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of <h1>Court Grants Relief in Foreign Exchange Regulation Case, Delays Recovery Proceedings</h1> <h3>M Sathiyamoorthy Versus Foreign Exchange Regulation Appellate Board</h3> The court granted relief to the petitioner in a case challenging proceedings under the Foreign Exchange Regulation Act, 1973. The court directed the first ... Appeals to Appellate Board Issues:1. Challenge to proceedings under the Foreign Exchange Regulation Act, 1973.2. Failure of the first respondent to pass orders on the application to dispense with penalty deposit.3. Legality of the direction issued by the third respondent to deposit the penalty amount.4. Relief sought by the petitioner in light of pending appeal and inaction of the first respondent.Analysis:1. The petitioner challenged the proceedings under the Foreign Exchange Regulation Act, 1973, initiated by the second respondent, which resulted in the imposition of a penalty. The petitioner appealed to the first respondent against this order. However, the first respondent had not passed any orders on the petitioner's application to dispense with the penalty deposit, leaving the petitioner in a vulnerable position. The petitioner contended that without a stay order or dispensation of the penalty deposit, the second respondent could proceed with recovery actions. The petitioner sought relief through the writ petition due to the lack of action by the first respondent.2. The legal counsel for the petitioner argued that the first respondent's failure to exercise the power vested under the statute, as per the second proviso to section 52(2) of the Act, by not passing any orders on the application for dispensation of the penalty deposit, left the petitioner with no choice but to approach the court for relief. On the other hand, the counsel for the second respondent highlighted that in the absence of a stay order or dispensation of the penalty deposit by the first respondent, the second respondent was within their rights to pursue recovery of the penalty amount. The legal provision under section 52(2) clearly empowered the appellate authority to dispense with the penalty deposit, a power that had not been exercised in this case.3. The direction issued by the third respondent to deposit the penalty amount was challenged by the petitioner in the writ petition. The court noted that without an order of stay from the appellate authority, the third respondent was justified in issuing the direction for depositing the penalty amount. While the court found no illegality in the third respondent's action, it acknowledged the petitioner's predicament due to the pending appeal and the first respondent's inaction in deciding on the application for dispensation of the penalty deposit.4. In light of the pending appeal and the delay in the first respondent's decision on the penalty deposit dispensation application, the court deemed it necessary to grant relief to the petitioner in the interest of justice. The court directed the first respondent to dispose of the appeal within three months and ordered the third respondent not to initiate any recovery proceedings against the petitioner until the appeal was resolved. This decision aimed to provide the petitioner with protection against immediate penalty recovery actions while awaiting the appellate authority's decision, ensuring a fair opportunity for the petitioner to present their case.
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