Transactree Technologies Private Limited
- CitationRBI Compounding Order CA No. NDL 558/2019
Ratio decidendi
The rule this decision rests on
The order holds that a company which admits a contravention of paragraph 9(1)(B) of Schedule 1 to FEMA 20/2000-RB, by filing Form FC-GPR three days after the thirty-day period for reporting the issue of shares to a non-resident investor, may have that contravention compounded under the Foreign Exchange (Compounding Proceedings) Rules, 2000, on payment of a compounding amount fixed in accordance with the Guidance Note on Computation Matrix, having regard to the amount involved, the period of delay, and the absence of mala fides or wilful intention as submitted. The compounding authority's power to accept such compounding is exercised only on the basis of the applicant's declarations that the particulars are true and correct, that no enquiry, investigation or adjudication is pending, and that no appeal has been filed under Section 17 or Section 19 of FEMA, and the compounding order is expressly subject to those declarations being found accurate.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
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 September 24, 2019 (received at Reserve Bank of India, New Delhi on October 1, 2019) and addendums dated January 28, 2020 and February 10, 2020 for compounding of contravention of the provisions of the Foreign Exchange Management Act, 1999 (hereinafter referred to as FEMA) and the regulations issued thereunder. The contravention sought to be compounded is of delay in filing Form FC-GPR after issue of shares in terms of paragraph 9(1)(B) of Schedule 1 of 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 then applicable.
2. The relevant facts of the case are as follows: (a) The applicant company, incorporated on October 5, 2015, is engaged in other
Transactree Technologies Private Limited CA No. NDL 558/2019 information technology and computer services activities n.e.c. (b) The applicant had issued 62000 equity shares for a consideration of ₹6,20,000.00 to its foreign investor, M/s Lumitree Limited, Mauritius, on December 29, 2016 and reported the same on January 31, 2017 with a delay of 3 days beyond the prescribed period, in contravention of paragraph 9(1)(B) of Schedule 1 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 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 Form FC-GPR as specified by the Reserve Bank from time to time together with the documents prescribed therein. (c) Thus, there is a contravention of paragraph 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. Shri Bhuvan Rustagi, Director, Ms. Kritima Chadha and Ms. Yatika Tibrewal, both Consultant, appeared for personal hearing on February 20, 2020 on behalf of the applicant. The representatives admitted the contravention committed by the applicant for which compounding has been sought. During the personal hearing, they submitted that the contravention was without any malafide or wilful intention but was mainly due to technical problem. 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 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(b) above. The contravention relates to an amount of ₹6,20,000.00 (Rupees Six Lakh Twenty Thousand only) and the period of delay is 3 days.
Transactree Technologies Private Limited CA No. NDL 558/2019
5. It has been declared in the compounding application dated September 24, 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 02, 2020 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 contravention which is being compounded in this Order is 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 ₹10,080.00 (Rupees Ten Thousand and Eighty only) will meet the ends of justice in the circumstances of this case.
7. Accordingly, I compound the admitted contravention of paragraph 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 ₹ 10,080.00 (Rupees Ten Thousand and Eighty 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
Transactree Technologies Private Limited CA No. NDL 558/2019
Exchange (Compounding Proceedings) Rules, 2000 dated May 3, 2000 shall apply.
The application is disposed accordingly.
Dated this the 21st day of February 2020.
Sd/- (Md. Shakir Hasan) Assistant General Manager
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