Ad Valorem Court-Fees to be paid in Money Suits for Compensation/Damages: SC

AD VALOREM COURT-FEES TO BE PAID IN MONEY SUITS FOR COMPENSATION/DAMAGES: SC

Cause Title: State of Punjab and Others v. Dev Brat Sharma

Case Number: Civil Appeal No. 2064/2022 (Arising out of SLP (Civil) No. 12468/2018)

Quorum: Justice Dinesh Maheshwari and Justice Vikram Nath

Judgment Date: 16/03/2022

Counsel for the Appellant: Ms. Uttara Babbar

Counsel for the Respondent: Shri Abhimanyu Tiwari

Author: Pragash B, Advocate, Madurai Bench of Madras High Court

To View/Download Judgment:State of Punjab and Others v. Dev Brat Sharma

Background of the Case

The Respondent instituted a suit in Case No. 1661/2015 before the Court of Civil Judge (Senior Division), Jalandhar for recovery of Rs. 20 Lakhs as damages suffered by him on denying the status of freedom fighter by the defendants and also for the loss of reputation on account of non-issuance of Certificate of Freedom Fighter along with interest @ 9% per annum from the date of institution of the suit till realization of the amount. The State of Punjab and five others (officers of the State Government) were impleaded as defendants.

The respondent belongs to a renowned family of Jalandhar. He had retired as DDPO and was the youngest freedom fighter in the Quit India Movement. After retirement he was practicing as an advocate and commanded great respect amount the residents of Jalandhar. The respondent was duly recognised as a ‘freedom fighter’ by the Government of Punjab but the Director, Lotteries (3rd Defendant) who was posted as Deputy Commissioner, Jalandhar denied the status.

The respondent had filed two writ petitions before the Honourable High Court at Chandigarh bearing CWP No. 15316/2013 and CWP No. 18535/2013 against the rejection of his request for issuing the certificate of ‘freedom fighter’. The High Court disposed the Writ Petition in CWP No. 15316/2013 on 19.07.2013 and allowed the Writ in CWP No. 18535/2013 on 14.11.2014.

The respondent had to travel to Chandigarh several times to engage lawyers, pay fees and expenses to conduct litigation at an old age and he had suffered great mental tension and torture on account of l=illegal acts of the defendant Nos. 3 to 6 (Officers of the State of Punjab). Moreover, his grandson could not get admission in Punjab due to the non-issuance of the said certificate and he has to be admitted in a college in the State of Tamilnadu. The respondent has approximately spent Rs. 2 Lakhs on litigation and made several trips to Tamilnadu for his grandson’s education. He submitted that suffered damages of approximately Rs. 20 Lakhs, which is inclusive of Rs. 2 Lakhs of Litigation expenses, mental tension, harassment and further incidental damages.

A legal notice dated 16.03.2015 was issued under Section 80 of CPC calling upon the defendants to pay a sum of Rs. 20 Lakhs suffered by him and on non-payment, the suit was instituted. The valuation of the suit both for the purpose of court fees and jurisdiction was fixed at Rs. 20 Lakhs but Court fee of Rs. 50/- was affixed relying upon Ajit Singh Kohar v. Shashi Kant passed by the Honourable High Court of Punjab and Haryana which was mentioned in Paragraph 11 of the Plaint. An undertaking to pay the court fees on the sum to be adjudicated as damages by the Court in due course of time was also stated.

The defendants raised preliminary objections and one of them being that the suit is not properly stamped for the purpose of Court-fees. A replication was filed by the respondent reiterating the contents of the plaint and also refuting the preliminary objection. The appellants then filed an application under Order 7 Rule 11(c) read with Section 151 of CPC for rejection of plaint under non-payment of requisite Court-fees, which was registered as IA No. 1/2016. The Trial Court, vide its order dated 10.11.2016, disposed of the said application with the direction to the respondent to file the court-fees on the amount of Rs. 20 Lakhs as claimed and granted 10 weeks’ time to make good the deficiency.

Being aggrieved, the respondent filed a revision petition under Section 115 of CPC before the Honourable Punjab and Haryana High Court in CR. No. 291/2017. The High Court vide its Judgment and Order dated 11.08.2017 held that as the actual and specified amount of damages was still to be assessed and determined by the Trial Court, the direction to pay ad valorem Court fees on 20 Lakhs was not sustainable in law. The High Court accordingly, set aside the order of the Trial Court dated 10.11.2016 and rejected the application of the appellant under Order VII Rule 11 CPC with a further direction to the Trial Court to proceed with the suit.

The above judgment of the High Court is under challenge. During the pendency of the Special Leave Petition, the suit was dismissed by the Trial Court on 28.02.2020. Aggrieved, the respondent has preferred an appeal under Section 96 of CPC, which is pending.

Question at Hand

Whether the suit in question as framed was a money suit for compensation/ damages falling under Clause (i) of Section 7 or was a suit falling in any of the categories specified in clause (iv) of Section 7 of the Act?

Findings of the Honourable Court

The Court Fees Act, 1870 (“The Act”) deals with ‘Fees in Other Courts and in Public Offices’. Section 6 provides that no document of any kind specified as chargeable in the First or Second Schedule of this Act would be filed, exhibited or recorded in any Court of Justice or would be received or furnished by any public officer, unless in respect of such document, fee of an amount not less than that indicated by either of the said Schedules as the proper fee for such document is paid. First Schedule lays down the computation of ad valorem Court fees whereas Second Schedule gives the table of fixed Court fees payable on different categories of plaints, documents and pleadings. (Para 18)

Section 7 provides for the computation of fees payable in certain suits. Sub-clause (i) refers to Money Suits which includes suits for damages, compensation, arrears of maintenance, annuities or other sums payable periodically where the fee payable would be according to the amount claimed. However, sub-clause (iv) which has further six categories, namely, suits (a) for movable property of no market value; (b) to enforce a right to share in joint family property; (c) for a declaratory decree and consequential relief; (d) for an injunction; (e) for easements and (f) for accounts. The fees on a suit falling in these categories would be payable according to the amount at which the relief sought is valued in the plaint or memorandum of appeal. It also states that in all such suits the plaintiff would state the amount at which he values the relief sought. (Para 19).

A reading of the relief clause would make it abundantly clear that this was a money suit for compensation/ damages and not falling under any of the categories mentioned in clause (iv) of Section 7 of the Act. Therefore, there would be no question at all for the applicability of Section 7(iv) of the Act. It would be simple case of applicability of Section 7(i) of the Act and ad valorem Court-fees would have to be paid as per Schedule 1 entry 1. (Para 20).

It is only with respect to the category of suits specified in clause (iv) of Section 7 of the Act that the plaintiff has the liberty of stating in the plaint the amount at which relief is valued and Court-fees would be payable on the said amount. Liberty given under clause (iv) to the specific suits of six categories is not available to the suits falling under any other clause. Once the suit in question was a money suit for compensation and damages falling under clause (i) of Section 7 of the Act, ad valorem Court-fees would be payable on the amount claimed. (Para 21)

In the present case, the respondent has not given a separate valuation for relief sought and rightly so, as it had no liberty and right to give different valuation that what was being actually claimed. As a matter of fact, in para 11 of the plaint it is clearly stated that the valuation is the same for Court-fees and jurisdiction. (Para 28) The valuation for the purposes of jurisdiction and relief has to be the same in the money suits falling under the category 7(i). It was only in category of suits covered by clause (iv) of Section 7 that there could be two different valuations for the purposes of jurisdiction and for relief sought. (Para 29).

The Honourable Supreme Court of India observed

“The High Court, therefore, fell in error in setting aside the order passed by Trial Court whereby it had granted time to the plaintiff-respondent to make good the Court-fees within a particular period failing which the plaint would stand rejected.” (Para 36)

For all the reasons recorded above, the appeal is allowed. The judgment and order of the High Court dated 11.08.2017 is set aside and that of the Trial Court dated 10.11.2016 is restored. Since the suit itself had been finally dismissed on 28.02.2020, (i) but, court fees was nevertheless payable by the plaintiff-respondent on the valuation, i.e., on Rs. 20 Lakhs. Hence, it is directed that the plaintiff-respondent shall make payment of such court fees within four weeks from today; ii) Moreover, the plaintiff-respondent shall further be required to make payment of court fees in the appeal on the value he shall put on the relief sought to be claimed in appeal. The Appellate Court shall allow the plaintiff (who is appellant therein) to state the valuation and grant him reasonable time to make payment of court fees before proceeding further in appeal. (Para 37)

There shall be no order as to costs. (Para 38)

Pending application(s), if any, stand disposed of. (Para 39)

Cases Referred

1. Ajit Singh Kohar v. Shashi Kant, CR No. 5638/2014, decided on 25.08.2014.

2. Manpreet Singh v. Gurmail Singh and Others, (2016) 4 Civil Court Cases 503 (PLH).

3. State of Punjab v. Jagdip Singh Chowhan, (2005) 1 RCR (Civil) 54.

4. Ranjit Kaur v. PSEB, (2006) SCC Online P&H 1095

5. Manjeet Singh v. Beant Sharma, (2012) SCC Online P&H 13081.

6. M/S Commercial Aviation and Travel Company v. Vimla Pannalal, (1998) 3 SCC 423.

7. Hem Raj v. Harchet Singh, (1993) Civil Court Cases 48 (P & H)

8. Subash Chander Goel v. Harvind Sagar, (2003) AIR (Punjab) 248.

9. Dr. B. L. Kapoor Memorial Hospital v. Balbir Aggarwal, (2015) SCC Online P & H 1790.

10. M.P. Shreevastava v. Mrs. Veena, (1967) 1 SCR 147.

11. Shanbhagakannu Bhattar v. Muthu Bhattar, AIR 1971 SC 2468.

12. Bharpoor Singh and Another v. Lachhman Singh, 2017 (1) Law Herald 609.