M. Sathiyamoorthy vs Foreign Exchange Regulation Appellate Board and others

Jagadeesan, J.—The petitioner has filed the writ petition for issue of a writ of certiorarified mandamus to quash the proceedings of the third

respondent dated January 27, 1995, which is the consequential order of the second respondent in his proceedings dated October 25, 1994, and

further to direct respondents Nos. 2 to 4 not to interfere with the petitioner''s peaceful possession and enjoyment of the movable and immovable

properties situated at No. C-10, Housing Board Quarters, Todhunter Nagar, Saidapet, Madras-15.

The case of the petitioner is that the second respondent initiated proceedings against the petitioner for contravention of the Foreign Exchange

Regulation Act, 1973 (hereinafter referred to as ""the Act""). After a full-fledged enquiry, he has passed an order on November 4, 1993, imposing a

penalty of Rs. 18,100 for such contravention. A sum of Rs. 10,000 was seized from the petitioner''s house and that amount was adjusted towards

the penalty and the petitioner was directed to pay the balance of Rs. 8,100.

Against the said order of the second respondent, the petitioner has preferred an appeal to the first respondent u/s 52 of the Act. Along with the

appeal, he has also filed an application u/s 52(2) of the Act to dispense with the deposit of the balance of penalty amount as a condition precedent

to file the appeal. The appeal is still pending and the first respondent has not passed any order on the application to dispense with the deposit of the

penalty. While so, now the third respondent initiated action for the recovery of the balance penalty amount of Rs. 8,100. The petitioner has filed

this petition challenging the action of the third respondent.

Notice of motion was ordered on February 17, 1995. One Mr. Subramanian took notice for the respondents. The case was adjourned by 10

days. On February 28, 1995, when the case was listed, this court directed the office to print the name of Mr. V. Rangarajan, advocate, and

adjourned the case by one week. On March 16, 1995, the case was listed and at request it was adjourned by two weeks. The case was posted

for final disposal on July 3, 1995.

Heard both counsel. Mr. Rangarajan is appearing for the second respondent. Learned counsel for the petitioner contended that against the

order of the second respondent levying penalty, the petitioner has preferred an appeal on the file of the first respondent and the same is pending.

The second proviso to section 52(2) of the Act empowers the first respondents to dispense with the deposit of the penalty amount. The first

respondent has failed to exercise their power vested under the statute by not passing any orders on the application filed by the petitioner under this

provision. Hence, the petitioner is helpless and has no other forum except to approach this court for relief.

Learned counsel for the second respondent contended that though the petitioner has preferred an appeal before the first respondent, in the

absence of any order from the first respondent, either granting stay of the operation of the order of the second respondent or dispensing with the

deposit of the penalty amount imposed by him it is always open to the second respondent to take action for recovery of the penalty amount

imposed by him. He also cited an unreported judgment made in Kamal Batcha v. Deputy Director of Enforcement (W. P. No. 14431 of 1993).

Section 52(2) of the Act reads as follows :

Appeal to Appellate Board. -... (2) Any person aggrieved by such order may, after depositing the sum imposed by way of penalty u/s 50 and

within forty-five days from the date on which the order is served on the person committing the contravention, prefer an appeal to the Appellate

Board :

Provided that the Appellate Board may entertain any appeal after the expiry of the said period of forty-five days, but not after ninety days, from the

date aforesaid if it is satisfied that the appellant was prevented by sufficient cause from filing the appeal in time :

Provided further that where the Appellate Board is of opinion that the deposit to be made will cause undue hardship to the appellant, it may, in its

own discretion, dispense with such a deposit either unconditionally or subject to such conditions as it may deem fit.

From the above provision, it is clear that the appellate authority is vested with the power to dispense with the deposit of the penalty amount as a

condition precedent to entertain the appeal. The petitioner has filed the necessary application for dispensing with the deposit of the penalty amount.

However, the first respondent has not passed any orders on the application filed by the petitioner, which would amount of failure of exercise of the

power. The first respondent ought to have passed an order either rejecting the application filed by the petitioner or allowing the same by dispensing

with the deposit of the penalty amount. So long as the application is pending, the petitioner''s liability to deposit the same is also in question.

The petitioner has field this writ petition to quash the order of the third respondent dated January 27, 1995. So virtually this is not an order but it

is only a direction issued to the petitioner by the third respondent, requesting the petitioner to deposit the penalty amount pursuant to the order of

the second respondent dated October 25, 1994. As long as the petitioner is not able to get an order of stay from the appellate authority and

produce the same before the third respondent, the third respondent is well within the jurisdiction in issuing the direction to the petitioner to deposit

the penalty amount. Hence, there is no illegality in the proceeding of the third respondent dated January 27, 1995. But, however, taking into

consideration the pendency of the appeal before the first respondent and the inaction of the first respondent in passing orders on the application

filed by the petitioner under the second proviso to section 52(2) of the Act, I think, in the interest of justice, some relief should be granted to the

petitioner.

Hence, I direct the first respondent to dispose of the appeal filed by the petitioner against the order of the second respondent in his proceedings

No. DA/MAS/15.94, dated October 25, 1994, within three months from the date of receipt of a copy of the order in this writ petition. Till then,

the third respondent is directed not to take any recovery proceedings against the petitioner in respect of the penalty levied by the second

respondent in the above-said proceedings dated October 25, 1994. The writ petition is ordered accordingly.