ORDER

26.11.2024 FPA-FE-18-21/HYD/2022 This order would dispose of the applications to seek waiver of the condition of pre-deposit to maintain the appeals under Section 19 of the Foreign Exchange Management Act, 1999 (in short `the Act of 1999’). The counsel for the appellants pressed the application in reference to the financial hardship of the appellants and thereby did not press the applications by touching the merits of the case.

2. It was submitted that the appellants are the victim in the hands of the person to whom remittance was made alleging to be in contravention of the provisions of the Act of 1999. It was submitted that due to family relation and friendship with Anil Kumar Obbu @ Tofikuddin R. Ovaysi (hereinafter referred to as `TofikuddinOvaysi’), a Russian citizen living in Ukraine, who was otherwise an Indian National earlier, the appellants made remittance to start the business of export and accordingly they arranged the funds after borrowing it from the friends and relatives. The remittance to a foreign National was made in instalments but after receiving the currency, the foreign National stopped taking telephone calls and even avoided the appellants. The appellants were thus cheated in the hands of the foreign National. In the background aforesaid, no penalty should have been imposed. However, the issue in reference to the merit of the case would be argued at the time of hearing of the appeals.

3. It was submitted that a penalty of Rs.1,65,00,000/- has been imposed on appellant PamuruPrabhakarfor onward remittance of Rs.1,64,62,077/- while Rs.45,00,000/- on appellant Smt. Alluri Anupama for onward remittance of Rs.44,68,866/-. The penalty of Rs.1,11,00,000/- has been imposed on appellant Ajay Dantuluri for onward remittance of Rs.1,10,21,130/- while Rs.2,00,00,000/- on appellant VenkataSubbarajuDantuluri for onward remittance of Rs.1,98,23,696/-. It is in reference to the remittance made by them toTofikuddinOvaysi showing it to be a Gift which, in fact, was to acquire franchise of M/s World Food Inc, Ukraine thus they have contravened the provisions of Section 10 (6) of the Act of 1999.The gist of allegations and modes for onward remittance in all the appeals are similar.

4. The learned counsel for the appellants submitted that due to financial hardship, the appellant VenkataSubba Raju Dantuluri is compelled to work at the age of 73 years. His yearly income on an average is around Rs.25 lakhs which is not sufficient for repayment of the loan borrowed by him from his relatives and friends and even to take care of his livelihood. Hence, it is extremely difficult for him to pay the penalty amount of Rs.2,00,00,000/-.

5. We have considered the submission and perused the record. The appellant VenkataSubba Raju Dantuluri has shown his income on an average of Rs.25 lakhs in a year. It is reflected from the income-tax returns itself that his financial condition is not such which may restrict him to deposit the penalty amount. It is more so when there is nothing on record to prove borrowing of funds from relatives and friends for onward remittance of Rs.1,98,23,696/- toTofikuddinOvaysi. We still take a liberal view which may not cause hardship to him to pursue the appeal and accordingly looking to the financial condition of the appellant, we direct him to deposit 25% of the penalty amount to satisfy the condition of pre-deposit. It is taking into consideration the income- tax returns and the bank statement which shows accumulated fund in his bank account and there is no document on record to show alleged borrowing of the amount by him for its repayment. He remitted Rs.1,98,23,696/- to Mr. Ovaysi while he had no means to pay the amount.

6. So far as appellant Smt. Alluri Anupama is concerned, the penalty imposed on her is Rs.45,00,000/-. It was submitted that onward remittance of Rs.44,68,866/- was made after borrowing it from friends and relatives. However, no document to substantiate the aforesaid has been placed on rec