Bliss Inns Private Limited

In the RESERVE BANK OF INDIA Foreign Exchange Department 6, Sansad Marg New Delhi-110001 Present V.G. Sekar Chief General Manager Date: July 2, 2019 CA No. NDL 381/2019 In the matter of Bliss Inns Private Limited C-34, Ground Floor, Hauz Khas, New Delhi - 110016 (Applicant) In exercise of the powers under Section 15(1) of Foreign Exchange Management Act, 1999 and the Regulations/ Rules/ Notifications/ Orders made thereunder, I pass the following Order. ORDER The applicant has filed the compounding application dated January 28, 2019 (received at Reserve Bank of India, New Delhi on February 06, 2019) for compounding of contraventions of the provisions of the Foreign Exchange Management Act, 1999 (hereinafter referred to as FEMA) and the regulations issued thereunder. The contraventions sought to be compounded are those of (i) delay in reporting foreign inward remittance received for issue of shares, (ii) delay in filing Form FC-GPR after allotment of shares, and (iii) delay in refund of excess share application money in terms of paragraphs 9(1)(A), 9(1)(B) and 8 respectively of Schedule 1 to Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000 notified vide Notification No. FEMA 20/2000-RB dated May 3, 2000 (hereinafter referred to as FEMA 20/2000- RB), as amended from time to time.

2. The relevant facts of the case are as follows: (a) The applicant company was incorporated on June 10, 2010 and is engaged in the Bliss Inns Private Limited CA No. NDL 381/2019 business of providing platforms for online booking of hotels and other short stay accommodations. (b) The applicant had reported receipt of foreign inward remittance on twenty two occasions from May 2012 to September 2018. On six occasions the applicant reported the receipt of remittance with delay ranging from 5 days to 11 months and 9 days, as detailed hereunder, beyond the prescribed period in contravention of paragraph 9(1)(A) of Schedule I to FEMA 20/2000-RB, as then applicable. Whereas, in terms of paragraph 9(1)(A) of Schedule 1 to FEMA 20/2000-RB, an Indian company issuing shares or convertible debentures or warrants in accordance with these Regulations shall submit through AD bank to the Regional Office concerned of the Reserve Bank under whose jurisdiction the Registered office of the company operates, not later than 30 days from the date of receipt of the amount of consideration received by Indian company for issue shares or convertible debentures or warrants, report in Advance Reporting Form as specified by Reserve Bank from time to time along with the documents prescribed therein.

Sl. No. Date of receipt Amount (₹) Date of reporting 1 02.05.2012 20,00,000.00 10.05.2013 2 27.05.2014 50,00,000.00 01.07.2014 3 03.02.2016 4,50,39,673.00 08.05.2016 4 08.06.2017 1,00,00,000.00 25.07.2017 5 28.06.2017 2,25,00,000.00 12.08.2017 6 25.09.2017 1,00,00,000.00 11.01.2018 Total 9,45,39,673.00 Further, on seven other occasions the delays were in contravention of the provisions of Regulation 13.1(1) of FEMA 20(R)/2017-RB, as then applicable, and the applicant has paid Late Submission Fee (LSF) for the said contraventions as required in terms of Regulation 13.2 of FEMA 20(R)/2017-RB. (c) The applicant had reported allotment of shares on twenty occasions from July 2012 to September 2018. On eleven occasions the applicant reported the allotment of shares in Form FC-GPR with delay ranging from 1 month and 12 days to 10 months and 13 days, as detailed hereunder, beyond the prescribed period in contravention of paragraph 9(1)(B) of Schedule I to FEMA 20/2000-RB, as then applicable. Whereas, in terms of paragraph 9(1)(B) of Schedule 1 to FEMA 20/2000- RB, an Indian company issuing shares or convertible debentures or warrants in accordance with these Regulations shall submit through AD bank to the Regional

Bliss Inns Private Limited CA No. NDL 381/2019

Office concerned of the Reserve Bank under whose jurisdiction the Registered office of the company operates not later than 30 days from the date of issue of shares or convertible debentures or warrants, a report in the Form FC-GPR as specified by the Reserve Bank from time to time together with documents prescribed therein. Sl. Date of No. of shares Amount (₹) Date of reporting in No. allotment allotted Form FC-GPR 1 13.07.2012 15,000 19,99,950.00 25.06.2013 2. 24.01.2014 1,61,887 2,43,47,804.00 23.04.2014 3 27.05.2014 33,244 49,99,897.60 26.03.2015 4 10.07.2014 15,322 23,04,428.80 23.05.2015 5 07.08.2014 6,475 9,73,840.00 25.05.2015 6 03.02.2016 2,36,156 4,50,39,672.32 25.10.2016 7 03.02.2016 3,40,816 6,50,00,427.52 21.10.2016 8 01.05.2017 12,714 24,24,814.08 13.07.2017 9 10.06.2017 49,593 99,99,982.13 09.01.2018 10 03.07.2017 1,11,584 2,24,99,909.34 09.01.2018 11 25.09.2017 49593 99,99,982.13 26.04.2018 Total 18,95,90,707.90 Further, on nine other occasions the delays were in contravention of the provisions of Regulation 13.1(2) of FEMA 20(R)/2017-RB, as then applicable and the applicant has paid Late Submission Fee (LSF) for the said contraventions as required in terms of Regulation 13.2 of FEMA 20(R)/2017-RB.

(d) The applicant had allotted 340816 shares amounting to ₹6,50,00,427.52 against inward remittance of ₹6,52,74,246.60 (₹6,18,84,246.60 received on February 02, 2016 and ₹33,90,000/- received on January 28, 2016). The applicant sought approval for refund of the excess share application money of ₹2,73,819.08 on September 07, 2018 with a delay of 2 years, 1 month and 7 days and refunded the same on December 13, 2018 in contravention of paragraph 8 of Schedule 1 to FEMA 20/2000-RB, as then applicable. Whereas, in terms of paragraph 8 of Schedule 1 to FEMA 20/2000-RB, a company in India issuing shares or convertible debentures or warrants under this Schedule to a person resident outside India shall receive the amount of consideration for such shares or convertible debentures or warrants by inward remittance through normal banking channels, or by debit to NRE / FCNR (B) account of the person concerned maintained with an authorised dealer / authorized bank, or by debit to a non-interest bearing Escrow account (in Indian Rupees) maintained in India with an AD bank in accordance with Foreign Exchange Management (Deposit) Regulations, 2000. Provided that if the shares or convertible debentures or warrants are not issued within 180 days from the date of receipt of the Bliss Inns Private Limited CA No. NDL 381/2019 inward remittance or date of NRE / FCNR (B) / Escrow account, the amount of consideration so received shall be refunded to the person concerned by outward remittance through normal banking channels or by credit to his NRE / FCNR (B) account, as the case may be.

Provided further that the Reserve Bank may on application made to it and for sufficient reasons permit an Indian company to refund the amount of consideration received towards issue of security, if such amount of consideration is outstanding beyond a period of 180 days from the date of receipt. (e) Thus, there are contraventions of paragraphs 9(1)(A), 9(1)(B) and 8 of Schedule 1 to FEMA 20/2000-RB, as then applicable.

3. The applicant was given an opportunity for personal hearing for further submission in person and/ or by producing documents, if any, in support of the application. Shri Lavkesh Singh, Compliance Head of the company and Shri Pranav Bakshi, Consultant appeared for personal hearing on July 2, 2019 on behalf of the applicant. The representatives of the applicant admitted the contraventions committed by the applicant for which compounding has been sought. During the personal hearing, they submitted that contraventions were without any malafide or wilful intention but were mainly due to oversight. They requested for a lenient view in the matter. The application for compounding is, therefore, being considered on the basis of averments made in the application as well as other documents and submissions made during the personal hearing.

4. I have given my careful consideration to the documents on record and submissions made by the applicant during the personal hearing. Accordingly, I hold that the applicant has contravened the following FEMA provisions: (a) Paragraph 9(1)(A) of Schedule 1 to FEMA 20/2000-RB, as then applicable, on account of delay in reporting of foreign inward remittance received towards subscription of shares as detailed in paragraph 2(b) above. The contraventions relate to an amount of ₹9,45,39,673/- (Rupees Nine Crore Forty Five Lakh Thirty Nine Thousand Six Hundred and Seventy Three only) and the period of delay is ranging from 5 days to 11 months and 9 days. (b) Paragraph 9(1)(B) of Schedule 1 to FEMA 20/2000-RB, as then applicable, on account of delay in filing Form FC-GPR after issue of shares as detailed in paragraph 2(c) above. The contraventions relate to an amount of ₹18,95,90,707.90

Bliss Inns Private Limited CA No. NDL 381/2019 (Rupees Eighteen Crore Ninety Five Lakh Ninety Thousand Seven Hundred Seven and Paise Ninety only) and the period of delay is ranging from 1 month and 12 days to 10 months and 13 days. (c) Paragraph 8 of Schedule 1 to FEMA 20/2000-RB, as then applicable, on account of delay in refund of excess shares application money as detailed in paragraph 2(d) above. The contravention relates to an amount of ₹2,73,819.08 (Rupees Two Lakh Seventy Three Thousand Eight Hundred Nineteen and Paise Eight only) and the period of delay is 2 years, 1 month and 7 days.

5. It has been declared in the compounding application dated January 28, 2019, that the particulars given by the applicant in the application are true and correct to the best of their knowledge and belief. It has also been declared in the declaration dated January 29, 2019 furnished with the compounding application that the applicant was not under any enquiry/ investigation/ adjudication by any agency as on the date of the application and has, in this regard, not informed of initiation of any such enquiry/ investigation/ adjudication proceedings against it, thereafter. It has further been declared that the applicant has not filed any appeal under Section 17 or Section 19 of FEMA. Accordingly, the above contraventions which are being compounded in this Order are subject to the veracity of the above declarations made by the applicant and this Order is without prejudice to any other action which may be taken by any authority under the extant laws if the said declarations are subsequently discovered to be false and/ or incorrect.

6. In terms of Section 13 of FEMA, any person contravening any provision of the Act shall be liable to a penalty up to thrice the sum involved in such contravention upon adjudication. After considering the submissions made by the applicant and the entire facts and circumstances of the case I am persuaded to compound the contraventions, in line with the Guidance Note on Computation Matrix prescribed as part of Master Direction – Compounding of Contraventions, framed in accordance with the Foreign Exchange (Compounding Proceedings) Rules, 2000. Accordingly, it stands to reason that payment of an amount of ₹2,07,373/- (Rupees Two Lakh Seven Thousand Three Hundred and Seventy Three only) will meet the ends of justice in the circumstances of this case.

Bliss Inns Private Limited CA No. NDL 381/2019

7. Accordingly, I compound the admitted contraventions of paragraphs 8, 9(1)(A), and 9(1)(B) of Schedule 1 to FEMA 20/2000-RB, as then applicable, by the applicant based on the facts detailed above in terms of the Foreign Exchange (Compounding Proceedings) Rules, 2000, on payment of an amount of ₹2,07,373/- (Rupees Two Lakh Seven Thousand Three Hundred and Seventy Three only) which shall be deposited by the applicant with the Reserve Bank of India, Foreign Exchange Department, 6, Sansad Marg, New Delhi - 110001 by a demand draft drawn in favour of the “Reserve Bank of India” and payable at New Delhi within a period of 15 days from the date of this Order. In case of failure to deposit the compounded amount within the above mentioned period, Rule 10 of the Foreign Exchange (Compounding Proceedings) Rules, 2000 dated May 3, 2000 shall apply.

The application is disposed accordingly.

Dated this the 2nd day of July 2019.

Sd/- (V.G. Sekar) Chief General Manager