2010 (2) TMI 582 - HC - FEMA

Whether the order of the Special Director itself suffered from serious irregularities and illegalities? Whether more than prima facie case has been made out by each of the Petitioners herein in their appeals before the Appellate Tribunal? Held that - It appears that the interests of justice would be served if the impugned order of the Appellate Tribunal is modified, and it is directed that the Petitioners appeal should be heard on merits now that each of them has deposited 15 per cent of the penalty amount as directed by this Court. The impugned order of the Appellate Tribunal will stand modified accordingly. The Appellate Tribunal will proceed with the final hearing of the Petitioners appeals and pass a final order thereon within a period of six months from today.

Issues:
1. Rejection of prayer for waiver of pre-deposit by the Appellate Tribunal.
2. Consideration of merits of the case by the Appellate Tribunal.
3. Financial condition of the petitioners not being considered by the Appellate Tribunal.
4. Modification of the impugned order of the Appellate Tribunal by the High Court.

Detailed Analysis:
1. The High Court addressed the issue of the rejection of the prayer for waiver of pre-deposit by the Appellate Tribunal in two writ petitions. The Appellate Tribunal had directed the petitioners to deposit their entire penalty amounts within 30 days. The High Court, after considering the materials on record, granted limitation protection and allowed the Tribunal to proceed with the hearing of the appeal on its merit. The petitioners were required to deposit 15% of the penalty amount within eight weeks to continue the appeal process.

2. The High Court further analyzed the consideration of the merits of the case by the Appellate Tribunal. The petitioners contended that the order of the Special Director had serious irregularities and illegalities, which were not addressed by the Tribunal. The financial condition of the petitioners was also brought up, stating that the Tribunal did not consider it adequately. The High Court found that a prima facie case had been made out by the petitioners in their appeals, and therefore directed the Appellate Tribunal to hear the appeals on merits after the petitioners had deposited 15% of the penalty amount.

3. Regarding the financial condition of the petitioners not being considered by the Appellate Tribunal, the High Court acknowledged the submissions made by the petitioners' counsel. It was argued that the Tribunal had not appropriately assessed the financial standing of the petitioners, assuming they had sufficient assets due to their dealings in substantial wealth. The High Court took this into consideration and modified the impugned order of the Appellate Tribunal, allowing the appeals to be heard on merits after the petitioners had made the required deposit.

4. Lastly, the High Court focused on the modification of the impugned order of the Appellate Tribunal. It directed that the appeals of the petitioners should be heard on merits, with the impugned order being modified accordingly. The Appellate Tribunal was instructed to pass a final order on the appeals within six months, ensuring that no observations from the previous order would influence the final decision. The petitioners were granted the opportunity to raise their points before the Appellate Tribunal, which would consider each point on its merits and provide a reasoned order.

In conclusion, the High Court disposed of the petitions and pending applications, emphasizing that a certified copy of the order should be delivered to the Appellate Tribunal promptly.

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