Opinion Summary — Taxing Judge under the Court-fees Act

Factual and Procedural Background

The matter was referred to the Taxing Judge under Section 5 of the Court-fees Act. It arises from an appeal against a final decree in a mortgage suit in which the appellants had been defendants. The appellants filed the appeal without any court-fee, contending that full ad valorem court-fees had already been paid on their earlier appeal from the preliminary decree and that nothing more should be payable. In the earlier (preliminary) appeal they had succeeded only in obtaining a reduction of interest; the present appeal attacks the entire final decree. The appellants advanced new grounds said to have arisen between the preliminary and final decrees (for example, failure to make substitution on the death of a party, alleged abatement, and presentation of the application for final decree to a wrong Court). The Taxing Judge was asked to determine whether ad valorem court-fees were payable on the appeal from the final decree and, if so, whether credit should be given for fees already paid on the preliminary appeal.

Legal Issues Presented

Whether ad valorem court-fees are payable on an appeal from a final decree in a mortgage suit when ad valorem fees were already paid on an earlier appeal from the preliminary decree.
If ad valorem court-fees are payable on the appeal from the final decree, whether the appellants are entitled to credit for the amount already paid on the preliminary-appeal (and, relatedly, whether only the difference in valuation should be charged).
Whether the present appeal should be treated as an appeal from an order (not having the force of a decree) such that only fixed court-fees under Schedule II, Article 11 (or Article 17(vi) if valuation is not possible) are payable instead of ad valorem fees.

Arguments of the Parties

Appellants' Arguments

No court-fee is payable on the appeal from the final decree because full ad valorem court-fees were already paid on the appeal from the preliminary decree; the law could not have contemplated paying ad valorem fees twice for defending a single suit.
If any fee is payable, it should be assessed only on the difference between the valuation used in the preliminary-appeal and the valuation for the final-appeal (the value increased by accumulated interest), i.e. only the incremental increase should attract fee.
Alternatively, the appeal should be treated as an appeal from an order (not a decree) and so attract the fixed court-fee under Schedule II, Article 11 of the Court-fees Act for a memorandum of appeal not from a decree or an order having the force of a decree.
In the alternative to Article 11, if valuation were not possible, fees should be assessed under Schedule II, Article 17(vi) as a memorandum of appeal where it is not possible to estimate the money value of the subject-matter.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Durga Prasad v. Sri Niwas Surekha, 15 P.L.T. 696	Case where only point was whether decree should be for sale or for foreclosure; taxing judge held difference could not be estimated in money.	The court noted the decision even if correct (and doubted), held it had no application to the present case.
Ranga Raju v. Ethirajammal, 53 Mad. 155	Authority relied upon for treating an appeal as from an order rather than a decree.	The court observed this was a single case basis for that contention and that it had been subsequently dissented from; it is not in accord with other High Courts.
Ramchandra Rao v. Rattayya, A.I.R. 1934 Mad. 198	Dissent from Ranga Raju; indicates Ranga Raju's view was not followed later in Madras.	Used to show that the Ranga Raju view has been dissented from in the Madras High Court.
Bajrangi Lal v. Mahabir Kunwar, 35 All. 476 (Full Bench)	Interpreted the legislative change replacing "order absolute" with "final decree" and held appeal from final decree requires ad valorem court-fee and cannot be stamped as an appeal from an order.	Relied upon as an authoritative Full Bench decision supporting that appeals from final decrees require ad valorem fees.
Kanchan Mandar v. Kamala Prosad Chowdhury, 16 C.L.J. 564	Decision relating to account suits / mesne profits where valuation and fee consequences differ.	Cited among authorities relied on by appellants; the court held such decisions are not analogous to mortgage suits.
In re Supputhayammal, 65 Mad. 664	Decision relating to account suits / mesne profits.	Listed as one of the account-suit authorities which the court found inapplicable by analogy.
Niras Rai v. Jagrup Singh, 1 P.L.W. 151 (NP)	Decision relating to account suits / mesne profits.	Included among authorities the court considered inapplicable to mortgage suits.
Ram Mander v. Maharani Nawlakhbati, 3 Pat. 815	Decision relating to account suits / mesne profits.	Cited by appellants but the court held the principles of such cases do not apply to mortgage suits.
Dhanukhdhari Prasad v. Ramadhikari, 12 Pat. 188	Decision relating to account suits / mesne profits.	Again listed among the account-suit authorities deemed inapplicable by analogy.
Kanti Chandra v. Radha Raman, 33 C.W.N. 743	Decision relating to account suits / mesne profits.	Cited as not analogous to mortgage suits for purposes of court-fees liability.
Damodar Padhano v. Haribhandbu Patnaick, 70 I.C. 392	Authority emphasizing the different treatment between mortgage suits and account suits under the Court-fees Act.	Applied to stress the complete difference between the two classes of cases and to justify different fee treatment.
Budhu Ram v. Niamat Rai, 4 Lah. 406	Redemption suit decision; final decree treated as a mere corollary to preliminary decree in that context.	Cited as an example where final decree was formal and appeal might be unnecessary; court noted such considerations do not apply to the present mortgage suit.
Shadi Lal v. Jagdamba Sahai, A.I.R. 1931 All. 655	Illustrates that in suits for sale upon a mortgage the final decree may lapse automatically if appeal against preliminary decree succeeds.	Used to show that the automatic lapse concept is limited to certain categories (e.g., sale on mortgage) and does not dictate fee treatment in present case.

Court's Reasoning and Analysis

The court proceeded by applying the relevant provisions of the Code of Civil Procedure and the Court-fees Act and by distinguishing the present case from categories where different fee rules apply.

Nature of appeals and valuation:
The court observed that Section 2 of the CPC recognizes preliminary and final decrees, with a final decree being one that completely disposes of the suit. Section 97 of the CPC allows separate appeals from preliminary and final decrees. Accordingly, an appeal from a final decree attacks a decree which is an adjudication fully disposing of the suit and therefore the value of the appellants' interest in the appeal is the amount of the final decree. There is no difficulty in estimating the subject-matter in money value in this case.
On treating the appeal as from an order:
The court rejected the contention that the appeal should be treated as an appeal from an order not having the force of a decree, noting that the relevant decisions supporting that approach (Ranga Raju) had been dissented from and were not in accord with other High Courts. The Full Bench decision in Bajrangi Lal was cited to show that an appeal from a final decree requires an ad valorem fee and cannot be stamped as an appeal from an order.
Statutory requirement for fee payment:
Section 4 of the Court-fees Act was invoked to establish that documents such as memoranda of appeal (as chargeable in Schedules I and II) shall not be filed in the High Court in its appellate jurisdiction unless the fee indicated by the schedules is paid. Schedule I, Article 1 specifically covers a memorandum of appeal not otherwise provided for and prescribes ad valorem court-fees for cases like the present.
On the contention of double payment / credit:
The court rejected the appellants' submission that it would be a hardship to pay ad valorem fees twice. The judge explained that court-fees are payable for the decision of the Court and separate appeals that lead to separate decisions generally attract separate fees. The subject-matter of appeals from preliminary and final decrees is ordinarily different (and the same point cannot be agitated twice); only in rare cases will a full challenge to the final decree be possible. Therefore, paying separate ad valorem fees for distinct appeals is not shown to be legally objectionable.
Distinguishing account/mesne-profit suits:
The court distinguished account suits and mesne profits cases relied on by the appellants. In those cases the preliminary decree merely declares that an amount is liable to be ascertained and the valuation for fee purposes is provisional; the actual liability is fixed by the final decree and any further fee adjustments relate to that final determination. By contrast, in mortgage suits the preliminary decree substantially settles liabilities and the final decree normally acts as a procedural step (for instance to allow payment by the defendant) — thus the statutory provisions treat these classes differently (referencing Section 7(i) for mortgage suits and Section 7(iv)(f) for account suits).
Search for statutory exemption or credit:
The court reviewed the Court-fees Act and found no provision permitting credit or exemption in the circumstances of this case. Section 19 lists documents exempt from fees but did not include the kind at issue; Section 85 permits the Local Government to reduce or remit fees but no provision under Section 85 had been made to cover such cases.
Conclusion of analysis:
On the combined statutory reading and the body of supporting decisions, the court concluded that ad valorem court-fees are payable on the appeal from the final decree in the mortgage suit and that no statutory credit or exemption was available for the fees already paid on the appeal from the preliminary decree.

Holding and Implications

HOLDING: The court ordered that the appellants must pay ad valorem court-fees on the sum of Rs. 88,419-12-0, amounting to Rs. 2,559-6-0 as required by the stamp report.

Direct Consequence for the Parties: The appellants were directed to pay the specified fee and were granted three months from the date of the judgment to make payment. The court made an express order accordingly.

Broader Implications: The decision confirms (in accordance with numerous decisions cited) that appeals from final decrees in mortgage suits ordinarily attract ad valorem court-fees even when a prior appeal from the preliminary decree attracted ad valorem fees; no provision in the Court-fees Act was found to permit credit for the earlier fee in this factual context. The opinion does not purport to create a new precedent beyond applying established statutory interpretation and prior authorities; its effect is the direct requirement of payment in this case.

Order: The appellants must pay Rs. 2,559-6-0 on the decree amount Rs. 88,419-12-0 within three months. "Order accordingly."

Show full summary ...

Sm. Kausalya Debi And Others v. Kauleshwar Singh And Others

1. This matter has been referred to me as Taxing Judge under Section 5 of the Court-fees Act. It arises out of an appeal from a final decree in a mortgage suit in which the appellants were defendants. They have filed the appeal without any court-fee on the ground that nothing more is payable in view of the fact that full ad valorem court-fees were paid on the appeal from the preliminary decree. In the appeal from the preliminary decree, all they succeeded in obtaining was a reduction of interest. In the present appeal the entire final decree is attacked. Under Section 97 of the CPC which was introduced in 1908, where any party aggrieved by a preliminary decree does not appeal from such decree he shall be precluded from disputing its correctness in any appeal which may be preferred from the final decree. Therefore, under the law as it now stands, a party is forced to appeal from the preliminary decree, and cannot wait to attack it in a single appeal after and from a final decree. Clearly a party cannot attack the final decree upon grounds which he has urged unsuccessfully in the appeal against the preliminary decree. But, in the present case, an attack is made upon the whole final decree upon new grounds, by reason of things alleged to have happened between the preliminary decree and the final decree, namely, failure to make substitution upon the death of a party, leading to an alleged abatement, and the alleged presentation of the application for final decree to a wrong Court. The argument put forward for the appellants is that the law never contemplated that ad valorem court-fees should be paid twice over. Therefore, no court-fee at all need be paid. Secondly, if any court-fee is payable, it can only be on the difference between the valuation of the preliminary appeal and the final appeal, the sum due having of course increased in the interval owing to the accumulation of interest. It has further been argued on behalf of the appellants, but not very strenuously, that the appeal should be treated as an appeal from an order, and so court-fees, if payable, should be the fixed court-fees payable under sch. II, Article 11, Court-fees Act, upon a memorandum of appeal when the appeal is not from a decree or an order having the force of a decree. In the alternative, court-fees should be assessed under Sch. II, Article 17(vi) as upon a memorandum of appeal where it is not possible to estimate at a money value the subject-matter in dispute, which is not otherwise provided for in the Court-fees Act.

2. The last two points may be dealt with very briefly. There is no difficulty at all in estimating at a money value the subject-matter in dispute in the appeal.

3. As the appeal attacks the entire decree and asserts that no final decree can be passed, the value to the appellants is the amount of the final decree. The case which is relied upon [Durga Prasad v. Sri Niwas Surekha] 15 P.L.T 696,1 even if correct, which has been doubted, has no application. It was a case where the only point in dispute was whether there should be a decree for sale, or for foreclosure, and the learned Taxing Judge took the view that the difference could not be estimated in money.

4. As to the contention that the appeal is from in order not having the force of a decree, this cannot he entertained for one moment. Section 2 of the CPC, expressly provides that a decree may be either preliminary or final, and the test of a final decree is whether it is an adjudication completely disposing of the suit. Section 97, moreover, makes it quite clear that there can be separate appeals both from the preliminary decree and from the final decree. The contention has been based merely upon a single case, [Ranga Raju v. Ethirajammal] 53 Mad. 155,2 which has been subsequently dissented from even in the Madras High Court, in [Ramchandra Rao v. Rattayya] A.I.R 1934 Mad. 198,3 and is not in accord with the view of any of the other High Courts. The point is so well-settled and there are so many decisions that it is not necessary to cite them. I shall refer to only one, the Full Bench case of the Allahabad High Court, [Bajrangi Lal v. Mahabir Kunwar] 35 ALL. 476,4 where it was pointed out that the Legislature had deliberately altered the words “order absolute” and replaced them by the words “final decree”, and it was laid down that an appeal from a final decree passed under O. 34, R. 5 of the CPC, requires an ad valorem court-fee, and cannot be stamped as an appeal from an order.

5. The contention that no court-fee at all is payable also merits no serious consideration. Under Section 4 of the Court-fees Act, no document of any of the kinds specified in the Schs. 1 and 2 (which includes, of course, a memorandum of appeal), as chargeable with fees, shall be filed, exhibited or recorded in, or shall be received or furnished by any of the said High Court…..in the exercise of its jurisdiction as regards appeals from the Courts subordinate to its superintendence, unless in respect of such document there be paid a fee of an amount not less than that indicated by either of the said schedules as the proper fee for such document. Schedule I, Article 1, covers a case like the present, namely, a memorandum of appeal not otherwise provided for in the Act, and provides for ad valorem court-fees.

6. There remains the question whether the appellants should be given credit for the amount already paid upon the preliminary appeal. It is argued that it is a hardship, and the law could not have contemplated, that the appellant in defending a single suit should have to pay ad valorem, court-fees twice over. I do not myself see the hardship. The court-fee is paid for the decision of the Court. Court-fees have to be paid separately upon a first appeal and a second appeal. If that is no hardship, why is it a hardship to pay separate court-fees for two separate decisions upon separate points by the same Court. The subject-matter of the two appeals is entirely different, and must necessarily be entirely different, since the same point cannot be agitated in the preliminary appeal and in the final appeal. It can only be in rare and exceptional cases that it will be possible to challenge the entire decree in the final appeal, since in the main the rights of the parties will have been determined in the preliminary appeal, and all that will be left for the final appeal in most cases will be subsidiary points, which do not involve a challenge to the entire decree, and consequently will not necessitate the payment of full ad valorem court-fees. A case like the present is and must be unusual.

7. Apart from all this, however, ethical considerations do not really enter into the picture. It is a question merely of construing the Court-fees Act. I have already shown that under the Court-fees Act ad valorem court fees are payable upon an appeal from the final decree in a mortgage suit, and that is settled by numerous decisions. If therefore, for any reason the appellants can claim any credit or exemption from any portion of the fee it can only be by reason of some provision in the Court-fees Act. A complete search of the Act fails to reveal any provision for such a case. In S. 19 of the Act a number of documents are set out, which shall not be chargeable with any fee, but no document is included of the and with which we are here concerned. Section 85 of the Act provides that the Local Government may reduce or remit in the whole or in any part all or any of the fees mentioned in the first and second schedules, but the Local Government has made no provision under S. 85 for cases like the present. The appellants rely upon a number of decisions relating to account suits and claims for mesne profits. Such cases are [Kanchan Mandar v. Kamala Prosad Chowdhury] 16 C.L.J 564.5 [In re Supputhayammal] 65 Mad. 664.6 [Niras Rai v. Jagrup Singh] 1 P.L.W 151 (NP)7. [Ram Mander v. Maharani Nawlakhbati] 3 Pat. 815,8 [Dhanukhdhari Prasad v. Ramadhikari] 12 Pat 1889 [Kanti Chandra v. Radha Raman] 33 C.W.N 743.10

8. It is unnecessary to deal with these decisions in detail because there is no analogy between the two types of cases. In account suits and mesne profits cases, the amount due is not decided by the preliminary decree. The decree provides only that the amount is liable to be ascertained. Though the law provides that court-fees upon the preliminary appeal must be paid upon the plain, tiff's estimate of the amount, that is, as it were, only provisional and by way of anticipation. The actual court-fee payable can be finally determined only later, and in the case of the plaintiff the balance will have to be made up under Section 11 of the Court-fees Act, before he can execute. It is, therefore, only reasonable that it should be the balance that the defendant must make up in his appeal from the final decree. It is the final decree which settles the actual liabilities, and not the preliminary decree, whereas in mortgage suits it is the preliminary decree which really settles the liabilities, and the final decree is substantially merely a postponement of the final order of the Court to give the defendant a chance to pay. The complete difference of the two classes of cases is emphasised by the fact that they come under different provisions of the Court-fees Act. Mortgage suits fall under S. 7(i), whereas account suits are separately provided for under S. 7(iv)(f). The principles applicable to the one type of case are not applicable to the other: see [Damodar Padhano v. Haribhandbu Patnaick] 70 I.C 392.11 In account suits there can be one joint appeal against the preliminary and final decree. That is not the case in mortgage suits. [Budhu Ram v. Niamat Rai] 4 Lah. 40612 was a redemption suit. In such a suit also, the principles applicable are not those applicable to suits for sale. Redemption suits and foreclosure suits are separately provided for in Section 7(ix) of the Court-fees Act. Assuming, without expressing the opinion, that this decision is correct, the ratio decidendi was that the final decree was a mere corollary to the preliminary decree, and followed it as a matter of course. There was nothing fresh for the Court to decide before it passed the final decree, and the appeal from that decree was really of a formal nature and did not contest anything beyond what was contested in the appeal from the preliminary decree. In short, the appeal from the final decree was unnecessary and a superfluity, because had the appeal against the preliminary decree succeeded, the final decree would have lapsed automatically, just as indeed it does in the case of a suit for sale upon a mortgage: see [Shadi Lal v. Jagdamba Sahai] A.I.R 1931 All. 655.13 Such considerations have no place in a case like the present.

9. The contention put forward must be rejected and the appellants must pay the ad valorem court-fees upon the sum of Rs. 88,419-12-0 namely, Rs. 2,559-6-0 as required by the stamp report. They request and are allowed three months from the date of this judgment in order to pay.

K.B/D.H

10. Order accordingly.

Sm. Kausalya Debi And Others v. Kauleshwar Singh And Others

Opinion Summary — Taxing Judge under the Court-fees Act

Factual and Procedural Background

Legal Issues Presented

Arguments of the Parties

Appellants' Arguments

Table of Precedents Cited

Court's Reasoning and Analysis

Holding and Implications

Sm. Kausalya Debi And Others v. Kauleshwar Singh And Others

Comments