This is defendants’ petition, questioning the order dated 4th May 2007 on objections regarding payment of court fees in O.S.No.3649/2007 pending on the file of XXIV Addl. City Civil Judge, Bangalore City.

2. Respondents are plaintiffs. They have brought a suit for declaration of title to the schedule ‘A’ and ‘B’ properties and further declaration that the registered sale deed dated 18.11.2000 alleged to have been executed by the plaintiffs in favour of defendant No.2 in respect of ‘B’ schedule property as null and void, not binding on the plaintiffs and other reliefs.

3. Initially the suit was valued under Section 24(b) of the Karnataka Court Fees and Suits Valuation Act, 1958 (hereinafter referred to as ‘the Act’) and fees of Rs.57,860/- was paid. As regards to the decree for injunction, the court fee was determined under Section 26(c) of the Act. The office raised an objection as regard to the valuation of the property. Thereafter, plaintiffs were called upon to pay the deficit court fee on the basis of the market value and accordingly, plaintiffs valued the suit at Rs.87,50,000/- and the court fees of Rs.1,86,500/- was paid including an amount of Rs.57,888/- already paid. The said payment of court fees was accepted by the trail court, as against which, the defendants raised an objection by filing an application under Section 24 clause (b) of the Act read with Order VII Rule 11 of CPC interalia seeking for rejection of the plaint on the ground that the court fees paid is insufficient and the suit is not maintainable.

4. The trail court considering the market value held that, the court fee is paid on the basis of the amount of consideration stated in the document and accordingly, rejected the objections of the defendants, as against which this writ petition has been filed.

5. Learned Counsel for the petitioners submitted that, the suit is one for cancellation of document. In case of cancellation of a document, the suit has to be valued under Section 38 of the Act, it is the value of the property as on the date of the suit is required to be taken into consideration for the purpose of determining the court fees. In this regard, he relied on the order passed by the trail court and pointed out that the trail court relying on the valuation of 2005 has valued the suit, instead of taking the valuation as on the date of filing of the suit. In support of her arguments, she relied on the judgment of the Division Bench reported in 1963 (1) MLJ page 67 in the matter of R. Rangiah and another –vs- Thimma Setty and Others and submitted that, in identical circumstances, while interpreting the provisions of Section 4 clause (iv) of the Mysore Court Fees Act, 1900, the Division Bench held that, the value of the property referred under the said provision means the actual value of the property when the suit was brought and not the value mentioned in the document. Relying on the said judgment, she further submitted that, Section 38 of the Act has to be understood to mean the value of the property as on the date of filing of the suit and not the value as stipulated in the document.

6. On the other hand, learned Counsel appearing for the respondents-plaintiffs submitted that, the consideration has been mentioned in the document and it is for cancellation of the said document. In case of cancellation of a document, the consideration mentioned in the document has to be considered for the purpose of determination of the court fees and accordingly, the plaintiffs have valued the suit and have paid the court fees. He further submitted that, it is not the actual value as on the date of suit but it is the value mentioned in the document.

7. Section 38 of the Act reads as under: “38. Suits for cancellation of decrees, etc.-(1) In a suit for cancellation of a decree for money or other property having a money value, or other document which purports or operates to create, declare, assign, limit or extinguish, whether in present or in future, any rig