Discretionary FEMA penalty quantum will not be enhanced on appeal absent perversity or misuse of judgment

Section 13(1) of the Foreign Exchange Management Act, 1999 prescribes only a maximum penalty and no irreducible minimum, so the quantum remains within the adjudicating authority's discretion, to be exercised judiciously on the facts and evidence. Because the authority had already imposed a substantial penalty and the record showed no perversity or non-application of mind, appellate interference was unwarranted. The request for enhancement of penalty was rejected and the original adjudication order was left undisturbed.

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Issues: Whether enhancement of the penalty imposed under the Foreign Exchange Management Act, 1999 was warranted in the appeal.

Analysis: The statutory scheme of Section 13(1) of the Foreign Exchange Management Act, 1999 prescribes only the ceiling of penalty and does not fix any irreducible minimum. The quantum of penalty is therefore left to the adjudicating authority's discretion, which must be exercised judiciously on the facts and evidence. The adjudicating authority had already imposed a substantial penalty in relation to the alleged contravention, and the record did not show any perversity or non-application of mind warranting interference. In the circumstances, enhancement was not considered justified.

Conclusion: The request for enhancement of penalty was rejected and the adjudication order was left undisturbed.

Ratio Decidendi: Where the statute prescribes only a maximum penalty and no minimum, the quantum of penalty is discretionary and will not be interfered with in appeal if the discretion has been exercised judiciously on the facts of the case.

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