2010 (5) TMI 758 - SC - Indian Laws

Whether direction given by Sub Judge Palakkad (hereinafter described as the trial Court ) to the appellant to pay court fee on the market value of the plaint schedule property is correct? Held that - Appeal allowed. Impugned order of the learned Single Judge of Kerala High Court as also the order passed by the trial Court directing the appellant to pay court fee on the market value of the property in respect of which the sale deed was executed by respondent No.1 in favour of respondent No.2 are set aside.

Summary

Issues Involved:

1. Interpretation of Section 40 of the Kerala Court-Fees and Suits Valuation Act, 1959.
2. Determination of the appropriate value for court fee payment in a suit for cancellation of a document.

Issue-wise Detailed Analysis:

1. Interpretation of Section 40 of the Kerala Court-Fees and Suits Valuation Act, 1959:

The primary issue in this case is the interpretation of Section 40 of the Kerala Court-Fees and Suits Valuation Act, 1959. The appellant argued that the court fee should be based on the value of the property as specified in the sale deed (Rs. 7 lakhs), while the respondents contended that it should be based on the market value of the property (Rs. 12 lakhs per acre).

The Court examined the language of Section 40, which states that in a suit for cancellation of a document that creates, declares, assigns, limits, or extinguishes any right, title, or interest in property, the fee shall be computed on the "value of the subject-matter of the suit," which is deemed to be the value of the property for which the document was executed. The Court emphasized that the legislature used the term "value of the property for which the document was executed" rather than "market value," indicating that the court fee should be based on the value mentioned in the document, not its market value.

The Court cited various judgments to support this interpretation, including Venkata Narasimha Raju v. Chandrayya, where it was held that the statutory value should be adopted for court fee purposes. The Court also referred to the Full Bench judgment in Kutumba Sastri v. Sundaramma, which interpreted similar provisions in the Court-fees Act and concluded that the value should be based on the amount specified in the document.

2. Determination of the appropriate value for court fee payment in a suit for cancellation of a document:

The Court analyzed the statutory provisions and judicial precedents to determine the appropriate value for court fee payment. Section 7 of the Act outlines different methods for determining the market value of property for court fee purposes but begins with the phrase "Save as otherwise provided," indicating that specific provisions like Section 40 take precedence.

The Court noted that Section 40 contains a special rule for valuing property in suits for cancellation of documents, distinct from the general rule in Section 7. The deeming clause in Section 40(1) clarifies that the value of the property for which the document was executed, not its market value, is relevant for court fee computation. The Court emphasized that if the legislature intended to require court fees based on market value, it would have explicitly stated so, as it did in other sections like Sections 25, 27, 29, 30, 37, 38, 45, and 48.

The Court concluded that the judgments of the Division Bench of Madras High Court and learned Single Judges in cases like Venkata Narasimha Raju v. Chandrayya and Andalammal v. B. Kanniah correctly interpreted the law, holding that the value mentioned in the document should be used for court fee purposes. The Court rejected the interpretation that court fees should be based on market value, as seen in judgments like P.K. Vasudeva Rao v. Hari Menon and Pachayammal v. Dwaraswamy Pillai.

Conclusion:

The appeal was allowed, setting aside the orders of the Kerala High Court and the trial Court that directed the appellant to pay court fees based on the market value of the property. The Court held that the court fee should be computed based on the value of the property as specified in the document being challenged, not its market value. The trial Court was directed to proceed with the case in accordance with this interpretation.