Bombay High Court Declines Application For Increasing Valuation Of Suit, Says Pecuniary Jurisdiction Lies With City Civil Court

The Bombay High Court recently observed that it cannot entertain an application for increasing the valuation of a suit over which it has already lost jurisdiction due to an increase in pecuniary jurisdiction of the Mumbai City Civil Court and the consequent transfer of cases from HC to that court.

It further held that allowing a court to decide an application in any suit that was already transferred to another court would set a dangerous trend.

Justice Sandeep V Marne refused to entertain an application for amendment of a plaint to increase its valuation. The Bombay City Civil Court (Amendment) Act, 2023, had caused the suit to be transferred to the City Civil Court due to its increased pecuniary jurisdiction.

“Permitting a Court to entertain or decide any application filed in a Suit, which is already transferred to another Court, would set a dangerous trend where Courts, despite losing jurisdiction, would continue to exercise jurisdiction in an indirect manner over those suits. Jurisdiction is an authority conferred on a court to decide or adjudicate any dispute and it also signifies a limit or restriction within which a court has to exercise such authority. It is therefore necessary that clear boundaries of Court's jurisdiction are set out and Courts do not transgress the same on case-to-case basis”, the court observed.

The Amendment Act, 2023, came into force on January 28, 2024. By this amendment, Section 3 of the Bombay City Civil Court Act, 1948 was amended to increase the pecuniary jurisdiction of the City Civil Court from Rs. 1 Crores to Rs. 10, and Section 4A was amended to transfer suits pending in the HC falling within the increased pecuniary jurisdiction.

The plaintiffs are a Co-operative Housing Society and its members who purchased flats and row houses in the 'Grand Paradi' buildings complex in South Mumbai. They have sought conveyance of the buildings and lands from the developer. The valuation of the suit is declared at Rs. 6.75 Crores, based on the property's value as of November 27, 1977.

This suit now falls under the City Civil Court's pecuniary jurisdiction. The plaintiffs filed the present Interim Application before the HC seeking to amend the valuation to Rs. 100 Crores.

Plaintiffs argued that the HC could decide this application since the revised valuation would exceed Rs. 10 Crores and the suit would fall back within the HC's pecuniary jurisdiction.

They relied on Delhi HC's judgment in Subhashini Malik v. SK Gandhi & Ors, which held that the Delhi HC could retain jurisdiction in certain circumstances where suits were slated for transfer as per the Delhi High Court Amendment Act, 2015, which increased the minimum valuation of suits that can be entertained by the Delhi HC.

However, Bombay HC found that the language of the relevant statutes distinguished the present case. The amended Bombay City Civil Court Act provides for the automatic transfer of cases from Bombay HC to the Mumbai City Civil Court while the Delhi Amendment Act allowed for the discretion of the Chief Justice of Delhi HC in transferring cases, the court held.

“the amended Section 4A of the City Civil Courts Act uses the words 'shall stand transferred' thereby entailing automatic and instant transfer of the Suits without performance of any action or passing of any order by the Chief Justice”, the court observed, holding that the present suit stood transferred to the City Civil Court on January 28, 2024.

The court reasoned that once a suit was transferred, all applications pertaining to it should be decided by the court to which it was transferred.

The plaintiffs' contention, seeking to retain the HC's jurisdiction to decide specific types of applications related to amendments of the plaint, is unacceptable, the court said. “If Plaintiffs' contention is accepted, only an order allowing the amendment can be passed by a Court in a transferred Suit and not an order of rejection. Such selective and result oriented jurisdiction cannot be conferred on Courts”, the court added.

The court pointed out that the pecuniary jurisdiction of subordinate courts is altered from time to time. “Permitting one class or sub-class of applications to be entertained by courts even after loss of pecuniary jurisdiction would create confusion and chaos as well as result in misuse of such liberties by usurping jurisdictions by Courts who have already lost jurisdiction over particular category of suits.”

Thus, the court ruled that it could not decide the present application and needed to be addressed by the City Civil Court, to which the suit had already been transferred. The court directed the Registry to promptly transfer all papers to the City Civil Court to facilitate further proceedings.

Also read: Pecuniary Jurisdiction Determined By Valuation Disclosed In Plaint, Not Potential Award If Suit Decreed In Plaintiff's Favour: Bombay High Court

Case no. – Interim Application (L) No. 4009 of 2024

Case Title – Grand Paradi Co-operative Housing Society Ltd. & Ors. v. Mont Blanc Properties & Industries Pvt. Ltd. & Ors.