IN THE HIGH COURT OF HIMACHAL PRADESH AT SHIMLA. RFA No.244 of 1998 with C.O. No.199 of 99. Reserved on:10.12.2007 Date of Decision:February 25, 2008 Raman Dawar & Ors. …Appellants. Versus Dharam Singh ...Respondent. Coram The Hon’ble Mr. Justice Kuldip Singh,Judge Whether approved for reporting?1 Yes For the appellants : Mr K.D.Sood, Advocate. For the respondent : Mr G.D.Verma, Sr.Advocate with Mr B.C.Verma, Advocate. Kuldip Singh, Judge. Rani Dawar, original defendant, had filed this appeal against judgment and decree dated 30.6.1998 passed by learned District Judge, Shimla in Civil Suit No.142-S/1 of 1995. Dharam Singh respondent / plaintiff has filed cross objections in the appeal against the judgment, decree dated 30.6.1998. Rani Dawar has died during the pendency of the appeal and her legal representatives have been brought on record. 2. The facts, in brief, as emerge from the plaint, are that parties entered into an agreement dated 30.11.1992 Ext.P-1 for sale of land comprised in khasra numbers 220/A/1, 220/C, 220/D and 220/A 1 Whether reporters of Local Papers are allowed to see the Judgment? Yes …2… measuring 339.03 square yards situate at Station Ward, Chhota Shimla for a sale consideration of Rs.8,48,000. Dharam Singh purchaser paid a sum of Rs.1,10,000 as advance through cheque to seller Rani Dawar. The balance amount was to be paid by the purchaser to the seller on or before 31.3.1994. The seller was to arrange the demarcation of the land. As per agreement, the earnest money would stand forfeited in favour of seller in case purchaser would back out from the bargain, seller would pay double the amount of earnest money to purchaser in case she would back out from the bargain. 3. According to respondent Dharam Singh, he was ready and willing to perform his part of the contract. He made inquiries about the location, boundaries, title deeds, latest revenue entries in the revenue record from Rani Dawar and her husband several times regarding the land agreed to be sold. They were also asked to arrange proper demarcation for identifying the land but they adopted evasive attitude to answer the queries of the respondent. He had written letter dated 11.12.1993 Ext.P-2, another letter dated 21.3.1994 Ext.P-3 and also got issued notice through counsel dated 27.6.1995 Ext.P-4 to Rani Dawar. Rani Dawar through her advocate sent reply dated 5.7.1995 Ext.D-1 to the notice dated 27.6.1995 and took false defence in the reply dated 5.7.1995. The suit has been valued for the purposes of Court fee and jurisdiction at Rs.2,20,000. The respondent made prayer for passing a decree for specific performance of contract dated 30.11.1992, recovery of compensation / damages amounting to Rs.2,20,000 which is equivalent to double the amount of Rs.1,10,000 which was received by Rani Dawar. …3… 4. The suit was contested by Rani Dawar by filing written statement in which she took preliminary objections of pecuniary jurisdiction of the Court to try the suit, limitation, estoppel and lack of material particulars. On merits, it has been submitted that the agreement has become infructuous and has lapsed. The respondent Dharam Singh has violated the terms and conditions of the agreement and he has no cause of action to file the suit. Time was the essence of contract and respondent has miserably failed to adhere to the same. The respondent has set up a false case. He had verified everything before entering into the agreement. The respondent filed replication to the written statement and took the plea that the Court has jurisdiction to try the suit. The plaint has been properly valued for the purposes of Court fee and jurisdiction. The following issues were framed on the basis of the pleadings of the parties:- i) Whether the plaintiff is entitled to specific performance of the agreement dated 30.11.1992, if so its effect? OPP ii) If issue No.1 is proved, whether the plaintiff is also entitled to recover a sum of Rs.2,20,000 by way of damages from the defendant? OPP iii) Whether this Court has no jurisdiction to entertain and try the present suit, as alleged? OPD iv) Whether the suit is barred by limitation, as alleged? OPD …4… v) Whether the plaintiff is estopped by his acts from filing the present suit, if so, its effect? OPD vi) Relief. The learned District Judge decreed the suit of respondent / plaintiff for a sum of Rs.1,10,000 with proportionate cost and interest at the rate of 6% per annum from the date of suit to the date of satisfaction of decree. Hence, this appeal in which respondent / plaintiff has filed cross objections. 5. I have heard Mr.K.D.Sood, learned counsel for the appellants and Mr.G.D.Verma, learned Senior Counsel, for the respondent / plaintiff / cross objector. Mr.Sood has submitted that learned District Judge had no jurisdiction to try the suit. The value of the suit for the purposes of jurisdiction will not change on the basis of statement of the counsel of the respondent / plaintiff. The plaint was not amended and, therefore, the impugned judgment and decree having been passed by Court having no jurisdiction are not sustainable. He has also submitted that the respondent / plaintiff has violated the terms and conditions of agreement Ext.P-1 and, therefore, whatever amount he had paid to Rani Dawar under the agreement that has been forfeited. The learned District Judge has erred in decreeing the suit. Mr.Verma, learned Senior Counsel, has supported the impugned judgment and decree. He has submitted that learned District Judge has allowed interest on the lower side, the respondent / plaintiff is entitled to interest at the rate of 18% per annum. …5… 6. The respondent / plaintiff examined PW-1 K.R.Bhawani, Special Assistant, Bank of India and has proved statement of account Ext.PA of respondent for the period ending December 1992. PW-2 K.R.Kaushal, an attesting witness of agreement, has proved the agreement dated 30.11.1992 Ext.P-1. He identified his signatures as well as signatures of the parties on the photo copy of agreement Ext.P-1. In cross examination, the execution of the agreement Ext.P-1 has not been questioned. Plaintiff Dharam Singh has appeared as PW-3 and has stated that as per agreement he was to purchase 339.03 square yards land in Chhota Shimla for a consideration of Rs.8,48,000, he paid Rs.1,10,000 as earnest money. The remaining sale consideration was to be paid after the demarcation of the site, which was not done and, therefore, he did not pay the balance money. He approached Rani Dawar several times to get the demarcation of the land and also served notice Ext.P-2. He has also written letter Ext.P-3. Rani Dawar did not respond to notice Ext.P-2 and letter Ext.P-3. She rather started raising construction on the site agreed to be sold. Thereupon he served notice Ext.P-4 through advocate. He never refused to buy the plot agreed to be sold. Now, he is not willing to purchase the site and is interested only in refund of his money and award of damages. In cross examination, he has stated that Kaushal was an agent of Rani Dawar and reference in Ext.P-2 of the agent pertains to said Kaushal. He approached the agent of Rani Dawar to answer his queries but he also did not respond. He has denied that Rani Dawar was ready and willing to perform her part of the contract. He has reiterated that he is not interested to purchase the land. He has denied that 31.3.1994 was the last date for performing the …6… contract. Rani Dawar has appeared as DW-1 and has stated that she had complied with all conditions of agreement Ext.P-1. She did not receive Ext.P-2 and Ext.P-3. She has admitted that she received notice Ext.P-4 which she replied vide Ext.D-1. She is prepared to sell the suit land to plaintiff. In cross examination, she has admitted that plot is surrounded by land of other persons. She did not get the plot demarcated after the execution of agreement Ext.P-1. She has admitted that last year she started raising construction on the plot. She did not give any notice to the plaintiff that she was raising construction on the plot. She has further stated that no time for execution of the sale deed was fixed but time for payment of balance sale consideration was fixed. At the time of hearing of the suit in the Court below on 24.6.1998, Mr.Y.P.Sood, counsel for the plaintiff, made a separate statement that plaintiff withdraws the claim for specific performance of contract but presses for the refund of advance money and damages. 7. The learned District Judge in the impugned judgment has observed that no findings on Issues No.1 and 3 are required in view of the statement of Mr.Y.P.Sood, Advocate. The learned District Judge ultimately while deciding Issue No.2 has held that plaintiff is entitled to refund of earnest money and decreed the suit of the plaintiff for a sum of Rs.1,10,000 with proportionate costs and interest at the rate of 6% per annum from the date of the suit to the date of satisfaction of decree. 8. It has been urged on behalf of the appellant that the plain reading of the plaint would show that it is a suit for specific performance of the contract on the basis of agreement dated 30.11.1992 Ext.P-1 wherein sale consideration is Rs.8,48,000, therefore, value of suit for the …7… purposes of Court fee and jurisdiction is Rs.8,48,000 and not Rs.2,20,000 as stated in the plaint. The appellant / defendant has taken objection of valuation in the written statement and a specific issue No.3 to this effect has also been framed by the Court below. According to the appellant, in the present case, the learned District Judge has erred in entertaining the statement of learned counsel for the respondent for abandoning a part of claim. The learned counsel for the appellant has submitted that even if the respondent has abandoned a part of the claim that will not change the valuation of the suit unless valuation is changed through amendment. According to the appellant, on 30.6.1998, when the suit was decided, the learned District Judge had jurisdiction in all original civil suits the value of which exceeds Rs.2 lacs but does not exceed Rs.5 lacs. In the present case, apparently the jurisdiction of the suit was Rs.8,48,000, therefore, the learned District Judge had no jurisdiction to entertain and decide the suit. The learned counsel for the respondent has supported the impugned judgment and decree and has submitted that a part of the claim was abandoned by the counsel representing the respondent in the Court below by making statement on 24.6.1998 and what was left before the Court for adjudication was refund of advance money and damages i.e. Rs.2,20,000 and on the date of decision of the suit the learned District Judge had the jurisdiction to entertain and decide the suit having claim of Rs.2,20,000. 9. The question is whether in the facts and circumstances of the case amendment application was required to amend the valuation of the suit as contended on behalf of the appellant or by abandoning a part of the claim by respondent through his counsel, the learned District …8… Judge had the jurisdiction to try the suit. In Mrs.Shobha Venkat Rao Versus M.R.Mahale, AIR 1969 Bombay 370, the question was whether by abandoning two parts of the claim would bring the suit within the jurisdiction of the Bombay City Civil Court, for which even an application for amendment was also moved which was not allowed on the ground that if the Court had no jurisdiction to entertain the suit it would have no jurisdiction to entertain the application for amendment of the plaint. In Mrs.Shobha Venkat Rao’s case (supra), it has been held:- “… … Order 23, Rule 1 (1), Civil P.C. provides that at any time after the institution of a suit, the plaintiff may abandon a part of his claim. The plaintiff was, therefore, within her right to abandon a part of her claim. This did not require any amendment of the plaint or any permission of the Court. She could have done so voluntarily by a unilateral act of herself. She could have made a statement to the Court and the Court would normally record the statement and proceed to try the suit with regard to the remaining part of the claim. The draft amendment should actually have been treated as such statement.” It has been further held:- “… … As long as the Court has not given a finding that it had no jurisdiction and the plaint should be returned for presentation to the proper Court, it is seized of the matter because the Court has the right to decide the question of its own jurisdiction even if the decision ultimately be that it has no …9… jurisdiction. As long as the Court is seized of the matter, it is open to a party at any time to abandon a part of the claim by a unilateral act by making a statement to that effect which the Court must record if thereafter the suit is within its jurisdiction, the Court should proceed to hear it. If this position were not correct, it would only mean that the Court must make an order returning the plaint for presentation to the proper Court and the plaintiff must withdraw the plaint, amend it by abandoning a part of his claim and represent it to the same Court. The only consequence of such procedure would be that the suit must be numbered as a new suit and under the conditions prevailing to-day be heard after another six years and if evidence has already been recorded, as it has been done in this case, the suit must be re-tried. From the words of Order 23, Rule 1(1), I do not think that such consequence is inevitable. Order 2, Rule 2(2) is not the only provision in the Code of Civil Procedure for voluntary relinquishment of claims or parts of claims. In my opinion, before the Court had passed an order returning the plaint for presentation to the proper Court, it was open to the plaintiff to abandon any part of her claim under Order 23, Rule 1(1), Civil P.C., so as to bring it within the jurisdiction of the Court. In such event it would not be necessary for the Court to return the plaint to the plaintiff for presentation to the proper Court. This is the procedure that the learned Judge ought to have adopted and …10… since he has not done so, his order must be set aside. Mr.Varghese on behalf of the plaintiff has made such statement before me abandoning the parts of his claim covered by the draft amendment at page 103.” 10. I am in respectful agreement with the view taken in Mrs.Shobha Venkat Rao’s case (supra), by the Bombay High Court. The grievance of the appellant is that only by way of amendment application necessary changes could have been made in the plaint in order to bring the suit within the jurisdiction of learned District Judge. The respondent / plaintiff has abandoned a part of his claim and confined the claim at Rs.2,20,000. It is not the case of the appellant that on 30.6.1998, the learned District Judge had no jurisdiction to decide the claim of Rs.2,20,000. It is, thus, held that learned District Judge had the jurisdiction to decide the suit filed by respondent after counsel for respondent abandoned the claim of the respondent for specific performance and confined the claim to refund of advance and the damages equivalent to Rs.2,20,000. 11. The objection of the appellant regarding the jurisdiction of the learned District Judge in deciding the suit has no force from another angle also. Sub-section (2) of Section 21 C.P.C. is as follows:- “21. (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 …11… are settled, at or before such settlement, and unless there has been a consequent failure of justice.” Section 99 C.P.C. is as follows:- “99. No decree shall be reversed or substantially varied, nor shall any case be remanded, in appeal on account of any misjoinder or non-joinder of parties or causes of action or any error, defect or irregularity in any proceedings in the suit, not affecting the merits of the case or the jurisdiction of the Court: Provided that nothing in this section shall apply to non-joinder of a necessary party. Section 11 of the Suits Valuation Act, 1987 is as follows:- “11. (1) Notwithstanding anything in Sec.578 of the Code of Civil Procedure (14 of 1882), and objection that by reason of the over- valuation or under-valuation of a suit or appeal a Court of first instance or Lower Appellate Court which had no jurisdiction with respect to the suit or appeal exercises jurisdiction with respect thereto shall not be entertained by the 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 reason to be recorded by it in writing, that the suit or appeal was over- valued or under valued, and that the over-valuation or …12… 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 Cl.(a) of sub-section (1), but the Appellate Court is not satisfied as to both the matter mentioned in Cl.(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 suit 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 suits or appeal. (4) The provisions of this section with respect to an appellate court shall, so far as they can be made applicable, apply to a court exercising revisional jurisdiction under Sec.622 of the Code of Civil Procedure (14 of 1882) or other enactment for the time being in force. …13… (5) This section shall come into force on the first day of July, 1817.” The combined reading of aforesaid provisions of C.P.C. and Suit Valuation Act would show that objection regarding the jurisdiction of the Court must be taken at the earliest possible opportunity and it has also to be shown that there has been a consequent failure of justice due to trial of the suit in a Court which lacks jurisdiction to try the suit because of pecuniary limit. 12. In Kiran Singh and others Versus Chaman Paswan and others, AIR 1954 SC 340, the Hon’ble Supreme Court has noticed Sections 21 and 99 C.P.C. as well as Section 11 of the Suit Valuation Act. The Hon’ble Supreme Court has held:- “7. … … The policy underlying sections 21 and 99 C.P.C. and section 11 of the Suits Valuation Act is the same, namely, that when a case had been tried by a Court on the merits and judgment rendered, it should not be liable to be reversed purely on technical grounds, unless it had resulted in failure of justice, and the policy of the legislature has been to treat objections to jurisdiction both territorial and pecuniary as technical and not open to consideration by an appellate Court, unless there has been a prejudice on the merits. The contention of the appellants, therefore, that the decree and judgment of the District Court, Monghyr, should be treated as a nullity cannot be sustained under section 11 of the Suits Valuation Act.” …14… The Hon’ble Supreme Court dwelling on prejudice has held as follows:- “15. So far, the definition of “prejudice” has been negative in terms – that it cannot be mere change of forum or mere error in the decision on the merits. What then is positively prejudice for the purpose of section 11? That is a question which has agitated Courts in India ever since the enactment of the section. It has been suggested that if there was no proper hearing of the suit or appeal and that had resulted in injustice, that would be prejudice within section 11 of the Suits Valuation Act. Another instance of prejudice is when a suit which ought to have been filed as an original suit is filed as a result of under- valuation on the small cause side. The procedure for trial of suits in the Small Cause Court is summary; there are no provisions for discovery or inspection; evidence is not recorded ‘in extenso’, and there is no right of appeal against its decision. The defendant thus loses the benefit of an elaborate procedure and a right of appeal which he would have had, if the suit had been filed on the original side. It can be said in such a case that the disposal of the suit by the Court of Small Causes has prejudicially affected the merits of the case. No purpose, however, is served by attempting to enumerate exhaustively all possible cases of prejudice which might come under section 11 of the Suits Valuation Act. The jurisdiction that is conferred on appellate Courts under that section is an equitable one, …15… to be exercised when there has been an erroneous assumption of jurisdiction by a Subordinate Court as a result of over-valuation or under-valuation and a consequential failure of justice. It is neither possible nor even desirable to define such a jurisdiction closely, or confine it within stated bounds. It can only be predicated of it that it is in the nature of a revisional jurisdiction to be exercised with caution and for the ends of justice, whenever the facts and situations call for it. Whether there has been prejudice or not, is, accordingly, a matter to be determined on the facts of each case.” In Kiran Singh’s case (supra), it has further been held that there is a considerable authority that clauses (a), (b) of Section 11 of the Suits Valuation Act should be read conjunctively, notwithstanding the use of the word ‘or’. 13. In the present case, on the basis of material on record it is to be seen whether any prejudice has been caused to the appellant when the suit was tried by learned District Judge. The contention of appellant is that value of suit for the purposes of jurisdiction in the present case is Rs.8,48,000 on the basis of agreement Ext.P-1. As per notification No.HHC/PJ/1-2001 dated 1.4.2005 of this Court, the Court of District Judge / Additional District Judge shall have the pecuniary jurisdiction in all original civil suits the value of which exceeds Rs.5,00,000 (Rs.Five lacs) but does not exceed Rs.10,00,000 (Rs.Ten lacs). Therefore, even if contention of learned counsel for the appellants is accepted in that case also, now the learned District Judge has …16… jurisdiction to try a suit having jurisdictional value of Rs.8,48,000. No purpose will be served to set aside the impugned judgment, decree on technical ground and remanding the case to the same Court for fresh decision. It has not been pointed out on behalf of the appellant what prejudice has been caused to the appellant by the trial of the suit by learned District Judge. I am satisfied that