# Prathama U.P. Gramin Bank v. Union of India & Ors

- **Citation:** (2019) 4 ILRA 1179
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2017-05-02
- **Case number:** Writ-C No. 27086 of 2019
- **Bench:** Dr. Yogendra Kumar Srivastava
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/prathama-u-p-gramin-bank-v-union-of-india-ors-44896
- **Pages:** 14

## Headnote

A. Civil Law - Payment of Gratuity Act,
1972 - Section 7(7) - Appeal - Pre-deposit
condition - Mandatory nature - Right to
appeal
has
been
qualified
with
the
requirement of pre-deposit as a condition
precedent and the said condition having
been introduced is mandatory - Appellate
Authority has no discretion to waive the
condition of pre-deposit - Appeal cannot
be held to be competent in the absence of
fulfilment of the condition of pre-deposit.
(Para 34 & 37)

Held -The Appellate Authority having been
given no discretion to waive the condition of
predeposit there is no scope for admitting the
appeal unless at the time of preferring the
appeal the appellant produces a certificate of
the Controlling Authority to the effect that the
amount in question has been deposited with
the authority or deposits such amount with the
Appellate Authority.

B. Appeal - Right of - Nature - is a
statutory right and it is open to the
legislature, which confers the remedy of
an appeal, to provide for conditions
subject to which the right to appeal may
be exercised - Right to appeal inheres in
no one and such right being the creature of
a statute, the same can be qualified or be
made subject to fulfilment of conditions
prescribed therefor. (Para 11 & 35)

C. Interpretation of Statute - Rules
regarding construction of a proviso -
Object of Proviso - P.G. Act, 1972 -
second proviso to Section 7(7) - As a
1180 INDIAN LAW REPORTS ALLAHABAD SERIES
general rule, a proviso is added to an
enactment to qualify or create an
exception to what is in the enactment
and
ordinarily
a
proviso
is
not
interpreted as stating a general rule -
Natural and appropriate effect of a
proviso to a statute, or to a section
thereof, is to restrain or qualify the
provisions immediately preceding it -
second proviso has been introduced with
a view to make pre-deposit of the
gratuity amount determined by the
Controlling Authority as a prerequisite
for preferring an appeal and a duty has
been cast on the Appellate Authority not
to
admit
an
appeal
unless
it
is
accompanied either by a certificate or by
a deposit, as the case may be. (Para 24, 32
& 36)

Writ Petition dismissed. (E-1)

List of cases cited: -

## Text

_Characters 0–39,950 of 45,213. This is a partial read: ask again with offset=39950 for what follows._

4 All. Prathama U.P. Gramin Bank Vs. Union of India & Ors.
1179
actual possession on 10.05.2007, the
District Magistrate after considering the
evidence adduced by the petitioner and
the State by its order dated 10.05.2007
found that the possession from the
petitioner was taken on 25.06.1993
pursuant to the notice dated 25.02.1987,
i.e., prior to the enforcement of the Repeal
Act. Moreover, the order of the District
Magistrate
dated
10.05.2007
was
challenged by the petitioner after lapse of
two years in July, 2009 and in the
meantime Jal Nigam at the surplus land
had constructed Sewage Treatment Plant
(STP) at the cost of Rs. 73.00 crores. In
context of the said fact the Court had
dismissed the writ petition of the
petitioner therein.

37. In view of the above, we find that
the physical possession of the land was never
taken from the petitioner. He is still in
cultivatory and physical possession. On the
basis of the materials on record we are
satisfied that the State authorities have not
taken possession from the petitioner in terms
of sub-section 5 or sub-section (6) of Section
10 of the Act, 1976 and he is still in
possession. Hence, in our view, the
proceedings initiated under the Act,1976
stands abated in terms of sub-section 2(a) of
Section 3 of the Repeal Act. The order of the
District Magistrate dated 02.05.2017 is set
aside and the proceedings under Act, 1976 is
abated. The writ petition is, accordingly,
allowed.
----------
(2019)12 ILR A1179

ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 23.10.2019

BEFORE
THE HON'BLE DR. YOGENDRA KUMAR
SRIVASTAVA, J.
Writ-C No. 27086 of 2019

Prathama U.P. Gramin Bank ...Petitioner
Versus
Union of India & Ors. ...Respondents

Counsel for the Petitioner:
Sri Dharmendra Vaish

Counsel for the Respondents:
A.S.G.I., Ms. Jyotsna Srivastava, Sri
Sandeep Kumar

A. Civil Law - Payment of Gratuity Act,
1972 - Section 7(7) - Appeal - Pre-deposit
condition - Mandatory nature - Right to
appeal
has
been
qualified
with
the
requirement of pre-deposit as a condition
precedent and the said condition having
been introduced is mandatory - Appellate
Authority has no discretion to waive the
condition of pre-deposit - Appeal cannot
be held to be competent in the absence of
fulfilment of the condition of pre-deposit.
(Para 34 & 37)

Held -The Appellate Authority having been
given no discretion to waive the condition of
predeposit there is no scope for admitting the
appeal unless at the time of preferring the
appeal the appellant produces a certificate of
the Controlling Authority to the effect that the
amount in question has been deposited with
the authority or deposits such amount with the
Appellate Authority.

B. Appeal - Right of - Nature - is a
statutory right and it is open to the
legislature, which confers the remedy of
an appeal, to provide for conditions
subject to which the right to appeal may
be exercised - Right to appeal inheres in
no one and such right being the creature of
a statute, the same can be qualified or be
made subject to fulfilment of conditions
prescribed therefor. (Para 11 & 35)

C. Interpretation of Statute - Rules
regarding construction of a proviso -
Object of Proviso - P.G. Act, 1972 -
second proviso to Section 7(7) - As a
1180 INDIAN LAW REPORTS ALLAHABAD SERIES
general rule, a proviso is added to an
enactment to qualify or create an
exception to what is in the enactment
and
ordinarily
a
proviso
is
not
interpreted as stating a general rule -
Natural and appropriate effect of a
proviso to a statute, or to a section
thereof, is to restrain or qualify the
provisions immediately preceding it -
second proviso has been introduced with
a view to make pre-deposit of the
gratuity amount determined by the
Controlling Authority as a prerequisite
for preferring an appeal and a duty has
been cast on the Appellate Authority not
to
admit
an
appeal
unless
it
is
accompanied either by a certificate or by
a deposit, as the case may be. (Para 24, 32
& 36)

Writ Petition dismissed. (E-1)

List of cases cited: -

1. The Anant Mills Company Ltd. Vs St. of
Gujarat & Ors. (1975) 2 SCC 175

2. Vijay Prakash D. Mehta & Anr. Vs Collector
of Customs (Preventive), Bombay (1988) 4
SCC 402

3. Gujarat Agro Industries Company Ltd. Vs
Municipal
Corporation
of
the
City
of
Ahmedabad & Ors. (1999) 4 SCC 468

4. M/s Elora Construction Company Vs The
Municipal Corporation of Greater Bombay &
Ors. AIR 1980 Bom. 162

5. Government of Andhra Pradesh & Ors. Vs P.
Luxmi Devi (Smt.) (2008) 4 SCC 720

6. Manik Lal Majumdar & Ors. Vs Gauranga
Chandra Dey & Ors. (2004) 12 SCC 448

7. National Textile Corporation Ltd. & Ors. Vs
Deputy
Labour
Commissioner
Appellate
Authority (P.G. Act) & Ors.2014 LLR 71

8. The Management, Tamil Nadu State
Transport Corporation (Madurai) Ltd. Vs The
Controller under the Payment of Gratuity Act,
Assistant Commissioner of Labour & Ors.
2018 LLR 66

9. Hindustan Fertilizer Corporation Ltd. Vs
Union of India & Ors. 2017 LLR 1058

10. Ishverlal Thakorelal Almaula Vs Motibhai
Nagjibhai AIR 1966 SC 459

11. Shah Bhojraj Kuverji Oil Mills & Ginning
Factory Vs Subbash Chandra Yograj Sinha AIR
1961 SC 1596

12 S. Sundaram Pillai & Ors. Vs V.R.
Pattabiraman & Ors. (1985) 1 SCC 591

13. State of Rajasthan Vs Leela Jain AIR 1965
SC 1296

14. S.T.O. Vs Hanuman Prasad AIR 1967 SC
565

15. C.T. Vs Jhaver Ramkishan Shrikishan AIR
1968 SC 59

16 Delhi Metro Rail Corporation Ltd. Vs Tarun
Pal Singh & Ors. (2018) 14 SCC 161

17.
Haryana
State
Cooperative
Land
Development Bank Ltd. Vs Haryana State
Cooperative
Land
Development
Banks
Employees Union & Anr. (2004) 1 SCC 574

18. Madras and Southern Mahratta Railway
Company Ltd. Vs Bezwada Municipality AIR
1944 PC 71

(Delivered by Hon'ble Dr. Yogendra
Kumar Srivastava, J.)

1. Heard Sri Dharmendra Vaish,
learned counsel for the petitioner, Ms.
Jyotsana
Srivastava,
learned
counsel
appearing for respondent nos.1, 2 and 3
and Sri Sandeep Kumar, learned counsel
for respondent no.4.

2. The present petition has been filed
seeking a direction to the Appellate
Authority constituted under the Payment
4 All. Prathama U.P. Gramin Bank Vs. Union of India & Ors.
1181
of Gratuity Act, 19721 to accept the bank
guarantee furnished by the petitioner-bank
in lieu of the deposit to be made as a precondition for filing of an appeal under
Section 7(7) of the P.G. Act, 1972.

3. Briefly stated the facts of the case
are that upon an application filed by the
fourth respondent under sub-rule (1) of
Rule 10 of the Payment of Gratuity
(Central) Rules, 19722 alleging that he
had not been paid due amount of gratuity
by the Prathama Bank, Head Office, Ram
Ganga
Vihar,
M.D.A,
Moradabad
(petitioner
herein)
an
order
dated
12.03.2019 was passed by the Controlling
Authority
under
the
P.G.
Act,
1972/Assistant
Labour
Commissioner
(Central),
Bareilly
allowing
the
application and issuing a direction to the
Prathama Bank to pay the balance amount
of gratuity together with interest to the
fourth respondent.

4. It is submitted that against the
aforesaid order passed by the Controlling
Authority an appeal under Section 7(7) of
the P.G. Act, 1972 was preferred before
the second respondent with a request for
accepting bank guarantee in lieu of
deposit as required under sub-section (7)
of Section 7. It is further submitted that
the
fourth
respondent
vide
its
communication dated 02.08.2019 has
informed the petitioner-bank that in terms
of Section 7(7) of the P.G. Act, 1972 bank
guarantee cannot be permitted as there is
no provision for the same and the
petitioner has been advised to deposit the
amount in the shape of demand draft
within the specified period so that the
appeal could be entertained.

5. Contention of the learned counsel
for the petitioner is that the petitioner is a
rural bank and is facing financial crisis
and in view of the same the condition of
deposit of the amount would further
aggravate its financial hardship and as
such permission ought to have been
granted for furnishing of bank guarantee
in lieu of the requirement to make the predeposit.

6. The issue which thus arises in the
present petition is as to whether the
condition of pre-deposit under sub-section
(7) of Section 7 of the P.G. Act, 1972 is
mandatory, and as to whether bank
guarantee can be directed to be furnished
in lieu of such pre-deposit.

7. In order to appreciate the
contention which is sought to be raised by
the petitioner the provision of filing of an
appeal under sub-section (7) of Section 7
of the P.G. Act, 1972 may be referred to.
For ease of reference Section 7 of the P.G.
Act, 1972 is being extracted below:-

"7.
Determination
of
the
amount of Gratuity.--(1) A person who
is eligible for payment of gratuity under
this Act or any person authorised, in
writing, to act on his behalf shall send a
written application to the employer,
within such time and in such form, as may
be prescribed, for payment of such
gratuity.

(2) As soon as gratuity becomes
payable, the employer shall, whether an
application referred to in sub-section (1)
has been made or not, determine the
amount of gratuity and give notice in
writing to the person to whom the gratuity
is payable and also to the controlling
authority
specifying
the
amount
of
gratuity so determined.

(3) The employer shall arrange
to pay the amount of gratuity within thirty
days from the date it becomes payable to
1182 INDIAN LAW REPORTS ALLAHABAD SERIES
the person to whom the gratuity is
payable.

(3-A) If the amount of gratuity
payable under sub-section (3) is not paid
by the employer within the period
specified in sub-section (3) the employer
shall pay, from the date on which the
gratuity becomes payable to the date on
which it is paid, simple interest at such
rate, not exceeding the rate notified by the
Central Government from time to time for
repayment of long-term deposits, as that
Government may, by notification specify :

Provided that no such interest
shall be payable if the delay in the
payment is due to the fault of the
employee and the employer has obtained
permission in writing from the controlling
authority for the delayed payment on this
ground.

(4)(a) If there is any dispute as
to the amount of gratuity payable to an
employee under this Act or as to the
admissibility of any claim of, or in
relation to, an employee for payment of
gratuity, or as to the person entitled to
receive the gratuity, the employer shall
deposit with the controlling authority such
amount as he admits to be payable by him
as
gratuity.

Explanation.-- x x x x x

(b) Where there is a dispute with
regard to any matter or matters specified
in clause (a), the employer or employee or
any other person raising the dispute may
make an application to the controlling
authority for deciding the dispute.

(c) The controlling authority
shall, after due inquiry and after giving
the parties to the dispute a reasonable
opportunity of being heard, determine the
matter or matters in dispute and if, as a
result of such inquiry any amount is found
to be payable to the employee, the
controlling authority shall direct the
employer to pay such amount or, as the
case may be, such amount as reduced by
the amount already deposited by the
employer.

(d) The controlling authority
shall pay the amount deposited, including
the excess amount, if any, deposited by
the employer, to the person entitled
thereto.

(e) As soon as may be after a
deposit is made under clause (a) the
controlling authority shall pay the amount
of the deposit--

(i) to the applicant where he is
the employee; or

(ii) where the applicant is the
employee, to the nominee or, as the case
may be, the guardian of such nominee or
heir of the employee if the controlling
authority is satisfied that there is no
dispute as to the right of the applicant to
receive the amount of gratuity.

(5)
For
the
purpose
of
conducting an inquiry under sub-section
(4), the controlling authority shall have
the same powers as are vested in a Court,
while trying a suit, under the Code of
Civil Procedure, 1908 (5 of 1908), in
respect of the following matters namely--

(a) enforcing the attendance of
any person or examining him on oath;

(b) requiring the discovery and
production of documents;

(c)
receiving
evidence
on
affidavits;

(d) issuing commissions for the
examination of witnesses.

(6) Any inquiry under this
section shall be a judicial proceeding
within the meaning of Sections 193 and
228, and for the purpose of Section 196,
of the Indian Penal Code, 1860 (45 of
1860).

(7) Any person aggrieved by an
order under sub-section (4), may, within
4 All. Prathama U.P. Gramin Bank Vs. Union of India & Ors.
1183
sixty days from the date of the receipt of
the order, prefer an appeal to the
appropriate Government or such other
authority as may be specified by the
appropriate Government in this behalf :

Provided that the appropriate
Government or the appellate authority, as
the case may be, may if it is satisfied that
the appellant was prevented by sufficient
cause from preferring the appeal within
the said period of sixty days, extend the
said period by a further period of sixty
days.

Provided further that no appeal
by an employer shall be admitted unless
at the time of preferring the appeal, the
appellant either produces a certificate of
the controlling authority to the effect that
the appellant has deposited with him an
amount equal to the amount of gratuity
required to be deposited under sub-section
(4), or deposits with the appellate
authority such amount.

(8) The appropriate Government
or the appellate authority, as the case may
be, may, after giving the parties to the
appeal a reasonable opportunity of being
heard, confirm, modify or reverse the
decision of the controlling authority."

8.

A
plain
reading
of
the
aforementioned
statutory
provision
indicates that a right of appeal has been
provided for against an order under subsection (4) of Section 7 which is to be
preferred within sixty days from the date
of the receipt of the order. In terms of the
first proviso the Appellate Authority is
empowered to extend the aforesaid period
by a further period of sixty days upon
being satisfied that the appellant was
prevented by sufficient cause from
preferring
the
appeal
within
the
prescribed time period.

9. The second proviso to sub-section
(7) of Section 7 which has been inserted
by Act 25 of 19843 stipulates that no
appeal by an employer shall be admitted
unless at the time of preferring the appeal,
the appellant either produces a certificate
of the Controlling Authority to the effect
that the appellant has deposited with him
an amount equal to the amount of gratuity
required to be deposited under sub-section
(4), or deposits with the Appellate
Authority such amount.

10. The provision with regard to predeposit of an amount equal to the amount
of gratuity as a condition precedent for
the appeal being admitted has been
introduced by insertion of the second
proviso by Act 25 of 1984 and the same
having been provided for in mandatory
terms it would follow that the right to
appeal under sub-section (7) of Section 7
becomes a vested right only when the precondition of deposit is complied with. The
Appellate Authority is not to admit the
appeal unless at the time of preferring the
appeal, the appellant either produces a
certificate of the Controlling Authority to
the effect that the appellant has deposited
with the authority an amount equal to the
amount of gratuity required to be
deposited
under
sub-section
(4)
or
deposits such amount with the Appellate
Authority.

11. The right of appeal, it is well
settled, is a statutory right and it is open to
the legislature which confers the remedy
of an appeal to provide for conditions
subject to which the right to appeal may
be exercised. The power to regulate the
exercise of the right of appeal by
providing for a pre-deposit as a condition
precedent to the entertainment of an
appeal
seeking
to
challenge
the
1184 INDIAN LAW REPORTS ALLAHABAD SERIES
imposition of the amount came up for
consideration in the case of The Anant
Mills Company Ltd. Vs. State of
Gujarat & Ors.4 and it was held that the
right of appeal being a creature of a
statute it was upon the legislature to
impose an accompanying liability upon a
party upon whom a legal right is
conferred or to prescribe conditions for
the exercise of the right. The relevant
observations in the judgment are as
follows:-

"40. 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 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;
4 All. Prathama U.P. Gramin Bank Vs. Union of India & Ors.
1185
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 had 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 fulfilment 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
party's 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."

12. The right to appeal being subject
to the obligatory condition of making a
pre-deposit
again
came
up
for
consideration in the context of Section
129-E of the Customs Act, 1962 in the
case of Vijay Prakash D. Mehta & Anr.
Vs. Collector of Customs (Preventive),
Bombay5, and it was held that the right to
appeal is neither an absolute right nor an
ingredient of natural justice and the said
right being a statutory right it can be
circumscribed by the conditions in the
grant. The relevant observations made in
the judgment are as follows:-

"5.
The
aforesaid
section
provides a conditional right of appeal in
respect of an appeal against the duty
demanded or penalty levied. Although the
section does not expressly provide for
rejection of the appeal for non-deposit of
duty or penalty, yet it makes it obligatory
on the appellant to deposit the duty or
penalty, pending the appeal, failing which
the Appellate Tribunal is fully competent
to reject the appeal. See, in this
connection, the observations of this Court
in respect of Section 129 prior to
substitution of Chapter XV by the Finance
Act, 1980 in Navinchandra Chhotelal v.
Central Board of Excise & Customs
(1971) 1 SCC 289. The proviso, however,
1186 INDIAN LAW REPORTS ALLAHABAD SERIES
gives power to the Appellate Authority to
dispense
with
such
deposit
unconditionally
or
subject
to
such
conditions in cases of undue hardships. It
is a matter of judicial discretion of the
Appellate Authority.

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."

13. A similar view was reiterated in
the case of Gujarat Agro Industries
Company
Ltd.
Vs.
Municipal
Corporation of the City of Ahmedabad
& Ors.6 wherein the constitutionality of
the pre-condition of deposit under Section
406(2)(e) of the Bombay Municipal
Corporation Act, 1949 was upheld and it
was stated that the right to appeal being a
statutory right and not an inherent right it
is for the legislature to decide to make the
right subject to any condition or not. The
observations made in the judgment in this
regard are as follows:-

"8. 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
the earlier decision of this Court in Anant
Mills case (1975) 2 SCC 175 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 (1975) 2 SCC 175.
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 (1974) 2
SCC 393)."

14. The provision restricting the
right of appeal by requiring deposit of the
amount concerned in appeal again came
up in the case of M/s Elora Construction
Company
Vs.
The
Municipal
Corporation of Greater Bombay &
Ors.7, and it was stated that the right of
appeal being a creation of statute could be
taken away by the statute expressly or by
necessary intendment and the provision
restricting the right of appeal by requiring
deposit of the amount concerned was held
constitutionally valid.

15. Again, in the case of Government
of Andhra Pradesh & Ors. Vs. P. Luxmi
Devi (Smt.)8 the requirement of pre-deposit
under Section 47-A proviso of the Stamp Act,
1899 was held to be constitutionally valid and
not violative of Articles 14 and 19 or any other
provision of the Constitution of India9.

16. The question as to whether the
Appellate Authority has the discretion to
say that an appeal could be preferred
4 All. Prathama U.P. Gramin Bank Vs. Union of India & Ors.
1187
without satisfying the pre-condition of
deposit where the statutory requirement
has
been
specifically
stated
in
a
compulsive
language
came
up
for
consideration in the case of Manik Lal
Majumdar & Ors. Vs. Gauranga
Chandra Dey & Ors.10, and it was held
that the condition of pre-deposit being a
statutory requirement no discretion was
left to the Appellate Authority to hold that
an appeal could be preferred without
satisfying the said requirement.

17. The provision with regard to the
requirement to deposit the amount of
gratuity under the second proviso to
Section 7(7) of the P.G. Act, 1972 came up
for consideration in the case of National
Textile Corporation Ltd. & Ors. Vs.
Deputy
Labour
Commissioner
Appellate Authority (P.G. Act) & Ors.11
and it was held that as per terms of the
second proviso, the deposit of the amount
of gratuity was required and as the same
had not been complied the appeal had
rightly been dismissed. The observations
made in the judgment are as follows:-

"3.
...the
petitioners
were
required to deposit the amount of gratuity
as provided under section 7(7) of the Act
of 1972 and as they have not complied the
statutory provisions as contained under
the Act of 1972, their appeal has rightly
been dismissed. This Court is of the
considered
opinion
that
the
appeal
preferred by the petitioners has rightly
been dismissed due to non-compliance of
the aforesaid statutory provisions."

18. In The Management, Tamil
Nadu State Transport Corporation
(Madurai) Ltd. Vs. The Controller
under the Payment of Gratuity Act,
Assistant Commissioner of Labour &
Ors.12 it was held that the object of the
legislation was very clear and the second
proviso to sub-section (7) of Section 7 of
the Act, 1972 had been introduced with
the object of making pre-deposit of the
gratuity
amount
determined
by
the
Controlling Authority as a pre-requisite
for preferring an appeal and failure to
deposit the amount would mean that the
appeal itself is incompetent. The relevant
extracts in the judgment are as follows:-

"3.
Once
the
Controlling
Authority quantifies the amount of
gratuity and directs the employer to pay
the same, it should be required to be
deposited before preferring appeal in
terms of the provisions of the Payment of
Gratuity Act. The intention and object of
the legislation is very clear and the second
proviso to sub section 7 of Section 7 of
the Act, has been introduced with the
object of making pre-deposit of the
gratuity
amount
determined
by
the
Controlling Authority as a pre-requisite
for preferring appeal. Further, Clause (a)
of sub-section 4 of Section 7 deals with
voluntary deposit by the employer at the
threshold where the employer has come
forward with such deposit.

4. The Division Bench of this
Court in Onward Trading Company,
Madras and Deputy Commissioner of
Labour, Madras and another reported in
1989 (2) LLN 672, held that the statutory
precondition must be obeyed and also
held that failure to deposit the amount
would mean that the appeal itself is
incompetent.
As
the
petitioner
Management has not deposited the
amount, the relief sought for by the
petitioner has got to be rejected..."

19. A similar position was reiterated
in Hindustan Fertilizer Corporation
1188 INDIAN LAW REPORTS ALLAHABAD SERIES
Ltd. Vs. Union of India & Ors.13
wherein it was held that the word "shall"
used in the second proviso to Section 7(7)
is to be read as mandatory and it curtails
the right of an appellant not depositing the
requisite amount to have his appeal heard
or even admitted. Further, it was held that
the relevant provision suggests that a duty
has been cast on the Appellate Authority
not to admit such an appeal unless it is
accompanied either by a certificate or by
a deposit as the case may be. The
observations made in the judgment are as
follows:-

"6. For the purpose of filing of
an appeal, there is certain requirement to
be complied with. The second proviso to
Section 7(7) of the said Act, inter alia,
says that no appeal under Section 4 of the
Act shall be admitted unless at the time of
preferring the appeal, the appellant either
produces a certificate of the Controlling
Authority to the effect that the appellant
has deposited with him an amount equal
to the amount of gratuity required to be
deposited under Section 4 or deposits with
the appellate authority such amount.
While rejecting the petitioner's appeal, the
respondent No. 2 had specifically held
that the employer had neither obtained a
certificate from the Controlling Authority
nor deposited the awarded amount with
the appellate authority. Therefore, the
appeal was rejected.

9. ...I find no infirmity in the
order in rejecting the appeal. The second
proviso to Section 7(7) of the Act which
was
incorporated
by
way
of
an
amendment specifically says that no
appeal shall be admitted unless the
requirements
as
mentioned
in
the
subsequent part of the proviso is complied
with. The use of the word 'shall' is to be
read as mandatory and there is no scope
of reading it as directory. It curtails the
right of an appellant not depositing the
requisite amount to have his appeal heard
or even admitted. A more close look at the
relevant provisions of law suggests that a
duty has been cast on the appellate
authority not to admit such an appeal
unless it is accompanied either by a
certificate or by a deposit, as the case may
be.
The
appellate
authority
merely
followed the provisions of law which it
was bound to."

20. The provisions with regard to
making of a pre-deposit as a condition
precedent for filing of an appeal having
been inserted under sub-section (7) of
Section 7 of the P.G. Act, 1972 by way of
a proviso, it would be apposite to refer to
the manner in which a proviso is to be
construed.

21. In Craies on Statute of Law14,
referring
to
the
rules
regarding
construction of a proviso, it has been
observed as follows:-

"9.1. The effect of an excepting
or qualifying proviso, according to the
ordinary rules of construction, is to except
out of the preceding portion of the
enactment, or to qualify something
enacted therein, which but for the proviso
would be within it; and such a proviso
cannot be construed as enlarging the
scope of an enactment when it can be
fairly and properly construed without
attributing to it that effect."

22. Again, as has been pointed out
by Craies in the treatise on Statute Law;

"The effect of an excepting or
qualifying proviso, according to the
ordinary rules of construction, is to except
4 All. Prathama U.P. Gramin Bank Vs. Union of India & Ors.
1189
out
the
preceding
portion
of
the
enactment, or to qualify something
enacted therein, which but for the proviso
would be within it."

23.

In
Ishverlal
Thakorelal
Almaula Vs. Motibhai Nagjibhai15, the
intendment of the proviso has been
discussed thus:-

"8. The proper function of a
proviso is to except or qualify something
enacted in the substantive clause, which
but for the proviso would be within that
clause. It may ordinarily be presumed in
construing a proviso that it was intended
that the enacting part of the section would
have included the subject-matter of the
proviso. But the question is one of
interpretation of the proviso and there is
no rule that the proviso must always be
restricted to the ambit of the main
enactment. Occasionally in a statute, a
proviso is unrelated to the subject-matter
of the preceding section, or contains
matters extraneous to that section, and it
may have then to be interpreted as a
substantive
provision,
dealing
independently with the matter specified
therein, and not as qualifying the main or
the preceding section."

24. In Shah Bhojraj Kuverji Oil
Mills & Ginning Factory Vs. Subbash
Chandra Yograj Sinha16, the object of
the proviso and how it is to be interpreted
has been stated in the following manner:-

"9. The law with regard to
provisos
is
well
settled
and
well
understood. As a general rule, a proviso is
added to an enactment to qualify or create
an exception to what is in the enactment,
and ordinarily, a proviso is not interpreted
as stating a general rule..."

25. Again, in S. Sundaram Pillai &
Ors. Vs. V.R. Pattabiraman & Ors.17,
various decisions with regard to the
manner of construction of a proviso have
been discussed and it has been stated as
follows:-

"29. Odgers in Construction of
Deeds and Statutes (5th Edn.) while
referring to the scope of a proviso
mentioned the following ingredients:

'p. 317. Provisos--These are
clauses of exception or qualification in an
Act, excepting something out of, or
qualifying something in, the enactment
which, but for the proviso, would be
within it.

p. 318. Though framed as a
proviso, such a clause may exceptionally
have
the
effect
of
a
substantive
enactment.'

30. Sarathi in Interpretation of
Statutes at pp. 294-95 has collected the
following principles in regard to a
proviso:

(a) When one finds a proviso to
a section the natural presumption is that,
but for the proviso, the enacting part of
the section would have included the
subject-matter of the proviso.

(b) A proviso must be construed
with reference to the preceding parts of
the clause to which it is appended.

(c) Where the proviso is directly
repugnant to a section, the proviso shall
stand and be held a repeal of the section
as the proviso speaks the latter intention
of the makers.

(d)
Where
the
section
is
doubtful, a proviso may be used as a
guide to its interpretation: but when it is
clear, a proviso cannot imply the
existence of words of which there is no
trace in the section.
1190 INDIAN LAW REPORTS ALLAHABAD SERIES

(e) The proviso is subordinate to
the main section.

(f) A proviso does not enlarge an
enactment except for compelling reasons.

(g) Sometimes an unnecessary
proviso is inserted by way of abundant
caution.

(h) A construction placed upon a
proviso which brings it into general
harmony with the terms of section should
prevail.

(i) When a proviso is repugnant
to the enacting part, the proviso will not
prevail over the absolute terms of a later
Act directed to be read as supplemental to
the earlier one.

(j) A proviso may sometimes
contain a substantive provision."

26. In the case of State of
Rajasthan
Vs.
Leela
Jain18,
the
following observation with regard to
construction of a proviso has been made:-

"14. ...So far as a general
principle of construction of a proviso is
concerned, it has been broadly stated that
the function of a proviso is to limit the
main part of the section and carve out
something which but for the proviso
would have been within the operative
part."

27. In S.T.O. Vs. Hanuman
Prasad19, it was held as follows:-

"5. ... It is well recognised that a
proviso is added to a principal clause
primarily with the object of taking out of
the scope of that principal clause what is
included in it and what the legislature
desires should be excluded."

28.

In
C.C.T.
Vs.
Jhaver
Ramkishan
Shrikishan20
following
observations were made:-

"8. ...Generally speaking, it is
true that the proviso is an exception to the
main part of the section; but it is
recognised that in exceptional cases a
proviso may be a substantive provision
itself."

29. The different purposes served by
a proviso have been summarised in the
case of Delhi Metro Rail Corporation
Ltd. Vs. Tarun Pal Singh & Ors.21 in
the following manner:-

"43. ...To sum up, a proviso may
serve four different purposes:

(1) qualifying or excepting
certain
provisions
from
the
main
enactment;

(2) it may entirely change the
very concept of the intendment of the
enactment
by
insisting
on
certain
mandatory conditions to be fulfilled in
order to make the enactment workable;

(3) it may be so embedded in
the Act itself as to become an integral part
of the enactment and thus acquire the
tenor and colour of the substantive
enactment itself; and

(4) it may be used merely to act
as an optional addenda to the enactment
with the sole object of explaining the real
intendment of the statutory provision."

30. In Haryana State Cooperative
Land Development Bank Ltd. Vs.
Haryana
State
Cooperative
Land
Development Banks Employees Union
& Anr.22, the function of proviso has
been considered and it has been observed
as follows:-

"9. The normal function of a
proviso is to except something out of the
enactment
or
to
qualify
something
enacted therein which but for the proviso
4 All. Prathama U.P. Gramin Bank Vs. Union of India & Ors.
1191
would be within the purview of the
enactment. As was stated in Mullins v.
Treasurer of Surrey (1880) LR 5 QBD
170 at p. 173 (DC) (referred to in Shah
Bhojraj Kuverji Oil Mills & Ginning
Factory v. Subbash Chandra Yograj Sinha
(AIR 1961 SC 1596) and Calcutta
Tramways Co. Ltd. v. Corpn. of Calcutta
(AIR 1965 SC 1728), when one finds a
proviso
to
a
section
the
natural
presumption is that, but for the proviso,
the enacting part of the section would
have included the subject-matter of the
proviso. The proper function of a proviso
is to except and to deal with a case which
would otherwise fall within the general
language of the main enactment and its
effect is confined to that case. It is a
qualification of the preceding enactment
which is expressed in terms too general to
be quite accurate.