Sections 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 43 says that rights, obligations, liabilities, proceedings and appeals arising from section 13 do not end on the death or insolvency of the person liable. They pass to the legal representative, the official receiver or the official assignee, and a legal representative is liable only up to the estate. Section 44 protects the Government, the Reserve Bank and officers for what they do in good faith under the Act.
Section 43 keeps any right, obligation, liability, proceeding or appeal arising from section 13 alive after the death or insolvency of the person liable; it devolves on the legal representative, the official receiver or the official assignee. A deceased person's legal representative is liable only to the extent of the inheritance or estate. Section 44 says no suit, prosecution or other legal proceeding lies against the Central Government, the Reserve Bank, their officers or any other person exercising power under the Act for anything done or intended to be done in good faith.
About this article
This article is based on the consolidated text of the Act consulted (amendments shown up to Act 50 of 2019). Later amendments should be checked. Sections 43 and 44 are printed without a footnote of amendment. Section 13 sets out the penalties; see our post on contravention and penalties under section 13. If a liability under the Act has arisen on a death or an insolvency in the family or the business, our legal consultation team can help you understand what passes and to whom.
Section 43: death or insolvency
The section reads: any right, obligation, liability, proceeding or appeal arising in relation to the provisions of section 13 shall not abate by reason of death or insolvency of the person liable under that section, and upon such death or insolvency such rights and obligations shall devolve on the legal representative of such person or the official receiver or the official assignee, as the case may be.
What it covers:
| Item | Position under section 43 |
|---|---|
| Subject matter | Rights, obligations, liabilities, proceedings and appeals arising in relation to section 13 |
| Events | Death or insolvency of the person liable under section 13 |
| Effect | They do not abate |
| Who takes over | The legal representative (on death), or the official receiver or the official assignee (on insolvency), "as the case may be" |
Points to note.
- Only section 13. The words are "in relation to the provisions of section 13". Matters that arise under other sections are not within these words, and the Act does not say what happens to them.
- Wide list. The text lists rights, obligations, liabilities, proceedings and appeals. A pending adjudication under section 16 or an appeal under section 17 or 19 does not lapse because the person has died or become insolvent.
- "As the case may be". The phrase links death with the legal representative, and insolvency with the official receiver or official assignee. The Act does not say which of the latter two applies in a given case; that depends on the insolvency law, which this Act does not name.
- No new liability for the estate beyond the person's own. What passes is what arose under section 13 for the person.
The proviso: limited to the estate
A legal representative of the deceased shall be liable only to the extent of the inheritance or estate of the deceased. The proviso is stated for the deceased person's legal representative. The text does not state a matching limit for the official receiver or the official assignee; the Act is silent on any limit for them.
For a family, the result is that the liability follows the estate. A legal representative is not to be asked to pay out of his own funds beyond what he took from the estate; the proviso uses "inheritance or estate" and does not define either. The Act also does not say how the extent of the estate is to be proved or by whom.
What the section does not do. It does not say a penalty is reduced because of death. It does not give a time for substituting a legal representative in a proceeding. It does not describe, in terms, what a death means for a prosecution; for the prosecution provisions that sit in section 13, see our article on section 13(1A) to (1D).
Section 44: bar of legal proceedings
No suit, prosecution or other legal proceeding shall lie against:
- the Central Government;
- the Reserve Bank;
- any officer of that Government or of the Reserve Bank; or
- any other person exercising any power or discharging any functions or performing any duties under the Act,
for anything in good faith done or intended to be done under the Act or any rule, regulation, notification, direction or order made thereunder.
Reading the words:
- Good faith. The protection is for what is done, or intended to be done, in good faith. The Act does not define good faith, and nothing in section 44 says that an act done otherwise than in good faith is protected.
- Done or intended. It covers what is intended as well as what has been done.
- Any other person. It reaches beyond the Government and the Bank to others exercising power or performing duties under the Act. The Act does not list who is meant; the words are "any other person exercising any power or discharging any functions or performing any duties".
- Wide instruments. The protection extends to action under the Act or any rule, regulation, notification, direction or order made under it.
This is different from section 34, which closes the civil courts for matters the authorities are empowered to determine. Section 44 protects the actor; section 34 limits the forum. See our article on sections 32 to 34.
It is also different from the liability of a company's officers under section 42, which is about who may be proceeded against for a contravention; see our article on section 42.
Example. A hypothetical importer, Mr Verma, is the subject of a penalty proceeding under section 13 when he dies. The proceeding does not abate. His son, as legal representative, takes his place. The penalty, if imposed, can be recovered only up to the value of the inheritance or estate. Had Mr Verma instead become insolvent, the right and the liability would devolve on the official receiver or the official assignee, as the case may be. Separately, an officer of the Reserve Bank who acted in good faith under a direction made under the Act is protected from a suit for that action by section 44.
What the Act does not say
- It does not define "legal representative", "official receiver" or "official assignee", or name the law that governs insolvency.
- It does not say what "good faith" means in section 44.
- It does not say how a legal representative proves the extent of the estate.
- It does not set a limit on the official receiver or official assignee comparable to the estate limit.
Need help where a liability passes on?
Where a person under a section 13 proceeding has died or become insolvent, the questions are who now stands in his place and how far. Our legal consultation team can help you review the proceeding and the estate position.
Key takeaways
- Section 43: rights, obligations, liabilities, proceedings and appeals arising from section 13 do not abate on death or insolvency.
- They devolve on the legal representative, the official receiver or the official assignee, as the case may be.
- A deceased person's legal representative is liable only to the extent of the inheritance or estate.
- Section 44: no suit, prosecution or other legal proceeding for anything done or intended to be done in good faith under the Act.
Read next
- Section 42: contravention by companies and liability of officers
- Sections 32–34: representation in appeals, public servants and the bar on civil courts
- Section 13(1A) to (1D): penalty, confiscation and prosecution for assets held outside India
- Adjudication Under FEMA: Section 16
Disclaimer: Based on a consolidated text of the Foreign Exchange Management Act, 1999 showing amendments up to Act 50 of 2019, as consulted on 2 October 2026. Limits, forms, timelines and procedures are set by rules, regulations and Reserve Bank directions made under the Act; they change from time to time and are not covered here. Later amendments should be checked. This article is general information, not legal advice; check the official text before acting.