PARASRAMPURIA INTERNATIONAL Vs. UNION OF INDIA & ANR

JUDGEMENT

(1.) By order of 1st May, 2007 the Appellate Tribunal for Foreign Exchange refused to modify or review its order dated 6th December, 2006 whereby the appellant was directed to furnish a bank guarantee of 20% of the penalty amount as a pre-condition of hearing the appeal, as per provisions of Foreign Exchange Regulation Act. Since the appellant had not complied with the condition of furnishing bank guarantee of the 20% of the penalty amount within the time period prescribed by the Appellate Tribunal and thereafter extended by the Appellate Tribunal up to 15th February, 2007, the appeal was dismissed vide order dated 1.5.2007. The applicant has filed this application for stay of proceedings against it as a consequence of dismissal of appeal.

(2.) It is to be noted that the appellant did not prefer an appeal against the order dated 6th December, 2006 whereby the Appellate Tribunal had asked the appellant to give a bank guarantee of 20% of the penalty amount within 60 days of the order. The appeal has been preferred only against the order dated 1st May, 2007 whereby because of non-compliance of the pre-condition of giving bank guarantee the appeal was dismissed.

(3.) The relevant facts are that a penalty of Rs. 10,03,00,000/- was imposed by the adjudicating authority on the appellant after taking into account the incriminating evidence and material against the appellant company. Against this order of imposition of penalty, the appellant preferred an appeal before the Appellate Tribunal and the appeal was admitted for hearing by the Tribunal without imposing any condition of pre-deposit of penalty as provided in Section 19 of FERA. Against the order of the Tribunal of admitting appeal to hearing without satisfying the condition of pre-deposit. Union of India preferred an appeal before this Court and this Court vide order dated 13th July, 2006 allowed the appeal and gave directions to the Appellate Tribunal to discuss the circumstances warranting exemption from the precondition of depositing the penalty which was more than Rs. 10 crore. Thereafter, both the parties again appeared before the Appellate Authority and Appellate Tribunal passed order dated 6th December, 2006. A perusal of order dated 6th December, 2006 would show that the appellant had taken the plea before the Tribunal that the appellant was a BIFR company and was unable to make the pre-deposit of the penalty amount due to financial difficulties and the condition of pre-deposit would cause financial hardship to the appellant company. On the other hand Union of India had brought to the notice of the Tribunal that the Annual Report of the year 2005-06 of the Appellant Company showed that the sales of the appellant company in that year were over Rs. 139 crore, besides other income and it also showed that cash and bank balance of the appellant company was also over Rs. 2.65 crore. That apart, the Annual Report showed the value of the immovable property owned by the appellant company over Rs. 105 crore. It was also seen that the value of the immovable property had been shown in the Annual Report after taking into account the depreciation, whereas in reality the value of immovable property had got appreciated considerably looking into the boom in realty market. It was also contended before the Appellate Tribunal that the appellant had failed to furnish the evidence showing the utilization of remittance of foreign exchange and there was no prima facia case in favor of the appellant company. The Tribunal after taking into account the financial position of the company came to the conclusion that no financial hardship would be caused if the appellant was directed to furnish unconditional bank guarantee for 20% of the penalty amount within 60 days. The appellant company did not challenge this order and in fact sought more time from the Tribunal for furnishing bank guarantee. The time was extended up to 15th February, 2007.