Ashoka Builders & Promoters And ... vs Edward Keventer (Succrs.) Pvt. ...
1994 Latest Caselaw 763 Del

JUDGMENT

Vijender Jain, J.

(1) These are applications filed by defendant Nos.1 to 3 under Order 7 Rule 11 (b) read with Section 151 of the Civil Procedure Code . (IA No-8136/93 filed by defendant No.1, Ia No-8137/93 filed by defendant No.2 and Ia No.8138/93 filed by defendant No.3). Identical prayers have been made inter alia stating that prayer of plaintiffs in paragraph-88 of the plaint is that they are entitled to 23,219 sq.rntr.clean (25% of 22.95 acres) with permission to construct thereon, of the construction, plaintiffs will have 63% leaving 37% to the delivered to defendant Nos.1 and 2 against return of the safe deposit a sum of Rs.2 crores, thus making the suit for specific performance to the extent of 23,219 sq.mtr. of land.

(2) MR.MADAN Bhatia, learned counsel for defendant No.3, has argued that the plaintiff has under-valued the subject-matter of the suit by stating that subject-matter of .the suit cannot be valued in terms of money and thus 'have valued the suit wrongly for the purposes of court fee at Rs.1 crore.

(3) MR.BHATIA has contended that plaintiff ought to have valued the suit for the purpose of court fee and jurisdiction on the market value of the suit property being 23,219 sq.mtr. on the basis of rates issued-by the Government of India w.e.f 1.4.1992 to 31.3.94 which according to him was Rs.l2,600.00per sq.mtr. A copy of the said Circular is also annexed with the application. According to Mr.Bhatia, value for the purposes of jurisdiction and court fee on the basis of said Circular is Rs.29,25,59,400.00 and ad valorem court fee was payable on the said basis. Mr.Bhatia has further contended that the suit is under- valued under the provisions of Order 7 Rule 11 (b) of the Civil Procedure Code ., therefore, the suit is liable to be rejected or in the alternative plaintiff be directed to make good deficiency in court fee. He has further argued that the Court has to see in order to decide the question of court fee into the allegations of the plaint and as to what is substantive relief asked for by the plaintiff and mere astuteness in drafting the plaint will not be allowed to stand in the way of Court looking at the substance of the relief. In his support, he has cited the cases of Shamsher Singh V.Rajinder Prashad & ors. and Sanjay Kaushish V.D.C. Kaushish & ors. reported as Air 192 Del 118.

(4) According to learned counsel for the defendant No.3 even in paragraph-77 of the plaint, the Memorandum of Understanding/Agreement between the parties provided for transfer of construction rights over 25% of 22.95 acres i.e. 5.71 acres (23,219 sq.mtr.) clean and on the basis of this averment of the plaintiff, has argued that plaintiff is obliged to pay court fee on the market value as per the Government of India Circular on 23,219 sq.mtr. To support his arguments, Mr.Bhatia has quoted from the Memorandum of Understanding (MOU) Clauses 20 and 21, which are as follows 1 - "CLAUSE20 :- In return for the construction of the buildings and the development of the site thereof, including electrification, sewers, sewage lines, roads, storm water drains, landscaping etc., together with the fulfillment of their other commitments as per this Mou and the provision of all statutory and necessary infrastructure such as lifts, stand-by generating sets for lifts, electric sub-station and fire fighting equipment, the cost of all of which shall be borne entirely by the Co-Developers, and which shall be of uniform and excellent quality, excellent design and superior finishes (and equal to or superior in overall quality to the best flats located in Zones D-11 and D-12, New Delhi, e.g. the Tata Housing Project (excluding central air conditioning) on Prithvi Raj Road, the Ansals Project on Aurangzeb Road and completely finished, including electrification and wiring, switches, plumbing and plumbing fixtures, doors, windows, complete woodwork (cupboards, almirahs etc.) etc., the Co-Developers shall be entitled to retain/sell their percentage of the built up saleable area as detailed in this Mou, Keventers/Dalmias shall retain the rest. The Co-Developers shall use materials such that the flats shall be of superior most quality i.e. super deluxe class. Clause 21 :- On completion of the construction of the building(s) and handing over of Keventers/Dalmias share thereof, Keventers shall transfer the saleable areas falling to the share of the Co-Developers to them or their nominees. All charges for transfer in favor of the transferees shall be borne by the transferres."

(5) Learned counsel for the defendant No.3 has argued on the basis of the aforesaid Clauses that as a matter of fact the Mou was in sum and substance an Agreement to transfer the land, therefore, plaintiffs ought to pay the court fee on the market value of the said specified land.

(6) MR.BHATIA has also argued that the case of the plaintiffs would fall under Sub-section (v) of Section 7 of the Court Fee Act. Court fee has to be paid on the basis of the value of the subject-matter. In support of his submissions, he has cited the case of Sujir Keshav Nayak V. Sujir Ganesh Nayak in which the Supreme Court laid down the law on this aspect as under | - "(1)Where the question of court fee is linked with jurisdiction a defendant has a right to raise objection and the court should decide it as a preliminary issue. (2) But in those cases where the suit is filed in court of unlimited jurisdiction the valuation disclosed by the plaintiff or payment of amount of court fee on relief claimed in plaint or memorandum of appeal should be taken as correct. (3) This does not preclude the court even in suits filed in courts of unlimited jurisdiction from examining if the valuation, on averments in plaint, is arbitrary."

(7) On the basis of the above judgment, Mr.Bhatia has argued that the question of court fee should be decided as a preliminary issue. To support his. argument that the question of court fee be decided as preliminary issue before proceeding in the case, he has cited the case of Jagdish Rai & ors. V. Smt.Sant Kaur Air 1976 Del 147.

(8) MR.RAJIV Sawhney, learned counsel appearing for defendant No.2, has also supported the arguments of Mr. Madan Bhatia. He has further argued that in this suit, on the basis of the averments made by the plaintiff, the valuation for the purposes of court fee and jurisdiction has to be on the market value and ad valorem court fee has to be paid, plaintiff cannot escape the liability to pay the court fee on the ground that subject-matter of the property is incapable of being valued in terms of money. To support his arguments he has cited the case of M/s.Commercial Aviation & Travel Co. & ors. V.Mrs.Vimla Pannalal he has contended that in the instant case on the basis of the averments made in the plaint, the plaintiff has to pay court fee on the definite area of land for which the plaintiff is seeking relief in the suit. Mr. Sawhney has also invited my attention to the case of Abdul Hamid Shamsi V. Abdul Majid & ors. in which the Court held |- "THAT if the Court come to the conclusion on the material placed before the Court by the parties that the valuation put by the plaintiff was arbitrary. The Court could pass appropriate order under Order 7 of the Civil Procedure Code ."

(9) On the other hand, Mr. Chandhiok, learned counsel for the plaintiff has argued that in paragraph- 80 of the plaint in which it has been mentioned that subject-matter of the suit cannot be valued in terms of money. Nevertheless value of Rs.1 crore has been fixed and court fee of Rs.1 lac has been paid on the plaints It has also been averred that if any further court fee is payable, the plaintiff was ready and willing to pay the court fee as are lawfully payable. Mr. Chandhiok has vehemently argued that the defendants in the written statement has taken the objection in reply to paragraph-86 of the plaint and stated that plaint is not properly Valued for the purposes of court fee and jurisdiction. Mr. Chandhiok has drawn the attention of the Court to the provisions of Order 8 Rule 5 of the Civil Procedure Code read with Order 14 and argued that each and every fact in the plaint must be specifically denied and on the basis of these denials the issues are framed on the pleadings of the parties by the Court under Order 14 of the Civil Procedure Code . Learned counsel for the plaintiff has argued that defendants cannot be permitted to enlarge the scope of the written statement by virtue of this application which they have moved under Order 7 Rule 11. In sum and substance the arguments of Mr.Chandhiok is that on the pleadings of the parties, issue has to be framed about the maintainability of the plaint in view of the objections taken in the written statement as to whether the suit is properly valued for the purposes of court fee and jurisdiction and by the present application, the whole endeavor of the defendants are to delay the trial of the suit. He has invited the attention of this Court to the orders passed by this Court on 5.7.1993 on the application of defendants under Order 2 Rule 2 against which an appeal was filed before the Division Bench which was dismissed in liming. Aggrieved by the said dismissal, the defendants/appellants preferred an appeal before the Supreme Court which has remitted back the appeal to the Division Bench to decide the same on facts and in law.

(10) MR.CHANDHIOK has submitted that this application is a device to delay the trial of the suit and has argued that Court will only interfere in the valuation at this stage, if the the valuation of the plaintiff is demonstratively arbitrary or has been made to invest this Court with jurisdiction. Learned counsel for the plaintiff has stated that order made in Automatic Electric Ltd. V. Mr.R.k. Dhawan & anr. in Suit No.2136 of 1994 decided on October, 17, 1994 is not applicable to the facts of this case and has tried to distinguish the same, according to him, this is not a case where the plaintiff is trying to invest the Court with the jurisdiction which it otherwise does not have. Mr.Chandhiok has argued that even if this suit is valued at Rs.20 crores, or Rs.50 crores, this Court will have the jurisdiction. Mr.Chandhiok has taken me to paras 31, 35, 74, 75 and 78 of the plaint to lay stress that in essence on the basis of these representations, that was the understanding and an agreement inter se parties came into. existence which was incorporated into an Mou and what is sought in the suit is specific performance of this MOU.

(11) MR.CHANDHIOK has further argued that there is a specific provision for the suits for specific performance under the Court Fees Act under Section 7(iv) and 7(x), the court fee has to be paid, which read as under | - "SUB-SECTION(iv) | - (a) for movable property of no market-value - for movable property where the subject- matter has no market-value, as, for instance, in the case of document relating to title. (b) to enforce a right to share in joint family property - to enforce the right to share in any property on the ground that it is family property. (c) for a declaratory decree and consequential relief - to obtain a declaratory decree or order, where consequential relief is prayed. (d) for an injunction - to obtain an injunction. Sub-section (x) | - (a) of a contract of sale - according to the amount of the consideration; (b) of a contract of mortgage - according to the amount agreed to be secured; (c) of a contract of lease - according to the aggregate amount of the fine or premium (if any) and fof the rent agreed to be paid during the first year of the term; (d) of an award - according to the amount or value of the property in dispute."

(12) The arguments of learned counsel for the plaintiff is that there is no definite amount of consideration in the suit as the suit relates to the construction rights, therefore, aforesaid provisions of the Court Fees Act will not be applicable to him. Similarly, Mr.Chandhiok has also argued that court fee cannot be computed in terms of sub-section , of Section 7 of the Court Fee Act as the same is not applicable as the subject-matter and value thereof has to be determined in terms of Clauses (a) to (d) which relate to the revenue paid to the Government, which means that these provisions relate to agricultural lands, which is not the position in this case, the subject-matter of dispute is not agricultural land but an Agreement. Similarly, he argued that the provisions of Section 7(iv)(e) of the Court Fees Act will not be applicable for the payment of court fee in relation to relief sought for in this case is concerned.

(13) MR.CHANDHIOK has contended that what would be applicable to the present case is Schedule-11 of the Court Fees Act and particularly Article-17(vi), which reads as follows I - "ARTICLE-17:- Plaint or memorandum of appeal in each of the fol lowing suits :- (vi) Every other suit where it is not possible to estimate at a money value the subject-matter in dispute, and which is not otherwise provided for by this Act."

(14) On the basis of this Article, .Mr.Chandhiok has argued that what is not specifically provided in other Sections of the Court Fees Act is provided in the Residuary Article-17 and the court fee has to be paid on the basis of Article-17 of Schedule-11 of the Court Fees Act which is very nominal. Mr.Chandhiok has also argued that the land rate as circulated by the Government of India has no relevance for determining the controversy between the parties and in his support he has cited a decision of the Division Bench of this Court in Mcd V. Shri J.S. Ahuja reported as (1991) 1 Delhi Lawyer 370.

(15) After hearing learned counsel for the parties at length, this Court in order to decide these applications under Order 7 Rule 11 has to see whether the relief claimed is under-valued. At this stage until and unless the plaintiff has put the valuation in an arbitrary manner, the Court will not substitute its own valuation for that of the plaintiff. Paragraph-88 of the plaint which contains the prayer clause seeks a decree for specific performance of the Agreement in suit in favor of the plaintiffs. In the. prayer clause it has been further mentioned that decree be passed and such directions/orders against defendant Nos.3 to 7 be made so as to make the plaintiff entitle to 23,219 sq.mtr. clean (i.e. 25% of 22.95 acres) out of land in suit and he be permitted to carry on construction thereupon and of such construction the plaintiff is entitled to retain 63% leaving 37% to be delivered to defendant Nos.1 and 2 against return of the amount of Rs.2 crores referred to in paragraph-37. In sum and substance the relief prayed for by the plaintiffs is for specific performance of the Agreement which has been pleaded in different paragraphs of the plaint. The rest of the prayers are dependent on the first prayer. The contention of Mr.Bhatia that suit has to be valued on the market value of 23,219 sq.mtr. does not seem to be plausible in view of the stand taken by the plaintiffs in the plaint in paragraphs 35, 36 and 37, it was an agreement in the nature of joint venture where defendant No.2 contributed the land and the plaintiff contributed to its development by virtue of their expertise, efforts and goodwill. What Court would grant if it agrees with the plaintiff is a decree for specific performance of agreement with all ifs and buts, therefore, arguments advanced by the learned counsel for the defendants do not hold good. It is well settled as to which category of cases would fall under sub-section (iv) of Section 7 of the Court Fees Act. The subject-matter of the dispute. Agreement of which specific performance has been sought by the plaintiff is not capable of being valued in terms of money. Nevertheless, the plaintiff has fixed its tentative value at Rs.1 crore and has paid Rs.1 lac as court fee with a further averment that if further court fee is payable, the plaintiff is ready and willing to pay the court fee. I see force in the arguments of learned counsel for the plaintiffs that if in the written statement objections have been taken by the defendants that the suit is not properly valued for the purposes of court fee and jurisdiction, a specific issue is to be framed by the Court and on evidence led by both the parties, the Court will give a finding and if the Court comes to the conclusion that the suit is not properly valued or under-valued the Court can give appropriate directions to the plaintiff in this 'regard at that stage. There is another aspect of the matter, procedural as well as substantive rules are made to serve the ends of justice and not to create impediments in the course of administration of justice. The suit has been filed in the year 1992 and issues have yet not been framed because of one application or the other. Supreme Court in the case of Sujir Keshav Nayak's case (supra) held that where the suit is filed in a court of unlimited jurisdiction the valuation disclosed by the plaintiff or payment of amount of court fee on relief claimed in plaint or memorandum of appeal should be taken as correct until and unless Court comes to a conclusion that valuation, on averments in plaint, is arbitrary. The case of the plaintiff does not fall under sub-section (v) of Section 7 of the Court Fees Act, as provisions contained therein relate to lands paying annual revenue as stated in sub-rules (a), (b), (c) and (d) of Sub-section (v) of Section 7 of the Court Fees act, where the subject-matter is land.

(16) Plaintiff is seeking enforcement of MOU/Agreement and not possession of land in question. For seeking a declaration from the Court that the Agreement between the parties be declared to be operative or to put in the language of the plaint, decree for specific performance of the Agreement be passed, no objective standards or materials to value the relief of subject-matter can be ascertained either by the Court or by the plaintiff. However, if the Court grants a decree in terms of the prayer. Court is not precluded from granting such decree after directing the plaintiff to make the deficiency in court fee good. Nothing said above will be an expression of opinion on the merit of the case. It will be open for the parties to argue after framing of issues on court fee and jurisdiction on the objection taken in the written statement. For the present, I see no justification to interfere with the valuation of the plaintiff on the plaint as the same is not demonstratively arbitrary. I dismiss the applications. List this matter for directions on 1.12.1994.