the Foreign Exchange Management (Encashment of Draft, Cheque, Instrument and payment of interest) Rules

Official text

TO BE PUBLISHED IN THE GAZETTE OF INDIA

(EXTRA ORDINARY)

PART II - SECTION 3 - SUB - SECTION (i)

MINISTRY OF FINANCE

(DEPARTMENT OF ECONOMIC AFFAIRS)

NOTIFICATION

New Delhi, Dated 3rd May, 2000

G.S.R. 379(E).- In exercise of the powers conferred by section 46 of the Foreign

Exchange Management Act, 1999 (42 of 1999) , the Central Government hereby

makes the following rules, namely:-

1. Short title and commencement-(1) These rules may be called the Foreign

Exchange Management (Encashment of Draft, Cheque, Instrument and payment

of interest) Rules, 2000.

(2) They shall come into force on the 1st day of June, 2000

2. Definitions:- In these rules, unless the context otherwise requires;-

(a) “Act” means the Foreign Exchange Management Act, 1999 (42 of 1999);

(b) "Adjudicating Authority" means an officer appointed by the Central

Government under sub-section (1) of section 16 of the Act;

(c) "Authorised Person" means a person as defined in clause (c) of section 2 of

the Act;

(d) "Cheque" includes a traveller's cheque;

(e) "Investigation" means an investigation as envisaged under section 37 of the

Act;

(f) "Special Director (Appeals)" means Special Director (Appeals) appointed by

the Central Govt. under sub-section (1) of section 17 of the Act;

(g) "Appellate Tribunal" means the Appellate Tribunal for Foreign Exchange

established under section 18 of the Act.

3. Delivery of Draft, Cheque and other Instrument for Encashment

Where investigation referred to in section 37 is being taken up into any alleged

contravention of any provision of the Act or of any rule, regulation, direction or

order, or violation of any condition subject to which Reserve Bank of India gives

authorisation, made thereunder, and any draft, cheque or other instrument relevant

for such investigation such officer shall cause such draft, cheque or other

instrument to be delivered for encashment to Reserve Bank of India or an

authorised person as the officer may specify.

4. Encashment of draft, cheque or other instrument - The Reserve Bank of

India or an authorised person shall take steps without delay for encashing the

draft, cheque or other instrument and, on such encashment, shall credit the

proceeds realised (less any commission and expenses incurred for such

encashment) to a separate account in the name of the Directorate of

Enforcement.

5. Opening an Account :- Where Investigation referred to in section 37 of the

Act is being taken up into any alleged contravention of any provision of the

Act or any rule, regulation or direction or order, or violation of any condition

subject to which Reserve Bank of India gives authorisation, the indian

currency relevant to such investigation is in the custody of an officer of

Enforcement Directorate, then, such officer shall deposit the indian currency

in a nationalised bank to a separate account in the name of Directorate of

Enforcement.

6. Indemnity:- The Central Government shall indemnify the Reserve Bank of

India or an authorised person against any liability which the Reserve Bank of

India or an authorised person may incur by reason of, or in connection with,

the encashment of the draft , cheque or other instrument delivered to it.

7. Direction for Payment of the Proceeds :- (i) Where it has been found during

the course of investigation or adjudication that, any draft, cheque or other

instrument is not relevant for such investigation, the Investigating Officer or

the Adjudicating Authority, as the case may be, pass such order that the

person to whom the proceeds of such draft, cheque or other instrument may be

paid.

(ii) Where it has been found during the course of appeal before the Special

Director (Appeals) or the Appellate Tribunal or the High Court, as the case

may be, that, any draft, cheque or other instrument is not considered relevant

for such appeal, then, the Special Director (Appeals) or the Appellate Tribunal

or the High Court, as the case may be, pass such order specifying the person

to whom the proceeds of the draft, cheque or other instruments may be paid.

8. Payment of interest on the seized Indian currency:- (i) Where it is found

after completion of the investigation that the Indian currency seized under

section 37 of the Act is not involved in the contravention and is to be returned,

the same shall be returned to such persons together with interest at the rate of

6% per annum from the date of seizure till the date of payment.

(ii) Where it has been found during the course of adjudication that the seized

Indian currency is not relevant for such adjudication, the Adjudicating

Authority may pass such order returning such Indian currency

togetherwith interest at the rate of 6% per annum to such person.

(R. S. Sharma)

Joint Secretary to the Government of India

F.No. 1/9/EC/97