S. N. AGGARWAL, J. ( 1 ) CRL. M. NO. 8305/2004, an application for stay is listed for hearing after notice to the respondent. ( 2 ) LEARNED Additional Solicitor General has drawn my attention to the order of adjudication passed by the Special Director of Enforcement imposing a penalty of Rs. 10,03,00,000/- on the respondent-Company for violation of various provisions of FERA. Aggrieved by this order, the respondent preferred an appeal under the Foreign Exchange Management Act, 1999 before the Appellate Tribunal. The appeal was admitted to hearing by the Tribunal without satisfying the condition of pre-deposit of penalty as provided in Section 19 of the Foreign Exchange Management Act. ( 3 ) WHILE hearing on this application, I find that the main appeal itself can be disposed of because what is challenged by the appellant (Union of India) in this appeal is the order of the Tribunal dated 5. 7. 2004 at Page 26 of the appeal paper book allowing dispensation of pre-deposit of penalty in full. ( 4 ) A perusal of the adjudication order passed by the Special Director (pages 32 to 39 of the appeal paper book) would show that the penalty of Rs. 10,03,00,000/- was imposed by the said order after taking into account the relevant material against the respondent-Company. It is mentioned in the adjudication order at Page 34 that the respondent had made a statement during the course of adjudication proceeding that it had cleared more than 75% cases and it could not clear the balance due to acute financial crisis and as few of their assets were auctioned by the Customs. ( 5 ) THE proviso to Section 19 of FEMA confers discretion upon the Tribunal before whom appeal can be filed against adjudication order to exempt the appellant from deposit of penalty if he is satisfied that it was a case of undue hardship. Section 19 (1) of FEMA is relevant and is reproduced hereinbelow. "19. ( 5 ) THE proviso to Section 19 of FEMA confers discretion upon the Tribunal before whom appeal can be filed against adjudication order to exempt the appellant from deposit of penalty if he is satisfied that it was a case of undue hardship. Section 19 (1) of FEMA is relevant and is reproduced hereinbelow. "19. Appeal to Appellate Tribunal- (1) Save as provided in sub-section (2), the Central Government or any person aggrieved by an order made by an Adjudicating Authority, other than those referred to in sub-section (1) of section 17, or the Special Director (Appeals), may prefer an appeal to the Appellate Tribunal: provided that any person appealing against the order of the Adjudicating Authority or the Special Director (Appeals) levying any penalty, shall while filing the appeal, deposit the amount of such penalty with such authority as may be notified by the Central Government: provided further that where in any particular case, 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 such conditions as it may deem fit to impose so as to safeguard the realisation of penalty. " ( 6 ) A reference to the impugned order would show that the learned Appellate Tribunal has nowhere discussed the circumstances warranting exemption from deposit of penalty which is to the tune of more than Rs. 10 crores. In my opinion, the order of the Appellate Tribunal dated 5. 7. 2004 impugned in this appeal cannot stand the test of judicial scrutiny and the said order is, therefore, set aside. ( 7 ) IN view of the above, the application as well as the main appeal are allowed and stand disposed of. The parties are directed to appear before the Appellate Tribunal for further directions on 8. 8. 2006.