Arbitrary valuation of the suit for the purpose of court fee is not permitted: High Court of Delhi

 IN THE HIGH COURT OF DELHI AT NEW DELHI Date of Reserved: 17.02.2021 Date of Decision: 18.03.2021 CM(M) 106 2021 & CM No.4573 2021 SHIV KUMAR GUPTA ..... Petitioner Through Mr.Abhimanyu Singla Adv. POOJA & ANR. Through Nemo ..... Respondents CM(M) 127 2021 & CM No.5389 2021 DINESH KUMAR Through Mr.Nikhil Malhotra Adv. ..... Petitioner LEKH RAJ & ORS. Through Nemo ..... Respondent HON BLE MR. JUSTICE NAVIN CHAWLA These petitions have been filed by the petitioner(s) challenging the order(s) passed by the learned Trial Court(s) in their respective Suits calling upon the petitioner(s) herein who are the plaintiffs in the Suit(s) to deposit the deficit court fee. The Suits filed by the petitioner(s) are claiming damages qua their alleged defamation. CM(M) 106 2021 & CM(M) 127 2021 Page 1 The question that arises for consideration in the present petitions is as to whether the court fee payable on such Suits claiming damages for defamation is ad valorem according to the amount claimed or whether the petitioners as plaintiffs can value the Suit for purposes of court fee at a value different from the amount claimed in the Suit and pay the court fee according to the said amount with an undertaking to pay the court fee upon the amount which is finally determined by the learned Trial Court(s) in the Suits as damages payable to the petitioners. The learned Trial Court has held that the petitioners are to pay the court fee on the amount claimed in the Suit. In support of their submission that the petitioners are entitled to put their own valuation to the relief of damages and pay court fee at such value with an undertaking to deposit more court fee when the actual damages are awarded by the court the learned counsels for the petitioners have placed reliance on the judgments of the Supreme Court as well as of the Punjab and Haryana High Court as mentioned herein under:  Shiv Kumar Sharma v. Santosh Kumari 8 SCC 600  Amandeep Sidhu v. M s Ultratech Cement Limited & Ors. 2016 SCC OnLine P&H 15769  Maha Singh v. Mukesh & Anr.  Mange Ram v. State of Haryana and Ors. CM(M) 106 2021 & CM(M) 127 2021 Page 2  Dev Brat Sharma v. State of Punjab and Ors.  M S Commercial Aviation & Travel Company and Ors. v. Vimla Pannalal 3 SCC 423  Bharpoor Singh & Anr v. Lachhman Singh  Subhash Chander Goel v. Harvind Sagar AIR 2003 P&H 248 OnLine P&H 1022  State of Punjab and Ors v. Jagdip Singh Chowhan 2004 SCC  S. Ajit Singh Kohar v. Shashi Kant  Kashmir Singh v. Mandeep Kaur & Ors. I have considered the submissions made by the learned counsels for the petitioners however find no merit in the same. Section 7(i) of the Court Fees Act 1870requires the plaintiff to pay the court fee in a Suit inter alia claiming damages ad valorem according to the amount claimed. Section 7(iv)(f) of the Act on the other hand requires the plaintiff where the Suit is inter alia for accounts to put a valuation on the relief sought and to pay the court fee on such relief. In CM(M) 106 2021 titled as Shiv Kumar Gupta v. Pooja & Anr. the petitioner has filed the Suit for seeking Permanent Injunction CM(M) 106 2021 & CM(M) 127 2021 Page 3 and claimed compensation for slander against the respondents. The following prayer is made by the petitioner in the Suit: Decree for payment of Rs.1.25 Crore as “2. the Slander Damages and Compensation for the mental harassment caused by the defendants against the defendants and in favour of the As far as valuation of the suit for purposes of jurisdiction and court fee paragraph 31 of the Suit reads as under: That the valuation of the suit for the purpose “31. of court fee and jurisdiction qua prayer no.1 is fixed at Rs.130 upon which a Court fee of Rs.13 has been affixed. Qua prayer no.2 the subject matter of the suit is valued at Rs.1.25 Crore being compensation for Slander Recovery of the Damages. Hence this Hon ble Court has pecuniary jurisdiction to try and dispose of the present suit. However the quantum of compensation damages is yet to be determined by the Court. In view of the settled law the plaintiff is not required to pay ad voleram Court fee on the amount of sought for compensation. Hence the plaintiff is affixing a Court fee of Rs.50 on the plaint qua prayer no.2 being tentative. However the plaintiff undertakes to pay the Court fee on the awarded amount at the time of passing the final judgment and decree. Hence this Hon ble Court has jurisdiction to try and dispose off the suit.” A reading of the above paragraph would show that while a of Rs.1.25 Crores damages compensation from the respondents and the petitioner has valued the Suit for the purposes of jurisdiction also at that value for the purposes of court fee the petitioner has affixed a fixed court fee of CM(M) 106 2021 & CM(M) 127 2021 Page 4 Rs.50 claiming that he is not required to pay ad valorem court fee and undertakes to pay the deficit court fee on the awarded amount at the time of passing of the final judgment and decree. In CM(M) 127 2021 titled as Dinesh Kumar v. Lekh Raj & Ors. the petitioner has challenged the order dated 16.01.2021 passed by the learned Trial Court dismissing the application of the petitioner seeking amendment of the plaint and calling upon the petitioner to pay the deficit court fee. The Suit in question is one filed for claiming damages on account of defamation. It makes inter alia the following Recovery of an amount of Rs.1 00 00 000 or “i. of such amount as may be quantified adjudicated by this Hon ble Court on account of damages may please be passed in favour of the plaintiff and against the defendants directing the defendants to pay the same jointly and severely alongwith pendentelite and future interest @ 12% p.a. till the realisation of the decreetal amount in the interest of justice and fair play.” 11. Paragraph 40 of the plaint gives the valuation of the Suit for the purposes of court fee and jurisdiction and reads as under: “40. That value of the suit for the purpose of jurisdiction is Rs.1 00 00 000 and value of the suit for the purpose of court fee is Rs. 10 00 000 and an appropriate court fees of Rs. 12 110 has been affixed herewith. The plaintiff undertakes to affix the deficit court fee at the time of final decree of the suit.” 12. The petitioner thereafter filed an application whereby he sought an amendment in paragraph 40 of the plaint to be read as under: CM(M) 106 2021 & CM(M) 127 2021 Page 5 “40. That value of the suit for the purpose of court fee and jurisdiction is Rs.1 00 00 000 . However since the plaintiff has tentatively assessed the damages to be Rs.1 Crore and finally assessed quantified minimum damages as Rs.10 lakh so an amount of Rs.12 110 has been affixed as court fee on Rs.10 lakh. The plaintiff undertakes to pay deficit court fee on the damagesby this Hon ble Court at the time when the damages are so quantified." 13. The plaintiff also sought to amend the prayer clause in the plaint to read as under: “i. Recovery of an amount of Rs.1 00 00 000 or of such amount as may be quantified adjudicated by this Hon ble Court on account of damages may please be passed in favour of the plaintiff and against the defendants directing the defendants to pay the same jointly and severely alongwith pendentelite and future interest @ 12% p.a. till the realization of the decreetal amount in the interest of justice and fair play." 14. A reading of the above plaints in both the Suits would show that the petitioners have prayed for a specific amount as damages. Section 7(i) of the Act clearly provides that in a Suit for money including Suit for damages the court fee shall be payable according to the amount claimed in the Suit. Section 7(iv)(f) of the Act which is for suit for accounts can have no application to such a Suit. There are no accounts to be taken in the Suit. In K.C. Sakaria v. Govt. Of State of Kerala & Anr. 2 SCC 285 the Supreme Court in relation to a Suit filed by a contractor CM(M) 106 2021 & CM(M) 127 2021 Page 6 seeking recovery of money for the work done and contending it to be a Suit for accounts held as under: “15. It is now well settled that the right to claim rendition of accounts is an unusual form of relief granted only in certain specific cases and to be claimed when the relationship between the parties is such that the rendition of accounts is the only relief which will enable the plaintiff to satisfactorily assert his legal right 60 PR 1899: 6 Punj LR 1900] in Gulam Qutab ud din Khan v. Mian Faiz BakhshState of J&K v. L. Tota RamTriloki Nath Dhar v. Dharmarth Counselsuits by a member of a joint family against the karta for partition and accounts suits by a co sharer against other co sharer(s) who has have received the profits of a common property suits by principal against an agent and suits by a minor against a person who has received the funds of the minor. 16. Even where there is no specific provision for rendition of accounts courts have recognised an equitable right to claim rendition of accounts. In Narandas Morardas Gaziwala v. S.P. Am. Papammalthis Court considered the maintainability of a suit by an agent against the principal for accounts. Negativing the contention that only a principal can sue the agent for rendering proper accounts and not vice versathis Court held:CM(M) 106 2021 & CM(M) 127 2021 Page 7 “In our opinion the statute is not exhaustive and the right of the agent to sue the principal for accounts is circumstances and is not a statutory right. Though an agent has no statutory right for an account from his principal nevertheless there may be special circumstances rendering it equitable that the principal should account to the agent. Such a case may arise where all the accounts are in the possession of the principal and the agent does not possess accounts to enable him to determine his claim for commission against his principal. The right of the agent may also arise in an exceptional case where his remuneration depends on the extent of dealings which are not known to him or where he cannot be aware of the extent of the amount due to him unless the accounts of his principal are gone 17. To summarise a suit for rendition of accounts can be maintained only if a person suing has a right to receive an account from the defendant. Such a right can either becreated or recognised under a statute orbased on the fiduciary relationship between the parties as in the case of a beneficiary and a trustee orclaimed in equity when the relationship is such that rendition of accounts is the only relief which will enable the person seeking account to satisfactorily assert his legal right. Such a right to seek accounts cannot be claimed as a matter of convenience or on the ground of hardship or on the ground that the person suing did not know the exact amount due to him as that will open the floodgates for converting several types of money claims into suits for accounts to avoid payment of court fee at the time of institution.” CM(M) 106 2021 & CM(M) 127 2021 Page 8 16. Following the above judgment this Court in Hari Gokal Jewellers v. Satish Kapur 2006 SCC OnLine Del 482 has held as “11. In view of these facts as stated in the plaint and the documents filed by the plaintiff there can hardly be any doubt that suit for rendition of accounts would not be maintainable. Furthermore in the plaint there is no reference to any fiduciary or other relationship like master or servant employee and contractor regular mutuality of accounts maintained in the normal course of business where a party holds the goods in trust or otherwise and members of the trust. The vague averments made in the plaint do not give rise to any definite cause of action which could form basis for institution of suit for rendition of accounts. Another facet of the present case is that the plaintiff had himself given a notice for recovery of a definte amount and so as he maintained in the plaint by paying the 12% interest to the said amount and valuing the suit at a sum of Rs. 18 lakhs. The plaintiff is certainly master of the suit as a discretion to value the suit for purposes of court fee and jurisdiction but this discretion of the plaintiff has to be regulated by the well settled cannons of law. Where the plaintiff in his notice and even then in the plaint claims a definite sum which in the notice dated 7th October 2004 was claimed beyond any shadow of doubt the suit for rendition of accounts could not be instituted by the said plaintiff.” 17. The petitioners having claimed specific amount as damages therefore were liable to pay court fee on such amount. They cannot arbitrarily value the reliefs claimed so as to avoid their liability of paying the court fee alongwith the plaint. CM(M) 106 2021 & CM(M) 127 2021 Page 9 In M s Commercial Aviation Travelthe Supreme Court was considering a Suit which prayed inter alia for dissolution of the partnership and for accounts. While upholding the dismissal of an application filed by the defendant therein under Order VII Rule 11 of the Code of Civil Procedure 1908 the Supreme Court held that in a Suit for accounts it is difficult for the Court as well to come to a finding even as to the approximate correct valuation of the relief the Court therefore has no other alternative than to accept the plaintiff‟s valuation tentatively. If the Court is itself unable to say what the correct valuation of the relief is it cannot require the plaintiff to correct the valuation that has been made by him. It was however further held that where certain positive objective standards are available for the purpose of determination of the valuation of the relief and yet the plaintiff ignores the same and puts an arbitrary valuation the Court would be entitled to interfere under Order VII Rule 11(b) of the Code for in such cases the Court will be in the position to determine the correct valuation with reference to the objective standards or materials available to it. In such cases the plaintiff will not be permitted to put an arbitrary valuation dehors such objective standards or material. In the present case the objective and positive material for the correct valuation of the relief claimed was available in the relief itself. The petitioners have claimed a specific amount in their respective Suit. They cannot therefore arbitrarily value the Suit for the purposes of court fee and pay a lesser amount as court fee. CM(M) 106 2021 & CM(M) 127 2021 Page 10 20. This Court in M s. R & D Enterprises& Anr. v. Air France & Anr. ILR I Delhi 528 in a claim made under the Carriage by Air Act 1972 held that it is the duty of the Court in which the Suit is instituted to ensure at the time of institution of the Suit that proper court fee has been paid according to the Act. The Court therein held that for simple Suits for money there is no provision or warrant to fix a tentative value of the court fee in the plaint. Rejecting the plea of the plaintiff therein that the claim though of money is tentative in nature and is yet to be determined by the Court and that the plaintiff shall pay the court fee once the same is determined by the Court this Court held as under: “10. In the instant case the amount claimed in plaint para 23 as noticed above being Rs.5 00 002 court fees is payable on this amount. The amount of compensation payable has to be decided by the court on the merits of the case. It may be found to be more or less than the amount claimed in the suit or it may be that it is held to be not payable. Can the plaintiff for this uncertainty be allowed to pay court fees on some tentative value arbitrarily fixed instead of the amount claimed by him in the suit even though with an averment to make up the deficiency if any at a later this would stage Obviously not tantamount to undue and unfair advantage and indeed an abuse of the process of the court by enabling a plaintiff to make a highly exaggerated claim at an astronomical figure and having trial process for adjudication of issues raised without payment of proper court fee on the claim so laid. for otherwise Besides this being a money suit and the court fees payable being ad valorem the plaintiff having the suit at jurisdictional value of CM(M) 106 2021 & CM(M) 127 2021 Page 11 Rs.5 00 002 cannot in view of section 8 of the Suits Valuation Act 1887 be heard to say that the value for purposes of court fee in any pointed circumstances could be affixed at a lesser or tentative amount.” 21. The reliance placed by the learned counsels for the petitioners on the judgment of the Supreme Court in Shiv Kumar Sharmais ill founded inasmuch as the Supreme Court therein was considering a claim for mesne profits and the liberty granted by the High Court to the plaintiff therein to claim damages mesne profits in a separate Suit. It was in that context that the Supreme Court observed that in a case where damages are required to be calculated for example future mesne profits a fixed court fee is to be paid but on the quantum determined by the Court the balance court fee would have to be paid when final decree is to be prepared. The “damages” mentioned therein were clearly in the nature of future mesne profits which were yet to be determined by the Court. 22. As far as the judgments of the Punjab & Haryana High Court cited by the learned counsels for the petitioners are concerned apart from the fact that they are not binding on this Court even otherwise they have been doubted and not followed even by the Punjab & Haryana High Court. 23. As an exemplar in Kushalpal Singh & Ors. v. Fortis Healtcare Limited & Ors. the Punjab & Haryana High Court considered the CM(M) 106 2021 & CM(M) 127 2021 Page 12 conflicting decisions of that Court on the issue of proper court fee to be affixed in the Suits claiming damages and held that where specific amount of damages compensation is being claimed the court fee has to be paid on such amount. The Court further held as under: “16. Therefore in view of the above discussion though there are differing views in judgments of co ordinate Benches of this court with this Bench respectfully agreeing with the view held in Ranjit Kaurs and Manjeet Singhs cases it would otherwise have been necessary to refer the matter to a Division Bench however firstly in view of the fact that in both those cases the contrary view of this court in Chowhans Hemrajs and Subhash Chander Goels cases were duly noticed with the subsequent Benches still having come to a conclusion after discussing the provisions of the Act that court fee would be payable ad valorem on the specific amount of damages claimed in the suit and moreover the order of the Supreme Court having now in any case made that clear in Chowhans case itself it is not considered necessary to refer the matter to a larger Bench.” 24. Reference in this regard may also be had to the judgment of the Punjab & Haryana High Court in Ranjit Kaur & Ors. v. Punjab State Electricity Board & Ors. 2006 SCC OnLine P&H 1095 holding that in Suit claiming damages ad valorem court fee needs to be affixed. In view of the above I find no infirmity in the orders passed by the learned Trial Court(s) in the present petitions. However as both the Suits are at an initial stage it shall be open to the petitioners to file applications seeking amendment in their respective plaints if so CM(M) 106 2021 & CM(M) 127 2021 Page 13 advised to claim a lower amount of damages and pay ad valorem court fee on the amount which may be so claimed. 26. The petitions are therefore dismissed with the above observations. There shall be no order as to costs. NAVIN CHAWLA J MARCH 18 2021 Arya P CM(M) 106 2021 & CM(M) 127 2021 Page 14 

Summary: Where the objective and positive material for the correct valuation of the relief claimed is available in the relief itself and petitioners have claimed a specific amount in their respective Suit. They cannot therefore, arbitrarily value the suit for the purposes of court fee and pay a lesser amount as court fee. This was held in SHIV KUMAR GUPTA v. POOJA &amp; ANR and DINESH KUMA v. LEKH RAJ &amp; ORS [CM(M) 106/2021 &amp; CM No.127/2021] in the High Court of Delhi by single bench consisting of JUSTICE NAVIN CHAWLA. Facts of the case are that suits filed by the petitioners are claiming damages qua their alleged defamation. Petition has been filed by the petitioners challenging the order passed by the learned Trial Court. The court had ordered to deposit the deficit court fee, the petitioners are to pay the court fee on the amount claimed in the Suit. The counsel of petitioner contended, that the petitioners are entitled to put their own valuation and pay court-fee at such value, with an undertaking to deposit more court fee on actual damage awarded. Reliance was placed on the judgments of the Supreme Court judgement, Shiv Kumar Sharma v. Santosh Kumari. The High Court relied on the precedent laid down in the judgment of Supreme Court, Hari Gokal Jewellers v. Satish Kapur, wherein it was held that, “Another facet of the present case is that the plaintiff had himself given a notice for recovery of a definite amount and so as he maintained in the plaint by paying the 12% interest to the said amount and valuing the suit at a sum of Rs. 18 lakhs. The plaintiff is certainly master of the suit as a discretion to value the suit for purposes of court fee and jurisdiction but this discretion of the plaintiff has to be regulated by the well settled cannons of law. Where the plaintiff in his notice and even then in the plaint claims a definite sum, which in the notice dated 7th October, 2004 was claimed beyond any shadow of doubt, the suit for rendition of accounts could not be instituted by the said plaintiff.” The court also referred to the judgement of M/s. R &amp; D Enterprises (Export) &amp; Anr. v. Air France &amp; Anr, ILR (1998) I Delhi 528, where in a claim made under the Carriage by Air Act, 1972, it was observed that,“In simple suits for money, there is no provision or warrant to fix a tentative value of the court fee in the plaint.”