Section 43 FEMA Act 1999 - Death or Insolvency in Certain Cases
Section 43 explains what happens to rights, obligations, liabilities, proceedings and appeals arising under Section 13 of FEMA when the person concerned dies or becomes insolvent.
Section 43 at a glance
A matter arising in relation to Section 13 of FEMA does not automatically end merely because the liable person dies or becomes insolvent. The relevant rights and obligations pass, as applicable, to the legal representative, official receiver or official assignee.
For a deceased person, however, the legal representative's liability is expressly limited to the extent of the inheritance or estate of the deceased.
Text and effect of Section 43
Section 43 - Death or insolvency in certain cases.
Any right, obligation, liability, proceeding or appeal arising in relation to Section 13 does not abate because of the death or insolvency of the person liable under that section. On death or insolvency, those rights and obligations devolve on the legal representative, official receiver or official assignee, as the case may be.
A legal representative of a deceased person is liable only to the extent of the inheritance or estate of the deceased.
The statutory wording should be read from the current official text of the Act. The summary above is provided to make the provision easier to understand and is not a substitute for the enacted text.
What does Section 43 mean?
Section 43 is a continuity provision. Its purpose is to prevent matters connected with a liability under Section 13 from disappearing solely because the person against whom the matter arose has died or has become insolvent.
The provision covers not only a liability but also a right, obligation, proceeding or appeal arising in relation to Section 13. Depending on the event, the statutory position devolves upon the appropriate successor recognised by law.
Connection with Section 13 of FEMA
Section 43 operates specifically in relation to Section 13. Section 13 is the FEMA provision dealing with penalties for contravention where a person contravenes FEMA, a rule, regulation, notification, direction or order issued in exercise of powers under the Act, or a condition subject to which an authorisation is issued by the Reserve Bank of India.
Accordingly, Section 43 should be read together with Section 13 when a penalty-related right, obligation, liability, proceeding or appeal is affected by death or insolvency.
Who steps into the matter after death or insolvency?
- Death: the relevant rights and obligations devolve upon the legal representative of the deceased.
- Insolvency: they devolve upon the official receiver or official assignee, as the case may be.
The exact person or authority who acts in a particular matter depends on the applicable succession, insolvency and procedural law and the facts of the case.
Limit on liability of a legal representative
Section 43 contains an important statutory safeguard. A legal representative does not become personally liable without limit merely because the original person has died. The provision restricts the legal representative's liability to the extent of the inheritance or estate of the deceased.
Does a pending proceeding or appeal abate?
No, not merely because of death or insolvency. Section 43 expressly states that a proceeding or appeal arising in relation to Section 13 shall not abate for that reason. The provision therefore enables continuation through the person or office upon whom the relevant rights and obligations devolve.
Practical reading
When Section 43 becomes relevant, identify: (1) whether the underlying matter arises in relation to Section 13; (2) whether the event is death or insolvency; (3) the proper legal representative, official receiver or official assignee; and (4) in a death case, the extent of the inherited estate because that limits the legal representative's liability.
Official legal sources
For the current statutory text and amendment history, refer to the Government of India's official sources: Foreign Exchange Management Act, 1999 on India Code and the Department of Economic Affairs - Acts and Policies.
Last reviewed: 27 September 2026. Readers should verify notifications, amendments and case-specific procedural requirements from official sources before relying on the provision in a live matter.