TMI Blog1991 (2) TMI 413X X X X Extracts X X X X X X X X Extracts X X X X ..... is 20,42 ultra vires? 2. In Civil Writ Petition No. 148/89 the matter was referred by the Division Bench of this Court on 17th January, 1989 to the Full Bench for the reason that certain other writ petitions on such questions have been admitted, although the judgment of the Division Bench comprising of V. S. Deshpande and Yogeshwar Dayal, JJ. in Civil Writ Petition No. 963/75 - Panchsheela House Building Cooperative Society v. Municipal Corporation of Delhi (hereinafter referred to as 'the Panchsheela case) already covers some issues involved. Therefore, Panchsheela case requires re-consideration. 3. In Panchsheela case the Division bench of this Court has taken a view that an appeal is filed to be heard. On constructions of Sections 169 to 171 of the Act, the deposit of the amount is a condition precedent to the hearing of the appeal and an appeal cannot be entertained or filed unless the condition is complied with. The appellant cannot insist on the appellate court receiving the memo of appeal but disabling itself from hearing the appeal by the mere refusal of the appellant to deposit the amount. 4. Similar question arose in Civil Writ Petition No. 2799/87 R. K. Goy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssor Collector vide his order dated 23rd December, 1986 assessed the rateable value of the property as ₹ 2,28,650/-with effect from 27-6-1983, the date when the party applied for completion certificate. According to the petitioner, the rateable value with effect from 1st March, 1984 should be only ₹ 94,920/- as opposed to ₹ 2,28,650/- with effect from 27-6-1983. The petitioner being aggrieved against this order of assessment of rateable value of the Deputy Assessor Collector filed an appeal before the District Judge under Section 169 of the Act which was dismissed by him vide order dated 13-10-1988 on the preliminary point that the petitioner has not deposited the amount as required under Section 170(b) of the Act which is a condition precedent for the purpose of maintainability of the appeal. The judgment of Panchsheela case was also relied upon. Being aggrieved against this order of the District Judge dated 13-10-1988, the petitioner has filed the present writ petition on various grounds, inter alia, that the rateable value has not been fixed by the Deputy Assessor Collector in accordance with law. Apart from that the impugned judgment is illegal as the Di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the hearing of the appeal and an appeal cannot be entertained or filed unless the condition is complied with. On the other hand, the judgment in Punj Sons case (supra) correctly decides the issue where it has been held that unless the amount is deposited, no appeal shall be heard or determined. Normally, no appeal shall be determined unless it is heard. This would suggest that the appeal can be filed by the assessed without deposit of any amount. The District Judge at the time of hearing shall have the discretion to direct the deposit of an admitted amount or disputed amount or a part of the total tax amount, with or without conditions. In view of Section 457 of the Act, Order 41 Rule 5 of the Code of Civil Procedure can be pressed in service to resolve the conflicting interest of the assessed and the Corporation. In order to appreciate this contention the relevant portion of Rule 170(b) is reproduced below: 170. Conditions of right to appeal. No Appeal shall be heard or determined under Section 169 unless (a) ............... (b) the amount, if any, in dispute in the appeal has been deposited by the appellant in the office of the Corporation. 7. A bare per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stated, does not mean the same thing as the filing of the application or admission of the application by the court. A similar view was again taken in Dhoom Chand Jain v. Chamanlal Gupta, in which the learned Chief Justice Desai and Mr. Justice Dwivedi gave the same meaning to the expression 'entertain'. It is observed by Dwivedi, J. that the word 'entertain' in its application bears the meaning 'admitting to, considered on', and therefore when the court cannot refuse to take an application which is backed by deposit or security, it cannot refuse judicially to consider it. In a single bench decision of the same court reported in Bawan Ram v. Kunj Beharilal, one of us (Bhargava J.) had to consider the same rule. There the deposit had not been made within the period of limitation and the question had arisen whether the court could entertain the application or not. It was decided that the application could not be entertained because proviso (b) debarred the court from entertaining an objection unless the requirement of depositing the amount or furnishing security was complied with within the time prescribed. In that case the word 'entertain' is not inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . This decision of the Supreme Court in M/s. Lakshmiratan Engineering Works Ltd. case (supra) was followed in Hindusthan Commercial Bank Ltd. v. Punna Sahu (dead) through legal representatives . In that case the amended clause (b) to proviso of Order 21 Rule 90, by Allahabad High Court with effect from 1-6-1957, was again considered and the contention that this proviso would not apply to the proceedings to set aside the sale initiated earlier under the amended proviso was rejected and the interpretation of word entertain was followed as given in M/s. Lakshmiratan Engineering Works Ltd. case (supra) which would mean adjudicate upon or proceed on merits and does not refer to initiation of proceedings. M/s. Lakshmiratan Engineering Works Ltd. case (supra) was again followed in M/s. Lalta Prasad Khinni Lal v. Asstt. Commissioner (Judicial) Sales Tax, Kanpur Range 1, Kanpur . The question that arose in that case was that the memorandum of appeal was filed under Section 9(6) of the U.P. Sales Tax Act (15 of 1948) within time but the amount of tax admitted to be due was not deposited within time although it was deposited later. It was held that it is true that an appeal filed under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9. As such the reasoning and view taken by this Court in Panchsheela case that the memorandum of appeal cannot be filed under Section 169 of the Act and entertained unless the condition precedent of deposit of the amount is complied with is not quite correct. 10. Mr. Rohatgi, relying upon the judgment of Wad, J. in Punj Sons case (supra) next submitted that after the appeal is filed by the assessed under Section 169 of the Act, the application under Order XLI Rule 5 of the Code of Civil Procedure can be filed by him with the prayer for grant of stay of the disputed amount of the property tax with or without conditions and the court has discretion to grant stay having regard to facts and circumstances of each case in the interest of justice. It is possible that the appellant may not have money to deposit the amount along with the memorandum of appeal and may arrange and deposit afterwards. The arguments proceed on the basis that under Section 457 of the Act the procedure provided in the Code of Civil Procedure with regard to suits should be followed as far as it can be made applicable, in the disposal of applications, appeals or references that may be made to the court of Dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arned counsel and am of opinion that such a contention cannot be accepted. The case cited is distinguishable. In this case there was no provision under the Act for granting stay for the recovery of penalty or tax etc. although the provision of appeal was provided for in the statute. Therefore, in such circumstances it was held that the court has inherent powers to grant stay as incidental and ancillary to its appellate jurisdiction. In the present case, however- there is a specific provision to the contrary under Section 170(b) of the Act that unless the amount in dispute in the appeal is deposited by the appellant in the office of the Corporation, no appeal shall be heard or determined. This contention is, therefore, also rejected. 12. It was next contended that even if 0.41, R.5 of the Code of Civil Procedure is not to be made applicable then the petitioner should be allowed to deposit the disputed amount in appeal filed before the District Judge under S. 169 of the Act and not the whole amount of the tax. The interpretation being given by, the District Judge is wholly erroneous and it cannot be sustained in the eyes of law. 13. In this context let me examine the relevant p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usly it would only mean that in case an appeal is preferred against the demand of tax, it has necessarily to be for the purpose of final determination/adjudication as otherwise no remission of appeal is possible under the provisions of the Act. The District Judge before whom the appeal has to be preferred under S. 169 can remit the amount in appeal only in case the appeal is heard and adjudicated upon, for which the amount in dispute in the appeal has to be deposited under S. 170(b) of the Act. Merely filing of a memorandum of appeal without deposit of amount in dispute in the appeal shall not amount to preferring of an appeal as disearlier. Therefore, unless the amount is deposited under S. 170(b) of the Act, there is no preferring of an appeal in the eyes of law and, therefore, the assessed shall be deemed to be in default and consequently there will be no legal impediment for the recovery of tax under warrant of distress or otherwise as provided under the law. 14. In this background the question that arises for consideration is as to what is the amount in dispute in the appeal in the present writ petition and how it should be interpreted. If the literal interpretation to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on will obviously lead to manifest absurdity and also to the result not intended by the scheme of taxation. The object of enacting provision of S. 170(b) appears to us is that the assessed should be prevented from filing frivolous appeal against the rateable value and levy of the property taxes against the corporation and that the tax due to the Corporation is more than adequately secured before the appeal is heard and determined. In case if the disputed amount is literally interpreted to mean the disputed amount in the appeal as discussed above, this will defeat the very purpose and object of the provisions of S. 170(b) of the Act which the Legislature never intended. Therefore, the amount in dispute in the appeal would have to be interpreted as the tax amount based on whole amount of the rateable value - which tax has to be paid by the assessed. Such an interpretation shall be in conformity with the well settled principle of interpretation of statutes. In this connection reference may be made to Maxwell on 'Interpretation of Statutes': The so-called golden rule is really a modification of the literal rule. It was stated in this way by Parke B. It is a very useful ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 16. Lastly it was contended that the provision of Section 170(b) of the Act requiring the assessed to deposit the amount in dispute in the appeal in the office of the Corporation before the appeal is heard and determined is arbitrary and violative of Article 14 of the Constitution. The argument proceeds on the basis that the condition imposed under Section 170(b) is so onerous that it would amount to unreasonable restrictions rendering the right almost illusory as no discretion is left with the appellate authority to grant stay or dispense with the requirement of pre-deposit of the amount in dispute in the appeal. On the other hand, Mr. Datar, learned counsel for the respondents, vehemently submitted that the right to appeal is a creature of statute and there is no reason why the legislature while granting the right cannot impose the conditions for the exercise of such rights. Therefore, before the appeal is heard or determined Section 170(b) of the Act must necessarily be compiled with. 17. In support of his submissions Mr. Datar, learned counsel appearing for the respondents, referred to various cases. At the very outset the case of Shri Vijay Prakash D. Mehta/Sh. Jawahar D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal against rateable value should be entertained unless the amount claimed from the appellant by a bill for property taxes was deposited in Court. The amended section gave to the Judge a discretion to dispense with the deposit or a part thereof if he was of opinion that the deposit would cause undue hardship to the appellant. It appears the unamended provision did not give to a Judge the discretion to dispense with the deposit or a part thereof in case of undue hardship. This unamended provision was struck down by the Gujarat High Court on the basis that the unamended Section 406(2)(e) classified the appellants filing appeals against tax and rateable value into two classes : (1) those who deposited the amount of tax assessed by the Commissioner; and (2) those who did not. It was held that the above classification had no rational nexus with the object of the provision for appeal and that there was no reasonable justification for giving a right of appeal to one class and denying it to the other. Section 406 (2)(e) was further amended by Act 5 of 1970 wherein the Judge was given a discretion to dispense with the deposit or a part thereof if he was of opinion that the deposit wou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the entertainment of the appeal by a person who has not deposited the amount of tax due from him and who is not able to show to the appellate Judge that the deposit of the amount would cause him undue hardship arises out of the constitutional validity of provision has his own omission and default. The above not been taken note by the single Judge of provision, in our opinion, has not the effect of Bombay High Court although the above case classes with the object of meeting out differential treatment to them; it only spells out the consequences flowing from the omission and default of a person who despite the fact that the deposit of the amount found due from him would cause him no hardship, declines of his own volition to deposit that amount. The right of appeal is the creature of a statute. Without a statutory provision creating such a right the person aggrieved is not entitled to file an appeal. We fail to understand as to why the legislature while granting the right of appeal cannot impose conditions for the exercise of such right. In the absence of any special reasons there appears to be no legal or constitutional impediment to the imposition of such conditions. It necess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... already been discussed in Anant Mill's case (supra) and in the case of Nand Lal to be discussed hereinafter, it is apparent that though no doubt right of appeal is the creation of statute but in case the conditions imposed on the right of appeal are so onerous as to amount unreasonable restrictions rendering the right almost illusory and nugatory, such conditions can always be struck down by the court being ultra vires. In fact, in the aforementioned cases, the Supreme Court did go into the question whether the conditions imposed on the right of appeal are onerous as to render the right of appeal illusory and nugatory. Furthermore, for the correction in the assessment of the rateable value, the appropriate forum is neither the writ jurisdiction nor a civil suit as has also been explained hereinafter. Therefore, the decision of Chatter Singh's case cannot also advance-the case of the respondents any further. 22. In Nand Lal v. State of Haryana the case of Anant Mills (supra) was followed. In that case challenge was made to the provision contained in Section 18(7) of Haryana Ceiling and Land Holdings Act imposing a condition of making a deposit of a sum equal to 30 times ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g as the conditions are not so onerous as to amount to unreasonable restrictions rendering the right almost illusory In the first place, the object of imposing the condition is obviously to prevent frivolous appeals and revision that impede the implementation of the ceiling policy; secondly, having regard to sub-sections (8) and (9) it is clear that the cash deposit or bank guarantee is not by way of any exaction but in the nature of securing mesne profits from the person who is ultimately found to be in unlawful possession of the land; thirdly, the deposit or the guarantee is correlated to the land holdings tax (30 times the tax) which, we are informed, varies in the State of Haryana around a paltry amount of ₹ 8 per acre annually; fourthly, the deposit to be made or bank guarantee to be furnished is confined to the land holdings tax payable in respect of the disputed area i.e. the area or part thereof which is declared surplus after leaving the permissible area to the appellant or petitioner. Having regard to those aspects particularly the meagre rate of the annual land tax payable, the fetter imposed on the right of appeal/revision, even in the absence of a provision confe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able restriction rendering the right of appeal almost illusory and nugatory and, therefore, suffers from vice of unconstitutionality and of being ultra vires of Article 14 of the Constitution. 24. No doubt provisions of Haryana Ceiling Act in Nand Lal's case and Bombay Municipal Corporation Act in Anant Mills' case have been upheld but that is on the basis of a finding that the conditions are not onerous or unreasonable whereas in the present case the condition is onerous and unreasonable which makes the right to appeal illusory. As we have seen various other Acts, e.g., Customs Act, 1962, Haryana Ceiling Act, Bombay Municipal Corporation Act, 1949 wherein an order to relieve the person from the rigour of the provision of predeposit of the amount in dispute in appeal for hearing and determination, the provision has been made for granting the Tribunal/Judge a discretion to stay the deposit of the amount or dispense with or waive the requirement of pre-deposit of the amount in case of hardship As already discussed, Section 406 (2)(e) of Bombay Municipal Corporation Act, 1949 which imposed a condition for deposit of the amount of tax before the appeal is heard or determin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition, the availability of right to invoke Articles 226 227 of the Constitution is also not a sufficient safeguard as all questions relating to appeal including highly disputed and complicated questions of facts cannot be gone into in the writ and supervisory jurisdiction. In M/s. Wire Netting Stores, Delhi v. The Regional Provident Funds Commissioner, New Delhi this Court struck down Section 7A of the Employee's Provident Funds and Miscellaneous Provisions Act being violative of Article 14 of the Constitution since no appeal was provided for against the order under Section 7A of the Act and Jurisdiction of civil court was also barred. In that case the question that arose for consideration was whether Section 7A of the Employees Provident Funds and Miscellaneous Provisions Act which gives adjudicative power to the Commissioner to determine the amount due from the employer is ultra vires of Article 14 of the Constitution as such this provision gave a finality to such an order and was not to be questioned in any court of law, and no remedy of appeal etc. was provided for against such adjudication. It was held that admittedly there is no appeal provided for against the order und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der See. 170(b) of the Delhi Municipal Corporation Act, 1957 (hereinafter referred to as the Act) is a condition precedent for hearing or determination of the appeal but also for filing of memorandum of appeal? 2. Whether the District Judge has a discretion to grant stay of the disputed amount or dispense with the condition pre-deposit of the amount in appeal, with or without conditions, in the office of the Corporations Further what is the amount in deposit in appeal? 3. In case it is held that the deposit of tax amount under Sec. 170(b) of the Act is a condition precedent for hearing or determination of the appeal and the District Judge has no discretion to grant stay of the deposit of tax amount and dispense with the condition of pre-deposit of amount with or without conditions, whether such provision is ultra vires? 31. We agree with the conclusion arrived at by our learned brother Nag J. as regards the first two questions, but are unable to do so the regard to the third question. 32. Sub-section (1) of S. 169 of the Delhi Municipal Corporation Act, M7 provides that an appeal against the levy of assessment of any tax under this Act shall lie to the court of District ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s observed that the right of appeal is the creation of statute and it can be taken away only by a statute; and by express words or necessary intendment. It was further observed that the right of appeal is not inherent or fundamental but created by law. Courts which are subordinate to the High Court are not constituted under the Constitution and, therefore, access to such subordinate courts may be lawfully abridged or made subject to the fulfillment of conditions imposed by law. 34. It is, thus, clear that the right of appeal is neither absolute, inherent or unfettered and limitations can be prescribed to the right of appeal by the statute itself. 35. Submission of learned counsel for the petitioner has been that there is a total bar in the hearing of an appeal of a person who is unable to deposit the amount of tax which as such is violative of the provisions of Article 14 of the Constitution of India. He has, thus, submitted that unless and until the amount in dispute in the appeal is deposited by a person his appeal shall not be heard by the District Judge on account of which the said individual would be deprived of his right of adjudication by the appellate court. He has al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In the absence of any special reasons there appears to be no legal or constitutional impediment to the imposition of such conditions. It is impossible, for example, to prescribe a condition in criminal cases that unless a convicted person is released on bail, he must surrender to custody before his appeal against the sentence of imprisonment would be entertained. Likewise, it is permissible to enact a law that no appeal shall lie against an order relating to an assessment of tax unless the tax had been paid. Such a provision was on the statute book in Section 30 of the Indian Income-tax Act, 1922. The proviso to that section provided no appeal shall lie against an order under sub-section (1) of Section 46 unless the tax had been paid . Such conditions merely regulate the exercise of the right of appeal so that the same is not abused by a recalcitrant party and there is no difficulty in the enforcement of the order appealed against in case the appeal is ultimately dismissed. It is open to the legislature to impose an accompanying liability upon a party upon whom a legal right is conferred or to prescribe conditions for the exercise of the right. Any requirement for the discharge of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d holding tax was recovered in respect of land. There was a further amendment in this section in June 1978 thereby permitting the appellant or the petitioner to furnish a bank guarantee for the requisite amount as an alternative to making cash deposit. This provision was upheld by the Supreme Court for more than one reasons which have been enumerated. One of the grounds mentioned therein was that the amount required to be deposited was not a heavy amount. The fact, however, remains that in the said provision also there was no discretion with the appellate or the revisional authority to grant exemption from the payment of the amount and the provision was still held to be valid. It is, thus, clear that the consistent view has been that the appeal is a statutory right and it is open to the legislature to provide for conditions under which the right of appeal can be exercised. 42. We may also refer to the case Chatter Singh Baid v. Corporation of Calcutta. It was a case relating to the payment of house-tax and the right of the aggrieved party who filed an appeal. Petitioners in the said case were the owners of Premises No. 11, Indra Kumar Karnani Street. and with effect from 4th qua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there is no constitutional or legal impediment to imposition of such a condition for deposit of tax. 48. Absence of a discretion in the appellate Court to exempt the deposit, of the amount of tax cause hardship in some cases but the Court cannot test the validity of the statutory provision on the touchstone of hardship or stringency. If a provision made in a statute is not invalid, any person desirous of availing the right of appeal has no option but to comply with the condition under which this right of appeal can be exercised. A restriction is, undoubtedly, bound to be irksome and painful to the citizens even though it may be for public good. However, important the right of a citizen or an individual may be, it has to yield to the larger interest of the country or the community., 49. Learned counsel for the petitioner submits that there may be cases where the assessing authority goes palpably wrong in the determination of the rateable value of the property and may even assess a person not even being the owner of the premises. He has also suggested that on account of clerical mistake the assessment is made ten times or hundred times more and in such like cases the aggrieved ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the opinion that this may be one of the reasons for the legislature to make a provision for the deposit of the disputed amount before an appeal is entertained by the District Judge. An assessed getting relief in appeal would have a right of adjustment of the excess amount paid as tax and, thus, he is not deprived of any excess amount. 51. At this stage it would be useful to refer to a recent judgment of the Supreme Court in case Shri Vijay Prakash D. Mehta/Sh. Jawahar D. Mehta v. Collector of Customs (Preventive) Bombay, Judgment Today . In the said case at the material time in 1983 Vijay Prakash D. Mehta and Shri Jawahar D.Mehta were based in Hong Kong and Singapore respectively. They came to India in February, 1983 and were charged of alleged offences under Ss. 112 and 114 of the Customs Act and simultaneously they were alleged to have committed offences under the Foreign Exchange Regulation Act (FERA). Petitioners' statements were recorded by the Enforcement Authorities under Sec. 40 of FERA which according to them were obtained by using third degree methods. Their statements, however, were not recorded under S. 108 of the Customs Act. In the FERA proceedings they wer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 of the Constitution of India. We have carefully gone through, the aforesaid judgment and have, no doubt, in our mind that this-judgment cannot be of any help to the petitioners. The admitted facts in the said case were that no appeal was provided from the decision of the Commissioner of Provident Funds nor could it be justified in a Civil Court. It was held that a provision should have been made for an appeal to tribunal, judicial or quasijudicial. It is also pertinent to note that in the said case powers were conferred on the Commissioner to enforce attendance of persons to examine them on oath and require discovery and production of documents. However, no such right was made available to the employer. In this way, the procedure provided was not just as it did not provide similar opportunities to the employer as were made available to the Commissioner. There was a complete absence of the right to challenge the order of the Commissioner though with a proviso to the effect that the amount of tax has to be deposited before the appeal is heard or determined. This judgment, thus, is distinguishable and cannot be of any help to the petitioners. 53. As a result, the writ petitions a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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