Reasonable efforts to realise export proceeds can defeat a contravention finding where payment is ultimately received.

Delayed realisation of export proceeds under the Foreign Exchange Regulation Act was examined against the exporter's efforts to recover payment. The materials showed ultimate receipt of the proceeds during the adjudication proceedings, repeated reminders to overseas buyers, correspondence with the authorised dealer, and attempts to obtain extension of time. On those facts, the exporter's conduct was treated as consistent with reasonable and prudent efforts, and the delay was not regarded as wilful default or lack of due diligence. The resulting finding of contravention under section 18(2) and section 18(3) was therefore unsustainable, and the penalty was liable to be set aside.

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Issues: Whether the appellants had made reasonable efforts for realisation of the outstanding export proceeds, and whether the finding of contravention under section 18(2) and section 18(3) of the Foreign Exchange Regulation Act, 1973 and the consequential penalty were sustainable.

Analysis: The records showed that the export proceeds under all the invoices were ultimately realised during the pendency of the adjudication proceedings. The delay in shipment and realisation was explained by the circumstances placed before the authority, including the business difficulties faced by the exporter and repeated attempts to secure remittance from the overseas buyers through reminders and communications. The materials also showed correspondence with the authorised dealer and efforts for extension of time. On these facts, the exporter's conduct was found to be consistent with reasonable efforts expected of a prudent exporter, and the failure to realise the amounts within time was not treated as establishing wilful default or lack of due diligence.

Conclusion: The finding of contravention was unsustainable, and the penalty imposed on the appellants was liable to be set aside.

Ratio Decidendi: Where export proceeds are ultimately realised and the exporter has taken reasonable efforts for recovery, a charge of contravention for delayed realisation cannot be sustained.

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