Business law BY Dr. K.Rajeswari

1. Prepared by
Dr.K.RAJESWARI
Associate Professor
Avinash Degree College
Affiliated by Osmania University
Kukatpally, Hyderabad
BUSINESS LAW

2. • FEMA 1999: Objects of FEMA, definition of important terms – authorized dealer, currency, foreign currency,
foreign exchange, foreign security, Directorate of Enforcement, salient features of the FEMA, offences and
penalties,
• Environment Protection Act, 1986: Objects of the Act, definitions of important terms – environment, environment
pollutant, environment pollution, hazardous substance and occupier, types of pollution, global warming, causes
for ozone layer depletion, carbon trade, rules and powers of central government to protect environment in India.
Economic and Environmental Laws - FEMA 1999

3.  To have in depth knowledge about the FEMA 1999
 To have in depth knowledge about Environment Protection Act, 1986
Learning Objectives

4. FEMA 1999

6. • FEMA – modification of FERA
• Increase in Foreign Exchange
• Growth Foreign Trade
• Current a/c Convertability
• Liberalise Investment
• Access to the commercial borrowing
• Encourage Foreign intuitional investors
Introduction

7. Scope - whole of India
Objectives:
• External trade payment
• Restrict current a/c
• Promote foreign market
• Flow of capital a/c for permitted transactions
Scope & Objectives

8.  Sec. 3 Dealing in Foreign exchange
 Sec. 4 Restriction on holding of foreign exchange
 Sec. 5 Current a/c transactions
 Sec. 6 Capital a/c transactions
 Sec. 7 export of goods and services
 Sec.8 Realisation and repatriation of foreign
exchange
 Sec.10 Authorised person
 Sec.13 Contravention and penalties
 Sec.14Enforcement of the orders of adjudicating
authority
 Sec. 46 Powers to make rules
Main Provisions of the Act

9. Dealing in Foreign Exchange
(Section 3)
(a) Deal in or transfer any foreign exchange or
foreign security to any person not being
authorized person.
(b) Make any payment to or for the credit of any
person resident outside India in any manner.
(c) Receive otherwise through an authorised
person, any payment by order or on behalf of any
person resident out side India in any manner.
(d) Enter into any financial transactions in India
as consideration for or in association with
acquisition or creation or transfer of a right to
acquire, any asset outside India by any person.
Restriction on Holding of Foreign
Exchange [Section – 4]
No person resident – in India shall
acquire, hold, own, posses or transfer any
foreign exchange, foreign security or any
immovable property situated out side
India .

10. Current Account transactions [Section – 5]
According to section 2(J) “Current Account
Transaction” means a transaction other than
a capital account transaction.
It include following:-
– Payment due in connection with foreign
trade, other current business services and
short term banking and credit facilities in the
ordinary course of business.
– Payments due as interest on loans and
as net income from investments
– Remittances for living expenses of
parents, spouse and children residing
abroad
– Expenses in connection with foreign
travel, education and medical care of
parents, spouse and children.
NO RESTRICTIONS UNLESS
SPECIFIED
 Payment for imports of goods which
are permitted under Open General
Licence.
 Export Commission with exceptions.
 Advertisement abroad, except TV
advertisement in foreign country.
PROHIBITED CURRENT ACCOUNT
TRANSACTIONS.
 Drawal for travel to Nepal or Bhutan
 Remittance out of lottery winnings
Remittance of income from
racing/riding etc. or any other hobby
 Remittance for purchase of lottery
tickets, etc.

11. Capital account transactions [Section 6]
According to Section 2(e) ‘capital account
transaction’ means and includes:
 A transaction which alters the assets or
liabilities, including contingent liabilities,
outside India of persons resident in India
 A transaction which alters the assts or
liabilities in India of persons resident
outside India
 Transfer or issue of any foreign security
by a person resident in India
 Transfer or issue of any security by a
person resident outside India.
 Export, import or holding of currency or
currency notes
Sec. 5(4)(2) Permissible Capital Account
transactions by persons resident in India.
 Investment in foreign securities by a person
resident in India.
 Foreign currency loans raised in India and
abroad by a person resident in India.
Sec. 5(4)(3) Permissibble Capital
Account transactions by persons
resident outside India.
 Deposits between a person resident
in India and a person resident
outside India
 Foreign currency accounts in India
of a person resident outside India

12. Export of Goods and Services
Section 7 of foreign Exchange
Management Act
Every exporter of goods shall Furnish
to the Reserve Bank or to such other
authority a declaration
Exemption from realisation and
repatriation Section (9)
Provides exemption from provisions of
section 4 & 8 in the following cases:
 Possession of foreign currency or
foreign coins by any person up to
such limit as the Reserve Bank may
specify.
 Foreign currency account held or
operated by such person or class of
persons and the limit up to which the
Reserve Bank may specify.

13. Authorised Person (Section – 10)
Only a person appointed by RBI can
deal in foreign exchange or in foreign
securities as an authorised dealer.
No payment can be made to a person
resident out side India, without the
permission of RBI.
No one can receive any payment from
a person resident out side India without
the permission of Reserve Bank.
Contravention & Penalties [Section – 13]
 If any person contravenes any provisions
of FEMA – he be liable to a penalty up to
“Thrice” the sum involved in such
contravention where such amount is
quantifiable.
 Up to two lakhs where the amount is not
quantifiable.
 If contravention is continues everyday
further penalty which may extend to Rs.
5,000/- for every day after the first day
during which contravention continues on
him within a period of 90 days, he shall be
liable to civil imprisonment.

14. Enforcement of the Orders of
Adjudicating Authority (Section–14)
 Civil Imprisonment for failure to
deposit penalty amount
 Show cause notice before arrest and
detention
 Warrant for Arrest if defaulter libely to
Abscond
 Time Limit for producing Arrested
Person
 Show Cause notice before
committing to Civil Prison
 Detention of Person pending enquiry
Procedure upon Conclusion of
Enquiry: Release
 Period of Imprisonment
 Release not to discharge from
liability for Arrears
 Detention order can be executed
anywhere in India.
POWER TO MAKE RULES (SECTION - 46)
 The imposition of reasonable
restrictions on current account
transactions
 The manner in which the
contravention may be compounded
under section 15
 The manner of holding an inquiry by
the Adjudicating Authority

15. Environment Protection Act, 1986

17. • Enacted on 23rd May 1986
• Scope- Extents whole of India
• Co-Ordination of activities with various regulatory agencies
• High revel authority to protect environment protection
• Regulate handing of hazardous substances Administer speedy response
• Deterrent punishment for endangering human environment.
Scope and Objectives

18. Co-ordination with
State Government
Standard for emission or
discharge of environment
pollutants
Sponsoring investigations &
research for environment
pollution
Planning &
execution nationwide
Procedures to
prevent
accidents
Inspection of premises,
plant, equipment
machinery
Standard for quality
environment
Examination of
manufacture processes
causing environmen -
tal pollution
Establishment /
recognition of
environmental
laboratories
Preparation of
manual codes
guides for
prevention/ control
Powers of Central Government

19. • Appointment of offices and their powers and functions
• Rules to regulate environmental pollution
i) Emission or discharge of environmental pollutants
ii) Handling hazardous substance
iii) Furnishing of information to authorities and agencies in certain cases
PREVENTION, CONTROL AND ABATEMENT OF ENVIRONMENTAL POLLUTION

20. • Powers of entry and inspection
• Power to take sample and Procedure to be followed in connection there with
• Environmental laboratories
• Government Analysts
• Reports of Government Analysts
• Penalties
• Section 16-Offences by companies:
• Section-17 Offences by Government Departments

21. • Sec. 18. Protection of action taken in good faith:
• Sec. 19. Cognizance of offence:
• Sec. 20. Information, reports or returns:
• Sec. 21. Members, officers and employees of the authority, constituted under section 3 to be public servants:
• Sec. 22. Bar of jurisdiction:
• Sec. 23. Power to delegate:
• Sec. 24. Effect of other laws:
• Sec. 25. Power to make rules:
• Sec. 26. Rules made under this Act to be laid before Parliament
MISCELLANEOUS

24. (1) Subject to the provisions of this Act, the Central Government shall have the power to take all such measures as it deems necessary or expedient for the purpose
of protecting and improving the quality of the environment and preventing controlling and abating environmental pollution.
(2) In particular, and without prejudice to the generality of the provisions of sub-section (1), such measures may include measures with respect to all or any of the
following matters, namely:
(i) Co-ordination of actions by the State Governments, officers and other authorities: (a) Under this Act, or the rules made there under, or (b) Under any other law
for the time being in force which is relatable to the objects of this Act;
(ii) Planning and execution of a nation-wide programme for the prevention, control and abatement of environmental pollution; (
iii) Laying down standards for the quality of environment in its various aspects;
(iv) Laying down standards for emission or discharge of environmental pollutants from various sources whatsoever: Provided that different standards for emission
or discharge may be laid down under this clause from different sources having regard to the quality or composition of the emission or discharge of environmental
pollutants from such sources;
(v) Restriction of areas in which any industries, operations or processes or class of industries, operations or processes shall not be carried out or shall be carried out
subject to certain safeguards;
(vi) Laying down procedures and safeguards for the prevention of accidents which may cause environmental pollution and remedial measures for such accidents;
(vii) Laying down procedures and safeguards for the handling of hazardous substances; Economic & Environmental Laws - FEMA 1999 289
(viii)Examination of such manufacturing processes, materials and substances as are likely to cause environmental pollution;
(ix) Carrying out and sponsoring investigations and research relating to problems of environmental pollution;
Powers of central government to protect environment in India

25. x) Inspection of any premises, plant, equipment, machinery, manufacturing or other processes, materials or
substances and giving, by order, of such directions to such authorities, officers or persons as it may consider
necessary to take steps for the prevention, control and abatement of environmental pollution;
(xi) Establishment or recognition of environmental laboratories and institutes to carry out the functions entrusted
to such environmental laboratories and institutes under this Act;
(xii) Collection and dissemination of information in respect of matters relating to environmental pollution;
(xiii)Preparation of manuals, codes or guides relating to the prevention, control and abatement of environmental
pollution;
(xiv)Such other matters as the Central Government deems necessary or expedient for the purpose of securing the
effective implementation of the provisions of this Act.
(3) The Central Government may, if it considers it necessary or expedient so to do for the purpose of this Act, by
order, published in the Official Gazette, constitute an authority or authorities by such name or names as may be
specified in the order for the purpose of exercising and performing such of the powers and functions (including the
power to issue directions under section 5) of the Central Government under this Act and for taking measures with
respect to such of the matters referred to in sub-section (2) as may be mentioned in the order and subject to the
supervision and control of the Central Government and the provisions of such order, such authority or authorities may
exercise and powers or perform the functions or take the measures so mentioned in the order as if such authority or
authorities had been empowered by this Act to exercise those powers or perform those functions or take such
measures.
Continued…

26. Thank you.

27. Acknowledgement
Special thanks to Dr. R.G Saha, Vision Book House