IN THE HIGH COURT AT CALCUTTA

ORIGINAL SIDE FEA 12 OF 2025

IA NO. GA 1 OF 2025

M/S LORDS POLYMER (I) PRIVATE LIMITED

VS

THE ADDITIONAL DIRECTORATE OF ENFORCEMENT,

DIRECTORATE OF ENFORCEMENT (FEMA)

FEA 13 OF 2025

IA NO. GA 1 OF 2025

AMIT SAHA

VS

THE ADDITIONAL DIRECTORATE OF ENFORCEMENT,

DIRECTORATE OF ENFORCEMENT (FEMA)

BEFORE:

THE HON’BLE JUSTICE RAJARSHI BHARADWAJ

AND

THE HON’BLE JUSTICE UDAY KUMAR

For the Appellant : Mr. Nilotpal Chowdhury, Ld. Adv.

Ms. Pallavi Roy, Ld. Adv.

For the Respondent : Mr. Arijit Chakrabarti, Ld. Adv.

Mr. Debsoumya Basak, Ld. Adv.

Ms. Swati Singh, Ld. Adv.

Hearing concluded on : 02.12.2025 Judgment on : 15.01.2026

Uday Kumar, J:-

1. These two appeals, preferred under Section 35 of the Foreign Exchange Management 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. 2,20,00,000/- on its Director for alleged contraventions of Sections 7 and 8 of FEMA, read with the Foreign Exchange Management (Export of Goods and Services)

Regulations, 2000.

3. Seeking statutory redress, the appellants moved the Learned Appellate Tribunal. By an interim order dated 23.04.2025, the Tribunal, invoking the second proviso to Section 19(1) of FEMA, directed the appellants to deposit 10% of the penalty amount as a condition for entertaining the appeal. Upon the expiry of the stipulated period, the appellants failed to remit the said sum. Consequently, on 28.08.2025, the Learned Tribunal—noting that the appellants had "ceased communication" with their counsel and in the absence of any protective order from a superior forum—dismissed the appeals for non-compliance with the pre-deposit requirements.

QUESTION FOR DETERMINATION

4. The singular question that falls for our adjudication is:

“Whether the Ld. Tribunal was legally justified in dismissing the appeals for non-compliance with the 10% pre-deposit condition, or whether such a dismissal, in the face of a specific plea of financial incapacity and a communication gap with counsel, offends the principles of natural justice and the right to a forum.”

ARGUMENTS OF THE PARTIES

5. Mr. Nilotpal Chowdhury, Learned Counsel for the Appellants argued that the Tribunal adopted a mechanical approach, failing to apply the ratio of Monotosh Saha V. Special Director, ED. It was contended that a 10% deposit—exceeding 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 proviso mandates a deposit of the penalty, the legislature provided a critical "safety valve" in the second proviso, empowering the Tribunal to dispense with such deposit if it would cause "undue hardship." It provides that:

“Provided further that where in any particular case, the Appellate Tribunal is of the opinion that the