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Citation Codes
Equivalent Citations
citation codes
Case Number
Attorney(S)
  • S.N. Kacker
  • P.N. Bakshi
Judges
  • Brij Mohan Lall, J.
Acts
  • Section 7(v)(I)(c) of the Court-fees Act.
  • Article 17(vi) of Sch. 2, Court-fees Act.
  • Article 17(vi), Sch. 2, Court-fees Act.13.
  • Section 7(v) of the Court-fees Act
  • COURT FEES ACT
  • buildings.8. Section 7(v),
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Cites
Cited by
Citation Codes
Equivalent Citations
citation codes
Case Number
Attorney(S)
  • S.N. Kacker
  • P.N. Bakshi
Judges
  • Brij Mohan Lall, J.
Acts
  • Section 7(v)(I)(c) of the Court-fees Act.
  • Article 17(vi) of Sch. 2, Court-fees Act.
  • Article 17(vi), Sch. 2, Court-fees Act.13.
  • Section 7(v) of the Court-fees Act
  • COURT FEES ACT
  • buildings.8. Section 7(v),
See more information ...
Smart Summary

Summary of the Opinion: Appeal under Section 6A, Court-fees Act (valuation dispute)

Factual and Procedural Background

The appellant (plaintiff) instituted a suit in the Court of the Civil Judge, Agra, seeking various reliefs. The only relevant relief for present purposes sought delivery of possession of a specified portion of land (marked A–H on an attached plan) by dispossessing Defendant 1 and by demolition of unauthorised constructions in portions A, H, G. That relief was valued in the plaint at Rs. 6,000/-. The defendants contended that the subject-matter should be valued at Rs. 60,000/-. A Commissioner was appointed to assess valuation; he reported a value equivalent to Rs. 21,445/-. Both parties objected to the Commissioner's report; the Civil Judge rejected both objections summarily and required the appellant to pay a deficiency (calculated as Rs. 937-8-0) based on the Commissioner's report. The plaintiff appealed under Section 6A of the Court-fees Act; the defendants filed a cross-objection asserting a market value of Rs. 60,000/-. The appeal and cross-objection were heard together in this opinion.

Legal Issues Presented

  1. Whether the defendants' cross-objection is maintainable when the statutory right of appeal in relation to court-fee valuation is conferred on the plaintiff alone.
  2. Which provision of the Court-fees Act governs valuation of the suit: specifically, whether Section 7(v) applies and, if so, whether the subject-matter for valuation includes the land only or both the land and the buildings thereon.
  3. What is the correct statutory method to determine the market value of the land under Section 7(v)(I)(c) (i.e., whether the Commissioner applied the prescribed method — multiplying the average annual net profits by twenty — or erred in adopting a different approach).

Arguments of the Parties

Appellant's Arguments

  • The subject-matter of the relief is the land itself and not the buildings standing thereon; the plaintiff does not seek possession of the buildings, only of the land and demolition of unauthorised constructions.
  • The suit should be governed by Section 7(v)(I)(c) of the Court-fees Act (i.e., valuation by reference to net profits or the market value calculated via the statutory formula), not by a valuation that includes the buildings.
  • The appellant challenged the Civil Judge's summary rejection of objections to the Commissioner's report and the order to pay a deficiency based on that report.

Respondents' Arguments

  • The buildings are part of the subject-matter of the dispute and their value ought to be taken into account when fixing the court-fee; therefore, the suit falls under Section 7(v)(II) (as contended by respondents).
  • The market value of the land (including structures, in respondents' view) should be fixed at Rs. 60,000/-, and the cross-objection sought to have this figure accepted.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Jogal Kishore v. Tale Singh, 4 All 320 (Full Bench) The interpretation that in S.7(v) the words "subject-matter" must be read with the opening words "for the possession of land, houses and gardens"; where a plaintiff seeks possession of land but not of the buildings, the value of buildings (which may have to be demolished) is not to be taken into account in estimating court-fees under S.7(v). Also, the plaintiff must pay on the title or thing he wants to recover, not on incidental costs to the defendant. The court relied on this Full Bench decision to support the conclusion that where possession of the buildings is not sought, their value should be excluded from valuation under Section 7(v). The precedent was used to distinguish suits where possession of both land and buildings is claimed from suits seeking land possession alone plus demolition.

Court's Reasoning and Analysis

The court analyzed the matter in a sequence of legal determinations:

  1. Maintainability of Cross-objection:

    The court examined O.41, R.22 CPC which permits a respondent to take a cross-objection only in respect of matters that could have been challenged by way of appeal. The court observed that the law of court-fee confers a right of appeal to the plaintiff alone and not to the defendant. Allowing a cross-objection where the respondent had no statutory right of appeal would circumvent the statutory scheme. Therefore, the cross-objection filed by the defendants (seeking valuation at Rs. 60,000) was held not maintainable and dismissed with costs.

  2. Applicable Provision — Section 7(v):

    The parties agreed Section 7(v) of the Court-fees Act applied; the precise question was which sub-clause. Section 7(v) applies to "suits for possession of land, buildings or gardens" with court-fee levied "according to the value of the subject-matter". The court identified the essential preliminary issue as determining what constitutes the "subject-matter" of the relief — whether it is the land only or both land and buildings.

  3. Whether Buildings Are Part of the Subject-matter:

    The court drew a distinction: if the plaintiff seeks possession of both the land and buildings, both are the subject-matter. But where the plaintiff seeks possession of land and prays only that the defendant be permitted to remove the buildings (i.e., demolition rather than possession of the buildings), the buildings are not the subject-matter for the purpose of S.7(v). The court relied on the reasoning in Jogal Kishore v. Tale Singh to support exclusion of building value where possession of buildings is not sought. Because in the present case possession over the buildings was not sought, the court-fee under S.7(v) could not be levied on the value of the buildings.

  4. Separate Fee for Demolition:

    Although the value of buildings is excluded under S.7(v) for valuation of the possession claim, the court held that a separate court-fee must be paid for the demolition relief. That fee is not under S.7(v) but under Article 17(vi) of Schedule 2 of the Court-fees Act, which prescribes a fixed fee (stated in the opinion as Rs. 18-12-0) for "every other suit where it is not possible to estimate at a money value the subject-matter...". Thus the relief was characterized as a combination: possession of land (S.7(v)(I)(c)) plus a demolition relief (Article 17(vi) Sch.2).

  5. Proper Method to Determine Market Value under S.7(v)(I)(c):

    Section 7(v)(I)(c) prescribes a method: where no net profits have arisen from the land for the prior three years, the market value "shall be determined by multiplying by twenty the annual average net profits of similar land for the three years immediately preceding the date of presenting the plaint." The Commissioner did not follow this statutory method (multiplying average net profits by twenty) and instead applied a rent/rental-based hypothetical construction approach, relying on various assumptions about rental yields, structure costs, and capitalisation rates. The court found the Commissioner's procedure unsatisfactory and not in accordance with the statute.

  6. Specific Critique of the Commissioner's Method:

    The Commissioner assumed a per-square-yard price for a portion of the land, added a structure value per square foot, derived a combined capital value, computed an annual net income after a 25% deduction, assumed that income represented a 24% yield, and then capitalised other shop-rents on that assumed yield to deduce values. The court described this as based on too many assumptions, not following the statutory formula, and therefore erroneous.

  7. Admission in Section 145 Proceedings:

    The Civil Judge relied on an earlier petition in Section 145 proceedings in which the appellant had said the property was worth about Rs. 30,000, arguing that this higher figure supported dismissal of the appeal. The court rejected this reliance: the admission related to market sale value (including constructions) and did not equate to an admission of the statutory valuation for court-fee purposes under Section 7(v)(I)(c). The court therefore held the admission did not bar the appellant from contesting the valuation for court-fee purposes.

  8. Result of the Analysis:

    Because the Commissioner did not correctly apply Section 7(v)(I)(c) and the Civil Judge's approach was erroneous, the appellate court allowed the appeal against the valuation order, set aside the order of the Court below, remanded the case for fresh determination of the value of the subject-matter in accordance with law, and dismissed the defendants' cross-objection as not maintainable. Costs of the appeal were directed to abide the result; the cross-objection was dismissed with costs.

Holding and Implications

Holding: APPEAL ALLOWED; ORDER OF THE COURT BELOW SET ASIDE; CASE REMANDED

Implications and Direct Effects:

  • The defendants' cross-objection (seeking valuation at Rs. 60,000) was held not maintainable under O.41, R.22 CPC and was dismissed with costs.
  • The value of the buildings standing on the land was excluded from the valuation under Section 7(v) for the possession relief because the plaintiff did not seek possession of the buildings; therefore court-fee under S.7(v) is to be calculated on the land subject-matter only (S.7(v)(I)(c) as applicable).
  • A separate court-fee is payable for the demolition relief under Article 17(vi) of Schedule 2 of the Court-fees Act (a fixed fee as specified in that Article).
  • The Commissioner's valuation was set aside as not being in accordance with the statutory method prescribed by S.7(v)(I)(c) (i.e., the prescribed multiplication of average annual net profits by twenty when applicable). The matter is remitted to the Court below to determine the subject-matter value afresh in accordance with law.
  • Costs of the appeal were directed to abide the result; the cross-objection was dismissed with costs.

The opinion does not discuss broader doctrinal implications beyond its direct application to the parties; it remands for fresh valuation and does not purport to lay down any new legal precedent beyond applying existing statutory interpretation and the cited Full Bench authority.

Show full summary ...

    Mt. Kulsumunn-Isan v. Khushnudi Begum And Another

    1. This is an appeal by a plaintiff under Section 6A of the Court-fees Act. The appellant instituted a suit in the Court of the Civil Judge of Agra, claiming several reliefs of which the following is the only relevant one viz.:

    “That the plaintiff be delivered possession over the land in dispute marked by letters A, B, C, D, E, F, G, H and shown in red colour in the attached plan by dispossessing defendant 1 therefrom and by the demolition of the constructions made unauthorisedly by her in the portion A, H, G of the said land in dispute.”

    2. This relief was valued at Rs. 6,000/-. A plea was taken in defence by the defendants that the subject-matter of the suit should be valued at Rs. 60,000/- and not Rs. 6,000/-. A Commissioner was appointed by the Court to assess the valuation of the subject-matter of the suit and, according to his report, the subject-matter should have been valued at Rs. 21,445/-. Both parties lodged objections against the Commissioner's report. The learned Civil Judge rejected the objections of both parties in a summary judgment and called upon the appellant to pay the deficiency of Rs. 937-8-0 as calculated on the basis of the Commissioner's report. Dissatisfied with this order, the plaintiff has preferred this appeal. The defendants have filed a cross-objection and their contention is that the market value of the land in question should be fixed at Rs. 60,000/-.

    3. The cross-objection may be disposed of first. It is provided by O. 41, R. 22 of the CPC that a respondent

    “though he may not have appealed from any part of the decree may………take any cross-objection to the decree which he could have taken by way of appeal.”

    4. It is, therefore, obvious from the very language of the statute that a cross-objection can be taken in respect of that matter only which could be agitated by means of an appeal, if the respondent had so chosen to do. In the matter of court-fee, however, law has conferred a right of appeal on the plaintiff alone but not on the defendant. If the respondents had thought fit to prefer an appeal against the decision of the learned Civil Judge, they could not do so. In the circumstances, they cannot file a cross-objection also because that would amount to circumventing the law. If a cross-objection is allowed to be filed in respect of a matter which could not be agitated by means of an appeal, the very purpose of the law will be defeated I am, therefore, of the opinion that the cross-objection is not maintainable. It is dismissed with costs.

    5. Taking up the appeal, the first point to decide is as to which section of the Court-fees Act governs a suit like the present. The parties are agreed that Section 7(v) of the Court-fees Act will apply to a case like the present, although they differ as to which sub-clause will be applicable to this case. Section 7(v) says that in suits for possession of land, buildings or gardens, the court-fee shall be levied “according to the value of the subject-matter”. Thereafter rules have been laid down for determining the value of the subject-matter. The point for decision in the present case is as to what is the subject-matter of the relief in question. It is the land itself or also the buildings that stand thereon?

    6. It has been contended on behalf of the appellant that the subject-matter of this relief is the land itself and not the buildings standing thereon. On the contrary, it has been urged on behalf of the respondents that the buildings are also the subject-matter of the dispute and their value should also be taken into consideration. It is, therefore, contended on behalf of the respondents that the present suit falls under S. 7(v)(II), while the learned counsel for the appellant maintains that the suit falls under S. 7(v)(I)(c).

    7. If a plaintiff brings a suit stating that he owns certain land and also the buildings standing thereon, that he has been dispossessed by the defendant from the land as well as the buildings and he seeks possession over both the land and the buildings, the subject-matter of dispute will certainly be the land as well as the buildings. But if the plaintiff comes with the allegation that he owns the land and that the defendant has unlawfully taken possession of the land and made constructions thereon without his consent and if he further prays that the land alone be delivered to him and the buildings be allowed to be removed by the defendant, the buildings standing thereon are not, in my opinion, the subject-matter of the suit. It may be pointed out that he does not seek possession over the buildings.

    8. Section 7(v), which imposes on the plaintiff the obligation to pay court-fee in respect of the subject-matter, contemplates a suit for “possession” of that subject-matter. Since possession is not sought over the buildings in this case court-fee cannot be levied in respect of the price of the buildings. To hold that in such a case also the buildings would be the subject-matter of the suit would mean placing this class of case on the same level with a suit in which possession is sought over the land as well as the buildings.

    9. This point arose for decision in the Full Bench case of — ‘Jogal Kishore v. Tale Singh’, 4 All 320 (A). Stuart C.J made certain observations on pages 327-328 which bear quotation. He remarked as follows:

    “In S. 7, sub-s. (v), there is a court-fee provided for ‘suits for the ‘possession’ of land, houses, and gardens, according to the value of the subject-matter’,………………and if this expression ‘subject-matter’ could be detached from the opening words of the same sub-section, it might perhaps be considered to cover a claim of the nature made in these suits, but the words ‘subject-matter’ in this provision must, I think, be read not irrespective of but ‘with’ the commencing words of the same sub-section, ‘for the possession of land, houses and garden’…… And of course if that be the true view of the present state of the law as provided by the Court-fess Act of 1870, the value of the buildings in these two cases sought to be demolished is not to be taken, into account in estimating the court-fees to be charged in the suit.”

    10. In a separate and concurrent judgment, Tyrrell J., (Straight and Brodhurst JJ., concurring), observed as follows:

    “But he (plaintiff) need not pay on the value of the buildings raised by the defendant. This is not a proper factor in the estimate of the plaintiff's reliefs. He must pay on the title he asserts the thing he wants to recover, or the equities he has to vindicate, not on any considerations of what cost or charges or loss his success in his suit may entail on the defendant.”

    11. The judgment goes on to add:

    “The answer therefore in this as well as in the other referred case should be that the value of the buildings which may have to be demolished is not to be taken into account in estimating the value of the suit for the purposes of the Court-fees Act……………”

    12. It is true that the relief in question is to be distinguished from another relief in which the only prayer is for possession of land. The relief in question differs from the relief claiming possession only without demolition in this much that it contains a prayer for demolition also. Therefore, while holding that, in a case like the present, the value of the buildings is to be excluded from consideration, I must record a finding that a separate court-fee must also be paid for the relief of demolition. That court-fee will not be paid under S. 7(v) but under Article 17(vi) of Sch. 2, Court-fees Act. That Article provides that for “every other suit where it is not possible to estimate at a money value the subject-matter in dispute and which is otherwise provided for by this Act” a fixed court-fee of Rs. 18-12-0 is chargeable. I am, therefore, of opinion that the relief in question is, in substance, a combination of two reliefs, i.e, a relief for possession of land, which is governed by S. 7(v)(I)(c), and a relief for demolition, in respect of which court-fee is payable under Article 17(vi), Sch. 2, Court-fees Act.

    13. Having determined this basic principle, it remains to find out the market value of the land under sub-cl. (c). This clause runs as follows:

    “Where the land pays no such revenue, or has been partially exempted from such payment, or is charged with any fixed payment in lieu of such revenue, and nett profits have arisen from the land during the three years immediately preceding the date of presenting the plaint—twenty times the annual average of such nett profits; but when no such nett profits have arise therefrom, the market value, which shall be determined by multiplying by twenty the annual average nett profits of similar land for the three years immediately preceding the date of presenting the plaint.”

    14. It will appear that the Commissioner should have found out the average net profits of this land and should have multiplied the said profits by twenty. If no net profits had accrued from this land during the three years immediately preceding the date of the suit, he should have found out the average annual profits of a similar land and should have multiplied the figure so found out by twenty. This was the proper method for determining the net profits. Unfortunately the Commissioner seems to have overlooked this method of calculation. The provisions of S. 7(v)(I)(c) do not appear to have been present to the mind of the Commissioner because he has nowhere attempted to multiply the net profits by twenty.

    15. The method adopted by him may be reproduced in his own words as follows:

    “I have therefore no exemplars before me and the only data before me is the rent of the shops standing on the plots in the vicinity and on a portion of the plot in dispute. Hence, I shall have to determine the value of the land on the rental basis of the hypothetical constructions believed to be standing on the land in suit.”

    16. This may or may not be a correct method of determining the actual market value for the purposes of sale of the property, but certainly it is not the method recognised by S. 7(v)(I)(c) for the purposes of determining the court-fee.

    17. What the Commissioner did may briefly be stated below. He took a portion of the area in dispute which is marked A, B, C, P. Relying on a certain judgment of the Rent Control Officer he accepted the price of this piece of land as Rs. 30/- per square yard. He calculated the price of the structure standing on that area at Rs. 4/8/- per square foot. Then he added the aforesaid two sums found out by him and fixed the total price of the land as well as the structure at Rs. 4,191/-. He worked out the annual net income after making a deduction of 25 per cent, on account of repairs, depreciation and taxes and fixed the income at Rs. 990/-. Therefrom he drew a conclusion that the rent yielded a return of 24 per cent, per annum on the capital outlay. Having arrived at this conclusion, he took up another piece of land and found out the rent of the shops which stood on that piece of land. Having determined the income from the shops standing on that piece of land at Rs. 2,825/- and acting on the assumption that this was the yield at the rate of 24 per cent, per annum on the capital cost, he calculated the capital cost of the land as well as the buildings. Thereafter he made another assumption, viz., that the cost of building was Rs. 5/- per square foot.

    18. Thus he determined the cost of the buildings standing on that land and, deducting the cost so found out from the capital value determined according to the above calculation, he fixed the price of the land. This procedure was very unsatisfactory. It was based on too many assumptions which may or may not be correct. In any case, this is not the method prescribed by the Court-fees Act. When the statute lays down a special method for calculating the value for a particular purpose, that method and that alone is to be followed.

    19. The learned Judge has pointed out that in proceedings under Section 145 of the Cr PC which took place before the institution of the suit the appellant had made an admission in the course of a petition presented to that Court to the effect that the property in question was worth about Rs. 30,000/-. Reliance was placed on this admission and it was urged that since the figure contained in this admission is higher than the figure found out by the Commissioner, the appeal should be dismissed. This argument has no force. When the appellant said that the property in question was worth about Rs. 30,000/-, obviously she meant that the property (which included a portion of the construction also) could be sold in the market for that sum.

    20. But the price which a property may fetch in the market by sale is not necessarily the same as the price calculated for the purposes of court-fee under Section 7(v)(I)(c) of the Court-fees Act. When the appellant made that admission in the petition aforesaid, she did not mean to admit that for the purposes of court-fee also the value of the property was Rs. 30,000/-. I am, therefore, of opinion, that this admission does not stand in the appellant's way. Since the Commissioner has not correctly recorded the value of the subject-matter of the suit and the entire approach of the Commissioner and the Court below has been Erroneous, this appeal must succeed. The order of the Court below is set aside. The case is remanded to the Court below with directions that it shall proceed afresh to determine the value of the subject-matter of the suit in accordance with law. The costs of the appeal shall abide the result. The cross-objection is dismissed with costs.

    B/R.G.D

    21. Case remanded.

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    Comments

    Mt. Kulsumunn-Isan v. Khushnudi Begum And Another
    (Aug 5, 1953)