Nexon Aerospace Ltd. made a payment for importing raw materials intended for manufacturing finished products. During this time, a new Managing Director assumed charge. Although the raw materials arrived in India, the com

Contravention of Section 10(6) of the Foreign Exchange Management Act, 1999 (FEMA) is a continuing actionable offence. The facts of the given situation is very similar to the case of Suborno Bose (Appellant) v. Enforcement Directorate and Anr. (Respondents) decided by Supreme Court. In this case, it was held that the Company and the persons managing the affairs of the Company remain liable to take corrective measures in right earnest. Considering the admitted fact that the MD took over the management of the Company and was fully alive to the default committed by the Company, yet failed to take corrective steps in right earnest. MD now cannot be heard to contend that no liability could be fastened on him individually. Indeed, FEMA regulations provides for the period within which the foreign exchange ought to be surrendered if the Company was not wanting to take delivery of the goods imported. That does not mean that the contravention ceased to exist beyond the specified period. On the other hand, after the specified period had expired, it would be a case of deemed contravention until rectified. Applying the above decision, it can be concluded that transaction under question is a deemed contravention and MD cannot escape penalty as imposed the adjudicating authority.