Pre-deposit condition modified where security and asset disclosure were accepted instead of full cash deposit.

The pre-deposit requirement for challenging a penalty was modified because the surrounding facts justified indulgence and the petitioner offered adequate protective measures. The court accepted that one export consignment had already been written off with RBI approval, that a similar factual basis existed for the second consignment, and that security together with an affidavit of assets would safeguard recovery of the disputed amount. As a result, cash deposit of the entire balance was not insisted upon; the petitioner was allowed to retain the amount already paid, furnish security for the remaining sum, and file an affidavit of assets, with the impugned waiver order varied accordingly.

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Issues: Whether the order directing pre-deposit of 50% of the penalty amount should be modified by permitting security for the balance amount instead of cash deposit.

Analysis: The petitioner had exported two consignments to the same foreign buyer, both of which remained undelivered abroad. One consignment had already been written off with the Reserve Bank of India's approval, and the petitioner relied on the similar factual basis of the second consignment. The Court noted the petitioner's willingness to furnish security for the balance penalty amount and to disclose assets by affidavit, while preserving the respondent's protection for recovery of the disputed sum.

Conclusion: The pre-deposit condition was modified and the petitioner was permitted to deposit Rs. 75,000 already paid, furnish security for Rs. 2,25,000, and file an affidavit of assets.

Final Conclusion: The writ petition succeeded to the extent of substituting security for the balance pre-deposit obligation, and the impugned waiver order stood varied accordingly.

Ratio Decidendi: Where the surrounding facts justified indulgence and adequate protective measures were offered, the pre-deposit condition could be satisfied by security rather than insisting on cash deposit of the entire balance.

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