24. No person resident in India shall, except with the
general or special permission of the Reserve Bank, settle, or make a
gift of, any property so that a person who at the time of the
settlement or the making of the gift is resident outside India,
elsewhere than in the territories notified in this behalf by the
Reserve Bank, will have an interest in the property, or exercise any
power for payment in favour of a person who at the time of the
exercise of the power is resident outside India elsewhere than in such
notified territories:
Provided that any settlement or gift made or any power exercised as
aforesaid without the permission of the Reserve Bank shall not be
invalid merely on the ground that such permission has not been
obtained.
Restriction on holding of immovable property outside India
25. (1) No person resident in India shall, except with the
general or special permission of the Reserve Bank, acquire or hold or
transfer or dispose of by sale, mortgage, lease, gift, settlement or
otherwise, any immovable property situate outside India:
Provided that nothing in this sub-section shall apply to the
acquisition or transfer of any such immovable property by way of lease
for a period not exceeding five years.
(2) Any person resident in India and holding any immovable property
outside India at the commencement of this Act shall, before the expiry
of a period of three months from such commencement or such further
period as the Reserve Bank may allow in this behalf, declare such
holding to the Reserve Bank in such form and containing such
particulars as may be specified by the Reserve Bank.
(3) Deleted by Act 29 of 1993
(4) Nothing in this section shall apply to a national of a foreign
State.
Certain provisions as to guarantee in respect of debt or other
obligation
26. Except with the general or special permission of the
Central Government, or the Reserve Bank, no person resident in India
shall give a guarantee in respect of any debt or other obligation or
liability-(i) of a person resident in India, and due or owing to a
person resident outside India, or (ii) of a person resident outside
India.
27. Deleted by Act 29 of 1993
Restrictions on the appointment of certain persons and companies
as agents
28. (1) Without prejudice to the provisions of section 47
and notwithstanding anything contained in any of other provision of
this Act or the Companies Act, 1956, a person resident outside India
(whether a citizen of India or not) or a person who is not a citizen
of India but is resident in India, or a company (other than a banking
company) which is not incorporated under any law in force in India or
any branch of such company, shall not, except with the general or
special permission of the Reserve Bank act, or accept appointment, as
agent in India of any person or company, in the trading or commercial
transactions of such person or company, or
(2) Where any such person or company (including its branch) as is
referred to in sub-section (1) acts or accepts appointment as such
agent, without the permission of the Reserve Bank, such acting or
appointment shall be void.
(3) Where any such person or company (including its branch) as is
referred to in sub-section (1) acts as, or holds the appointment of,
any such agent as is referred to in that sub-section at the
commencement of this Act, such person or company (including its
branch) shall, within a period of six months from such commencement or
such further period as the Reserve Bank may allow in this behalf, make
an application to the Reserve Bank in such form and containing such
particulars as may be specified by the Reserve Bank for permission to
continue to act, as such agent.
(4) On receipt of an application under sub-section (3), the Reserve
Bank may, after making such inquiry as it deems fit, either allow the
application subject to such conditions, if any, as the Reserve Bank
may think fit to impose, or reject the application:
Provided that no application shall be rejected under this
sub-section unless the parties who may be affected by such rejection
have been given a reasonable opportunity for making a representation
in the matter.
(5) Where any application has been rejected under sub-section (4),
the acting, appointment or permission, as the case may be, shall be
void on the expiry of a period of ninety days, or such other later
date as may be specified by the Reserve Bank, from the date of receipt
by the person or company (including its branch) concerned of the
communication conveying such rejection.
(6) Where no application has been made under sub-section (3) by any
such person or company (including its branch) as is referred to in
sub-section (1), the Reserve Bank may, by order, direct such person or
company (including its branch) to desist from such acting on the
expiry of such period as may be specified in the direction:
Provided that no direction shall be made under this sub-section
unless the parties who may be affected by such direction have been
given a reasonable opportunity for making a representation in the
matter.
(7) Where any direction made under sub-section (6) has not been
complied with by any person or company (including its branch), then,
without prejudice to any action that may be taken under this Act, the
acting, shall be with effect from the expiry of the period specified
in the direction.
Explanation - For the purposes of this section, -(a) "agent"
includes any person or company (including its branch) who or which
buys any goods with a view to sell such goods before any processing
thereof; (b) "company" means any body corporate and includes
a firm or other association of individuals; (c) "processing"
means any art or process for producing, preparing or making an article
by subjecting any material to a manual, mechanical, chemical,
electrical or any other like operation but does not include any
process incidental or ancillary to the completion of a manufactured
product such as dividing, pressing, compressing, packing, re-packing,
labeling, re-labeling, branding or the adoption of any such treatment
as is necessary to render such product marketable to the consumer.
(d) Deleted by Act 29 of 1993
Restrictions on establishment of place of business in India
29. (1) Without prejudice to the provisions of section 28
and section 47 and notwithstanding anything contained in any other
provisions of this Act or the provisions of the Companies Act, 1956, a
person resident outside India (whether a citizen of India or not) or a
person who is not a citizen of India but is resident in India or a
company (other than a banking company) which is not incorporated under
any law in force in India or any branch of such company, shall not,
except with the general or special permission of the Reserve Bank,
-(a) carry on in India, or establish in India a branch, office or
other place of business for carrying on any activity of a trading,
commercial or industrial nature, other than an activity for the
carrying on of which permission of the Reserve Bank has been obtained
under Section 28; or (b) acquire the whole or any part of any
undertaking in India of any person or company carrying on any trade,
commerce or industry or purchase the shares in India of any such
company.
(1A)A company (other than a banking company) in which the
non-resident interest is more than forty per cent, shall not, except
with the general or special permission of the Reserve Bank, carry on
in India any activity relating to agriculture or plantation or acquire
the whole or any part of any undertaking in India of any person or
company carrying on any activity relating to agriculture or plantation
or purchase the shares in such company..(2) (a) Where any person or
company (including its branch) referred to in sub-section (1) carries
on any activity referred to in clause (a) of that sub-section at the
commencement of this Act or has established a branch, office or other
place of business for the carrying on of such activity at such
commencement, then, such person or company (including its branch) may
make an application to the Reserve Bank within a period of six months
from such commencement or such further period as the Reserve Bank may
allow in this behalf for permission to continue to carry on such
activity or to continue the establishment of the branch, office or
other place of business for the carrying on of such activity, as the
case may be.
(b) Every application made under clause (a) shall be in such form
and contain such particulars as may be specified by the reserve Bank.
(c) Where any application has been made under clause (a), the
Reserve Bank may, after making such inquiry as it may deem fit, either
allow the application subject to such conditions, if any, as the
Reserve Bank may think fit to impose or reject the application:
Provided that no application shall be rejected under this clause
unless the parties who may be affected by such rejection have been
given a reasonable opportunity for making a representation in the
matter.
(d) Where an application is rejected by the Reserve Bank under
clause (c), the person or company (including its branch) concerned
shall discontinue such activity or close down the branch, office or
other place of business established for the carrying on of such
activity, as the case may be, on the expiry of a period of ninety days
or such other later date as may be specified by the Reserve Bank from
the date of receipt by such person or company (including its branch)
of the communication conveying such rejection.
(e) Where no application has been made under clause (a) by any
person or company (including its branch), the Reserve Bank may, by
order, direct such person or company (including its branch) to
discontinue such activity or to close down the branch, office or other
place of business established for the carrying on of such activity, as
the case may be, on the expiry of such period as may be specified in
the direction:
Provided that no direction shall be made under this clause unless
the parties who may be effected by such direction have been given a
reasonable opportunity for making a representation in the matter.
(3) Notwithstanding anything contained in sub-section (2), the
Reserve Bank may, having regard to -
(i) the fact that any person or company (including its branch),
referred to in sub-section (1), is carrying on any activity referred
to in clause (a) of that sub-section at the commencement of this Act
or has established a branch, office or other place of business for the
carrying on of such activity at such commencement, in either case, in
pursuance of any permission or licence granted by the Central
Government;
and
(ii) the nature of the activity which is being, or intended to be,
carried on by such person or company (including its branch), by order,
exempt -(a) such person or company (including its branch); or (b) any
class of such persons or companies (including their branches), in
relation to such activity as may be specified in the order, from the
operation of the provisions of sub-section (2) subject to such
conditions as may be specified in the order:
Provided that the Reserve Bank shall not make any order under this
sub-section in a case where the activity which is being, or intended
to be, carried on is solely of a trading nature.
(4) (a) Where at the commencement of this Act any person or company
(including its branch) referred to in sub-section (1) holds any shares
in India of any company referred to in clause (b) of that sub-section,
then, such person or company (including its branch) shall not be
entitled to continue to hold such shares unless before the expiry of a
period of six months from such commencement or such further period as
the Reserve Bank may allow in this behalf such person or company
(including its branch) has made an application to the Reserve Bank in
such form and containing such particulars as may be specified by the
Reserve Bank for permission to continue to hold such shares.
(b) Where an application has been made under clause (a), the Reserve
Bank may, after making such inquiry as it may deem fit, either allow
the application subject to such conditions, if any, as the Reserve
Bank may think fit to impose or reject the application:
Provided that no application shall be rejected under this clause
unless the parties who may be affected by such rejection have been
given a reasonable opportunity for making a representation in the
matter.
(c) Where an application has been rejected under clause (b) or where
no application has been made under clause (a), the Reserve Bank may,
if it is of opinion that it is expedient so to do for the purpose of
conserving the foreign exchange, direct such person or company
(including its branch) to sell or procure the sale of such shares:
Provided that no direction shall be made under this clause unless
notice of such direction for a period of not less than ninety days has
been given to the person or company (including its branch) to be
affected by such direction.
Explanation - For the purposes of this section, -(i) "company"
has the same meaning as in clause (b) of the Explanation to section
28:
(ii) "non-resident interest" means participation in the
share capital by, or entitlement to the distributable profits of any
individual or company resident outside India, or any company not
incorporated under any law in force in India, or any branch of such
company whether resident outside India or not.
Prior permission of Reserve Bank required for practising
profession, etc. in India by nationals of foreign States
30. (1) No national of a foreign State shall, without the
previous permission of the Reserve Bank practise any profession or
carry on any occupation, trade or business in India in a case where
such national desires to acquire any foreign exchange (such foreign
exchange being intended for remittance outside India) out of any
moneys received by him in India by reason of the practising of such
profession or the carrying on of such occupation, trade or business,
as the case may be.
(2) Where any national of a foreign State desires to obtain the
permission of the Reserve Bank under sub-section (1), he may make an
application to the Reserve Bank in such form, in such manner and
containing such particulars as may be prescribed.
(3) On receipt of an application under sub-section (2), the Reserve
Bank may, after making such inquiry as it deems fit, allow the
application subject to such conditions, if any, as it may think fit to
impose or reject the application:
Provided that no application shall be rejected under this
sub-section unless the applicant has been given a reasonable
opportunity for making a representation in the matter.
Restriction on acquisition, holding, etc., of immovable property
in India
31. (1) No person who is not a citizen of India and no
company (other than a banking company) which is not incorporated under
any law in force in India shall, except with the previous general or
special permission of the Reserve Bank, acquire or hold or transfer or
dispose of by sale, mortgage, lease, gift, settlement or otherwise any
immovable property situate in India:
Provided that nothing in this sub-section shall apply to the
acquisition or transfer of any such immovable property by way of lease
for a period not exceeding five years.
(2) Any person or company referred to in sub-section (1) and
requiring a special permissionunder that sub-section for acquiring, or
holding, or transferring, or disposing of, by sale, mortgage, lease,
gift, settlement or otherwise any immovable property situate in India
may make an application to the Reserve Bank in such form and
containing such particulars as may be specified by the Reserve Bank.
(3) On receipt of an application under sub-section (2), the Reserve
Bank may, after making such inquiry as it deems fit, either grant or
refuse to grant the permission applied for:
Provided that no permission shall be refused unless the applicant
has been given a reasonable opportunity for making a representation in
the matter:
Provided further that if before the expiry of a period of ninety
days from the date on which the application was received by the
Reserve Bank, the Reserve Bank does not communicate to the applicant
that the permission applied for has been refused, it shall be presumed
that the Reserve Bank has granted such permission.
Explanation - In computing the period of ninety days for the
purposes of the second proviso, the period, if any, taken by the
Reserve Bank for giving an opportunity to the applicant for making a
representation under the first proviso shall be excluded.
(4) Every person and company referred to in sub-section (1) holding
at the commencement of this Act any immovable property situate in
India shall, before the expiry of a period of ninety days from such
commencement or such further period as the Reserve Bank may allow in
this behalf, make a declaration in such form as may be specified by
the Reserve Bank regarding the immovable property or properties held
by such person or company.
32. Deleted by Act 29 of 1993.
Power to call for information
33. (1) The Central Government may, at any time by
notification in the Official Gazette, direct the owners, subject to
such exceptions, if any, as may be specified in the notification, of
such foreign exchange or foreign securities or immovable properties
held outside India as may be so specified, to submit a return, or from
time to time returns, thereof to the Reserve Bank within such period,
and giving such particulars, as may be so specified.
(2) Where for the purposes of this Act the Central Government or the
Reserve Bank or any officer of Enforcement, not below the rank of a
Chief Enforcement Officer, considers it necessary or expedient to
obtain and examine any information, book or other document in the
possession of any person or which in the opinion of the Central
Government or the Reserve Bank or such officer it is possible for such
person to obtain and furnish, the Central Government or the Reserve
Bank or, as the case may be, such officer may, by order in writing,
require any such person (whose name shall be specified in the order)
to furnish, or to obtain and furnish, to the Central Government or the
Reserve Bank or such officer or any person specified in the order with
such information, book or other document and thereupon such person
shall be bound to comply with such requisition.
Explanation - For the purposes of this section, section 34 and
sections 36 to 41 (both inclusive), "document" includes
Indian currency, foreign exchange and books of account.
APPENDIX I (Part 2 Of 2)
Power to search suspected persons and to seize documents
34. (1) If any officer of Enforcement authorised in this
behalf by the Central Government, by general or special order, has
reason to believe that any person has secreted about his person or in
anything under his possession, ownership or control any documents
which will be useful for, or relevant to, any investigation or
proceeding under this Act, he may search that person or such thing and
seize such documents.
(2) When any officer of Enforcement is about to search any person
under the provisions of this section, the officer of Enforcement
shall, if such person so requires, take such person without
unnecessary delay to the nearest gazetted officer of Enforcement
superior in rank to him or a magistrate.
(3) If such requisition is made, the officer of Enforcement may
detain the person making it until he can bring him before the gazetted
officer of Enforcement or the magistrate referred to in sub-section
(2).
(4) The gazetted officer of Enforcement or the magistrate before
whom any such person is brought shall, if he sees no reasonable ground
for search, forthwith discharge the person but otherwise shall direct
that search be made.
(5) Before making a search under the provisions of this section, the
officer of Enforcement shall call upon two or more persons to attend
and witness the search and may issue an order in writing to them or
any of them so to do; and the search shall be made in the presence of
such persons and a list of all documents seized in the course of such
search shall be prepared by such officer and signed by such witnesses.
(6) No female shall be searched by any one excepting a female.
Power to arrest
35. (1) If any officer of Enforcement authorised in this
behalf by the Central Government, by general or special order, has
reason to believe that any person in India or within the Indian
customs waters has been guilty of an offence punishable under this
Act, he may arrest such person and shall, as soon as may be, inform
him of the grounds for such arrest.
(2) Every person arrested under sub-section (1) shall, without
unnecessary delay, be taken to a magistrate.
(3) Where any officer of Enforcement has arrested any person under
sub-section (1), he shall, for the purpose of releasing such person on
bail or otherwise, have the same powers and be subject to the same
provisions as the officer-in-charge of a police station has, and is
subject to, under the Code of Criminal Procedure, 1973.
Power to stop and search conveyances
36. If any officer of Enforcement authorised in this behalf
by the Central Government, by general or special order, has reason to
believe that any document which will be useful for, or relevant to,
any investigation or proceeding under this Act is secreted in any
aircraft or vehicle or on any animal in India or in any vessel in
India or within the Indian customs waters, he may at any time stop any
such vehicle or animal or vessel or, in the case of an aircraft,
compel it to stop or land, and -
(a) rummage and search any part of the aircraft, vehicle or vessel;
(b) examine and search any goods in the aircraft, vehicle or vessel
or on the animal;
(c) seize any such document as is referred to above;
(d) break open the lock of any door or package for exercising the
powers conferred by clauses (a), (b) and (c), if the keys are
withheld.
Power to search premises
37. (1) If any officer of Enforcement, not below the rank of
an Assistant Director of Enforcement, has reason to believe that any
documents which, in his opinion, will be useful for, or relevant to,
any investigation or proceeding under this Act, are secreted in any
place, he may authorise any officer of Enforcement to search for and
seize or may himself search for and seize such documents.
(2) The provisions of the Code of Criminal Procedure, 1973, relating
to searches, shall, so far as may be, apply to searches under this
section subject to the modification that sub-section (5) of section
165 of the said Code shall have effect as if for the word "Magistrate",
wherever it occurs, the words "Director of Enforcement or other
officer exercising his powers" were substituted.
Power to seize documents, etc.
38. Without prejudice to the provisions of section 34 or
section 36 or section 37, if any officer of Enforcement authorised in
this behalf by the Central Government, by general or special order,
has reason to believe that any document or thing will be useful for,
or relevant to, any investigation or proceeding under this Act or in
respect of which a contravention of any of the provisions of this Act
or of any rule, direction or order made thereunder has taken place, he
may seize such document or thing.
Power to examine persons
39. The Director of Enforcement or any other officer of
Enforcement authorised in this behalf by the Central Government, by
general or special order, may, during the course of any investigation
or proceeding under this Act,-
(a) require any person to produce or deliver any document relevant
to the investigation or proceeding;
(b) examine any person acquainted with the facts and circumstances
of the case.
Power to summon persons to give evidence and produce documents
40. (1) Any gazetted officer of Enforcement shall have power
to summon any person whose attendance he considers necessary either to
give evidence or to produce a document during the course of any
investigation or proceeding under this Act.
(2) A summons to produce documents may be for the production of
certain specified documents or for the production of all documents of
a certain description in the possession or under the control of the
person summoned.
(3) All persons so summoned shall be bound to attend either in
person or by authorised agents, as such officer may direct; and all
persons so summoned shall be bound to state the truth upon any subject
respecting which they are examined or make statements and produce such
documents as may be required:
Provided that the exemption under section 132 of the Code of Civil
Procedure, 1908, shall be applicable to any requisition for attendance
under this section.
(4) Every such investigation or proceeding as aforesaid shall be
deemed to be a judicial proceeding within the meaning of sections 193
and 228 of the Indian Penal Code.
