Reasonable steps to realise export proceeds must satisfy the statute's foreign exchange control scheme, not mere correspondence.

Under the Foreign Exchange Regulation Act, 1973, an exporter must show that all reasonable steps were taken to realise export proceeds in light of the statute's object of conserving foreign exchange. Mere correspondence with overseas buyers or their agents was held insufficient where the proceeds remained unrealised. The Court also treated the failure to seek extension of time from the Reserve Bank of India as a relevant non-compliance with the statutory scheme. On these facts, the appellant did not establish effective efforts to recover the dues, and the finding of contravention was sustained.

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Issues: Whether the appellant had taken reasonable steps to realise the export proceeds so as to avoid contravention of Section 18(3) of the Foreign Exchange Regulation Act, 1973.

Analysis: The export proceeds remained unrealised in respect of shipments made to overseas buyers. The appellant relied on correspondence showing closure of one buyer firm and insolvency of another, and contended that further recovery efforts, including proceedings abroad or approach to the Reserve Bank of India, would have been futile. The Court held that the expression "reasonable" must be understood in the context of the object of the statute, namely conservation and proper utilisation of foreign exchange resources. Mere correspondence with the foreign buyers or their agents was treated as insufficient to establish that all reasonable steps had been taken. The Court further found that the appellant had not approached the Reserve Bank of India for extension of time, which was a relevant legal requirement under the scheme of the Act and Rules.

Conclusion: The appellant failed to establish compliance with the requirement of taking all reasonable steps to recover the export proceeds, and the finding of contravention was sustained.

Ratio Decidendi: Under the Foreign Exchange Regulation Act, 1973, the reasonableness of recovery efforts for export proceeds is judged in light of the statutory object and the exporter must show effective compliance with the prescribed mechanism, including seeking extension where required; mere internal correspondence is not enough.

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