Section 37 FEMA Act 1999 - Power of Search, Seizure and Investigation

Section 37 of the Foreign Exchange Management Act, 1999 deals with investigation of FEMA contraventions and the investigative powers available to specified Enforcement Directorate officers and other officers authorised by the Central Government.

Updated: 27 September 2026

In brief: Section 37 requires specified Enforcement Directorate officers to investigate contraventions referred to in Section 13. It also permits the Central Government to authorise specified officers to investigate such contraventions. For investigation, the officers mentioned in Section 37(1) may exercise powers like those conferred on income-tax authorities under the Income-tax Act, 1961, subject to the limitations laid down under that Act.

What does Section 37 of FEMA provide?

Section 37 appears in Chapter VI of FEMA, dealing with the Directorate of Enforcement. Its purpose is to identify who may investigate contraventions covered by Section 13 and to define the statutory source and limits of the investigative powers available for that purpose.

Text of Section 37 - Power of search, seizure, etc.

37. (1) The Director of Enforcement and other officers of Enforcement, not below the rank of an Assistant Director, shall take up for investigation the contravention referred to in section 13.

(2) Without prejudice to the provisions of sub-section (1), the Central Government may also, by notification, authorise any officer or class of officers in the Central Government, State Government or the Reserve Bank, not below the rank of an Under Secretary to the Government of India to investigate any contravention referred to in section 13.

(3) The officers referred to in sub-section (1) shall exercise the like powers which are conferred on income-tax authorities under the Income-tax Act, 1961 (43 of 1961) and shall exercise such powers, subject to such limitations laid down under that Act.

Section 37(1): Investigation by Enforcement Directorate officers

Under sub-section (1), the Director of Enforcement and Enforcement officers not below the rank of Assistant Director are required to take up investigation of contraventions referred to in Section 13 of FEMA.

Section 13 is the principal FEMA provision dealing with penalties for contravention. Broadly, it applies where a person contravenes FEMA, any rule, regulation, notification, direction or order issued in exercise of powers under FEMA, or a condition subject to which an authorisation issued by the Reserve Bank of India is granted.

Section 37(2): Other officers may be authorised

Sub-section (2) gives the Central Government an additional mechanism for investigation. By notification, it may authorise an officer or class of officers in the Central Government, a State Government or the Reserve Bank of India, provided the officer is not below the rank specified in Section 37(2), to investigate a contravention referred to in Section 13.

The words "without prejudice to" mean that this additional power does not displace or reduce the investigation authority already given under Section 37(1).

Section 37(3): Search, seizure and related investigative powers

Sub-section (3) links FEMA investigation powers to powers conferred on income-tax authorities under the Income-tax Act, 1961. It is important that the provision does not state an unlimited power. The same sub-section expressly requires the FEMA officers concerned to exercise those powers subject to the limitations laid down under that Act.

Accordingly, the statutory framework should be read as both a conferral of investigative power and a requirement to observe the corresponding legal limitations and safeguards. Depending on the investigation, relevant powers may concern matters such as search, seizure, examination of material and collection of evidence.

Current statutory position: The official India Code consolidation of FEMA, stated to be updated as on 1 June 2026, continues to use the expression "Income-tax Act, 1961" in Section 37(3). This page therefore preserves the enacted wording of Section 37 rather than silently substituting the name of another enactment.

How Section 37 relates to Section 13 of FEMA

Section 37 is an investigation provision; Section 13 is the provision to which it expressly refers for the contraventions under investigation. A Section 37 investigation is therefore connected with determining whether conduct amounts to a FEMA contravention that may attract the consequences prescribed by Section 13 and other applicable provisions.

Key points to remember

Section 37 is contained in Chapter VI, which concerns the Directorate of Enforcement.
The Director of Enforcement and Enforcement officers not below the rank of Assistant Director may investigate contraventions referred to in Section 13.
The Central Government may, by notification, authorise other qualifying officers described in Section 37(2).
The investigative powers under Section 37(3) are linked to powers conferred on income-tax authorities under the Income-tax Act, 1961.
Those powers are expressly subject to the limitations laid down under that Act.
Section 37 should be read with Section 13 and other applicable FEMA provisions, rules, regulations, notifications and judicial decisions relevant to the facts of a particular case.

Official legal references

For the latest official text and regulatory material, readers should verify the provision from India Code and the Directorate of Enforcement FEMA Acts and Rules page. FEMA is administered within the foreign exchange enforcement framework, while the Reserve Bank of India also performs statutory and regulatory functions under FEMA.

Disclaimer: This article is for general legal information. Statutory provisions, notifications, rules, regulations and judicial interpretations should be checked for their application to the facts of a particular matter.