W.P.(C) No. 8355/2008 Page 1 10. * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 8355/2008 & CM No. 16019/2008 Date of decision: 5th May, 2009 S.K.MITTAL ..... Petitioner Through Ms. Meenakshi Arora & Mr. Mohit D. Ram,Advocates. Versus APPELLATE TRIBUNAL FOR FOREIGN EXCHANGE..... Respondent Through Ms. Monika Garg, CGSC. For the respondent. CORAM: HON'BLE MR. JUSTICE SANJIV KHANNA 1. Whether Reporters of local papers may be allowed to see the judgment? 2. To be referred to the Reporter or not ? 3. Whether the judgment should be reported in the Digest ? O R D E R % 1. The petitioner Mr. S.K. Mittal is a Chartered Accountant, who has been saddled with penalty of Rs.6,41,18,065/- for contravention of Sections 8(1), 9(1)(a) and 9(1)(f)(i) of the Foreign Exchange Regulation Act, 1973 (hereinafter referred to as the Act, for short). The petitioner has W.P.(C) No. 8355/2008 Page 2 filed 178 appeals before the Appellate Tribunal for Foreign Exchange challenging the penalty orders. 2. It is pointed out to me that about 500 show cause notices in all were issued under the Act for violation of the aforesaid Sections. The allegations against the petitioner are that he was instrumental in introducing parties to whom payments were made through NRE accounts after foreign currency were transferred/deposited in these accounts. The petitioner is not a recipient but allegedly a broker who had arranged for transactions made through these accounts for payment to the recipients. NRE accounts are not in the name of the petitioner. Learned counsel for the petitioner points out that in about 300 cases show cause notices were dropped and no penalty order was passed. It is stated that in about 178 cases on identical facts the aforesaid penalty orders have been passed. It is stated that there is wide disparity in the quantum of penalty imposed. There is no criterion on the basis of which quantum of penalty has been fixed. 3. I need not go into merits in detail in view of the limited controversy before me. However it is apparent that the question of quantum requires consideration. The impugned order subject matter of the present writ petition dated 8th September, 2008 disposes of the application of the petitioner seeking waiver of the pre-deposit with the condition that the W.P.(C) No. 8355/2008 Page 3 petitioner will deposit 50% of the penalty amount or provide unconditional bank guarantee in lieu thereof. In the case under reference and subject matter of the order dated 8th September, 2008 penalty of Rs. 5 Crores has been imposed. Learned Appellate Tribunal for Foreign Exchange while passing the said impugned order has relied upon the fact that wife of the petitioner is owner of property measuring 125 square yards at Chitranjan Park. The impugned order does not refer to the assets of the petitioner himself. The petitioner and his family are residing in the property. There is no evidence or material to show that the petitioner had funded purchase of the aforesaid property, which stands registered in the name of petitioner’s wife. The petitioner has filed on record copies of his income tax return, in which annual income of about Rs. 3 lacs is disclosed. The petitioner submits that the impugned order virtually takes away his right to first appeal. 4. Petitioner has already deposited Rs.5 lacs with the Adjudicating Officer. The petitioner states that he is ready and willing to deposit a further sum of Rs.12,50,000/- with the Adjudicating Officer in two equal installments. The said statement is accepted. The first installment of Rs.2.5 lacs will be deposited by 30th May, 2009 and balance amount of Rs.5 lacs each will be deposited on or before 31st July, 2009 and 30th September, 2009 respectively. W.P.(C) No. 8355/2008 Page 4 5. The petitioner will also file an affidavit and an undertaking before the Adjudicating Officer giving complete details of his assets including bank accounts. The petitioner will not dispose of his assets without permission of the Appellate Tribunal for Foreign Exchange. He will be, however, entitled to operate his bank accounts for his day-to-day needs. The petitioner will file photocopy of his bank statement with the Adjudicating Officer every month. 6. On the aforesaid deposits being made and affidavit and undertaking being filed, the petitioner’s appeals will be heard by the Appellate Tribunal for Foreign Exchange. The impugned order dated 8th September, 2008 is modified to the extent indicated above. The aforesaid order will equally apply and govern 178 appeals, which are pending before the Appellate Tribunal. 7. The present writ petition is accordingly disposed of. All pending applications are also disposed of. The findings given in present order are prima facie and tentative and the Appellate tribunal will decide the matter on merits without being influenced by the findings given in this order. DASTI. SANJIV KHANNA, J. MAY 05, 2009 VKR