TMI Blog2020 (3) TMI 1260X X X X Extracts X X X X X X X X Extracts X X X X ..... ll opportunity to the parties to rely on whatever evidence is permissible. Thus, the appeal provision is the second stage of adjudication, which, therefore, cannot be a stage where violation of fundamental rights can be urged - In the instant case, there is a further right of appeal before the High Court, after the decision of the Appellate Tribunal, in terms of Section 58 of the 2016 Act. This, however, is in terms of Section 100 of the Code of Civil Procedure, 1908, namely, giving rise to a substantial question of law. The words it shall not be entertained occurring in the proviso to Sub-Section (5) of Section 43 of the 2016 Act, is a preliminary injunction. This prevents even the presentation of an appeal. The Clause before the said appeal is heard ultimately is a final injunction to the process of appellate exercise of jurisdiction. Conjointly, to our mind, this clearly shuts out even the presentation or physical filing of an appeal before the Appellate Authority, as the total amount to be deposited as against compensation is a sine qua non. The justification for the same by the respondents is to prevent any form of exploitation, as the promoter or the builder is in a fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icating Officer under the Act, before entertaining the appeal and it being heard by the Appellate Tribunal. 2.The challenge to the validity of the provision has been occasioned on account of an order passed by the Adjudicating Officer on 17.09.2019. The second respondent had paid a booking advance under a Memorandum of Agreement dated 06.06.2012 for purchase of a flat being constructed by the petitioner in a project named as 'January'. The total sale consideration settled between the parties was ₹ 48,47,400/- towards which the second respondent complainant advanced a sum of ₹ 28,33,440/-. The flat was to be delivered within thirty months with a grace period of 90 days. The complaint was filed claiming that the flat is not complete and the complainant was put to heavy losses on account of such delay of the project, therefore, a relief was prayed for, alleging violation of Section 18 of the Act by moving an application before the Competent Authority under Section 71 read with Section 72 of the said Act. 3.The Competent Authority is the Adjudicating Officer as defined under Section 2 (a) of the Act, appointed by the Real Estates Regulatory Authority establish ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer is not the forum of first adjudication. Consequently, when an appeal is provided for, this opens the first opportunity to contest the matter on merits and hence, keeping in view the provisions of Sections 21, 22, 43 and 71 of the 2016 Act, the outcome is that the Adjudicating Officer presiding over a non-judicial forum and appointed by a non-judicial Authority, the violation of fundamental rights due to the onerous condition on such parameters is available for challenge questioning the validity of the proviso to Sub-section (5) of Section 43 of the 2016 Act. To substantiate the submissions, learned counsel has laid stress on the judgment of the Delhi High Court in the case of Gagan Makkar and Anr. vs. Union of India, (2012) 192 DLT 186, where the challenge was to the provision of appeal in a matter arising out of a property tax imposed by the Delhi Municipal Corporation and it was held that the provision for deposit of the entire amount before the appeal is heard is an onerous condition rendering the right of appeal illusory and the said provision was struck down as being ultra vires. The judgment of the Delhi High Court and other similar matters arising out of the actio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... word 'entertained' with the aid of the judgment in the case of Shyam Kishore (supra), learned counsel has also invited the attention of the Court to the judgment of the Supreme Court in the case of M/s.S.E. Graphites Private Limited vs. State of Telangana and Ors., (Civil Appeal No.7574 of 2014), decided on 10.07.2019. 12.Countering the said submissions raised on behalf of the petitioner, the learned Additional Solicitor General, contends that the contention that the right of appeal is the first adjudicatory forum is absolutely incorrect, inasmuch as under Section 71(1), the Authority, in consultation with the appropriate Government, appoints the Adjudicating officer, who is or has been a District Judge. Thus, the argument advanced that the Authority as defined under Section 22 constitutes of persons having no experience in adjudication is futile, inasmuch as the Selection Committee, consists of the Chief Justice of High Court or his nominee, which selects the Chair Person and Members of the Authority, who, in consultation with the State Government appoint an Adjudicatory Officer. In this view of the matter, the argument being advanced that the forum itself may not be c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be exercised by placing reasonable restrictions. He submits with the aid of another judgment in the case of Gujarat Agro Industries Co. Ltd. vs. Municipal Corporation of the City of Ahmedabad and Ors., (1999) 4 SCC 468, to urge that a right of appeal is neither an absolute right nor an ingredient of natural justice. He has also invited the attention of the Court to other judgments to substantiate his submissions. 15.We may further point out that the learned counsel for the petitioner has also placed before us the judgment of the Apex Court in the case of M/s.Tecnimont Pvt. Ltd. vs. State of Punjab and Ors., (Civil Appeal No.7358 of 2019), decided on 18.09.2019, where a condition of 25% pre-deposit for hearing the appeal was challenged as onerous, harsh and unreasonable. Another question as to whether the Appellate Authority had an inherent power to grant an interim order was also raised. While answering the said questions, the Apex Court held that the High Court could not have culled out a power of granting interim protections and therefore, if the statute did not make any prescription, the Appellate Authority could not have exercised such powers. On the issue of pre-deposit, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he right of appeal inheres in no one and therefore, an appeal for its maintainability must have the clear authority of law. The judgment also took notice of the decision of the Apex Court in Anant Mills Co. Ltd. vs. State of Gujarat, (1975) 2 SCC 175, where it was a case of entertainment of an appeal by a person who had not deposited the amount of tax and who had not been able to demonstrate undue hardship, which, in that case, arose out of his own omission and default and then, held that such a provision would not be violative of Article 14 of the Constitution of India. It was further held that it was 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. The same being valid, no violation of Article 14 was discernible. However, the said case turned on the point that a disability or a disadvantage arising out of the party's own default or omission cannot be taken to be a differentiation so as to attract Article 14 of the Constitution of India. 18.The Apex Court then considered the provisions of the Delhi Municipal Corporation Act, namely Section 170 aforesaid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ording. Also, the absence of a language in clause (b) of the proviso similar to that in clause (a) - which indicates that an appeal filed beyond the period of limitation will not stand admitted unless the delay is condoned - also warrants an inference that the payment of disputed tax is not a condition precedent to the entertainment or admission of the appeal. In the present statutory context, it sounds plausible to say that such an appeal can be admitted or entertained but only cannot be heard or disposed of without pre-deposit of the disputed tax. Such an interpretation will provide some much-needed relief from the harshness of the provision. These are not days in which the calculation of the property tax is simple and uncomplicated; the determination of the annual value of the property, except when based on the actual rent received from the property, involves various subjective factors and, not unoften, there is a wide gulf between the tax admitted to be due and the tax demanded. Sometimes, to compel the assessee to pay up the demanded tax for several years in succession might very well cripple him altogether. This apart, an assessee may not be able to deposit the tax while fili ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Section 170 only as a bar to the hearing of the appeal and its disposal on merits and not as a bar to the entertainment of the appeal itself. 45.If the provision is interpreted in the manner above suggested, one can steer clear of all problems of constitutional validity. The contention on behalf of the Corporation to read the provision rigidly and seek to soften the rigour by reference to the availability of recourse to the High Courts by way of a petition under Articles 226 and 227 in certain situations and the departmental instructions referred to earlier does not appear to be a satisfactory solution. The departmental instructions may not always be followed and the resort to Articles 226 and 227 should be discouraged when there is an alternative remedy. A more satisfactory solution is available on the terms of the statute itself. The construction of the section approved by us above vests in the appellate authority a power to deal with the appeal otherwise than by way of final disposal even if the disputed tax is not paid. It enables the authority to exercise a judicial discretion to allow the payment of the disputed tax even after the appeal is filed but, no doubt, before th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as under:- 27. In the backdrop of these legal principles - can it be said that the proviso to Section 169 (1) of the DMC Act imposes a condition so harsh or onerous as to make the right of appeal granted under Section 169(1) illusory ? We have seen that in Anant Mills (supra), the provision in question [section 406(2)(e) of the Bombay Provincial Municipal Corporation Act, 1949] had a proviso which permitted the appellate authority to dispense with the requirement of pre-deposit of the tax claimed from the appellant in cases of hardship. In Seth Nand Lal (supra), the Supreme Court upheld such a provision, inter alia, because of the 'meagre' amount of pre-deposit that was required under the Act in question. Once again, in Vijay Prakash D. Mehta (supra), the Supreme Court upheld the validity of Section 129 E of the Customs Act, 1962 which also contained a proviso enabling the appellate authority to dispense with the pre-deposit of tax or penalty. A similar provision was considered in Gujarat Agro Industry (supra) though in that case, the power to dispense with the pre-deposit was limited to 25% of such amount. In Shyam Kishore (supra), the Supreme Court interpreted Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... down as being violative of Article 14 of the Constitution of India. 21.In the case of M/s.S.E.Graphites Private Limited (supra), the Apex Court came to a conclusion that the provision therein was not a provision of pre-deposit at the stage of filing or institution or presentation of an appeal and held as under in paragraph 9:- 9. Suffice it to observe that, stricto sensu, the said proviso is not a provision of pre-deposit at the stage of filing, institution or presentation of the appeal as such; but is a provision stipulating payment of tax dues as a prerequisite or sine qua non for consideration of appeal on merits or otherwise and/or for condonation of delay in filing the same, as the case may be, for the first time. If we may say so, it is also to impose fetter on the Appellate Authority from admitting the appeal for consideration on merits. It is well recognized that filing, institution or presentation of appeal in the office of the Appellate Authority is an independent event than the appeal being taken up for consideration for the first time for being admitted on merits or otherwise and/or for condonation of delay in filing it, as the case may be. There is no reas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otal amount to be deposited as against compensation is a sine qua non. The justification for the same by the respondents is to prevent any form of exploitation, as the promoter or the builder is in a far more dominant position financially or otherwise and the allottee being pitted against such dominants require protection of his life time savings in such investments. It is in order to protect the interest of an allottee that such stringent conditions were necessarily required after it was experienced that promoters and builders had been enriched themselves at the cost of individuals who were made to run to Courts and fight long drawn litigations to recover their priced investments. This being a laudable object to our mind is a reasonable approach because it ensures refund of the amount as well as compensate the allottee proportionately. Such a provision will also act as a deterrent to promoters and builders not to withhold the money of the investors against their wishes in the event of violation of the terms of an agreement and would substantially put on guard all promoters and builders to ensure timing precision and the expected levels of accuracy in construction. This object in n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ersonal investment of the allottee and therefore, does not stand on the same footing as that of a property tax assessed by an Authority. 26.There is, however, one question which has to be answered, namely, there is no discretion left in the Appellate Authority at all to modify the terms of deposit and the statute requires a total deposit of the entire amount of compensation. The issue of safety valve being provided in a statute, as discussed in the judgment of Gagan Makkar (supra), has to be taken notice of. As observed by the Apex Court in the case of M/s.Tecnimont Pvt. Ltd. (supra), we cannot read into the hands of the Appellate Authority any discretionary power in this regard. But, at the same time, we find the observation made therein in paragraph 18 that in case of extreme hardship, a writ petition could be an appropriate remedy. To this extent, it is open to an aggrieved person, including the petitioner, to explore the possibility of raising a challenge for exercise of any such discretion in a writ petition. But, then, that is not an issue for us to finally pronounce upon, and would depend as and when such an option is exercised by the petitioner. There are no pleadings in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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