Karnataka High Court
Shri G Dhananjaya Reddy vs Additional Director on 9 October, 2025
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NC: 2025:KHC:39901-DB
MSA No. 158 of 2025
HC-KAR
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 9TH DAY OF OCTOBER, 2025
PRESENT
THE HON'BLE MR. JUSTICE JAYANT BANERJI
AND
THE HON'BLE MR. JUSTICE K. V. ARAVIND
MISCELLANEOUS SECOND APPEAL NO. 158 OF 2025
BETWEEN:
1. SHRI G. DHANANJAYA REDDY
S/O. OBUL CHAKRAPANI REDDY
AGED ABOUT 55 YEARS,
R/AT NO.002, C-BLOCK,
SJR LUXURY APARTMENTS,
AREKERE,
BANNERGHATTA ROAD,
Digitally signed
by VALLI IIM POST,
MARIMUTHU
BENGALURU - 560 076.
Location: HIGH
COURT OF
KARNATAKA ...APPELLANT
(BY SRI. MANE SHIVAJI HANUMANTHAPPA., ADVOCATE)
AND:
1. ADDITIONAL DIRECTOR,
ADJUDICATING AUTHORITY
THE DIRECTORATE OF
ENFORCEMENT,
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NC: 2025:KHC:39901-DB
MSA No. 158 of 2025
HC-KAR
SOUTHERN REGIONAL OFFICE,
SHASTRI BHAVAN,
III BLOCK,
III FLOOR, 26,
HADDOWS ROAD
CHENNAI - 600 006.
...RESPONDENT
THIS MISCELLANEOUS SECOND APPEAL IS FILED UNDER
SECTION 35 OF THE FOREIGN EXCHANGE MANAGEMENT ACT,
1999, PRAYING TO CALL FOR RECORDS AND SET ASIDE THE
FINAL ORDER DATED 16.04.2025 IN FPA-EF-97/CHN/2019 IN
MP-FE-601/CHN/2019 (MISC) PASSED BY THE APPELLATE
TRIBUNAL UNDER SAFEMA AT NEW DELHI, AND GRANT RELIEF
AS PRAYED FOR WITH COSTS AND SUCH OTHER RELIEFS AS
THIS HONBLE COURT MAY DEEM FIT TO GRANT IN THE
CIRCUMSTANCES OF THE CASE AND RENDER JUSTICE
(ANNEXURE A).
THIS APPEAL, COMING ON FOR FINAL HEARING, THIS
DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:
CORAM: HON'BLE MR. JUSTICE JAYANT BANERJI
and
HON'BLE MR. JUSTICE K. V. ARAVIND
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NC: 2025:KHC:39901-DB
MSA No. 158 of 2025
HC-KAR
ORAL JUDGMENT
(PER: HON'BLE MR. JUSTICE JAYANT BANERJI) Heard Sri. Mane Shivaji Hanumanthappa, the learned counsel for the appellant.
2. This Miscellaneous Second Appeal has been filed under Section 35 of the Foreign Exchange Management Act, 19991, seeking the following relief:
"WHEREFORE, the Appellant prays that this Hon'ble Court be pleased to call for records and set aside the Final Order dated 16.04.2025 in FPA-FE-97/CHN/2019 in MP-FE-601/CHN/2019 (Misc) passed by the Appellate Tribunal Under SAFEMA at New Delhi, and grant relief as prayed for with costs and such other reliefs as this Hon'ble Court may deem fit to grant in the circumstances of the case and render justice."
3. The impugned final order of 16.04.2025 has been passed dismissing the appeals preferred by the appellants under Section 19 of the FEMA Act.
4. The Appellate Tribunal has recorded that vide its order dated 26.09.2024, the appellants were directed to pay the amounts of Rs.10,00,000/- each within a period of eight weeks and the matter was adjourned to 12.12.2024 for final 1 FEMA Act -4- NC: 2025:KHC:39901-DB MSA No. 158 of 2025 HC-KAR hearing. Adjournment was again sought on 12.12.2024 to make the payment. The same was considered and allowed with an observation that if the requirement of pre-deposit as ordered is not made within the entered time, the appeal would be liable for dismissal. The Tribunal noted that inspite of giving time and opportunity, the pre-deposit order had not yet been complied with. The appellants had again sought an adjournment for a period of four weeks to comply with the order of 26.09.2024 as they had no means to pay the pre- deposit of penalty of Rs.10,00,000/- each. Accordingly, it was directed that sufficient opportunities having already been given to the appellants for pre-deposit of penalty amount, the same having not been done, the appeals were dismissed.
5. It is pertinent to mention that the appellant has not challenged the order of 26.09.2024. The second proviso to sub- section (1) of Section 19 of the FEMA Act provides that where 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 -5- NC: 2025:KHC:39901-DB MSA No. 158 of 2025 HC-KAR such conditions as it may be fit to impose so as to safeguard the realisation of penalty.
6. Since the order of 26.09.2024 has not been challenged, nor it is on record, therefore, this Court cannot peruse the reasons for passing the order of 26.09.2024 by which the appellants were directed to pay the amounts of Rs.10,00,000/- each within a period of eight weeks. Moreover, it is not been demonstrated by the learned counsel for the appellant that material was placed before the Tribunal to demonstrate undue hardship to the appellants that would entail dispensing with the pre-deposit.
7. Learned counsel for the appellant has at this stage sought to raise grounds for challenging the order passed by the adjudicating authority dated 19.09.2019. Moreover, for assailing the order impugned, he has sought to place reliance on clause (VI) of Para 134 of the judgment of the Supreme Court in Lifestyle Equities C.V. and Another vs. Amazon Technologies Inc., reported in 2025 SCC OnLine SC 2153.
8. As far as the arguments being raised on the merits of the order in original passed by the adjudicating authority, we -6- NC: 2025:KHC:39901-DB MSA No. 158 of 2025 HC-KAR note that the same is not under challenge in the instant Second Appeal. Moreover, that order can only be challenged on facts before the Appellate Tribunal and not before this Court which can only examine the matter only if questions of law exist. Further, as far as the reliance of the counsel for the appellant in the case of Lifestyle Equities C.V. (supra), is concerned, clause (VI) of para 134 of the aforesaid judgment refers to the provision of sub-rule (5) of Rule 5 of Order XLI of Code of Civil Procedure2 which provides for a bar on the Court to make an order staying execution on the decree where the appellant fails to make the deposit or furnish securities as provided in sub-rule (3) of Rule 1. The aforesaid provision of law, with all respect to the judgment of the Supreme Court, would not apply to the facts and circumstances of the instant case which is governed by special provisions for pre-deposit.
9. It is pertinent to mention at this stage, that we have posed a query to the learned counsel for the appellant that whether he would be ready to make payment of the amount of pre-deposit as directed by the Appellate Tribunal by 2 CPC -7- NC: 2025:KHC:39901-DB MSA No. 158 of 2025 HC-KAR means of its order of 26.09.2024. However, learned counsel expressed the inability of the appellant to do so.
10. For the aforesaid reasons, we find no merit in the instant Second Appeal and it is accordingly, dismissed.
Pending I.A's if any, stand disposed of.
Sd/-
(JAYANT BANERJI) JUDGE Sd/-
(K. V. ARAVIND) JUDGE DDU List No.: 1 Sl No.: 2