https://www.taxtmi.com/caselaws?id=314488 A remittance placed in deposit with a resident in India, under an agreement that expressly barred payment or use for the foreign company until Reserve Bank permission was obtained, did not amount to a prohibited payment to a person resident outside India under the Foreign Exchange Regulation Act, 1947. The arrangement also did not create an actionable debt or transfer a recoverable right in favour of the foreign company because any liability remained contingent on statutory approval. Section 21 supported reading the statutory restriction into the contract, so an agreement awaiting permission was not unlawful merely for that reason. The transaction therefore did not contravene section 5(1)(a) or section 5(1)(b), and the penalty was unsustainable. en-us Wed, 03 Oct 1979 00:00:00 +0530 Fri, 14 Jun 2024 17:19:39 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=314488 A remittance placed in deposit with a resident in India, under an agreement that expressly barred payment or use for the foreign company until Reserve Bank permission was obtained, did not amount to a prohibited payment to a person resident outside India under the Foreign Exchange Regulation Act, 1947. The arrangement also did not create an actionable debt or transfer a recoverable right in favour of the foreign company because any liability remained contingent on statutory approval. Section 21 supported reading the statutory restriction into the contract, so an agreement awaiting permission was not unlawful merely for that reason. The transaction therefore did not contravene section 5(1)(a) or section 5(1)(b), and the penalty was unsustainable. Case-Laws FEMA Wed, 03 Oct 1979 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=314488