Pre-deposit hardship relief: HC reduced the deposit requirement after finding the original condition unduly harsh.

The Madras HC modified a Tribunal-imposed pre-deposit condition for waiver of duty and penalty after finding it unduly harsh in light of financial hardship, non-commencement of commercial production, and parallel recovery proceedings under the SARFAESI Act. The court held that the deposit requirement should be reduced to reflect the appellant's circumstances and balanced the interim protection sought in appeal against the burden of compliance. It accordingly reduced the pre-deposit from the amount fixed by the Tribunal to a lower sum, with the balance duty and penalties waived pending appeal on compliance.

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Issues: Whether the pre-deposit condition imposed by the Tribunal for waiver of duty and penalty was onerous and required modification on account of financial hardship and non-commencement of commercial production.

Analysis: The appellant was facing financial difficulty, commercial production had not commenced, and recovery proceedings had also been initiated under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. In these circumstances, the condition to deposit Rs. 80 lakhs was found to be unduly harsh and prejudicial. The Court therefore modified the Tribunal's order and reduced the pre-deposit requirement.

Conclusion: The pre-deposit condition was modified in favour of the appellant, with the deposit reduced to Rs. 10 lakhs and the balance duty and penalties waived pending appeal upon compliance.

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