FERA rectification limits and branch liability: substantive findings cannot be altered by corrigendum, and alleged contraventions failed on facts.

A corrigendum under FERA could not delete an original finding that charges were unproved, because the rectification power extends only to clerical, arithmetical or accidental mistakes. The Delhi High Court also found no factual basis to fasten liability on the appellant under Section 68, as mere involvement in permissions or branch dealings did not show that he was in charge of and responsible for the business. On the alleged remittances, the Court accepted that the credit and debit notes reflected internal accounting adjustments and that foreign exchange contraventions under Sections 16(1), 9(1)(a) and 9(1)(c) were not established. The adverse findings and penalties were set aside.

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Issues: (i) Whether the corrigendum deleting the original finding in favour of the appellant was valid under the rectification power under the Foreign Exchange Regulation Act, 1973, and whether the appellant could be fastened with liability under Section 68 of that Act; (ii) Whether the alleged remittances and accounting entries by the branch office constituted contraventions under Sections 16(1), 9(1)(a) and 9(1)(c) of the Foreign Exchange Regulation Act, 1973.

Issue (i): Whether the corrigendum deleting the original finding in favour of the appellant was valid under the rectification power under the Foreign Exchange Regulation Act, 1973, and whether the appellant could be fastened with liability under Section 68 of that Act.

Analysis: The rectification provision permits only correction of clerical or arithmetical mistakes or accidental slips. Deleting an entire finding that the charges were not proved amounted to a substantive alteration and not a permissible clerical correction. The appellant was also sought to be proceeded against on the basis that he was in charge of and responsible for the business of the branch, but the record did not furnish a factual foundation for such attribution. Mere reference to his role in securing permissions or dealing with the branch did not establish the statutory basis required for Section 68.

Conclusion: The corrigendum was illegal, and the appellant could not be held liable under Section 68 of the Foreign Exchange Regulation Act, 1973.

Issue (ii): Whether the alleged remittances and accounting entries by the branch office constituted contraventions under Sections 16(1), 9(1)(a) and 9(1)(c) of the Foreign Exchange Regulation Act, 1973.

Analysis: The explanation that the credit notes and debit notes reflected only an accounting mechanism for commission and branch adjustments was found plausible. On the material available, the amounts were not shown to be sums actually payable to the branch in the manner alleged, nor was there a proved remittance abroad requiring permission on the facts accepted by the Court. In the circumstances, the alleged foreign exchange violations were not established in law.

Conclusion: The findings of contravention under Sections 16(1), 9(1)(a) and 9(1)(c) of the Foreign Exchange Regulation Act, 1973 could not be sustained against the branch office.

Final Conclusion: The penalties and adverse findings under the adjudication order and the appellate order were set aside in entirety, and both appeals were allowed.

Ratio Decidendi: A purported rectification cannot be used to effect a substantive review of an order, and liability under the company-offences provision of FERA requires a clear factual basis showing that the person was in charge of and responsible for the conduct of the business at the relevant time.

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