Case: Diwan Bros Vs. Central Bank of India, Bombay and Others

This is an appeal by special leave against the judgment of the Single Judge of the Allahabad High Court deciding a court fee matter in connection with the memorandum of appeal filed by the appellants before the Allahabad High Court against a decree passed by the Tribunal appointed under the Displaced Persons (Debts Adjustment) Act, 1951- hereinafter referred to as the Act. The appellants had filed an application under s. 13 of the Act before the Tribunal alleging that it was a partnership firm and claimed that an amount of Rs. 3, 50, 000/- by way of refund of security deposits and a sum of Rs. 55, 000/- as commission was due from the respondents. The application was tried by the Tribunal and the claim preferred by the appellants was ultimately dismissed by the Tribunal by its decree dated May 19, 1965. Additional Civil Judge of Badaun was assigned as the Tribunal under the aforesaid Act. The appellants then filed an appeal before the Allahabad High Court with a nominal court fee of Rs. 5/- but the Stamp Reporter of the High Court was of the opinion that the appellants should have paid ad valorem court fees on the total claim preferred by the appellants before the Tribunal which had been disallowed. The matter was taken up by the Taxing Officer, who, in view of the substantial importance of the point raised, made a reference to the Taxing Judge for deciding the court fee payable on the memorandum of appeal in the instant case. The plea of the appellants was that as the decision of the Tribunal did not amount to a decree as contemplated by s. 2(2) of theCode of Civil Procedure 1908, ad valorem court fees were not payable and the appellants were entitled to pay co urt fees as prescribed in Sch. 11 Art. 11 of the Court Fees Act. The stand taken by the revenue was that as the present appeal was against a decree, the case of the appellants squarely fell within the ambit of s. 4 of the Court Fees Act and the refore ad valorem court fees were payable under Sch. I Art. 1 of the Court Fees Act. The matter was taken up by the Taxing Judge who went into the question of law raised before him and after considering some authorities, particularly those of the Allahabad High Court, agreed with the Stamp Reporter and came to the conclusion that the appellants should pay ad valorem court fees under Sch. I Art. 1 of the Court Fees Act. The Taxing Judge accordingly by his order dated October 11, 1965 directed the appellants to make up the deficiency in the payment of the court fees. It was against this order that the appellants filed a petition for special leave to this Court which having been granted the appeal has now been placed before us for hearing.This appeal involves a short but substantial question of law as to the interpretation, scope and ambit of Sch. II Art. 11 of the Court Fees Act as applicable to appeals preferred against the orders or decrees passed by the Tribunal constituted under the Act. The point is not free from difficulty and there appears to be a serious divergence of judicial opinion on the question as to whether in appeals like the present, Sch. I Art. 1 or Sch. II Art. 11 of the Court Fees Act would apply.

Reasoning: Having regard to these circumstances we are satisfied that the term "decree" used in Sch. II, Art. 11, is referable to a decree as defined in s. 2 (2) of theCode of Civil Procedure and as the decision of the Tribunal in the instant case does not fulfil the requirements of a "decree" as mentioned above, the said decision is not a decree within the meaning of Sch. II, Art. 11 of the Court Fees Act and, therefore, the memorandum of appeal filed by the appellants squarely falls within the ambit of Sc h. II Art. 11 of the Court Fees Act and ad valorem court-fees under Sch. I Art. 1 are notare, however, unable to agree with the view taken by these Courts. In the first place, these decisions have not taken into consideration the nature of the proceeding under the Act and the clear distinction made by the Act itself between a suit and a proceeding. These decisions have also not considered the various aspects which we have discussed above relating to the essential conditions of a decree and finally these decisions have also overlooked the main purpose and object of the Act and seem to have also ignored the rule of strict interpretation of a fiscal statute. For these reasons, therefore, that the court-fee of Rs. 5/- paid by the appellants on the cannot be held to be good law and must, therefore, bea consideration of the facts, circumstances and the law on the subject we are clearly of the view that the memorandum of appeal in the instant case falls within the ambit of Sch. II, Art. 11, and the view of the Taxing Judge that ad valorem court-fee was payable under Sch. I, Art. 1, of the Court Fees Act was legally erroneous. We hold, therefore, that the court-fee of Rs. 5/- paid by the appellants on the memorandum of appeal wasconcluding we must notice an argument advanced by the learned counsel for the respondents. It was submitted that under s. 5 of the Court Fees Act a decision of the Taxing Judge as designated by the Chief Justice is final and cannot be reopened in any Court. It was submitted by Mr. Dikshit that in view of this provision the appeal to this Court by special leave was not maintainable. We are, however, unable to agree with this contention. Even though an order of the Taxing Judge may be final under s. 5 of the Court Fees Act, the power of this Court under Art. 136 granted by the Constitution will override any stamp of finality given by a statute or Act passed by Parliament. The finality which may attach under s. 5 of the Court Fees Act cannot derogate from the power conferred by the Constitution itself on the Supreme Court. Reliance, however, seems to have been placed on a decision of this Court in S. Rm. Ar. S. Sp. Satheppa Chettiar v. S. Rm. Ar. Ramanathan Chattiar and particularly on the following observations made by this Court:"In our opinion, the decision of the Division Bench of the Madras High Court that the memorandum of appeal should be taxed for the purposes of Court fee under s. 7(iv) (b) of the Act is final under the provisions of s. 5 of this Act. That is why we have not allowed t he merits of this order to be questioned in the present appeal. We must, therefore, deal with the appellants contention on the basis that the court fees on his memorandum of appeal must be levied under s. 7(iv) (b) of the Act.more, it appears that as the appellant before the Supreme Court was satisfied with the observations made by the Court, he did not press for a decision on the question of court-fees and confined his arguments only to the question as to whether the court-fees should be levied under s. 7(iv) (b) of the Court Fees Act. In these circumstances, therefore, the identical question raised before us was neither argued nor decided in the case referred to above by the respondents. For these reasons the contention raised by the respondents on this score must be overruled.