Supreme Court clarifies suit valuation for mandatory injunctions: Bharat Bhushan Gupta vs. Pratap Narain Verma (2022)

LEGAL ISSUE: Determining the correct method for valuing a suit seeking a mandatory injunction, particularly in cases involving property and licenses.

CASE TYPE: Civil Law (Property and Injunctions)

Case Name: Bharat Bhushan Gupta vs. Pratap Narain Verma & Anr.

Judgment Date: 16 June 2022

Date of the Judgment: 16 June 2022
Citation: (2022) INSC 541
Judges: Dinesh Maheshwari, J. and Vikram Nath, J. The judgment was authored by Justice Dinesh Maheshwari.

Can a court reject a plaint based on the plaintiff’s cross-examination testimony about property value, when the suit is for a mandatory injunction and not for possession? The Supreme Court addressed this question in a recent case, clarifying the principles for valuing suits seeking mandatory injunctions related to property disputes. The core issue was whether the High Court was correct in ordering the return of a plaint because the plaintiff’s statement during cross-examination indicated a property value much higher than the suit’s valuation for court fees and jurisdiction.

Case Background

The plaintiff, Bharat Bhushan Gupta, filed a suit against the defendants, Pratap Narain Verma and another, seeking a mandatory injunction to remove them from his property, along with a prohibitory injunction to prevent them from creating third-party rights or making constructions. The plaintiff claimed ownership of a 252 sq. yard plot in Delhi, which he had purchased in 1981. He stated that in 1983-84, he built a three-room tin shed on the plot. The first defendant, the plaintiff’s brother, was allegedly permitted to use the plot for storage as a gratuitous licensee. Later, the second defendant, who worked as a Munshi with the first defendant, was allowed to reside in two rooms of the tin shed until the plaintiff needed the space.

The plaintiff alleged that when he planned to construct on the plot, the defendants refused to vacate. He served a legal notice on 09.08.2016, terminating their licenses and demanding they vacate. When they did not comply, the plaintiff filed a suit for mandatory and prohibitory injunctions, also seeking damages for unauthorized occupation. The plaintiff valued the suit at Rs. 250 for each injunction relief and Rs. 1 lakh for damages, paying court fees accordingly.

The second defendant contested the suit, claiming the plaintiff had no right to the property and that he was in hostile possession. The defendant also argued that the suit was undervalued, stating the property was worth over Rs. 2.5 crores, which was beyond the Trial Court’s pecuniary jurisdiction.

Timeline

Course of Proceedings

The Trial Court initially rejected the defendant’s application under Order VII Rule 11 of the Code of Civil Procedure (CPC), which sought the rejection of the plaint for lack of pecuniary jurisdiction. The Trial Court held that the plaint was properly valued according to the reliefs sought. However, the High Court, in its order dated 18.03.2019, reversed the Trial Court’s decision. The High Court relied on the plaintiff’s statement during cross-examination that the market value of the property was approximately Rs. 1.8 crores. The High Court concluded that the suit’s valuation of Rs. 250 for each injunction relief was arbitrary and ordered the return of the plaint for filing in a court with appropriate jurisdiction. The Supreme Court stayed the High Court’s order on 26.04.2019, and the trial proceeded, ultimately resulting in a decree in favor of the plaintiff on 31.08.2021. The defendant’s appeal against this decree is currently pending.

Legal Framework

The Supreme Court referred to Section 7(iv)(d) of the Court-fees Act, 1870, which governs the computation of fees in certain suits, particularly those seeking an injunction. The section states:

“7.Computation of fees payable in certain suits . – The amount of fee payable under this Act in the suits next hereinafter mentioned shall be computed as follows: –
(iv) In suits-
for an injunction . – (d) to obtain an injunction,
according to the amount at which the relief sought is valued in the plaint or memorandum of appeal;
In all such suits the plaintiff shall state the amount at which he values the relief sought;”

This provision allows the plaintiff to state the value of the relief sought in a suit for an injunction. The Court noted that the nature of the relief claimed in the plaint determines the suit’s valuation, not necessarily the market value of the property involved. The Court emphasized that a suit for mandatory injunction to remove a licensee is a recognized legal remedy, distinct from a suit for possession, and should be valued accordingly.

Arguments

Appellant’s Arguments (Bharat Bhushan Gupta):

• The appellant argued that the suit was correctly valued under Section 7(iv)(d) of the Court Fees Act, as the relief sought was a mandatory injunction to remove the defendants from the property, not a suit for possession.
• The appellant contended that the market value of the property is not relevant for valuing a suit for injunction.
• The appellant cited the decisions in Maria Margarida Sequeira Fernandes & Ors. v. Erasmo Jack de Sequeira (dead) through LRs.: 2012 (5) SCC 370 and Sant Lal Jain v. Avtar Singh : AIR 1985 SC 857, to support the argument that a suit for mandatory injunction against a licensee is maintainable.
• The appellant argued that the High Court erred in relying solely on the plaintiff’s statement about the property’s market value during cross-examination to determine the suit’s valuation.

Respondent’s Arguments (Pratap Narain Verma):

• The respondent argued that the suit was essentially a claim for possession disguised as a suit for mandatory injunction.
• The respondent contended that since the market value of the property was over Rs. 1.8 crores, the Trial Court lacked pecuniary jurisdiction.
• The respondent relied on Commercial Aviation and Travel Company and Ors. v. Vimla Pannalal: 1988 (3) SCC 423, to argue that there cannot be arbitrary valuation, even under Section 7(iv)(d) of the Court Fees Act.
• The respondent argued that the Trial Court failed to frame an issue on jurisdiction despite his objections.
• The respondent submitted that the plaintiff is seeking possession of the suit property in the garb of mandatory injunction and that the respondent was in undisputed possession of the suit property for more than 12 years.

Submissions Table

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame issues in the judgment. However, the core issue that the court addressed was:

✓ Whether the High Court was correct in ordering the return of the plaint based on the plaintiff’s cross-examination testimony about the property’s market value, when the suit was for a mandatory injunction and not for possession.

Treatment of the Issue by the Court

Authorities

Judgment

The Supreme Court allowed the appeal, setting aside the High Court’s order and restoring the Trial Court’s decision. The Court held that the High Court erred in relying on the plaintiff’s cross-examination statement about the property’s market value to determine the suit’s valuation. The Court emphasized that the suit was for a mandatory injunction, which is distinct from a suit for possession, and should be valued according to Section 7(iv)(d) of the Court Fees Act. The Court reiterated that the nature of the relief claimed in the plaint determines the suit’s valuation, not the market value of the property.

How each submission made by the Parties was treated by the Court?

How each authority was viewed by the Court?

The Supreme Court analyzed each authority to determine its relevance to the case at hand. The authorities were cited to emphasize the following points:

• Sant Lal Jain v. Avtar Singh [AIR 1985 SC 857]:* This case was followed to support the view that a suit for mandatory injunction is maintainable against a licensee after the termination of the license. It also clarified that such suits should be valued under Section 7(iv)(d) of the Court Fees Act, not based on the market value of the property.
• Maria Margarida Sequeira Fernandes & Ors. v. Erasmo Jack de Sequeira (dead) through LRs. [2012 (5) SCC 370]:* This case was used to highlight that a suit for mandatory injunction is a recognized legal remedy, distinct from a suit for possession.
• Mulk Raj Khullar v. Anil Kapur & Ors. [(2013) 139 DRJ 303]:* The Court noted that the High Court had previously held that a suit for mandatory injunction is maintainable against a licensee whose license has been terminated.
• Milka Singh v. Diana [AIR 1964 J & K 99]:* This case was referred to emphasize that a licensee is obligated to surrender possession after the termination of the license.
• Joseph Severance & Ors. v. Benny Mathew & Ors. [(2005) 7 SCC 667]:* This case was considered while discussing the maintainability of a suit for mandatory injunction against a licensee.
• Padmavati Mahajan v. Yogender Mahajan & Anr. [(2008) 152 DLT 363]:* This case was referred to clarify that a suit for injunction can be valued by the plaintiff, provided it is not done in a whimsical manner.
• Commercial Aviation and Travel Company and Ors. v. Vimla Pannalal [1988 (3) SCC 423]:* This case was distinguished, as it dealt with a suit for rendition of accounts, and the Court clarified that the principles for valuing such suits are different from those for suits seeking injunctions.
• Mahant Purshottam Dass & Ors. v. Har Narain & Anr. [AIR 1978 Delhi 114]:* The Court clarified that this case was not relevant to the present matter as it dealt with a suit for declaration and perpetual injunction, which is governed by different provisions of the Court Fees Act.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the need to uphold the correct legal principles for valuing suits seeking injunctions. The Court emphasized that:

• The nature of the relief claimed in the plaint is the primary factor in determining suit valuation.
• A suit for mandatory injunction is distinct from a suit for possession and should be valued accordingly.
• The market value of the property is not the determining factor in valuing a suit for mandatory injunction.
• The High Court erred in relying solely on the plaintiff’s cross-examination testimony about the property’s market value.

Sentiment Analysis of Reasons given by the Supreme Court

Fact:Law Ratio

The ratio of fact to law indicates that the court primarily focused on the legal aspects of the case, such as the interpretation of Section 7(iv)(d) of the Court Fees Act and the distinction between suits for injunction and possession. The factual aspects of the case, such as the plaintiff’s testimony about the property’s market value, were secondary to the court’s legal analysis.

Logical Reasoning

The court considered alternative interpretations but rejected them because they did not align with the established legal principles governing suit valuation for injunctions. The court’s final decision was based on a clear interpretation of Section 7(iv)(d) of the Court Fees Act and the distinction between suits for injunction and possession.

“The nature of the present suit, as noticed hereinabove, makes it evident on the face of record that the plaintiff-appellant has sought the reliefs of mandatory injunction against the defendants for removing themselves and their belongings from the plot in question, while alleging that the defendants were in occupation thereof only as licensees; and were obliged to remove themselves after termination of respective licenses.”

“It remains trite that it is the nature of relief claimed in the plaint which is decisive of the question of suit valuation. As a necessary corollary, the market value does not become decisive of suit valuation merely because an immovable property is the subject-matter of litigation.”

“For what has been discussed hereinabove, we may simply put the upshot in other words that the High Court has totally omitted to consider the applicable provision of law i.e., Section 7(iv)(d) of the Court Fees Act as also the principles of law stated in the very same decision being referred to and relied upon in the impugned order itself.”

Key Takeaways

• The valuation of a suit for mandatory injunction should be based on the value the plaintiff places on the relief sought, not the market value of the property.
• A suit for mandatory injunction is a distinct legal remedy from a suit for possession.
• Courts should not reject a plaint based solely on the plaintiff’s cross-examination testimony about the property’s market value, especially when the suit is for an injunction.
• The correct interpretation and application of Section 7(iv)(d) of the Court Fees Act are crucial in determining suit valuation for injunctions.

Directions

The Supreme Court did not issue any specific directions other than setting aside the High Court’s order and restoring the Trial Court’s decision.

Development of Law

The ratio decidendi of this case is that the valuation of a suit for mandatory injunction should be based on the value the plaintiff places on the relief sought, as per Section 7(iv)(d) of the Court Fees Act, and not on the market value of the property. This judgment reinforces the established legal position that a suit for mandatory injunction is distinct from a suit for possession and clarifies the correct method for valuing such suits. There is no change in the previous positions of law, but a reiteration of the same.

Conclusion

The Supreme Court’s judgment in Bharat Bhushan Gupta vs. Pratap Narain Verma clarifies the principles for valuing suits seeking mandatory injunctions, particularly in property disputes. The Court emphasized that the nature of the relief claimed in the plaint determines the suit’s valuation, not the market value of the property. This decision ensures that such suits are valued according to the relevant provisions of the Court Fees Act, preventing arbitrary rejection of plaints based on extraneous factors like the market value of the property.

Category

• Civil Law
  • Property Law
  • Injunctions
  • Court Fees Act, 1870
  • Section 7(iv)(d), Court Fees Act, 1870
  • Suit Valuation
  • Pecuniary Jurisdiction

FAQ

Q: What is a mandatory injunction?

A: A mandatory injunction is a court order that compels a person to perform a specific action, such as removing themselves from a property.

Q: How is a suit for mandatory injunction valued for court fees?

A: According to Section 7(iv)(d) of the Court Fees Act, 1870, the suit is valued at the amount the plaintiff states for the relief sought, not necessarily the market value of the property involved.

Q: Can a court reject a plaint based on the plaintiff’s statement about the property’s market value?

A: No, the Supreme Court clarified that a plaint for mandatory injunction should not be rejected solely based on the plaintiff’s statement about the property’s market value during cross-examination.

Q: Is a suit for mandatory injunction different from a suit for possession?

A: Yes, a suit for mandatory injunction is a distinct legal remedy, particularly in cases involving licensees, and it should not be treated as a suit for possession.

Q: What if I am a licensee and the licensor asks me to vacate?

A: If your license is terminated, you are obligated to vacate the premises. The licensor can seek a mandatory injunction to compel you to leave.