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Om Prakash v. Maya Ram And Others
Factual and Procedural Background
The plaintiff, Om Prakash, filed a suit in the court of the Munsif seeking dissolution of a partnership firm and accounts, alleging that the firm, formed on 31-10-1953, was dissolved on 16-11-1955 without his knowledge or consent. He claimed to have invested Rs. 22,000 in the partnership and asserted ownership of a sum of Rs. 4,383-4-9 from an old firm’s accounts. The plaintiff valued the suit at Rs. 1,000 for jurisdictional and court fee purposes, stating it was not possible to ascertain the exact amount due. The defendants admitted partnership but denied the investment and contended the firm suffered losses, alleging the suit was undervalued arbitrarily.
The Munsif court held that the suit exceeded its pecuniary jurisdiction and rejected the plaint. On appeal, the Additional Civil Judge agreed and returned the plaint for presentation to the proper court. The plaintiff then filed the present appeal, which was heard by a Single Judge who identified a divergence of opinion between two precedents concerning whether a plaintiff can arbitrarily value a suit for accounts to choose a forum, and recommended the matter be decided by a larger bench.
Legal Issues Presented
- Whether in a suit for accounts the plaintiff can put an arbitrary value upon his claim with a view to choose his forum.
- Whether the court can determine the correct valuation of a suit for accounts by examining the allegations in the plaint and the defendant’s written statement.
- What constitutes the ‘approximate sum due’ to the plaintiff for the purpose of valuation under Section 7(iv)(b) of the Court Fees Act as amended.
Arguments of the Parties
The opinion does not contain a detailed account of the parties' legal arguments.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Inayat Husain v. Bashir Ahmad, A.I.R 1932 All. 413 | Plaintiff cannot put an arbitrary or fictitious valuation on the claim when the valuation can be ascertained correctly. | The court recognized this principle as restricting plaintiffs from overvaluing or undervaluing claims to choose jurisdiction. |
| Jumman Khan v. Bhurey Khan, A.I.R 1949 All. 161 | Valuation for jurisdiction and court fees must be based on the plaintiff’s statement of approximate sum due; court may not conduct a detailed inquiry. | The court held that the approximate sum due is primarily the plaintiff’s own valuation unless clearly contradicted by admissions in the plaint. |
Court's Reasoning and Analysis
The court analyzed the provisions of Section 7(iv)(b) of the Court Fees Act, as amended by the U.P. Amendment Act of 1938, which requires the valuation of suits for accounts to reflect the 'approximate sum due' to the plaintiff. The term ‘approximate’ was interpreted as a valuation closely resembling the actual sum claimed. The court noted that where the plaintiff clearly asserts a specific sum due, the valuation cannot be arbitrary or fictitious merely to obtain jurisdiction in a particular court.
In the present case, the plaintiff claimed a definite sum (Rs. 17,000 and odd) including capital investment and profits, making the approximate valuation ascertainable. The court rejected the argument that the plaintiff could rely on the defendants’ denial or claim of losses to justify an arbitrary valuation. It emphasized that jurisdiction depends on the plaint's allegations, not on the defendant’s denials, and that a plaintiff cannot manipulate jurisdiction by undervaluing the suit.
The court reconciled the conflicting precedents by holding there is no real conflict: when a plaintiff admits a sum is due, that sum is the approximate valuation for jurisdictional purposes. Only when the amount cannot be ascertained without proper accounting may a notional valuation be accepted. The court found that in this case, the plaintiff deliberately undervalued the suit to secure jurisdiction in the Munsif court and thereby avoid higher court fees, which was impermissible.
Holding and Implications
The court DISMISSED the appeal, upholding the return of the plaint for presentation to the proper court due to deliberate undervaluation by the plaintiff.
The direct implication is that plaintiffs in suits for accounts must value their claims approximately in accordance with the actual sum due, as alleged in the plaint, to invoke jurisdiction and pay appropriate court fees. The decision reinforces that courts will not permit manipulation of jurisdiction through fictitious valuations, but no new precedent beyond the application of existing principles was established.
Uniyal, J.:— This is an appeal by Om Prakash, plaintiff against the appellate order of the Additional Civil Judge, Muzaffarnagar returning the plaint for presentation to the proper court.
2. The plaintiff filed a suit in the court of the Munsif for dissolution of a partnership firm and for accounts on the allegation that the said firm came into existence on 31-10-1953 and carried on its business till 16-11-1955. It was alleged that the defendants dissolved the said firm on 16-11-1955 without his knowledge or consent. In paragraph 5 of the plaint it was asserted that the plaintiff made a capital investment of Rs. 22,000 in the partnership business which was going on well till it was dissolved, and that he owned a sum of Rs. 4,383-4-9 only to the partnership in respect of the accounts of an old firm. In paragraph 7 of the plaint it was pleaded that it was not possible of the plaintiff to ascertain the exact amount due to him from the firm and he was therefore, valuing the suit at Rs. 1,000 for the purpose of jurisdiction and the payment of court fees. The defendant admitted that the plaintiff was a partner in the firm but denied that he had made any investment. It was also asserted that the firm had suffered losses in its business, and lastly that on the allegations made in the plaint the suit was undervalued and the valuation of Rs. 1,000 was arbitrary.
3. The Munsif came to the conclusion that the suit was beyond his pecuniary jurisdiction and rejected the plaint. On appeal the Civil Judge agreed with the finding of the trial court that the suit was undervalued and ordered the return of the plaint for presentation to the proper court.
4. The plaintiff filed the present appeal and it came on for hearing before a learned Single Judge who thought that there was divergence of opinion between the case of Inayat Husain v. Bashir Ahmad A.I.R 1932 All. 413 and the case Jumman Khan v. Bhurey Khan A.I.R 1949 All. 161 on the question as to whether in a suit for accounts the plaintiff can put an arbitrary value upon his claim with a view to choose his forum. The learned Single Judge observed that the view expressed in the case of Jumman Khan indicated that the court in order to ascertain the correct valuation can also go into the allegations made by the defendants in their written statement, and in case the defendants say that nothing is due to the plaintiff they cannot be allowed to take the plea that the suit was not cognizable by the court. He was of the view that a contrary opinion had been expressed in the case of Inayat Husain in which it was said that where the valuation can be ascertained correctly the plaintiff cannot be allowed to put an arbitrary value upon his claim, nor permitted to over-value or undervalue his claim with a view to choose his forum. The learned Single Judge was, therefore, of the view that the case should be decided by a larger bench, and this is how the matter has come up before us.
5. Sec. 8 of the Suits Valuation Act lays down that the value as determinable for purposes of court fees and the value for purposes of jurisdiction in a suit for accounts shall be the same. Court fee in such suits has to be paid in accordance with Sec. 7(iv)(b) of the Court Fees Act, which, so far as is material, reads as follows:—
“7(iv) … ……
(b) for accounts:
according to the amount at which the relief sought is valued in the plaint or memorandum of appeal:
6. Provided … …. Provided further, that in suits filed under Cl. (b), such amount shall be the approximate sum due to the plaintiff and the said sum shall form the basis for calculating (or determining) the valuation of an appeal from a preliminary decree passed in the suit.”
7. The second proviso to this sub-section is new and was added by the U.P Amendment Act of 1938. The language of the proviso leaves no room for doubt that in suits filed under Cl. (b) the valuation shall be the ‘approximate’ sum due to the plaintiff, according to the allegations in the plaint. The word ‘approximate’ means very near, closely resembling or fairly correct. Therefore, when the plaintiff is required to put down an approximate valuation of the suit it means that the valuation is as nearly as may be the sum in respect of which he seeks relief in the suit. If it is possible to ascertain the approximate valuation on the basis of the allegations made in the plaint, then the plaintiff cannot be allowed to put down a fictitious value for the purpose of jurisdiction.
8. The averments made by the plaintiff in his plaint clearly go to show that he was claiming a sum of Rs. 17,000 and odd by way of his contribution towards the capital of the firm, besides profits which according to him had been earned by the partnership during its continuance. In the present case, therefore, there was no difficulty in ascertaining the approximate valuation of the suit having regard to the relief claimed in the suit.
9. The ratio of the decision in Jumman Khan v. Bhurey Khan as stated by the learned Judges, was as follows:—
“It cannot be the intention of the law that the valuation of the suit for purposes of jurisdiction and payment of court fees must be determined upon a regular inquiry to be made about the amount due to the plaintiff …. The expression ‘approximate sum due to the plaintiff’ in Sec. 7(iv)(b) as amended must inevitably refer to the statement of the plaintiff himself as to what he thinks is the approximate sum due to him.”
10. The learned Judges, however, made it clear that—
“Where the plaintiff himself has admitted in the body of the plaint that on the checking of accounts such and such amount will be found due to him, but has deliberately under-valued his claim for purposes of payment of court, fees; or where the plaintiff admits that there are no liabilities and the value of the assets is also admitted, then, in such cases, the court will be justified in not accepting the valuation as put by him in the plaint, and in calling upon him to correct it according to his own admission.”
11. Tile observations quoted above go to show that in a case where the plaintiff has clearly stated that a particular sum is due to him from the partnership firm and it is alleged that the said partnership had earned profits in the course of its business, the plaintiff cannot be allowed to put an arbitrary or fictitious valuation on the suit for the purpose of jurisdiction. There may, however, be cases where the plaintiff states that it is not possible for him to ascertain the amount due to him without a proper accounting; there the plaintiff would be justified to give a notional valuation in the plaint for purposes of jurisdiction and payment of the court fees. It would, therefore, depend on the facts of each case whether the valuation put down by the plaintiff in the plaint was the approximate sum due to him for the purpose of determining the valuation of the suit and the payment of court fees. No hard and fast rule can be laid down for the purpose of determining the proper valuation that may be put by the plaintiff in a suit for accounts. The question has to be decided with reference to the facts and circumstances of each case.
12. We are, therefore, of opinion that there is no real conflict between the views expressed by the Division Benches in the two cases of Inayat Husain v. Bashir Ahmad and Jumman Khan v. Bhurey Khan. It seems to us that in a case where the plaintiff asserts that a particular sum of money is due to him from the defendants, on account of the business of partnership, it would be correct to say that is the ‘approximate sum’ due to the plaintiff within the meaning of the second proviso to Cl. (b) of Sec. 7(iv) of the Court Fees Act as amended, and the plaintiff cannot be heard to say that the amount due to him cannot be ascertained without proper accounting. The argument that since the defendants denied the claim of the plaintiff in their written statement and alleged that the partnership had incurred losses, the valuation put by the plaintiff could not be said to be arbitrary, cannot be countenanced. The jurisdiction of the court to entertain a suit must ordinarily depend on the allegations made in the plaint and not upon the denial of the plaintiff's claim in the written statement. The plaintiff cannot be allowed to choose his forum by deliberately undervaluing his suit. It is the function of the court in which the suit is instituted to find out whether on the allegations made in the plaint the suit would be cognisable by that court or not. If prima facie the allegations in the plaint disclose that the court has no jurisdiction to grant the relief claimed in the suit and the plaintiff has deliberately undervalued the suit, the court would have no option but to return the plaint for presentation to the proper court.
13. We are satisfied that in this case the plaintiff had deliberately undervalued his claim in order to give jurisdiction to the Munsif to entertain the suit. This he could not be allowed to do merely to escape the payment of court fees.
14. The result, therefore, is that this appeal fails and is hereby dismissed with costs.
15. Appeal dismissed.
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