Allahabad High Court
M/S Ansal Prop.& Infrastructure Ltd. ... vs U.O.I.Thru.Secy.Ministry Of Law & ... on 28 February, 2020
Bench: Munishwar Nath Bhandari, Manish Kumar
HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH A.F.R. Court No. - 2 Case :- MISC. BENCH No. - 5867 of 2020 Petitioner :- M/S Ansal Prop.& Infrastructure Ltd. Thru.Auth.Signatory Respondent :- U.O.I.Thru.Secy.Ministry Of Law & Justice New Delhi & Ors. Counsel for Petitioner :- Anurag Singh Counsel for Respondent :- C.S.C.,A.S.G.,Shobhit Mohan Shukla Hon'ble Munishwar Nath Bhandari,J.
Hon'ble Manish Kumar,J.
( Delivered by Hon'ble Manish Kumar ,J)
1. Shri Shobhit Mohan Shukla, Advocate appears for respondent no.3.
Shri Manjive Shukla, Advocate appears for respondent nos.2 and 5.
Shri S.B.Pandey, learned A.S.G. assisted by Shri Mahendra Mishra appears for respondent no.1.
2. By this writ petition, a challenge is made to Section 43(5) of the Real Estate (Regulation and Development ) Act, 2016 ( for short 'Act of 2016').
3. The challenge is also made to order dated 25.7.2019 passed by the Real Estate Regulatory Authority ( in short 'the authority') and also the recovery certificate dated 21.11.2019.
4. The writ petition has been pressed mainly to challenge to Section 43(5) of the Act of 2016. The order of Real Estate Regulatory Authority has also been challenged, though for which an appeal is maintainable before the Real Estate Appellate Tribunal.
5. Learned counsel submits that a complaint was filed against the petitioner before the Real Estate Regulatory Authority. An order in pursuance to it was passed on 25.7.2019 in ignorance of the jurisdiction under the Act of 2016. In pursuance to the order aforesaid, recovery certificate was issued on 21.11.2019. The petitioner is having a remedy of appeal against the order dated 25.7.2019 but as per Section 43 (5) of the Act of 2016, the condition of pre deposit needs to be satisfied. The condition under Section 43 (5) of Act of 2016 is hit by Article 14 and 19 of the Constitution of India being onerous making the provision to be illusory, thus be declared unconstitutional. To support the argument, learned counsel for the petitioner has referred the judgment of the Apex Court in the case of Mardia Chemicals Ltd. and others Vs. Union of India and others : (2004) 4 SCC 311.
6. In the case of Mardia Chemicals Ltd. (supra), Section 17 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short 'Act of 2002') was challenged. The Apex Court declared aforesaid provision to be ultra vires to the Constitution finding it to be onerous for maintaining an appeal. Therein the condition was to deposit 70% of the demand for maintaining appeal. The condition aforesaid was taken to be not only onerous and oppressive but unreasonable and arbitrary. It was thus, declared to be ultra vires to Article 14 of the Constitution of India.
In the instant case also, Section 43 (5) of the Act of 2016 mandates deposition of at least 30% of the penalty or such higher percentage, as may be determined by the Tribunal or the total amount payable to the allottee including interests and compensation imposed on the promoter or both, before the appeal is heard. No discretion has been given to the appellate Tribunal to reduce the total amount payable to the allottee including interest and compensation. The discretion lies on the penalty, where also mandate is to deposit 30% amount. Thus, in view of the aforesaid, the present matter may be governed by the ratio propounded by the Apex Court in the case of Mardia Chemicals Ltd. (supra).
7. Learned counsel further submits that if an appeal is preferred by the complainant, condition of pre deposit has not been imposed on him, thus the provision under challenge is even discriminatory in nature offending Article 14 of the Constitution of India. Thus on the aforesaid ground also, Section 43 (5) deserves to be struck down.
8. Coming to the facts of the case, learned counsel for the petitioner submits that a complaint was maintained by the side opposite alleging that a flat under BHAROSA Scheme, Lucknow was booked with the payment of required amount but possession of the flat has not been given. The Real Estate Authority has directed to return a sum of Rs.3,62,581/- with interest. In pursuance to which the recovery citation has been issued for a sum of Rs.5,62,738. 40 paisa. If the petitioner is subjected to deposition of the entire amount payable to the complainant, then it is nothing but imposition of onerous condition for hearing of the appeal. It is despite the fact that the order passed by the authority is without jurisdiction. The prayer is accordingly to first struck down the provision under challenge and if the prayer aforesaid is not accepted, then to entertain the writ petition for quashing the order passed by the authority and the recovery citation.
No other argument has been raised for pressing the writ petition.
9. Learned Standing Counsel Shri Manjive Shukla for the State has opposed the writ petition so as Shri Shobhit Mohan Shukla, learned counsel appearing for respondent no.3 and 4.
Reference of the judgment of the Apex Court has been given where similar challenge did not sustain. It is with a clarification that judgement in the case of Mardia Chemicals Ltd.(supra) has no application to the facts of this case.
10. We have considered the rival submissions of the parties and scanned the matter carefully.
11. Challenge has been made to Section 43(5) of the Act of 2016. It would be gain full to quote Section 43 of the Act of 2016, which reads hereunder :-
"Section -43. Establishment of Real Estate Appellate Tribunal.
(1) The appropriate Government shall, within a period of one year from the date of coming into force of this Act, by notification, establish an Appellate Tribunal to be known as the-- (name of the State/Union territory) Real Estate Appellate Tribunal.
(2) The appropriate Government may, if it deems necessary, establish one or more benches of the Appellate Tribunal, for various jurisdictions, in the State or Union territory, as the case may be.
(3) Every bench of the Appellate Tribunal shall consist of at least one Judicial Member and one Administrative or Technical Member.
(4) The appropriate Government of two or more States or Union territories may, if it deems fit, establish one single Appellate Tribunal:
Provided that, until the establishment of an Appellate Tribunal under this section, the appropriate Government shall designate, by order, any Appellate Tribunal functioning under any law for the time being in force, to be the Appellate Tribunal to hear appeals under the Act:
Provided further that after the Appellate Tribunal under this section is established, all matters pending with the Appellate Tribunal designated to hear appeals, shall stand transferred to the Appellate Tribunal so established and shall be heard from the stage such appeal is transferred.
(5) Any person aggrieved by any direction or decision or order made by the Authority or by an adjudicating officer under this Act may prefer an appeal before the Appellate Tribunal having jurisdiction over the matter:
Provided that where a promoter files an appeal with the Appellate Tribunal, it shall not be entertained, without the promoter first having deposited with the Appellate Tribunal at least thirty per cent of the penalty, or such higher percentage as may be determined by the Appellate Tribunal, or the total amount to be paid to the allottee including interest and compensation imposed on him, if any, or with both, as the case may be, before the said appeal is heard.
Explanation.-For the purpose of this sub-section "person" shall include the association of allottees or any voluntary consumer association registered under any law for the time being in force."
12. A person aggrieved by any direction or decision or an order made by the authority or by an adjudicating officer can prefer an appeal. The proviso to Section 43(5) imposes condition of pre deposit if an appeal is preferred by the promoter. The appeal in the hands of promoter cannot be entertained without deposition of at least 30% of the penalty before the appellate Tribunal, or such higher percentage as may be determined by the appellate Tribunal or the total amount to be paid to the allottee including interests and compensation imposed on him if any, or both. The proviso aforesaid has been challenged alleging to be an onerous. It is mainly on the ground that no discretion has been given to the appellate Tribunal to suitably exempt or reduce the amount payable to the allottee in pursuance to the order of authority. So far as amount of penalty is concerned, minimum 30% of it has to be deposited, if amount is not subjected to higher amount by the Appellate Tribunal.
13. In the case of Mardia Chemicals Ltd. and others (supra), the condition was to deposit 75% of the amount demanded by the financial institution. The Apex Court held it to be unconstitutional. It was mainly on the ground that it is putting an onerous and oppressive condition making provision to be unreasonable and arbitrary. Whether the facts of this case are covered by the judgement in the case of Mardia Chemicals Ltd. and others (supra) is a question to be determined.
14. We have considered the main argument of the learned counsel for the petitioner in reference to the judgment of the Apex Court in the case of Mardia Chemicals Ltd. and others (supra) but could not pursue ourselves to accept the argument. It is in reference to the other judgements of the Apex Court where validity of a provision containing similar condition of deposit for maintaining appeal or its hearing was held constitutionally valid.
15. The recent judgement on the issue is in the case of M/s. Tecnimont Pvt. Ltd. Vs. State of Punjab : AIR 2019 SC 4489. The Apex Court has extensively considered the issue in reference to a condition of pre deposit for maintaining appeal.
16. The consideration of the issue was made in reference to the provision containing a condition of pre deposit for an appeal with a discretion to the appellate authority to suitably exempt or relax the amount and also where no discretion was given to reduce or exempt the amount.
17. In the case of M/s Technimont Pvt. Ltd.(supra), the judgement of the constitutional Bench of the Apex Court in the case of Seth Nand Lal and others Vs. State of Haryana and others : 1980 (Supp) SCC 574 was also considered. Paras no.9 to 12 and 14 to 18 of the judgement in the case of M/s technimont Pvt. Ltd. (supra) are quoted hereunder for ready reference :-
" 9. In Seth Nand Lal and Another vs. State of Haryana and others5, the Constitution Bench of this Court was called upon to consider whether the condition of pre-deposit for exercise of right of appeal was valid or not. A submission was raised that unlike the provision which was considered in The Anant Mills Co. Ltd.4, the Appellate Authority was not empowered to relieve the appellant of the requirement of pre-deposit. The submission was considered thus:--
"22. It is well settled by several decisions of this Court that the right of appeal is a creature of a statute and there is no reason why the legislature while granting the right cannot impose conditions for the exercise of such right so long as the conditions are not so onerous as to amount to unreasonable restrictions rendering the right almost illusory (vide : the latest decision in Anant Mills Ltd. v. State of Gujarat4). Counsel for the appellants, however, urged that the conditions imposed should be regarded as unreasonably onerous especially when no discretion has been left with the appellate or revisional authority to relax or waive the condition or grant exemption in respect thereof in fit and proper cases and, therefore, the fetter imposed must be regarded as unconstitutional and struck down. It is not possible to accept this contention for more than one reason. 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 landholdings tax (30 times the tax) which, we are informed, varies in the State of Haryana around a paltry amount of Rs. 8 per acre annually; fourthly, the deposit to be made or bank guarantee to be furnished is confined to the landholdings 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 appea1/revision, even in the absence of a provision conferring discretion on the appellate/revisional authority to relax or waive the condition, cannot be regarded as onerous or unreasonable. The challenge to Section 18(7) must, therefore, fail."
10. The principles laid down in The Anant Mills Co. Ltd.4 and in Seth Nand Lal5 have consistently been followed, for instance in (i) Vijay Prakash D. Mehta and Another vs. Collector of Customs (Preventive), Bombay6; (ii) Shyam Kishore and others vs. Municipal Corporation of Delhi and another7; (iii) Gujarat Agro Industries Co. Ltd. v. Municipal Corporation of the City of Ahmedabad and others8; (iv) State of Haryana v. Maruti Udyog Ltd and others.9; (v) Government of Andhra Pradesh and others vs. P. Laxmi Devi (Smt.)10; (vi) Har Devi Asnani v. State of Rajasthan and others 11; and (vii) S.E. Graphites Private Limited v. State of Telangana and Ors.12.
11. The decisions of this Court can broadly be classified in two categories, going by the width and extent of the concerned provisions:--
a) Under the first category are the cases where, the concerned statutory provision, while insisting on pre-deposit, itself gives discretion to the Appellate Authority to grant relief against the requirement of pre-deposit if the Appellate Authority is satisfied that insistence on pre-deposit would cause undue hardship to the appellant. The decisions in this category are The Anant Mills Co. Ltd.4, Vijay Prakash D. Mehta6, Gujarat Agro Industries8 and Maruti Udyog9
b) On the other hand, the decisions in said Seth Nand Lal5, Shyam Kishore7, P. Laxmi Devi10, Har Devi Asnani11 and S.E. Graphites12 dealt with cases where the statute did not confer any such discretion on the Appellate Authority and yet the challenge to the validity of such provisions was rejected.
12. The decision of the Constitution Bench of this Court in Seth Nand Lal5 did consider whether the requirement of pre-deposit would cause undue hardship. However considering that the liability in question and consequential requirement of pre-deposit was a meagre rate of the annual land-tax payable, the fetter imposed on the right of appeal/revision, even in the absence of a provision conferring the discretion on the appellant/revisional authority to relax or waive the condition was not found to be onerous or unreasonable.
14. In P. Laxmi Devi10, validity of the proviso to Section 47A of the Indian Stamp Act, 1899 was in issue. The High Court had held said provision to be unconstitutional, which view was reversed by this Court. The proviso to said Section 47A reads:--
"Provided that no reference shall be made by the registering officer unless an amount equal to fifty per cent of the deficit duty arrived at by him is deposited by the party concerned."
The relevant discussion was as under:--
"18. In our opinion, there is no violation of Articles 14, 19 or any other provision of the Constitution by the enactment of Section 47-A as amended by A.P. Amendment Act 8 of 1998. This amendment was only for plugging the loopholes and for quick realisation of the stamp duty. Hence it is well within the power of the State Legislature vide Entry 63 of List II read with Entry 44 of List III of the Seventh Schedule to the Constitution.
19. It is well settled that stamp duty is a tax, and hardship is not relevant in construing taxing statutes which are to be construed strictly. As often said, there is no equity in a tax vide CIT v. V.MR.P. Firm Muar13. If the words used in a taxing statute are clear, one cannot try to find out the intention and the object of the statute. Hence the High Court fell in error in trying to go by the supposed object and intendment of the Stamp Act, and by seeking to find out the hardship which will be caused to a party by the impugned amendment of 1998.
20. In Partington v. Attorney General14 Lord Cairns observed as under:
"If the person sought to be taxed comes within the letter of the law he must be taxed, however, great the hardship may appear to the judicial mind. On the other hand if the court seeking to recover the tax cannot bring the subject within the letter of the law, the subject is free, however, apparently within the spirit of the law the case might otherwise appear to be."
The above observation has often been quoted with approval by this Court, and we endorse it again. In Bengal Immunity Co. Ltd. v. State of Bihar15 this Court held that if there is hardship in a statute it is for the legislature to amend the law, but the court cannot be called upon to discard the cardinal rule of interpretation for mitigating a hardship.
21. It has been held by a Constitution Bench of this Court in ITO v. T.S. Devinatha Nadar16 (vide AIR paras 23 to 28) that where the language of a taxing provision is plain, the court cannot concern itself with the intention of the legislature. Hence, in our opinion the High Court erred in its approach of trying to find out the intention of the legislature in enacting the impugned amendment to the Stamp Act.
22. In this connection we may also mention that just as the reference under Section 47-A has been made subject to deposit of 50% of the deficit duty, similarly there are provisions in various statutes in which the right to appeal has been given subject to some conditions. The constitutional validity of these provisions has been upheld by this Court in various decisions which are noted below.
23. In Gujarat Agro Industries Co. Ltd. v. Municipal Corpn. of the City of Ahmedabad8 this Court referred to its earlier decision in Vijay Prakash D. Mehta v. Collector of Customs6 wherein this Court observed: (Vijay Prakash case, SCC p. 406, para 9) "9. Right to appeal is neither an absolute right nor an ingredient of natural justice the principles of which must be followed in all judicial and quasi-judicial adjudications. The right to appeal is a statutory right and it can be circumscribed by the conditions in the grant."
While dealing with the submission that in terms of said proviso, no relief could be granted even in cases where the requirement of pre-deposit may result in great prejudice, this Court went on to observe:--
"28. We may, however, consider a hypothetical case. Supposing the correct value of a property is Rs. 10 lakhs and that is the value stated in the sale deed, but the registering officer erroneously determines it to be, say, Rs. 2 crores. In that case while making a reference to the Collector under Section 47-A, the registering officer will demand duty on 50% of Rs. 2 crores i.e. duty on Rs. 1 crore instead of demanding duty on Rs. 10 lakhs. A party may not be able to pay this exorbitant duty demanded under the proviso to Section 47-A by the registering officer in such a case. What can be done in this situation?
29. In our opinion in this situation it is always open to a party to file a writ petition challenging the exorbitant demand made by the registering officer under the proviso to Section 47-A alleging that the determination made is arbitrary and/or based on extraneous considerations, and in that case it is always open to the High Court, if it is satisfied that the allegation is correct, to set aside such exorbitant demand under the proviso to Section 47-A of the Stamp Act by declaring the demand arbitrary. It is well settled that arbitrariness violates Article 14 of the Constitution vide Maneka Gandhi v. Union of India17. Hence, the party is not remediless in this situation."
15. In Har Devi Asnani11 the validity of proviso to Section 65(1) of the Rajasthan Stamp Act, 1998 came up for consideration in terms of which no revision application could be entertained unless it was accompanied by a satisfactory proof of the payment of 50% of the recoverable amount. Relying on the earlier decisions of this Court including in P. Laxmi Devi10, the challenge was rejected and the thought expressed in P. Laxmi Devi10 was repeated in Har Devi Asnani11 as under:--
"27. In Govt. of A.P. v. P. Laxmi Devi10 this Court, while upholding the proviso to sub-section (1) of Section 47-A of the Stamp Act introduced by Andhra Pradesh Amendment Act 8 of 1998, observed: (SCC p. 737, para 29) "29. In our opinion in this situation it is always open to a party to file a writ petition challenging the exorbitant demand made by the registering officer under the proviso to Section 47-A alleging that the determination made is arbitrary and/or based on extraneous considerations, and in that case it is always open to the High Court, if it is satisfied that the allegation is correct, to set aside such exorbitant demand under the proviso to Section 47-A of the Stamp Act by declaring the demand arbitrary. It is well settled that arbitrariness violates Article 14 of the Constitution (vide Maneka Gandhi v. Union of India17). Hence, the party is not remediless in this situation."
28. In our view, therefore, the learned Single Judge should have examined the facts of the present case to find out whether the determination of the value of the property purchased by the appellant and the demand of additional stamp duty made from the appellant by the Additional Collector were exorbitant so as to call for interference under Article 226 of the Constitution.
16. These decisions show that the following statements of law in The Anant Mills Co. Ltd.4 have guided subsequent decisions of this Court:
"...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.
...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.
....It is open to the Legislature to impose an accompanying liability upon a party upon whom legal right is conferred or to prescribe conditions for the exercise of the right. Any requirement for the discharge of that liability or the fulfilment of that condition in case the party concerned seeks to avail of the said right is a valid piece of legislation."
17. In the light of these principles, the High Court rightly held Section 62(5) of the PVAT Act to be legal and valid and the condition of 25% of pre-deposit not to be onerous, harsh, unreasonable and violative of Article 14 of the Constitution of India. Now we turn to question (c) as framed by the High Court and consider whether the conclusions drawn by the High Court while answering said question were correct or not.
18. It is true that in cases falling in second category as set out in paragraph 11 hereinabove, where no discretion was conferred by the Statute upon the Appellate Authority to grant relief against requirement of pre-deposit, the challenge to the validity of the concerned provision in each of those cases was rejected. But the decision of the Constitution Bench of this Court in Seth Nand Lal5 was in the backdrop of what this Court considered to be meagre rate of the annual land-tax payable. The decision in Shyam Kishore7 attempted to find a solution and provide some succour in cases involving extreme hardship but was well aware of the limitation. Same awareness was expressed in P. Laxmi Devi10 and in Har Devi Asnani11 and it was stated that in cases of extreme hardship a writ petition could be an appropriate remedy. But in the present case the High Court has gone a step further and found that the Appellate Authority would have implied power to grant such solace and for arriving at such conclusion reliance is placed on the decision of this Court in Kunhi1.
18. In para 10, a reference of the judgment of the Apex Court in the case of Anant Mills Co. Ltd. Vs. State of Gujrat and others : (1975) 2 SCC 175 and other judgements has been given.
Para 11 of the judgment bifurcates the issue in two parts. The first part deals with the provision where appellate authority is given discretion to exempt or relax the condition of pre deposit suitably while in second part, the issue has been dealt with where no discretion has been given to the appellate authority.
19. The case in hand is covered by the judgement referred above. Therein Apex Court considered the provision for appeal where discretion was given to the appellate authority to exempt or relax the condition of pre deposit and even those cases where no such discretion was given. We are unable to accept the argument of learned counsel for the petitioner that the judgement of the Apex Court in the case of Technimont Pvt. Ltd.(supra) is not applicable to the fact of this case. If section 43(5) of the Act of 2016 is taken into consideration, it does not direct deposition of the entire amount of penalty rather it is only 30% unless higher percentage is determined by the appellate authority.
20. The condition of pre deposit under Section 43(5) cannot held to be unconstitutional in reference to the judgement of Apex Court in the case of Mardia Chemicals (Supra) because appeal under Section 43 of the Act of 2016 is after the adjudication of dispute by the Real Estate Authority where as no such adjudication has been provided under SERFASI Act of 2002 before an appeal under Section 17 of the Act of 2002.
21. So far the issue of discrimination in maintaining appeal by the complainant is concerned, it is in ignorance of the fact that if the complaint is dismissed and an appeal is preferred by him, it cannot be with a condition of pre deposit as there is no provision for imposition of penalty, interest or compensation on the complainant. Thus, the argument aforesaid is irrational, hence cannot be accepted to hold the provision to be discriminatory in nature.
22. The reference of the judgement of the Apex Court in the case of Govt. of A.P. and others Vs. P.Laxmi Devi : 2008(4) SCC 720 is relevant where similar issue has been decided by the Apex court.
23.The other judgement relevant to the issue is in the case of Hardevi Asnani Vs. State of Rajasthan : 2011 ( 14) SCC 160. Therein also the validity of proviso to Section 65 (1) of Rajasthan Stamps Act of 1998 was challenged. The condition of pre deposit was held constitutionally valid. The right of appeal is right given by a statute thus can be with the conditions of pre deposit. In the said case, the Apex Court had even considered the facts of the case. It was found that the amount so determined was exorbitant thus condition to deposit 50% of the amount for an appeal was taken to be onerous on facts but the provision was not struck down.The writ petition was entertained as an exception.Therein the reference of the judgement in the case of Government of A.P. Vs. P. Laxmi Devi (supra) was given. Therein also writ petition was held maintainable if the amount so determined is found exorbitant or irrational. A liberty to maintain the writ petition was given as an exception and in rarest of the rare case and not as a matter of course. It can be only when the amount so determined is found to be exorbitant, unreasonable or shocking disproportionate, making condition of pre deposit to be onerous.
24. In the case of Seth Nand Lal and others Vs. State of Haryana and others 1980( Suppl) SCC 574, the constitutional Bench elaborately discussed the issue regarding condition of pre deposit for maintaining an appeal or for its hearing. The condition of pre deposit for maintaining an appeal was held to be constitutionally valid. The argument regarding violation of Article 14 of the Constitution of India was not accepted. Para 21 and 22 of the judgement in the case (supra) are quoted herein for ready reference :-
21. The next provision challenged as unconstitutional is the one contained in section section 18(7) imposing a condition of making deposit of a sum equal to 30 times the landholdings tax payable in respect of the disputed surplus area before appeal or revision is entertained by the appellate or revisional authority-- a provision inserted in the Act by Amending Act 40 of 1976. Section 18(1) and (2) provide for an appeal, review and revision of the orders of the prescribed authority and the position was that prior to 1976 there was no fetter placed on the appellate/revisional remedy by the statute. However, by the amendments made by Haryana Act 40 of 1976, sub - section (7) and (8) were added and newly inserted sub -section (7) for the first time imposed a condition that all appeals under sub-section (1) or sub-section (2) and revisions under sub-section (4) would be entertained only on the appellant or the dispute surplus area. Under Sub-section (8) it was provided that if the appellant or the petitioner coming against the order declaring the land surplus failed in his appeal or revision, he shall be liable to pay for the period he has at any time being in possession of the land declared surplus to which he was not entitled under the law, a license fee equal to 30 times the landholdings tax recoverable in respect of this area. On June 6, 1976 the Act was further amended by Amending Act 18 of 1978 whereby the rigour of the condition imposed under sub-section (7) was reduced by permitting the appellant or the petitioner to furnish a bank guarantee for the requisite amount as an alternative to making cash deposits and while retaining sub-section (8) in its original form , a new sub-section (9) was inserted under which it has been provided that if the appeal or revision succeeds, the amount deposited or bank guarantee furnished shall be refunded or released, as the case may be , but if the appeal or revision fails the deposit or the guarantee shall be adjusted against the license fee recoverable under sub- section (8). In the High Court two contentions were urged: First , section 18(1) and (2) , as originally enacted in 1972, gave an unrestricted and unconditional right of appeal and revision against the orders of the prescribed authority or the appellate authority but by inserting sub section (7) and (8) by Act 40 of 1976, a fetter was put on this unrestricted right which was unconstitutional ; secondly, even the mellowing down of the condition by Act 18 of 1978 did not have the effect of removing the vice of unconstitutionality, in asmuch as even the conditions imposed under the amended sub section (7 ) were so onerous in nature that they either virtually took away the vested right of appeal or in any event rendered it illusory. Both these contentions were rejected by the High Court and in our view rightly.
22. It is well settled by several decisions of this Court that the right of appeal is creature of statute and there is no reason why the legislature while granting the right cannot impose conditions for the exercise of such right so long as the conditions are not so onerous as to amount to unreasonable restrictions rendering the right almost illusory ( vide the latest decisions in Anant Mills Ltd. Vs. State of Gujarat). Counsel for the appellants, however urged that the conditions imposed should be regarded as unreasonable onerous especially when no discretion has been left with the appellate or revisional authority to relax or waive the condition or grant exemption in respect thereof in fit and proper cases, and therefore, the fetter imposed must be regarded as unconstitutional and struck down. It is not possible to accept this contention for more than one reason. In the first place, the object of imposing the condition is obviously to prevent frivolour appeal and revision that impede the implementation of the ceiling policy. Secondly, having regard to sub section (8) and (9), it is clear that the cash deposit or bank guaranteee 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 co related to the land holdings tax ( 30 times the tax) which, we are informed, varies in the state of Haryana around a paltry amount of Rs.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 the appeal/revision, even in the absence of a provision conferring discretion on the appellate/revisional authority to relax or waive the condition, cannot be regarded as onerous or unreasonable. The challenge to section 18 ( 7) must, therefore, fail."
25. In the case of Gujarat Agro Industries Vs. Municipal Corporation by the City of Ahmedabad and others : 1999 (4) SCC 468, the Apex Court held that the right of appeal, being statutory right and not inherent thus a condition for pre deposit can be imposed. It remains on the wisdom of the legislature. It can impose an appropriate condition of pre deposit for an appeal. In the said case, the appellate authority was given liberty to reduce the amount only to the extent of 25%.
The Apex Court did not accept challenge to the condition of pre deposit. The issue was dealt with specifically in reference to Article 14 of the Constitution of India.
Paragraph 8 of the said judgement is quoted hereunder :-
"8. By the amending Act 1 of 1979 discretion of the court is granting interim relief has now been limited to the extent of 25% of the tax required to be deposited. It is, therefore, contended that the earlier decision of this Court in Anant Mills case may not have full application. We, however, do not think that such a contention can be raised in view of the law laid down by this Court in Anant Mills case. This Court said that right of appeal is the creature of a statute and it is for the legislature to decide whether the right of appeal should be unconditionally given to an aggrieved party or it should be conditionally given. Right of appeal which is a statutory right can be conditional or qualified. It cannot be said that such a law would be violative of Article 14 of the Constitution. If the statute does not create any right of appeal, no appeal can be filed. There is a clear distinction between a suit and an appeal. While every person has an inherent right to bring a suit of a civil nature unless the suit is barred by statute, however, in regard to an appeal, the position is quite opposite. The right to appeal inheres in no one and, therefore, for maintainability of an appeal there must be authority of law. When such a law authorises filing of appeal, it can impose conditions as well(see Ganga Bai v. Vijay Kumar)."
26. In the light of the judgement referred to above, challenge to the constitutional validity of Section 43 (5) of the Act of 2016 cannot be accepted. It cannot be even in reference to the judgement of the Apex Court in the case of Mardia Chemicals Ltd. (supra). In the case of Mardia Chemicals, Section 17 of the SERFESI Act, 2002 was struck down to the extent of imposing condition of pre deposit for maintaining the appeal. It was after considering section 13 (2 ) and 13(4) apart from Section 14 of the Act of 2002. In the provisions aforesaid, the financial institution has been given right to secure its amount by taking the security interest of property by applying Section 13(4) and 13 of the Act of 2002. It was found that the amount is determined by the financial institution and not by an authority and otherwise the amount is secured by security interest in the property thus no reason remains to impose a condition of pre deposit. It was also found that the amount so demanded by the financial institution is by their unilateral act. It is not determined by any Tribunal, Authority or the Court. It was taken to be a case of unilateral demand, thus condition to deposit 75% of the amount for maintaining an appeal was held constitutional. The Apex Court even found Section 17 not to be a remedy of appeal in essence but for challenge to the notice under Section 13(4) of the Act of 2002. Thus on those grounds, the condition of pre deposit for invoking Section 17 of the Act of 2002 was held constitutionally invalid.
27. Contrary to the above, Section 43 of the Act of 2016 provides remedy of appeal after adjudication of the dispute by the Real Estate Regulatory Authority after providing opportunity of hearing to the parties. Thus, appeal thereupon is after adjudication of the complaint and not against a unilateral act of any party.
28. If compliance of the order of the Real Estate Authority is not made, powers exist for imposition of penalty. Thus, in such circumstances, if a condition of pre deposit has been imposed by the legislature under their wisdom, it cannot be considered to be unconstitutional not being unreasonable or onerous.
29. If the facts of this case are taken into consideration, it shows that the petitioner had booked Flat No.K-6/A-7/0610 on a total value of Rs.8,40,000/-. When the possession of the flat was not given despite deposit of initial amount, the Real Estate Authority directed for its return alongwith interests and that too only the amount which was deposited by the complainant.
30. In those circumstances, if petitioner is directed to comply the direction of Section 43(5), it cannot be said to be unreasonable or onerous on the petitioner for maintaining the appeal.
31. The object of the Act of 2016 is quite clear and Section 43 (5) is for the purpose sought to be achieved. It is to secure the complainant after adjudication of the matter by Real Estate Regulatory Authority. Thus, even on the facts of this case and in reference to the provisions of the Act of 2016, we find condition of pre deposit for hearing of the appeal to be neither unreasonable nor onerous so as to treat remedy to be illusory. The challenge to the provision cannot sustain rather for it, the writ petition is liable to be dismissed.
32. The petitioner is given liberty to avail the remedy of appeal as per provisions of law, if he so chooses because writ petition on the facts of this case would not be maintainable for challenge to the order of the Real Estate Regulatory Authority.
33. With the liberty aforesaid, the writ petition is dismissed.
Order Date -28.2.2020 Shukla