FFR Software Pvt. Ltd. Vs Union of India (Gujarat High Court)
In a recent development, the Gujarat High Court has set aside an order by the Reserve Bank of India (RBI) that declined to entertain a compounding application filed by FFR Software Pvt. Ltd. The court has directed the RBI to take a fresh decision on the application in accordance with the law, specifically emphasizing the requirement to follow the procedure outlined in Rule 8(2) of the Foreign Exchange (Compounding Proceedings) Rules.
The case, identified as FFR Software Pvt. Ltd. Vs Union of India, came before the High Court following the RBI’s communication dated May 24, 2017. This communication had resulted in the return of the petitioner’s application for compounding a contravention of Regulation 7 of the Foreign Exchange Management Act (FEMA).
According to submissions made by the petitioner’s advocate, the company is involved in import-export activities. The matter originated from a sales agreement with overseas buyers, confirmed by a purchase contract in December 2008. The petitioner had received advance payments against these contracts.
The petitioner’s representative informed the court that despite receiving advance payments, the overseas buyer repeatedly requested delays in shipments. A letter from the buyer on December 30, 2008, specifically requested holding shipments, to which FFR Software responded on January 10, 2009, confirming that the ordered goods were ready for export.






