Can a Company be Prosecuted under Section 56(1) of FERA Act?

  • Himaghn Jain
  • Show Author Details
  • Himaghn Jain

    Student at Amity Law School, Noida, India

  • img Save PDF


The corporate vehicle occupies such a large portion of the industrial, commercial and sociological sectors that amenability of the corporation to a criminal law is essential to have a peaceful society with stable economy. According to section 3(42) of the General Clauses Act of 1897 a person is defined as: Any company, association, or group of individuals, whether incorporated or not, is considered a person. Even if the term “person” isn't defined in any way, it invariably includes a company. Section 56 of the FERA states that if any person commits any offence, the person shall be tried under the section without any exception other than what is mentioned in the section itself, this brings up the question, How can a corporate body be imprisoned under the provisions of this section? The section is vague in this sense, however, if we look at the definition of person under the General Clauses Act of 1897, a company is a person regardless of anything else mentioned anywhere else. The applicability of the section has been discussed in the two landmark cases of Asst. Commr. v. Velliappa Textile Ltd. 2003 & Standard Chartered Bank v. Directorate of Enforcement wherein, the supreme court overruled the precedent set by the Velliapa textiles case which said that a corporate body cannot be covered under the provisions of section 56 of The Foreign Exchange Regulation Act.


Research Paper


International Journal of Legal Science and Innovation, Volume 3, Issue 4, Page 607 - 612


Creative Commons

This is an Open Access article, distributed under the terms of the Creative Commons Attribution -NonCommercial 4.0 International (CC BY-NC 4.0) (, which permits remixing, adapting, and building upon the work for non-commercial use, provided the original work is properly cited.


Copyright © IJLSI 2021