The Environment

(Protection) Act 1986

Back ground of the Act

In the wake of Bhopal tragedy ,the Government of India
enacted the Environment (Protection) Act of 1986.under
Article 253 of the Constitution.
The purpose of the Act is to implement the decision of the
United Nations conference on the Human Environment
of 1972.
The Act relate to the protection and improvement of the
human environment and the prevention of hazards to
human beings, other living creatures, plants and property.
The Act is an Umberlla Legislation designed to provide
a frame work for central government co-ordinating the
activities of various central and state authorities
established under previous laws.

Objectives of the Environment

Protection Act 1986
The Act come in to effect on 9 th November 1988 with
following objectives:
1) to co-ordinate the activities of other various
regulatory agencies already in existence.
2) Creating an authority with adequate power for
environmental protection
3) Regulation of discharge of environmental
pollutions and handling of hazardous substances.
4) Speedy response in the event of accidents
threatening environmental equilibrium and different
punishment to those who endanger human and
environmental safety and health.

Definitions of certain terms of the

ACT
Environment includes water , air , and
land and the inter-relationship which
exists among and between water,air and
land, and human being , other living
creatures,plants,micro-organism and
property.
Environment Pollutant means any
solid, liquid, or gaseous substance present
in such concentration as may be,or tend
to be, injurious to environment

Contd definitions
Environment pollution means the presence of any
environment pollutant in the environment
Hazardous Substance means any substance or preparation
of which,by reason of its chemical or physio-chemical properties
or handling,is liable to cause harm to human being , other living
creatures , plants, micro organism, property or environment.
Occupier in relation to any factory or premises, means a
person who has control over the affairs of the factory or the
premises and includes ,in relation to any substance , the person
in possession of the substance.
Handling ( in relation to any substance) means the
Manufacture
processing,treatment,package,storage,transportation,use,collect
ion,conversion, destruction,offering sale etc . of such substance.

General Power of Central Govt. in

relation to protection of environment.
A) Take all such measures to protect and improve the quality of the
environment.
B) prevent, control, and abating (reduction)environmental pollution
c) Co-ordination of actions of the State Government offices and
other authorities , under this Act or any other laws.
D) planning and execution of a nation-wide program for
prevention,control and abatement(reduction/decrease) of
environmental pollution
E) laying down standards for the quality of environment in its
various aspects.
F) fixing standards for emission or discharge of environmental
pollutants from various sources.
G) Restriction of Areas in which any industries ,operations,or
processes,or class of industries shall not be carried out or shall be
carried out subject to certain safeguards

ContdGeneral Power of Central Govt. in relation to protection of

environment.

H)examination of such manufacturing

process ,material substances that are likely
to cause environmental pollution
i) Establish and recognize environmental
laboratories and institutes to carry out such
functions which are entrusted by the Act.
J) such other act as the Central Government
deems fit to secure the implementation of
the provision of the Act.

ContdGeneral Power of Central Govt. in relation to protection of

K) power to appoint officers and

delegation of their powers as it
thinks for the purpose of this Act.
L) power to make rules to regulate
environmental pollution

ROLE of the Central Government to

prevent and control environ.. pollution
Section 7 to 26 of the Environment protection Act 1986 provide the measures for
prevention ,control and abatement of Environment pollution
1. Persons carrying on Industry,operation or process,should not allow emissions or
discharge of environmental pollutants in excess of the standards.
2)persons handling hazardous substances has to comply with procedural safety
measures and other prescribed procedure.
3)Information should be given to authorities concerned regarding discharging of any
environmental pollutions in excess of the fixed standards. So that accidents can be
prevented and quick measures could be taken to mitigate the likely losses.
4)Central Government can empower any person to enter any place of any time in
order to examine whether all provisions of the Act are scrupulously followed or not.
5) such person /officer can test any equipment ,plants, registers or document and
can search any building ,plant, documents ,materials as necessary to protect the
environment and prevent pollution.
6) The provisions of criminal procedure, code are applicable whenever search or
Seizure takes place

FEMA 1999.(Foreign Exchange

Management Act 1999)
Major changes have been introduced in Indian Economy in 1991,to facilitate
increased inflow of foreign investment and capital .
This is done to accelerate industrial growth and promote trade, especially
Exports.
In this Scenario FERA(Foreign Exchange Regulation Act )1973 was amended to
simplify regulations relating to foreign Investment.
Considering these developments,.the FEMA Bill was introduced in the loka
sabha on Augaust 4th 1998 and the Foreign Exchange Managemet Act ,1999
came in to force on 1st June 2000.
OBJECTIVES OF FEMA 1999.
1)substantial increase in our foreign exchange reserves,
2)growth in foreign trade ,
3) liberalization of Indian investments in abroad,
4)increased access to external commercial borrowings by Indian corporates
5) participation of foreign Institutional investors in our stock markets,
6) To promote an orderly maintenance of the foreign Exchange market in Our
Country. etc.,

Scope of FEMA 1999

The FEMA 1999 is applicable to the whole of
India
It shall also apply to all branches,offices,and
agencies,outside India owned or controlled
by a person resident in India and
Any contraventions, of the provisions of
FEMA by all those who are covered under
the above two aspects, committed outside
India

Definitions/ meaning of TERMS used

in the ACT

Foreign Currency ,means any currency other than Indian Currency.

Foreign exchange means foreign currency and includes:
1) deposits,credits, and balances payable in foreign currency.
Ii) drafts, travellers cheques,letters of credit, bills of exchange drawn by
banks,institutions or persons out side India,but payable in Indian currency.
Adjudicating Authority.
Means an officer authorised under subsection (1) of section 16(8.2 (a).
Authorised person means an authorised dealer, money changer,offshore banking unit, or any other person for time being authorised under
sub section (1) of section 10 to deal in foreign exchange.
Appellate Tribunal means the Appellate Tribunal of Foreign Exchange
established under section 18 of the Act.
Capital Account Transaction means transaction which alters the assets
or liabilities ,including contingent liabilities,outside India of persons resident
in India and of assets or liabilities in India of persons resident outside India,
and includes transactions referred to in sub-section (3) of section 6

Definitions/ meaning of TERMS used

in the ACT
Currency Includes all currency
notes,postal notes,postal orders,money
orders, cheques,drafts,travellers
cheques,letters of credit,bills of exchange
and promisory Notes, credit cards or such
other similar instruments,as may be
notified by the reserve Bank
Currency Notes means and includes
cash in the form of coins and bank notes

Definitions/ meaning of TERMS used

in the ACT
Current Account Transactions means a transaction
other than a capital account transaction and without
prejudice to the generality of the foregoing such
transaction includes :
( i ) payments due in connection with foreign trade , other
current business,services,and short term banking and
credit facilities in the ordinary course of business.
(ii) payments due as interest on loans and as net income
from investments ,
(iii) remittances for living expenses of parents,spouse,and
children residing abroad
(iv) expenses in connection with foreign travel,
education,and medical care of parents ,spouse and children

Definitions/ meaning of TERMS used

in the ACT

Export means :
(i) taking out of India to a place outside India any goods ;
(ii) provision of services from India to any person out side
India
Import means bringing into India any goods or
services
Foreign Security
Means any security , in the form of shares, stocks,.
Bonds,debentures, or any other Instrument denominated
or expressed in foreign currency and includes securities
expressed in foreign currency, but where redemption or
any form of return such as dividend or interest is payable
in Indian Currency

Definitions/ meaning of TERMS used

in the ACT
person resident in India means :
(1) a person residing in India for more than one
hundred and eighty two days during the course of
preceding financial year but does NOT include:
(a) a person who has gone out of India or who stays
outside India , in either case:
(i) for or on taking up employment out side India or
(ii) for carrying on outside India a business or vocation
out side India or
(iii) for any other purpose , in such circumstances as
would indicate his intention to stay out side India for
a uncertain period

Definitions/ meaning of TERMS used

in the ACT
Indian Currency means currency which is expressed or drawn in
Indian rupees but does not include special bank notes and special
one rupee notes issued under section 28A of the RBI Act of 1934.
Person resident outside India means a person who is not
resident in India
Repatriate to India means bringing to India the realised foreign
exchange and:
(i) the selling of such foreign exchange to an authorised person in
India in exchange for rupees or
(ii) the holding or realised amount in an account with an authorised
person in India to the extent notified by the Reserve Bank,
and includes use of the realised amount for exchange of a debt
liability denominated in foreign exchange and the expression
repatriation shall be construed accordingly.

Salient features of FEMA

1999
1. Dealing in Foreign Exchange (section 3)
1. No person shall deal in or transfer any foreign exchange or foreign
security to any person not being an authorised person ,without the general
or special permission of the Reserve Bank and as per rules and regulations
made in this FEMA Act.
2. No person shall make any payment to or for the credit of any person
resident outside India in any manner other than mentioned in Act.
3. No person shall receive otherwise through an authorised person any
payment by order or on behalf of any person resident outside India in any
manner.
4. enter into any financial transaction in India as consideration for or in
association with acquisition or creation or trtansfer of a right to acquire ,
any asset outside India by any person.
Holding of Foreign Exchange. ( section 4)
No person in India shall acquire ,hold,own,possess,or transfer any foreign
exchange ,foreign security or any immovable property situated out side
India.

Current Account Transaction

Section 5.
Any person may sell or draw foreign exchange
to or from an authorised person if such sale or
drawal is a current account transaction,subject
to Reserve Bank restrictions.
CAPITAL ACCOUNT transactions. Subject
to Section 6,sub section(2) of the FEMA
1999,any person may sell or draw foreign
exchange to or from an authorised person for a
capital Account transaction

Contd.Capital Account
Transactions
The Reserve Bank may in consultation with the Central
Government, specify:
(i) any class or classes of capital account transactions
which are permissible
(ii) the limit up to which foreign exchange shall be
admissible for such transactions:
Provided that The RBI shall not impose any restriction on
the drawal of foreign exchange for payments due on
account of amortization of loans for depreciation of
direct investments in the ordinary course of business.
( to pay off(as mortgage) by instalments of principal &
interest -------- to gradually reduce or write off the cost
or value of an asset)

Export of Goods & Services

AS per Section 7 of the FEMA , every Exporter of goods
shall : (a) furnish to the RBI or to such authority a declaration
in such form and in such manner as may be specified
correct material particulars including full value of
Export of goods.
If the full value of export is not ascertainable at the
time of export, the expected value has to be furnished
to RBI.
(b) the exporter should also furnish such other
information as may be required by RBI for the purpose
of ensuing the realisation of such export proceeds.

ContdExport of Services
Every exporter of Services shall
furnish to the RBI or to such other
authorities a declaration in the
prescribed format containing the
true and correct material particulars
in relation to payment of such
services.

Realisation and Repatriation of

foreign exchange.
As per section 8 , any amount of
foreign exchange due or accrued to
any person resident in India,such
person shall take all reasonable steps
to realise and repatriate to India such
foreign exchange in such manner as
prescribed by RBI.

Exemption from realisation and

repatriation
Provisions of sections 8 shall not
apply to the following:
A) possession of foreign currency or
foreign coins by any person up to
such limit as the RBI may specify.
B) foreign currency account held or
operated by such person or class of
persons and the limit up to which the
RBI may specify.

OFFENSES under FEMA

1999
1. Only a person Authorised by Reserve Bank can deal
in Foreign Exchange.
2. No one can make a payment to a person resident
outside India, without permission of RBI
3. No one receives any Payment from a person resident
outside India, without permission of Reserve Bank
4.A person resident in India cannot deal in foreign
exchange,or any immovable property situated out side
India ,without permission of RBI
5.Similarly a person resident out side India, cannot
acquire immovable property in India without
permission of RBI

Difference between FERA &

FEMA

FERA
Consisting of 81 Sections
and was more Complex

FEMA
Only 49 Sections and is
much Simple

Terms like Capital Account

Transaction & Current
Account Transctions were
not defined in FERA

Terms Like Capital Account

Transaction/ current Account
Transactions are Well defined
in FEMA

Definition for Authorised

Person was Narrow

Definition For Authorised

Personwere widened to
include Banks,money
changes, Offshore Banking
Units etc.

ContdDifference between
FERA & FEMA

FERA
Criminal Offence punishable
with Imprisonment as per
Criminal Procedure
Amount of Penalty was nearly
5 times the amount involved

It conferred wide powers on a

police officer not below the
rank of Deputy
Superintendent of police to
make a search.

FEMA
Offence is Considered as
CIVIL offence only
punishable with some
amount of money as penalty.
Penalty is considerably
decreased to 3 times the
amount Involved.
The Scope and power of
search and seizure has been
curtailed to a great extent.

ContdDifference between
FERA & FEMA
There was a major
difference in the
definition of Resident
under FERA and Income
tax Act.

An appeal against the

order of Adjudicating
Office before Foreign
Exchange Regulation
Appellate Board went
before High Court

The Definition of Residentas

per FEMA are in consistent
with Income tax Act.( i.e. the
Criteria that residing In India
for 182 days) is same both in
FEMA and Income tax Act.
The Appellate Authority
under FEMA is the Special
Director (Appeals). Appeal
against the order of
Adjudicating Authority and
special Director (Appeals) lies
before Applleate Tribunal For
Foreign Exchange.