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Smart Summary

Factual and Procedural Background

Respondents Nos. 1 to 6 filed a suit for possession by partition of the half share of two shops situated at Mohindergarh against the petitioner Hardwari Lal and 29 other defendants (respondents Nos. 7 to 35). The trial Court framed issues for trial; issue No. 3 asked whether the suit was properly valued for purposes of court-fee and jurisdiction. The defendants prayed that issue No. 3 be treated as a preliminary issue on the ground that the plaintiff had allegedly undervalued the suit property. The Subordinate Judge, by order dated 22 February 1977, refused to treat issue No. 3 as a preliminary issue on the ground that valuation depended on evidence about the condition and market value of the shops and could be decided along with other issues at trial. The petitioner challenged that order by filing the present Revision Petition in the High Court.

Legal Issues Presented

  1. Whether the trial Court was justified in refusing to treat the issue of proper valuation of the suit (for court-fee and jurisdiction) as a preliminary issue.
  2. How the amendments to the Code of Civil Procedure (particularly Order VII, Rule 11 and Order XIV, Rule 2) affect the power to try preliminary issues and the consequences of under-valuation of a plaint.
  3. Whether the High Court, under the amended Section 115 of the Code, can vary or reverse an interlocutory order refusing to try an issue as preliminary — i.e., whether the proviso to Section 115 bars revision in the present circumstances.

Arguments of the Parties

Petitioner's (Appellant's) Arguments

  • Counsel for the petitioner contended that the trial Court should have treated the valuation issue as a preliminary issue because it touched upon the jurisdiction of the Court to try the suit.
  • It was argued that if the valuation issue were tried first and a finding recorded that the suit was not properly valued for purposes of court-fee and jurisdiction, the plaint could be rejected without going into the merits; this justified deciding the matter at the outset.
  • Counsel relied on the case Resham Lal v. Anand Sarup, AIR 1974 Punj & Har 97, as supporting authority for treating valuation issues as preliminary — albeit the Court noted the relied-on authority was based on the Code as it existed before the 1976 amendment.

Respondents' Arguments

The opinion does not contain a detailed account of the respondents' legal arguments.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Resham Lal v. Anand Sarup, AIR 1974 Punj & Har 97 Supported treating valuation/under-valuation issues as grounds for rejection of plaint under pre-amendment Order VII, Rule 11 (and considered Order VII, Rule 1). The Court held that this authority could not be relied upon in the present case because it was based on the pre-amendment text of Order VII, Rule 11; the 1976 amendment relaxed the strictness by permitting the Court to extend time for correction of valuation or supplying requisite stamp.

Court's Reasoning and Analysis

The Court's analysis proceeded in several linked steps, grounded in the text and effect of the 1976 amendments to the Code of Civil Procedure:

  1. The Court first observed that the provisions of Order VII, Rule 11 (as amended) now include a proviso that allows the trial Court to extend the time for correction of valuation or supplying requisite stamp. This represented a legislative relaxation from the pre-amendment position in which the plaint had to be rejected for under-valuation if the plaintiff failed to correct valuation within time fixed by the Court.
  2. The Court then examined Order XIV, Rule 2 as it existed before and after the amendment. Under the unamended provision, courts were required to try issues of law first and could postpone issues of fact. The amended provision, however, requires the Court to pronounce judgment on all issues notwithstanding that a case may be disposed of on a preliminary issue; sub-rule (2) permits trying an issue of law first only when that issue (a) relates to the jurisdiction of the Court or (b) relates to a bar to the suit created by law, and such an issue must be an "issue of law only."
  3. The Court explained the textual and purposive limits of the amended provision: not every challenge to jurisdiction is a pure issue of law. A jurisdictional objection may be (a) an inherent lack of jurisdiction that can be resolved as a matter of law (no factual inquiry), or (b) a factual contest that must be resolved before concluding on jurisdiction. The phrase "an issue of law only" must be given its due meaning; if every jurisdictional controversy were automatically treated as an issue of law, the limiting words would be purposeless.
  4. Applying these principles, the Court concluded there was no error in the trial Court's refusal to try issue No. 3 as a preliminary issue. The determination of valuation in the present suit required inquiry into the market value and condition of the shops — a factual probe that was appropriately deferred until full trial.
  5. The Court further considered the amended scope of revision under Section 115. The 1976 amendment added a proviso to S.115(1) barring the High Court from varying or reversing any order made in the course of a suit except where (a) the order, if made in favour of the applicant, would have finally disposed of the suit, or (b) allowing the order to stand would occasion a failure of justice or cause irreparable injury. The Court held that the present petition did not satisfy these conditions; the petitioner’s contention of failure of justice was not established.
  6. Because the trial Court's exercise of discretion in refusing to try the issue as preliminary was not shown to be illegal or unjudicial, and because the proviso to S.115 restricted the High Court's power of revision in interlocutory matters, the Revision Petition was incompetent and liable to be dismissed.

Holding and Implications

Holding: Revision petition dismissed.

Implications and immediate consequences:

  • The High Court upheld the trial Court's order refusing to treat issue No. 3 (valuation for court-fee and jurisdiction) as a preliminary issue because deciding valuation required factual inquiry into market value and condition.
  • The Court emphasized that, after the 1976 amendment to Order XIV, Rule 2, preliminary issues may be given preferential treatment only in limited circumstances — where the issue is an "issue of law only" and relates to jurisdiction or a statutory bar to the suit.
  • The amendment to Order VII, Rule 11 (allowing extension of time to correct valuation) and the proviso to Section 115 (restricting High Court revision of interlocutory orders except in specified circumstances) mean that earlier authorities based on the pre-amendment Code may not be applicable in like cases under the amended Code.
  • Direct practical effects in this matter: the Revision Petition was dismissed; the parties (represented by counsel) were directed to appear before the trial Court on 27 February 1978; and the costs of the Revision Petition were ordered to follow the event.
  • The opinion does not purport to lay down a novel binding precedent beyond its application of the amended statutory provisions to the facts: it interprets and applies the statutory amendments and upholds the trial Court's exercise of discretion in these circumstances.

    Hardwari Lal v. Pohkar Mal And Ors

    1. The salutary provisions of the Code of Civil Procedure (Amendment) Act 1976 which were enacted for the laudable object of plugging the loop--holes in processual law and, thus, expediting the conclusion of protracted litigation, appear to have failed to make an impact, at least in the present case. The facts may be noticed, though briefly. Respondents Nos. 1 to 6(in the present Revision Petition) filed a suit against Hardwari Lal petitioner and 29 others (respondents Nos. 7 to 35) for possession by partition of the half share of two shops situated at Mohindergarh. The suit was contested and the trial Court framed the necessary issues to cover the controversial points. One of the issues, i.e. issue No. 3 was to the following effect:--

    "Whether the suit is properly valued for purposes of court--fee and jurisdiction"?

    It transpires that a prayer was made on behalf of the defendants that the above issue may be treated as a preliminary issue as the plaintiff had allegedly under--valued the suit property. The trial Court vide its order, dated February 22, 1977, considered this matter and was of the view that the question regarding the valuation of the property to be fixed, depended on evidence about the condition and the market value of the shops and this matter could be conveniently decided along with the other issues when the parties lead their evidence. The learned Subordinate Judge, therefore, refused to try the said issue as a preliminary issue. It is this order of the learned Subordinate Judge which is the subject matter of attack in the present Revision Petition.

    2. Mr. B. S. Shant learned counsel for the petitioner, with his usual eloquence, contended that the trial Court was not justified in refusing the prayer for treating the concerned issue as a preliminary issue as the point involved touched upon the jurisdiction of the Court to try the suit. He further submitted that in case the said issue is tried in the first instance and a finding is recorded that the suit had not been properly valued for purposes of court--fee and jurisdiction, it could result in the rejection of the plaint and this fact made it justifiable for the Court to deal with the matter without going into the merits of the case. In support of his submission, he seeks to place reliance on Resham Lal v. Anand Sarup, AIR 1974 Punj and Har 97. There is no gainsaying that but for the change in law in consequence of the amendment of the Code of Civil procedure, this authority would certainly support his contention. A perusal of the order passed by the learned Single Judge in that case would show that the view expressed in this behalf was based upon the provisions of Order VII, Rule 11 of the Code of Civil, Procedure, as it was before its amendment. According the said provision, the plaint had to be rejected where the relief claimed is under--valued and the plaintiff on being required by the Court to correct the valuation within a time to be fixed by the Court, fails to do so. The learned Judge also noticed the contents of Order VII, rule 1 of the Code while recording his view in the matter.

    As already stated, this authority cannot be utilised in the present case in view of the change in law. Order VII, R. 11 of the Code, after its amendment, incorporates a proviso that the trial Court can even extend the time fixed for the correction of the valuation or supplying of the requisite stamp. It is obvious that a relaxation has been made by the Legislature in this behalf. Another provision of the Code which is relevant for the consideration of this matter is Order XIV, R. 2. This provision has also been radically changed in the amended Code. Order XIV, R. 2 of the Code as it existed earlier was to the following effect:-

    "Order XIV, R. 2--Issues of law and of fact.--Whether issues both of law and of fact arise in the same suit, and the Court is of opinion that the case or any part thereof may be "disposed of on the issues of law only, it shall try those issues first and for that purpose may, if it thinks fit, postpone the settlement of the issues of fact until after the issues of law have been determined."

    The provision is now amended and reads as follows:--

    "Court to pronounce judgment on all issues. (1) Notwithstanding that a case may be disposed of on a preliminary issue, the Court shall, subject to the provisions of sub--rule (2), pronounce judgment on all issues.

    (2) Where issues both of law and of fact arise in the same suit, and the Court is of opinion that the case or any part thereof may be disposed of on an issue of law only, it may try that issue first if that issue relates to--

    (a) the jurisdiction of the Court, or

    (b) a bar to the suit created by any law for the time being in force, and for that purpose may, if it thinks fit, postpone the settlement of the other issues until after that issue has been determined, and may deal with the suit in accordance with the decision on that issue."

    A comparative reading of the said provision as it existed earlier to the amendment and the one after amendment would clearly indicate that the consideration of an issue and its disposal as preliminary issue has now been made permissible only in limited cases. In the unamended Code, the categorisation was only between issues of law and of fact and it was mandatory for the Court to try the issues of law in the first instance and to postpone the settlement of the issues of fact until after the issues of law had been determined. On the other hand, in the amended provision there is a mandate to the Court that notwithstanding that a case may be disposed of on a preliminary issue, the Court has to pronounce judgment on all the issues. The only exception to this is contained in sub--rule (2). This sub--rule relaxes the mandate to a limited extent by conferring a discretion upon the Court that if it is of opinion that the case or any part thereof may be disposed of "on an issue of law only", it may try that issue first. The exercise of this discretion is further limited to the contingency that the issue to be so tried must relate to the jurisdiction of the Court of a bar to the suit created by a law in force.

    It is indeed contended by the learned counsel for the petitioner that any question touching upon the jurisdiction of the Court. would automatically become an issue of law, but there is no warrant for this general proposition. An objection in regard to the jurisdiction of the Court may pertain either to the inherent lack of jurisdiction of the Court or the lack of jurisdiction on account of certain factual allegations. In the former case, where it is not necessary to go into any controversial facts, the question may be treated as an issue of law, but if it is necessary to decide a factual controversy before arriving at a conclusion on the challenge to jurisdiction, such a question cannot be treated as a pure question of law. The use of the words "an issue of law only" in the first part of sub--rule (2) has to be given its due meaning and import in the context. If every controversy pertaining to the jurisdiction of the Court whether dependent upon consideration of facts or otherwise, was to be deemed as an issue of law, the use of the words noticed above would be without purpose and this cannot obviously be the intention of the Legislature. I am of the firm view that the amendment to Order XIV. Rule 2 of the Code has changed the notions in regard to considering some or more of the issues as preliminary issue for being tried on preferential basis and the scope in this behalf has now been considerably tapered. In view of this amendment, there is no infirmity in the order passed by the trial Court refusing to try issue No. 3 as a preliminary issue, more so when the determination of this issue required a probe into the market value of the property, which fact can be gone into when the whole case is tried.

    3. The matter can be viewed from another angle also. Even under Order XIV, R. 2, the general rule for the adjudication of the entire case has been clearly emphasised. If a discretion is vested in the Court to act differently in certain contingencies, the exercise of this discretion, which is not shown to be in any way illegal or un--judicious, cannot be the subject--matter of an attack in a Revision Petition. In this context, it is worthwhile to notice that the powers of revision under S. 115 of the Code, after the amendment of 1976, have also undergone constriction with the addition of the Proviso to sub--section (1) which runs as under :--

    "115. (1) xx xx xx Provided that the High Court shall not, under this section, vary or reverse any order made, or any order deciding an issue, in the course of a suit or other proceedings, except where--

    (a) the order, if it had been made in favour of the party applying for revision, would have finally disposed of the suit or other proceedings, or

    (b) the order, if allowed to stand, would occasion a failure of justice or cause irreparable injury to the party, against whom it was made."

    It is plain that after the amendment, the High Court is debarred under this section, to vary or reverse any order passed in the course of a suit unless it finds that the said order, if it had been made in favour of the party applying for revision, would have finally disposed of the suit or if that order is allowed to stand, would occasion a failure of justice or cause irreparable injury to the party against whom it was made. With a view to extricate himself from this proviso, all that the learned counsel for the petitioner is able to urge is that the impugned order has occasioned a failure of justice. No such conclusion can, however, be legitimately drawn. The present Revision Petition would, therefore, be incompetent on this score also.

    4. There is no merit in the Revision petition which is dismissed. Enough time has been lost, though unavoidably for the disposal of this Revision petition. The parties (who are represented in the present proceedings) through their counsel, have been directed to appear before the trial Court on February 27, 1978. The costs of the present Revision Petition shall follow the event.

    5. Revision dismissed.

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    Hardwari Lal v. Pohkar Mal And Ors
    (Feb 2, 1978)