Pre-deposit in statutory appeal upheld in principle, but appellate authority may waive or reduce it in deserving cases.

A statutory pre-deposit of 25% for filing an appeal under the Employees State Insurance Act was held valid in principle and not unconstitutional, because the right of appeal can be conditioned by the legislature and such a requirement operates as a regulatory safeguard for public dues. The Court also held that the appellate authority has incidental power to waive or reduce the deposit in appropriate cases, where a strong prima facie case is shown and insisting on deposit would defeat the appeal. The refusal to entertain the appeal solely for non-deposit was set aside, and the matter was remitted for consideration of interim protection and waiver according to law.

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Issues: (i) Whether the requirement of deposit of 25% of the contribution under Section 45-AA of the Employees State Insurance Act, 1948 is mandatory and constitutionally valid. (ii) Whether the Appellate Authority has implied power to waive, wholly or partly, the pre-deposit requirement in appropriate cases.

Issue (i): Whether the requirement of deposit of 25% of the contribution under Section 45-AA of the Employees State Insurance Act, 1948 is mandatory and constitutionally valid.

Analysis: The right of appeal is a creature of statute and may be conditioned by the legislature. A pre-deposit requirement does not, by itself, extinguish the appellate remedy or violate Article 14 merely because it imposes a condition for entertaining the appeal. The provision must be viewed as a regulatory measure balancing the appellate remedy with recovery of public dues. The Court followed the settled principle that such statutory conditions are valid unless shown to be arbitrary, onerous, or unreasonable.

Conclusion: The pre-deposit requirement was held to be valid in principle and not unconstitutional.

Issue (ii): Whether the Appellate Authority has implied power to waive, wholly or partly, the pre-deposit requirement in appropriate cases.

Analysis: The Court held that the appellate forum's jurisdiction to hear the appeal carries with it the necessary incidental power to protect that jurisdiction in deserving cases. The language of Section 45-AA was read as directory to the extent necessary to permit waiver or reduction of pre-deposit where a strong prima facie case is made out and insisting on deposit would frustrate the appeal. Such power is exceptional and must be exercised only by a reasoned order in appropriate cases, not routinely.

Conclusion: The Appellate Authority was held to have the power to waive the pre-deposit, either wholly or partly, in appropriate cases.

Final Conclusion: The impugned refusal to entertain the appeal solely for non-deposit of 25% was set aside, and the matter was sent back to the appellate forum for consideration of interim protection and waiver in accordance with law.

Ratio Decidendi: A statutory pre-deposit requirement for an appeal may be treated as directory where necessary to preserve the appellate remedy, and the appellate authority has incidental power to waive or reduce the deposit in deserving cases on a strong prima facie showing.

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