Pre-deposit requirement under foreign exchange law must be complied with unless undue hardship is shown

The statutory appeal scheme under section 52(2) of the Foreign Exchange Regulation Act, 1973 required pre-deposit of the penalty before an appeal could be entertained, subject to dispensation only on proof of undue hardship. Undue hardship was confined to recognised circumstances such as a prima facie bad order or genuine financial disability, and the provision could not be diluted merely because compliance was onerous. Where the appellants failed to make the required deposit within the time granted, the condition precedent for maintaining the appeals was not met, and the appeals were treated as not maintainable.

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Issues: Whether the appeals were liable to be dismissed for failure to comply with the pre-deposit condition imposed under section 52(2) of the Foreign Exchange Regulation Act, 1973.

Analysis: The statutory scheme required deposit of the penalty before an appeal could be entertained, unless dispensation was granted on the ground of undue hardship. The Tribunal held that undue hardship could be shown only in recognised circumstances such as a prima facie bad order or financial disability. It further held that the provision was clear and unambiguous and could not be rewritten or diluted merely because strict compliance produced harsh consequences. Since the appellants failed to make the required pre-deposit within the time granted, the condition for maintaining the appeals was not satisfied.

Conclusion: The appeals were not maintainable and were dismissed for non-compliance with the pre-deposit order.

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