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Case Number
Attorney(S)
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Acts
  • Punjab Amendment of section 7 (iv) (c) of the Court Fees Act,
  • Punjab Amendment in section 7 (iv) (c) of the Court Fees Act.
  • V.S Deshpande, J.: Section 7 (iv) (c) of the Court Fees Act
  • SECTION 8 TRANSFER OF PROPERTY ACT
  • section 7 (iv) (c) of the Court Fees Act.
  • Court Fees (Punjab Amendment) Act, 1953
  • Punjab Amendment of section 7 (iv) (c)
  • Punjab Amendment to section 7 (iv) (c)
  • section 7 (v) of the Court Fees Act.
  • section 7 (v), under section 7 (iv) (c)
  • section 7 (iv) (c) and section 7 (v).
  • Section 7 (iv) (b)
  • Section 7 (iv) (d)
  • section 7 (iv) (c)
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Citation Codes
Equivalent Citations
citation codes
Case Number
Attorney(S)
Judges
Acts
  • Punjab Amendment of section 7 (iv) (c) of the Court Fees Act,
  • Punjab Amendment in section 7 (iv) (c) of the Court Fees Act.
  • V.S Deshpande, J.: Section 7 (iv) (c) of the Court Fees Act
  • SECTION 8 TRANSFER OF PROPERTY ACT
  • section 7 (iv) (c) of the Court Fees Act.
  • Court Fees (Punjab Amendment) Act, 1953
  • Punjab Amendment of section 7 (iv) (c)
  • Punjab Amendment to section 7 (iv) (c)
  • section 7 (v) of the Court Fees Act.
  • section 7 (v), under section 7 (iv) (c)
  • section 7 (iv) (c) and section 7 (v).
  • Section 7 (iv) (b)
  • Section 7 (iv) (d)
  • section 7 (iv) (c)
Smart Summary

Judgment Summary — V.S. Deshpande, J.

Factual and Procedural Background

The case arises from a prior compromise decree in a former suit jointly filed by the appellant and Respondent No. 1 against Respondents 2 to 6. By that decree the appellant and Respondent No. 1 were to manage a private wakf property (houses known as Thakurdwara Raja Ji Sukh Rai with attached shops and godowns at Gali Peepal Mahadee, Delhi) alternately: the appellant and Respondent No.1 jointly in one year and Respondents 2 to 6 jointly in the next year.

The present suit was instituted by the appellant alleging that Respondent No. 1 prevented the appellant from sharing in management and that friction had arisen. The appellant sought a declaration that he and Respondent No. 1 are entitled to manage the property separately for one year each alternately during their joint turn (or in such other manner as the Court may determine), together with consequential relief by way of injunction restraining Respondent No. 1 from interfering with such separate management.

For court-fee and jurisdiction the plaint valuation was Rs. 130 for the declaration and consequential injunction. Respondent No. 1 objected that under the Punjab Amendment to section 7(iv)(c) of the Court Fees Act the plaintiff must pay court-fees on the market value of the property that is the subject of joint management, because the appellant sought separate management for half the joint-management period; the trial Court rejected the objection, the Senior Subordinate Judge allowed it, and the present second appeal challenges the order directing payment of court-fees based on the market value of the property.

Legal Issues Presented

  1. Whether the relief sought by the plaintiff (division of the joint right of management into separate shares) is “with reference to any property” within the meaning of the proviso added to section 7(iv)(c) of the Court Fees Act by the Punjab Amendment.
  2. Subdivided for analysis in the opinion:
    1. What is the nature of the joint right of management of which a division is prayed for by the plaintiff?
    2. If the right of management is property, whether the relief sought is “with reference to any property” so as to attract valuation under section 7(v) (i.e., valuation by market value) pursuant to the proviso.

Arguments of the Parties

Appellant's Arguments

  • The appellant sought a declaration and injunction to enable separate management turns and valued the suit at Rs. 130 for the purposes of court-fee and jurisdiction.
  • Implicit in the plaint and judgment is the appellant's position that the relief sought is a division of a management right that is an incident of property and is not capable of ad valorem (market-value) valuation under section 7(v), so that valuation under section 7(iv)(c) (as pleaded) is appropriate.

Respondent No. 1's Arguments

  • Respondent No. 1 objected to the low valuation and maintained that under the Punjab Amendment to section 7(iv)(c) the plaintiff must pay court-fees equivalent to the market value of the property subject to the joint management, because the plaintiff sought separate management for one half of the joint-management period (i.e., a relief with reference to property value) and thus the proviso requires valuation under section 7(v).

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Chiranjitlal Chowdhuri v. Union of India (1950) SCR 869 Possession of an agent is not juridically the possession of the principal if the agent acts under direction of an external authority; agent must be obedient and amenable to principal for possession to be the principal's. Used to show that management performed on behalf of co-owners, subject to their control, does not amount to transfer or denial of the co-owners' rights in the property; supports view that division of management does not affect ownership rights.
Dwarkadas Shrinivas v. The Sholapur Spinning and Weaving Co. Ltd. (1954) SCR 674 Followed the principle that agent/manager's possession is not the principal's possession unless directed/controlled by principal. Followed the observations in Chiranjitlal to support that management on behalf of co-owners cannot affect the rights of other co-owners.
Bawa Bir Singh v. Ali Niwaz Khan, AIR 1964 Punjab 381 Proviso to section 7(iv)(c) applies only where valuation under section 7(v) is possible. Relied upon to hold that the Punjab Amendment's proviso operates only when the relief is capable of valuation under s.7(v); if not capable, proviso does not apply.
Parbhu and others v. Girdhari, AIR 1965 Punjab 1 The consequential relief must be one "with reference to the right, title or interest" in the property before the Punjab Amendment to s.7(iv)(c) can apply. Applied to show that the proviso only reaches consequential reliefs that affect rights, title or interest in the property; contrasted with present case where previous decree is respected and not sought to be set aside.
Kunju Meethyan v. Kunjan Marackar Mether, AIR 1954 Travancore-Cochin 51 Suit by trustee/manager to remove defendant from office and recover possession of trust properties held not capable of market-value valuation; fixed court-fee appropriate. Analogised to the present case to show that management-right disputes (even exclusive management) have been held incapable of ad valorem valuation; supports classification under s.7(iv)(c).
Thakur Sitaramji Maharaj Brijman Mandir v. Raghunath Das, AIR 1944 Allahabad 279 Suit between rival managers for exclusive right to manage trust property is not a suit for possession and fixed fee under Schedule II suffices. Used to reinforce that disputes over managerial rights are not necessarily suits for possession and need not be valued ad valorem.
Ram Kanwar Kidarmal v. Naurang Rai Kundan Lal, AIR 1956 Punjab 251 Where cancellation of a lease deed was sought, valuation of the relief corresponded to the lease-hold rights (market-related valuation). Distinguished: the lower appellate Court relied on it, but the present Court held it does not support treating the present relief as equivalent to valuation of the property because no cancellation of the compromise decree was sought here.

Court's Reasoning and Analysis

The Court divided the inquiry into two parts: (1) the nature of the joint right of management sought to be divided, and (2) if that right is property, whether the relief is “with reference to any property” so as to attract the Punjab Amendment proviso requiring valuation under section 7(v).

On the first part, the Court explained that the right of management is an incident of property — one of several rights that constitute property — and while a transfer of the principal property passes its incidents, the transfer of an incident does not transfer the principal property. Therefore the right of management is distinct from the property itself.

The Court further analysed two species of management rights: (a) exclusive management for the benefit of the manager alone (which might affect others' rights), and (b) management on behalf of co-owners with accountability to them (which does not affect other co-owners' property rights). Applying the test developed in Chiranjitlal Chowdhuri (and followed in Dwarkadas Shrinivas), the Court concluded that management performed on behalf of co-owners under their control cannot be equated with ownership changes.

Applying these principles to the facts, the Court held that a division of the joint right of management into separate shares for the appellant and Respondent No. 1 — with accountability to co-owners — would not affect the respondents' rights in the property. It is therefore a division of an incident of property, not a transfer of the property itself, and functions as a change in the mode of management akin to partition of mode of enjoyment, not a change in ownership rights.

On the second part, the Court read section 7(iv)(c) in context with the rest of section 7: section 7(iii) and 7(v) require ad valorem valuation where market value exists; section 7(iv) addresses reliefs not capable of market valuation. The Punjab Amendment's proviso to section 7(iv)(c) (preventing undervaluation by plaintiffs seeking to avoid ad valorem fees) was intended to apply where the relief sought is “with reference to any property” and valuation under section 7(v) is possible.

The Court emphasised that the Amendment could not and did not eliminate the fundamental distinction between reliefs capable of market valuation (s.7(v)) and those which are not (s.7(iv)(c)). Relying on Bawa Bir Singh and Parbhu, the Court held that the proviso applies only when valuation under s.7(v) is possible and when the consequential relief affects right, title or interest in the property.

The Court then distinguished authorities relied on by the lower appellate court (notably Ram Kanwar Kidarmal), noting that in that case cancellation of a lease was sought thereby making valuation relate to leasehold rights; by contrast, here the plaintiff did not seek to set aside the compromise decree but sought to work within it to arrange separate management turns.

The Court also cited Kunju Meethyan and Thakur Sitaramji to show that suits concerning managerial rights (even exclusive management) have been held incapable of ad valorem valuation and liable only to fixed fees. From these analyses the Court concluded that the plaintiff's claim is not “with reference to any property” in the sense required to invoke the proviso; the claim seeks division of a management incident that is incapable of valuation under section 7(v).

Consequently, the proviso added by the Punjab Amendment to section 7(iv)(c) is not attracted and the plaintiff's valuation of the suit at Rs. 130 under section 7(iv)(c) is valid.

Holding and Implications

Holding: The appeal is allowed. The order of remand passed by the lower appellate Court is set aside. The valuation by the plaintiff-appellant (Rs. 130) is held to be valid. The lower appellate Court is directed to hear the appeal pending before it on merits. There will be no order as to costs.

Implications:

  • The direct effect is that the plaintiff's classification and valuation under section 7(iv)(c) stands; the Punjab Amendment proviso (requiring valuation under section 7(v) based on market value) does not apply where the relief is a division of a management right that is incapable of ad valorem valuation.
  • The decision limits application of the Punjab Amendment's proviso to cases in which valuation under section 7(v) is actually possible and where the consequential relief affects right, title or interest in the property; it does not dissolve the distinction between s.7(iv)(c) and s.7(v).
  • This opinion does not state that it establishes any broader new legal principle beyond its application to the facts; its effect is to resolve the valuation-dispute between the parties and to remit the matter for hearing on the merits by the lower appellate Court.

This summary is based exclusively on the contents of the provided opinion and does not introduce information beyond the text of that opinion.

    Onkar & Nath v. Rameshwar Dass & Others S

    V.S Deshpande, J.:— section 7 (iv) (c) of the Court Fees Act as amended by the Court Fees (Punjab Amendment) Act, 1953 as extended to Delhi runs as follows:—

    “7. The amount of fee payable under this Act in the suits next hereinafter mentioned shall be computed as follows: —
    * * *
    (iv) In Suits —
    * * *
    (c) to obtain a declaratory decree or order, where consequential relief is prayed,
    * * *
    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:
    Provided that the minimum court-fee in each case shall be thirteen rupees.
    Provided further that in suits coming under sub-clause (c) in cases where the relief sought is with reference to any property such valuation shall not be less than the value of the property calculated in the manner provided for by clause (v) of this section.”
    It is common ground between the parties that in a former suit jointly filed by the appellant and the Respondent No. 1 against the Respondents 2 to 6, a compromise decree was passed according to which the appellant and Respondent No. 1 jointly in one year and the Respondents 2 to 6 jointly in the next year were to alternately manage the following private wakf property, namely, houses known as Thakurdwara Raja Ji Sukh Rai which include a Thakurdwara, attached shops and godowns situated at Gali Peepal Mahadee, Delhi.
    The present suit was instituted by the appellant alleging that the Respondent No. 1 did not allow the appellant to share in the management of the property and there was friction between them. He, therefore, in effect prayed that the Court should divide the joint right of management of the appellant and Respondent No. 1 into two separate shares so that the appellant would manage the property in one year while the Respondents 2 to 6 would manage it next year, the Respondent No. 1 would manage in the year thereafter and Respondents 2 to 6 would again manage it for one year after which the turn of the appellant should come. The suit is opposed by the Respondent No. 1 on the ground that the compromise provides for joint management by the appellant and the Respondent No. 1 and this arrangement cannot be varied at the instance of the appellant alone.
    The relief prayed for in the plaint is a declaration that the appellant and the Respondent No. 1 are entitled to manage the property separately for one year each alternately during the period of their joint turn or in such other manner as the Court may determine and the consequential relief of injunction restraining the Respondent No. 1 from interfering in such separate management by the appellant. For the purposes of court-fee and jurisdiction, the suit is valued at Rs. 130/- for the relief of declaration coupled with the consequential relief by way of injunction. The Respondent No. 1 objects to the valuation on the ground that in view of the Punjab Amendment of section 7 (iv) (c) of the Court Fees Act, the plaintiff appellant was bound to pay court-fees on the market value of the property which was jointly manageable by the parties and in which the plaintiff appellant was claiming to be entitled to a separate management for one half of the period for which the appellant and the Respondent No. 1 were entitled to joint management so that the Respondent No. 1 should also separately manage the property for the other half of the period of the joint management of the appellant and the Respondent No. 1. The objection to the valuation of the relief was rejected by the trial Court but was allowed by the Senior Subordinate Judge, Delhi. Hence this second appeal against the order directing the plaintiff to pay court-fees on the market value of the property which is the subject-matter of the joint management of all the parties.
    The question for decision is whether the relief sought by the plaintiff is “with reference to any property” within the meaning of the proviso inserted by the Punjab Amendment in section 7 (iv) (c) of the Court Fees Act. The consideration of this question may be divided into the following parts, namely:—
    (1) What is the nature of the joint right of management of which a division is prayed for by the plaintiff, and
    (2) If the right of management is property, then is the relief sought by the plaintiff appellant “with reference to any property” within the meaning of the proviso added to section 7 (iv) (c) of the Court Fees Act by the Punjab Amendment?
    Right of management is an incident of property in the sense that it is one of the components of the various rights which go to form the concept of property. If property is transferred, the right of management of such property would also be transferred with it. For, unless a different intention is expressed or necessarily implied, a transfer of property passes forthwith to the transferee all the interest which the transferor is then capable of passing in the property, and in the legal incidents thereof. (Section 8 of the Transfer of Property Act). But the converse of this proposition does not follow. The transfer of a legal incident of a property without more cannot operate to transfer the property itself. In other words, while the transfer of the principal thing will pass the incident of the right to property, the transfer of an incident will not pass the property itself. That is to say, the accessory right of management goes with the property but the property itself does not go with the accessory right of management.
    Further the right of management itself is of two kinds, namely, (a) right of exclusive management for the benefit of the manager alone excluding other co-owners of the property, and (b) right of management on behalf of the other co-owners with accountability to the others. It may possibly be argued that the right of exclusive management without accountability to the other co-owners may to some extent affect the rights of other co-owners to the property. But the right to manage a property on behalf of the other co-owners with accountability to them for the profits cannot in any way affect the rights of the other co-owners in the property. The principle underlying this view was recognized by the Supreme Court in Chiranjitlal Chowdhuri v. Union of India, (1950) SCR 869 (1). Mukherjea, J., with whose views Kania C.J, concurred, and to whose views Fazl Ali, J. subscribed to a certain extent said as follows:—
    “Possession of an agent, it is said, cannot juridically be the possession of the principal, if the agent is to act not according to the commands or dictates of the principal, but under the direction of an exterior authority.”
    Das, J. made the same point in the following words:—
    “In order that the possession of the servant or agent may be juridically regarded as the possession of the master or principal, the servant or agent must be obedient to, and amenable to the directions of, the master or principal.”
    These observations were followed by Mahajan J. speaking for the majority in Dwarkadas Shrinivas v. The Sholapur Spinning and Weaving Co. Ltd., and others, (1954) SCR 674 at pages 686-687 (2).
    Judged by the above test, the rights of the respondents in the property would in no way be affected by the division of the joint management of the plaintiff and Respondent No. 1 into two shares, one for separate management by the appellant and the other of separate management by Respondent No. 1. For, the management has to be on behalf of the co-owners and subject to all their rights to see that the management by the plaintiff is carried out properly. If the plaintiff makes any mistake, the other co-owners would have a right to object and to enforce their right that the management is carried out correctly by the plaintiff appellant on behalf of all. On the first part of the question, my opinion, therefore, is that the right of one of the co-owners to the division of the right of joint management is completely consonant with the rights of all the co-owners. A physical division of the joint right of management does not, therefore, in any way amount to a denial of the right of management by the other co-owners. The right of management is only an incident of the property. A division of such incident without denying the rights of other co-owners to manage the property according to their own compromise is merely a matter of convenient arrangement but does not amount to the denial of the rights of other co-owners to the management of the property as a whole and for all the time. Each co-owner can separately manage such property on behalf of the others. Just as the partition of joint property by metes and bounds is only a change in the mode of enjoyment but not in the rights of the parties similarly a partition of the joint right of management is only a change in the mode of management.
    The meaning of section 7 (iv) (c) is to be understood in the context of the scheme of section 7 (iv) as a whole which itself is a part of section 7. It would be observed that section 7 (iii) provides that in suits for moveable property where the subject-matter has a market-value, the valuation has to be according to such value. Similarly, section 7 (v) provides that in suits for the possession of lands, houses and gardens, the valuation has to be according to the value of the subject-matter, the value being determined in different ways. In between the two lies section 7 (iv) which deals with suits in respect of things which are not capable of valuation according to market value. For instance, section 7 (iv) (a) deals with suits for moveable property where the subject-matter has no market-value Section 7 (iv) (b) deals with the right to share in any property on the ground that it is joint family property. Section 7 (iv) (d) deals with an injunction. Section-7 (iv) (c) is pitch-forked among these provisions. It would be legitimate to think therefore, that it also deals with things which are not capable of valuation according to market-value. This is why in all the cases under section 7 (iv), the valuation has to be according to the amount at which the relief sought is valued in the plaint or in the memorandum of appeal.
    Human nature being what it is, it was found that attempts were made by certain plaintiffs to value their suits under section 7 (iv) (c) when they should have been actually valued under section 7 (v). The motive was to avoid payment of ad valorem court-fees. This is why the Punjab Amendment of section 7 (iv) (c) provided that where the relief sought is “with reference to any property” such valuation shall not be less than the value of the property calculated in the manner provided for by clause (v) of section 7. The intention of the amendment was to prevent such attempts to bring suits which by their nature ought to fall under section 7 (v), under section 7 (iv) (c) to avoid payment of ad valorem court-fees. But the intention of the amendment could not have been to wipe out the distinction between section 7 (iv) (c) and section 7 (v). In fact it was impossible for any Legislature to make any such attempt to wipe out the distinction. For, by their very nature the reliefs under section 7 (iv) (c) are incapable of valuation according to market-value. It would have been meaningless, therefore, for the Legislature to say that they should be valued under section 7 (v). This is why it was recognized in Bawa Bir Singh v. Ali Niwaz Khan, AIR 1964 Punjab 381 (3) that the proviso to section 7 (iv) (c) would apply only when valuation under section 7 (v) is possible. Similarly, in Parbhu and others v. Girdhari, AIR 1965 Punjab 1 (4) both the majority and the minority were agreed that the consequential relief must be one with reference to the right, title or interest in the property in dispute before which the Punjab Amendment to section 7 (iv) (c) can apply. In that case, the majority held that the prayer that the previous decree should be declared null and void and the consequential relief that it should be set aside affected the right, title and interest of the parties in the property though the minority judgment went so far as to think that even such setting aside of the decree would not affect the right, title and interest of the parties in the property. The case before me is a stronger one. The plaintiff does not seek to set aside the previous compromise decree at all. On the other hand, he stands on it and respects the rights of the respondents. He only seeks the help of the Court to find out an arrangement how the appellant and the Respondent No. 1 should both manage the property alternately so that friction may be avoided.
    In Kunju Meethyan v. Kunjan Marackar Mether, AIR 1954 Travancore-Cochin 51 (5) the suit was brought by a trustee or a manager to remove the defendant from such office and to recover possession of the trust properties from him. It was held that the suit fell under Art. 17. (vi) Schedule II of the Court Fees requiring payment of fixed court-fee on the principle that the relief was not capable of valuation according to market-value. It was held that court-fees could not be levied ad valorem on the market-value of the property in such a case. As already pointed out in dealing with the first part of the question for decision, the division of the right of management may be of two kinds, namely, one exclusive and the other concurrent. In the Kunju Meethyan's case, an exclusive right of management was sought and even than it was held to be incapable of ad valorem valuation. A fortiori, the right of management on behalf of the respondents and without denying their rights sought in the present case was incapable of ad valorem valuation. In Thakur Sitaramji Maharaj Brijman Mandir v. Raghunath Das, AIR 1944 Allahabad 279 (6) a suit between two rival managers for exclusive right to manage trust property was again held not to be a suit for possession and, therefore, court-fee under Art. 17 of Schedule II was held to be sufficient. The decision in Ram Kanwar Kidarmal v. Naurang Rai Kundan Lal, AIR 1956 Punjab 251 (7) relied upon by the learned lower appellate Court does not support the order appealed against. For, in that case the cancellation of the lease deed was sought. The Court, therefore, held that the valuation of the relief was that of the lease-hold rights. In the present case, no cancellation of the compromise decree is sought and, therefore, the value of the relief cannot be equated with the value of the property which was the subject matter of the compromise.
    Once it is grasped that there is no dispute at all about the joint ownership of all the parties including the right of management of the property by all the parties, it must follow that what is to be valued is not the property but only the division of the right of management so that both the appellant and Respondent No. 1 may enjoy their own shares of the right of management without friction. It is easy to see that this share of the appellant in the right of management on behalf of the other parties is simply incapable of ad valorem valuation. It cannot, therefore, be valued under section 7 (v) of the Court Fees Act. This is precisely the reason why it must fall under the principal part of section 7 (iv) (c) of the Court Fees Act. The proviso added by the Court Fees (Punjab Amendment) Act, 1953 is not attracted inasmuch as no valuation of the share in the right of management can be made under section 7 (v) of the Court Fees Act.
    The appeal is, therefore, allowed. The order of remand passed by the lower appellate Court which has been appealed against is set aside. The valuation by the plaintiff-appellant is held to be valid. The lower appellate Court is directed to hear the appeal pending before it on merits. In the circumstances, there will be no order as to costs.
    Appeal allowed.
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    Comments

    Onkar & Nath v. Rameshwar Dass & Others S
    (Aug 5, 1971)