Sections 37 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Not every duty in the Act has its own penalty. Section 37 catches the rest: a failure to comply with any provision for which no separate penalty has been provided is punishable with imprisonment up to one year, or fine, or both. Section 38 then adds a heavier consequence for repeat offenders: a person convicted a second time of an offence under section 35 or section 37 that relates to the acceptance or utilisation of foreign contribution may not accept any foreign contribution for five years.
This article reads sections 37 and 38 as per the Act as enacted, read with the Foreign Contribution (Regulation) Amendment Act, 2020 (33 of 2020), which did not change these sections. Later amendments should be checked.
Section 37: whoever fails to comply with any provision of the Act for which no separate penalty has been provided is punishable with imprisonment up to one year, or fine, or both. Section 38: a person convicted of an offence under section 35 or 37, in so far as it relates to the acceptance or utilisation of foreign contribution, who is again convicted of such an offence shall not accept any foreign contribution for five years from the date of the subsequent conviction.
Section 37: when no separate penalty exists
The section reads: "Whoever fails to comply with any provision of this Act for which no separate penalty has been provided in this Act shall be punished with imprisonment for a term which may extend to one year, or with fine or with both."
Three points follow from the words.
- A residual provision. It applies only where the Act "has not provided" a separate penalty. Where a section such as 33, 34 or 35 already provides a penalty for the conduct, section 37 does not apply to that conduct.
- Any provision. The failure may be of "any provision of this Act", not of a rule or an order. Sections 33 and 35 refer to rules and orders; section 37 does not. Read the section as printed.
- The measure. Up to one year, or fine, or both. The amount of the fine is not fixed in the Act.
If you think a duty you have missed may fall in section 37, a short legal consultation can help you assess it before a notice arrives.
What kind of failure falls here?
The text does not list examples, so this article does not guess. As a matter of method, a reader can test a duty in two steps: find the provision that imposes it, and check whether Chapter VIII (sections 33 to 36) provides a penalty for that conduct. If not, section 37 is the candidate. Duties of intimation and accounts in sections 18 and 19, for instance, are explained in the article on sections 18 to 20; whether a given failure falls in section 37 or in another penal section depends on its facts, and on the wording of each section. A false intimation under section 18 is dealt with by section 33(a), not by the residual section.
The penal ladder in Chapter VIII, with the maximum imprisonment in each section, is:
| Section | Conduct | Maximum imprisonment |
|---|---|---|
| 33 | Knowingly false intimation; fraud in seeking permission or registration | Six months, or fine, or both |
| 34 | Breach of a prohibitory order | Three years, or fine, or both, plus additional fine |
| 35 | Accepting, or assisting in accepting, foreign contribution in contravention | Five years, or fine, or both |
| 36 | (Fine only) item not available for confiscation | Fine up to five times the value or one thousand rupees, whichever is more |
| 37 | Failure to comply with a provision with no separate penalty | One year, or fine, or both |
The earlier sections are explained in the article on sections 33 and 34 and the article on sections 35 and 36.
Section 38: no foreign contribution for five years
The section begins "Notwithstanding anything contained in this Act" and reads: "whoever, having been convicted of any offence under section 35 or section 37, in so far as such offence relates to the acceptance or utilisation of foreign contribution, is again convicted of such offence shall not accept any foreign contribution for a period of five years from the date of the subsequent conviction."
| Element | Text of section 38 |
|---|---|
| First conviction | An offence under section 35 or section 37, in so far as it relates to the acceptance or utilisation of foreign contribution |
| Second conviction | Again convicted "of such offence" |
| Consequence | Shall not accept any foreign contribution for five years |
| Starting point | The date of the subsequent conviction |
| Override | "Notwithstanding anything contained in this Act" |
Note what is not in the text. The first conviction must be under section 35 or section 37; a conviction under section 33 or section 34 does not start the count on the words. The offence must relate to "the acceptance or utilisation of foreign contribution", so a section 37 conviction for an unrelated failure does not start it. And the five years run from the date of the "subsequent" conviction, that is, the second. The section does not say whether the two convictions must be for the same section, and it is silent on that; the words "of such offence" are the only guide, and the point should be taken up on advice.
The words "notwithstanding anything contained in this Act" mean the bar operates even against a person who otherwise holds a certificate or prior permission: for the five years, he "shall not accept any foreign contribution". The bar is on acceptance. The section does not itself say what happens to a certificate; cancellation and its separate three-year ineligibility are in section 14, explained in the article on section 14.
Example (invented). Mr. Harish Bhatt is convicted under section 35 for accepting foreign contribution in breach of the Act. Some years later he is convicted again of an offence under section 35 relating to acceptance of foreign contribution. From the date of the second conviction he may not accept any foreign contribution for five years.
Practical reading for boards
For organisations the message is not about prosecution as such, but about governance. First, track every duty in the Act to the section that gives its penalty; the gaps are where section 37 sits. Second, treat a first conviction of a trustee, director or office-bearer as a serious event for the organisation: under section 12(4)(d) and (e), convictions and pending prosecutions are part of the conditions for registration, as explained in the article on those conditions. Third, remember that offences by companies reach those in charge of the business under section 39, explained in the article on sections 39 and 40.
Need help understanding your exposure?
Exposure under the Act is easiest to manage before a notice arrives. Speak to our legal consultation team to map your duties to the sections that enforce them.
Key takeaways
- Section 37 punishes failure to comply with any provision for which no separate penalty is provided, with up to one year, or fine, or both.
- Section 38 bars acceptance of foreign contribution for five years after a second conviction under section 35 or 37 relating to acceptance or utilisation.
- The five years run from the date of the subsequent conviction.
- Sections 33 and 34 are not in the list that starts the count under section 38 on its words.
- Convictions also matter for registration conditions under section 12(4)(d) and (e).
Read next
- Sections 35 and 36: punishment for contravention and additional fine
- Sections 39 and 40: offences by companies and sanction for prosecution
- Section 41: compounding of offences
- Section 14: cancellation of certificate
Disclaimer: Based on the Foreign Contribution (Regulation) Act, 2010 as enacted, read with the Amendment Act, 2020 and the other amendments named in this article, and on the Foreign Contribution (Regulation) Rules, 2011 as amended by the notifications named (latest consulted: S.O. 3272(E) dated 22 June 2026), as consulted on 2 October 2026. No consolidated official text was available; some provisions rest on a third-party copy and are identified as such. Later amendments, notifications and Ministry of Home Affairs orders should be checked. This article is general information, not legal advice; check the official text before acting.