Abdul Hamid
Shamsi Vs. Abdul Majid & Ors [1988] INSC 103 (12 April 1988)
Sharma,
L.M. (J) Sharma, L.M. (J) Sen, A.P. (J)
CITATION:
1988 AIR 1150 1988 SCR (3) 507 1988 SCC (2) 575 JT 1988 (2) 69 1988 SCALE
(1)694
CITATOR
INFO : R 1988 SC1636 (23) R 1992 SC1526 (3)
ACT:
Court
Fees Act, 1870. Section 7(iv) (b)-Suit for accounts-Plaintiff not obliged to
state exact amount that may result after taking all accounts-But not permitted
to choose unreasonable and arbitrary figure-It is open to the Court to reject
such figure, though ordinarily the Court does not examine the correctness of
the valuation.
HEAD NOTE:
The
father and brothers of Respondent No. 1 were running a proprietary business,
which was later converted into a partnership firm by a regular deed. On the
death of the father, the two brothers had effectively taken control of the
business and excluded Respondent No. 1. The suggestion to reconstitute the
partnership made repeatedly by Respondent No. 1 had been ignored.
The
two brothers represented before the Income Tax Officer that a new deed of
partnership had been executed on 15.1.1979 to be effective from 1.1.1979 in
which Respondent No. 1 had no interest and on that basis the Income Tax Officer
passed an order. In the suit filed by Respondent No. 1, he challenged the
partnership deed as being illegal and void and prayed for a decree for
dissolution of the partnership firm and for accounts. Valuation of the suit was
put as Rs.150 i.e., Rs.50 each for declaration, rendition of accounts, and for
profit to the share of the plaintiff.
Court
fee was paid accordingly.
The
defendants in the suit denied the allegations made in the plaint and also
challenged the valuation as being grossly undervalued and arbitrary. The issue
relating to the correct valuation and pecuniary jurisdiction of the Court was
decided in favour of the plaintiff. The defendants challenged the order by a
Civil Revision Application which was dismissed by the High Court.
This
appeal by special leave is against the High Court's order. On behalf of the
appellant, it was contended that while relief to the tune of lakhs of rupees
had been claimed, the plaint had been tentatively valued for Rs.50 only, which
is preposterous. The contention of Respondent No. 1 was that a Plaintiff has
the absolute right to put on the plaint any 508 value he wishes and the court
has no jurisdiction to examine the matter.
Allowing
the appeal, this Court, ^
HELD:
1. It is true that in a suit for accounts the correct amount payable by one
party to the other can be ascertained only when the accounts are examined and
it is not possible to give an accurate valuation of the claim at the inception
of the suit. The plaintiff is, therefore, allowed to give his own tentative
valuation. Ordinarily the Court shall not examine the correctness of the
valuation chosen, but the plaintiff cannot act arbitrarily in this matter. If a
plaintiff chooses whimsically a ridiculous figure it is tantamount to not
exercising his right in this regard. In such a case it is not only open to the
Court but its duty to reject such a valuation. [512D-E]
2. In
the instant case the valuation put by the plaintiff on the plaint is arbitrary
and unacceptable.
However,
the question is remitted to the trial court for reconsideration. It is open to
the trial court to take into consideration the statement in the plaint that the
plaintiff has been ousted from the partnership business. If the court comes to
the conclusion that the tentative valuation of the suit would be beyond its
pecuniary jurisdiction, it shall pass an appropriate order under Order VII of
the Code of Civil Procedure. [512F-G] Smt. Tara Devi v. Sri Thakur Radha
Krishna Maharaj, [1987] 4 SCC 69; Meenakshisundaram Chettiar v. Venkatachalam Chettiar,
[1979] 3 SCR 385, relied on.
Aizaz
Ahmad v. Nazirul Hasan, AIR 1935 Allahabad 849;
Attar
Singh v. Manohar Singh, ILR (1947) Nagpur 933; Mata Ram v. Daulat ILR (1938) Nagpur 588 (F.B.); Salahuddinhyder
v. Dhanoolal, [1945] ILR XXIV Patna 334; Shama Pershad Sahi v. Sheopershad
Singh XLI I.C. 95 (Patna); Gouri Lal and others v. Raja Babu,
AIR 929 Patna 626, approved.
Krishnaji
Hari v. Gopal Narayan. AIR 1936 Bombay 166 and Ishwarappa v. Dhanji, AIR 1932 Bombay 111, overruled.
CIVIL
APPELLATE JURISDICTION: Civil Appeal No. 1004 of 1988.
From
the Judgment and Order dated 2.12.1987 of the High Court of Calcutta in Civil
Order No. 2506 of 1987.
509
S.N. Kacker, N. Choudhary and Rathin Das for the Appellant.
A.P. Chatterjee,
Deepak Mitra and G.S. Chatterjee for the Respondents.
The
Judgment of the Court was delivered by SHARMA, J. The jurisdiction of the City Civil Court, Calcutta to entertain a suit being T.S. No. 520 of 1983 filed by the
respondent No. 1 is under challenge in the present appeal, on the ground that
the correct value of the suit is beyond the pecuniary jurisdiction of the
Court. The plaintiff-respondent No. 1 has alleged that he is a partner of a
partnership business along with his brothers defendant Nos. 1 and 2. Originally
it was a proprietary business belonging to Abdul Samad, father of the plaintiff
and defendant Nos. 1 and 2, and was later converted into a partnership firm by
a regular deed. During his life time the business was under the control of
Abdul Samad, but on his death the defendants Nos. 1 and 2 have effectively
taken charge of the business and excluded the plaintiff. A suggestion to
re-constitute and partnership made and repeated by the plaintiff has been
ignored. In reply to the plaintiff's letter seeking information the defendant
no. 2- petitioner has stated in his letter to the plaintiff that he (the
plaintiff) has no interest in the firm. In paragraph 11 of the plaint it is
stated that he has on enquiry discovered that the defendants nos. 1 and 2 have
been falsely representing before the Income-Tax department, inter alia, that a
new deed of partnership had been executed on 15.1.1979 to be effective from
1.1.1979 in which the plaintiff has no interest. The Income-Tax Officer passed
an order on 26th
December 1981 on the
basis of the false allegations made by the defendants. The plaintiff has
challenged the aforementioned partnership deed of 1979. In paragraph 16 of the
plaint the amount of profit from the business has been described as
"huge". In the prayer portion of the plaint the plaintiff prayed for
declaring the partnership deed of 1979 as illegal and void and for passing a
decree for dissolution of the partnership firm and for accounts. The valuation
of the suit was put as Rs.150 being the sum of Rs.50 for declaration, Rs. 50
for rendition of accounts and another sum of Rs. 50 for profit to the share of
the plaintiff arising out of the business. Court fee was accordingly paid.
2. The
defendants no. 1 and 2, besides denying the plaint allegations made by the
plaintiff, challenged the valuation given by the plaintiff as grossly
undervalued and arbitrary. The issues relating to the correct valuation and
pecuniary jurisdiction of the court to enter- 510 tain the suit were taken up
as preliminary issues and were decided in favour of the plaintiff. The
defendants challenged the order by a civil revision application before the
Calcutta High Court which was dismised. The defendant no. 2 has now come to
this Court against the High Court's order. Special leave is granted.
3. Mr.
Kacker, the learned counsel for the appellant, has contended that it is
manifest that relief to the tune of lacs of rupees has been claimed by the
plaintiff in the suit. He said that the plaintiff has laid claim to a sum of
Rs.1,26,796.72 besides another sum of over Rs.84,000 as his share in the profit
for a particular period by reference to the proceeding of the Income-Tax
department mentioned in paragraph 11 of the plaint, and it is, therefore,
preposterous on his part to suggest in paragraph 19 of the plaint that it could
be tentatively valued at Rs.50 only.
According
to the defence case which is challenged as incorrect by the plaintiff, the
plaintiff requested for and was allowed a larger share 'in the well established
and reputed business of auctioneer known as "Russell Exchange" and
its assets and goodwill as well as the amount lying in the Habib Bank, Karachi
Branch, solely and absolutely'. The "Russell Exchange" building is a
very valuable property near Park Street in
the city of Calcutta. A copy of the Profit and Loss
Account for the calendar year 1979 attached by the plaintiff to the additional
affidavit filed on his behalf before this Court mentions figures in lacs.
4. Mr.
Arun Prakash Chatterjee, the learned counsel for the plaintiff-respondent no.
1, has argued that the suit is governed for the purpose of court fees by s.
7(iv)(f) of the Court Fees Act, and the plaintiff has the absolute right to put
on the plaint any value he wishes to and the court has no jurisdiction to
examine the matter. In other words, it is the sweet-will of the plaintiff to
choose any figure he likes and thus decide finally the court which shall have
jurisdiction to entertain the suit without reference to the subject matter of
the litigation, the nature and extent of the relief claimed or any other
factor. He has relied upon the decision of this Court in Smt. Tara Devi v. Sri Thakur
Radha Krishna Maharaj, [1987] 4 SCC 69, and Meenakshisundaram Chettiar v. Venkatachalam
Chettiar, [1979] 3 SCR 385. Reference was also made to Krishnaji Hari v.
Gopal Narayan,
AIR 1936 Bombay 166 and Ishwarappa v. Dhanji, AIR
1932 Bombay 111. Mr. Chatterjee claimed that
the different High Courts in the country have consistently confirmed this right
of the plaintiff and he has not discovered any decision to the contrary. 511
5. We
are afraid, the interpretation put by the learned counsel on the decisions of
this Court is not correct and cannot be accepted. None of the two cited
judgments relied upon by Mr. Chatterjee helps him. It is true that in a suit
for accounts the plaintiff is not obliged to state the exact amount which would
result after taking all the accounts and he may, therefore, put a tentative
valuation upon the suit, but he is not permitted to choose an unreasonable and
arbitrary figure for that purpose. At page 392 of the judgment in Meenakshisundaram
Chettiar v. Venkatachalam Chettiar, (supra) this Court while taking note of the
plaintiff's right to give a tentative valuation on the suit, observed:
"The
plaintiff cannot arbitrarily and deliberately under-value the relief." In Smt.
Tara Devi v. Sri Thakur Radha Krishna Maharaj, [1987] 4 SCC 69, the view was
reiterated thus at page 70:
".....
The plaintiff however, has not been given the absolute right or option to place
any valuation whatever on such relief and where the plaintiff manifestly and
deliberately under- estimates the relief the court is entitled to examine the
correctness of the valuation given by the plaintiff and to revise the same if
it is patently arbitrary or unreasonable ....."
6. So
far as the opinion of the High Courts is concerned, it is not uniform. The
argument, "that the plaintiff can give an arbitrary valuation in the
plaint, and that the court is bound to accept that" made on behalf of the
plaintiff before the Allahabad High Court in Aizaz Ahmad v. Nazirul Hasan, AIR
1935 Allahabad 849, was rejected, after observing that there was some authority
for the extreme view as urged in two Calcutta decisions but later a different
view was taken by the said Court as also by the Allahabad Court. In Attar Singh
v. Manohar Singh, ILR (1947) Nagpur 933, the plaintiff non-applicant before the
High Court filed a suit for dissolution of partnership and accounts valuing at
Rs.150 as has been done in the case before us. The defendant's objection to the
valuation was rejected by the trial court "on the ground that the court
was powerless to challenge the valuation put by the plaintiff on the relief
claimed in the suit." The Full Bench decision in Mata Ram v. Daulat, ILR
(1938) Nagpur 588 (F.B.) was attempted to be distinguished on the basis that it
was a case covered by s. 7(iv)(c). of the Court Fees Act and not by s.
7(iv)(f). The 512 High Court while repelling the argument pointed out that the
principle underlying both the clauses (c) and (f) of s. 7(iv) is substantially
the same and the Full Bench decision governed the case. Accordingly it was held
that when the valuation put by the plaintiff appears to be arbitrary and
unreasonable the court may reject it and leave the plaintiff to correct the
valuation or have the suit rejected. Similar was the view of the Patna High
Court in suits covered by s. 7(iv)(c) in Salahuddinhyder v. Dhanoolal, [1945]
ILR XXIV Patna 334, and Shama Pershad Shahi v. Sheopershad Singh XLI, I.C. 95 (Patna). In Gouri Lal and others v. Raja Babu,
AIR 1929 Patna 626, the respondent filed a suit praying for accounts from
appellant no. 1. Rejecting his claim to put any valuation under s. 7(iv)(f) of
the Court Fees Act the High Court observed that when a plaintiff is required to
place the valuation on his claim he must state a valuation which need only be
approximately correct but qualified it by saying that, "it must not be
arbitrary or manifestly inadequate."
7. It
is true that in a suit for accounts the correct amount payable by one party to
the other can be ascertained only when the accounts are examined and it is not
possible to give an accurate valuation of the claim at the inception of the
suit. The plaintiff is, therefore, allowed to give his own tentative valuation.
Ordinarily the Court shall not examine the correctness of the valuation chosen,
but the plaintiff cannot act arbitrarily in this matter. If a plaintiff chooses
whimsically a ridiculous figure it is tantamount to not exercising his right in
this regard. In such a case it is not only open to the Court but its duty to
reject such a valuation. The cases of some of the High Courts which have taken
a different view must be held to be incorrectly decided.
8. The
learned counsel for the parties have placed before us the materials on the
record at considerable length and we do not have any hesitation in holding that
the valuation put by the plaintiff (respondent before us) on the plaint is
arbitrary and unacceptable. We, however, do not propose to examine the matter
further and remit this question to be reconsidered by the trial court. While
examining the issue it will be open to the trial court to take into
consideration the statement in the plaint that the plaintiff has been ousted
from the partnership business. If the court comes to the conclusion that the
tentative valuation of the suit would be beyond its pecuniary jurisdiction, it
shall pass an appropriate order under Order VII of the Code of Civil Procedure.
The appeal is accordingly allowed with costs payable by the plaintiff
respondent.
G.N. Appeal
allowed.
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