IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA FAO No.446 of 2007 Reserved on: 11.5.2011 Decided on: 18.6.2011 Shri Tikam Ram and ors. …..Appellants. VERSUS Sh.Purshotam Ram and others …..Respondents. Coram The Hon’ble Mr. Justice Deepak Gupta, Judge. Whether approved for reporting? Yes For the Appellants: Mr.Sanjeev Kuthiala, Advocate. For the Respondents: Mr.Bhupender Gupta, Sr.Advocate with Mr.Onkar Jairath, counsel for respondents. Deepak Gupta,Judge The appellant No.2-plaintiff No.1 is a deity, Devta Trijugi Narain Diar, which filed a suit through its next friend Jai Chand and the appellants No.1 and 3 Tikam Ram and Bhawani Singh, i.e., plaintiff Nos.2 and 3 were the votaries, haryans and worshipper of the plaintiff No.1. In view of the questions involved in this …2… appeal, it is not necessary to give detailed facts of the case. Briefly stated the relevant facts are that according to the plaintiffs, Chune Ram was Kardar (Manager) of plaintiff No.1, deity and he, totally ignoring the interest of the deity of which he was the guardian, leased out very valuable and substantial property of the deity in perpetuity for a negligible consideration of Rs.4750/- to his sons, the defendants. The plaintiffs alleged that this deed was executed in a clandestine manner and, therefore, prayed that the plaintiff No.1 may be declared to be owner in possession of the suit land, lease deed be declared to be null and void and further the defendants be directed to hand over the possession of the suit property to the plaintiffs. The value of the suit was fixed at Rs.200/- for the relief of declaration, permanent injunction and possession. The suit was valued on the basis of the land revenue. It is however not disputed that a major portion of this land is an orchard and building has been raised on a …3… portion of the land. One of the allegations made in the suit was that the market value of the suit property is not less than Rs.80 lacs. In the written statement itself, an objection was raised that the suit has not been property valued for the purpose of court fee and jurisdiction. The learned Trial Court came to the conclusion that Chune Ram, Kardar had not acted in the interest of the minor deity and decreed the suit in favour of the plaintiffs. While deciding the issue of jurisdiction, the learned Trial Court held that the suit of the plaintiffs was properly valued and decided this issue against the defendants. The defendants filed an appeal and the learned Lower Appellate Court vide the impugned order set aside the decree and judgment of the learned Trial Court only on the ground that the suit was under-valued for the purpose of court fee and jurisdiction. According to the learned Lower Appellate Court, since the plaintiffs had claimed that the …4… valuation of the suit property was Rs.80 lacs, therefore, the learned Trial Court had no pecuniary jurisdiction to entertain and try the suit and accordingly set aside the decree and judgment of the learned Trial Court and further ordered that the plaint be returned to the plaintiffs for presentation before the competent Court, if so advised. This order is under challenge in the present appeal. I have heard Sh.Sanjeev Kuthiala, learned counsel for the appellants and Sh.Bhupender Gupta, learned Senior Advocate for the respondents. It has been contended by Sh.Sanjeev Kuthiala, Advocate that the suit has been properly valued for the purpose of court fee and jurisdiction and he submits that a stray averment made with regard to the value of the suit property could not be made the sole ground for holding that the suit was not properly valued. In the alternative, Sh.Kuthiala submits that since the suit has been decided, merely because the learned Trial Court did not have …5… pecuniary jurisdiction, is no ground to set aside its judgment and decree without showing that any prejudice has been caused to the defendants. On the other hand, Sh.Bhupender Gupta, learned Senior Advocate appearing on behalf of the respondents submits that the suit was not properly valued and had to be valued on the market value of the property. He further submits that once the learned Trial Court had no pecuniary jurisdiction to decide the matter, it had no inherit jurisdiction to decide the same and since the defendants had raised this objection at the time of initial hearing of the suit, the Court was bound to decide the issue and since the learned Trial Court lacked jurisdiction, the learned Lower Appellate Court was fully justified in ordering the return of the plaint. Firstly, I shall take up for consideration the question as to whether the suit was properly valued for the purpose of court fee and jurisdiction or not. Admittedly, …6… the plaintiffs have stated in the plaint that the value of the suit property is Rs.70-80 lacs. The defendants however contended that the value of the suit property in the year 1994 was not Rs.70-80 lacs but was Rs.4750/-. They further submitted that they have constructed building and raised orchards on the suit land and according to them, the value of the same was Rs.6,80,000/- and, therefore, prayed that in case the suit is decreed, the plaintiffs be directed to make payment of Rs.6,80,000/- to the defendants. However, while replying to para relating to the valuation and court fees, it was submitted that the suit is not properly valued for the purpose of court fee and jurisdiction which is more than Rs.80 lacs and, therefore, proper court fee be affixed on the plaint. As per Section 7(v)(e) of the H.P Courts Fee Act, when the suit property is land of houses and gardens, it is the market value of the property which has to be taken into consideration. …7… In Devta Satya Narayan and another Vs. Lal Chand and others, 2006(3) SLC, 92, this Court held that where the relief sought is with reference to the land, house and garden then the suit has to be valued on the basis of the market value of the property. Therefore, the suit for the purpose of court fee and jurisdiction had to be valued on the basis of the market value. To this extent, the learned Lower Appellate Court was right in holding that the suit should not have been valued at less than the market value. The next question which arises is what is the market value of the suit property? According to the defendants and the learned lower appellate Court, since the plaintiffs have stated that the market value of the property is more than Rs.80 lacs, only these allegations have to be taken into consideration for this purpose. Reliance has been placed in this regard on the judgment of the Apex Court in Neelavathi and others Vs. N.Natarajan and others, AIR 1980 SC 691. In my view, this …8… judgment of the Apex Court, when read as a whole, does not in any way indicate that a stray allegation made in the plaint can be made the entire basis for deciding the valuation of the suit. The market value had to be decided either by the learned Trial Court or by the learned Lower Appellate Court. None of the Courts below, on the basis of the evidence led before it, have given any finding as to what is the market value of the suit property. It is the market value of the property as on the date of the institution of the suit which in the present case was 21.11.2002 which is relevant for the purpose of deciding the issue. A stray averment in the plaint cannot be made the sole ground for deciding what was the market value of the property. Both sides were not ad idem on this issue. They had taken diametrically opposite stand and one of the issues framed by the learned Trial Court was: “Whether the suit is not properly valued for the purpose of court fee and …9… jurisdiction of this court, if so the proper court fee and its effect? OPD” The onus to lead evidence on this issue was on the defendants. Virtually no evidence was led on this issue and there is no material on record to show what exactly was the market value of the suit property as on 21.11.2002, the date of institution of the suit. However, as already observed above, the method of valuation followed by the plaintiffs was not the correct method. In my view, when the onus to prove this issue was on the defendants, the defendants should have led evidence to show what was the valuation of the suit property. In case the suit was of higher value, all that would happen would be that more court fees would be paid. This is a matter between the State and the plaintiffs and has not in any manner affected the rights of the parties. No prejudice is shown to have occurred nor is it shown how there has been consequent failure of justice. In such …10… eventuality, the forum of the suit or the appeal will not in any manner affect the rights of the parties. As far as the defendants are concerned, while appearing in the witness box, they have stated that after the lease deed, they have raised 1½ storeyed house and planted orchard on a portion of the land and have spent about Rs.7-8 lacs on the same. Thus, no evidence was led on the issue on what was the valuation of the property but even if the statement of the defendants is accepted to be correct then the valuation would be about Rs.8 lacs. The only cross-examination to the plaintiffs in this regard is that the defendants have raised a house value of which is about 7-8 lacs. The plaintiffs were never confronted with what was stated in the plaint, pleadings cannot take the place of evidence once parties have been put to trial. Keeping in view the statement of the defendants themselves, the value of the suit property is fixed at Rs.8 lacs. …11… On 8th April, 2009, this Court superseded its earlier notification and vested all the Civil Judges (Junior Division) with jurisdiction to hear disputes in all original Civil Suits value of which does not exceed Rs.5 lacs. The Civil Judges (Senior Division) could hear matters, pecuniary jurisdiction of which is Rs.10 lacs and above that the jurisdiction is of the District Judges upto Rs.15 lacs and beyond that, all original suits have to be filed in the High Court. Appeals upto the value of Rs.10 lacs lay to the District Judge. In my view, even if there may have been wrong valuation, the matter could still have been heard at Kullu by a Civil Judge (Senior Division) at the most. I have come to the opinion that the suit was not properly valued for the purpose of court fee and jurisdiction and for the purpose of second contention, it may be presumed that the value of the suit property was more than Rs.5 lacs and, therefore, the Court of the Civil Judge (Junior Division) did not have jurisdiction to decide the suit. Will this mean that the …12… judgment of the learned Trial Court must be set aside only on the ground that it did not have pecuniary jurisdiction to decide the matter? To appreciate the rival contentions of the parties, it would be appropriate to refer to Section 21 of the CPC and Section 11 of the Suits Valuation Act which read as follows:- Civil Procedure Code “21.Objections to jurisdiction.- [(1)] No objection as to the place of suing shall be allowed by any Appellate or Revisional Court unless such objection was taken in the Court of first instance at the earliest possible opportunity and in all cases where issues are settled, at or before such settlement, and unless there has been a consequent failure of justice. (2) No objection as to the competence of a Court with reference to the pecuniary limits of its jurisdiction shall be allowed by any Appellate or Revisional Court unless such objection was taken in the Court of first instance at the earliest possible opportunity, and, in all cases where issues are settled, at or before such settlement, and unless there has been a consequent failure of justice. (3) No objection as to the competence of the executing Court with reference to the local limits of its jurisdiction shall be allowed by any Appellate or Revisional …13… Court unless such objection was taken in the executing Court at the earliest possible opportunity, and unless there has been a consequent failure of justice.]” Suits Valuation Act “11. Procedure where objection is taken on appeal on revision that a suit or appeal was not properly valued for jurisdictional purposes.- (1) Notwithstanding anything in [Section 578 of the Code of Civil Procedure (14 of 1882)] and objection that by reason of the over-valuation or under-valuation of suit or appeal a Court of first instance or lower Appellate Court which had no jurisdiction with respect to the suit or appeal exercise jurisdiction with respect thereto shall not be entertained by an Appellate Court unless.- (a) the objection was taken in the Court of first instance at or before the hearing at which issues were first framed and recorded, or in the lower Appellate Court in memorandum of appeal to that Court, or (b) the Appellate Court is satisfied, for reasons to be recorded by it in writing, that the suit or appeal was over-valued or under-valued, and that the over-valuation or under- valuation thereof has prejudicially affected the disposal of the suit or appeal on its merits. (2) If the objection was taken in the manner mentioned in clause (a) of sub- …14… section (1), but the Appellate Court is not satisfied as to both the matters mentioned in clause (b) of that sub-section and has before it the materials necessary for the determination of the other grounds of appeal to itself, it shall dispose of the appeals as if there had been no defect of jurisdiction in the Court of first instance or lower Appellate Court. (3) If the objection was taken in that manner and the Appellate Court is satisfied as to both those matters and has not those materials before it, it shall proceed to deal with the appeal under the rules applicable to the Court with respect to the hearing of appeals; but if it remands the suits or appeal, or frames and refers issues for trial, or requires additional evidence to be taken, it shall direct its order to a Court competent to entertain the suit or appeal. (4) The provisions of the section with respect to an Appellate Court shall, so far as they can be made applicable, apply to a Court exercising revisional jurisdiction under [Section 622 of the Code of Civil Procedure (14 of 1882)] or other enactment for the time being in force. (5) This section shall come into force on the first day of July, 1887.” A number of judgments have been cited by both the sides. …15… The Apex Court in Kiran Singh and others Vs. Chaman Paswan and others, AIR 1954 (41), SC 340 was dealing with a case for recovery of possession of more than 12 acres of land. The suit was dismissed. The plaintiff thereafter filed an appeal in the Court of the District Judge who also dismissed the appeal. In the second appeal, the plaintiffs for the first time raised an objection that the suit itself had not been properly valued for the purpose of court fee and jurisdiction and prayed that their appeal should be treated as a first appeal against the order of the learned Trial Court. The High Court rejected the plea of the plaintiffs on the ground that the defendants could succeed only when they established prejudice on the merits of the case. An appeal was filed before the Apex Court and it was urged that the decree passed by the District Court was a nullity because in an original suit having valuation of Rs.9980/-, appeal would lie to the High Court alone and not to the District Judge. The Apex Court held as follows:- …16… “It is a fundamental principle well established that a decree passed by a Court without jurisdiction is a nullity & that its invalidity could be set up whenever and wherever it is sought to be enforced or relied upon, even at the stage of execution and even in collateral proceedings. A defect of jurisdiction, whether it is pecuniary or territorial, or whether it is in respect of the subject-matter of the action, strikes at the very authority of the court to pass any decree, and such a defect cannot be cured even by consent of parties.” Relying upon these observations, Sh.Bhupender Gupta, learned senior counsel for the respondents submits that the decree and judgment of the learned Trial Court is a nullity and the learned District Judge was justified in ordering the return of the plaint. This argument cannot be accepted to be correct because it was after making these observations that the Apex Court dealt with Section 11 of the Suits Valuation Act. Dealing with the import of the word prejudice occurring in Section 11, the Apex Court held as follows:- …17… “The language of Section 11 of the Suits Valuation Act is plainly against such a view. It provides that over-valuation or under-valuation must have prejudicially affected the disposal of the case on the merits. The prejudice on the merits must be directly attributable to over-valuation or under-valuation and an error in a finding of fact reached on a consideration of the evidence cannot possibly be said to have been caused by over-valuation or under- valuation. Mere errors in the conclusions on the points for determination would therefore be clearly precluded by the language of the section. “ It is also important to note that the aforesaid decision of the Apex Court was rendered much before the amendment of Section 21 of the Code of Civil Procedure. Vide Code of Civil Procedure Amendment Act, 1976, sub-sections 2 and 3 were introduced in Section 21 and sub-section 2 clearly provides that no objection as to the competence of a Court with reference to the pecuniary limits of its jurisdiction shall be allowed by any Appellate Court unless such objection was taken in the Court of the first instance at the earliest possible …18… opportunity before settlement of issues and unless there has been a consequent failure of justice. Sub-section 2 clearly envisages that not only should the objections have been taken at the first instance but there should have been consequent failure of justice. If there is no failure of justice then the Court would not entertain the objection as to the competence of the Court with reference to its pecuniary limits. This aspect of the matter has not at all been considered by the lower Appellate Court. In Sat Paul and another Vs. Jai Bhan Ananta Saini, AIR 1973 Punjab and Haryana 58 decided prior to the amendment to section 21 and only taking into consideration Section 11 of the Suits Valuation Act, a learned Single Judge of the Punjab and Haryana High Court held that without showing that any prejudice has been caused, the Appellate Court could not set aside the judgment only on the ground of the suit being improperly valued. …19… In Harshad Chiman Lal Modi Vs. DLF Universal Ltd. and another 2005 (7) SCC 791 the Apex Court held as follows:- “We are unable to uphold the contention. The jurisdiction of a court may be classified into several categories. The important categories are (i) territorial or local jurisdiction; (ii) pecuniary jurisdiction; and (iii) jurisdiction over the subject-matter. So far as territorial and pecuniary jurisdictions are concerned, objection to such jurisdiction has to be taken at the earliest possible opportunity and in any case at or before settlement of issues. The law is well settled on the point that if such objection is not taken at the earliest, it cannot be allowed to be taken at a subsequent stage. Jurisdiction as to subject-matter, however, is totally distinct and stands on a different footing. Where a court has no jurisdiction over the subject- matter of the suit by reason of any limitation imposed by statute, charter or commission, it cannot take up the cause or matter. An order passed by a Court having no jurisdiction is a nullity.” The Apex Court further went on to hold that the Courts at Delhi did not have jurisdiction under Section 16 to decide the issue …20… and, therefore, lacked inherent jurisdiction to decide the matter. The then Hon’ble Chief Justice of this Court in Ajay Singh Vs. Tikka Brijendra Singh and others, 2006(2) SLC 394 considered this question in detail and after noting the provisions of Sections 21 and 99 of the Civil Procedure Code and Section 11 of the Suits Valuation Act held as follows:- “A combined reading of the aforesaid three provisions of law clearly suggests, first and foremost that no objection as to the competence of a Court with reference to its pecuniary limits of jurisdiction shall be allowed unless there has been a consequential failure of justice, and secondly, that no decree shall be reversed or substantially varied etc. on account of any error etc. including an error of jurisdiction which does not affect the merits of the case and thirdly, no objection about the jurisdiction of a Court for over-valuation or under-valuation of a suit etc. shall be entertained by an Appellate Court unless, apart from the objection having been taken in the Court of first instance etc., the Appeal Court is satisfied for reasons to be recorded in writing that such over-valuation or under-valuation has prejudicially …21… affected the disposal of the suit by the trial Court.” In Hasham Abbas Sayyad Vs. Usman Abbas Sayyad and others, 2007 (2) SCC 355, the Apex Court held as follows:- “24. We may, however, hasten to add that a distinction must be made between a decree passed by a Court which has no territorial or pecuniary jurisdiction in the light of Section 21 of the Code of Civil Procedure, and a decree passed by a Court having no jurisdiction in regard to the subject-matter of the suit. Whereas in the former case, the appellate Court may not interfere with the decree unless prejudice is shown, ordinarily the second category of the cases would be interfered with.” It would be pertinent to mention that the Apex Court and this Court clearly laid down that so far as objections to the territorial and pecuniary jurisdiction are concerned, the objections must be taken at the earliest possible opportunity and order of the Court not having pecuniary jurisdiction cannot be said to be an nullity. The Court does not lack jurisdiction to decide such …22… a dispute. It only does not have the pecuniary jurisdiction to decide the dispute. Therefore if it entertains and tries the matter and decides these disputes then the learned Appellate Court cannot set aside its findings unless it comes to the conclusion that prejudice has been caused in terms of Section 11 of the Suits Valuation Act and consequent failure of justice in terms of Section 21(2) of the Code of Civil Procedure. In the present case, both parties belong to Kullu. They reside at Kullu and led evidence. No doubt, objection with regard to jurisdiction was raised at the preliminary stage itself but there is nothing on record to show that there has been any prejudice or consequent failure of justice. The Apex Court in Kiran Singh’s case supra clearly held that mere change of forum will not amount to prejudice. By amending the Code of Civil Procedure, the Legislature in its wisdom thought it fit to amend Section 21 and has now provided that the Court of Appeal will not entertain objection with regard to the competence of the Trial Court …23…