New Delhi: The Supreme Court has refused to
interfere with the Appellate Tribunal for Foreign Exchange
order directing prominent stock broker Ketan Parekh and his
two related firms to deposit a staggering Rs 66 crore with the
Enforcement Directorate in an alleged FEMA violation case.
A bench of justices GS Singhvi and SJ Mukhopadhaya
asked the stock broker and two others to deposit the amount
with the authorities within four weeks failing which their
appeal in the tribunal challenging the Rs 132 crore penalty
imposed on them would stand automatically dismissed.
The tribunal had asked the stock broker and others to
deposit Rs 66 crore as pre-deposit pending adjudication of the
The apex court said the appellants had not come with
clean hands to the court and rejected their plea that they
were in a precarious financial condition and hence unable to
deposit the amount.
"In our considered view, the appellants miserably failed
to make out a case, which could justify an order by the
Appellate Tribunal to relieve them of the statutory obligation
to deposit the amount of penalty.
"The appellants have the exclusive knowledge of their
financial condition/status and it was their duty to candidly
disclose all their assets, movable and immovable including
those in respect of which orders of attachment may have been
passed by the judicial and quasi judicial forums.
"However, instead of coming clean, they tried to paint a
gloomy picture about their financial position, which the
Appellate Tribunal rightly refused to accept," Justice Singhvi
writing the judgement said.
The Appellate Tribunal in Mumbai had passed the order on
August 2, 2007. But instead of approaching the Bombay High
Court they chose to appeal in the Delhi High Court to delay
A single judge of the Delhi High dismissed their writ
petitions on July 26, 2010.
Thereafter, they filed appeals under Section 35 of the
Act before the Bombay High Court and sought condonation of
1056 days, delay in filing the appeal which was dismissed by a
division bench following which they appealed in the apex
The apex court said Parekh and others in the case were
well conversant with various statutory provisions including
FEMA and several and and several civil and criminal cases are
pending against him.
"The very fact that they had engaged a group of eminent
Advocates to present their cause before the Delhi and the
Bombay High Courts shows that they have the assistance of
"This seems to the reason why they invoked the
jurisdiction of the Delhi High Court and not of the Bombay
High Court despite the fact that they are residents of Bombay
and have been contesting other matters including the
proceedings pending before the Special Court at Bombay, the
apex court said.
The bench further said Parekh`s plea of being in
financial difficulties cannot be believed by any stretch of
"If what was stated in the applications filed by the
appellants and affidavit dated 10.10.2008 is correct, then the
appellants must be in a state of begging which not even a man
of ordinary prudence will be prepared to accept.
"To us, it is clear that the appellants deliberately
concealed the facts relating to their financial condition.
Therefore, the Appellate Tribunal did not commit any error
by refusing to entertain their prayer for total exemption,"
the apex court said.