1 IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN ATJODHPUR ------------------------------------------------------ CIVIL WRIT No. 458 of 2006 M/S.CHOKSI HERAEUS PVT.LTD.,UDAIPUR V/S STATE & ORS. Mr. DINESH MEHTA, for the appellant / petitioner Mr. NM LODHA,AAG, Mr. BL BHATI,AGA, Mr.SHYAM TOSHNIWAL, for the respondents. Date of Order : 1.11.2007 HON'BLE SHRI N P GUPTA,J. HON'BLE SHRI MUNISHWAR NATH BHANDARI,J. ORDER REPORTABLE. ----- This bunch of writ petitions (detailed in Schedule-A) have been filed before the Division Bench,seeking to challenge the orders passed by the Collector,under chapter IV, V and clause (a) of the proviso to Section 29 and/or Section 35 of the Rajasthan Stamp Act, 1998, and seeking to challenge the validity of the provisions of proviso to Section 65 (1) of the Rajasthan Stamp Act, 1998, and since for the present purposes they involve the common question of law, petitions are being disposed by this common order. We need not encumber the judgment by narrating facts of each individual case, and may confine our judgment to the validity of provisions noticed above 2 only, as the matters have come up before Division Bench only on account of validity of above provisions having been challenged. To start with, we may be gainfully reproduce the provisions of Section 65 of the Rajasthan Stamp Act, 1998, hereinafter referred to as the Act, as a whole, which reads as under :- “65. Revision by the Chief Controlling Revenue Authority.-(1)Any person aggrieved by an order made by the Collector under Chapter IV and V and under Clause (a)of the first proviso to Sec.29 and under Sec.35 of the Act, may within 90 days from the date of order, apply to the Chief Controlling Revenue Authority for revision of such order : Provided that no revision application shall be entertained unless it is accompanied by a satisfactory proof of the payment of fifty percent of there recoverable amount. (2)The Chief Controlling Revenue Authority may suo motu or on information received from the registering officer or otherwise call for and examine the record of any case decided in proceeding held by the Collector for the purpose of satisfying himself as to the legality or propriety of the order passed and as to the regularity of the proceedings and pass such order with respect thereto as it may think fit: Provided that no such order shall be made except after giving the person 3 affected a reasonable opportunity of being heard in the matter.” Out of the above provisions, it is only the proviso appended to Section 65 (1), which is under challenge. While arguing on the side of the petitioners, to challenge the proviso, it was contended by Mr.Mehta, that against the order of the Collector passed under Chapter-IV and V, and under clause (a) of first proviso to Section 29, and under Section 35 of the Act, the only remedy provided under the Act is the one under Section 65 (1), which in substance is a remedy in the nature of appeal, and by incorporating the proviso to this sub-section, the remedy of the appeal has been rendered illusory, rather meaningless, inasmuch as the condition is onerous,burdensome, and cumbersome, and by this reason it is very much unreasonable, and arbitrary. The other argument advanced is, that Section 65 of the Act comprises of two parts, being sub-section (1) and sub-section (2), inasmuch as under sub-section (1) any person aggrieved by an order made by the Collector under the aforesaid provision can apply for revision: While under sub- section (2) the Chief Controlling Revenue Authority may suo motu, or on information received from the 4 registering officer, or otherwise, call for and examine the record of any case decided, in proceeding held by the Collector, for the purpose of satisfying himself as to the legality or propriety of the order passed, and as to the regularity of the proceedings, and pass such order with respect thereto as it may think fit. It is contended, that the requirement of pre-deposit, as comprised in the proviso to sub- section (1), is not attracted in the case of eventuality comprehended by sub-section (2), thus the provision is discriminatory, and is liable to be struck down. Then, it was also submitted, that the stamp duty is a direct tax, and the provision for pre- deposit as comprised in other taxing provisions, is in the legislations which cover indirect taxes, and even in those provisions the authority is given discretion to waive the condition, while no such provision has been enacted in the present Act, conferring any discretion to waive the condition, even though the matter is of direct tax. Then it was submitted, that in the proviso the expression used is “recoverable amount” while there is nothing to show as to how this figure of “recoverable amount” is to be arrived at, therefore, the provision is vague. It was also contended that the proviso has the effect of taking away the fundamental right of citizen to hold the property, inasmuch as in case of an arbitrary 5 demand being raised by the Collector, in the event of any person purchasing the property, if the purchaser is not able to satisfy the demand, he cannot be allowed to challenge the same, without fulfilling the condition of pre-deposit, and consequently he stands deprived of the property, therefore, also the provision is bad. Then, the learned counsel relied upon the judgment of Hon'ble the Supreme Court, in Mardia Chemicals Ltd. Vs. Union of India, reported in (2004) 4 SCC-311, to contend, that in that judgment Hon'ble Supreme Court had struck down identical provision contained in Section 17 (2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. It was also argued that under Section 65, the remedy, though given the nomenclature of revision, but then in substance, it is right of appeal, as, against the orders detailed in sub- section (1) the aggrieved person has no other remedy, and therefore, it is required to be treated as appeal, and such a right of appeal cannot be curtailed, albeit taken away,by imposing such condition of pre-deposit. Learned counsel cited the judgment of Hon'ble the Supreme Court, in M/s. Ram Kanai Jamini Ranjan Pal Pvt. Ltd. Vs. Member, Board of Revenue, reported in AIR 1976 SC- 1545, Bhavya Apparels Private Limited Vs. Union of India, reported in JT 2007 (11) SC-253. The Division 6 Bench judgment of this Court, in Gaurav Gupta Vs. State, reported in 2001 (2) WLC (Raj.) - 201 was also cited. Mr. Varun Goyal supported the contentions, by adding, that in the Stamp Act there is no provision for refund, and therefore, the proviso (the impugned provision) is confiscatory in nature, inasmuch as, in the event of revision petition being allowed, and the order impugned being set aside, the person stands deprived of the amount deposited, by way of complying with the impugned proviso.Mr. Goyal also cited judgment of Madras High Court, in Royal Insulation (P) Ltd. Vs. Commercial Tax Officer, Manali Assessment Circle, Chennai, reported in (2006) 147 STC-246 (Mad), and submitted that in judgment the Division Bench of Madras High Court has recommended the State Government, to issue an ordinance, to provide for relaxation. He has also relied upon Division Bench judgment of this Court, rendered in bunch of writ petitions led by Santu Ram Vs. State of Rajasthan, being D.B.Civil Writ Petition No.6492/91, decided on 4.4.1994, to contend, that certain conditions of security deposit provided in Colonisation Act was held to be unreasonably and harshly onerous. Then, Mr. K.N.Joshi relied upon the judgment of 7 this Court, in State of Rajasthan v. Bhilwara Spinning Mills, reported in 2001 (2) RLR-311. On the other hand, Mr. N.M.Lodha submitted, that for the purpose of judging the vires of any legislation, what should be the relevant considerations, is a matter, which is no more res integra, and is settled by series of judgments of Hon'ble the Supreme Court, and in that regard cited the judgments in, Maharashtra State Board of Secondary & Higher Secondary Education & Ors. Vs.Paritosh Bhupesh, reported in AIR 1984 SC-1543, Nand Lal Vs. State of Haryana, reported in AIR 1980 SC-2097, State of Bihar Vs. Bihar Distillery Ltd., reported in AIR 1997 SC-1511, Union of India Vs. Elphinstone Spinning and Weaving Co. Ltd., reported in AIR 2001 SC-724.Then the judgment in Prafulla Kumar Das & Ors.Vs.State of Orissa & Ors.,reported in(2003) 11 SCC-614, was cited to contend, that hardship cannot be ground for declaring the legislation ultravires. Then it was submitted, that in various judgments of Hon'ble the Supreme Court, including those in Vijay Prakash D. Mehta Vs. Collector of Customs, reported in AIR 1988 SC-2010, and The Anant Mills Co. Ltd. etc. Vs. The State of Gujarat, reported in 1975 SC-1234, and of this Court, in M/s. G.S.Pharmbutor Pvt. Ltd. Vs. State of Rajasthan, reported in 2004 (3) WLC-31, it has 8 been held, that condition can be imposed while making provision for right of appeal i.e. Right of appeal can be circumscribed by certain conditions as is thought appropriate by legislature. Then, learned counsel also relied upon Division Bench judgment of this Court, in Pappu Ram Vs.State of Rajasthan, being D.B. Civil Writ Petition No.5873/2006, decided on 8.11.2006, Lachhmandas Vs. State of M.P. & Another reported in 1995 (98) STC-274, Monoranjan Chakraborty Vs. State of Tripura & Anr. Reported in 1991 (81) STC- 291 to contend, that in these judgments the provision for such pre-deposit has been upheld. Then, it was submitted that this condition as imposed by the proviso, cannot be said to be arbitrary, and merely because it is claimed by the petitioners to be onerous, burdensome, or cumbersome, on that ground it cannot be sruck down. The judgment of Hon'ble the Supreme Court, in Mardia Chemicals was distinguished by Mr. Lodha, contending, that therein Hon'ble the Supreme Court had cataloged the considerations, guided whereby the provision was struck down, as have been enlisted in para-64, while in the present case, the majority of those conditions do not exist, including the fact, that in that case the action of Bank under Section 13 was taken to be not an out come of an adjudicatory procedure, and seeking of remedy under Section 17 was found to be only approaching the 9 adjudicating authority of the first instance, while in the present case the adjudicatory authority is the Collector, and the remedy against the order passed by the Collector is available, thus the judgment of Hon'ble the Supreme Court in Mardia Chemical's case does not cover the controversy involved in the present case. Then, it was also submitted that in view of various judgments of Hon'ble the Supreme Court referred to above, it is clear, that provision cannot be struck down, as it is neither ultra vires, nor is otherwise unreasonable, requiring to be struck down. Learned counsel also distinguished the judgment cited by Mr.K.N.Joshi, and Mr. Varun Goyal. We have considered the submissions, and have gone through the various judgments. The first argument raised by the learned counsel appearing for the petitioners is that the provision of revision under Section 65 is in substance, a provision for appeal, therefore, provisions for appeal should not have been subjected to any condition. To support this argument, learned counsel has referred judgment of the Apex Court in M/s. Ram Kanai Jamini Ranjan Pal Pvt. Ltd. v. Member Board of Revenue, West Bengal (AIR 1976 SC 1545). In para 12 of the said judgment, the provisions of Section 20 (3) of Bengal 10 Finance (Sales Tax) Act were found to be widely worded and there was nothing in the Act or the Rules to limit or circumscribe the revisional power therein. Hence, it was held that the power of the Commissioner was not limited as provided under Section 115 of Code of Civil Procedure for exercising revisional powers by the High Court. During the course of argument, learned counsel for the petitioners was asked as to how the challenge to constitutional validity of proviso to Section 65 (1) of the Rajasthan Stamp Act, 1998 (hereinafter referred to as 'the Act of 1998') is going to support by this argument, even if the revisional power provided under Section 65 of the Act of 1998 is treated as a power of appeal, because the right of appeal is again not an inherent right, but only a statutory right. The learned counsel for the petitioners was unable to show that the argument raised above, in any way, helps the petitioner to strengthen their argument for challenging the proviso to Section 65 (1) of the Act of 1998. Therefore, the first argument seems to have been raised, only for sake of argument, however, while examining the constitutional validity of proviso to Section 65 (1) of the Act of 1998, we will further examine it by treating the revisional power to be appellate power. The next argument raised by the learned counsel 11 for the petitioners is that Section 65 of the Act comprises two parts being under sub-section (1) and sub-section (2). Under sub-section (1), any person aggrieved by an order passed by the Collector can apply for revision, while under sub-section (2), Chief Controlling Revenue Authority may suo motu or on information received from the registering officer, or otherwise, call for an examine the record of any case decided in the proceeding held by the Collector. It was contended that the requirement of pre-deposit as provided in the proviso to sub-section (1), is not attracted in the case covered by sub-section (2), thus liable to be struck down being discriminatory. Considering this argument, we found that proviso to sub-section (1) cannot be struck down on the argument raised above, because sub-section (1) of Section 65 gives a remedy to any person aggrieved by an order passed by the Collector and the said remedy is provided on the condition of payment of fifty per cent of recoverable amount, whereas sub-section (2) gives power to the Chief Controlling Revenue Authority to examine an order passed by the Collector suo motu or on information received from the registering officer or otherwise. The word “otherwise” used covers those matters where a revision is preferred under sub- section (1), therefore, while sub-section (1) gives a remedy to any person aggrieved of the order passed by 12 the Collector, sub-section (2) gives authority to the Chief controlling Revenue Authority for exercising such powers in the circumstances provided under sub- section (2) itself. Therefore, provisions of sub- sections (1) and (2) exists in different context provided therein. Hence, it cannot be said to be bringing about any discrimination on the anvil as contended because a remedy provided for aggrieved person on certain conditions cannot be equated with the power of revisional authority to call for and examine the matter suo motu or on information. Hence, we are not impressed with this argument raised by the learned counsel for the petitioners. While challenging the proviso to sub-section (1) of Section 65 of the Act, 1998, learned counsel contended that a condition of pre-deposit for maintaining the revision petition is a burdensome condition which, in fact, takes away right of revision of a person aggrieved by the order of Collector. It was urged that the remedy of revision has been rendered illusory, rather meaningless, inasmuch as the condition of pre-deposit is onerous, burdensome and cumbersome, hence it becomes unreasonable and arbitrary thus deserves to be declared as unconstitutional. To support the argument, learned counsel for the petitioners referred the judgment of Mardia Chemicals Ltd. & Others v. Union of India & 13 Others, reported in (2004) 4 SCC 311. In the said judgment, the Hon'ble Apex Court declared sub-section (2) of Section 17 of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 as unconstitutional, where for maintaining an appeal, condition of pre-deposit was provided. According to the learned counsel for the petitioners, condition as exists in proviso to sub- section (1) of Section 65 of the Act of 1998 is similar to sub-section (2) of Section 17 of the Act, 2002 which was then declared to be unconstitutional by the Apex Court. Thus, it was submitted that based on the judgment of the Apex Court, proviso to sub-section (1) of Section 65 should be declared to be unconstitutional. In that regard, reference to Paras No.55 to 64 was given, which are reproduced hereunder :- “55. We may then turn to the arguments raised on behalf of the petitioners that the remedy before the Debts Recovery Tribunal under Section 17 of the Act is illusory, burdened with onerous and oppressive condition of deposit of 75% of the amount of the demand notice before an appeal can be entertained by the Tribunal. We feel that it would be difficult to brush aside the challenge made to the condition of such a deposit. Sub- section (2) of Section 17 itself says that no appeal shall be entertainable unless the borrower has deposited the aforesaid sum of amount claimed. Much stress has been given in reply to the proviso to sub-section (2) of Section 17, according to which the Tribunal has 14 power to waive or reduce the amount. While waiving the condition of depositing the amount or reducing it, the Tribunal is required to record reasons for the same. It is submitted for the respondents that in an appropriate case, DRT which is presided over by a member of a higher judicial service, would exercise its discretion and may waive or reduce the amount required to be deposited in deserving cases. It is, therefore, not an absolute condition which must in all cases and all circumstances be fulfilled irrespective of the special features of a particular case. 56. The contention of the petitioner is that in the first place such an oppressive provision should not have been made at all. It works as a deterrent or as a disabling provision impeding access to a forum which is meant for redressal of the grievance of a borrower. It is submitted that where the possession of the secured assets has already been taken over or the management of the secured assets of the borrower including the right to transfer the same, in that event it would not at all be necessary to burden the borrower doubly with deposit of 75% of the demand amount. In a situation where the possession of the secured assets has already been taken over or its management, it is highly unreasonable further to ask for 75% of the amount claimed before entertaining the grievance of the borrower. 57. Secondly, it is submitted that, it would not be possible for a borrower to raise funds to make deposit of the huge amount of 75% of the demand, once he is deprived of the possession/management of the property, namely, the secured assets. Therefore, the condition of deposit is a condition of impossibility which renders the 15 remedy made available before DRT as nugatory and illusory. The learned Attorney General refutes the aforesaid contention. It it further submitted that such a condition of pre-deposit has been held to be valid by this Court earlier and a reference has been made to SCC at p. 202 in Anant Mills Co. Ltd. v. State of Gujarat (1975) 2 SCC 175 to submit that such a provision is made to regulate the exercise of the right of an appeal conferred upon a person. The purpose is that right of appeal may not be abused by any recalcitrant party and there may not be any difficulty in enforcing the order appealed against if ultimately it is dismissed and there may be speedy recovery of the amount of tax due to the Corporation. 58. In another decision relied upon, namely Seth Nand Lal v. State of Haryana 1980 Supp. SCC 574 there was no provision for a waiver or reduction of amount of pre-deposit, it is submitted, even that (sic then) the provision was held to be valid as the purpose was to prevent frivolous appeals and revisions which impede the implementation of the ceiling policy. Referring to yet another decision in Vijay Prakash D. Mehta Collector of Customs (Preventive) (1988) 4 SCC 402, it is submitted that right to appeal is neither an absolute right nor an ingredient of natural justice which principles are to be followed in judicial and quasi-judicial proceedings. A right of appeal is a statutory right and it can be circumscribed by the conditions. We also find that there are further observations to the effect the condition is for the purpose to act in terrorem to make the people comply with the provisions of the law. Shyam Kishore v. Municipal Corporation of Delhi (1993) 1 SCC 22 has been referred to submit that a similar provision was upheld without there 16 being any provision for waiver of the condition. The submission is that such a provision as that of pre-deposit before maintaining an appeal is not unknown to law and there are several other statutes containing similar provisions. Emphasis is on the provision of waiver or reduction of the amount required to be paid which, it is submitted, strikes a balance between the right of a person to appeal and the right of the person appealed against for speedy recovery of his dues. 59. We may like to observe that proceedings under Section 17 of the Act, in fact, are not appellate proceedings. It seems to be a misnomer. In fact it is the initial action which is brought before a forum as prescribed under the Act, raising grievance against the action of measures taken by one of the parties to the contract. It is the stage of initial proceeding like filing a suit in civil court. As a matter of fact proceedings under Section 17 of the Act are in lieu of a civil suit which remedy is ordinarily available but for the bar under Section 34 of the Act in the present case. We may refer to a decision of this Court in Ganga Bai v. Vijay Kumar (1974) 2 SCC 393 where in respect of original and appellate proceedings a distinction has been drawn as follows: (SCC p. 397, para 15) “There is a basic distinction between the right of suit and the right of appeal. There is an inherent right in every person to bring a suit of civil nature and unless the suit is barred by statute one may, at one's peril, bring a suit of one's choice. It is no answer to a suit, howsoever frivolous to claim that the law confers no such right to sue. A suit for its maintainability requires no authority of law and it is enough that no statute bars the suit. But the position in regard to appeals is quite 17 the opposite. The right of appeal inheres in no one and therefore an appeal for its maintainability must have the clear authority of law. That explains why the right of appeal is described as a creature of statute.” 60. The requirement of pre- deposit of any amount at the first instance of proceedings is not to be found in any of the decisions cited on behalf of the respondent. All these cases relate to appeals. The amount of deposit of 75% of the demand, at the initial proceeding itself sounds unreasonable and oppressive, more particularly when the secured assets/the management thereof along with the right to transfer such interest has been taken over the secured creditor or in some cases property is also sold. Requirement of deposit of such a heavy amount on the basis of a one-sided claim alone, cannot be said to be a reasonable condition at the first instance itself before start of adjudication of the dispute. Merely giving power to the Tribunal to waive or reduce the amount, does not cure the inherent infirmity leaning one-sidedly in favour of the party, who, so far has alone been the party to decide the amount and the fact