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Haramani Devi And Ors. v. Balaram Panda And Ors.
Summary of Opinion: Application by Defendant-Respondents for Leave to Appeal to the Supreme Court (Article 133 read with Sections 109 and 110 CPC)
Factual and Procedural Background
This application was brought by the defendant-respondents under Article 133 of the Constitution read with Sections 109 and 110 of the Code of Civil Procedure seeking leave to appeal to the Supreme Court against a reversing judgment of this Court which had decreed the plaintiff's suit for specific performance of a contract to sell.
The agreement to sell was dated 7-12-1942 with the contract price fixed at Rs. 9,500. For purposes of court-fees and jurisdiction the suit was valued at Rs. 9,500 under Section 7(x)(a) of the Court-fees Act. At the petitioners' request the matter was referred to the trial Court for a report on the market value of the properties: the trial Court reported market values of Rs. 18,500 at the date of institution of the suit and Rs. 15,000 by the time of the decree of the High Court; no objection was taken to that report.
Procedural timeline in the opinion: suit instituted on 29-8-1945; appeal filed on 26-11-1947; disposed of by this Court on 11-11-1954. The application now seeks leave to appeal to the Supreme Court.
Legal Issues Presented
- Whether, for the purposes of Section 110 of the Civil Procedure Code (and Article 133 of the Constitution), the value of the subject-matter in a suit for specific performance is to be determined by the contractual consideration (the price in the agreement to sell) or by the real/market value of the property contracted to be sold.
- Whether, on the facts of this case (where the market value reported by the trial Court exceeded Rs. 10,000 but the agreement price was Rs. 9,500), the petitioners are entitled as of right to leave to appeal to the Supreme Court under the relevant statutory and constitutional provisions.
- Whether Clause (2) of Section 110, C.P.C. — which requires that a decree or final order must involve directly or indirectly some claim or question to or respecting property of like amount or value — can apply to property which is the subject of the suit (i.e., property in dispute in the suit), and whether this supports leave to appeal.
Arguments of the Parties
Petitioners' Arguments
- The petitioners contend they are entitled, as a matter of right, to leave to appeal because the amount or value of the subject-matter in dispute in the Court of first instance and still in dispute on appeal exceeds Rs. 10,000, meeting the threshold under Section 110 (as it stood before the Constitution) and Article 133.
- Mr. Dasgupta (for the petitioners) further contended that Clause (2) of Section 110 C.P.C. applies in this case and, together with Article 133, supports leave to appeal because the decree or final order involves a question respecting property of the requisite value.
Opposite Parties' Arguments
- Learned counsel for the opposite parties, Mr. B. Mohapatra, argued that in suits for specific performance the value of the subject-matter should be the consideration stated in the agreement to sell; here that consideration was Rs. 9,500, therefore the petitioners do not meet the Rs. 10,000 threshold and are not entitled to leave to appeal.
- To support that contention counsel relied upon Bhawarlal v. Lachmandas (AIR 1929 Nag 75), where it was said that the consideration or price payable under the contract of sale must alone determine the value of the subject-matter for purposes of appeal.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court in this Opinion |
|---|---|---|
| Kamal Nayan v. Bira Naik, ILR 1950 Cut 663 (AIR 1951 Orissa 141) | The right to appeal is a vested right at the time the suit is instituted; Article 133 has no retrospective operation. | Referenced to show that a litigant's right to appeal vests at institution and that Article 133 does not operate retrospectively; used in the background on rights of appeal. |
| Bhawarlal v. Lachmandas, AIR 1929 Nag 75 | Held that the consideration or price under the contract of sale must alone determine the value of the subject-matter for purposes of appeal. | Relied upon by opposing counsel to argue that the contractual price (Rs. 9,500) determines valuation; the Court noted the decision arrived at the conclusion without giving reason. |
| Hari Mohan v. Surendra Narain, ILR 31 Cal 301 | In a suit for an injunction it is open to the applicant for leave to appeal to show the real value of the subject-matter even if, for Court-fees Act purposes, the suit was valued at less than the appealable amount. | Used to support the proposition that a party may show the real/market value for appeal purposes despite a lower valuation for court-fees. |
| Mahendranarayan v. Janakinath, AIR 1931 Cal 417 | The value referred to in Section 110 of the Code is the real or market value; where a plaint or memorandum is valued on some other basis, the doctrine of "approbate and reprobate" does not apply to prevent showing market value for appeal purposes. | Adopted to support the conclusion that Section 110 requires market value and that parties are not estopped from showing market value despite a lower Court-fees valuation. |
| Govindbhai Lallubhai v. Dahyabhai Nathabhai, AIR 1937 Bom 326 | Where suit valuation is notional (e.g., for declaration) a party is not estopped from showing higher value for purposes of appeal. | Cited as authority that a party can demonstrate a higher value for appeal despite having put a lower valuation in the plaint or memorandum of appeal. |
| Nawaz Ali v. Allu, AIR 1924 Lah 82 | Rules under the Suits Valuation Act do not apply for determining value for Section 110; instead market value must be ascertained for that purpose. | Used to support the proposition that market value, not valuation rules for lower-court jurisdiction, determines the amount for Section 110. |
| Kashi Prasad v. Bajju Paswan, ILR 31 Pat 269 (AIR 1953 Pat 24) | Addressed valuation and related issues in suits for specific performance. | Cited by the Court in support of the view that the appellant is entitled to leave to appeal when the market value supports the jurisdictional threshold. |
| Ishwari Prasad Singh v. Kameshwar Singh Bahadur, AIR 1941 Pat 288 | Applied Clause (2) of Section 110 where the property involved was worth more than the valuation placed on the suit for other purposes; held fit for appeal under Section 110(2). | Relied upon as an example where Section 110(2) was applied even though the suit was valued below Rs. 10,000, because the property in question exceeded that value. |
| Nadir Husain v. Municipal Board Agra, AIR 1937 All 169 | Clause (2) of Section 110 may be independent and self-sufficient; if decree involves property which could be sold exceeding Rs. 10,000 an appeal lies as of right. | Cited to support the view that Clause (2) can give a right of appeal where the property involved meets the monetary threshold, and to illustrate the clause's independent operation. |
Court's Reasoning and Analysis
The Court reviewed conflicting authorities on the point whether, in suits for specific performance, the value of the subject-matter for purposes of Section 110 should be the contractual consideration or the market value of the property. The Court distinguished the valuation used for fiscal purposes (i.e., valuation under the Court-fees Act, Section 7(x)(a), which fixes valuation according to the consideration) from the valuation relevant to Section 110 (jurisdictional threshold for appeal).
The Court observed that in suits for specific performance the relief sought includes both execution of a sale-deed and delivery of possession; therefore the subject-matter of the suit is the property contracted to be sold. Consequently, for the purposes of Section 110, the relevant measure is the value of the property itself (market or real value), not merely the contractual consideration.
The Court relied on a line of decisions (including Hari Mohan, Mahendranarayan, Govindbhai Lallubhai and Nawaz Ali) that permitted a party to show the real/market value for appeal purposes despite a nominal or fiscal valuation for court-fees, and which held that Section 110 refers to market value. The Court rejected the submission that the Court-fees Act valuation (the consideration) should lock parties into a lower valuation for the purpose of determining the right to appeal under Section 110.
Separately, the Court considered Clause (2) of Section 110 (that a decree or final order must involve directly or indirectly some claim or question respecting property of like amount or value). Noting conflicting views in the authorities, the Court agreed with the Patna and Allahabad High Courts' approach that Clause (2) may be applied to property which is in dispute in the suit. The Court examined factual examples (Ishwari Prasad Singh and Nadir Husain) and concluded Clause (2) may support leave where the property in dispute meets the monetary threshold.
On these grounds — (a) that valuation for Section 110 is the market value of the property and (b) that Clause (2) can apply to property in dispute — the Court concluded the petitioners were entitled to leave to appeal to the Supreme Court under Clauses (1) and (2) of Section 110 and Article 133 of the Constitution.
Holding and Implications
Holding: The Court concluded that the petitioners are entitled to leave to appeal to the Supreme Court. The core ruling is:
Leave to appeal to the Supreme Court is granted under Clauses (1) and (2) of Section 110, Civil Procedure Code and Article 133 of the Constitution.
Implications:
- Direct effect on the parties: The petitioners (defendant-respondents) are entitled to seek leave to appeal to the Supreme Court because the market (real) value of the property contracted to be sold meets the jurisdictional threshold even though the contract price (and the valuation for court-fees) was lower.
- On Clause (2) of Section 110: The Court accepted that Clause (2) may operate where the property in dispute in the suit meets the requisite value, thereby providing an additional basis for leave to appeal in appropriate cases.
- On the relationship between Court-fees Act valuation and Section 110: The Court held that valuation under the Court-fees Act is a fiscal valuation and does not prevent a party from establishing the real/market value for the purpose of determining entitlement to appeal under Section 110.
The opinion concludes by recording the decision of Narasimham, C.J., with an agreement by the other (concurring) judge.
1. This is an application by the defendant-respondents under Article 133 of the Constitution read with Sections 109 and 110 of the Code of Civil Procedure, for leave to appeal to the Supreme Court against the reversing judgment of this Court decreeing the plaintiff's suit for specific performance of a contract to sell.
2. The agreement to sell was dated 7-12-42 and the price fixed in the agreement for the properties to be sold was Rs. 9,500. The suit was valued, for purpose of court-fees and jurisdiction, at this sum of Rs. 9,500 in accordance with Section 7(x)(a) of the Court-fees Act. At the request of the petitioners the matter was referred to the trial Court for submitting a report about the market value of the properties covered by the contract for sale, both at the time the suit was filed and at the time of the appeal. The lower Court submitted its report, according to which, it valued the property at Rs. 18,500 by the date of institution of the suit and at Rs. 15,000 by the time of the decree of the High Court. There was no objection to the value as submitted by the learned Subordinate Judge.
3. The suit was instituted on 29-8-45. The appeal was filed on 26-11-47 and was disposed of by this Court on 11-11-54. In the case of Kamal Nayan v. Bira Naik, ILR 1950 Cut 663: (AIR 1951 Orissa 141) (A), this Court held, "The right to appeal is a vested right which vests in the litigant at the time the suit is instituted. By subsequent alteration of the Law, either relating to the forum or to the other limitations to the right of appeal, it cannot "be taken away, unless the law purporting to take it away is, either expressly or by necessary intendment, given a retrospective operation" and "Article 133 of the Constitution of India (1950), has no retrospective operation."
Before the Constitution and at the time the suit and the appeal were filed, under Section 110 of the C. P. C., the amount or value of the subject-matter of the suit in the Court of first instance must be Rs. 10,000 or upwards and the amount or value of the subject-matter in dispute on appeal to the Supreme Court must be the same sum or upwards. Consequently the petitioners contend that they are, us a matter of right, entitled to leave to appeal as the amount or value of the subject-matter in dispute in the Court of first instance and still in dispute in appeal is more than Rs. 10,000/- and the judgment to be appealed against is a judgment of reversal.
4. But Mr. B. Mohapatra, the learned, counsel for the opposite parties strenuously contends that in suits for specific performance of a contract to sell, the Value of the subject-matter is the value for which the agreement to sell was executed and as the agreement to sell was for Rs. 9,000/-, the value of the subject-matter is only Rs. 9,500/- and consequently the petitioners are not entitled to leave to appeal to the Supreme Court.
5. Section 7, Clause (x) of the Court-fees Act is as follows :
"(x) In suits for specific performance
(a) of a contract of sale -- according to the amount of the consideration.
x x x x"
The consideration in this case being Rs. 9,500/-, Mr. Mohapatra contends that the value of the subject-matter must be taken to be Rs. 9,500/-. In support of his contention, he relies upon a decision in the case of Bhawarlal v. Lachmandas, AIR 1929 Nag 75 (B). In this case, a Division Bench of the Nagpur High Court held,
The consideration or price payable under the contract of sale must alone determine the value of the subject-matter in dispute on appeal to His Majesty in Council.'' In the course of the judgment, it was observed,Since the consideration for the sale determines the value of the subject-matter of the suit for purposes of both Court-fees and jurisdiction in view of Section 8, Suits Valuation Act, we think, the consideration or price payable under the contract of sale must alone determine the value of the subject-matter in dispute on appeal to His Majesty in Council.'' In this decision, no reason was given for arriving at the conclusion.
6. But in the case of Hari Mohan v. Surendra Narain, ILR 31 Cal 301 fC), a Bench of three Judges consisting of Sir Francis W. Maclean, Chief. Justice, Mr. Justice Hill and Mr. Justice Stevens, construed the expression 'value of the subject-matter of the suit' and held,
"In a suit for an injunction it is open to the applicant for leave to appeal to His Majesty in Council to show what the real value of the subject-matter of the suit is, notwithstanding the fact that for the purposes of the Court-fees Act (7 of 1870) the value of the suit was fixed at a sum less than the appealable amount."
In the case of 'MahendYanarayan v. Janakinath, AIR 1931 Cal 417 (D), a Division Bench of the Calcutta High Court consisting of Rankin, C. J. and C. C. Ghose, J. held, "The value referred to in section 110 of the code is the real or market value and that where, under the Court-fees Act or otherwise a plaint or memorandum of appeal is not required to be valued according to tile real or market value, but is allowed or required to be valued upon some other basis the doctrine of "approbate and reprobate'' does not apply."
The decision is clearly an authority for the position that though under Section 7, Clause (x) (a) of the Court-fees Act, a plaint or memorandum of appeal is required to be valued at the amount of consideration for the contract and not according to the real or market value, yet the appellant can show what the market value is for purposes of appeal to the Privy Council. In the case of Govindbhai Lallubhai v. Dahyabhai Nathabhai, AIR 1937 Bom 326 (E), it was held, "Where the plaintiff sues for a declaration of title to certain property as a whole praying at the same time for possession of a comparatively small item of such property the suit being mainly for declaration, the suit as a whole Can have a notional valuation for purposes of jurisdiction inasmuch as a prayer for declaration can be valued only on a notional basis. . If in such a suit the plaintiff; puts in his own valuation at an amount less than Rs. 10,000 and this valuation is reiterated in appeal and on the High Court dismissing his suit, he files an application for leave to appeal to Privy Council, claiming that the value of the subject-matter was more than Rs. 10,000/- he is not in such a case estopped, by the rate that a man cannot approbate and repro bate, from showing that the value of the subject-
matter of the suit and appeal was Rs. 10,000/- or over within the meaning of Section 110, Civil Procedure Code."
In the case of Nawaz Ali v. Allu, AIR 1924 Lah 82 (F), it was held, "The rules under the Suits Valuation Act in accordance with which the land in suit is valued for the purposes of jurisdiction in the Lower Courts do not apply in determining the value for the purposes of Section 110, Civil P. C. but it is the market value which has to be ascertained.''
7. On a review, of these decisions, I am of opinion that the valuation in suits for specific performance according to the consideration of the contract of sale is a valuation for fiscal purposes and the appellant is at liberty to give the valuation of the subject-matter of the suit, the subject-matter of the suit being the property contracted to be sold. As the relief in a suit for specific performance consists of not only to execute a sale deed but also to deliver possession of the property, the subject-matter of the suit is the value of the property to be sold and on this view, the appellant is entitled to leave to appeal to the Supreme Court (See Kashi Prasad v. Bajju Paswan, ILR 31 Pat 269 : (AIR 1953 Pat 24) (G)):
8. Mr. Dasgupta also contended that his case falls within Clause (2) of Section 110 of the C. P. C. as also Article 133 of the Constitution. Clause (2) of Section 110, C. P. C. is,
"A decree or final order must involve, directly or indirectly, some claim or question to or respecting property of like amount or value."
Though there is a conflict of views on the question whether "Property" in this clause includes property which is in dispute in the suit or relates to property other than that in dispute in suit, the Patna and the Allahabad High Courts have taken the view that tins clause is applicable to cases involving properties in dispute in the case. In the case of Ishwari Prasad Singh v. Kameshwar Singh Bahadur, AIR 1941 Pat 288 (11), the plaintiffs brought the suit tor a declaration that a certain property could not be attached and sold in execution of the certificates as they had purchased it in execution of a mortgage decree obtained by them against the persons who owned the property. The suit which was valued at Rs. 7,699 odd for which the certificate was issued was decreed by the trial Court but was dismissed on appeal by the High Court. The appeal also was valued at Rs. 7,699. But the property in respect of which the certificate was issued was worth more than Rs. 10,000. On these facts it was held by a Division Bench of the Patna High Court consisting of Harries C. J. and Fazl Ali J. that the case was fully covered by Section 110(2) and was a fit one for appeal to His Majesty in Council from the decree of the High Court. In the case of Nadir Husain v. Municipal Board Agra, AIR 1937 All 169 (I), a suit was brought for recovery of Rs. 17,000/- against defendant 1 principally, with a prayer that defendants 2 to 4 were liable to pay Rs, 7,625/- under a hypothecation bond and in case of default the mortgaged property was liable to be sold. Trial Court held that defendant 1 was liable for full amount but defendants 2 to 4 were liable for Rs. 7,265/-, and their property was not liable for rent accrued after security bond. The High Court on appeal came to the conclusion that rents which accrued after the date of the security bond also created a charge on the property and property was liable to be sold in execution of such arrears. Total liability of defendants 2 to 4 was limited to Rs. 7,265/-. On these facts it was held that as the plaintiff was claiming to enforce a charge and obtain a decree for sale with option to sell any part of. the mortgaged property, there would be an appeal as of right if the total value of the property sought to be sold exceeded Rs. 10,000/-. In the course of the judgment, it was observed, "It seems to us that if the applicants can satisfy the Court that the decree or final order passed by the High Court which is sought to be appealed against to His Majesty in Council involved directly or indirectly some claim or question in respect of the amount of Rs. 10,000/- or upwards, then they are entitled to appeal as of right, provided the decision of the Court below has not been affirmed or there is a substantial question of law involved as required by para 3 of that Section. We trust hold that the condition laid down in para 2 is independent and self-sufficient and is not in any way dependent on the fulfilment of both or either of the conditions in para I :..... So far as the pecuniary liability of the applicant's property is concerned it is certainly limited to the sum of Rs. 7,625/- only. They can never be called upon to pay more than that amount nor can more than that amount be realised out of their property. But it cannot be disputed that property worth more than Rs. 7,625/-can be put up for sale at auction in execution of the mortgage decree and sold."
I respectfully agree with the view of the Patna and the Allahabad High Courts that Clause (2) of Section 110 of the Civil Procedure Code may apply also to property which is in dispute in the suit. On this ground also, therefore, the petitioners are entitled to leaver to appeal to the Supreme Court. We satisfy that it is a fit case for leave to appeal to the Supreme Court under Clauses (1) and (2) of Section 110, Civil Procedure Code and Article 133 of the Constitution.
Narasimham, C.J.
9. I agree.
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