2026 (1) TMI 793

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.... Act, 1999 (hereinafter referred to as 'FEMA'), are directed against the common Final Order dated 28.08.2025 passed by the Appellate Tribunal under SAFEMA, New Delhi. The seminal grievance of the appellants is that the Learned Tribunal non-suited them by dismissing their substantive appeals in limine on the solitary ground of non-compliance with a pre-deposit condition. The appellants contend that such an approach, amidst a pleaded case of "undue hardship," has effectively rendered their statutory right of appeal illusory. FACTUAL MATRIX 2. The litigation originated from an Order-in-Original dated 15.09.2020, wherein the Adjudicating Authority imposed an aggregate penalty of Rs. 22,00,00,000/- on the Appellant Company and Rs. 2,20,00,....

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....ding Rs. 2.2 Crores-was mathematically impossible given the company's distressed financial health. It was further submitted that a litigant should not be deprived of their right to be heard on merits due to a temporary breakdown in communication with their legal representative. 6. Mr. Arijit Chakrabarti, Learned Counsel for the Respondent (ED) supported the impugned order, emphasizing that the Tribunal had already exercised its discretion by waiving 90% of the penalty. It was argued that the appellants displayed a lack of diligence, and the Tribunal was well within its jurisdiction to enforce the mandate of Section 19. 7. To adjudicate this dispute, we turn to the statutory architecture of Section 19(1) of FEMA. While the first provis....

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....ntative. A substantive appeal involving significant stakes should not be interred on a technicality without a merit-based hearing. When a party alleges that their very existence as a "going concern" is at stake, the Tribunal must ensure that the "remedy" does not become more burdensome than the "injury." 10. In our view, the Learned Tribunal failed to balance the mandate of Section 19(1) with the "undue hardship" doctrine. When a party alleges that their very existence as a "going concern" is at stake, the Tribunal must look beyond mere non-payment and examine if the 10% condition had effectively rendered the statutory right of appeal illusory. 11. We are equally cognizant of the need to "safeguard the realization of penalty" as requi....