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Art Of Memorising By Krishan Chahal Trial Undertakings Act

The right to appeal is a statutory right and it can be circumscribed by the conditions in the grant. 24. In Anant Mills Co. Ltd. v. State of Gujarat (1975) 2 SCC 175 this Court held that the right of appeal is a creature of the 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.

Award for an amount of 2,88,61,758- along with future interest at three times the bank rate till the date of realization was passed against the petitioners.

The petitioners filed CWP No.19189 of 2015 titled as Ms Mahesh Kumar Singla and another Vs.

The writ petition was 2 of 28 CWP No.23368 of 2015 3 disposed of vide order dated 28.9.2015 holding that the petitioners had an alternative remedy to challenge the award before the Civil Court in terms of Section 19 of the 2006 Act.

Moreover, as per Section 19 of the 2006 Act, no application for setting aside any decree, award or other order made by the Council could be entertained without prior deposit of seventy-five per cent of the decretal amount, which had not been done.

Accordingly, the writ petition was dismissed.

The present petition has been filed challenging Section 19 of the 2006 Act to the extent of the requirement of deposit of seventy- five per cent of the amount of award as a pre-condition for entertaining an application thereunder.

The petition came up for preliminary hearing on 2.11.2015 and notice of motion was issued.

It was observed that the petitioners may file an application for setting aside the award before the competent authority.

The petitioners have filed C.M.

No.146 of 2017, wherein, it has been stated that after the filing of this petition, they had filed the application (Annexure A-1) before the Additional District Judge, Patiala for setting aside the award dated 30.9.2014.

The respondent filed objection petition regarding the maintainability of the application on account of non- deposit of seventy five per cent of the amount awarded.

Vide order dated 21.12.2016 (Annexure A-4) the Additional District Judge, Patiala allowed the objection petition, but subject to deposit of seventy-five per cent of the amount awarded within twenty days of the order.

Ld. Counsel for the petitioners has argued that the requirement of pre-deposit of seventy-five percent of the amount awarded as a pre- 3 of 28 CWP No.23368 of 2015 4 condition for entertaining the appeal is onerous and oppressive.

Reliance was placed, primarily, on the decision of Honble the Supreme Court in Mardia Chemicals Ltd.

Union of India and others, (2004) 4 SCC 311, where Honble the Supreme Court had declared Section 17(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short 2002 Act) to be arbitrary and unconstitutional.

As per Section 17(2) of the 2002 Act no appeal could be entertained before the Debt Recovery Tribunal unless the borrower had deposited seventy-five per cent of the amount claimed in the notice under Section 13(2) thereof.

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.

This is reflected in the Statement of Objects and Reasons of the Bill where among the objectives sought to be achieved by this Act are as follows: 2.

In view of the above-mentioned circumstances, the Bill aims at facilitating the promotion and development and enhancing the competitiveness of small and medium enterprises and seeks xxxxxxxx (f) make provisions for ensuring timely and smooth flow of credit to small and medium enterprises to minimise the incidence of sickness among and enhancing the competitiveness of such enterprises, in accordance with the guidelines or instructions of the Reserve Bank of India.

Art Of Memorising By Krishan Chahal Trial Undertakings Act

CWP No.23368 of 2015 5 xxxxxxxxxx (k) make further improvements in the Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993 and making that enactment a part of the proposed legislation and to repeal that enactment.

The effort through the aforesaid legislation was to statutorily ensure that payment is made to the micro, small and medium enterprises supplier within forty-five days of the supplies being made (Section 15).

Any disputes regarding the supplies made would be adjudicated within ninety days Section 18(5).

He argued that Section 19 of the 2006 Act has been interpreted by Honble the Supreme Court in Goodyear India Ltd.

Norton Intech Rubbers (P) Ltd., (2012) 6 SCC 345.

In that case, the Honble Supreme Court dismissed the Special Leave Petition against the order of the High Court, wherein, it had been held that on a plain reading of Section 19 of the 2006 Act, the Court had no discretion to either waive or reduce the amount of seventy-five per cent of the award as a pre-deposit for filing of the appeal.

Only an extended period of six weeks was granted to the petitioner therein to deposit the amount.

We have heard Ld.

Counsel for the parties and perused the record.

The impugned Section 19 of the 2006 Act is reproduced below: 19.

Application for setting aside decree, award or order.No 5 of 28 CWP No.23368 of 2015 6 application for setting aside any decree, award or other order made either by the Council itself or by any institution or centre providing alternate dispute resolution services to which a reference is made by the Council, shall be entertained by any court unless the appellant (not being a supplier) has deposited with it seventy-five per cent of the amount in terms of the decree, award or, as the case may be, the other order in the manner directed by such court: Provided that pending disposal of the application to set aside the decree, award or order, the court shall order that such percentage of the amount deposited shall be paid to the supplier, as it considers reasonable under the circumstances of the case, subject to such conditions as it deems necessary to impose.

Similar requirement of making a pre-deposit before entertaining appeals is found in many statutes.

Some statutes have an express provision enabling the appellate revisional authority to reduce, waive or defer the payment, while some statutes do not contain such a provision.

The validity of such statutes has come up for consideration before the Courts on numerous occasions and it has been consistently held that as 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.

Simultaneously, it has been held that 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 6 of 28 CWP No.23368 of 2015 7 Authority that the very purpose of the appeal would be frustrated or rendered nugatory if such stay was not granted.

The case law on the subject was extensively reviewed by a Division Bench of this Court in Punjab State Power Corporation Limited vs.

This Court framed the following questions for consideration: (a) Whether the State is empowered to enact section 62(5) of the pvat act (b) Whether the condition of 25 pre-deposit for hearing first appeal is onerous, harsh, unreasonable and, therefore, violative of Article 14 of the Constitution of India (c) Whether the first appellate authority in its right to hear appeal has inherent powers to grant interim protection against imposition of such a condition for hearing of appeals on merits Among the decisions relied on were Govt.

A.P. v. P. Laxmi Devi, (2008) 4 SCC 720 and Har Devi Asnani v.

State of Rajasthan, ( 2011) 14 SCC 8 of 28 CWP No.23368 of 2015 9 160.

In P. Laxmi Devis case, Honble the Supreme Court upheld the validity of Section 47-A of the Stamp Act, 1899, introduced by the Indian Stamp Act (A.P.

Amendment Act 8 of 1998), as per which, a party was required to deposit fifty per cent of the deficit stamp duty before a reference could be made to the Collector.

The observations of Honble the Supreme Court are as under: 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 right to appeal is a statutory right and it can be circumscribed by the conditions in the grant.

In Anant Mills Co.

Ltd. v. State of Gujarat (1975) 2 SCC 175 this Court held that the right of appeal is a creature of the 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.

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