LexMONOTOSH SAHA versus SPECIAL DIRECTOR, ENFORCEMENT DIRECTORATE AND ANR.
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[2008] 12 S.C.R. 444 ct- A MONOTOSH SAHA v. SPECIAL DIRECTOR, ENFORCEMENT DIRECTORATE AND ANR. (Civil Appeal No. 5188 of 2008) B AUGUST 21, 2008 -t • [DR. ARIJIT PASAYAT AND DR. MUKUNDAKAM SHARMA, JJ.] c Foreign Exchange Regulation Act, 1973: s.19(1) - Penalty - Pre-deposit of, as condition to hear appeal - Stay !Dispensation of predeposit - Grant of - Held: While granting stay, pending disposal of the matters before the concerned forum, though discretion is available, same has to be D exercised judicially - Petitions for stay should not be disposed of in routine manner - Where denial of interim relief may lead to public mischief, grave irreparable private injury or shake citizens' faith in the impartiality of ppblic )<' administration, interim relief can be given - Tribunal while E dealing with stay application has to consider materials placed by assessee relating to undue hardship and also to stipulate condition as required to safeguard the realization of penalty - On facts, appellant deposited penalty amount as directed by this Court - For balance amount demanded, with a view F to safeguard realization of penalty, appellant to furnish such security as may be stipulated by the Tribunal - On that being ~ done, appeal be heard without requiring further deposit - Interim order. The appellant allegedly acquired foreign exchange G contravening the provisions of s.8(1) of the Foreign Exchange Regulation Act, 1973 thereby rendering him liable to be proceeded under s.50 of the Act. After issuance of show cause notice and receipt of reply, the Special Director passed an order imposing penalty of H 444 ~ . MONOTOSH SAHA v. SPECIAL DIRECTOR, 445 ENFORCEMENT DIRECTORATE & ANR. ·-f Rs.25 lakhs on the appellant. The appellant filed appeal A before the Tribunal and an application for dispensing with the requirement of pre-deposit. The Tribunal passed an order directing deposit of 60% of penalty amount for entertaining the appeal. On appeal, High Court held that no case for hardship was made out either before the B + Tribunal or before it, therefore there was no scope for interference with the order of Tribunal. .... In appeal to this Court, appellant contended that case for dispensing with pre-deposit was made out; and that in compliance with this Court's interim order dated c 5.2.2007 the amount of Rs.10,00,000/- was deposited with the concerned Directorate. Disposing of the appeal, the Court HELD: 1. While granting stay, pending disposal of D the .matters before the concerned forum, though discretion is available, same has to be exercised judicially. It is true that on merely establishing a prima facie case, interim order of protection should not be passed. But if on a cursory glance, it appears that the demand raised E has no leg to stand, it would be undesirable to require the assessee to pay full or substantive part of the demand. Petitions for stay should not be disposed of in a routine manner unmindful of the consequences flowing from the order requiring the assessee to deposit full or part of the F demand. There can be no rule of universal application in such matters and the order has to be passed keeping in view the factual scenario involved. Where denial of interim relief may lead to public mischief, grave irreparable private injury or shake citizens' faith in the impartiality of public G administration, interim relief can be given. [Para 6 & 8] ~ [448-G, 449-B-D] Silliguri Municipality and Ors. v. Amalendu Oas and Ors. AIR (1984) SC 653; Mis Samarias Trading Co. Pvt. Ltd. v. S. Samuel and Ors. AIR (1985) SC 61; Assistant H 446 SUPREME COURT REPORTS [2008] 12 S.C.R. A Collector of Central Excise v. Dunlop India Ltd. AIR (1985) \-· SC 330 - relied on. 2.1. There are two important expressions in Section 19(1) of the Foreign Exchange Regulation Act, 1973. One is undue hardship. This is a matter within the special 8 knowledge of the applicant for .waiver and has to be established by him. A mere assertion about undue hardship + would not be sufficient. For a hardship to be 'undue' it • must be shown that the particular burden to observe or perform the requirement is out of proportion to the nature C of the requirement itself, and the benefit which the applicant D ·would derive from compliance with it. The word "undue" adds something more than just hardship. It means an excessive hardship or a hardship greater than th
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