FEMA

and
Environmental Protection Act
SUBMITTED BY: SUBMITTED TO:
• PRATEEK DR. HIMANI SHARMA
• JATIN
• RAJESH
• RAGHAV
• DEEPAK
• SAGAR
Foreign Exchange
Management Act
And
Environmental
Protection Act

2
 CONTENTS
• Introduction
• Meaning
• Foreign Exchange Management Act
• Objectives of FEMA
• Why FERA Converted into FEMA
• Difference between FERA and FEMA
• Mechanism under FEMA
• Structure of FEMA
• Two Golden Rule
• Main Feature
• Administration of the Act
• Rule under FEMA
• Applicability of FEMA
• Penalties for Contravention under FEMA
• AMENDMENTS 3
FOREIGN EXCHANGE MANAGEMENT
ACT

4
SHORT HISTORY OF FORIEGN EXCHANGE
CONTROL IN INDIA

FEMA,
FERA, 1973 1999
FERA, 1947

Defence
of India
Act, 1939
Her
Majesty

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INTRODUCTION
Foreign Exchange control was first introduced in
September, 1939 under Defence of India Rules. Foreign
Exchange Regulation Act was first introduced in 1947.
This was later replaced with ‘The Foreign Exchange
Regulation Act (FERA), 1973. FERA was very strict and
even has a provision for imprisonment. FERA was not
suitable in the new and liberal economy, thus it was
replaced by Foreign Exchange Management Act
(FEMA) 1999, which came into effect from 1st June
2000. RBI plays a key role in the management of
foreign exchange.

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MEANING
• FEMA stands for Foreign Exchange Management Act. It
is a soft, liberal & simplified law that aims at boosting
foreign trade and investment more in tune with
Country’s new economic environment of globalization of
Indian economy.

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 FOREIGN EXCHANGE
MANAGEMENT ACT
 The Foreign Exchange Management Act(FEMA) was an act
passed in the winter session of parliament in 1999 which
replaced Foreign Exchange Regulation Act, 1973 (FERA).
 This act seeks to make offenses related to foreign exchange
civil offenses.
 It extends to the whole of India .
 It had become the need of the hour since FERA had become
incompatible with the pro-liberalisation policies of the
Government of India .
 FEMA has brought a new management regime of Foreign
Exchange consistent with the emerging Framework of the
World Trade Organisation(WTO).

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• It is another matter that the enactment of FEMA
also brought with it the Prevention of MONEY
LAUNDERING ACT 2002, which came into effect
from 1 July 2005.
• 49 Sections in this Act.
• It’s head office is known as Enforcement
Directorate is situated in New Delhi & headed by a
Director.

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 OBJECTIVES OF FEMA
• To help RBI in maintaining exchange rate stability.
• To conserve precious foreign exchange.
• To prevent/regulate Foreign business in India.
• To consolidate and amend the law relating to foreign
exchange with the object to facilitating external trade and
payments and for promoting the foreign exchange market in
India.
• So the new law is for the management of foreign exchange
instead of regulation of foreign exchange.
• The draconian provisions were dropped out in new
enactment.

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• The size of the bare act got reduced to 49 sections in place of 81
sections in FERA.
• To facilitate external trade and payments.
• To promote the orderly development and maintenance of foreign
exchange market.

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WHY FERA CONVERTED INTO FEMA?
 The FERA was promulgated in India at a time when it does
not have good foreign exchange reserve. It aimed at
conserving foreign currency and its optimum utilisation for the
development of the economy. In the budget of 1997-98, the
government had proposed to replace FERA -1973 by FEMA
(FOREIGN EXCHANGE MANAGEMENT ACT).

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 DIFFERENCE BETWEEN
FERA AND FEMA
1. The objective of FERA was to conserve forex and to prevent its
misuse.
• The objective of FEMA is to facilitate external trade and payments
and maintenance of forex market in India.
2. Violation of FERA was a criminal offence
• Whereas violation of FEMA is a civil offence.
3. Offences under FERA were not compoundable
• Offences under FEMA are compoundable.
4. Citizenship was a criteria to determine the residential status of
a person under FERA.
• While stay of more than 182 days in India is the criteria to decide
residential status under FEMA.

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 Mechanism under FEMA

Act – FEMA (Passed by the

Parliament – the
Legislature)

Rules –
Current A/C (Current AP Dir Circulars
Notifications Notified Account by the to Aps (All aspect of
in the Gazette – by Government ) Forex transactions
the Executive by the RBI)
Regulations-
Capital A/C (Capital
Account by the RBI)

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 STRUCTURE OF FEMA
There are 49 sections under FEMA ,of which
9 sections (Section1-9) are substantive and
the rest are procedural/ administrative.

Foreign Exchange Management Act, 1999 (W.e.f 01-06-2000)

Section 1 Section 3 Section 13

to Section to Section
(Application Section 10
9 38 Section 39
& to Section
( deals with (Contraven to 49
Commence 12
Current A/c tion , (Miscellane
ment) (deals with
transaction Penalties, ous
Authorised
Rules & Appeals & Provisions)
Person)
Section2 capital A/c Adjudicatio
( Definitions) Regulations n)

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TWO GOLDEN RULES OR PRINCIPLES IN FEMA FOR
FOREX TRANSACTION

Current • All Current Account

Transactions are
Account permitted unless
otherwise Prohibited
Transaction

Capital • All Capital account

transactions are
Account prohibited unless
otherwise permitted
Transaction

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 CURRENT ACCOUNT TRANSACTION

•   Any Person may sell or draw foreign exchange to or from an

Authorized person if such sale or drawl is a current Account
transaction.

The definition is exclusive and any expenditure which is not a capital account
transaction will be current account transaction. It include:

Payment due in connection with foreign trade, other current business,

Services, and short-term banking and credit facilities in the ordinary course
of business

Payment due as interest on loans and as net income from investments

Remittances for living expenses of parents, spouse and childrenresiding

abroad,

Expenses in connection with foreign travel, education and medical care of

parents, spouse and children
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 CAPITAL ACCOUNT TRANSACTION

Capital Account Transaction Means a transaction which the

alters the assets or liabilities, including contingent liabilities,
outside India of persons resident in India or assets or
liabilities in India person resident outside India, and include
transaction like:

Changes in Assets/ Liabilities

Transfer/issue of Security
Borrowing/ Lending
Export, import or holding of currency or currency notes
Giving Guarantee
Capital Account Transaction are deemed to be prohibited
unless permitted.

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MAIN FEATURES
• Activities such as payments made to any person outside India or receipts from
them, along with the deals in foreign exchange and foreign security is
restricted. It is FEMA that gives the central government the power to impose
the restrictions.
• Free transactions on current account subject to a reasonable restrictions that
may be imposed.
• Without general or specific permission of FEMA, MA restricts the
transactions involving foreign exchange or foreign security and payments
from outside the country to India – the transactions should be made only
through an authorised person.

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• Deals in foreign exchange under the current account by an
authorised person can be restricted by the Central Government,
based on public interest generally.
• Although selling or drawing of foreign exchange is done
through an authorized person, the RBI is empowered by this
Act to subject the capital account transactions to a number of
restrictions.
• Residents of India will be permitted to carry out transactions in
foreign exchange, foreign security or to own or hold
immovable property abroad if the currency, security or property
was owned or acquired when he/she was living outside India, or
when it was inherited by him/her from someone living outside
India.

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 ADMINISTRATION OF THE
ACT
 The rules regulations and norms pertaining to many sections are laid
down by RBI in consultation with central Government.
 The Act requires central Government to appoint,
• Adjudicating Authorities for holding enquires related to the
contravention of the Act
• One or more Special Directors (appeals) to hear appeals against the order
of the Adjudicating authorities
 Central Government shall have to establish
• An Appellate Tribunal for foreign Exchange to hear appeals against
the order of the Adjudicating Authorities and the Special Directors
• A Director of Enforcement with a Director and such officers or class
of officers as it thinks fit for taking up for investigation the contravention
under this Act

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 REGULATIONS/RULES
UNDER FEMA
• Foreign Exchange Management (Current Account Transactions)
Rule, 2000
• Foreign Exchange Management (Foreign currency accounts by a
person resident in India)Regulations, 2000
• Foreign Exchange Management (Transfer or Issue of any
Foreign Security) regulations, 2004
• Foreign Exchange Management (Deposit) Regulations, 2016
• Foreign Exchange Management (Transfer or Issue of Security by
a Person Resident Outside India) Regulations, 2017
• Foreign Exchange Management (Borrowing and Lending)
Regulations, 2018
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 APPLICABILITY OF FEMA
• The FEMA, is applicable:
To the whole of India.
Any Branch, office & agency, which is situated outside
India, but is owned or controlled by a person resident in India.
• Broadly speaking FEMA, covers three different types of
categories are:
a) Person.
b) Person Resident in India.
c) Person Resident outside India.
• Export:
Goods & services from India to outside.
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Foreign Currency:
• Other than Indian Currency.
Foreign Exchange:
• Means foreign currency.
Foreign Security:
• Security expressed in foreign currency.
Import:
• Goods & services from outside to India.
Security:
• Share, Stock etc. as defined in the Public Debt Act of 1994.
Service:
• Banking, Financing, Insurance etc.
Transfer:
• sale, Purchase, Exchange etc..
Non-Resident Indian (NRI):
• Citizen of India residing outside.
Overseas Corporate Body (OCB):
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• A company, firm, etc… Owned at least 60% by NRIs.
 Penalties for Contravention
under FEMA
SECTION 13 –
• The Penalty could be up to thrice the sum
involved where amount is quantifiable
• If the Amount is not quantifiable, penalty up to
₹ 2 lacs can be imposed
• If contravention is of continuing nature, further
penalty up to ₹ 5000 per day during which the
contravention continues can be imposed.
• Further in addition to the penalty, any currency,
security or other money or property involved in
the contravention may also be confiscated.

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 PROVISIONS IN SECTIONS ……

SECTION 17 –
Empowers the central Govt. to appoint one or more
special Directors to hear the appeals against the orders
of the Adjudicating Authorities.
SECTION 18 –
Empowers the central Govt. to establish Appellate
Tribunal to hear appeals against the orders of
Adjudicating Authorities and special Director.
SECTION 19 –
It makes provisions as regards appeals to Appellate
Tribunal.

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 PROVISIONS IN SECTIONS ……

SECTION 20 – 25
Composition of Appellate Tribunal.
Qualifications for appointment of Chairperson member
and Special Director.
Term of Office.
Terms and Conditions of service.
Vacancies.

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 PROVISIONS IN SECTIONS ……

SECTION 25 – 30
Resignation and Removal.
Member to act as Chairperson in certain circumstances.
Staff of Appellate Tribunal and Special Directorate.
Power of Appellate Tribunal and Special Director.
Distribution of business among benches.
Power of Chairperson to Transfer cases.

SECTION 31-35
Decision to be by majority.
 Right of Appellant to take assistance of legal practitioner or CA and of
Govt. to appoint presenting officer.
Members, etc to public servants.
Civil court not to have jurisdiction.
Appeal to High Court.

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AMENDMENTS
• Foreign Exchange management (Foreign currency accounts
By a person resident in India)
(Amendment Regulations,2019 FEMA 10(R)(2)/2019-RB)

• Foreign exchange management (Transfer or issue of security

by person resident outside India)
(Third Amendment) Regulations, 2019FEMA 20 (R) (4)/2019-
RB

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Example
• Jaipur IPL Cricket Private Limited
and Ors. V.

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Summary
• FEMA. ... The main objective behind the Foreign
Exchange Management Act (1999) is to consolidate and
amend the law relating to foreign exchange with the
objective of facilitating external trade and payments. It
was also formulated to promote the orderly
development and maintenance of foreign
exchange market in India.

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ENVIRONMENTAL PROTECTION
ACT

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 CONTENTS
• Environmental Protection Act
• Definition
• Objectives of EPA
• Scheme Of The Act
•Important Terminology
•General Power of central government
•Prevention, Control and abatement of environment pollution
•Offences
•Penalties
•Why ODD and Even formula ???
•Environmental Pollution
•Types of Pollution
•Conclusion
•Bibliography
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 The environment protection act came into force after the
Bhopal gas Tragedy and it is considered as umbrella
legislation designed to provide framework for central and state
government .

 The constitution of India clearly state that it is the duty of

the state to “protect and improve the environment and
safeguards the forests and wildlife of the country”.

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DEFINITION
• Environmental protection is the
practice of protecting the natural
environment by individuals,
organizations and governments for the
benefit of the natural environment and
humans.

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OBJECTIVES
 Providing for the protection and improvement o f the
environment.
 Preventing environment pollution in all its forms.
 To tackle specific environment problems that are peculiar to
different part of country.
 To protect forest and wildlife in the country.
 To appoint environment officers to check environment pollution
and establishing laboratories.

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 SCHEME OF THE ACT
• The environment protection act, 1986 has 26 sections
and it has been divided into four chapters relating to
1. Preliminary
2. General Powers of central government
3. Prevention, control & abatement environment
pollution
4. Miscellaneous

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 Preliminary
Short title, Extent and commencement.

The environment protection act enacted under article

253 of Indian constitution. To protect and improve
environmental quality, control and reduce pollution
from all sources.

• This act may be called the environment act 1986.

• It extends to whole of India.

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 IMPORTANT TERMINOLOGY
 Sec 2(a) -“Environment”.

 Sec2(b) -“Environment pollutant”.

 Sec 2(c)-”Environment pollution”.

 Sec 2(d)-” Handling”

 Sec2(e) -“Hazardous substance”

 Sec2(f)-”Occupier”
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 General power of central government
 Laying down standards for emission or discharge of environmental
pollutants from various sources
Restriction of areas.
The authority shall exercised the powers under sec19 of the said Act.
Laying down procedures & safeguards for the handling of hazardous
substances.
The ministry of water resources shall create a cell to assist the authority to
carry out of assigned functions.

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 Prevention, Control and
abatement of environment pollution
• Persons carrying on industry operation, etc., not to allow
emission or discharge of environmental pollutants in excess
of standards.
• Persons handling hazardous substances to comply with
procedural safeguards.
• Furnishing of information to authorities and agencies in
certain cases.
• Powers of entry and inspection.
• Power to take simple and procedure to be followed in
connection therewith.

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 Offences
OFFENCES BY COMPANIES
(1) Where any offence under this Act has been committed by a company,
every person who, at the time the offence was committed, was directly in
charge of, and was responsible to, the company for the conduct of the
business of the company, as well as the company, shall be deemed to be
guilty of the offence and shall be liable to be proceeded against and
punished accordingly :
 Provided that nothing contained in this sub-section shall render any
such person liable to any punishment provide in this Act, if he proves
that the offence was committed without his knowledge or that he
exercised all due diligence to prevent the commission of such offence.
(2) Not with standing anything contained in sub-section (1), where an
offence under this Act has been committed by a company and it is proved
that the offence has been committed with the consent or connivance of, or
is attributable to any neglect on the part of, any director, manager,
secretary or other officer of the company, such director, manager,
secretary or other officer shall also deemed to be guilty of that offence
and shall be liable to be proceeded against and punished accordingly.

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 OFFENCES BY GOVERMENTS DEPARTMENTS
• (1) Where an offence under this Act has been committed by the Department of
Government, the Head of the Department shall be deemed to be guilty of the offence
and shall be liable to be proceeded against and punished accordingly :

Provided that nothing contained in this section shall render such Head of the
Department liable to any punishment if he proves that the offence was committed
without his knowledge or that he exercised all due diligence to prevent the
commission of such offence.

• (2) Not with standing anything contained in sub-section (1), where an offence under
this Act has been committed by a Department of Government and it is proved that
the offence has been committed with the consent or connivance of, or is attributable
to any neglect on the part of, any officer, other than the Head of the Department,
such officer shall also be deemed to be guilty of that offence and shall be liable to be
proceeded against and punished accordingly.

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Penalties
• Whoever fails to comply with or contravenes any of the
provisions of this Act, or the rules made or orders or directions
issued there under, shall, in respect of each such failure or
contravention, be punishable
• With a fine of 1 lakh
• With imprisonment for term for 5 years
• Or both
But in case the failure or contravention continues, with additional
fine which may extend to five thousand rupees for every day during
which such failure or contravention continues after the conviction for
the first such failure or contravention.

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47
 Why ODD and Even formula ???
•To curb air pollution and
road congestion on Delhi
roads.

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 In dec 2015 before the odd even programme began daily
pollution trends in delhi and neighbouring region were
similar.

 It is possible to go one step further in our analysis by

tracking pollution changes hour by hour, since the odd-
even policy was only in effect from 8 am to 8 pm.
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 ENVIRONMENTAL POLLUTION
 Environmental Pollution can be defined as any undesirable
Change in physical, chemical, or biological characteristics of
any component of the environment i.e. air, water, soil which
can cause harmful effects on various forms of life or property.

 Pollution: The term pollution can be defined as influence of

any substance causing nuisance, harmful effects, and
uneasiness to the organisms.

 Pollutant: Any substance causing nuisance or harmful effects

or uneasiness to the organisms, then that particular
substance may be called as the pollutant.

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 TYPES OF POLLUTION

• WATER POLLUTION

• AIR POLLUTION

• LAND POLLUTION

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WATER POLLUTION

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Water pollution is the contamination of water bodies,
usually as a result of human activities. Water bodies include
for example lakes, rivers, oceans, acqifers and
groundwater. Water pollution results when contaminants
are introduced into the natural environment.

The Central Pollution Control Board, a Ministry

of Environment and Forests Government of India
entity, has established a National Water Quality
Monitoring Network comprising 1429
monitoring stations in 28 states and 6 in Union
Territories on various rivers & water bodies
across the country. This effort monitors water
quality year round.
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AIR POLLUTION

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Air pollution occurs when harmful or excessive
quantities of substances including the gases , particles
(both organic and inorganic) , and biological molecules
are introduced into Earth’s atmosphere. It may cause
diseases, allergies and even death to humans and it may
also cause harm to other living organisms.

In 2019, India launched ‘The National Clean Air

Programme’ with tentative national target of
20%-30% reduction in PM2.5 and PM10
concentrations by 2024, considering 2017 as the
base year for comparison. It will be rolled out in
102 cities that are considered to have air quality
worse than the National Ambient Air Quality
Standards.
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LAND POLLUTION

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Land pollution is the deterioration (destruction) of the
earth’s land surfaces, often caused by human
their misuse of land resources. It occurs when waste is
not disposed properly, or can occur when humans throw
chemicals onto the soil in the form of pesticides,
insecticides and fertilizers during agricultural practices.

There is no specific legislation which deals in

regulation of land pollution. Unlike water
pollution , air pollution, etc. having a specific
statute to govern, land pollution is in general
being touched upon by the EPA. EPA
comprehensively deals with all aspects of
environmental pollution.
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conclusion
• The awareness toward improving the quality
of environment need to be increased
substantially.
• Management of environment it refers to
proper utilization &conservation of
resources.
• Environmental pollution is world wide
phenomenon so we must have coordinated
structures at international level.

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Bibliography
• WWW.Google.COM
• WWW.Wikipedia.COM
• www.india.gov.in

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