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Revision Questions:

NEPAL CHARTERED ACCOUNTANTS ACT, 2053 AND RULES, 2061

1. Green City Resorts Limited was incorporated on 2076/10/10 and obtained certificate to commence
business from the Company Registrar Office on 2077/01/15. Mr. Ram Shrestha was appointed as an
auditor of the company by the board of directors of the company to audit its accounts of the Fiscal Year
2076-2077. Ram Shrestha committed certain offences in the course of auditing the accounts of the
company. The company removed him and complained this matter to Institute of Chartered Accountants of
Nepal (ICAN). Green City Resorts Limited has sought your advice on the following questions:
(i) Is the appointment of Mr. Ram Shrestha valid?
(ii) What are the punishments imposed against the auditor for his offences under the Companies Act,
2063? (iii) What action the Council of ICAN can take against the auditor, in this case?
(iv) Suggest the remedies if any available to Mr. Ram Shrestha against the action taken by Council of
ICAN.

2. Mr. Clever has registered as Chartered Accountant member of Institute of Chartered Accountants of
Nepal (ICAN) after passing Chartered Accountants Membership Examination of the Institute in 2018 and
got Certificate of Practice under Section 28 of the Nepal Chartered Accountants Act, 2053. In the due
course, it was found that certificate submitted by Mr. Clever was false on the ground that he has not
passed any Chartered Accountant Examination in the Institute of Chartered Accountants of Pakistan. The
certificate that was submitted to the Institute of Chartered Accountants in Nepal was fraudulent paper
prepared by him somewhere else.
(i) State the procedures of cancellation of the membership and certificate of practice of Mr. Clever?
(ii) What types of penalties is attracted to Mr. Clever?

COMPANIES ACT, 2063

3. Himalayan Garments Limited has been operating in profit for the last 3 years. The Board of Directors
of the company felt that changed conditions are not favorable to the company’s long term prospects and
thus decided that the company be liquidated voluntarily. Explain in the light of Companies Act, 2063:
(i) What are the conditions for the company to voluntarily liquidate?
(ii) What is the procedure for voluntary liquidation of the company?
(iii) What would be the consequences if it is discovered, during the process of liquidation, that the
company is not able to pay its liabilities in full?

4. Sky Inc. is a foreign company registered with the Company Registrar’s Office (CRO) pursuant to
Chapter- 16 of Companies Act, 2063. His legal representative in Nepal is unaware about books of
accounts, annual report and auditing requirements of such company. Advise him on the light of
Companies Act, 2063.

SECURITIES ACT, 2063

5. List the securities business person that require to specify at least one person to act as an agent. Explain
the procedures for becoming a formal agent of a securities business person in the light of Securities Act,
2063.
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BANKS AND FINANCIAL INSTITUTIONS ACT, 2073

6. Pralahad Gautam is Deputy General Manager of Sambriddhi Bank Limited. The shares of the bank are
listed in the stock exchange. Pralahad knows that the bank has made a better profit than expected. On the
basis of that knowledge, he buys shares of the bank before the good results are announced. He makes a
substantial profit on the share dealing. He also discloses the fact to his friend Shyam Sharma before they
are announced. Shyam also buys shares of the bank. Whether Pralahad and Shyam have committed any
immoral/unethical act? Explain how these issues are addressed and tried to control under the prevailing
laws of Nepal?

NEPAL RASTRA BANK ACT, 2058

7. Deena Bank Limited (‘A’ class bank licensed by Nepal Rastra Bank) has been facing financial
problems from the last two years. It has not been able to operate smoothly. The loan assets quality of the
bank is not good and its liability also exceeds the net assets. The bank is also subject to frequent
violations of Rastra Bank directives. In the light of the given information answer the following questions:
(i) Can Deena Bank Limited subject to control by Rastra Bank and subject to resolution (settlement)?
(ii) If Rastra Bank takes Deena Bank under its control and appoints Special Administration Team to
initiate the work of resolution, explain the role of directors and chief executive officer of the bank in the
resolution process.

AUDIT ACT, 2075

8. Share structure of Mustang Hydro Energy Limited is as follows:
Mustang People 20%
Other Nepalese 10%
Dairy Development Corporation 70%
The management of Mustang Hydro Energy Limited has written a letter to the Institute of Chartered
Accountants of Nepal (ICAN) for audit of the books of account of the company for 2076/77. ICAN has
handed over the letter to the office of the Auditor General of Nepal. Who has the authority to appoint
auditors of Mustang Hydro Energy Limited? Justify your answer referring the provisions of Audit Act,
2075.
INDUSTRIAL ENTERPRISES ACT, 2076
9. Mr. Shyam Sundar is running a beer industry (situated at Panchkhal, Kavre) for last 2 years. The entire
beer is sold within the country. The industry wants to expand its production base for which it requires
additional land. Due to his limited land, Mr. Shyam wants to avail government land on lease. You are
required to advice Mr. Shyam Sundar provisions relating to availing government land on lease for
operation of industry. Also advice Mr. Shyam Sundar whether he can avail government land on lease for
the operation of his industry.

FOREIGN INVESTMENT AND TECHNOLOGY TRANSFER ACT, 2075

10. Explain the procedure a foreign investor can invest in Nepal according to the Foreign Investment and
Technology Transfer Act, 2075? State the foreign investment approving authority under the Act.
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INSURANCE ACT, 2049

11. General Insurance Company Limited, a newly established general insurance company obtains
insurance contract of Everest Hotel for the F/Y 2077/78 by quoting rates lower than the prescribed rates.
In the previous fiscal year, the hotel was insured with Himalayan General Insurance Company Limited.
Sanima General Insurance is contemplating whether the unethical deal can be sued. Advise highlighting
the provisions of Insurance laws/regulations.

LABOUR ACT, 2074 AND RULES, 2075

12. Sky Lark Garments Limited has been run by 90 staffs. The total staff consists of 50 permanent staffs
and labors and 40 (50) daily wages temporary staffs. The recruitment of the daily wages staffs was done
in the lot of 20 (25) persons twice whereas recruitment of 50 permanent staffs was done in the lot of 30,
10 and 10 thrice. The industry faces financial problems in its operation. The management of the industry
decides to close down a part of its plants and also decides to retrench all its daily wages staffs and 20
permanent staffs for the period of 6 months:
(i) Which lot of permanent staffs will be retrenched in the normal situation?
(ii) What is the compensation payable to the retrenched staffs?
(iii) Will the amount of compensation be same if the factory is seasonal and the staffs have been lay off
for off season?

INTERNATIONAL FINANCIAL TRANSACTIONS ACT, 2054

13. The Revenue Investigation Commission has filed a case to the court against Clever Hedge Funds
Limited, an international financial institution licensed by the implementation committee. Can the court
direct the Implementation Committee to submit documents pertaining to Clever Hedge Funds Limited? Is
the Implementation Committee obliged to furnish the information to the court?

COOPERATIVES ACT, 2074 & RULES 2075

14. During the course of inspection of the Sandar Cooperatives Bank Limited, it was observed that it has
not complied with the directives issued by Nepal Rastra Bank. As a consequence of violation of Rastra
Bank directives, Nepal Rastra Bank suspended the board of directors of the Sandar Cooperatives Bank.
Give your opinion as to the validity of the actions of the Rastra Bank pursuant to the cooperatives laws.

INSOLVENCY ACT, 2063

15. Ram Sharan Bhandari was appointed as a restructuring manager pursuant to the order of the court to
implement the restructure scheme of the Gurans Resorts Limited. He duly called the meeting of the
creditors to discuss the details of restructuring program and accordingly a resolution was adopted on
restructuring scheme submitted by Mr. Ram Sharan Bhandari. Mr. Hari Sharma (an unsecured creditor) is
not satisfied with the resolution adopted by the creditors and contemplating to challenge the decision. Is
there any validity in his contemplation?
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ASSET (MONEY) LAUNDERING PREVENTION ACT, 2064 & Rules 2073

16. Explain Enhanced Customer Due Diligence (ECDD). Mention the categories/types of customers in
which a reporting entity shall follow appropriate measures of enhanced customer due diligence in
establishing business relationship or conducting transaction. Answer shall be based on the provisions of
Money Laundering Prevention Act, 2064.

PUBLIC PROCUREMENT ACT, 2063 AND RULES 2064

17. What is a two-stage bidding? Explain the legal provisions of two-stage bidding as provided in Public
Procurement Act, 2063.

ARBITRATION ACT, 2055

18. Ram and Shyam had an agreement to settle their civil case through arbitration. The dispute was
referred for arbitration proceedings. The arbitrators pronounced their decision on 2077/5/5 and notified
the parties on the same date. Ram was not satisfied with the decision taken by the arbitrators. Suggest him
remedial measures if any in this regards in the light of Arbitration Act, 2055.

BANKING OFFENSE AND PUNISHMENT ACT, 2064

19. During the lock down period announced by Government of Nepal, Ms. Rohini Shrestha formed a
group of 20 Chartered Accountants ladies. On the basis of mutual understandings, they raised fund of Rs.
2 lakhs each and agreed to provide loan to each other. Is this transaction an offense on the light of
Banking Offenses and Punishment Act, 2064?

FINANCIAL INTERMEDIARY SOCIETIES ACT, 2055 (1999)

20. Explain whether Financial Mediator should be a company registered under the Companies Act, 2063 or
not.

FOREIGN EXCHANGE (REGULATION) ACT, 2019 (1962)

21. Explain the duties of importer in the light of Foreign Exchange Regulation Act, 2019
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AUDIT ACT, 2075

Answer to Question no 9
Article 240(1) of the Constitution of Nepal, 2072 has laid down provisions regarding the appointment of
Auditor General. It provides that the President of Nepal shall on the recommendation of the Constitutional
Council, appoint Auditor General. The term of office of the Auditor General shall be six years from the
date of appointment.

As per the provisions provided in Article 240(6) of the Constitution of Nepal, the qualification of Auditor
General shall be as follows:
(a) Having experience in the special class of Government of Nepal or having at least 20 years of
experience in audit related work after having obtained a bachelor's degree in management, commerce
or accounting from recognized university by the Government of Nepal or having passed a chartered
accountancy examination,
(b) Not being a member of any political party at the time of appointment,
(c) Having attained the age of 45 years, and
(d) Being of high moral character.

Mr. Lokman Tamang is a CA having over 25 years of experience in audit. Considering Mr. Tamang, not
being a member of any political party, attained the age of 45 years and having high moral character, he is
qualified for the appointment.
The constitution provides that the President of Nepal shall on the recommendation of the Constitutional
Council, appoint Auditor General. In the given case, the Auditor General is appointed on the
recommendation of the ICAN. Thus, the appointment is invalid.

INDUSTRIAL ENTERPRISES ACT, 2073

Answer to Question no 10
Section 5 of Industrial Enterprises Act, 2073 provides that on receipt of the application for registration of
industry, the Industry registration Body shall, after making necessary examination regarding the compliance
of required documents as per the Act and regulation thereof, issue registration certificate as prescribed to
the Industry within 15 days from the date of application for registration. If, it is found that the applicant has
failed to comply required formalities as required by the Act or Rules or failed to submit the required
documents, the Industry Registration Body may refuse to register the industry with reasons thereof.

If the Industry registration Body refuses the registration of industry as above, the applicant not satisfied
with the decision, may make an appeal to the Ministry within thirty days from the receipt of issue of notice
of refusal. The Ministry has to decide the matter after necessary examination against the appeal within thirty
days of receipt of application.
In the given case the Department has notified Mr. Ram Lal the decision of refusal of registration of industry
on 2076/7/28. He has approached for legal advice on 2076/9/5 i.e. after 36 days from the date of notification
of refusal of registration of the industry. The time limit for making appeal to the Ministry is within thirty
days from the receipt of issue of notice of refusal. The time limit for making appeal has expired. Thus, Mr.
Ram Lal cannot seek any remedy against the decision of the Department.
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field of economic, monetary, banking, finance, commerce, management, commercial law and from among
the Deputy Governors. Government of Nepal, the Council of Ministers shall, out of the names
recommended by the Committee, appoint one person to the Office of Governor.

Section 20 provides provisions relating to qualifications required for appointment of Governor. In order to
be appointed to the post of Governor, a person shall have to meet the following qualifications:
(a) A Nepalese citizen.
(b) Having higher moral character.
(c) Having work experience in economic, monetary, banking, financial and commercial law sectors after
having attained at least master's degree in economics, monetary, banking, finance, commerce,
management, public administration, statistics, mathematics and law. "Work experience" means the
experience of works in the post of special class of Government of Nepal or of the Bank or in the post
of a university Professor or in the post of Executive Chief of class ‘A’ of a commercial bank or of a
financial institution or in the equivalent post or in the post higher than those in terms of the order of
protocol.
(d) Not disqualified under Section 21.

Section 21 provides provisions relating to disqualifications for appointment of Governor. Following

persons shall not be eligible for appointment to the Office of the Governor:
(a) Member or official of a political party, or
(b) The person blacklisted in relation to transaction with a commercial bank or financial institution,
or
(c) An official currently engaged in any commercial bank or financial institution, or
(d) A person having five percent or more shares or voting right in a Commercial Bank or financial
institution, or
(e) A person rendered bankrupt for being unable to pay debts to creditors, or
(f) An insane person, or
(g) A person convicted by a court in an offence involving moral turpitude.

CA. Maha Prasad Adhikari is past deputy governor of Nepal Rastra Bank and has also served Rastra Bank
for 28 years before becoming deputy governor. Thus, he is renowned name in banking.

Considering the implications of section 20 regarding his qualification, he holds Masters Degree in
Management and possesses the required work experience.

Considering the implications of section 21 regarding his disqualifications, he should hold five percent or
more shares or voting right in a Commercial Bank or financial institution. He holds 4.5 % equity shares of
Machapuchchhre Bank Limited. So he is not disqualified

Considering the combined implications of section 15, 20 and 21, CA. Maha Prasad Adhikari is eligible for
the post of Governor of Nepal Rastra Bank.
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(c) Detail description as to whether to continue the current financial transactions of the bank or financial
institution or to revoke them,
(d) Decision or order of the court,
(e) Details of the actions taken for compensation from the Director, official or employee for the offences
and other unlawful acts they have committed,
(f) Details description as to classification of claims and priority order of payment,
(g) Plan of sale and liquidity of the main asset or group of assets of the BFI,
(h) Liabilities of the bank or financial institution and table of details of the probable payment to be made
to depositors and creditors within the upcoming 90 days,
(i) Costs and expenses of the mandatory liquidation,
(j) Other details as prescribed by the Rastra Bank.

Once the liquidation plan is approved by the court, the plan shall have to be made available to the creditors
of the bank or financial institution for inspection, whose claims are stated in the plan. The Liquidator shall,
in order to settle the claims according to the liquidation plan, publish and broadcast public notice stating
the nature, quantity and priority order for payment of the claims.

Answer to Question no 7
(i) Clause (f) of sub-section (2) of section 13 of Banks and Financial Institutions Act, 2073 provides that
the amount of capital bought back by the Bank or Financial Institutions shall not exceed 20% of the sum of
its total paid up capital and general reserve. Thus, the Bank can buy back shares representing Rs.
12,00,00,0000 of its capital.

Clause (e) of sub-section 2 states that the total debts of the Bank or financial institution shall not be more
than twice the sum of its capital and general reserves after the buy back. Since the total debts stand at Rs.
90,00,00,0000, the sum of capital and general reserve after buy back cannot be less than Rs. 45,00,00,0000
i.e. capital up to Rs. 15,00,00,0000 could be bought back. However, because of the restrictive provision of
clause (f) of sub-section (2), the Bank can only buy back 12,00,0000 equity shares.

(ii) The Bank should complete buy-back of shares within six months of the date of approval from Nepal
Rastra Bank or within twelve months from the date of passing special resolution by the General Meeting
whichever is later (sub-section 5).

(iii) As per sub-section (8) of section 13 of the Act, the amount of shares bought back by the bank or
financial institution shall be cancelled within 120 days from the date of buy back. Thus, Hamro
Development Bank cannot re-issue such shares to its employee but has to cancel them within 120 days.

NEPAL RASTRA BANK ACT, 2058

Answer to Question no 8
Section 15 of Nepal Rastra Bank Act, 2058 provides that Government of Nepal, the Council of Ministers
shall appoint Governor on the basis of the recommendation of the Recommendation Committee formed by
it. While making recommendation for the appointment of Governor, the Recommendation Committee shall
recommend to Government of Nepal, the Council of Ministers the names of 3 persons renowned in the
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or the objective mentioned in Sub-section (1) may make an application to the Office pursuant to
section 4.
(3) The number of promoters promoting such company shall be at least five and after the incorporation
of such company, it may have any number of its members, with a minimum of five members.
(4) The membership of a company incorporated pursuant to sub-section (1) shall not be transferable in
any manner. The membership of any person or body shall ipso facto be terminated in the event of
death, cancellation of registration or dissolution of such member or amalgamation of such member
with another body or company.
(5) Except with the prior approval of the Office, a company incorporated pursuant to Sub-section (1)
shall not add words such as “company”, “ limited “’ or “private limited” at the end of its name.
(6) A company registered pursuant to Sub-section (1) shall obtain approval of the Office to expand its
branch.

SECURITIES ACT, 2063

Answer to Question no 5
Section 96 of Securities Act, 2063 provides that if any person individually or in association with others
commits any of the following acts to affect directly or indirectly the transaction in securities, such a person
shall be deemed to have affected stock exchange:
(a) To increase the market price of securities issued by any company with the intent to encourage others
to purchase or sell the securities or to avoid the purchase or sale of such securities,
(b) To decrease the market price of securities issued by any company with the intent to encourage others
to purchase or sell the securities or to avoid the purchase or sale of such securities,
(c) To stabilize the market price of securities issued by any company with the intent to encourage others
to purchase or sell the securities or avoid the purchase or sale of such securities.

Section 101(2) provides that a person who commits any offense referred to in section 96 (activities deemed
to have affected stock exchange), fine of Rs. 50,000 to Rs. 100,000 or with imprisonment for a term not
exceeding 1 year or with both punishments shall be imposed and where anyone has suffered any loss or
damage from such an act, such loss or damage has also to be recovered.

BANKS AND FINANCIAL INSTITUTIONS ACT, 2073

Answer to Question no 6
Section 88 of Banks or Financial Institutions Act, 2073 provides that the liquidator shall classify the claims
into claims accepted, partially accepted or rejected and record separately with segregation of it in different
title.

Section 90 provides that the liquidator shall, within 30 days after completion of classification of the claims
pursuant to section 88, prepare detail action plan of the liquidation of the said bank or financial institution
and submit it to the court for approval and information thereof shall be given to the Rastra Bank as well.
The following matters shall be incorporated in the liquidation plan:
(a) Details description of the assets and liabilities of the BFI and its nature and quantity,
(b) The past and projected income and expenditure of the bank or financial institution,
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COMPANIES ACT, 2063

Answer to Question no 3
Section 158(1) of Companies Act, 2063 provides that a foreign company shall make an application
accompanied by the prescribed fees to the Company Registrar Office for the cancellation of its registration
in the following circumstances:
- If the foreign company wishes to close down the transaction which it is carrying on in Nepal and get
its registration canceled, or
- Where the competent authority acting in accordance with the prevailing law prohibits such company
from carrying on the transaction or business within Nepal.

Civil Aviation Authority of Nepal (CAAN) is a regulatory authority to regulate airlines business in Nepal.
It has published a notice to prohibit foreign airlines company to operate in Nepal. Thus, by referring to the
provisions of section 158(1) of the Companies Act, 2063, registration of Himalayan Airlines is bound to be
cancelled in Nepal.

Himalayan Airlines is required to follow the following procedures for the cancellation of its registration
(section 158):
 It shall make an application accompanied by the prescribed fees to the Company Registrar Office
(CRO) for the cancellation of its registration.
 It shall also submit, along with the application, an evidence and proof confirming that there is no
liability due and payable by such company to any person, organization or governmental or non-
governmental body in Nepal.
 In order to inquire whether the evidence and proof that there is no liability and payables are true or
not, Company Registrar Office shall publish at least twice in a national daily newspaper a notice
inviting claim, accompanied by evidence on any liability if any due and payable by the company to
any person within a period of 21 days.
 Where any person makes claim in pursuance of the notice published by the CRO, the concerned
company shall submit to CRO evidence or proof showing the settlement of such claim. Where the
claim made against such company cannot be settled from the assets of such company situated in
Nepal, such company shall settle the same from its assets situated outside Nepal.
 Where no claim is made by anyone within the specified time limit or a proof is submitted showing
that the claim made has been settled, CRO shall strike the name of such company off the foreign
company register and give information thereof to the concerned company.

Answer to Question no 4
Section 166 of the Companies Act, 2063 provides following provisions relating to establishment of
company not distributing profits:
(1) Notwithstanding anything contained elsewhere in this Act, any company may be incorporated to
develop and promote any profession or occupation or to protect the collective rights and interests of
the persons engaged in any specific profession or occupation or to carry on any enterprise for the
attainment of any scientific, academic, social, benevolent or public utility or welfare objective on the
condition of not distributing dividends.
(2) Any person or trustee of a public trust registered pursuant to the prevailing law or any other corporate
body incorporated pursuant to the prevailing law who wishes to register a company for the attainment
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Answers/Hints:
NEPAL CHARTERED ACCOUNTANTS ACT, 2053 AND RULES, 2061
Answer to Question no 1
Section 16(3) of the Nepal Chartered Accountants Act, 2053 provides that the membership of Registered
Auditor shall, subject to Section 18, be granted to a person who has obtained the certificate of auditor of
class ‘B’, ‘C’, or ‘D’ pursuant to the Auditors Act, 2031 (1975) at the time of the commencement of this
Act.
Section 19(3) of the Act provides where a person having possessed the qualification to obtain the
membership pursuant to sub-section (3) of Section 16 desires to have his or her name registered in the
membership of the Institute, he or she shall submit an application to the Institute no later than Six months
after the date of the commencement of Sections 29 and 49 of this Act, by Government of Nepal upon
notification in the Nepal Gazette. A person who fails to submit an application for the membership within
that period shall not be entitled to obtain the membership as referred to in this Act.
Section 29 and 49 of the Act was made applicable by Government of Nepal with effective from 2059/04/01
as published in Nepal Gazette dated 2059/04/01.
By inferring the above legal provisions of the Act, Mr. Mohan Lama should have applied for the
membership of Registered Auditor within the period of 6 months from 2059/04/01. But he has applied for
membership on Falgun, 2076. The time limitation for applying of membership is expired. Thus, the Council
of ICAN cannot issue Mr. Mohan Lama Membership of ICAN.

Answer to Question no 2
Pursuant to section 22(1) of Nepal Chartered Accountants Act, 1997, the Council may issue an order to
remove the name of any member from the membership register in any of the following circumstances:
(a) If the member is convicted by a court of a criminal offence involving moral turpitude and punished
for such offence,
(b) If the member fails to pay the fees required to be paid to the Institute,
(c) If the member fails to abide by the professional conduct referred to in this Act and the Rules
framed under this Act,
(d) If the member becomes insane, or
(e) If the member dies.

Further, sub-section (2) provides that if a person whose name has been removed from membership pursuant
to sub-section (1) makes an application, accompanied by a reasonable ground to again obtain membership,
the Council may decide to grant membership by re-registering his or her name, upon receipt of the fees as
prescribed. The fee is prescribed in Rule 48 (Normal fees + 40% extra charges) and he/she should have
completed Continued Professional Education (CPE) hours pursuant to Rule 55(1) of Nepal Chartered
Accountants Rules, 2061.
Thus, Mr. Ramu Sherchan can restore his name in the membership register upon payment of the
membership fees and completion of the required Continued Professional Education (CPE) hours.
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ARBITRATION ACT, 2055

19. Can any of the parties of the arbitration demand for removal of arbitrator? Explain in the light of
Arbitration Act, 2055.

BANKING OFFENSE AND PUNISHMENT ACT, 2064

20. NIC Bank approved term loan of Rs. 40 million (to be disbursed into 4 half yearly installments) to
Graphite Hotels Private Limited. Accordingly the Bank disbursed first installment of 10 million
immediately. The Managing Director of the hotel approached the bank for disbursement of second
instalment after 6 months. The bank refused to disburse the loan showing the position of its tight C/D ratio.
The hotel is unable to complete its project due to shortage of fund and suffered loss. Is banking offense
attracted in the case and state the punishment if any pursuant to Banking Offenses and Punishment Act,
2064?

FINANCIAL INTERMEDIARY SOCIETIES ACT, 2055 (1999)

21. Deprox Nepal, an association registered under Association Registration Act, 2034 (1977) is carrying out
the activities of financial intermediation after obtaining license from Nepal Rastra Bank since last 2 years.
It has supplied micro credit according to the norms specified by the Rastra Bank. One of its borrower has
caused default in repayment of micro credit. Highlight the powers of the Deprox Nepal for the recovery of
the micro credit.

FOREIGN EXCHANGE (REGULATION) ACT, 2019 (1962)

22. Xemi Limited exported the Nepalese handicrafts worth $ 40 million to France after duly filling the
declaration form that such amount will be brought in Nepal within a period of four months.
(i) What will be the legal course of action if the Company receives only $ 35 million because the goods
amounting to $ 5 million found defective and are returned to Nepal?
(ii) Will your answer be the same if the Company does not receive money within the prescribed period of
four months?