2019 (6) TMI 964 - HC - FEMA

Stay of demand - waiver of pre-deposit - Tribunal dismissing the appeals for non-prosecution - HELD THAT - The appeals filed before the Tribunal could not have been dismissed for non-prosecution. Yet, we may point out that the conduct of the appellants in not appearing for several hearings also cannot be appreciated. We have to necessarily interfere with the common order passed by the Tribunal dated 14-9-2018, which was communicated to the appellants on 25-9-2018. So far as the conditional order passed by the Tribunal is concerned, considering the financial position pleaded by the appellants and their case that they are unable to realize export production in spite of their diligent efforts, we are of the considered view that the appellants have made out a prima facie case. However, this observation is made only for the purpose of imposing a condition on the appellants, so that the appeals before the Tribunal can be heard and disposed of on merits. Accordingly, CMA disposed of by slightly modifying the common order passed by the Tribunal by directing the appellants to deposit with the first respondent namely the Special Director, Enforcement Directorate, Government of India, 50% each of the penalty amounts imposed individually and furnish a bond for the balance 50% each and keep the bond alive till the appeals are heard and disposed of on merits by the Tribunal. No costs. Consequently, the connected CMPs are closed. The common order passed by the Tribunal dismissing the appeals for non-prosecution are set aside and the appeals are restored to the file of the Tribunal. The appellants are granted eight weeks time from the date of receipt of a copy of this judgment to deposit 50% each as directed above. Subject to the deposit of 50% each by the appellants within the time prescribed, the Tribunal shall fix a date for hearing of the appeals and pass orders on merits

Summary

Issues:
1. Challenge to the order passed by the Appellate Tribunal for Foreign Exchange, New Delhi regarding stay and waiver of pre-deposit in adjudication orders.
2. Dismissal of appeals for non-prosecution by the Tribunal.
3. Interpretation of relevant rules for dismissal of appeals for non-prosecution.
4. Financial hardship of appellants and the need for modification of the Tribunal's order.

Analysis:
1. The appeals filed by the firm and the partner challenged the common order passed by the Appellate Tribunal for Foreign Exchange, New Delhi, regarding stay and waiver of pre-deposit in adjudication orders. The main issue raised was whether the Tribunal correctly dismissed the appeals for non-prosecution and whether the appellants demonstrated financial hardship to warrant a modification of the order.

2. The Tribunal dismissed the appeals for non-prosecution, citing lack of interest by the appellants in pursuing the appeals. However, the rules governing the procedure before the Tribunal do not provide for rejection of an appeal for non-prosecution in case of non-appearance of the applicant. Legal precedents were cited to support the view that appeals should be decided on merits and not dismissed for default of appearance.

3. The Tribunal's action in dismissing the appeals for non-prosecution was found to be incorrect based on legal principles established in previous cases. While the conduct of the appellants in missing several hearings was criticized, it was concluded that the appeals could not have been dismissed for non-prosecution. The Tribunal was directed to restore the appeals to its file for further proceedings.

4. Regarding the financial hardship of the appellants, the Court acknowledged their plea and modified the Tribunal's order. The appellants were directed to deposit 50% of the penalty amounts individually and furnish a bond for the remaining 50% to ensure the appeals could be heard and decided on merits. The Court emphasized the need to balance the financial constraints of the appellants with the requirements of the case.

In conclusion, the High Court of Madras addressed the issues raised by the appellants regarding the Tribunal's orders, ensuring that the appeals were not dismissed unjustly and providing a modified direction to accommodate the financial circumstances of the appellants while allowing for a fair hearing on the merits.