Court’s Decision
The Delhi High Court dismissed an appeal challenging an order of remand by the Additional District Judge (ADJ), which directed the plaintiff to revalue the suit property and pay appropriate ad valorem court fees for seeking a declaration of ownership by adverse possession and consequential injunction. The High Court upheld the ADJ’s findings, observing that where there exists a standard for valuation, such as the circle rate, the plaintiff cannot undervalue the suit whimsically. The Court held:
“Plaintiff cannot whimsically choose a ridiculous figure for filing the suit most arbitrarily where there are positive materials and/or objective standards of valuation.”
Accordingly, the appeal was dismissed, and the remand order was sustained.
Facts
The appellant filed a suit seeking a declaration that he was the owner of a property located in Kaushalya Park, Hauz Khas, New Delhi, by virtue of adverse possession, along with a consequential relief of permanent injunction. The claim was based on an agreement dated 2 June 1975 entered into with Late Smt. Kaushalya Devi, allowing him occupation of a constructed portion of the land with the right to purchase the property in instalments.
The plaint stated that the appellant had remained in uninterrupted possession of the suit property for over 36 years. However, he valued the suit for declaration at ₹200 and for injunction at ₹130, paying a total court fee of only ₹33. The Trial Court rejected the plaint for improper valuation. The ADJ remanded the matter back, directing the appellant to revalue the suit based on the circle rate or lead evidence to determine market value.
The appellant then challenged the remand order before the High Court.
Issues
- Whether the suit filed for a declaration of ownership by adverse possession along with permanent injunction was properly valued for court fee and jurisdiction purposes?
- Whether the ADJ erred in remanding the matter for revaluation and payment of court fees based on market value or circle rate?
- Whether the plaintiff could adopt the same valuation method as used by the respondent in a previous suit?
Petitioner’s Arguments
The appellant contended that:
- The ADJ had failed to apply the provisions of the Suits Valuation Act, 1887.
- Since he was in possession of the property for over 36 years, he should not be required to value the suit at market rates.
- The respondent had earlier valued a suit for possession and mesne profits at ₹4200, based on the annual rent paid, and the same yardstick should apply here.
- Reliance was placed on Sheila Devi v. Kishan Lal Kalra (1974) and Commercial Aviation and Travel Co. v. Vimla Pannalal (1988) to argue that a plaintiff has discretion to value reliefs under Section 7(iv)(c) of the Court Fees Act.
Respondent’s Arguments
The respondent, though given multiple opportunities, did not appear to contest the matter before the High Court. The matter was thus heard and decided ex parte.
Analysis of the Law
The High Court examined the interplay between Section 7(iv)(c) of the Court Fees Act, 1870 and Section 8 of the Suits Valuation Act, 1887. Section 7(iv)(c) permits the plaintiff to value the suit for a declaratory decree with consequential relief, subject to reasonable limits. However, as held in Sujata Sharma v. Manu Gupta (2010), for a relief to be ‘consequential,’ it must be:
- Dependent upon the declaratory relief;
- Not independently enforceable;
- Not otherwise specifically provided for; and
- Not amenable to definite valuation.
The court observed that where objective standards like circle rates exist, the plaintiff is bound to use them. The Court Fee must reflect the actual valuation of the subject matter.
Precedent Analysis
- Sheila Devi v. Kishan Lal Kalra (1974 SCC OnLine Del 136)
Held that plaintiff’s valuation in declaratory suits must be accepted unless it is arbitrary. - Commercial Aviation and Travel Co. v. Vimla Pannalal [(1988) 3 SCC 423]
Reinforced the above principle and observed that courts can interfere with valuation if it appears to be arbitrary and unreasonable. - Sujata Sharma v. Manu Gupta (2010 SCC OnLine Del 506)
Defined the scope of consequential relief under Section 7(iv)(c), emphasizing the dependent nature of such relief. - Anathula Sudhakar v. P. Buchi Reddy [(2008) 4 SCC 594]
Clarified when a suit for injunction must be accompanied by a declaration. When title is in dispute or clouded, declaration is necessary.
Court’s Reasoning
The Court reasoned that:
- The appellant’s suit was not a mere injunction suit but involved a declaration of ownership by adverse possession—a claim that directly affects title.
- The relief of injunction was clearly consequential and could not be sought without the declaration.
- The appellant acknowledged that the title was disputed and multiple civil suits were already pending regarding the same property.
- Therefore, the court held that ad valorem court fee based on market value was rightly applicable, and the ADJ’s direction to use circle rate or lead evidence for proper valuation was justified.
Conclusion
The Court concluded that the relief of injunction was purely consequential to the declaratory relief and had to be valued in accordance with the market value of the property. Since there were objective standards available such as the Delhi circle rates, the appellant was not entitled to undervalue the suit arbitrarily. It upheld the ADJ’s order and dismissed the appeal.
Implications
- Reaffirms that declaratory suits with consequential relief cannot be undervalued.
- Clarifies that the plaintiff’s discretion to value is not absolute where objective criteria like circle rates exist.
- Reinforces the principle that injunctions related to disputed title must be treated as consequential and valued accordingly.
FAQs
1. Can a plaintiff undervalue a suit for declaration with consequential relief based on subjective estimates?
No. The court has held that when objective standards for valuation exist (like circle rates), plaintiffs cannot choose arbitrary or minimal values to escape proper court fee payment.
2. Is an injunction always treated as a consequential relief in suits for declaration of title?
Not always. But where the title is under dispute or cloud, and the plaintiff seeks both declaration and injunction, the injunction is deemed consequential.
3. What happens if the court finds the court fee undervalued?
The court may direct correction of valuation and payment of proper fees. If not complied with, the plaint can be rejected for non-payment of adequate court fee.
