Rising Sun Energy Pvt. Ltd.
- CitationRBI Compounding Order CA No. NDL 345/2018
Ratio decidendi
The rule this decision rests on
This is a compounding order under Section 15(1) of FEMA, not a judgment of a court, and it records no contested legal reasoning. The regional director accepted the applicant's admission of delayed reporting under paragraphs 9(1)(A) and 9(1)(B) of Schedule 1 to FEMA 20/2000-RB, found the contraventions established on the documents and the admission, relied on the declarations in the application, and fixed the compounding amount by exercising discretion under Section 13 of FEMA. The order states a discretionary, fact-specific determination and cites no principle of law as the ground of decision beyond the statutory power to compound. NO_RATIO: The order is an administrative compounding decision that rests on the applicant's admission and the exercise of statutory discretion on the facts, without articulating any general rule of law as the basis of decision.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
In the matter of Rising Sun Energy Private Limited S-18, Second Floor, Green Park Extension, 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 November 22, 2018 (received at Reserve Bank of India, New Delhi on November 29, 2018) 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, and (ii) delay in filing form FC-GPR after issue of shares, in terms of paragraphs 9(1)(A) and 9(1)(B) 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 September 25, 2014 and is engaged
Rising Sun Energy Private Limited CA No. NDL 345/2018 in the business of electric power generation using solar energy. (b) The applicant had reported the remittances received from its foreign investors viz. M/s Charisma Energy Services Limited, Singapore, M/s Bhadla Solar Investments Pte Limited, Singapore and M/s Sunseap International Pte Limited, Singapore on four occasions with delay ranging from 3 days to 1 year, 5 months and 1 day beyond the prescribed period of 30 days, as detailed below, in contravention of paragraph 9(1)(A) of Schedule 1 to FEMA 20/2000-RB, as then applicable. Sl. No. Date of receipt Amount (₹) Date of Reporting 1 02.05.2016 31,56,200 02.11.2017 2 09.05.2016 32,88,400 02.11.2017 3 13.10.2016 66,80,000 16.11.2016 4 25.11.2016 21,00,00,000 28.12.2016 Total 22,31,24,600 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 of shares or convertible debentures or warrants, a report in Advance Reporting Form as specified by Reserve Bank from time to time along with documents prescribed therein. (c) The applicant had reported the allotment of shares to its foreign investors viz. M/s Charisma Energy Services Limited, Singapore, M/s Bhadla Solar Investments Pte Limited, Singapore and M/s Sunseap International Pte Limited, Singapore on eight occasions with delay ranging from 2 months and 11 days to 11 months and 25 days beyond the prescribed period of 30 days, as detailed below, in contravention of paragraph 9(1)(B) of Schedule 1 to FEMA 20/2000-RB, as then applicable. Sl. No. Date of allotment Amount (₹) Date of Reporting 1 08.07.2016 23,00,000 11.04.2017 2 24.10.2016 36,490 12.04.2017 3 24.10.2016 66,80,000 24.05.2017 4 24.10.2016 31,56,200 16.11.2017 5 24.10.2016 32,88,400 17.11.2017 6 24.10.2016 1,00,000 19.08.2017 7 28.11.2016 21,00,00,000 20.05.2017 8 10.02.2017 34,00,52,570 23.05.2017 Total 56,56,13,660
Rising Sun Energy Private Limited CA No. NDL 345/2018
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 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. (d) Thus, there are contraventions of paragraphs 9(1)(A) and 9(1)(B) 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. Mr. Keshav Bansal and Ms. Harsha Saluja, both Company Secretary, appeared for personal hearing on April 23, 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 lack of awareness of FEMA regulations and RBI compliances. 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, on account of delay in reporting of foreign inward remittances received towards subscription of shares as detailed in paragraph 2(b) above. The contraventions relate to an amount of ₹22,31,24,600/- (Rupees Twenty Two Crore Thirty One Lakh Twenty Four Thousand and Six Hundred only) and the period of delay ranges from 3 days to 1 year, 5 months and 1 day. (b) Paragraph 9(1)(B) of Schedule 1 to FEMA 20/2000-RB, 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 ₹56,56,13,660/- (Rupees Fifty Six Crore Fifty
Rising Sun Energy Private Limited CA No. NDL 345/2018
Six Lakh Thirteen Thousand Six Hundred and Sixty only) and the period of delay ranges from 2 months and 11 days to 11 months and 25 days.
5. It has been declared in the compounding application dated November 22, 2018, 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 November 22, 2018 furnished as part of 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. However, taking into account the relevant facts and circumstances of the case as stated in the foregoing paragraphs, I am persuaded to take a lenient view on the amount for which the contraventions are to be compounded and I consider that an amount of ₹1,14,965/- (Rupees One Lakh Fourteen Thousand Nine Hundred and Sixty Five only) will meet the ends of justice.
7. Accordingly, I compound the admitted contraventions of paragraphs 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 ₹1,14,965/- (Rupees One Lakh Fourteen Thousand Nine Hundred and Sixty Five 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
Rising Sun Energy Private Limited CA No. NDL 345/2018 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 23rd day of April 2019.
Sd/- (Ajay Kumar) Regional Director for Delhi and CGM, New Delhi
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