Interlocutory pre-deposit orders may be modified when hardship later justifies further relief and discretion is exercised judicially.

An order made under the second proviso to Section 52(2) of the Foreign Exchange Regulation Act, 1973 directing pre-deposit is interlocutory, because it regulates the hearing of the appeal without deciding the merits, and the Appellate Board may modify it if later circumstances justify further relief. The Board's partial waiver was upheld because it was based on undue hardship, including substantial prior deposit and an inability to raise funds, and the discretion was exercised judicially rather than arbitrarily or perversely. The challenge to the Board's interim directions therefore failed.

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Issues: (i) Whether the Appellate Board's order regarding pre-deposit under the second proviso to Section 52(2) of the Foreign Exchange Regulation Act, 1973 was an interlocutory order capable of being modified on a subsequent application. (ii) Whether the Board was justified in waiving part of the pre-deposit on the ground of undue hardship and whether such waiver was arbitrary or perverse.

Issue (i): Whether the Appellate Board's order regarding pre-deposit under the second proviso to Section 52(2) of the Foreign Exchange Regulation Act, 1973 was an interlocutory order capable of being modified on a subsequent application.

Analysis: The statutory scheme permits the Appellate Board, where deposit would cause undue hardship, to dispense with the deposit wholly or partly and to impose conditions. That power is exercised at an interim stage before final adjudication of the appeal. An order made for pre-deposit does not determine the merits of the controversy and serves only to regulate the hearing of the appeal. Because it is procedural and interlocutory in nature, the Board may alter or modify such an order when circumstances justify further relief.

Conclusion: The pre-deposit order was interlocutory in nature and could be modified by the Board.

Issue (ii): Whether the Board was justified in waiving part of the pre-deposit on the ground of undue hardship and whether such waiver was arbitrary or perverse.

Analysis: The Board noted that the respondents had already deposited a substantial sum and that insisting on the balance would cause undue hardship. The request for further relief was supported by changed financial circumstances, including inability to raise funds. The exercise of discretion under the proviso was based on hardship and the need to advance justice, and the resulting relief did not disclose arbitrariness or perversity.

Conclusion: The waiver of part of the pre-deposit was justified and was not arbitrary or perverse.

Final Conclusion: The challenge to the Appellate Board's orders failed because the Board had jurisdiction to vary its interim pre-deposit directions and had exercised that discretion reasonably on grounds of hardship.

Ratio Decidendi: An order made under the proviso to Section 52(2) of the Foreign Exchange Regulation Act, 1973 concerning pre-deposit is interlocutory and may be varied where subsequent circumstances justify relief, provided the discretion is exercised judicially to avoid undue hardship.

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