FEMA pre-deposit waiver turns on undue hardship, prima facie case, and balance of convenience at the interim stage.

Waiver of pre-deposit under the proviso to section 19(1) of FEMA depends on demonstrated undue hardship, supported by material and not bare assertion. At the waiver stage, the appellate forum considers only a prima facie case, balance of convenience, and whether insisting on deposit would be disproportionate, without entering a detailed merits review. On the record, the appellant was found not shown to have actually operated the foreign accounts, and the existing findings left room for a different conclusion if a will had been produced. The pre-deposit condition was therefore set aside and the matter remitted for decision on merits without insisting on deposit.

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Issues: (i) whether the appellant had made out a case for waiver of pre-deposit under the proviso to section 19(1) of the Foreign Exchange Management Act, 1999 on the ground of undue hardship; (ii) whether, for the purpose of dispensing with pre-deposit, the appellant had shown a prima facie case and balance of convenience in her favour.

Issue (i): whether the appellant had made out a case for waiver of pre-deposit under the proviso to section 19(1) of the Foreign Exchange Management Act, 1999 on the ground of undue hardship.

Analysis: The proviso to section 19(1) empowers the appellate forum to dispense with deposit only when the applicant establishes that making the deposit would cause undue hardship. Undue hardship is not made out by a bare assertion and must be shown by material placed by the applicant. In the present matter, the record did not show that the appellant had actually operated the foreign accounts, and the adjudicating authority itself indicated that the position would have been different if a will assigning the assets to another person had been produced. In those circumstances, insistence on pre-deposit was not justified.

Conclusion: The appellant was held entitled to waiver of pre-deposit on the ground of undue hardship.

Issue (ii): whether, for the purpose of dispensing with pre-deposit, the appellant had shown a prima facie case and balance of convenience in her favour.

Analysis: At the stage of considering waiver, the authority is not to conduct a detailed inquiry into the merits but only to see whether a prima facie case exists, where the balance of convenience lies, and whether deposit would cause hardship. The accounts were frozen, no material established active operation of the account by the appellant, and the findings recorded by the adjudicating authority left room for a different conclusion if a will had existed. On that limited scrutiny, the appellant satisfied the threshold for waiver.

Conclusion: The appellant was held to have established a prima facie case and the balance of convenience in her favour.

Final Conclusion: The pre-deposit condition was set aside, the appeal was sent back to the appellate tribunal for decision on merits without insisting on deposit, and the appellant obtained the interim relief sought.

Ratio Decidendi: Waiver of pre-deposit under section 19(1) of FEMA depends on demonstrated undue hardship, and at that stage the decision turns on a prima facie case, balance of convenience, and whether insistence on deposit would be disproportionate.

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