Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2020 Supreme(SC) 181

SUPREME COURT OF INDIA
ARUN MISHRA, M. R. SHAH, S. RAVINDRA BHAT, JJ.
AGRA DIOCESAN TRUST ASSOCIATION – APPELLANT(S)
VERSUS
ANIL DAVID AND ORS. – RESPONDENT(S)
Civil Appeal No. 1722 OF 2020 (Arising out of SLP (C)No.18008 of 2019) With Civil Appeal No. 1723 OF 2020 (Arising out of SLP (C)No.18007 Of 2019)
Decided On : 19-02-2020

Advocates appeared:
For the Petitioner(s):P. N. Mishra, Nilakanta Nayak, Amit Yadav, B. D. Das, Shishir Deshpande, Advocates
For the Respondent(s):Rakesh Dwivedi, Pallavi Langar, Amrendra Kumar Mehta, Advocates

IMPORTANT POINT
There was no compulsion for plaintiff to, at the stage of filing suit, prove or establish claim that suit lands were revenue paying and details of such revenue paid.

Headnote:
Specific Relief Act, 1963 – Section 31 – Court Fees Act, 1870 – Section 7 (iv-A) – Suit for cancellation of sale-deed – Direction to plaintiff to pay ad valorem court fee on market value of land – Since plaintiff (Petitioner) sought, in addition to declaration, in both suits, decrees of cancellation, crucial point was what correct value for purposes of court fee was – There was no compulsion for plaintiff to, at the stage of filing suit, prove or establish claim that suit lands were revenue paying and details of such revenue paid – Once it is conceded that value of land is to be determined according to either sub clauses (v), (va) or (vb) of Act – concept of “market value” – a wider concept in other contexts, was deemed to be referable to one or other modes of determining value under sub clauses (v), (va) or (vb) of Section 7 (iv-A) – This aspect was lost sight of by High Court – Reasoning and conclusions of High Court are not sustainable – Impugned judgment and order and that of trial court, cannot stand – Consequently, question of what is market value, based on revenue payable, would be an issue to be tried in suit. (Paras 15, 17 and 18)
Facts of the case:
Appellant (plaintiff) had filed a suit (O.S. 24/ 2013) in court of the Civil Judge (Senior Division), Dehradun for cancellation of a sale deed dated 08.03.2013, executed by the defendant-respondent no.1. High Court, by the impugned judgment, after hearing counsel for the parties, accepted the respondent/defendants’ contentions that the circle rate fixed by Collector to charge stamp duty took into account the actual market value of the property situated in the area. It was held that fixation of circle rate by the collector is the proper mode for fixation or determination of the market value (for purposes of payment of court fees), unless an aggrieved person challenges that the circle rate fixed by the Collector is not the correct market value of the property.
Findings of the Court:
There was no compulsion for the plaintiff to, at the stage of filing the suit, prove or establish the claim that the suit lands were revenue paying and the details of such revenue paid. Once it is conceded that the value of the land [per explanation to Section 7 (iv-A)] is to be determined according to either sub clauses (v), (va) or (vb) of the Act, this meant that the concept of “market value” – a wider concept in other contexts, was deemed to be referable to one or other modes of determining the value under sub clauses (v), (va) or (vb) of Section 7 (iv-A). This aspect was lost sight of by the High Court, in the facts of this case.
Result : Appeals allowed.

Judgement Key Points

Based on the provided legal document, the key legal principles and findings are as follows:

At the stage of filing a suit, there is no obligation for the plaintiff to prove or establish that the suit lands are revenue paying or to provide details of revenue paid. The valuation for court fee purposes can be based on the relevant legal provisions and modes of valuation specified in the applicable statutes (!) (!) .
The concept of "market value" in the context of court fee valuation is deemed to be referable to specific modes of determination under the relevant statutory provisions, such as valuation based on revenue, the market value fixed by authorities, or other prescribed methods (!) .
Fixation of circle rates by the collector, which takes into account the actual market value, is considered a proper mode for determining the market value for the purpose of court fee calculation, unless the aggrieved party challenges the correctness of the circle rate as the true market value (!) (!) .
When valuing immovable property, the applicable method involves calculating the market value according to prescribed multipliers of revenue or net profits, or other relevant factors, as outlined in the statutory valuation provisions (!) (!) (!) (!) .
The valuation method adopted must be consistent with the provisions of the relevant valuation statutes. If the valuation is based on the circle rate fixed by the authorities, and no evidence proves that the circle rate does not reflect the true market value, then this method is deemed appropriate (!) (!) .
In cases where the valuation for court fee differs from the valuation for jurisdictional purposes, the court must consider the correct mode of valuation as per the applicable law, and the valuation based on the circle rate is valid unless challenged successfully (!) (!) .
The court emphasized that the valuation of the property for the purpose of court fee should be determined in accordance with the statutory provisions, and that the court should not accept contradictory valuations presented by the parties without proper proof (!) (!) .
The court clarified that the valuation of the suit property, when challenged, would be a matter to be tried in the suit itself, and the court fee payable should correspond to the correct valuation determined under the law (!) .

In summary, the legal principles highlight that the valuation for court fee purposes can be based on statutory provisions, such as the market value fixed by authorities or revenue-based valuation methods, and that the court's role is to ensure that the valuation adheres to the applicable legal framework. The initial burden of proof regarding the true market value or revenue details does not lie with the plaintiff at the filing stage, especially when the valuation method prescribed by law is followed.

JUDGMENT

S.RAVINDRA BHAT,J.

1. Leave granted. With consent of counsel for the parties, the appeals were heard finally.

2. The appellant, (hereafter “the plaintiff”) had filed a suit (O.S. 24/ 2013) in the court of the Civil Judge (Senior Division), Dehradun for cancellation of a sale deed dated 08.03.2013, executed by the defendant-respondent no.1. The third respondent, (hereafter called the “purchaser”) had acquired the property from the defendant-respondent no.1. Another suit (O.S. No. 25/ 2013, also titled as Agra Diocesan Trust Association v. Anil David and Others), was filed by the plaintiff for cancellation of the sale deed dated 08.03.2013 executed by the first two respondents in favour of the purchaser. A further relief sought was for permanent injunction against the respondents/ defendants restraining them from interfering in the plaintiff’s peaceful possession of the property in dispute. The defendants filed their written statements, contending inter alia that although the relief of cancellation of the sale deed in question has been sought, the plaintiff had improperly valued the suit and the court fee paid was insufficient.

3. The trial court on the pleadings of the parties, framed the issues; the relevant issues, Nos. 8 and 10 in both suits were (a) whether the suit filed by the plaintiff was undervalued and (b) whether the court fee paid by the plaintiff was insufficient.

4. The trial court by its order dated 23.04.2016, recorded the findings against the plaintiff / petitioner and held that the suits filed were under-valued and the court fee paid by the plaintiff was insufficient. Aggrieved by the same, the plaintiff filed the writ petition before the High Court, contending that the land in dispute was agricultural land. Further, it was stated that the appellant-plaintiff was not party to the sale deed, and therefore, the learned trial court has committed an illegality in deciding the issues against the plaintiff and in directing the plaintiff to pay ad valorem court fee on the market value of the land. It was also submitted that as the land in dispute was agricultural land, the petitioner was obliged to pay the court fee on the revenue payable as fixed by the state government in view of Section 7(iv-A) of the Court Fees Act, 1870.

5. The High Court, by the impugned judgment, after hearing counsel for the parties, accepted the respondent/defendants’ contentions that the circle rate fixed by the collector to charge stamp duty took into account the actual market value of the property situated in the area. It was held that fixation of circle rate by the collector is the proper mode for fixation or determination of the market value (for purposes of payment of court fees), unless an aggrieved person challenges that the circle rate fixed by the Collector is not the correct market value of the property.

6. Mr. P.N. Mishra, learned senior counsel, argued that the land in dispute is revenue payable land. Accordingly, the suits were correctly valued at 30 times of the revenue fixed by the state. It was urged that being a stranger to the sale deed in question, the plaintiff had to pay 1/5th on the market value as assessed, i.e. on 30 times the revenue. It was urged that the market value in the sale deed was mentioned at Rs. 11,79,09,000/- and Rs. 7,20,36,000/- respectively as the market value assessed in view of the circle rate fixed by the collector, which was not the correct market value. Counsel relied on a textual interpretation of Section 7(iv-A) of the Court Fees Act. Reliance was placed on Shailendra Bhardwaj v. Chandra Pal & Anr., (2013) 1 SCC 579 to say that the circle rate fixed by the collector for charging stamp duty is not the correct market value of the property for the purpose of court fees. Therefore, the market value mentioned in the sale deed in order to pay the stamp duty, i.e. Rs. 11,79,09,000/- and Rs. 7,20,36,000/- respectively, is not the correct market value of the property in dispute. Mr. Mishra also argued

Click Here to Read the rest of this document

2020 Supreme(SC) 181

IMPORTANT POINTThere was no compulsion for plaintiff to, at the stage of filing suit, prove or establish claim that suit lands were revenue paying and details of such revenue paid.

Cases Referred (2)

IMPORTANT POINT
There was no compulsion for plaintiff to, at the stage of filing suit, prove or establish claim that suit lands were revenue paying and details of such revenue paid.