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2017 (5) TMI 771 - PUNJAB AND HARYANA HIGH COURTMaintainability of petition - Vires of Section 19 of the MSME Development Act, 2006 - requirement of deposit of seventy-five per cent of the amount of award as a pre-condition for entertaining an application - case of petitioner is that the requirement of pre-deposit of seventy-five percent of the amount awarded as a pre- condition for entertaining the appeal is onerous and oppressive. It renders the remedy of appeal wholly illusory - Ld. Counsel for the respondents, on the other hand, argued that the 2006 Act was the culmination of efforts spanning over two decades to introduce a mechanism to ensure timely realization and to protect the payments receivable by the Small Scale Industries. Held that: - the right to appeal is a creature of the statute, it can be conditional or qualified. The requirement about the deposit of the amount claimed as a condition precedent to entertainment of an appeal does not nullify the right of appeal and cannot be considered to be unconstitutional - even in the absence of an express provision to that effect, the Appellate Authority or Tribunal would have power to grant stay as incidental or ancillary to its appellate jurisdiction subject to there being a strong prima facie case established to the satisfaction of the Appellate Authority that the very purpose of the appeal would be frustrated or rendered nugatory if such stay was not granted. Section 19 of the 2006 Act applies to an application for setting aside any decree, award or order, made either by the Council or any institution or centre providing dispute resolution services to which reference has been made by the Council. Thus, before the application under Section 19 is made, the matter in dispute between the parties as to the amount due, has already been adjudicated by an impartial forum envisaged in the 2006 Act by following the procedure prescribed in the 1996 Act. The application made under Section 19 of the 2006 Act, thus not being a stage of initial adjudication of the dispute consequent on a unilateral determination by one of the parties, unlike in the case of the Section 17(2) under the 2002 Act. The condition incorporated in Section 19 of the 2006 Act that no application for setting aside any decree, award or other order shall be entertained by any Court unless the appellant (not being a supplier) has deposited seventy- five percent of the amount in terms of the decree, award etc. is arbitrary, illegal and unconstitutional. Whether the requirement of predeposit for entertaining the appeal, is a mandatory requirement or it should be read as directory, with an inherent power in the appellate authority to waive or reduce the amount where considered necessary? - Held that: - provisions of Section 62(5) of the VAT Act were directory in nature and that the first appellate authority was empowered to partially or completely waive the condition of pre-deposit by necessary implication and intendment and in the interest of justice. This power was not to be exercised in routine but only on a strong prima facie case being made out and the first appellate authority being satisfied that the entire purpose of the appeal will be frustrated or rendered nugatory by allowing the condition of pre-deposit to continue as a condition precedent to the hearing of the appeal before it. While upholding the validity of Section 19 of the 2006 Act, it has to be held that the requirement of pre-deposit thereunder is not mandatory and the Court would be empowered to waive, either partially or completely, the requirement of pre-deposit in the same circumstances and conditions. The matter is remitted to the Court to decide the application for interim injunction/protection before the appeal/ petition is taken up for hearing - petition allowed in part and part matter on remand.
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