2018 (11) TMI 1672 - AT - FEMA

Court stresses prima facie case, defers plea on natural justice principles, grants relief to select parties.

The court emphasized the need to establish a prima facie case and deferred detailed examination to the final hearing. The appellant's plea regarding ... Stay petition - pre-deposit orders - HELD THAT:- With regard to undue hardship he pleaded financial hardship for all. However, the ITR produced by him shows the financial conditions of all as comfortable except for M/s. Queen Forex Pvt. Ltd and M/s. Cheap Cloth Store whose financial status as noticed from their Income Tax Return for the years 2017-18, 2018-19 are not good. Hence Shri Rajinder Singh Duggal, Shri Vishal Arora and Shri Sunil Gupta are directed to pre-deposit the entire amount as per the impugned order. The pre-deposit with respect to M/s Queen Forex Pvt. Ltd and M/s Cheap Cloth Store is stayed until further order. All the deposits are to be done within a period of five months from today. Issues:1. Clarification on establishing chain and linkages in the case.2. Compliance with principles of natural justice.3. Financial hardship plea and examination of financial status.4. Direction for pre-deposit of amounts as per the impugned order.Analysis:1. The learned counsel for the appellant made efforts to clarify the chain and linkages in the case, emphasizing that a detailed examination was necessary and couldn't be decided at the stay petition stage. The need for establishing a prima facie case was highlighted, indicating that further details would be considered at the final hearing.2. The issue of principles of natural justice was raised, stating that the appellant was not heard despite records in the adjudication order suggesting otherwise. An affidavit was requested to address this discrepancy, with a decision on this matter deferred to the final hearing stage, implying that the appellant failed to establish a prima facie case.3. Concerning financial hardship, the appellant pleaded financial difficulties for all parties involved. However, upon examination of Income Tax Returns, it was revealed that the financial conditions of most parties were comfortable, except for M/s. Queen Forex Pvt. Ltd and M/s. Cheap Cloth Store, whose financial status was deemed unfavorable based on their returns for specific years.4. The judgment directed specific individuals to pre-deposit the entire amounts as per the impugned order, while staying pre-deposit requirements for M/s. Queen Forex Pvt. Ltd and M/s. Cheap Cloth Store until further notice. A deadline of five months was set for all deposits, with a compliance reporting scheduled for a specified date. Additionally, copies of the order were to be provided 'dasti' to both parties for reference.