Sections 42 and 43 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.
Section 42 gives an inspecting officer, while an inspection is going on, three powers: to call for information, to require production of documents or things, and to examine persons who know the facts. Section 43 lets an authority specified by the Central Government investigate an offence under the Act with the powers of an officer-in-charge of a police station.
This article reads sections 42 and 43 as per the Act as enacted, read with the Foreign Contribution (Regulation) Amendment Act, 2020 (33 of 2020); no paragraph of that Amendment Act changes either section. Later amendments should be checked.
An inspecting officer under section 23 who is authorised by the Central Government for this purpose may, during an inspection, call for information, require documents or things to be produced, and examine any person acquainted with the case (section 42). Separately, any offence under the Act may also be investigated by such authority as the Central Government may specify, which has all the powers of an officer-in-charge of a police station investigating a cognisable offence (section 43).
Section 42: who holds the power
Section 42 is not a stand-alone power. It belongs to "any inspecting officer referred to in section 23 who is authorised in this behalf by the Central Government". Two conditions follow from the words:
- The officer must be an inspecting officer in the sense of section 23, that is, an officer or authority authorised by general or special order, where the Central Government has recorded in writing a ground to suspect a contravention by a political party, person, organisation or association. See the article on sections 23 and 24.
- The officer must also be authorised "in this behalf" for section 42. The section does not say whether this is the same order as the one under section 23. The text does not answer whether this is a separate order, so when an officer asks for something under section 42, it is sensible to ask which order authorises the power. If you are facing such a request, our legal dispute resolution practice can look at the order with you.
The powers can be used only "during the course of any inspection of any account or record maintained by any political party, person, organisation or association in connection with the contravention of any provision of this Act". Both limbs matter: there must be an inspection in progress, and it must be connected with a contravention of the Act.
The three powers in section 42
| Clause | Power | What the text says |
|---|---|---|
| (a) | Call for information | "from any person", for the purpose of satisfying himself whether there has been any contravention of the Act or of a rule or order made under it |
| (b) | Require production | any person to produce or deliver any document or thing "useful or relevant to such inspection" |
| (c) | Examine | any person "acquainted with the facts and circumstances of the case related to the inspection" |
Points to note from the table:
- Clause (a) reaches "any person", not only the person whose account is being inspected. Clause (c) likewise reaches any person acquainted with the facts.
- Clause (b) is tied to the inspection: the document or thing must be "useful or relevant" to it.
- Section 42 does not say what happens if a person does not comply, and does not itself prescribe a penalty. Penalty sections are separate; see the article on sections 35 and 36 and the article on sections 37 and 38 for the punishments the Act prints. Whether a given refusal falls under any of them depends on the facts.
- Section 42 gives no power of seizure. Seizure of accounts and records is in section 24, which applies after inspection if the inspecting officer has reasonable cause to believe that a provision of the Act or of any other law relating to foreign exchange has been or is being contravened.
Example (invented). An inspecting officer is inspecting the accounts of the Gram Vikas Mandal under an order of the Central Government. The officer asks the Mandal's former accountant, who no longer works there, to explain certain entries, and asks the secretary to hand over a register relevant to the inspection. Clause (a) and clause (c) cover the questions to a person acquainted with the facts, and clause (b) covers the register, if it is useful or relevant to the inspection.
Section 43: investigation of offences
Section 43 begins "Notwithstanding anything contained in the Code of Criminal Procedure, 1973". The Act still cites that Code, so check the current law for the corresponding provision. It then says "any offence punishable under this Act may also be investigated into by such authority as the Central Government may specify in this behalf".
Three features:
- "Also". Investigation by the specified authority is in addition to whatever other investigation the law permits. The section does not say that other agencies are excluded.
- The authority is specified by the Central Government. No notification specifying an authority is held among the texts consulted, so this article names none. Check the current notification before relying on any authority's power.
- Police powers. The specified authority has "all the powers which an officer-in-charge of a police station has while making an investigation into a cognisable offence". The section does not list those powers; they come from the investigation law the section refers to.
Rule 22 (read in the article on rules 22 and 23) requires the investigating agency that conducts any investigation under the Act to furnish reports to the Central Government on a quarterly basis, indicating the status of each case entrusted to it. That is a duty of the agency, not of the person investigated.
How the two sections fit together
| Point | Section 42 | Section 43 |
|---|---|---|
| Who acts | Inspecting officer authorised in this behalf | Authority specified by the Central Government |
| When | During an inspection under section 23 | For an offence punishable under the Act |
| Object | Satisfy himself whether there has been a contravention | Investigate the offence |
| Powers | Call for information, require documents, examine persons | All the powers of an officer-in-charge of a police station for a cognisable offence |
An inspection can therefore come first and an investigation later, but the text does not make one a condition of the other.
Need help with an inspection or an investigation?
If an inspecting officer or an investigating authority has asked you for documents or statements, the order authorising the officer and the scope of the request are the first things to examine. Our legal dispute resolution team can go through the order, the questions and your records with you.
Key takeaways
- Section 42 powers belong to an inspecting officer under section 23 who is authorised in this behalf, and arise only during an inspection connected with a contravention.
- The three powers are to call for information, to require production of documents or things, and to examine persons acquainted with the facts.
- Section 43 allows investigation by an authority the Central Government specifies, with the powers of an officer-in-charge of a police station.
- The specifying notification is not in the texts consulted; check it before relying on any authority.
- Seizure of records is a separate power in section 24.
Read next
- Sections 23 and 24: inspection and seizure of accounts or records
- Sections 44 to 47: returns, protection, directions and delegation
- Section 41: compounding of offences
- Rules 22 and 23: returns by the investigating agency
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.