Kalu Ram v. Babu Lal

Sulaiman, C.J, Mukerji, Banerji, King and Pullan, JJ.:— The Taxing Judge has referred two questions of law to a Full Bench. The case itself has not been referred to us. Section 5 of the Court Fees Act has in no way been contravened. The final order will be passed by the Taxing Judge himself in the light of the observations of this Full Bench.

The suit was instituted by the nephew and the son of Sundar Lal, who had executed a mortgage deed on the 20th of December, 1918, in favour of the defendant appellant Kalu Ram. In the mortgage suit the present plaintiffs also were impleaded under the guardianship of their grandmother. The suit was decreed and a preliminary decree was passed on the 16th of September, 1925, which resulted in a final decree on the 2nd of April, 1927.

In the present suit the plaintiffs sought to avoid the mortgage deed on the ground that it was fictitious and without consideration and legal necessity, the compromise on the ground of fraud, and the decree on the ground of negligence and collusion of the guardian. Two main reliefs claimed were as follows: (1) The mortgage deed, dated the 20th of December, 1918, and registered on the 21st of December, 1918, may be adjudged void and ineffectual as against the plaintiffs and it may be cancelled; (2) The compromise and the preliminary decree, dated the 16th of September, 1925, and the absolute decree, dated the 2nd of April, 1927, of the court of the Subordinate Judge of Jhansi In re Kalu Ram v. Sunder Lal, may be cancelled.

The plaintiffs valued the first relief at Rs. 5,000 and paid Rs. 10 as court fee thereon and valued the second relief at Rs. 6,276-3-9 and paid another Rs. 10 on it. A difference arose between the Registrar, who is the Taxing Officer of this Court, and the appellant's counsel, and the former referred the matter to the Taxing Judge, who has referred the following questions to us: (1) What provisions of the Court Fees Act determine the court fee payable in respect of relief No. 1, i.e that the mortgage deed in suit may be declared void and ineffectual as against the plaintiffs, and that it may be cancelled? (2) What provisions of the Court Fees Act determine the court fee payable in respect of relief No. 2, i.e that the specified compromise and decrees may be cancelled?

The main question for consideration is whether the reliefs fall under section 7(iv)(c) and are to obtain a declaratory decree where consequential relief is prayed, or under article 17(iii) of the second schedule to obtain a declaratory decree where no consequential relief is prayed, and if not, whether under article 1 of the first schedule as a plaint not otherwise provided for in the Court Fees Act where the amount or value of the subject-matter in dispute can be ascertained, or under article 17(vi) of the second schedule, that is, a suit not otherwise provided for and where it is not possible to estimate at a money value the subject-matter in dispute. It is quite clear that if the reliefs fall under either of the first two provisions of law, the last two general articles would not be applicable.

The learned counsel for the appellant relies strongly on the Full Bench ruling of this Court in Karam Khan v. Daryai Singh in which it was laid down that a suit in which the relief for the cancelment of a mortgage deed is claimed is in the nature of a simple declaratory suit. The report of the case is very brief and the judgment is also very short. The original plaint in the vernacular is not available in this Court. If the learned Judges meant to lay down that a suit for the cancellation of an instrument under the provisions of section 39 of the Specific Relief Act was a mere declaratory suit under schedule II, article 17(iii), then with great respect we are unable to agree with that view.

The only reported cases brought to our notice in which this ruling has been followed are Hira Lal v. Wali Bhagat and Durga Bakhsh v. Mirza Mohammad Ali Beg . We may point out that the Full Bench ruling has been expressly dissented from by some of the other High Courts, vide Samiya Mavali v. Minammal , Parvatibai v. Vishvanath Ganesh and Mussammat Noowooagar v. Shidhar Jha . But in these cases it has been taken for granted without any discussion of section 39 of the Specific Relief Act that a relief for the cancellation of an instrument is a consequential relief.

Section 42 of the Specific Relief Act covers cases where a declaration can be granted to a person entitled to any legal character or to any right as to any property, except where the plaintiff being able to seek further relief than a mere declaration of title omits to do so.

Under section 39 of the Act “any person against whom a written instrument is void or voidable, who has reasonable apprehension that such instrument, if left outstanding, may cause him serious injury, may sue to have it adjudged void or voidable; and the court may, in its discretion, so adjudge it and order it to be delivered up and cancelled.” In the case of cancelling a registered instrument, the law further provides that the court shall also send a copy of its decree to the officer in whose office the instrument has been registered.

The illustrations to the section make it obvious that the relief is available even to persons other than parties to an instrument, and in respect of both void and voidable instruments. It is equally clear that a plaintiff need only ask for the instrument to be adjudged void or voidable and need not in express terms ask for it to be delivered up and cancelled. Even though no relief, for cancellation is asked for a court may grant cancellation also. But this does not prevent a plaintiff from also asking in express terms a? relief for its being delivered up and cancelled, if he feels that having it merely adjudged void or voidable would not be adequate for his purpose.

The court has discretion to adjudge a written instrument void or voidable and has also discretion to order it to be delivered up and cancelled. Section 39 cannot mean that where the court adjudges an instrument void or voidable, it is bound to order it to be delivered up and cancelled. It is easy to conceive of cases where the court, while adjudging it void or voidable, may not think it fit or possible to order it to be delivered up and cancelled. For instance, an instrument executed by another person may not bind the plaintiff and may yet bind the executant. In such a case it cannot actually be cancelled. Or the original registered instrument may have been lost, in which case it cannot be ordered to be delivered up.

A relief to have a registered instrument adjudged void or voidable, with the possible result of its being delivered up and cancelled and a copy of the decree being sent to the registration office for a note to be made by the registering officer in his books, is much more than a mere declaratory relief. It is undoubtedly a substantial relief of a nature differing from a declaratory one.

We may note that section 39 of the Specific Relief Act is in chapter V which is headed “Of the cancellation of instruments”, whereas there is a separate chapter VI headed “Of declaratory decrees”. Obviously the legislature intended to draw a distinction between a decree adjudging a written instrument void or voidable, which may result in its cancellation, and a mere declaratory decree. Though the Specific Relief Act was passed some years after the Court Fees Act, the distinction existed before the Specific Relief Act was passed and it cannot be said that for the purposes of Court Fees Act a relief for adjudging an instrument void is of a declaratory nature.

In our opinion, the expression “consequential relief” in section 7(iv)(c) means some relief which would follow directly from the declaration given, the valuation of which is not capable of being definitely ascertained and which is not specifically provided for anywhere in the Act and cannot be claimed independently of the declaration as a substantive relief. A consideration of all the clauses (a) to (f) of sub-section (iv), section 7, of the Court Fees Act leads to the same conclusion.

The court has to see what is the nature of the suit and of the reliefs claimed, having regard to the provisions of section 7 of the Court Fees Act. If a substantive relief is claimed, though clothed in the garb of a declaratory decree with a consequential relief, the court is entitled to see what is the real nature of the relief, and if satisfied that it is not a mere consequential relief but a substantive relief it can demand the proper court fee on that relief, irrespective of the arbitrary valuation put by the plaintiff in the plaint on the ostensible consequential relief. Suppose a plaintiff asks for a declaration that the defendant is liable to pay him money due under a certain bond and also asks for recovery of that amount; or suppose that he asks for a declaration that he is the owner of certain property and is entitled to its possession and asks for recovery of its possession; surely the reliefs for the recovery of money or for the recovery of possession cannot be treated as mere consequential reliefs which can be arbitrarily valued at any low figure and court fees paid on that arbitrary valuation only. In our opinion, where a suit is for the cancellation of an instrument under the provisions of section 39 of the Specific Relief Act the relief is not a declaratory one. It fall's neither under section 7(iv)(c) nor under schedule II, article 17(iii), but under the residuary article, namely schedule I, article 1, of the Court Fees Act. We hold therefore that the court fee payable on the first relief is governed by schedule I, article 1.

As regards the second relief, the prayer that the compromise may be cancelled is similar to a relief for the cancellation of the mortgage deed and is governed by the same article.

In on opinion a relief for the cancellation of a decree, or to be more accurate, for the setting aside of a decree, is not a declaratory relief only. The effect is not merely a declaration as to a person's character or status as contemplated by section 42 of the Specific Relief Act, but the effect will be to render the decree void and incapable of execution and will free the plaintiff from all further liability under it. The claim, therefore, is not merely for a declaratory relief falling under schedule II, article 17(iii). Nor does the relief fall under section 7(iv)(c). There is no prayer for a declaration that the decree is void, or for a declaration of any sort, so the relief that the decree be set aside cannot be regarded as a “consequential” relief in any sense of that word. We hold that the court fee in respect of the prayer for cancellation of the decree is payable under schedule I, article 1, on the value of the decree.

As the compromise has merged in the preliminary decree and the latter has merged in the final decree, we consider that the cancellation of the compromise, the preliminary decree and the final decree are not “distinct subjects” within the meaning of section 17, but in reality only one subject. The court fee for the second relief is payable on the value of the final decree only.

Accordingly our answers to the questions referred to us are as follows: (1) Relief No. 1 is governed by schedule I, article 1; (2) Relief No. 2 is one consolidated relief (and not distinct reliefs) and it also falls under schedule I, article 1.