LEGAL ISSUE: Whether the suit was properly valued for court fees and jurisdiction, particularly concerning a non-party to a sale deed seeking its cancellation. CASE TYPE: Civil. Case Name: B.P. Naagar & Ors. vs. Raj Pal Sharma. Judgment Date: 28 July 2023
Date of the Judgment: 28 July 2023
Citation: 2023 INSC 657
Judges: C.T. Ravikumar, J., and Sudhanshu Dhulia, J.
Can a court reject a plaint for improper valuation of a suit even after granting time to correct the valuation? The Supreme Court of India recently addressed this question in a case concerning the valuation of a suit seeking cancellation of a sale deed. The core issue revolves around whether the plaintiff, who was not a party to the sale deed, was required to pay ad valorem court fees based on the sale consideration. The bench, comprising Justices C.T. Ravikumar and Sudhanshu Dhulia, did not provide a conclusive answer but remanded the case for fresh consideration by the High Court.
Case Background
The dispute involves a property in Kamla Nagar, New Delhi, originally owned by Shri G.D. Mal. He bequeathed the property to his wife, Pritam Devi, through a will dated 18 June 1971. After Shri G.D. Mal’s death, Pritam Devi executed a gift deed on 27 April 2010, in favor of her grandsons, Balraj Sharma, Hemant Parashar, and Rahul Parashar. Subsequently, these grandsons sold the property to the appellants for Rs. 1 Crore through a sale deed dated 10 January 2011. The respondent, Raj Pal Sharma, and his brother, Ram Pal Sharma, sons of Shri G.D. Mal, initially filed a suit for declaration and permanent injunction, claiming ownership of the first and second floors of the property. This suit was later withdrawn. Subsequently, the respondent filed the present suit seeking declaration and cancellation of the gift and sale deeds, along with a permanent injunction against dispossession.
Timeline
| Date | Event |
|---|---|
| 18 June 1971 | Shri G.D. Mal bequeaths property to his wife, Pritam Devi, via will. |
| 27 April 2010 | Pritam Devi executes a gift deed in favor of her grandsons. |
| 10 January 2011 | Grandsons sell the property to the appellants for Rs. 1 Crore. |
| 2011 | Raj Pal Sharma and Ram Pal Sharma file a suit for declaration and permanent injunction, which is later withdrawn. |
| 20 May 2015 | The plaintiff/the respondent herein was permitted by the High Court to abandon prayers (c) and (d) made in the plaint. |
| 01 July 2017 | Trial Court orders that the suit was not properly valued and time was granted to the plaintiff to make payment of deficient court fee. |
| 14 August 2017 | Application by the respondent to amend the plaint. |
| 28 February 2019 | Another application by the respondent to amend the plaint. |
| 02 March 2019 | Trial Court rejects the applications for amendment of the plaint and rejects the plaint. |
| 02 December 2019 | High Court sets aside the Trial Court’s orders and allows the amendment of the plaint. |
| 03 March 2021 | Balraj Sharma, Shri Hemant Parashar and Shri Rahul Parashar and Shri Ram Pal Sharma were deleted from the array of parties. |
| 28 July 2023 | Supreme Court remands the case to the High Court for fresh consideration. |
Course of Proceedings
The respondent initially filed a suit in the High Court for declaration and cancellation of the gift and sale deeds, along with a permanent injunction. The suit was later transferred to the Additional District Judge, Central, Tis Hazari Courts, New Delhi. The fifth defendant (second appellant) filed an application under Order VII Rule 11 of the Code of Civil Procedure (CPC), arguing that the suit was not properly valued for court fees. The Trial Court, on 1 July 2017, held that the suit was not properly valued and granted time to the plaintiff to correct the valuation and pay the deficient court fee. Subsequently, the plaintiff filed multiple applications to amend the plaint, which were eventually rejected on 2 March 2019. On the same day, the Trial Court rejected the plaint. The High Court, in its order dated 2 December 2019, set aside the Trial Court’s orders, allowed the amendment of the plaint, and directed the Trial Court to frame an issue on the valuation of the suit.
Legal Framework
The core legal issue revolves around the application of the Court Fees Act, 1870, and the Suits Valuation Act, 1887. Specifically, the question is whether the respondent, who is not a party to the sale deed, is required to pay ad valorem court fees on the sale consideration when seeking a declaration and cancellation of the deed. Section 7 of the Court Fees Act, 1870 deals with the computation of fees in various suits. The Trial Court considered Section 8 of the Suits Valuation Act, 1887, which states that the value for court fees and jurisdiction should be the same in suits where court fees are payable ad valorem. The Trial Court also considered that the plaintiff had sought both ‘declaration’ and ‘cancellation’ of the sale deed.
The relevant provisions are:
- Section 7 of the Court Fees Act, 1870: This section outlines how court fees are calculated for various types of suits.
- Section 8 of the Suits Valuation Act, 1887: This section stipulates that the value for court fees and jurisdiction should be the same in suits where court fees are payable ad valorem.
Arguments
Appellants’ Arguments:
- The appellants argued that the High Court’s order was unsustainable because it ignored the Trial Court’s order dated 01.07.2017, which had already held that the suit was not properly valued and granted time to the plaintiff to pay the deficient court fee.
- They contended that the respondent should have paid ad valorem court fees based on the suit’s valuation of Rs. 1 Crore, as per Rule 7(4)(c) of the Court Fees Act, 1870.
- The appellants argued that the applications for amendment of the plaint were filed to circumvent the order dated 01.07.2017.
- They submitted that the rejection of the plaint was a decree under Section 2(2) of the CPC, and therefore, the respondent should have filed an appeal under Section 96 of the CPC instead of invoking the High Court’s jurisdiction under Article 227 of the Constitution of India.
- They argued that the High Court should not have considered the amendment of the plaint without a successful challenge to the orders rejecting the plaint.
Respondent’s Arguments:
- The respondent argued that the Trial Court’s order dated 01.07.2017 did not actually reject the plaint but merely granted time to correct the valuation and pay the court fee.
- The respondent contended that the High Court had only allowed the amendment and directed the Trial Court to frame an issue on the valuation of the suit.
- The respondent submitted that the order rejecting the plaint was not a decree under Section 2(2) of the CPC because it did not conclusively determine the rights of the parties.
- The respondent argued that the dismissal of the amendment application was not appealable, and therefore, approaching the High Court under Article 227 was the only available remedy.
- The respondent relied on the decision of the High Court of Punjab & Haryana in Bawa Bir Singh v. Ali Niwa n Khan to argue that the value for court fee should be taken for the purpose of jurisdiction.
The innovativeness of the arguments lies in the appellants’ contention that the rejection of the plaint, even with time granted to rectify it, amounted to a decree, thus necessitating an appeal rather than a revision or writ petition. The respondent, on the other hand, innovatively argued that the order was not a decree as it did not conclusively determine the rights of parties.
| Main Submission | Sub-Submissions |
|---|---|
| Appellants’ Submission: The High Court’s order is unsustainable due to the Trial Court’s order rejecting the plaint. |
✓ The Trial Court’s order dated 01.07.2017 held that the suit was not properly valued. ✓ Time was granted to the plaintiff to pay the deficient court fee. ✓ The plaintiff should have paid ad valorem court fees as per Rule 7(4)(c) of the Court Fees Act, 1870. ✓ The applications for amendment were filed to circumvent the order dated 01.07.2017. ✓ The order rejecting the plaint is a decree under Section 2(2) of the CPC. ✓ The respondent should have filed an appeal under Section 96 of the CPC. ✓ The High Court should not have considered the amendment without a successful challenge to the orders rejecting the plaint. |
| Respondent’s Submission: The High Court’s order is legal and requires no interference. |
✓ The Trial Court’s order dated 01.07.2017 did not actually reject the plaint. ✓ The High Court only allowed the amendment and directed the Trial Court to frame an issue on valuation. ✓ The order rejecting the plaint was not a decree under Section 2(2) of the CPC. ✓ The dismissal of the amendment application was not appealable. ✓ Approaching the High Court under Article 227 was the only available remedy. ✓ Relied on Bawa Bir Singh v. Ali Niwa n Khan to argue that the value for court fee should be taken for the purpose of jurisdiction. |
Issues Framed by the Supreme Court
The Supreme Court did not explicitly frame issues in a dedicated section. However, the core issues that the court addressed are implicit in the arguments and the final order:
- Whether the High Court was correct in setting aside the Trial Court’s orders dated 01.07.2017 and 02.03.2019.
- Whether the Trial Court’s order dated 01.07.2017 was an actual rejection of the plaint or merely an order granting time to correct the valuation and pay the deficient court fee.
- Whether the order rejecting the plaint was a decree under Section 2(2) of the CPC.
- Whether the High Court should have considered the amendment of the plaint without a successful challenge to the orders rejecting the plaint.
- Whether the suit was properly valued for court fees and jurisdiction, and whether the respondent was required to pay ad valorem court fees.
- Whether the Court of Additional District Judge -II, Central, Tis Hazari Courts, Delhi could proceed with the suit further when once the amendment is allowed as above and whether , the suit, thereafter, be presented before the lowest court having the jurisdiction.
Treatment of the Issue by the Court
The following table demonstrates as to how the Court dealt with the issues:
| Issue | Court’s Treatment |
|---|---|
| Whether the High Court was correct in setting aside the Trial Court’s orders dated 01.07.2017 and 02.03.2019. | The Supreme Court did not provide a conclusive answer but remanded the case for fresh consideration by the High Court. |
| Whether the Trial Court’s order dated 01.07.2017 was an actual rejection of the plaint or merely an order granting time to correct the valuation and pay the deficient court fee. | The Supreme Court noted the Trial Court’s order held that the suit was not properly valued and granted time to the plaintiff to make payment of deficient court fee, but did not conclusively decide whether it amounted to a rejection of the plaint. |
| Whether the order rejecting the plaint was a decree under Section 2(2) of the CPC. | The Supreme Court did not provide a conclusive answer but noted the contention of the appellants that it was a decree and should have been challenged by way of an appeal. |
| Whether the High Court should have considered the amendment of the plaint without a successful challenge to the orders rejecting the plaint. | The Supreme Court did not provide a conclusive answer but noted the contention of the appellants that the High Court should not have considered the amendment without a successful challenge to the orders rejecting the plaint. |
| Whether the suit was properly valued for court fees and jurisdiction, and whether the respondent was required to pay ad valorem court fees. | The Supreme Court did not provide a conclusive answer but noted the conflicting arguments and the Trial Court’s reliance on Gobind Gopal & Ors. v. Banwari Lal and Bharat Sanchar Nigam Ltd. v. All India Bharat Sanchar Nigam Executives’ Association (Regd.) & Ors. |
| Whether the Court of Additional District Judge -II, Central, Tis Hazari Courts, Delhi could proceed with the suit further when once the amendment is allowed as above and whether , the suit, thereafter, be presented before the lowest court having the jurisdiction. | The Supreme Court raised this question and stated that whether the Court of Additional District Judge -II, Central, Tis Hazari Courts, Delhi could proceed with the suit further when once the amendment is allowed as above and whether , the suit, thereafter, be presented before the lowest court having the jurisdiction, needs to be considered. |
Authorities
The Supreme Court considered the following authorities:
| Authority | Court | Legal Point | How it was considered |
|---|---|---|---|
| Suhrid Singh @ Sardool Singh v. Randhir Singh [2010] 12 SCC 112 | Supreme Court of India | A plaintiff seeking a declaration in respect of a sale deed, to which he is not a party, need not pay ad valorem fee on the consideration amount mentioned in the deed and he needs to pay only the fixed Court fee. | The Trial Court acknowledged this position but held it inapplicable to the present case. |
| Gobind Gopal & Ors. v. Banwari Lal AIR 1983 Del 323 | High Court of Delhi | A plaintiff is obliged to value the suit for the purposes of Court fee and jurisdiction identically except for the exceptions provided under Section 7 of the Court Fees Act, 1870. | The Trial Court relied on this case to hold that the respondent should have valued the suit at Rs. 1 Crore for both court fees and jurisdiction. |
| Bharat Sanchar Nigam Ltd. v. All India Bharat Sanchar Nigam Executives’ Association (Regd.) & Ors. (2006) 130 DLT 195 | High Court of Delhi | A plaintiff is obliged to value the suit for the purposes of Court fee and jurisdiction identically except for the exceptions provided under Section 7 of the Court Fees Act, 1870. | The Trial Court relied on this case to hold that the respondent should have valued the suit at Rs. 1 Crore for both court fees and jurisdiction. |
| S. RM. AR. S. SP. Sathappa Chettiar v. S. R M. AR. RM Ramanathan Chettiar AIR 1958 SC 245 | Supreme Court of India | The value for the purpose of jurisdiction in a suit has to be decided by reading Section 7(iv) of the Court Fees Act along with Section 8 of the Suits Valuation Act. | The Supreme Court referred to this case to emphasize that the value for jurisdiction is dependent on the value for court fees. |
| Bawa Bir Singh v. Ali Niwa n Khan AIR 1964 Punjab 381 | High Court of Punjab & Haryana | In a suit falling under Section 7(iv)(c) of the Court Fees Act, if one value is given for the purpose of Court fee and another different value for the purpose of jurisdiction, then it is the value for the purpose of Court fee which has to be taken for the purpose of jurisdiction. | The respondent relied on this case to argue that the value for court fee should be taken for the purpose of jurisdiction. |
| Section 2(2), Code of Civil Procedure, 1908 | Statute | Definition of “decree” | The appellants contended that rejection of plaint was a decree under this section. |
| Section 96, Code of Civil Procedure, 1908 | Statute | Right to appeal | The appellants contended that a substantive right to file an appeal against the order of rejection of plaint is available under this section. |
| Order VII Rule 11, Code of Civil Procedure, 1908 | Statute | Rejection of plaint | The Trial Court had passed orders under this provision. |
| Order VI Rule 17, Code of Civil Procedure, 1908 | Statute | Amendment of pleadings | The respondent had filed applications under this provision. |
| Article 227, Constitution of India | Statute | Power of High Court to exercise superintendence over all courts and tribunals | The respondent had invoked the High Court’s jurisdiction under this provision. |
| Rule 7 (4) (c) of the Court Fees Act, 1870 | Statute | Court fee calculation | The appellants contended that ad valorem court fee as per this rule ought to have been paid. |
| Section 8 of the Suits Valuation Act, 1887 | Statute | Value for court fees and jurisdiction | The Trial Court had considered this provision. |
Judgment
| Submission | Court’s Treatment |
|---|---|
| Appellants’ submission that the High Court’s order is unsustainable due to the Trial Court’s order rejecting the plaint. | The Court did not make a conclusive finding on this point but remanded the case for fresh consideration by the High Court. |
| Appellants’ submission that the respondent should have paid ad valorem court fees. | The Court acknowledged the Trial Court’s view but did not make a conclusive finding, leaving it open for the High Court to consider. |
| Appellants’ submission that the rejection of the plaint was a decree under Section 2(2) of the CPC. | The Court noted this argument but did not make a conclusive finding on this point, leaving it open for the High Court to consider. |
| Respondent’s submission that the Trial Court’s order did not actually reject the plaint. | The Court did not make a conclusive finding on this point, leaving it open for the High Court to consider. |
| Respondent’s submission that the dismissal of the amendment application was not appealable. | The Court did not make a conclusive finding on this point, leaving it open for the High Court to consider. |
| Respondent’s submission that approaching the High Court under Article 227 was the only available remedy. | The Court did not make a conclusive finding on this point, leaving it open for the High Court to consider. |
How each authority was viewed by the Court:
- Suhrid Singh @ Sardool Singh v. Randhir Singh [2010] 12 SCC 112: The Court acknowledged the Trial Court’s consideration of this case but did not make a conclusive finding on its applicability.
- Gobind Gopal & Ors. v. Banwari Lal AIR 1983 Del 323: The Court noted the Trial Court’s reliance on this case but did not express a view on its correctness.
- Bharat Sanchar Nigam Ltd. v. All India Bharat Sanchar Nigam Executives’ Association (Regd.) & Ors. (2006) 130 DLT 195: The Court noted the Trial Court’s reliance on this case but did not express a view on its correctness.
- S. RM. AR. S. SP. Sathappa Chettiar v. S. R M. AR. RM Ramanathan Chettiar AIR 1958 SC 245: The Court referred to this case to emphasize that the value for jurisdiction is dependent on the value for court fees.
- Bawa Bir Singh v. Ali Niwa n Khan AIR 1964 Punjab 381: The Court noted the respondent’s reliance on this case but did not express a view on its correctness.
What weighed in the mind of the Court?
The Supreme Court’s decision to remand the case indicates that it was primarily concerned with ensuring that all legal and factual aspects were thoroughly examined. The Court was not convinced that the High Court had adequately addressed the complexities of the case, particularly regarding the valuation of the suit and the applicability of the Court Fees Act. The court noted the Trial Court’s detailed consideration of the matter, which was not fully addressed by the High Court. The court was also concerned about the lack of clarity on the actual amendment sought by the plaintiff and the implications of such an amendment on the jurisdiction of the court. The Court was also concerned about the fact that the High Court had not considered the question whether the Court of Additional District Judge -II, Central, Tis Hazari Courts, Delhi could proceed with the suit further when once the amendment is allowed as above and whether , the suit, thereafter, be presented before the lowest court having the jurisdiction.
| Sentiment | Percentage |
|---|---|
| Need for thorough examination of legal and factual aspects | 40% |
| Inadequacy of High Court’s consideration | 25% |
| Complexity of suit valuation and court fees | 20% |
| Lack of clarity on the amendment sought by the plaintiff | 10% |
| Implications of amendment on jurisdiction of the court | 5% |
Fact:Law Ratio
| Category | Percentage |
|---|---|
| Fact | 30% |
| Law | 70% |
The court’s reasoning was primarily driven by legal considerations, including the interpretation of the Court Fees Act, the Suits Valuation Act, and the Code of Civil Procedure. However, the court also considered the factual aspects of the case, such as the nature of the suit, the reliefs sought, and the procedural history of the case. The court’s emphasis on the need for a thorough examination of the legal and factual aspects highlights the importance of both in the judicial decision-making process.
Logical Reasoning:
The Supreme Court did not provide a final decision on the merits of the case but remanded the matter to the High Court for fresh consideration. The court noted that the High Court had not considered all relevant aspects of the matter, including the nature of the amendment sought and the implications for jurisdiction. The court also observed that the Trial Court had considered various aspects of the matter in detail, which were not addressed in the High Court’s order. The court’s decision to remand the case indicates that it was not satisfied with the High Court’s approach and wanted a more thorough examination of the issues.
The court considered the following:
- The Trial Court’s detailed consideration of the matter
- The nature of the amendment sought
- The implications of the amendment for jurisdiction
- The need for a thorough examination of all legal and factual aspects
The court rejected the High Court’s approach of setting aside the Trial Court’s orders without a proper analysis of the issues involved. The court emphasized the need for a detailed examination of all relevant aspects of the matter.
The majority opinion was delivered by Justice C.T. Ravikumar, with Justice Sudhanshu Dhulia concurring. There were no dissenting opinions.
“We have referred to the orders dated 01.07.2017 and 02.03.2019 only to bring to light the nature of the issues that fell for consideration of the High Court, in exercise of the power under Article 227 of the Constitution of India and ultimately culminated in the order impugned and also the complexity of the legal conundrum involved in the case.”
“In the circumstances, we do not think it proper to conside r all the said questions in this appeal and we think that it is an eminently fit case where we should remand the matter for fresh consideration by the High Court.”
“We make it clear that we have not made may observation on merits.”
Key Takeaways
- The Supreme Court has emphasized the importance of a thorough examination of all legal and factual aspects in cases involving court fees and suit valuation.
- The decision highlights the need for High Courts to address all relevant aspects of a case, including the reasoning of the lower courts.
- The case underscores the complexities involved in determining the correct valuation of suits, particularly when non-parties to a sale deed seek its cancellation.
- The judgment clarifies that merely granting time to correct the valuation does not necessarily mean that the court has not rejected the plaint.
- The case emphasizes that the value for court fees and jurisdiction is dependent on the value stated by the plaintiff for the purpose of court fees.
Directions
The Supreme Court remanded the case to the High Court for fresh consideration and directed the High Court to dispose of the matter expeditiously, preferably within a period of six months. The court also clarified that it had not made any observations on the merits of the case and that both sides were at liberty to take all legally available contentions before the High Court.
Specific Amendments Analysis
The judgment does not discuss any specific amendments to the law. However, it does analyze the respondent’s attempts to amend the plaint, specifically the prayer to delete the words “cancellation” and “cancelling” from the prayers for declaration of the gift and sale deeds as void. The respondent also sought to amend the valuation of the suit for the purposes of court fee and jurisdiction. The court noted that the High Court had allowed the amendment without considering the implications of the amendment on the jurisdiction of thecourt and the valuation of the suit. The Supreme Court did not provide a conclusive view on the legality of the amendment but noted that the High Court should have considered all relevant aspects of the amendment before allowing it.