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Interpretation of the expression "Undue hardship" in Proviso to Section 19 of FEMA. Analysis: The judgment revolves around the interpretation of the term "undue hardship" in the context of a case where a bank was required to make a pre-deposit of 50% of a penalty amount to appeal an order under FEMA. The petitioner argued that "undue hardship" should not be limited to financial hardship only but should also consider cases where a party has a strong prima facie case. The court referred to various legal definitions and precedents to explain that "undue hardship" includes situations where the burden imposed is disproportionate to the fault or guilt. It highlighted that a strong prima facie case can be a valid reason for waiver of deposit, even without financial hardship. The judgment further analyzed similar provisions in other laws, such as the Customs Act and Central Excise Act, to establish the principles for granting waiver of deposit. It emphasized that the existence of a prima facie case is crucial, and if a party has a very strong case or errors in the order are evident, waiver of pre-deposit can be granted to avoid undue hardship. The court outlined factors to be considered, including balance of convenience, financial hardship, capacity to pay, and irreparable loss, while exercising judicial discretion in granting waiver of deposit. In the specific case under consideration, the court examined the facts where the bank was penalized for accepting deposits without proper authorization under FERA. The court noted that the bank had a strong prima facie case and raised questions about negligence leading to abetment of an offense. It acknowledged the arguments presented by both parties and concluded that the petitioner should deposit 50% of the penalty amount within a specified time for the appeal to be heard and disposed of. The judgment allowed the writ petition to the extent of directing the petitioner to make the required deposit within the stipulated timeframe for further legal proceedings. Overall, the judgment delves into the nuanced interpretation of "undue hardship" in the context of FEMA, citing legal definitions, precedents, and principles from related laws to guide the decision-making process regarding the waiver of pre-deposit requirements in appeals under FEMA.
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