Reasonable steps to realise export proceeds must be proved to rebut the foreign exchange presumption and avoid penalty.

An exporter must take all reasonable steps to realise export proceeds before the statutory presumption of contravention under foreign exchange law is displaced. Mere correspondence with the foreign buyer, embassy, agents and bank, without pursuing the civil remedy to completion, was treated as only preliminary and insufficient to show diligent recovery action. The RBI write-off was also regarded as technical rather than a merits-based recognition that adequate steps had been taken. The appellant therefore failed to rebut the presumption, and the penalty for contravention was upheld.

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Issues: Whether the appellant had taken all reasonable steps to realise the export proceeds so as to rebut the statutory presumption under the foreign exchange law, and whether the penalty could be interfered with despite the RBI write-off.

Analysis: The statutory scheme places a duty on an exporter to secure payment for exported goods, subject to permission of the Reserve Bank of India, and creates a presumption of contravention where payment remains unrealised after the prescribed period unless reasonable steps to recover the amount are proved. On the facts, the appellant's correspondence with the foreign buyer, embassy, agents and bank was treated as only preliminary and internal in nature. The civil remedy was not pursued to completion, and the RBI write-off was found to be on technical grounds rather than on a merits-based finding that adequate recovery steps had been taken. The Court held that these measures did not amount to all reasonable steps within the meaning of the provision.

Conclusion: The appellant failed to rebut the statutory presumption, and the penalty imposed for contravention was upheld.

Final Conclusion: The appeal did not warrant interference and the impugned order sustaining the reduced penalty remained undisturbed.

Ratio Decidendi: Mere correspondence and incomplete recovery efforts do not constitute all reasonable steps to realise export proceeds, and the statutory presumption of contravention under the foreign exchange law stands unless rebutted by substantive proof of diligent recovery action.

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