Foreign exchange receipt delays caused by the recipient's own omissions can trigger liability, and responsible directors may also be liable.

A person entitled to receive foreign exchange under FERA Section 16(1)(a) remains liable if non-receipt is caused or prolonged by its own omissions, including failure to obtain required approvals, complete stipulated obligations, or take effective steps to demand performance from the non-resident purchaser; on these facts, contravention was established. Directors who were shown to be in charge of and responsible for the company's business were held liable for the company's contravention under Section 68, with board-level control supporting attribution of responsibility. The penalty order was sustained on merits.

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Issues: (i) Whether the appellants contravened the obligation under Section 16(1)(a) of the Foreign Exchange Regulation Act, 1973 by acts and omissions that delayed the receipt of foreign exchange from the non-resident purchaser. (ii) Whether the directors could be held liable for the company's contravention with the aid of Section 68 of the Foreign Exchange Regulation Act, 1973.

Issue (i): Whether the appellants contravened the obligation under Section 16(1)(a) of the Foreign Exchange Regulation Act, 1973 by acts and omissions that delayed the receipt of foreign exchange from the non-resident purchaser.

Analysis: The agreement required the appellants to obtain the necessary approvals and sanctions for the project and to complete other stipulated obligations before further instalments became payable. The record did not show that those approvals were obtained or that any effective steps were taken to call upon the non-resident purchaser to perform. No notice demanding performance or damages for breach was shown to have been issued. On these facts, the failure to receive the balance foreign exchange was attributed to the appellants' own omissions, which attracted the statutory duty under Section 16(1)(a) to refrain from doing anything that delays receipt.

Conclusion: The contravention under Section 16(1)(a) was established against the appellants.

Issue (ii): Whether the directors could be held liable for the company's contravention with the aid of Section 68 of the Foreign Exchange Regulation Act, 1973.

Analysis: The two individual appellants were shown to be directors and to have been actively involved in the management of the company's affairs. In that capacity, they were treated as persons in charge of and responsible for the conduct of the company's business. Their liability was therefore upheld on the footing of Section 68, with the company's responsibility also supported by the principle of board-level control under company law.

Conclusion: The directors were liable for the company's contravention under Section 68.

Final Conclusion: The penalty order was sustained and the appeals failed on merits.

Ratio Decidendi: A person entitled to receive foreign exchange cannot evade liability under Section 16(1)(a) by attributing non-receipt to the counterparty when the non-receipt is caused or prolonged by that person's own omission to take the steps required to secure performance; directors who are in charge of and responsible for the company's business are liable for the company's contravention under Section 68.

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