Appellate power to reduce penalty under FERA extends to the quantum once the matter is before the High Court.

In an appeal under Section 54 of the Foreign Exchange Regulation Act, 1947, the High Court could examine both the finding of contravention and the quantum of penalty. Reading Section 54 with Section 52(3), the Court treated the appellate power to modify orders as extending to the penalty once the matter was before the appellate forum, absent any express restriction. An appeal framed as a question of law did not bar consideration of the penalty, and the High Court was competent to reduce it.

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Issues: Whether, in an appeal under Section 54 of the Foreign Exchange Regulation Act, 1947, the High Court could examine and reduce the quantum of penalty while affirming the finding of violation.

Analysis: The appeal concerned not merely the finding of contravention but also the penalty imposed for that contravention. The statutory appellate scheme under Section 54 was read with Section 52(3), which confers power on the appellate authority to modify orders under appeal. In the absence of any express restriction, the High Court, as the second appellate authority, was treated as having the same power to deal with both the merits and the quantum of penalty. The Court held that the appeal on a question of law did not exclude consideration of the penalty once the entire matter was before the appellate court.

Conclusion: The High Court was competent to examine and reduce the penalty, and the challenge to that approach failed.

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