Individuals responsible for managing a firm's business operations, including partners and appointed attorneys, are liable for regulatory violations such as failure to repatriate export proceeds, unless it is proven that they took all reasonable and proactive steps to fulfill their statutory obligations.

FINAL ORDER

23.04.2026

This Order disposes of the Appeals Nos. FPA-FE-21/ MUM/2013 filed by Sh. Haresh Sanghvi and FPA-FE-22/MUM/ 2013 filed by Sh. Tushar P. Sanghvi, against the Order No. ADJ/01- B/ADE/AG/2013FEMA/75 dated 29.01.2013 (Impugned Order) passed by the Additional Director, Directorate of Enforcement, Government of India, Mumbai. The Ld. Adjudicating Authority (AA) imposed the penalty of Rs. 1,00,000/- each on Sh. Haresh Sanghvi and Sh. Tushar P. Sanghvi for the contravention of Section 7 & 8 of the Foreign Exchange Management Act, 1999 (FEMA) read with Regulation 8 & 9 of Foreign Exchange Management (Exports of Goods & Services) Regulation 2000 in terms of Section 42 of FEMA, vide the Impugned Order. The Applications filed on 26.02.2026 by the Appellants Shri Haresh Sanghvi and Shri Tushar P. Sanghvi seeking permission to place on record the rejoinders to the reply filed by the Respondent are allowed and the rejoinders are taken on record.

2. Ld. Counsels for the Appellants pleaded that around 1989, Sudan had undergone a political turmoil. Several African countries had faced acute shortage of foreign currency and hence their local currencies had been devalued. The payments against the exports were thus defaulted. The Appellant Company also could not realise certain export proceeds. Accordingly, RBI granted time till 31.03.2006 to them to realise proceeds for exports made to Sudan in respect of 33 GRs of 1990 deposited through State Bank. Similarly, RBI granted extension of time till 31.03.2006 for realisation of export proceeds in respect of 133 GRs of 1999 to 2001 lying with J&K Bank. Ld. Counsel further argued that after the exports were made, the foreign buyers in Sudan deposited the proceeds in the local banks in Sudan, which acted as an agent/correspondent bank of J&K Bank and State Bank. Upon such deposits by the buyers, the Indian banks were required to coordinate with their respective foreign agent banks for repatriation and realization of the export proceeds against the GRs deposited by M/s Meridian. Thus, for all practical purposes, M/s Meridian's role stood completed after depositing the GRs with the Indian banks, and the buyers having deposited payments in local currency with the Sudanese banks. Recognizing the hardships faced by the exporters, the Government of India, through Notifications and Circulars issued by the Engineering Export Promotion Council (EEPC) acknowledged the difficulties in realization of export proceeds from countries such as Sudan. Ld. Counsel further pleaded that during this period, the Appellants made continuous efforts to recover export proceeds, including frequent travel to Sudan despite unsafe conditions, and extensive correspondence with foreign buyers requesting remittance. As a result of these efforts of the Appellant, M/s Meridian was able to realize US $ 515,683.27, equivalent to INR 2,57,84,163, against total exports of US $ 29,59,294.92 (INR 14,79,64,746).

3. Ld. Counsels for the Appellants submitted that a notice was issued to them under erstwhile FERA on 30.01.2002 and vide order dated 05.06.2003, the then Special Director relied on the extension letter dated 06.04.2002 issued by RBI in the case of 133 GRs pending with J&K Bank and dropped the proceedings while imposing a penalty of Rs.1 lakh in respect of few GRs where receipt of export proceeds/local currency could not be produced. This order is final and binding as it has been accepted by the