Penalties
13. (1) If any person contravenes any provision of this Act, or
contravenes any rule, regulation, notification, direction or order
issued in exercise of the powers under this Act, or contravenes any
condition subject to which an authorisation is issued by the Reserve
Bank, he shall, upon adjudication, be liable to a penalty up to thrice
the sum involved in such contravention where such amount is
quantifiable, or up to two lakh rupees where the amount is not
quantifiable, and where such contravention is a continuing one,
further penalty which may extend to five thousand rupees for every day
after the first day during which the contravention continues.
(2) Any Adjudicating Authority adjudging any contravention under
sub-section (1), may, if he thinks fit in addition to any penalty
which he may impose for such contravention direct that any currency,
security or any other money or property in respect of which the
contravention has taken place shall be confiscated to the Central
Government and further direct that the foreign exchange holdings, if
any of the persons committing the contraventions or any part thereof,
shall be brought back into India or shall be retained outside India in
accordance with the directions made in this behalf.
Explanation. — For the purposes of this
sub-section, "property" in respect of which contravention
has taken place, shall include —
(a) deposits in a bank, where the said property is converted into
such deposits;
(b) Indian currency, where the said property is converted into that
currency; and
(c) any other property which has resulted out of the conversion of
that property.
Enforcement of the orders of Adjudicating Authority.
14. (1) Subject to the provisions of sub-section (2) of section 19,
if any person fails to make full payment of the penalty imposed on him
under section 13 within a period of ninety days from the date on which
the notice for payment of such penalty is served on him, he shall be
liable to civil imprisonment under this section.
(2) No order for the arrest and detention in civil prison of a
defaulter shall be made unless the Adjudicating Authority has issued
and served a notice upon the defaulter calling upon him to appear
before him on the date specified in the notice and to show cause why
he should not be committed to the civil prison, and unless the
Adjudicating Authority, for reasons in writing, is satisfied—
(a) that the defaulter, with the object or effect of obstructing the
recovery of penalty, has after the issue of notice by the Adjudicating
Authority, dishonestly transferred concealed, or removed any part of
his property, or
(b) that the defaulter has, or has had since the issuing of notice
by the Adjudicating Authority, the means to pay the arrears or some
substantial part thereof and refuses or neglects or has refused or
neglected to pay the same.
(3) Notwithstanding anything contained in sub-section (1), a warrant
for the arrest of the defaulter may be issued by the Adjudicating
Authority if the Adjudicating Authority is satisfied, by affidavit or
otherwise, that with the object or effect of delaying the execution of
the certificate the defaulter is likely to abscond or leave the local
limits of the jurisdiction of the Adjudicating Authority.
(4) Where appearance is not made pursuant to a notice issued and
served under sub-section (1), the Adjudicating Authority may issue a
warrant for the arrest of the defaulter.
(5) A warrant of arrest issued by the Adjudicating Authority under
sub-section (3) or sub-section
(4) may also be executed by any other Adjudicating Authority within
whose jurisdiction the defaulter may for the time being be found.
(6) Every person arrested in pursuance of a warrant of arrest under
this section shall be brought before the Adjudicating Authority
issuing the warrant as soon as practicable and in any event within
twenty-four hours of his arrest (exclusive of the time required for
the journey):
Provided that, if the defaulter pays the amount entered in the
warrant of arrest as due and the costs of the arrest to the officer
arresting him, such officer shall at once release him.
Explanation. — For the purposes of this
sub-section, where the defaulter is a Hindu undivided family, the karta
thereof shall be deemed to be the defaulter.
(7) When a defaulter appears before the Adjudicating Authority
pursuant to a notice to show cause or is brought before the
Adjudicating Authority under this section, the Adjudicating Authority
shall give the defaulter an opportunity showing cause why he should
not be committed to the civil prison.
(8) Pending the conclusion of the inquiry, the Adjudicating
Authority may, in his discretion, order the defaulter to be detained
in the custody of such officer as the Adjudicating Authority may think
fit or release him on his furnishing the security to the satisfaction
of the Adjudicating Authority for his appearance as and when required.
(9) Upon the conclusion of the inquiry, the Adjudicating Authority
may make an order for the detention of the defaulter in the civil
prison and shall in that event cause him to be arrested if he is not
already under arrest:
Provided that in order to give a defaulter an opportunity of
satisfying the arrears, the Adjudicating Authority may, before making
the order of detention, leave the defaulter in the custody of the
officer arresting him or of any other officer for a specified period
not exceeding fifteen days, or release him on his furnishing security
to the satisfaction of the Adjudicating Authority for his appearance
at the expiration of the specified period if the arrears are not
satisfied.
(10) When the Adjudicating Authority does not make an order of
detention under sub-section (9), he shall, if the defaulter is under
arrest, direct his release.
(11) Every person detained in the civil prison in execution of the
certificate may be so detained,—
(a) where the certificate is for a demand of an amount exceeding
rupees one crore, up to three years, and
(b) in any other case, up to six months:
Provided that he shall be released from such detention on the amount
mentioned in the warrant for his detention being paid to the
officer-in-charge of the civil prison.
(12) A defaulter released from detention under this section shall
not, merely by reason of his release, be discharged from his liability
for the arrears, but he shall not be liable to be arrested under the
certificate in execution of which he was detained in the civil prison.
(13) A detention order may be executed at any place in India in the
manner provided for the execution of warrant of arrest under the Code
of Criminal Procedure, 1973 (2 of 1974).
Power to compound contravention.
15. (1) Any contravention under section 13 may, on an application
made by the person committing such contravention, be compounded within
one hundred and eighty days from the date of receipt of application by
the Director of Enforcement or such other officers of the Directorate
of Enforcement and Officers of the Reserve Bank as may be authorised
in this behalf by the Central Government in such manner as may be
prescribed.
(2) Where a contravention has been compounded under sub-section (1),
no proceeding or further proceeding, as the case may be, shall be
initiated or continued, as the case may be, against the person
committing such contravention under that section, in respect of the
contravention so compounded.
