Undue hardship for pre-deposit waiver requires more than a prima facie case under foreign exchange law.

Section 52(2) of the Foreign Exchange Regulation Act, 1973 permits dispensation of pre-deposit for undue hardship, but the expression cannot be treated as satisfied by a prima facie case alone. Rule 6A requires disclosure of financial position, and the record showed the company had substantial fixed assets, profits, and assessed income, while the directors established no separate hardship. Balance of convenience, irreparable injury, public interest, and other relevant factors were also relevant to waiver. On those facts, the appellants failed to show undue hardship and were not entitled to dispensation of pre-deposit.

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Issues: Whether pre-deposit of the penalty imposed under the Foreign Exchange Regulation Act, 1973 should be dispensed with on the ground of undue hardship, including whether a prima facie case alone is sufficient for waiver.

Analysis: The dispensation power under section 52(2) is not confined to financial hardship alone, but the expression "undue hardship" cannot be reduced to a mere prima facie assessment. Rule 6A requires disclosure of financial position, and the materials showed that the company was financially sound, with substantial fixed assets, profits, and assessed income. The directors also failed to establish any separate financial hardship. The existence of a prima facie case was held to be only one relevant consideration. The decision drew on the principles of balance of convenience, irreparable injury, public interest, and other relevant factors, and held that these considerations apply equally to waiver of pre-deposit.

Conclusion: The appellants were not entitled to dispensation of pre-deposit, and the applications were rejected.

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