Citation Codes

Equivalent Citations

citation codes

Case Number

Letters Patent Appeal No. 50 of 1956, from the decision of Bavdekar, J., in Appeal No. 171 of 1955, reversing the order passed by B.J Diwan, Judge, City Civil Court, Bombay, in Suit No. 2435 of 1954

Judges

J.C Shah
Gokhale, JJ.

Acts

1954 cl. (iv)(c) of s. 7 of the Court-fees Act
s. 8 of the Suits Valuation Act, 1887,
SECTION 7 COURT FEES ACT
art. 17(v) of the Court-fees Act,
s. 8A, by Bombay Act XII of 1954
s. 7(iv)(c) of the Court-fees Act
s. 8 of the Suits Valuation Act
s. 8A of the Court-fees Act
Bombay Act XII of 1954,
COURT FEES ACT

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Smart Summary

Structured Summary of the Provided Opinion

Factual and Procedural Background

Plaintiffs filed Suit No. 2435 of 1954 in the City Civil Court, Bombay, seeking:

a declaration that an alleged auction sale effected by defendant No. 1 in favour of defendant No. 2 (purportedly exercised under powers in a mortgage deed) was illegal, void, invalid, ineffective, bad in law and not binding on the plaintiffs; and
a permanent injunction restraining defendant No. 1 from completing the sale and conveying the properties to defendant No. 2 and restraining defendant No. 2 from completing the purchase and having the properties conveyed in his favour.

The plaintiffs valued the suit at Rs. 420 for purposes of Court-fee and jurisdiction. The defendants challenged the City Civil Court's jurisdiction, asserting that the subject-matter value exceeded the court's pecuniary limit (Rs. 25,000), and obtained an order returning the plaint for presentation to the proper Court. An appeal against that order was heard by Mr. Justice Bavdekar, who allowed the appeal and set aside the order returning the plaint. Defendant No. 1 then appealed under the Letters Patent. The subsequent opinion (by J.C. Shah, J.) reviews the classification and valuation issues under the Court-fees Act and the effect of s. 8A (Bombay Act XII of 1954) on the Court's power to revise valuation.

Legal Issues Presented

Whether the suit falls within s. 7(iv)(c) of the Court-fees Act (i.e., a suit to obtain a declaratory decree where consequential relief is claimed) or within other provisions (such as Schedule II, article 17), thereby determining how valuation for Court-fee and jurisdiction is to be computed.
Whether s. 8A of the Court-fees Act (as enacted by Bombay Act XII of 1954) authorizes the Court to revise the valuation made by the plaintiff in the plaint and, if so, whether there was a prima facie reason in this case to treat the plaintiffs' valuation as undervalued and to undertake an inquiry under s. 8A.
What constitutes the "subject-matter" of the suit for valuation purposes in this case — i.e., whether it is the property (or its market value), the equity of redemption, or the relief claimed (declaration and injunction) — and what valuation should govern jurisdiction and Court-fees.

Arguments of the Parties

Appellant / Defendant No. 1 (and counsel Mr. C.S. Trivedi)

Contended that the suit should not be treated as falling under s. 7(iv)(c) of the Court-fees Act but rather under Schedule II, article 17 (iv) or (vii), which would change the applicable valuation rules.
Argued that if the suit did not fall under s. 7(iv)(c), s. 8 of the Suits Valuation Act would not apply and, consequently, valuation for Court-fee and jurisdiction need not be the same; the plaintiffs should be required to value the claim for jurisdiction at the property's market value (or equivalent measure such as equity of redemption).
Asserted that s. 8A (Bombay Act XII of 1954) allows the Court, where it is of opinion the subject-matter has been undervalued, to hold an inquiry and correct the valuation, and that the auction price or market value should be the yardstick.

Respondents / Plaintiffs (and counsel S.B. Vakil)

Framed the suit under s. 7(iv)(c) of the Court-fees Act and valued the relief at Rs. 420; relied on the statutory position that in suits under s. 7(iv)(c) the plaintiff may value the relief claimed for Court-fee purposes.
Implicitly disputed that the auction price or the gross property value should determine the valuation for Court-fee and jurisdiction, emphasizing that what is sought are a declaration and injunction (reliefs that may not be readily expressible as a single money value).

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Bai Lilavati v. Vadilal, 1944 47 Bom. L.R. 386	Discussed classification of a suit and whether it falls under s. 7(iv)(c) or another provision (in that case the Court held the suit did not fall under s. 7(iv)(c) but under art. 17(v)).	The court distinguished the present case from Bai Lilavati: Bai Lilavati was not an instance of the Court correcting a valuation under s. 7(iv)(c); instead it involved a misclassification of the suit. The present suit was held to fall within s. 7(iv)(c), so Bai Lilavati did not mandate a different outcome here.
Vachhani Keshabhai v. Vachhani Nanbha (citation referenced in the opinion)	Noted in the opinion as an example where a suit seeking declaration and injunction was sometimes valued separately for different reliefs (and no objection had been taken to separate valuation).	The court observed that separate valuation of declaration and injunction has sometimes been accepted; it treated any formal objection as one that could be met by a formal amendment rather than as a ground to return the plaint.

Court's Reasoning and Analysis

The court's analysis proceeded by focusing on the statutory framework and the facts asserted in the plaint.

Statutory framework:
- Section 7(iv)(c) of the Court-fees Act prescribes computation of Court-fee in suits to obtain declaratory decrees where consequential relief is claimed — the Court-fee is to be computed according to the valuation placed by the plaintiff in the plaint, but subject to s. 8A and with a minimum fee of Rs. 10.
- Section 8A (enacted by Bombay Act XII of 1954) provides that if the Court is of opinion that the subject-matter of any suit has been wrongly valued it may revise the valuation and hold an inquiry as it thinks fit.
- Section 8 of the Suits Valuation Act, 1887, equates the valuation for Court-fee and for purposes of jurisdiction in suits falling under s. 7(iv)(c): the plaintiff's valuation governs both.
Whether there is any standard to show undervaluation:
The Court considered whether there existed a standard by which the plaintiffs' valuation (Rs. 420) could be demonstrated to be wrong under s. 8A. It concluded that in this case there was no such standard that would allow the Court to say prima facie that the valuation was wrong.
What is the "subject-matter" for valuation:
The Court examined competing suggestions that the subject-matter was (a) the property at large (market/auction value), (b) the equity of redemption, or (c) the relief sought (declaration and injunction).
- The auction price was Rs. 57,000. The Court noted that approximately Rs. 48,000 was due on the mortgage, giving an equity of redemption of about Rs. 9,000 (57,000 − ~48,000 = ~9,000).
- Even if the equity of redemption were treated as the subject-matter, the valuation would not exceed Rs. 9,000 and thus fall within the City Civil Court's pecuniary jurisdiction.
- However, the Court rejected rigidly treating the property or the equity of redemption as the subject-matter. It emphasised that the plaintiffs' suit seeks a declaration and an injunction, and the value of such reliefs may be indeterminate: setting aside a sale could lead to a future resale at an uncertain price (which might be higher or lower), so it is difficult to state the monetary worth of the relief claimed now.
- The court therefore treated the "subject-matter" for valuation as the relief claimed (declaration and injunction) and observed that plaintiffs in suits under s. 7(iv)(c) have historically been permitted some latitude in valuing such reliefs.
Application of s. 8A:
Because there was no reliable standard by which to demonstrate that the plaintiffs' valuation of the reliefs was wrongly made, the Court concluded there was no prima facie case of undervaluation that would attract exercise of the power under s. 8A to revise the valuation. Thus, the Court was not justified in revising the plaintiffs' valuation in the circumstances of this case.
Classification argument (Mr. Trivedi's submission):
The Court rejected the contention that the suit should be classified as one to set aside an alienation or otherwise fall under Schedule II article 17 (iv) or (vii). The Court held that a suit for a declaration that a sale is "invalid and ineffective" is not the same as a suit to set aside an alienation and falls squarely within s. 7(iv)(c) as a suit for a declaratory decree with consequential relief. Accordingly, the valuation rules applicable to s. 7(iv)(c) govern.

Holding and Implications

Holding: The Letters Patent appeal is APPEAL DISMISSED. The order passed by Mr. Justice Bavdekar (which had allowed the earlier appeal and set aside the order returning the plaint) is sustained. The court ordered the appeal dismissed with costs.

Implications (direct effects)

The City Civil Court was held to have jurisdiction to try the suit as valued by the plaintiffs (the plaintiffs' valuation of Rs. 420 was not shown to be prima facie undervalued in the circumstances).
The Court declined to exercise the revision power under s. 8A because there was no standard available to demonstrate that the plaintiffs' valuation of the reliefs (declaration and injunction) was wrong.
The classification of the suit was confirmed to be under s. 7(iv)(c) of the Court-fees Act (a suit for a declaratory decree where consequential relief is claimed) and not as a suit to set aside an alienation under Schedule II provisions.
The appeal was dismissed with costs. (The opinion records that the appeal is dismissed with costs; an earlier paragraph records that Mr. Justice Bavdekar had ordered respondents to pay appellants' costs of that earlier appeal.)

Note: This summary is strictly confined to the facts, reasoning, arguments and citations explicitly contained in the provided opinion. No information beyond the opinion's text has been added or inferred.

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Chhotalal Kalidas v. Laxmidas Mayaram

Bavdekar, J.:— This is an appeal arising from a suit for a declaration that the sale of the properties in suit by defendant No. 1 in favour of defendant No. 2 in exercise of the powers conferred upon him by the mortgage deed in defendant No. 1's favour was illegal, void, invalid, ineffective, bad in law and not binding upon the plaintiffs and for an injunction restraining defendant No. 1 from completing the sale further and conveying the properties in favour of defendant No. 2. Corresponding injunction has been asked against defendant No. 2 also. The plaint was returned to the plaintiffs for presentation to the proper Court on the ground that the value of the subject-matter of the appeal is not what the plaintiffs put in their plaint, which was for the two reliefs together a sum of Rs. 420, but it was more than Rs. 25,000, to which the pecuniary jurisdiction of the City Civil Court is limited.

2. Now, it is common ground that the suit falls under s. 7(iv)(c) of the Court-fees Act as it is framed by the plaintiffs. In such a suit the plaintiffs were allowed to value the suit for the purposes of Court-fees at such amount as they pleased, and the value for the purpose of jurisdiction is the same as the value for the purpose of Court-fees. It is contended, however, on behalf of the defendants that in the year 1954 cl. (iv)(c) of s. 7 of the Court-fees Act was amended so far as Bombay is concerned by the addition of s. 8A, and that section now permits the Court, if it is of the opinion that the subject-matter of the suit is undervalued, to hold, if necessary, an inquiry and correct the valuation. In order to make the position quite clear there have been added to s. 7(iv) the words, “subject to the provisions of s. 8A with a minimum fee of rupees ten in the case of suits falling under cls. (c) to (f)”. That necessarily means that even though ordinarily speaking the amount at which the relief sought is valued in the plaint is the valuation upon which the Court-fees are to be levied, this would be subject to the power of the Court under s. 8A to correct the valuation.

3. The only question consequently is whether in this case there is any reason for the Court to say that the plaintiffs have undervalued the subject-matter of the suit. Now, the plaintiffs sued in this case for a declaration that the auction sale held by defendant No. 1 is not, for certain reasons, legal or binding upon the plaintiffs and for an injunction restraining defendant No. 1 from completing the sale and defendant No. 2 from completing the purchase. It is contended on behalf of the defendants that in such a suit the subject-matter is really speaking the value of the property which has been brought to sale. That contention obviously cannot possibly be accepted because the property has already been mortgaged by the plaintiffs, and if the sale is good, what the plaintiffs hold is the equity of redemption. Now, the property in this case was sold for a sum of Rs. 57,000, and I am told that Rs. 48,000 and odd are due upon the mortgage. In the result, therefore, the correct valuation of the equity of redemption assuming that is the subject-matter of the suit, would be Rs. 9,000. It is true that the plaintiffs stated in their plaint that the property was worth about Rs. 1 lakh; but the defendants did not accept it, and consequently there is no reason why the price fetched for the property in auction, namely, Rs. 57,000, should not be taken as the correct valuation of the property. Even assuming therefore that the valuation has got to be corrected, the plaintiffs' suit cannot be valued at more than Rs. 9,000, and the City Civil Court would have jurisdiction though undoubtedly the question as to what Court-fee should have had to be levied will have to be gone into. But it does not seem to me that as a matter of fact the subject-matter of the suit is the equity of redemption. The plaintiffs' suit is for a declaration and for an injunction. If the present auction sale is set aside, the property is liable to be put to sale again. It does not mean, therefore, that the plaintiffs would necessarily retain the equity of redemption. It is difficult in circumstances like these to state what the relief of the plaintiff would be worth. If the auction sale is held hereafter and the property fetches less, all that the plaintiffs would have obtained by the present suit would be a loss. On the other hand, if the property was put up to auction again and fetches more, the plaintiffs would stand to benefit. What the plaintiffs stand to gain consequently as a result of this suit it is really impossible to say, and as a matter of fact it is because in cases falling under s. 7(iv)(c) and (d) it is difficult to state what the correct valuation of the subject-matter is that the plaintiff is allowed to value the relief which he claims at such amount as he chooses. It is true that the Legislature itself has decided that this valuation may be corrected by the Court, but what has got to be valued is the subject-matter of the suit, and in this case the subject-matter of the suit is neither the property which seems to be worth Rs. 57,000 nor the equity of redemption but the relief which the plaintiffs have claimed, that is, the declaration and the injunction. It has got to be remembered that under s. 8A the Court first of all values the subject-matter of the suit and then it calls upon the plaintiff to pay the Court-fees upon that valuation. But even then it does not call upon the plaintiff to pay Court-fees upon something which the plaintiff has not asked. If we look at s. 7(iv)(c), what the Court-fees Act requires the plaintiff to pay the Court-fees on is the value of the relief which he claims. The relief is, therefore, the subject-matter of the suit. When, therefore, the Court is valuing the subject-matter of the suit it has got to value the relief which the plaintiff claims in the property or the right in respect of which the reliefs are claimed by him, and as I have already mentioned, it is not possible in this particular case at any rate to say that the reliefs which the plaintiffs claim have been prima facie undervalued.

4. My attention has been drawn to an earlier case of this Court, namely, Bai Lilavati v. Vadilal . 1944 47 Bom. L.R 386.. That was not really a case in which the Court corrected so to speak the valuation of a suit falling under s. 7(iv)(c). In that suit it appeared that the plaintiff sought to set aside certain decrees and then he asked for a consequential relief. What was held was not that the valuation of the suit of the plaintiff for the purposes of Court-fees was wrong, assuming that the suit fell under s. 7(iv)(c). What was held was that the suit did not really fall under s. 7(iv)(c), but was a suit for setting aside a decree, and the suit consequently fell under art. 17(v) of the Court-fees Act, and inasmuch as the suit fell under art. 17(v) of the Court-fees Act, the valuation put by the plaintiff of the suit for the purposes of jurisdiction was wrong.

5. In the present case as I have said there being no primia facie reason for saying that the plaintiffs' suit was undervalued, it is obvious that no correction can be made.

6. One point which requires to be mentioned is that the view has sometimes been taken that in cases falling under s. 7(iv) the plaintiff has to value the total relief claimed by him. That means one valuation must be put upon the declaration as well as the injunction when the suit is for a declaration and injunction. The suit has sometimes, however, been valued separately also, and no objection appears to have been taken; see Vachhani Keshabhai v. Vachhani Nanbha. In any case, it appears to me that if the objection is a valid one it can be met by an amendment which is only formal, and it is not worthwhile asking the plaintiffs to amend their plaint now by showing that they seek to put the valuation of Rs. 420 on the totality of the reliefs claimed by them.

7. The appeal will, therefore, be allowed, and the order returning the plaint to the plaintiffs for presentation to the proper Court would be set aside. The respondents will pay the appellants' costs of this appeal.

8. Defendant No. 1 appealed under the Letters Patent.

9. C.S Trivedi, for Amin and Desai, for the appellant (original defendant No. 1).

10. S.B Vakil, for respondents Nos. 1 to 42 (original plaintiffs).

11. J.C Shah, J.:— The plaintiffs filed Suit No. 2435 of 1954 in the City Civil Court at Bombay claiming the following reliefs:

“(a) That it may be declared that the alleged sale by the defendant No. 1 in favour of the defendant No. 2 purported to have been effected at the auction held on October 11, 1954 is illegal, void, invalid, ineffective, bad in law and not binding upon the plaintiffs by reason of the premises mentioned in the plaint and that the same be set aside.

(b) That the defendant No. 1 be permanently restrained by an Order and Injunction of this Hon'ble Court from proceeding further with the completion of the alleged sale and conveying the said properties in favour of the defendant No. 2 and that the defendant No. 2 be also restrained by an Order and Injunction of this Hon'ble Court from completing the alleged sale and having the said properties conveyed in his favour.”

12. The plaintiffs valued the claim for Court-fee and jurisdiction at Rs. 420. The defendants contended that the City Civil Court had no jurisdiction to entertain the suit. They contended that the jurisdiction of the City Civil Court being limited to Rs. 25,000, the City Civil Court was incompetent having regard to the value of the subject-matter to entertain and try the suit. The learned Judge of the City Civil Court upheld the contention of the defendants and ordered that the plaint be returned for presentation to the proper Court. Against that order an appeal was preferred to this Court being Appeal from Order No. 171 of 1955. Mr. Justice Bavdekar, who heard the appeal, held that the City Civil Court had jurisdiction to entertain the suit, and reversed the order passed by the trial Court and directed the trial Court to proceed according to law. Mr. Justice Bavdekar observed that at best the plaintiffs were claiming a declaration of their right of redemption which was of the value not exceeding Rs. 9,000 and the City Civil Court was competent to try a suit which was valued at Rs. 9,000. Mr. Justice Bavdekar further observed that it did not seem ‘that as a matter of fact the subject-matter of the suit was the equity of redemption’, and that the suit being a suit for a declaration and an injunction, the plaintiffs were entitled to value it at any figure they liked, and the enactment of s. 8A, by Bombay Act XII of 1954 did not take away the right of the plaintiffs to value the claim for declaration and injunction as they chose. Holding that no prima facie case was made out in support of the plea that the plaintiffs' suit was undervalued, and the jurisdiction of the Court to determine the correct valuation under s. 8A of the Court-fees Act was not attracted, the learned Judge passed the order against which this appeal has been filed.

13. Section 7 of the Court-fees Act by cl. (iv)(c) prescribes the method of computation of Court-fee payable in suits to obtain a declaratory decree where consequential relief is claimed. In such a suit the Court-fee is to be computed according to the amount at which the relief sought is valued in the plaint but subject to the provisions of s. 8A with a minimum fee of Rs. 10. By s. 8A it is provided:

“If the Court is of opinion that the subject-matter of any suit has been wrongly valued it may revise the valuation and determine the correct valuation and may hold such inquiry as it thinks fit for such purpose.”

14. Evidently under s. 7, cl. (iv)(c), the plaintiffs have the right to put their own valuation on the subject-matter of the suit, and it is on the valuation put by the plaintiffs that the Court-fee is exigible. By s. 8 of the Suits Valuation Act, 1887, in suits falling under s. 7(iv)(c) the value determinable for the computation of Court-fees, and the value for purposes of jurisdiction, are to be the same: that is, the valuation adopted by the plaintiff for computing the Court-fees governs the jurisdiction of the Court in which the suit is instituted. Indisputably by s. 8A of the Court-fees Act, which was enacted by Bombay Act XII of 1954, the right of the plaintiff under s. 7(iv)(c) to put his own valuation on the subject-matter of the suit in the plaint for computation of Court-fee is made subject to the provisions of s. 8A. If in a case there is some standard by reference to which it may be possible to value the subject-matter of a suit, and the Court comes to the conclusion that the valuation made by the plaintiff is wrong, it is open to the Court to revise the valuation made by the plaintiff. But in this case it cannot be said that there was a standard by reference to which the valuation made by the plaintiffs of the subject-matter of the suit can be demonstrated to be wrong. The claim made by the plaintiffs is a claim for a declaration that a certain sale effected by defendant No. 1 in favour of defendant No. 2 was ‘illegal, void, invalid, ineffective and bad in law’ and for an injunction against the two defendants: and we are unable to appreciate by reference to what standard the valuation of the subject-matter by the plaintiffs of a suit for a declaration that a particular sale is “invalid, ineffective and bad in law” can be rectified. We, therefore, agree with Mr. Justice Bavdekar that the valuation made by the plaintiffs not being shown to be wrong, the Court is incompetent to revise it.

15. Mr. C.S Trivedi, who appears on behalf of defendant No. 1 in this appeal, submits that the suit was not one falling within the description of suits covered by s. 7(iv)(c) of the Court-fees Act but the appropriate provision which governs it is Sch. II, art. 17(iv) or (vii): and on that hypothesis Mr. Trivedi contends that as s. 8 of the Suits Valuation Act did not apply to the suit filed by the plaintiffs, the valuation for the purpose of Court-fee and jurisdiction need not be the same and that the plaintiffs were bound to value for purposes of jurisdiction the claim at the market value of the property which was the subject-matter of the suit.

16. We are unable to agree with the contention of Mr. Trivedi. This suit cannot be regarded as one to set aside an alienation. The plaintiffs claimed a declaration that the auction sale held by defendant No. 1 is void, ineffective and bad in law. A suit for a declaration that a sale is “invalid and ineffective” is not a suit to set aside an alienation. Nor can it be said that the suit is one where it is not possible to estimate at a money value the subject-matter in dispute and which is not otherwise provided for by the Act. The suit falls expressly within the description of a suit to obtain a declaratory decree where consequential relief is prayed under s. 7(iv)(c) of the Court-fees Act, and, therefore, it does not fall within the scope of the residuary art. 17(vii) of Sch. II.

17. In that view of the case, the order passed by Mr. Justice Bavdekar must be sustained and the appeal dismissed with costs.

18. Appeal dismissed.

Chhotalal Kalidas v. Laxmidas Mayaram

Structured Summary of the Provided Opinion

Factual and Procedural Background

Legal Issues Presented

Arguments of the Parties

Appellant / Defendant No. 1 (and counsel Mr. C.S. Trivedi)

Respondents / Plaintiffs (and counsel S.B. Vakil)

Table of Precedents Cited

Court's Reasoning and Analysis

Holding and Implications

Implications (direct effects)

Chhotalal Kalidas v. Laxmidas Mayaram

Comments