Partly allowed

Rohit Sehgal v. Directorate of Enforcement New Delhi

Delhi HC6 Jul 2018CRL.A./422/2016

Case brief

AI extract

What is this about?

In response to an appeal challenging a foreign exchange penalty, this Court found the appellant to be in extreme penury due to frozen accounts and lack of assets. It modified the Tribunal's order by waiving the requirement to furnish security for half the penalty

What did the court decide?

Waiver of security for 50% of penalty imposed; appellant directed to deposit 10% of penalty within six weeks.

Rohit Sehgal Vs Directorate of Enforcement New Delhi — Company and Corporate | Delhi HC (2018)

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$~18

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IN THE HIGH COURT OF DELHI AT NEW DELHI

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- CRL.A. 422/2016 & Crl.M.A.No.7076/2016

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ROHIT SEHGAL ..... Appellant Represented by: Mr.Govind Rishi, Advocate

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versus

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DIRECTORATE OF ENFORCEMENT NEW DELHI ..... Respondent Represented by: Mr.Dadhav Chitale, Advocate for Mr.Amit Mahajan, Advocate

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CORAM: HON'BLE MS. JUSTICE MUKTA GUPTA

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O R D E R % 06.07.2018

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Vide order dated 14^th March, 2014, the Adjudicating Authority passed an order against the petitioner imposing a penalty of ₹15 lakhs for contravention of Section 3(a) and 4 of FEMA, 1999 dropping other charges under Regulation 3 of Foreign Exchange Management (foreign currency account by a person resident in India) Regulations 2000, Regulation 4 and 5 of Foreign Exchange Management (realisation, repatriation and surrender of foreign exchange) Regulations, 2000. Aggrieved by the said order of the Adjudicating Authority, the appellant approached the Appellate Tribunal for Foreign Exchange. In the appeal preferred, the appellant filed an application for waiver of pre-deposit of the penalty which was disposed of vide order dated 26^th February, 2016 directing the appellant to deposit 10% of the amount of penalty imposed against the appellant and to furnish a reliable CRL.A. 422/2016 page 1 of 3

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security for 50% of the total amount of the penalty imposed to the satisfaction of Enforcement Director. Hence the present appeal seeking waiver of the pre-deposit.

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The petitioner prefers the present appeal both on merits as well as seeking waiver of the pre-deposit. As regards the merits since the appeal is pending before the Appellate Tribunal, the appellant would be at liberty to urge the grounds available to him. Thus, the only issue to be considered by this Court is whether the order dated 26^th February, 2016 directing the appellant to deposit 10% of the penalty and furnish reliable security for the 50% of the total amount of penalties amounts to extreme hardship and needs to be modified.

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The appellant on affidavit has stated that all his accounts were frozen and thus he has no money to survive. He has further placed on record his bank statement which shows that except the present earnings of the appellant which he claims to be from consultancy, the appellant does not have money deposited in his accounts or any assets from which pre-deposit can be made. In response to the affidavit filed by the appellant, this Court had directed the respondent to submit a report. A report from Chief Manager, Punjab National Bank, Asaf Ali Road has been placed on record according to which Account Nos.0993000100128317 and 0993000100095974 in the name of the appellant are frozen even as on date i.e. 6^th July, 2018. The appellant has also placed on record statements of three other accounts which are frozen for which though no status report has been filed but the freezing of the said accounts is not disputed by learned counsel for the respondent.

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page 2 of 3

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CRL.A. 422/2016

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Considering the penury condition of the appellant, this Court deems it fit to modify the order dated 26^th February, 2016 to the extent that the furnishing of the security for 50% of the total amount of penalty imposed is waived. Thus, the appeal filed by the appellant before the Appellate Tribunal for Foreign Exchange be heard on the appellant depositing 10% of the amount of penalty i.e. ₹1,50,000/- within a period of six weeks from today.

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Appeal and application are disposed of.

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Order dasti.

MUKTA GUPTA, J.

JULY 06, 2018

mamta

page 3 of 3

CRL.A. 422/2016

Rohit Sehgal v. Directorate of Enforcement New Delhi

Case brief

What is this about?

What did the court decide?

Rohit Sehgal v. Directorate of Enforcement New Delhi

Case brief

What is this about?

What did the court decide?

What the court decided

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