Valuation of suits for declaration with consequential relief must relate to market value and should not be arbitrary, following Section 7(iv)(c) of the Court Fees Act, 1870.

JUDGMENT :

K.R. Mohapatra, J.

1. This matter is taken up through hybrid mode.

2. Order dated 2^nd September, 2022 (Annexure-4) passed by learned Civil Judge (Junior Division), Bhubaneswar in C.S. No.1211 of 2019 is under challenge in this CMP, whereby an application under Order VII Rule 11(b) CPC filed by the Defendants-Petitioners, has been rejected.

3. Mr. Baug, learned counsel for the Petitioners submits that the suit has been filed by the Plaintiff-Opposite Party for a declaration that the sale deed bearing ID No.1131904158 dated 21^st May, 2019 executed by the Defendant No.1 in favour of Defendant No.2 is illegal and not binding on the Plaintiff. The Plaintiff also prayed for a consequential relief of permanent injunction. In Paragraph-4 of the plaint, the Plaintiff has specifically stated that Defendant No.1 being the owner of the suit property entered into an agreement with him (Plaintiff) to sale the suit land for a total consideration of Rs.2.00 crore and pursuant to that, the Plaintiff has already paid a sum of Rs.5.00 lakh. However, without respecting such registered agreement, sale deed in question has been executed in favour of Defendant No.2. Thus, the suit has been filed for the aforesaid relief. The Defendants-Petitioners, on their appearance, filed an application under Order VII Rule 11 (b) CPC stating that in a suit for declaration of a sale deed to be void, where the Plaintiff is not a party, he is free to value the suit as per his choice. But, it should not be palpably low and arbitrary. The valuation put by the Plaintiff must have some nexus with the market value of the land/subject matter at the time of institution of the suit. If the valuation put by the Plaintiff has no nexus with the market value of the property, the Court has the discretion to direct the Plaintiff to value the suit accordingly and pay the court fee. The Plaintiff having admitted in his plaint that an agreement was executed with him for Rs.2.00 crore, he should have valued the suit accordingly. But, the suit has been valued at Rs.1,000/- for the relief of declaration and Rs.100/- for the relief of injunction.

4. It is his submission that had it been a suit for declaration simpliciter, then he would have no objection to the valuation of the suit. But, since a consequential relief of permanent injunction is sought for, the suit should have been valued as per Section 7 (iv)(c) of Court Fees Act, 1870 (for short ‘the Act’). He also relied upon the decision in the case of Sk. Majnu and another – v- Lochan Sahoo and others , reported in 2011 SCC OnLine Ori 170, wherein at Paragraph-15, it is held as under:

“15. Also, even though provision under Section 7 (iv)(c) of the Court Fees Act provides for determination of valuation of the suit by the Plaintiffs at his option but such valuation cannot be arbitrary & must have some relation with the real market value of the property at the time of institution of the suit. Referring to a number of authoritative judicial Biswal v. Budhanath Jena : 106 (2008) C.L.T. 595.

“6. On a close & composite reading of the provisions of Section 7 (iv)(c) of the Court Fees Act along with the above noted case laws, one can comfortably infer that in a suit for declaration coupled with the consequential reliefs, the Plaintiffs as per the provisions of (iv)(c) of the Court Fees Act can value the suit at his option, but such valuation cannot be arbitrary & must have some relation with the real market value of the property at the time of institution of the suit.”

5. He also relied upon the decision of Hon’ble Supreme Court in the case of Tara Devi –v- Sri Thakur Radha Krishna Maharaj, through Sebaits Chandeshwar Prasad and