Pre-deposit waiver under FERA is an interlocutory discretion to prevent undue hardship and protect appeal rights.

Under FERA, the Appellate Board's power to dispense with pre-deposit of penalty is an interlocutory discretion meant to prevent undue hardship and preserve the right of appeal. The text explains that such waiver or reduction is not a decision on the merits, and the Board may modify an earlier deposit condition if later circumstances justify relief. Judicial review is confined to whether that discretion was exercised judiciously and without perversity. On the facts discussed, the Board's partial waiver and extension of time were treated as reasonable because they reflected financial hardship and the deposits already made.

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Issues: Whether the Appellate Board could, under the second proviso to section 52(2) of the Foreign Exchange Regulation Act, 1973, modify its earlier pre-deposit order and grant extension or waiver of deposit on the ground of undue hardship.

Analysis: The power to dispense with deposit under the second proviso to section 52(2) is discretionary and must be exercised judicially to prevent hardship and advance justice. The requirement of pre-deposit is only a procedural step at an interlocutory stage and does not decide the appeal on merits. An order made at that stage can be altered or varied by the Appellate Board if subsequent circumstances justify such relief. Where the Board found that insistence on further deposit would cause undue hardship and required only a limited additional sum, its exercise of discretion could not be characterised as arbitrary or perverse.

Conclusion: The Appellate Board was competent to modify the pre-deposit condition and waive part of the amount, and the impugned orders were valid.

Ratio Decidendi: An order dispensing with or conditioning pre-deposit under the second proviso to section 52(2) of the Foreign Exchange Regulation Act, 1973 is interlocutory in nature and may be modified on a judicial assessment of undue hardship and changed circumstances.

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