Court Fees Act - Market Value Does Not Become Decisive Of Valuation Merely Because Litigation Involves Immovable Property: Supreme Court

The Supreme Court, on Thursday, held that the nature of relief claimed in a plaint is decisive of the valuation of the suit. Market value does not become decisive of suit valuation merely because immovable property is the subject-matter of litigation. The Apex Court further stated that it is trite law that a suit for mandatory and prohibitory injunction is not required to be valued at the market value of the property. A Bench comprising Justices Dinesh Maheshwari and Vikram Nath allowed an appeal assailing the order of the Delhi High Court, which had held that the valuation of the suit for the purpose of Court fees and jurisdiction at Rs. 250 for each of the reliefs of mandatory and prohibitory injunction and at Rs. 1 lakh for damages was wholly arbitrary when it is an admitted fact that the value of the property at the time of filing the suit was as high as Rs. 1.8 crores. Factual Background The appellant had instituted a suit before the Court of Senior Civil Judge, South West District, Dwarka, New Delhi for injunction and recovery of damages against his elder brother and his Munshi. His elder brother was a licensee, utilising the concerned property which was owned by the appellant for storage purposes. Later, he sought permission from the appellant to allow his Munshi to stay in the concerned property until the time the appellant requires it. Thereafter, when the appellant had asked them to vacate the property, his brother and his Munshi refused. The appellant served legal notices in August, 2016 asking them to vacate the concerned property and warned that he would claim damages for unauthorised use in case they stayed beyond the expiry of the notice period. Gauging that they have no intention to vacate the premises, the appellant had filed the said suit. As the matter came up for hearing, the Munshi alleged that the concerned property did not belong to the appellant and the suit was instituted on the basis of forged documents and solely with the purpose to grab the property. He further alleged that the plan was hatched by the appellant in connivance with his elder brother. The Munshi also filed an application under Order XIV Rule 5 of Code of Civil Procedure, 1908 seeking orders for framing additional issues, which was dismissed by the Trial Court. He had again filed an Order VII Rule 11 application stating that the value of the property at the time of filing of the suit (Rs. 1.8 crores) as admitted by the appellant reflected that the Trial Court did not have the jurisdiction to adjudicate the suit. The application was rejected with costs and was subsequently assailed before the Delhi High Court. The High Court held that - "…market value of the suit property was around Rs.1.8 crores at the time of the filing of the suit. It is apparent thus, that the valuation of the suit for the purpose of Court Fees and jurisdiction at Rs.250 for each of the reliefs of injunction is wholly arbitrary." In view of the same, it directed the plaint to be returned to be filed before the appropriate court. Contentions raised by the appellant Referring to Section 7(iv)(d) of the Court-fees Act, 1870, the Senior counsel appearing on behalf of the appellant argued that the suit had been valued for the purpose of injunction to remove the licensees from the concerned property. It was emphasised that for the said purpose there was no requirement in law for valuation of the suit as per the market value of the concerned property. Contentions raised by the appellant The Counsel appearing for the Munshi argued that the pecuniary jurisdiction of the Senior Civil Judge, Dwarka, New Delhi is 3 lakhs, whereas the suit property has been admitted to have been valued at Rs. 1.8 crore at the time of institution of the suit and therefore, the said said Court cannot try the suit. It was asserted that the appellant was in essence seeking possession of the concerned property and hence the suit was not properly valued. Analysis by the Supreme Court At the outset the Court referred to Section 7 (iv)(d) of the Court-fees Act, 1870 which reads as under - "7. Computation of fees payable in certain suits. - The amount of fee payable under this Act in the suits next hereinafter mentioned shall be computed as follows: - [...] (iv) In suits- [...] for an injunction. – (d) to obtain an injunction, [...] according to the amount at which the relief sought is valued in the plaint or memorandum of appeal; In all such suits the plaintiff shall state the amount at which he values the relief sought;" It noted that the valuation of the suit depends on the nature of the relief claimed. Merely because the subject matter of the litigation involves an immovable property, market value would not become decisive of the suit valuation. The Court observed that in the present case, a mandatory injunction had been sought by the appellant seeking...

Court Fees Act - Market Value Does Not Become Decisive Of Valuation Merely Because Litigation Involves Immovable Property: Supreme Court

Sohini Chowdhury

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Sohini Chowdhury

Court Fees Act - Market Value Does Not Become Decisive Of Valuation Merely Because Litigation Involves Immovable Property: Supreme Court

Sohini Chowdhury

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Sohini Chowdhury

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