2025 (8) TMI 257 - HC - FEMA

Appeals dismissed as parties agree to penalty payment without liability; donation of Rs. 1.05 crores mandated under conditions

The HC held that since all parties, including the principal, had agreed to pay the penalty without admitting liability, the appeals filed by the Union ... FEMA proceedings - Appellant penalised as an abettor or not? - HELD THAT:- As all the parties therein, including the principal, agreed to pay the penalty amount without prejudice to their rights and contentions and without admitting any liability. This was one of the considerations based upon which the matters were given a quietus and the appeals filed by the Union were dismissed. Since the present Appellant seeks to adopt the same course of action, we see no grounds to deviate from the course of action adopted in the order dated 2 May 2025. Even the learned counsel for the Respondent did not, perhaps, and could not have objected to the adoption of this course of action in these appeals. Therefore, subject to the Appellant donating an amount of Rs.1.05 crores to the Prime Minister’s Relief Fund within eight weeks from the date of uploading of this order and filing a proof of payment with an advance copy to the learned counsel for the Respondent, the impugned order dated 4 July 2024 shall stand set aside. The Bombay High Court, per M.S. Sonak, J., disposed of two connected FEMA appeals challenging a common order dated 4 July 2024. The appellant agreed, without admitting liability or wrongdoing, to pay Rs. 1.05 crores to the Prime Minister's Relief Fund within eight weeks from the order's uploading, aligning with the course adopted in a prior order dated 2 May 2025 by a Coordinate Bench in related appeals. This payment was characterized as a measure to 'give quietus to the proceedings,' with no refund sought even if impugned orders were set aside. The Court noted that the earlier order involved parties agreeing to pay penalties 'without prejudice to their rights and contentions and without admitting any liability,' and found no grounds to deviate from this precedent. Consequently, the impugned order was set aside subject to timely payment, failing which the appeals would be dismissed and the respondent entitled to recover the penalty through due process. Upon payment, the appellant's bank guarantee of Rs. 19.62 crores was to be released within four weeks. The appeals and interim applications were disposed of accordingly, with no costs awarded.