2025 (10) TMI 398 - HC - FEMA

Additional eight-week chance to pay pre-deposit granted due to age and health; no further extensions; stay conditional

Ramesh Bhatija Versus Union of India and Another

Bombay HC held that, having considered the appellant's age and health and the Supreme Court's principles on undue hardship, justice required granting an ... Concept of undue hardship - additional opportunity - reasonable period for depositing the pre-deposit amount - Whether the Hon'ble Court failed to consider the concept of undue hardship as enumerated by the Hon'ble Supreme Court in the case of Kamala Devi & Ors. V/s. Collector of Central excise [1998 (5) TMI 28 - SUPREME COURT] & Monotosh Saha V/s. Special Director, Enforcement Directorate, [2008 (8) TMI 9 - SUPREME COURT] and consequently failed to grant a reasonable period to the Appellant to deposit the pre-deposit amount. - HELD THAT:- Reasons given by the Appellant relating to his health and advanced age - We have also considered the decision of the Hon’ble Supreme Court in the case of Kamala Devi (supra) & Monotosh Saha (supra) on the aspect of undue hardships. Upon such consideration, we think that the interests of justice would be better served if the Appellant is granted an additional opportunity in the peculiar facts of the case. However, considering Mr Yadav’s submissions that the amount required to be paid by the end of October 2008, we now grant the Appellant an additional opportunity, subject to the Appellant depositing within eight weeks from today without seeking further extensions for any reason. Ms Thadani, on instructions, states that this would be done. ISSUES PRESENTED AND CONSIDERED 1. Whether the concept of undue hardship, as articulated by the Supreme Court, required the Tribunal to grant a reasonable period for depositing the pre-deposit amount and whether failure to consider that concept vitiated the Tribunal's orders dismissing the appeal and the review. 2. Whether, in the exercise of appellate/tribunal discretion to require a pre-deposit as a condition of entertaining an appeal, exceptional factual circumstances (advanced age/health/personal hardship) can justify relieving an appellant from the consequences of non-deposit after long delay and multiple extensions. 3. Whether the court may conditionally restore an appeal dismissed for non-payment of the prescribed pre-deposit, specifying a higher deposit and a final non-extendable deadline, and whether such restoration should leave merits open for decision by the Tribunal. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Application of the doctrine of undue hardship to pre-deposit requirements Legal framework: The Tribunal and appellate courts have power to require a pre-deposit (partial payment of penalty/dues) as a condition for entertaining an appeal. The concept of undue hardship as developed by higher courts permits relief where strict compliance would cause exceptional injustice. Precedent Treatment: The Court expressly considered prior decisions articulating undue hardship (referred to as Kamala Devi and Monotosh Saha). Those decisions were treated as applicable authority supporting equitable relief in appropriate cases; they were followed rather than distinguished or overruled. Interpretation and reasoning: The Court examined the appellant's stated personal hardships (health and advanced age) and the chronology showing multiple opportunities and extended time granted earlier. Balancing the precedents on undue hardship against the respondent's contention that substantial time had already been afforded, the Court concluded that in the peculiar facts justice required an additional limited opportunity to meet the pre-deposit requirement. Ratio vs. Obiter: Ratio - where exceptional personal circumstances are shown, a court may, in the exercise of discretion and consistent with precedent on undue hardship, grant a further opportunity to make the pre-deposit. Obiter - general observations about the adequacy of prior extensions and the appellant's prior failures to deposit may be persuasive but are fact-specific. Conclusion: The doctrine of undue hardship applied; the Court answered the legal question in favour of granting relief by permitting an additional opportunity to deposit a prescribed sum within a finite period. Issue 2 - Scope of discretion to grant conditional restoration after failure to comply with pre-deposit directions Legal framework: Courts possess equitable discretion to set aside dismissals for non-compliance with pre-deposit directions and to restore appeals on terms, including a condition to deposit a specified amount within a stipulated timeframe, provided such exercise conforms to principles of fairness and precedent. Precedent Treatment: The Court relied on the same undue-hardship jurisprudence to justify intervening despite prior non-compliance. No contrary authority was invoked to limit this discretion. Interpretation and reasoning: The Court weighed competing considerations: (a) the appellant's failure to deposit after multiple extensions starting in 2008; (b) the appellant's pleaded personal hardships; and (c) the public interest in finality and preventing indefinite extensions. To strike a balance, the Court increased the deposit from the earlier 5% to a higher sum (Rs. 25 Lakhs) and imposed a firm, non-extendable deadline (eight weeks / specified calendar date) to ensure closure while affording a last opportunity consistent with undue-hardship principles. Ratio vs. Obiter: Ratio - a court may set a higher conditional deposit and a final deadline as a term of restoring an appeal dismissed for non-payment, where equitable considerations justify relief; the terms may preclude further extensions. Obiter - remarks about prior ample time and the appellant's multiple extensions are factual context, not general rule-making. Conclusion: The Court properly exercised discretion to grant conditional restoration on strict terms - a defined deposit within a non-extendable period - thereby aligning equitable relief with the need for finality. Issue 3 - Consequences of compliance/non-compliance with the court's conditional order and preservation of merits Legal framework: Conditional restoration orders customarily specify consequences of compliance (restoration and hearing on merits) and non-compliance (deemed dismissal). Courts may restore matters to the tribunal and leave substantive issues open to be decided afresh by the tribunal. Precedent Treatment: The Court followed established practice in directing restoration upon compliance and in leaving all substantive contentions open for the tribunal's adjudication. Interpretation and reasoning: To preserve procedural fairness while avoiding premature decision on the merits, the Court made restoration contingent upon deposit by the deadline. It directed the tribunal to decide the appeal on merits expeditiously after restoration and explicitly left all parties' substantive contentions open, thereby confining the High Court's intervention to procedural relief rather than substantive determination. Ratio vs. Obiter: Ratio - conditional restoration coupled with a clear timeline for deposit and an instruction to the tribunal to decide merits expeditiously is an appropriate exercise of appellate discretion; leaving merits open is necessary to respect the competence of the tribunal. Obiter - any suggestion that further extensions would never be entertained beyond the order's terms is context-specific. Conclusion: The order lawfully prescribes the consequence structure: compliance results in vacatur of prior dismissal and restoration for fresh adjudication; failure results in deemed dismissal without further reference to the Court. Miscellaneous and procedural considerations Legal framework: Courts balance equitable considerations against the need for finality and administrative convenience when granting relief after long delay. Interpretation and reasoning: The Court acknowledged the respondent's submission about ample prior time but held that justice in the peculiar facts warranted one final, non-extendable opportunity. The Court imposed an unequivocal timeline and higher deposit to protect respondent interests and court processes. Ratio vs. Obiter: Ratio - where an appellant has previously been afforded time and fails to comply, a final conditional opportunity with stricter terms is a permissible, proportionate remedy. Obiter - commentary on the sufficiency of earlier deadlines and number of prior extensions is factual and not a binding principle. Conclusion: The Court's approach preserves precedent on undue hardship while protecting procedural finality: relief may be granted, but on strict, enforceable terms and subject to clear consequences for non-compliance.