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The Supreme Court has held that a plaint cannot be rejected at the threshold under Order VII Rule 11 CPC over a dispute concerning payment of ad valorem court fee when the liability to pay such fee depends on disputed factual issues relating to possession and other aspects of the suit.

A bench of Justice S.V.N. Bhatti and Justice N.V. Anjaria set aside the Punjab and Haryana High Court's judgment, which had rejected the appellants' plaint at the threshold stage for failure to pay ad-valorem court fees (plaintiffs have only paid a fixed court fee) in a suit seeking declaration of joint ownership in an inherited property wherein the plaintiffs claimed to have a joint possession with the defendants.

The Appellants-Plaintiffs, who claimed to be in joint possession of the suit property, filed a suit seeking a declaration of joint ownership in a property inherited from their grandmother. They also claimed that, in collusion with defendant no.2, a sale deed had been falsely executed in favour of a third party.

The defendant no.2 sought rejection of the plaint for want of payment of ad valorem court fees for seeking a declaration of joint ownership. The trial court rejected the defendant no.2's application. The High Court, however, allowed the defendant no. 2's civil revision by recording a finding that the plaintiffs were required to affix ad valorem court fee.

Aggrieved by the High Court's findings, the plaintiffs approached the Supreme Court.

Setting aside the impugned order, the Judgment authored by Justice Anjaria observed that the High Court erred in giving credence to the materials placed on record in the defendants' application under Order VII Rule 11 CPC, which otherwise should be restricted to examining the averments in the plaint only.

“Prima facie, therefore, no aspect existed which would have persuaded the court to reject the plaint at the threshold by accepting the case of defendant No.2 in his application under Order VII Rule 11, CPC, that the ad-valorem court fee was payable.”, the Court observed, pointing out that at the stage of hearing Order VII Rule 11 CPC application, the courts are bound to consider the averments in the plaint only, without considering the materials placed on record in the defendants' application.

Since, the issue of non-payment of the ad-valorem court fees for seeking a declaration of joint ownership could only be assessed during the evidence, therefore, this would not be a ground to reject the plaint at the threshold stage, the Court said.

“The question of payment of court fee will have to be looked into in segregation, for, the same would depend upon not only the possession aspect or the prayer in that regard, but also the aspects relating to the sale deed claimed to have been executed and the other facts relevant thereto. They are the issues to be threshed out on evidence. Therefore, the question of payment of court fee, whether ad valorem or fixed court fee, could be addressed and considered only upon establishment of such germane facts upon leading of evidence in the suit.”, the Court observed.

Reference was made to the 2010 Supreme Court's judgment of Suhrid Singh alias Sardool Singh vs. Randhir Singh and Others to observe that since the Appellants were not party to the alleged sale deed executed by the defendants in a third party's favour, non-payment of the ad-valorem court fees would not frustrate the suit; rather a payment of fixed court fees was justified.

As a result, the Court allowed the appeal, thereby restoring the trial court's order rejecting the defendants' plaint rejection application, “subject to the modification that the question of payment of court fee would be considered and decided, after and on the basis of the evidence that may be led in the suit.”

Cause Title: NEELAM SHARMA AND OTHERS VERSUS AMITA PASSAN AND OTHERS

Citation : 2026 LiveLaw (SC) 855

Click here to download judgment

Appearance:

For Petitioner(s) Mr. Amit Aggarwal, Adv. Mr. Tek Chand Naniawat, Adv. Ms. Bano Deswal, Adv. Mr. R. C. Kaushik, AOR

For Respondent(s) Mr. Manoj Swarup, Sr. Adv. Mr. Hamad Tariq, Adv. Mr. Mukul Kumar, AOR

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