Dr.

Modi is held liable under section 18(2) and 18(3) of the Foreign Exchange Regulation
Act, 1973 for failure to take any action to secure the receipt of the full export value of the
goods exported within six months from the date of shipment of the goods or the time
extended by reserve bank of India.
The Foreign Exchange Regulation Act, 1973 has been replaced by Foreign exchange
Management Act in the year 2000. In the present date the provisions of FERA are not
applicable. The corresponding section for section 18 in the FEMA is Section 7.
Section 7 of the Foreign Exchange Management Act States that
1) Every exporter of goods shall; 1. furnish to the Reserve Bank or to such other authority a declaration in such form
and in such manner as may be specified, containing true and correct material
particulars, including the amount representing the full export value or, if the full
export value of the goods is not ascertainable at the time of export, the value which
the exporter, having regard to the prevailing market conditions, expects to receive on
the sale of the goods in a market outside India;
2. furnish to the Reserve Bank such other information as may be required by the
Reserve Bank for the purpose of ensuring the realization of the export proceeds by
such exporter.
(2) The Reserve Bank may, for the purpose of ensuring that the full export value of the goods
or such reduced value of the goods as the Reserve Bank determines, having regard to the
prevailing market conditions, is received without any delay, direct any exporter to comply
with such requirements as it deems fit.
(3) Every exporter of services shall furnish to the Reserve Bank or to such other authorities a
declaration in such form and in such manner as may be specified, containing the true and
correct material particulars in relation to payment for such services.

M/S Modi Carpet Ltd. Is liable for not securing the export proceeds amounting to Rs.17,
89,211.

Section 68 of the Foreign Exchange Regulation Act states that where any contravention is
made by a company then the person in charge of the conduct of the business at the time of
such contravention will be held liable and will be punished accordingly.
The Foreign Exchange Management Act, 1999 also attracts similar liabilities envisaged under
section 68 of FERA. Section 42 of the FEMA also provides that when the contravention is
made by a company the person in charge of such business transaction will be held liable and
is supposed to be proceeded under section 13 on FEMA.
The details of the outstanding export proceeds are provided in annexure A. Modi Carpet ltd.
Made six shipments from 14.12.79 to 29.5.80 in which a total of Rs.17,89,211-12 is still
outstanding.