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PETITIONER: THE GUJARAT AGRO INDUSTRIES CO. LTD.

       Vs.

RESPONDENT: MUNICIPAL CORPORATION OF CITY OF AHMEDABAD & ORS.  ETC.

DATE OF JUDGMENT:       26/04/1999

BENCH: D.P.Wadhwa, N.Santosh Hegde

JUDGMENT:

D.P. Wadhwa, J.

     This  batch  of appeals arises out of  judgment  dated October  9, 1980 passed by the Division Bench of the Gujarat High  Court  holding  that Section 406(2)(e) of  the  Bombay Provincial   Municipal  Corporations  Act,   1949   in   its application to Ahmedabad in the State of Gujarat was a valid piece of legislation.  Section 406 of the Act we may set out here and now :

     406.(1)   Subject  to   the  provisions   hereinafter contained,  appeals against any rateable value or tax  fixed or  charged under this Act shall be heard and determined  by the Judge.

     (2) No such appeal shall be entertained unless

     (a)  it  is  brought  within fifteen  days  after  the accrual of the cause of complaint;

     (b)  in the case of an appeal against a rateable value a  complaint has previously been made to the Commissioner as provided under this Act and such complaint has been disposed of ;

     (c)  in  the  case  of an appeal against  any  tax  in respect  of  which  provision exists under this  Act  for  a complaint to be made to the Commissioner against the demand, such complaint has previously been made and disposed of;

     (d)  in  the case of an appeal against  any  amendment made  in  the assessment book for property taxes during  the official  year,  a  complaint has been made  by  the  person aggrieved within fifteen days after he first received notice of such amendment and his complaint has been disposed of;

     (e)  in the case of an appeal against a tax, or in the case  of an appeal made against a rateable value, the amount of  the  disputed  tax claimed from the  appellant,  or  the amount  of  the tax chargeable on the basis of the  disputed rateable  value,  up to the date of filing the  appeal,  has been deposited by the appellant with the Commissioner :

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     Provided  that where in any particular case the  judge is  of  the  opinion that the deposit of the amount  by  the appellant will cause undue hardship to him, the judge may in his  discretion,  either unconditionally or subject to  such conditions  as  he may think fit to impose, dispense with  a part of the amount deposited so however that the part of the amount  so  dispensed with shall not exceed twenty five  per cent of the amount deposited or required to be deposited.

     Judge is defined in Section 2(29) of the Act to mean in  the  City of Ahmedabad the Chief Judge of the  Court  of Small  Causes or such other Judge of the Court as the  Chief Judge  may  appoint in his behalf and in any other City  the Civil  Judge  (Senior Division) having jurisdiction  in  the City.  Section 406 suffered some amendments.  In sub-section (2)  for  the  words shall be heard  were  substituted  by shall   be   entertained.   Proviso  to  clause   (e)   of sub-section  (2)  was first added by Gujarat amendment 5  of 1970.   This proviso (as it now exists) was then substituted by Gujarat Amendment 1 of 1979.

     Appellants  in all these appeals own properties in the City  of  Ahmedabad.   They are liable to pay  property  tax which is a tax on buildings and lands in the City.  Property tax  is revisable every four years.  When last revision took place,  appellants  challenged those assessments in  appeals which  they  filed before the Judge under Section 406(1)  of the  Act  after  bills  were   presented  by  the  Municipal Corporation  to them.  During the pendency of appeals before the  Judge,  appellants prayed for stay of recovery  of  the property  tax.  In view of proviso to clause (e) of  Section 406(2)  of  the  Act,  the Judge could  not  give  effective interim  relief to the appellants as exemption from  payment of  property tax could not be more than 25% of the amount of the   property  tax  demanded   from  the  appellants.   The appellants  therefor challenged the constitutional  validity of  clause (e) of sub- section (2) of Section 406 contending that it was violative of Article 14 of the Constitution.

     The  Division  Bench  who  heard  the  writ  petitions considered  the earlier history of amendments to clause  (e) of  Section 406(2) of the Act.  Clause (e), as it originally stood  at  the time when the Act was made applicable to  the City of Ahmeadbad, read as under :

     No  such appeal shall be heard unless- ...  ...   ... in  the case of an appeal against a tax or in the case of an appeal  made  against a rateable value after a bill for  any property  tax assessed upon such value has been presented to the  appellant,  the  claimed from the  appellant  has  been deposited by him with the Commissioner.

     A  Division  bench  of the Gujarat High Court  in  SCA No.662  of 1968 decided on October 27, 1969 held that clause (e)  violated  Article  14 of the Constitution.  It  is  not necessary  for us to go into the reasons which weighed  with the  Court in reaching such a conclusion.  By Gujarat Act  5 of 1970 following proviso was added to clause (e) :

     Provided  that where in any particular case the Judge is  of  opinion  that  the  deposit of  the  amount  by  the appellant will cause undue hardship to him, the Judge may in his  discretion  dispense with such deposit or part  thereof either  unconditionally or subject to such conditions as  he

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may deed fit.

     This  proviso  also came to be challenged  before  the Gujarat  High  Court on the same very plea that it  violated the provisions of Article 14 of the Constitution.  This time also a Division Bench of the High Court held that clause (e) violated  Article 14 of the Constitution.  This decision  of the  High  Court was challenged in this Court in  The  Anant Mills  Co.  Ltd.  vs.  State of Gujarat and Others [(1975) 2 SCC  175].   This  Court reversed the decision of  the  High Court  and  held that clause (e) with the added proviso  did not violate article 14 of the Constitution.

     Now  it  is  this amended clause (e) and  the  proviso which were subject matter of the constitutional challenge in the High Court and by the impugned judgment, High Court held the  same to be constitutionally valid and dismissed all the petitions filed before it.

     We  may  refer to the reasons which led this Court  to uphold  the constitutional validity of clause (e) read  with proviso  which  was  added by Gujarat Act 5 of  1970.   This Court said :

     After hearing the learned Counsel for the parties, we are unable to subscribe to the view taken by the High Court. Section 406(2)(e) as amended states that no appeal against a rateable  value or tax fixed or charged under the Act  shall be entertained by the Judge in the case of an appeal against a  tax  or in the case of an appeal made against a  rateable value  after a bill for any property tax assessed upon  such value has been presented to the appellant, unless the amount claimed  from  the appellant has been deposited by him  with the  Commissioner.   According to the proviso to  the  above clause, where in any particular case the Judge is of opinion that  the deposit of the amount by the appellant will  cause undue  hardship  to  him, the Judge may  in  his  discretion dispense   with  such  deposit  or  part   thereof,   either unconditionally or subject to such conditions as he may deem fit.   The  object of the above provision apparently  is  to ensure  the deposit of the amount claimed from an  appellant in  case he seeks to file an appeal against a tax or against a  rateable value after a bill for any property tax assessed upon  such  value has been presented to him.  Power  at  the same  time  is given to the appellate Judge to  relieve  the appellant from the rigour of the above provision in case the Judge  is of the opinion that it would cause undue  hardship to  the appellant.  The requirement about the deposit of the amount claimed as a condition precedent to the entertainment of  an appeal which seeks to challenge the imposition or the quantum  of that tax, in our opinion, has not the effect  of nullifying  the right of appeal, especially when we keep  in view  the  fact that discretion is vested in  the  appellate Judge  to  dispense  with  the   compliance  of  the   above requirement.   All that the statutory provision seeks to  do is  to  regulate the exercise of the right of  appeal.   The object  of  the  above provision is to keep in  balance  the right  of  appeal, which is conferred upon a person  who  is aggrieved  with  the  demand of tax made from him,  and  the right of the Corporation to speedy recovery of the tax.  The impugned provision accordingly confers a right of appeal and at  the  same time prevents the delay in the payment of  the tax.   We  find ourselves unable to accede to  the  argument that  the  impugned provision has the effect of  creating  a

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discrimination  as is offensive to the principle of equality enshrined  in  Article  14  of   the  Constitution.   It  is significant  that the right of appeal is conferred upon  all persons  who are aggrieved against the determination of  tax or  rateable value.  The bar created by Section 406(2)(e) to 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 his own omission  and default.  The above provision, in our opinion, has  not  the  effect  of making  invidious  distinction  or creating  two  classes  with  the   object  of  meting   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 is permissible, 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 that .  .  .  no appeal shall lie against an order under  sub-section (1) of Section 46 unless the tax has 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 legal  right is conferred or to prescribe conditions for the exercise of the right.  Any requirement for the discharge of that  liability or the fulfillment of that condition in case the  party  concerned seeks to avail of the said right is  a valid   piece  of  legislation,  and   we  can  discern   no contravention  of  Article  14  in   it.   A  disability  or disadvantage  arising  out  of  a  partys  own  default  or omission cannot be taken to be tantamount to the creation of two  classes  offensive to Article 14 of  the  Constitution, especially  when  that disability or  disadvantage  operates upon all persons who make the default or omission.

     By  the Amending Act 1 of 1979 discretion of the Court in  granting  interim  relief has now been  limited  to  the extent  of 25% of the tax required to be deposited.  It  is, therefore,  contended that 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 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

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of  appeal  which is 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, 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 Smt.  Ganga Bai vs.  Vijay Kumar  & Ors.  [(1974) 2 SCC 393]}.

     In  M/s.   Elora Construction Company  vs.   Municipal Corporation  of  Greater Bombay & Ors.  [AIR 1980  Bom.162], the  question  before  the Bombay High Court was as  to  the validity of Section 217 of the Bombay Municipal Corporations Act.  This Section provided for filing of appeal against any rateable value or tax fixed or charged under that Act but no such appeal could be entertained unless :

     (d) in the case of an appeal against a tax, or in the case of an appeal made against a ratable value the amount of the  disputed tax claimed from the appellant, or the  amount of  the tax chargeable on the basis of the disputed  ratable value,  up  to  the date of filing of the appeal,  has  been deposited by the appellant with the Commissioner.

     It  will  be  seen that clause (d)  aforesaid  was  in similar  terms  as  clause  (e)  of  Section  406(2)  as  it originally   existed.    Bombay  High   Court   upheld   the constitutional  validity  of  Section   217  of  the  Bombay Municipal  Corporation Act.  Calcutta High Court in Chhatter Singh Baid & Ors.  vs.  Corporation of Calcutta & Ors.  [AIR 1984  Cal.   283]  also took the same view.   There  it  was sub-section  (3A)  of Section 183 of the Calcutta  Municipal Act, 1951 which provided

     No  appeal  under this section shall  be  entertained unless  the  consolidated  rate payable up to  the  date  of presentation of the appeal on the valuation determined

     (a)  by an order under Section 182, in the case of  an appeal to the Court of Small Causes,

     (b)  by the decision of the Court of Small Causes,  in the case of an appeal to the High Court,

     has  been  deposited in the municipal office and  such consolidated  rate  is continued to be deposited  until  the appeal is finally decided.

     Similar  provisions  existed  in the  Delhi  Municipal Corporation  Act, 1957.  There it is Section 170 which is as under :

     170.   Conditions of right to appeal.No appeal  shall be heard or determined under Section 169 unless

     (a)  the  appeal  is, in the case of a  property  tax, brought   within  thirty  days  next   after  the  date   of authentication  of  the  assessment list under  Section  124

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(exclusive of the time requisite for obtaining a copy of the relevant  entries  therein) or, as the case may  be,  within thirty  days  of the date on which an amendment  is  finally made  under Section 126, and, in the case of any other  tax, within thirty days next after the date of the receipt of the notice  of assessment or of alteration of assessment or,  if no  notice has been given, within thirty days after the date of  the  presentation of the first bill or, as the case  may be, the first notice of demand in respect thereof :

     Provided  that  an  appeal may be admitted  after  the expiration of the period prescribed therefor by this section if  the appellant satisfies the court that he had sufficient cause for not preferring the appeal within that period;

     (b)  the amount, if any, in dispute in the appeal  has been  deposited  by  the  appellant in  the  office  of  the Corporation.

     A  Full  Bench of the Delhi High Court,  by  majority, upheld   the  constitutional  validity   of  the   aforesaid provision  though there was also challenge to the same based on  Article  14  of the Constitution.   Appeal  against  the judgment  of  the Delhi High Court was taken to  this  Court which upheld the view of the Delhi High Court.  The decision of  this  Court is reported as Shyam Kishore and  Ors.   vs. Municipal  Corporation  of Delhi & Anr.  [(1993) 1 SCC  22]. This Court relied on its earlier decisions in Ganga Bai case and  Anant  Mills case.  Reference was also made to  another decision  of  this  Court in Vijay  Prakash  D.   Mehta/Shri Jawahar  D.   Mehta vs.  Collector of Customs  (Preventive), Bombay [(1988) 4 SCC 402] where Justice Sabyasachi Mukharji, J., speaking for the Court, said :

     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.

     It is not necessary for us to refer to other decisions asserting  the  same  principle time and  again.   When  the statement  of  law  is so clear, we find  no  difficulty  in upholding  the  vires  of clause (e) of sub-section  (2)  of Section 406 read with proviso thereto.  Any challenge to its constitutional   validity  on  the   ground   that   onerous conditions  have been imposed and right to appeal has become illusory must be negatived.

     We  also note that under clause (c) of sub-section (2) of   Section  406,  a  complaint   lies  to  the   Municipal Commissioner against imposition of any property tax and only after that when the complaint is disposed of that appeal can be filed.  Appeal to the Court as provided in clause (e) may appear to be rather a second appeal.  Then under Section 408 of  the  Act  provisions exist for referring the  matter  to arbitration.  Under sub-section (1) of Section 408 where any person  aggrieved  by  any  order  fixing  or  charging  any rateable  value or tax under the Act desires that any matter in  difference between him and the other parties  interested in  such  order should be referred to arbitration, then,  if all such parties agree to do so, they may apply to the Court for  an  order of reference on such matter and when such  an

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order  is  made provisions relating to arbitration in  suits shall  apply.   That apart, if a person cannot avail of  the right of appeal under Section 406 of the Act, other remedies are  available  to him under the law.  In that case, it  may not  be  possible for the Municipal Corporation  to  contend that an alternative remedy of appeal exist under Section 406 of the Act.

     When leave was granted in these appeals by order dated December  12, 1980 this Court granted stay on the  condition that  seventy-five per cent of the tax is deposited with the Municipal  Commissioner within two months from that date and on  such  deposit  being  made, the  appeals  be  heard  and disposed  of (by the Judge) and we believe by this time  the appeals  filed before the Judge under Section 406 must  have been disposed of.

     When  the  arguments started in these matters, on  the statement  of learned counsel for the appellant two  appeals bearing Nos.3018-19/80 were dismissed as withdrawn.

     We  do not find any merit in these appeals.  These are accordingly dismissed with costs.