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Issues: (i) Whether a company struck off the Register of Companies is relieved of liabilities imposed by an Adjudicating Authority under FEMA and whether failure to make the statutory pre-deposit under Section 19(1) of FEMA warrants dismissal of the company's appeal; (ii) Whether the penalty imposed on the individual director under Section 13(1) and Section 42 of FEMA should be reduced.
Issue (i): Whether a company struck off from the Register remains liable to pay penalties imposed under FEMA and whether failure to comply with the pre-deposit requirement under Section 19(1) of FEMA mandates dismissal of its appeal.
Analysis: The Tribunal examined Chapter XVIII of the Companies Act, 2013, including Section 248(6) and Section 250, which preserve the continuance and enforceability of liabilities of a company even after its name is struck off and require that sufficient provision be made for discharge of liabilities. Section 19(1) of FEMA prescribes a statutory pre-deposit of penalty at the time of filing an appeal, subject to the Tribunal dispensing with the deposit in cases of undue hardship on conditions to safeguard realisation. The Appellant Company did not make the required pre-deposit and did not obtain dispensation under Section 19(1).
Conclusion: In favour of Respondent.
Issue (ii): Whether the penalty imposed on the individual director should be moderated.
Analysis: The Tribunal reviewed Section 13(1) of FEMA and authoritative precedents establishing that mens rea is not an essential element for imposing civil penalties for statutory contraventions; penalties attach upon establishment of contravention. The Tribunal considered the gravity and circumstances of the contraventions and the appellant's submissions seeking proportionality and reduction of penalty.
Conclusion: In favour of Appellant.
Final Conclusion: The Tribunal dismissed the appeal by the struck-off company for non-compliance with the pre-deposit requirement and partly allowed the appeal of the individual director by reducing his penalty; thus one appeal is dismissed and the other is partly allowed.
Ratio Decidendi: A company struck off under Sections 248 and 250 of the Companies Act, 2013 remains liable for its obligations and penalties imposed under FEMA and failure to comply with the statutory pre-deposit under Section 19(1) of FEMA warrants dismissal of the company's appeal; however, penalties on individuals may be moderated on assessment of proportionality despite absence of mens rea being immaterial for civil penalties under Section 13(1) of FEMA.
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