1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORIGINAL SIDE WRIT PETITION NO.2626 OF 2004 1. M/s.Arihant Impex & Anr. Petitioners vs. 1. Union of India & ors. Respondents Mr.K.Shroff i/b. M/s.Akshar Law for the petitioners. Mr.B.A.Desai, Additional Solicitor General with Mr.M.I.Sethna, senior counsel and Mr.H.V.Mehta for the respondents. CORAM : R. M. LODHA & J.P. DEVADHAR,JJ. DATED : 1st October 2004 P.C. Rule. Returnable forthwith. 2. The advocate on record for the respondents waive service. 3. Rule is treated on board for final hearing. 4. Section 19 of the Foreign Exchange Management Act, 1999 to the extent it is relevant for our purpose reads thus: "19. 19. 19. Appeal Appeal Appeal to to to Appellate Tribunal. - (1) Appellate Tribunal. - (1) Appellate Tribunal. - (1) Save as provided in sub-section (2), the Central Government or any person aggrieved by an order made by an Adjudicating Authority, other than those referred to in sub-section (1) of Section 17, or the Special Director (Appeals), may prefer an appeal to the Appellate Tribunal: Provided that any person appealing against 2 the order of the Adjudicating Authority or the Special Director (Appeals) levying any penalty, shall while filing the appeal, deposit the amount of such penalty with such authority as may be notified by the Central Government: Provided further that where in any particular case, the Appellate Tribunal is of the opinion that the deposit of such penalty would cause undue hardship to such person, the Appellate Tribunal may dispense with such deposit subject to such conditions as it may deem fit to impose so as to safeguard the realisation of penalty. (2)....... (3)....... (4)....... (5)....... (6)....... " 5. It would, thus, be seen that any person aggrieved by an order made by the Adjudicating Authority or the Special Director (Appeals), other than those referred to in sub-section (1) of section 17 may prefer an appeal to the Appellate Tribunal for Foreign Exchange. The party preferring the appeal against the order by the Adjudicating Authority of the Special Director (Appeals) is required to deposit the amount of such penalty so levied with the notified party. However, the Appellate Tribunal is empowered to dispense with such deposit of penalty if it is satisfied that the deposit of such penalty would cause undue hardship to the person appealed against the order. While dispensing with such deposit, the Appellate Tribunal is competent to impose such conditions as may be necessary to safeguard realisation of penalty. 6. Upon perusal of the impugned order, we find that the 3 aspect of dispensation of deposit has not been considered in accord with the statutory provision contained in section 19(1). The Appellate Tribunal has dispensed with the deposit of 90% of the penalty and directed the appellant to deposit 10% of the amount of penalty. What were the reasons that weighed in the mind of the Tribunal while passing such order are not reflected from the order. The order appears to have been passed at the ipse dixit of the appellate Tribunal. Such order not depicting the reasons, therefore, cannot be sustained. 7. We, accordingly, set aside the order dated 30th August 2004 passed by the Appellate Tribunal for Foreign Exchange, New Delhi. The Tribunal shall consider the appellant’s prayer for dispensation of the deposit of penalty amount afresh in accordance with law and pass the reasoned order. 8. No costs. (R.M. (R.M. (R.M. LODHA,J.) LODHA,J.) LODHA,J.) (J.P. (J.P. (J.P. DEVADHAR,J.) DEVADHAR,J.) DEVADHAR,J.)