2008 (9) TMI 852 - HC - FEMA

Stay/Dispensation of pre-deposit - Financial hardship - Clandestine banking activities - Held that - the financial position of the petitioner should be such as can satisfy the tribunal that in case applicant is held liable he will be in a position to deposit the amount immediately. So far as the contention of the petitioner that he was not served with the notice of personal hearing is concerned it being a question of fact will be considered by the tribunal at the final hearing of the appeal. So far as the contention of the petitioner that it is not established that at the relevant time Tiger Memon was not residing in India is concerned goning through the record there is sufficient material on record to show that the petitioner was dealing in money with persons who were not residing in India. The record reveals that two brothers of Tiger Memon were living in Dubai and were collecting money there in foreign currency. It is also on record that in 1992 Tiger Memon also went to Dubai. Appeal dismissed. The litigant like petitioner cannot be helped in extraordinary jurisdiction of this Court under Article 226 of the Constitution of India.

Summary

Issues:
Challenge to tribunal's order on predeposit condition for appeal.

Analysis:
The petitioner challenged the tribunal's order imposing a penalty of Rs. 35,00,000 under Section 50 of FERA for unauthorized financial transactions. The tribunal found the petitioner deeply involved with a notorious individual responsible for a terrorist attack. The petitioner argued lack of notice post change in adjudicating authority, invoking principles of natural justice. The petitioner cited judgments emphasizing undue hardship and lack of personal hearing. The petitioner's involvement in clandestine banking activities was highlighted, even after prior arrest. The TADA Court's judgment acquitted the petitioner of conspiracy but confirmed his association with terrorist activities. The petitioner's financial constraints due to prior custody and ongoing legal proceedings were presented as reasons for non-compliance with predeposit conditions.

Legal Jurisdiction:
The petition was filed under Article 226 of the Constitution, granting extraordinary jurisdiction to ensure justice and public interest. The court's discretion in dispensing with predeposit requirements is crucial and must align with public interest. The court reviewed the confessional statement implicating the petitioner in illegal financial activities and association with criminal elements. The court emphasized the need to safeguard revenue interests and ensure the petitioner's ability to meet financial obligations if found liable.

Conclusion:
The court dismissed the petition, considering the petitioner's extensive involvement in unlawful activities and association with criminal elements. The court found the petitioner's financial constraints insufficient to warrant dispensing with the predeposit requirement. The court stressed the importance of upholding public interest and revenue protection in such cases. The petitioner's arguments regarding lack of notice and residency of accomplices were deemed insufficient to alter the tribunal's decision. Overall, the court held that extraordinary jurisdiction under Article 226 could not assist the petitioner in this matter.