts issued under this Scheme may be listed on any of the Overseas Stock Exchanges, or over the counter exchanges or through Book Entry Transfer Systems prevalent abroad and such receipts may be purchased, possessed and freely transferable by a person who is a non-resident within the meaning of section 2(q) of the Foreign Exchange Regulation Act, 1973 (46 of 1973), subject to the provisions of that Act.

(1)������ A non-resident holder of Global Depositary Receipts may transfer those receipts or may ask the Overseas Depositary Bank to redeem those receipts.� In the case of redemption, Overseas Depositary Bank shall request the Domestic Custodian Bank to get the corresponding underlying shares released in favour of the non-resident investor, for being sold directly on behalf of the non-resident, or being transferred in the books of account of the issuing company in the name of the non-resident.

(2)������ In case of redemption of the Global Depositary Receipts into underlying shares, a request for the same will be transmitted by the Overseas Depositary Bank to the Domestic Custodian Bank in India, with a copy of the same being sent to the issuing company for information and record.�

(3)������ On redemption, the cost of acquisition of the shares underlying the Global Depositary Receipts shall be reckoned as the cost on the date on which the Overseas Depositary Bank advises the Domestic Custodian Bank for redemption.� The price of the ordinary shares of the issuing company prevailing in the Bombay Stock Exchange or the National Stock Exchange on the date of the advice of redemption shall be taken as the cost of acquisition of the underlying ordinary shares.

(4)������ For the purposes of conversions of Foreign Currency Convertible Bonds, the cost of acquisition in the hands of the non-resident investors would be the conversion price determined on the basis of the price of the shares at the Bombay Stock Exchange, or the National Stock Exchange, on the date of conversion of Foreign Currency Convertible Bonds into shares.

(1)������ Interest payments on the bonds, until the conversion option is exercised, shall be subject to deduction of tax at source at the rate of ten per cent.

(2)������ Tax on dividend on the converted portion of the bond shall be subject to deduction of tax at source at the rate of ten pre cent.

(3)������ Conversion of Foreign Currency Convertible Bonds into shares shall not give rise to any capital gains liable to income-tax in India.

(4)������ Transfers for Foreign Currency Convertible Bonds made outside India by a non-resident investor to another non-resident investor shall not give rise to any capital gains liable to tax in India.

(1)������ Under the provisions of the Income-tax Act, income by way of dividend on shares will be taxed at the rate of 10 per cent. The issuing company shall transfer the dividend payments net after deducting tax at source to the Overseas Depositary Bank.

(2)������ On receipt of these payments of dividend after taxation, the Overseas Depositary Bank shall distribute them to the non-resident investors proportionate to their holdings of Global Depositary Receipts evidencing the relevant shares. The holders of the Depositary Receipts may take credit of the tax deducted at source on the basis of the certification by the Overseas Depositary Bank, if permitted by the country of their residence.

(3)������ All transactions of trading of the Global Depositary Receipts outside India, among non-resident investors, will be free from any liability to income tax in India on capital gains therefrom.

(4)������ If any capital gains arise on the transfer of the aforesaid shares in India to the non-resident investor, he will be liable to income tax under the provisions of the Income-tax Act. If the aforesaid shares are held by the non-resident investor for a period of more than twelve months from the date of advice of their redemption by the Overseas Depositary Bank, the capital gains arising on the sale thereof will be treated as long-term capital gains and will be subject to income-tax at the rate of 10 per cent under the provisions of section 115AC of the Income-tax Act. If such shares are held for a period of less than twelve months from the date of redemption advice, the capital gains arising on the sale thereof will be treated as short-term capital gains and will be subject to tax at the normal rates of income-tax applicable to non-residents under the provisions of the Income-tax Act.

(5)������ After redemption of the Depositary Receipts into underlying shares, during the period, if any, which these shares are held by the redeeming non-resident foreign investor who has paid for these shares in foreign exchange at the time of purchase of the Global Depositary Receipt, the rate of taxation of income by way of dividends on these shares would continue to be at the rate of 10 per cent, in accordance with section 115(A) of the Income-tax Act.� The long-term capital gains on the sale of these redeemed underlying shares held by non-resident investors in the domestic market shall also be charged to tax at the rate of 10 per cent, in accordance with the provisions of section 115AC(1).

(6)������ When the redeemed shares are sold on the Indian Stock Exchanges against payment in rupees, these shares shall go out of the purview of section 115AC of the Income-tax Act and income therefrom shall not be eligible for the concessional tax treatment provided thereunder. After the transfer of shares where consideration is in terms of rupees payment, the normal tax rates would apply to the income arising or accruing on these shares.

(7)������ Deduction of tax at source on the amount of capital gains accruing on transfer of the shares would be made in accordance with sections 195 and 196C of the Income-tax Act.

(1)������ During the period of fiduciary ownership of shares in the hands of the Overseas Depositary Bank, the provisions of Avoidance of Double Taxation Agreement entered into by the Government Bank with the country of residence of the Overseas Depositary Bank will be applicable in the matter of taxation of income from dividends from underlying shares and interest on Foreign Currency Convertible Bonds.

(2)������ During the period, if any, when the redeemed underlying shares are held by the non-resident investor on transfer from fiduciary ownership of the Overseas Depositary Bank, before they are sold to resident purchasers, the Avoidance of Double Taxation Agreement entered into by the Government of Indian with the country of residence of the non-resident investor will be applicable in the matter of taxation of income from the dividends from the said underlying shares or interest on Foreign Currency Convertible Bonds, or any capital gain arising out of transfer of underlying shares.

The holding of the depositary receipts in the hands of non-resident investors and the holding of the underlying shares by the Overseas Depositary Bank in a fiduciary capacity and the transfer of the Global Depositary Receipts between non-resident investors and the Overseas Depositary Bank shall be exempt from wealth-tax under the Wealth-tax Act, 1957 (27 of 1957), and from gift-tax under the Gift-tax Act, 1958 (18 of 1958).

ADDITIONAL INFORMATION TO BE FILED BY COMPANIES APPLYING FOR PERMISSION TO FLOAT GLOBAL ISSUES

1.������� Name of the company and address for communication:

2.������� Existing business:

3.������� Profile on proposed expansion/ Diversification project with break-up requirements of rupee and F.E. Components:

________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

4.������� Existing resources:

Equity	Year ending in March			Debt	Year ending in March
	1993	1992	1991		1993	1992	1991
(i) Authorised capital				(i) Secured loans
(ii) Issued and paid-up capital				(a) Banks and Fls.
(iii) Reserve and surplus:				(b) Debentures
(a) General reserve				(c) Other loans
(b) Development rebate reserve				(ii) Unsecured loans
�(c) Investment allowance reserve				Deposits and loans
� (d) Capital reserve				Deferred Liabilities
� (e) Other reserves				(iii) Current liabilities over drafts from banks and other short-term borrowings

 

5.������� Fixed assets	Year ending in March
	1993	1992	1991
I.�������� (i) Gross block
���������� (ii) Additions and accretions during ������� the year
���������� (iii) Depreciation
���������� (iv) Net block
II.� Work-in-progress
6.�������
(i)Sales and other income
(ii) Operating expenses
(iii) Interest on loans
(iv) Profit before depreciation
(v) Depreciation
(vi) Profit before tax
(vii) Provision for taxation
(viii) Profit before appropriations
(ix) Dividend and other appropriations
(x) Profit transferred to general reserves

7.������� Capacity and utilisation

Products	Year	Units	Installed capacity P.A.	Production during the year	Capacity utilization percentage

 

8.������� Financial results and management ratios	Year ending in March
	1993	1992	1991
(i) Net worth
(ii) Capital employed
(iii) Capital-turnover ratio
(iv) Equity-debt ratio (long-term)
(v) Profitability
�(a) Profit margin: Net profit / Income X 100 = percentage
�(b) Return on equity: Net profit / Equity X 100 = percentage
(c) Return on net worth: Net profit / Net worth X 100 = percentage
(d) Return on total investment: Net profit / Total Investment X 100 = percentage
(e) Return on total capital employed: Net profit / Resources X 100 = percentage
(vi) Liquidity ratio: Current ratio=Current assets / Current liabilities
(vii) Revenue per worker: For the year = Income / Total employment
9.������� Statutory liabilities (Disputed and otherwise) and defaults
10.������ Defaults in respect of interest/ instalments to loans from banks/ financial institutions
11.������ Exports and imports:
���������� (a) Free on board value exports
���������� (b) Exported to (Countries)
���������� (c) Imports
�� ������������������ (i) Capitals equipment
�� ������������������ (ii) Materials, components, consumables
���������� (d) Other foreign currency expenditure
���������� (e) Foreign debt liabilities

12.������ Salient features of the prospective corporate plans and diversification proposals with special reference to foreign exchange requirements.

________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

 

FORMAT OF APPROVAL FOR FINALISING THE ISSUE STRUCTURE

F. No. ______________________________________________

Government of India, Ministry of Finance, Department of Economic Affairs (Investment Division) New Delhi

Dated the ___________________

To

M/s,

Subject:� Your application for a GDR/ ADR/ IDR issue for an amount of _____________________________________

Dear Sir,

I am directed to refer to your letter No. ___________________________________________ dated ____________________ on the subject mentioned above and to convey Government of India�s approval �in principle� to the mobilisation of foreign currency resources equivalent to ___________________________________________________ through issue of GDR/ ADR/ IDRs to cover the Foreign Currency needs for your ____________________________________________________ projects and other related corporate needs.

2.������� The approval is subject to the understanding that the foreign currency resources raised through the proposed issue should be mandatorily remitted to India immediately after the issue.

3.������� This approval is valid for a period for six months from the date of issue of this letter.

4.������� You are now requested to finalise the detailed parameters of the proposed GDR/ ADR/ IDRs offering for consideration and final approval by the Government of India.

 

Yours faithfully

Director (Foreign investments) ___________________________

 

INDICATIVE ITEMS OF FINAL APPROVAL FOR FOREIGN CURRENCY CONVERTIBLE BOND ISSUES

Issuer

Lead Manager

Co. Lead Manager(s)

Principal amount

Currency

Issue price (and premium, if any)

Coupon (and payment dates)

Conversion premium

Maturity

Listing of bonds

Optional redemption by issuer (Call)

Optional redemption by investor (Put)

Form and denomination Status

Cross default provisions

Negative pledge provisions

Taxation

Commissions

Reimbursable expenses

Governing laws

 

INDICATIVE ITEMS IN THE FINAL APPROVAL FOR EURO-EQUITY ISSUES THROUGH GDR MECHANISM

Issuer

Lead Manager

Co. Lead Manager(s)

Overseas Depositary Institution

Indian Custodian

Issue structure and denomination (No. of underlying shares represented by the GDRs)

Issue amount (Principal amount)

Greenshoe Option (Additional amount in percentage terms which may be retained if offered if offered) warrants attached, if any

Currency of Issue

G.D.R. Listing

Underlying shares listing

Standstill period (No further equity shares, or interests in equity shares, for a specified time period from the date of issue)

Trading provision

Settlement provisions

Selling commission

Underwriting commission and management fees

Legal expenses, printing expenses, Depositary fees, and other out of pocket expenses.

Taxation

Governing laws.