Appeal No 105 of 1950
Appeal from the Judgment and Order dated March 22 1945 of the Court of the Judicial Commissioner Ajmer Merwara Ajmer Davies J C in Civil First Appeal No 16 of 1944 arising out of the Judgment and Decree dated March 13 1944 of the Court of the Judge Small Causes Ajmer and Additional District Judge Ajmer in Civil Suit No 28 of 1942
section section Deedwania for the appellant
M C Setalvad Attorney General for India J N Sharma with him for the respondents 199 1952
November 10
The Judgment of the Court was delivered by MAHAJAN J
This is an appeal by special leave granted by the Privy Council and limited to the question of court fee viz whether the memorandum of appeal presented to the High Court court fee was payable under section 7 iv e or article 17 of Schedule II of the Court Fees Act
The question whether the memorandum of appeal was properly stamped arose in the following circumstances Edward Mills Co Ltd is a joint stock company situate in Beawar Ajmer Merwara
In accordance with the provisions of the articles of the company one Seth Gadh Mal Lodha and Rai Sahib Moti Lal respondent No 2 were its chairman and managing director respectively since 1916
Seth Gadh Mal Lodha represented his family firm of Kanwal Nain Hamir Singh while Rai Sahib Moti Lal represented the joint family firm of Champa Lal Ram Swaroop 1st July 1938 Rai Sahib Moti Lal and his firm were adjudged insolvents by the Bombay High Court
The result was that respondent No 2 had to vacate the office of managing director and the members of his firm also became ineligibleforit
By a resolution of the board of direetors passed 18th July 1938 Gadh Mal Lodha was appointed to take the place of Rai Sahib Moti Lal as managing director
Gadh Mal Lodha died llth January 1942 and the board of directors then appointed Seth Sobhagmal Lodha to act as chairman as well as managing director till the appointment was made by the company
An extraordinary meeting of the company was called for the 8th February 1945 for the election of the chairman
At this meeting conflict rose between the two groups represented by Sobhagmal Lodha and Moti Lal
The chairman therefore dissolved the meeting but the supporters of Moti Lal continued to hold it and passed a resolution appointing him as the sole agent and chairman for a period of twenty years a remuneration equal to ten per cent of the profits of the company It is this 200 resolution of the 8th February 1942 which has led to the present dispute
Seth Sobhagmal in the situation that arose approached the District Judge of Ajmer with the prayer that a general meeting of the company may be held under the supervision of the court
This request was allowed 11th February 1942 and the court ordered that the meeting be held 12th February 1942 under the chairmanship of Seth Sobhagmal
Respondent No 2 being aggrieved by this order filed an ap plication in revision in the Court of the judicial Commissioner impugning the order
The learned Judicial Commissioner allowed the revision and directed that the resolution of the 8th February 1942 should be acted upon
Having failed to get redress in the summary proceedings the appellant then filed the suit out of which this appeal arises for quashing the resolution of the 8th February 1942
In the plaint he asked for the following relies 1
That it be declared that the appointment of defendant No 2 is illegal invalid and ultra vires and that he has no right to act as chairman managing director etc
of defendant No 1 2
That a receiver be appointed to take charge of the management of the company until a properly qualified chairman managing director etc
are duly appointed as required by the memorandum and articles of the company
The plaint bore a court fee stamp of Rs 10 only but the objection of the respondents that court fee was payable relief No 2 the appellants paid ad valorem fee Rs 51000 which was the valuation of the suit for purposes of jurisdiction
The Additional District Judge dismissed the suit the preliminary ground that it was not maintainable as it related to the internal management of the company and that the appellants had no right to bring it without impleading the directors who were necessary parties to it
201 Aggrieved by this decision of the trials Judge the appellants preferred an appeal to the Court of the Judicial Commissioner Ajmer Merwara at Ajmer
The memorandum of appeal was Stamped with a courtfee stamp of Rs 1 0 and it was expressly stated therein that relief No 2 of the plaint was given up
An objection was raised regarding the amount of courtfee paid the memorandum of appeal
The Judicial Commissioner ordered that proper court fees be paid thereon in a month
In this order no reasons were given for this decision
The additional fee demanded was not paid and the Judicial Commissioner dismissed the appeal with costs 22nd March 1945
An application was made for leave to appeal to the Privy Council against this order but it was refused
In the order refusing leave it was said as follows  appeal to this court the memorandum was again stamped with a ten rupee stamp only and the respondents therefore objected
It having been conceded by plaintiffs earlier that the relief for the receivership was consequential to the relief for the declaration the appellants were directed to pay the same stamp as had been paid in the trial Court
They objected stating that they had expunged from their memorandum of appeal the request that the court should appoint a receiver and that they were not therefore liable to pay the same amount this a notice was issued and counsel were beard
It being clearly set out in section 42 of the Specific Relief Act that no court shall grarant a declaration only where the plaintiff being able to seek further relief than a mere declaration of title omits to do so the appellants were directed to pay as earlier ordered the same amount as bad ultimately been paid the plaint
They had earlier sought a consequential relief and the court was therefore entirelv unable to hold that the plaintiffs were unable to seek a further relief they having sought the relief in the lower court and it having been refused to them
The amount of the stamp was not paid and the appeal was therefore dis missed with costs
 202 The reasons for demanding additional court fee though not mentioned in the original order are stated in this order
The question for determination in this appeal is whether the order of the Judicial Commissioner demanding additional court fee can be sustained in law
A memorandum of appeal as provided in article 1 of Schedule I of the Court Fees Act has to be stamped according to the value of the subject matter in dispute in appeal in other words the relief claimed in the memorandum of appeal determines the value of the appeal for purposes of court fee
The only relief claimed in the memorandum of appeal was the first one mentioned in the plaint
This relief being purely of a declaratory character the memorandum of appeal was properly stamped under article 17 of Schedule II It is always open to the appellant in appeal to give up a portion of his claim and to restrict it
It is further open to him unless the relief is of such a nature that it cannot be split up to relinquish a part of the claim and to bring it within the amount of court fee already paid Brahnmnandam vs Secretary of State for India1 Ram Prasad vs Bhiman2 Karam Chand vs Jullundur Bank Ltd1 Neelachalam vs Nara singha Das4 Sah Bamehand vs Pannalal5 Chuni Lal vs Sheo Charanlat Lalman1
The plaintiffs in express terms relinquished the second reliefthey had claimed in the plaint in their memorandum of appeal
For the purpose of deciding whether the memorandum of appeal was properly stamped according to the subjectmatter of the appeal it was not open to the Judicial Commissioner to canvass the question whether the suit with the second prayer eliminated from it fell within the mischief of the proviso to section 42 of the Specific Relief Act
That was a question which related to the merits of the appeal and did not concern its proper institution this ground therefore the Judicial Commissioner had no jurisdiction to demand I Mad 48 2 All 151
3 AIR 1927 Leh 543
4 AR 5 AIR 1929 All
6 All
203 additional fee from the plaintiffs and the appeal could not be dismissed for failure to meet it
We are thus of the opinion that the order demanding additional court fee the memorandum of appeal as it stood  that is minus the second prayer was erroneous and we hold that the memorandum of appeal was properly stamped as the subject matter of the appeal was purely of a declaratory character
Mr Setalvad for the respondents contended that the first relief claimed in the plaint and which was the subject matter of the appeal included within it consequential relief and was not purely declaratory in nature and therefore the Judicial Commissioner was right in demanding additional court fee the value of the consequential relief
It was said that the words that respondent No 2 had no right to act as chairman and managing director amounted to a claim for consequential relief
We are unable to agree
The claim contained in the first relief of the plaint is to the effect that it be declared that defendant No 2 has no right to act as chairman an managing director because of his appointment being illegal invalid and ultra vires
The declaration claimed is in negative form that defendant No 2 has no right to act as chairman and managing director
No claim for a consequential relief can be read within this prayer
The words that defendant 2 has no right to act as chairman    are mere repetition and reiteration of what is contained in the opening sentence of the paragraph
This contention of Mr Setalvad therefore cannot be sustained
It was next contended that in view of the provisions of section 12 of the Court Fees Act it should be held that the decision of the Judicial Commissioner  was final and could not be challenged in appeal
Section 12 of the Court Fees Act enacts as follows Every question relating to Situation for the purpose of determining the amount of any fee chargeable under this chapter a plaint or memorandumu 204 of appeal shall be decided by the court in which such plaint or memorandum as the case may be is filed and such decision shall be final as between the parties to the suit
 The provisions of this section have to be read and construed keeping in view the provisions of the Code of Civil Procedure
Order VII Rule 11 Civil Procedure Code provides as follows The plaint shall be rejected b where the relief claimed is undervalued and the plaintiff being required by the court to correct the valuation within a time to be fixed by the court fails to do so d where the relief claimed is properly valued but the plaint is written upon paper insufficiently stamped and the plaintiff being required by the court to supply the requisite stamp paper within a time to be fixed by the court fails to do so
 An order rejecting a plaint is a decree as defined in section 2 sub section ii and is appealable as such
There is an apparent conflict between the provisions of the Code of Civil Procedure and the provisions of section 12 which make the order relating to valuation final and efforts to reconcile the provisions of the Court Fees Act and the Code have resulted in some divergence of judicial opinion the construction of the section
In a number of decisions the Calcutta High Court took the view that the finality declared by section 12 of the Court Fees Act had been taken away by the relevant provisions of the Code as the order rejecting a plaint was appealable as a decree no matter whether the dispute related to the category under which the same falls for purposes of court fee or only to valuation pure and simple under a particular category Vide In re Omrao Mirza vs Mary Jones and Tara Prasanna Chongdar vs Nrisingha Moorari Pal1
This extreme view has not been maintained in later decisions and it has been held that the finality declared by section 12 is limited only to the question 2 Cal
205 of valuation pure and simple and does not relate to the category under which a certain suit falls Tariman Khatun vs Secretary o State for India in Council1
The Allahabad High Court in its earlier decisions took the extreme view Vide Muhammad Sadik vs Muhammad Jan2
Later that court veered round to the view that the finality declared by section 12 only related to matters of appraisement
The High Court of Lahore has placed a similar construction the meaning of the expression valuation in section 12 and has held that the finality attaches only to a decision which concerns valuation simpliciter and no finality attaches when a court decides a question whether a case falls within one or other category of the cases mentioned in the different sections and schedule of the Court Fees Act Vide Mahna Singh vs Bahadur Singh1 Mst
Parmeshri vs PannaLal1
Thisviewhasconsistentlybeenheldin thatcourt
The Madras High Court took the same view in Lakshmi Amma vs Janamajayam Nambiar5 Annamalai Chetty V Cloete6 and Narasimhalu Chetty vs Bamayya Naidu7
Mr Setalvad drew our attention to the recent Full Bench decision of that court in Madana Mohana Naiko vs Krupasindhu Naiko1
That case however concerned the second part of section 12 and was not concerned directly with the construction to be placed the first part of the section
It however contains certain observations indicating that in the opinion of the judges there was no ground for this restricted construction of the word  valuation  in section 12 and that the finality declared bysection 12 attached not only to valuation pure and simple but also attached to decisions relating to category under which a suit or appeal falls for purposes of court fee
These obiter observations however cannot be said to overrule the earlier Full Beach decision of that court in Lakshmi Amma vs Janamajayam Nambiar5
In a 1 IIR1940 2 1889 ILR II All 91 FB 3 4 A IR 27 5  FB 6 Mad 204
7 AIR 1942 Mad
8 AIR 1937 Mad 81 206 later decision in Narasimhalu Chetty vs Bamayya Naidu1 the decision of the Full Bench was explained as not in any way overruling the decision in Lakshmi Amma vs Janamajayam Nambiar2
All recent decisions of the Bombay High Court have taken the same view Vide Dada vs Nagesh3 Krishnaji Bari Dhandhere vs Gopal Narain Dhandhere4
Mr Setalvad drew our attention to an earlier decision of the Bombay High Court in Vithal Krishna vs Balakrishna Janardan5
In that case the court undoubtedly held that no appeal lay and the finality declared by section 12 was comprehensive enough to include all questions whether relating to category or valuation pure and simple
It was however held that the High Court could correct an erroneous decision in the exercise of its revisional powers
Thus the finality declared by section 12 was destroyed by the exercise of powers of appeal under the guise of exercising revisional jurisdiction
In Patna and Oudh the game view has been taken as in Lahore
Vide Chandramoni Koer vs Basdeo Narain Singh 6 Gumani vs Banwari7
It thus appears that the consensus of judicial opinion is against the construction suggested by Mr Setalvad
We think that the construction given to the language in section 12 in these decisions is right and our reasons for saying so are these The difference in the phraseology employed in sections 5 and 12 of the Court Fees Act indicates that the scope of section 12 is narrower than that of section 5
Section 5 which declares decisions questions of court fee whenever they arise in the chartered High Courts as final makes a decision as to the necessity of paying a fee or the amount thereof final
Whereas section 12 makes a decision every question relating to valuation for the purpose of determining the amount of any fee payable under chapter 3 a plaint or memorandum of appeal final
Had section 12 been drafted somewhat as follows i AIR 1942 Mad 5025 1886 ILR lo Bom
610 FB 2 FB6 3 Bom
4867 4 AIR 1936 Bom
207 If any dispute arises as to the amount of any fee chargeable under this chapter a plaint or memorandum of appeal it shall be decided by the court in which such plaint or memorandum is filed and such decision shall be final as between the parties then the construction contended for by Mr Setalvad might have been upheld
When the two sections in the same Act relating to the same subject matter have been drafted in different language it is not unreasonable to infer that they were enacted with a different intention and that in one case the intention was to give finality to all decisions of the taxing officer or the taxing judge as the case may be while in the other case it was only intended to give finality to questions of fact that are decided by a court but not to questions of law
Whether a case falls under one particular section of the Act or another is a pure question of law and does not directly determine the valuation of the suit for purposes of court fee
The question of determination of valuation or appraisement only arises after it is settled in what class or category it falls
It has been argued in some decisions that it is absolutely necessary to decide the category in which a case falls before assessing its value and therefore the determination of the question of category is necessarily involved in the determination of the valuation of the suit for purposes of courtfee
This argument though plausible does not seem sound
The actual assessment of the value depends either arithmetical calculations or upon a valuation by an expert and the evidence led in the case while the decision of the question of category is one of law and may well be said to be an independent question antecedent but not relating to valuation
The expression  valuation interpreted in its ordinary meaning Of appraisement cannot be said to necessarily include within its ambit the question of category which is a matter of law
The construction placed this section by a long course of decisions is one which 208 reconciles the provisions of the Court Fees Act with that of the Code of Civil Procedure and does not make those provisions nugatory and is therefore more acceptable than the other constructions which would make the provisions of either one or the other of these statutes nugatory
Perhaps it may be possible to reconcile the provisions of the two statutes by holding that the finality declared by section 12 of the Court Fees Act means that the parties cannot impugn such a decision by preferring an appeal but that it does not confer such decisions a complete immunity from examination in a higher court
In other words section 12 when it says that such a decision shall be final between the parties only makes the decision of the court a question of court fee nonap pealable and places it the same footing as other interlocutory nod appealable orders under the Code and it does no more than that
If a decision under section 12 is reached by assuming jurisdiction which the court does not possess or without observing the formalities which are prescribed for reaching such a decision the order obviously would be revisable by the High Court in the exercise of revisional powers
Similarly when a party thinking that a decision under section 12 is palpably wrong takes the risk of his plaint being rejected or suit dismissed and then appeals from the order rejecting the plaint or from the decree dismissing the suit but not from the decision the question of court fee then it is open to him to challenge the interlocutory order even the question of court fee made in the suit or apppal
The word finality construed in the limited sense in which it is often used in statutes means that no appeal lies from an order of this character as such and it means no more than that
Conceding for the sake of argument but not admitting that Mr Setalvad is right in his contention that section 12 is comprehensive enough to include within its ambit all questions relating to court fee whether they involve a decision as to question of category or as to valuation simpliciter in the present 209 case the Judicial Commissioner decided none of these questions and his decision cannot be said to be one falling within the ambit of section 12
All that the Judicial Commissioner decided was that as the suit could not be maintained without asking for relief No 2 the same fee was payable the memorandum of appeal as the plaint
In substance the court decided an issue regarding the maintainability of the appeal without first deciding whether the appeal had been properly instituted in that court
No finality can attach to such a decision by the provisions of section 12 as in reality it decides no question within the ambit of section 12 of the Court Fees Act
For the reasons given above the second objection raised by Mr Setalvad that no appeal lies from the order of the Judicial Commissioner by special leave is without force and is overruled
The result is that the appeal is allowed the decision of the Judicial Commissioner dismissing the appeal is set aside and the case remanded to him for decision in accordance with law the basis that the memorandum of appeal presented to him was properly stamped
The appellants  costs of this appeal will be costs in the appeal in the Court of the Judicial Commissioner
Appeal allowed


Summary:
The respondent had agreed to transport coal from the appel lant s colliery to the railway station
The appellant had to keep the road in repair and arrange for petrol and had to make the payment for the actual coal despatched by the 10th of the following month
The appellant complained that he was suffering loss as the respondent had slowed down the work and the respondent complained that by not arranging for the petrol not keeping the road in repairs and not making payments of amounts due the appellant had made it impossible to fulfil the contract
The quantity of coal transported was a fact within the knowledge of the appellant and the agreement merely provided for payment of the bills by 10th of the following month without stating expressly that the presentation of bill was a condition precedent to the payment
The appellants contended that time was not of the essence of the contract and in any case the payment of the bills depended upon the presentation of bills in time and also challenged the award of the interest
Held that in commercial transactions time is ordinarily of the essence of the contract and was made so in the contract and when this important condition of the agreement was broken section 55 of the Indian Contract Act could be invoked by the aggrieved party and he was entitled to rescind the contract
In the present case by withholding the payment of the bills cl
5 of the contract was breached by the appellant
Held further that interest for a period prior to the com mencement of suit is claimable either under an agreement or usage of trade or under a statutory provision or under the Interest Act for sum certain where notice is given These 640 conditions not being satisfied and this being not a case in which Court of Equity grants interest interest was not awardable as damages
Held further that interest pendente lite being in the discretion of Court should be fixed in accordance with the circumstances and practice of the Court and should not be too high
Bengal Nagpur Railway Co Ltd vs Ruttanji Ramji 1937 LR 65 IA 66 referred to