REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.4347 OF 2010
(Arising out of S.L.P. (C) No.3597 of 2009)
Satheedevi .......Appellant
Versus
Prasanna and another .......Respondents
JUDGMENT
G.S. Singhvi, J.
1. Leave granted.
2. This appeal filed for setting aside order dated 21.7.2008 passed by the
learned Single Judge of Kerala High Court in Writ Petition No.21820 of
2008 whereby he declined to interfere with the 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 raises an
important question of law relating to interpretation of Section 40 of the
Kerala Court-Fees and Suits Valuation Act, 1959 (for short, `the Act').
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3. The appellant owned 9.98 acres rubber plantation. She executed
power of attorney No.376/2006 in favour of her own daughter (respondent
No.1 herein). After sometime, respondent No.1 transferred the property to
her husband (respondent No.2 herein) by registered sale deed No.1784/2007.
The appellant filed O.S. No.231/2007 for cancellation of the power of
attorney by alleging that respondent No.1 had misused the same and sold the
property to her husband. By an order dated 21.5.2008, the trial Court
directed the appellant to pay court fees on the market value of the plaint
schedule property. The appellant challenged that order in Writ Petition
No.17032/2008 (C) which was disposed of by the learned Single Judge of
Kerala High Court vide his order dated 26.6.2008, the relevant portion of
which reads as under:
"The learned counsel appearing for the petitioner further
submitted that in view of the contentions raised in the plaint,
petitioner has to file an application for amendment of the plaint
modifying the relief sought for. In the nature of the contentions
raised in the plaint, an amendment of the relief is definitely
necessary, as found by the learned Sub Judge. In such
circumstances, Writ Petition is disposed granting liberty to the
petitioner to amend the plaint and to pay the necessary court fee
payable on such pleading. It is made clear that the fact that a
time limit is fixed by this Court will not prevent the court from
granting amendment, as it is necessary for an appropriate
adjudication of the dispute involved in the suit. It is made clear
that the actual court fee payable by the plaintiff is to be decided
by the trial Court afresh, taking into consideration the relief
sought for in the plaint, in the light of the amendment of the
pleading."
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4. In furtherance of the direction given by the High Court, the appellant
applied for and she was granted permission to amend the plaint and to
incorporate prayer for cancellation of the sale deed executed by respondent
No.1 in favour of respondent No.2. In the amended plaint, value of the
property was shown as Rs.7,00,000/- and accordingly, the court fees was
paid. However by an order dated 3.7.2008, the trial Court directed the
appellant to pay court fee on the market value of the plaint schedule property
which was assessed at Rs.12 lakhs per acre.
5. Writ Petition No.21820/2008 filed by the appellant against the above
mentioned order was dismissed by the learned Single Judge, who referred to
the judgments of the Division Bench in Krishnan Damodaran v.
Padmanabhan Parvathy (1972) Kerala Law Times 774, P.K. Vasudeva
Rao v. Hari Menon AIR 1982 Kerala 35 and Pachayammal v.
Dwaraswamy Pillai (2006) 3 Kerala Law Times 527 and held that in terms
of Section 40 of the Act, the writ petitioner is required to pay court fees on
market value of the property and not on the value specified in the sale deed.
6. Shri Bechu Kurian Thomas, learned counsel for the appellant argued
that the interpretation placed by the trial Court and the High Court on
Section 40 of the Act is ex facie erroneous and impugned order is liable to
be set aside because that section does not provide for payment of court fee
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on the market value of the property for which the document, which is subject
matter of the suit, was executed. Learned counsel emphasized that in terms
of Section 40(1), court fees is required to be paid on the value of the
property for which the document was executed and submitted that the
appellant had correctly paid the court fees as per the value of the property
specified in the sale deed i.e., Rs. 7 lakhs. In support of his arguments, the
learned counsel relied upon the judgments of the learned Single Judges of
Madras High Court in Andalammal v. B. Kannaiah (1971) 2 Madras Law
Journal 205 and of Andhra Pradesh High Court in Allam Venkateswara
Reddy v. Golla Venkatanarayana and others AIR 1975 Andhra Pradesh
122.
7. Shri T.L.V. Iyer, learned senior counsel appearing for the respondent
argued that the expression `value of the property' for which the document
was executed means market value of the property and the same cannot be
read as value specified in the document. Learned senior counsel submitted
that different High Courts have, following the judgment of the Full Bench of
Madras High Court in Kutumba Sastri v. Sundaramma AIR 1939 Madras
462, consistently held that the market value of the property has to be taken
into consideration for the purpose of payment of the court fees. Learned
senior counsel relied upon the judgments of different High Courts -
Appikunju Meerasayu v. Meeran Pillai (1964) Kerala Law Times 895,
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Uma Antherjanam v. Govindaru Namboodiripad and others (1966)
Kerala Law Times 1046, T. Tharamma v. T. Ramchandra Reddy and
others AIR 1968 Andhra Pradesh 333, Sengoda Nadar v. Doraiswami
Gounder and others AIR 1971 Madras 380, Allam Venkateswara Reddy
v. Golla Venkatanarayana and others (supra), S. Krishna Nair and
another v. N. Rugmoni Amma AIR 1976 Madras 208 and Smt. Narbada
v. Smt. Aashi AIR 1987 Rajasthan 162 and argued that the learned Single
Judge did not commit any error by refusing to interfere with the order of the
trial Court.
8. We have considered the respective submissions. Sections 7(1) (2) (3)
(3A) (4), 25(a) (b), 27(a), 29, 30, 37(1) (3), 38, 40, 45 and 48 of the Act
which have bearing on the issue raised by the appellant, read as under:
"7. Determination of market value
(1) Save as otherwise provided, where the fee payable under
this Act depends on the market value of any property, such
value shall be determined as on the date of presentation of the
plaint.
(2) The market value of agricultural land in suits falling
under Section 25(a), 25(b), 27(a), 29, 30, 37(1), 37(3), 38, 45 or
48 shall be deemed to be ten times the annual gross profits of
such land where it is capable of yielding annual profits minus
the assessment if any made to the Government.
(3) The market value of a building shall in cases where its
rental value has been entered in the registers of any local
authority, be ten times such rental value and in other cases the
actual market value of the building as on the date of the plaint.
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(3A) The market value of any property other than agricultural
land and building falling under sub-sections (2) and (3) shall be
the value it will fetch on the date of institution of the suit.
(4) Where the subject-matter of the suit is only a restricted or
fractional interest in a property, the market value of the
property shall be deemed to be the value of the restricted or
fractional interest and the value of the restricted or fractional
interest shall bear the same proportion to the market value of
the absolute interest in such property as the net income derived
by the owner of the restricted or fractional interest bears to the
total net income from the property.
25. Suits for declaration.- In a suit for a declaratory decree
or order, whether with or without consequential relief, not
falling under Section 26-
(a) where the prayer is for a declaration and for possession
of the property to which the declaration relates, fee shall be
computed on the market value of the property or on rupees one
thousand whichever is higher;
(b) where the prayer is for a declaration and for
consequential injunction and the relief sought is with reference
to any immovable property, fee shall be computed on one-half
of the market value of the property or on rupees one thousand,
whichever is higher;
27. Suits for injunction.- In a suit for injunction-
(a) Where the reliefs sought is with reference to any
immovable property, and
(i) where the plaintiff alleges that his title to the property
is denied, or
(ii) where an issue is framed regarding the plaintiff's title
to the property,
fee shall be computed on one-half of the market value of the
property or on rupees five hundred, whichever is higher;
29. Suits for possession under the Specific Relief Act,
1877.- In a suit for possession of immovable property under
Section 9 of the Specific Relief Act, 1877 (Central Act 1 of
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1877), fee shall be computed on one-third of the market value
of the property or on rupees one hundred and fifty, whichever is
higher.
30. Suits for possession not otherwise provided for.- In a
suit for possession of immovable property not otherwise
provided for, fee shall be computed, on the market value of the
property or on rupees one thousand, whichever is higher.
37. Partition suits
(1) In a suit for partition and separate possession of a share
of joint family property or of property owned, jointly or in
common, by a plaintiff who has been excluded from possession
of such property, fee shall be computed on the market value of
the plaintiff's share.
(2) xxx xxx xxx
(3) Where, in a suit falling under sub-section (1) or sub-
section (2), a defendant claims partition and separate possession
of his share of the property, fee shall be payable on his written
statement computed on half the market value of his share or at
half the rates specified in sub-section (2), according as such
defendant has been excluded from possession or is in joint
possession.
38. Suits for joint possession.- In a suit for joint possession
of joint family property or of property owned, jointly or in
common, by a plaintiff who has been excluded from possession,
fee shall be computed on the market value of the plaintiff's
share.
40. 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 right, title or
interest in money, movable or immovable property, fee shall be
computed on the value of the subject-matter of the suit, and
such value shall be deemed to be--
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if the whole decree or other document is sought to be
cancelled, the amount or value of the property for which the
decree was passed or other document was executed;
if a part of the decree or other document is sought to be
cancelled, such part of the amount or value of the property.
(2) If the decree or other document is such that the liability
under it cannot be split up and the relief claimed relates only to
a particular item of property belonging to the plaintiff or to the
plaintiff's share in any such property, fee shall be computed on
the value of such property, or share or on the amount of the
decree, whichever is less.
Explanation.- A suit to set aside an award shall be deemed
to be a suit to set aside a decree within the meaning of this
section.
45. Suits under the Survey and Boundaries Act.-In a suit
under Section 14 of the Madras Survey and Boundaries Act,
1923, Section 13 of the Travancore Survey and Boundaries Act
of 1094, or Section 14 of the Cochin Survey Act, II of 1074, fee
shall be computed on one-half of the market value of the
property affected by the determination of the boundary or on
rupees one thousand, whichever is higher.
48. Interpleader suits.
(1) In an interpleader suit, fee shall be payable on the plaint
at the rates specified in Section 50.
(2) Where issues are framed as between the claimants, fee
shall be payable computed on the amount of the debt or the
money or the market value of other property, movable or
immovable, which forms the subject-matter of the suit. In
levying such fee, credit shall be given for the fee paid on the
plaint; and the balance of the fee shall be paid in equal shares
by the claimants who claim the debt or the sum of money or the
property adversely to each other.
(3) Value for the purpose of determining the jurisdiction of
Courts shall be the amount of the debt, or the sum of money or
the market value of other property to which the suit relates."
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9. Section 7 (iv), (iv-A) (as inserted by Madras Act of 1922) and (v) of
the Court-fees Act, 1870 (for short, `the Court-fees Act'), which have been
considered in various judgments of Madras High Court relied upon by
learned counsel for the respondents reads as under:-
"7. Computation of fees payable in certain suits.- The
amount of fee payable under this Act in the suits next
hereinafter mentioned shall be computed as follows:- "
xxx xxx xxx
(iv) In suits-
for movable property of no market-value.-(a) for moveable
property where the subject-matter has no market-value, as, for
instance, in the case of documents relating to title,
to enforce a right to share in joint family property.-(b) to
enforce the right to share in any property on the ground that it is
joint family property,
for a declaratory decree and consequential relief.-(c) to
obtain a declaratory decree or order, where consequential relief
is prayed,
for an injunction.-(d) to obtain an injunction,
for easements.-(e) for a right to some benefit (not herein
otherwise provided for) to arise out of land, and
for accounts.-(f) for accounts-
according to the amount at which the relief sought is valued in
the plaint or memorandum of appeal;
In all such suits the plaintiff shall state the amount at which he
values the relief sought
(iv-A) In a suit for cancellation of a decree for money or
other property having a money value or other document
securing money or other property having such value, the
valuation should be according to the value of the subject-matter
of the suit and such value shall be if the whole decree is sought
to be cancelled, the amount or value of the property for which
the decree was passed, and if a portion of the decree is sought
1
to be cancelled, such part of the amount or value of the
property.
(added by Madras Act of 1922)
for possession of land, houses and gardens.- (v) In suits for
the possession of land, houses, and gardens - according to the
value of the subject-matter; and such value shall be deemed to
be-
where the subject-matter is land, and-
(a) where the land forms an entire estate, or a definite share
of an estate, paying annual revenue to Government,
or forms part of such an estate and is recorded in the
Collector's register as separately assessed with such
revenue;
and such revenue is permanently settled - ten times the
revenue so payable;
(b) where the land forms an entire estate, or a definite share
of an estate, paying annual revenue to Government, or
forms part of such estate and is recorded as aforesaid;
and such revenue is settled, but not permanently -
five times the revenue so payable;
(c) where the land pays no such revenue, or has been
partially exempted from such payment, or is charged with
any fixed payment in lieu of such revenue,
and net profits have arisen from the land during the year
next before the date of presenting the plaint -
fifteen times such net profits;
but where no such net profits have arisen therefrom - the
amount at which the Court shall estimate the land with
reference to the value of similar land in the
neighbourhood;
(d) where the land forms part of an estate paying revenue to
Government, but is not a definite share of such estate and
is not separately assessed as above-mentioned - the
market-value of the land:"
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10. Before proceeding further, we may notice two well recognized rules
of interpretation of statutes. The first and primary rule of construction is that
the intention of the legislature must be found in the words used by the
legislature itself. If the words used are capable of one construction, only then
it would not be open to the courts to adopt any other hypothetical
construction on the ground that such hypothetical construction is more
consistent with the alleged object and policy of the Act. The words used in
the material provisions of the statute must be interpreted in their plain
grammatical meaning and it is only when such words are capable of two
constructions that the question of giving effect to the policy or object of the
Act can legitimately arise - Kanai Lal Sur v. Paramnidhi Sadhukhan
1958 SCR 360. The other important rule of interpretation is that the Court
cannot rewrite, recast or reframe the legislation because it has no power to
do so. The Court cannot add words to a statute or read words which are not
therein it. Even if there is a defect or an omission in the statute, the Court
cannot correct the defect or supply the omission. - Union of India v. Deoki
Nandan Aggarwal 1992 Supp (1) SCC 323, Shyam Kishori Devi v. Patna
Municipal Corporation (1966) 3 SCR 366.
11. Section 7 of the Act lays down different modes for determination of
the market value of the property for the purpose of payment of court fee.
Sub-section (1) of Section 7 begins with the expression "Save as otherwise
1
provided" and lays down that where the fee payable under the Act depends
on the market value of any property, such value shall be determined as on
the date of presentation of the plaint. From the plain language of Section
7(1), it is evident that it merely specifies the methodology for determination
of the market value of the property where the court fee payable under some
other provisions of the Act depends on the market value of the property
which is subject matter of the suit. Sections 25, 27, 29, 30, 37, 38, 45 and 48
deal with different kinds of suit i.e., suits for declaration, suits for injunction,
suits for possession under the Specific Relief Act, 1877, suits for possession
not otherwise provided for, partition suits, suits for joint possession, suits
under the Survey and Boundaries Act and interpleader suits. These sections
provide for payment of court fee computed on the market value of the
property. Sub-section (2) of Section 7 lays down that the market value of
the agricultural land in suits falling under Sections 25(a), 25(b), 27(a), 29,
30, 37(1), 37(3), 38, 45 and 48 shall be deemed to be ten times the annual
gross profits of such land where it is capable of yielding annual profits
minus the assessment, if any, made by the Government. In terms of sub-
section (3), the market value of a building in cases where its rental value has
been entered in the registers of any local authority, shall be ten times such
rental value and in other cases, the actual market value of the building as on
the date of the plaint. Clause (a) of sub-section (3) lays down that market
value of any property other than agricultural land and building shall be the
1
value it will fetch on the date of institution of the suit. Sub-section (4) lays
down that where subject matter of the suit is only a restricted or fractional
interest in a property, the market value of the property shall be deemed to be
the value of the restricted or fractional interest. Section 40 deals with suits
for cancellation of decrees etc. which are not covered by other sections. If
this section is interpreted in the light of the expression `save as otherwise
provided' used in Section 7(1), it becomes clear that the rule enshrined
therein is a clear departure from the one contained in Section 7 read with
Sections 25, 27, 29, 30, 37, 38, 45 and 48 which provide for payment of
court fee on the market value of the property. In that sense, Section 40
contains a special rule. Section 40(1) lays down that 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 right, title or interest in
money, movable or immovable property, fee shall be computed on the value
of the subject matter of the suit and further lays down that such value shall
be deemed to be if the whole decree or other document sought to be
cancelled, the amount or value of the property for which the decree was
passed or other document was executed. If a part of the decree or other
document is sought to be cancelled, such part of the amount or value of the
property constitute the basis for fixation of court fee. Sub-section (2) lays
down that if the decree or other document is such that the liability under it
1
cannot be split up and the relief claimed relates only to a particular item of
the property belonging to the plaintiff or the plaintiff's share in such
property, fee shall be computed on the value of such property, or share or on
the amount of the decree, whichever is less. The deeming clause contained
in the substantive part of Section 40(1) makes it clear that in a suit filed for
cancellation of a document which creates any right, title or interest in
immovable property, the court fees is required to be computed on the value
of the property for which the document was executed. To put it differently,
the value of the property for which the document was executed and not its
market value is relevant for the purpose of court fee. If the expression
`value of the subject matter of the suit' was not followed by the deeming
clause, it could possibly be argued that the word `value' means the market
value, but by employing the deeming clause, the legislature has made it clear
that if the document is sought to be cancelled, the amount of court fee shall
be computed on the value of the property for which the document was
executed and not the market value of the property. The words "for which"
appearing between the words "property" and "other documents" clearly
indicate that the court fee is required to be paid on the value of the property
mentioned in the document, which is subject matter of challenge.
12. If the legislature intended that fee should be payable on the market
value of the subject matter of the suit filed for cancellation of a document
1
which purports or operates to create, declare, assign, limit or extinguish any
present or future right, title and interest, then it would have, instead of
incorporating the requirement of payment of fees on value of subject matter,
specifically provided for payment of court fee on the market value of the
subject matter of the suit as has been done in respect of other types of suits
mentioned in Sections 25, 27, 29, 30, 37, 38, 45 and 48. The legislature may
have also, instead of using the expression "value of the property for which
the document was executed", used the expression "value of the property in
respect of which the document was executed". However, the fact of the
matter is that in Section 40(1) the legislature has designedly not used the
expression `market value of the property'.
13. If the interpretation placed by the trial Court and the High Court on
the expression "value of the property for which the document was executed"
is accepted as correct then the word `value' used in Section 40(1) of the Act
will have to be read as `market value' and we do not see any compelling
reason to add the word `market' before the word `value' in Section 40(1) of
the Act.
14. We may now advert to the judgments relied upon by the learned
counsel for the parties and some other judgments of different High Courts in
1
which Section 40(1) of the Act and similar provisions of other State
legislations have been interpreted.
15. In Venkata Narasimha Raju v. Chandrayya AIR 1927 Madras 825,
the Division Bench of Madras High Court interpreted Section 7 (v) (a) of the
Court-fees Act as amended by Madras Act of 1922 and observed:
"One point raised is whether the market value of the property
should not be taken for the purpose of this valuation, or whether
the statutory value should be adopted. We think the latter is the
proper course as there is nothing in the Act to show that the
market value is the value contemplated in S.7 (iv) (a). When
there is in the Act itself a special rule as to valuing property in
suits for Court-fees, we think it is proper to take that method of
valuation in preference to any other method to get the value
where there is no indication that any other method should be
adopted."
(emphasis supplied)
16. In Balireddi v. Khatipulal Sab AIR 1935 Madras 863, the learned
Single Judge of the High Court considered the question whether in a suit for
setting aside mortgage deeds and sale deeds, the plaintiff is required to pay
court-fees on the market value of the property and answered the same in
affirmative. The learned Judge referred to two earlier judgments in Venkata
Narasimha Raju v. Chandrayya (supra) and Venkatasiva Rao v.
Satyanarayanamurthi AIR 1932 Madras 605 but disagreed with the ratio
of those judgments and held:
"The amount of court-fee payable depends upon "the value of
the subject-matter of the suit," that is what the section says.
1
Where a document securing money is sought to be cancelled,
the section goes on to say, that the value of the subject-matter
shall be deemed to be "the amount for which the document is
executed." In the case of a mortgage instrument therefore the
court-fee has to be computed on the amount for which the
instrument is executed, in other words, the principal amount
secured by it. This is the plain effect of the words of the
section, and I fail to see how the method of computation fixed
in S.7(v) can possibly be applied. Now as regards the sale-
deed, the question arises, is the value referred to in the section,
the actual value of the property, that is to say, its market value
or the artificial value prescribed by S.7 (v)? The last mentioned
section deals with suits for possession and the legislature has
expressly enacted that in such suits the value shall be
determined in a particular manner. Cl. (iv-A) refers simply to
"the value of the property," which means "value" as generally
understood, whereas Cl. (v) prescribes an artificial method of
valuation. There is no reason to construe Cl. (iv-A) in the light
of Cl. (v) which deals with a specific matter; indeed, when the
legislature intends to prescribe an artificial method, it says so in
express terms, as Cl. (iv-c) also shows. I am therefore of the
opinion that in the case of the sale-deeds, the amount of court-
fee payable must be computed on the market value of the
properties with which they deal."
17. In Kutumba Sastri v. Sundaramma (supra), the Full Bench of
Madras High Court interpreted paragraph (iv-A) of Section 7 of the Court-
fees Act. The Full Bench referred to the earlier judgments in Venkata
Narasimha Raju v. Chandrayya (supra), Venkatasiva Rao v.
Satyanarayanamurthi (supra), Balireddi v. Khatipulal Sab (supra) and
approved the view expressed by the learned Single Judge in Balireddi v.
Khatipulal Sab (supra) by making the following observations:
"We consider that the view taken by Venkatasubba Rao J. in 59
Mad 240 is preferable to that taken in 53 MLJ 267. Para (iv-A)
deals with suits where it is necessary for the plaintiff to seek the
1
cancellation of a decree or of a deed. Para (v) relates merely to
suits for possession. In a suit for possession it is not always
necessary to set aside a decree or a document. Where a suit is
merely for possession the Act says how the value of the subject-
matter shall be arrived at. When adding para (iv-A) to S.7 the
Legislature did not say that in a suit falling within the new
paragraph the valuation of the subject-matter should be arrived
at in accordance with the method indicated in para (v). It said
that a suit within para (iv-A) should be valued according to the
value of the property, and the value of the property, unless there
is an indication to the contrary, must mean to its market value.
By the Amending Act of 1922 para (iv-C) was also amended.
Before the amendment, this paragraph provided that in a suit to
obtain a declaratory decree or order where a consequential
relief was prayed, the value should be according to the value of
the relief sought by the plaintiff. The Amending Act inserted
the Proviso to the effect that in a suit coming under this
paragraph in a case where the relief sought is with reference to
immovable property the valuation shall not be less than half the
value of the immovable property calculated in the manner
provided for by paragraph (v). There the Legislature expressly
provided that the method of calculation was to be in accordance
with para (v) but in adding para (iv-A) no such direction was
given. The court-fee is to be calculated on the amount or the
value of the property and to give the wording of para (iv-A) its
plain meaning the valuation must be the valuation based on the
market value of the property at the date of the plaint."
(emphasis supplied)
18. In Navaraja v. Kaliappa Gounder (1967) 80 Madras Law Weekly
19 (SN), the learned Single Judge noted that in the earlier suit, the properties
were valued at Rs.4000/-, referred to Section 40(1) of the Madras Court-fees
and Suits Valuation Act, 1955, which is pari materia to the Section 40 of the
Act and observed:
"............that as the decree itself specified the value of the
property it will fall within the language of Section 40(1),
1
namely, the amount or value of the property for which the
decree was passed and ordered that the court-fee has to be paid
calculated on the sum of Rs.4000, which is the value given in
the decree, and not the market value of the properties on the
date of the filing of the plaint."
(emphasis supplied)
19. In Arunachalathammal v. Sudalaimuthu Pillai (1968) 83 Madras
Law Weekly 789, another learned Single Judge examined the correctness of
order passed by the Subordinate Judge, Tirunelveli, who had allowed the
plaintiff to pay the court-fee for the cancellation of settlement deed on the
value of the document i.e. Rs.3500/-. While dismissing the revision filed by
the defendants, the learned Judge referred to Section 40(1) of the Madras
Act, distinguished the Full Bench judgment in Kutumba Sastri v.
Sundaramma (supra) and observed:
"It will be seen that the section provides for suits (1) relating to
cancellation of a decree for money, (2) cancellation of a decree
for other property having a money value, and (3) cancellation of
other document which purports or operates to create, declare,
assign, limit or extinguish rights in moveable or immoveable
property. The sub-section provides that fee shall be computed
on the value of the subject matter of the suit. Then it proceeds
to state how such value should be calculated. It provides that if
the whole decree is sought to be cancelled, the amount or value
of the property for which the decree was passed should be taken
into account. In the case of other document which purports or
operates to create, declare, assign, limit or extinguish rights in
moveable or immoveable property, the value shall be deemed to
be the value of the property. It is not clear as to whether the
words "the amount or value of the property for which the
decree was passed" are applicable to the cancellation of a
document which creates or declares rights in moveable or
immoveable property. In the case of suits for cancellation of
either documents, apart from suits for cancellation of a decree
2
for money or other property, the above clause would be
certainly applicable. This would mean that in the case of suits
for cancellation of other documents, the value of the subject
matter of the suit shall be deemed to be the amount for which
the documents was executed. It was submitted on behalf of the
defendants that even in the case of a suit for cancellation of
other documents, the value shall be deemed to be the value of
the property. But this contention would ignore the effect of the
words "value of the property for which the decree was passed".
Even conceding that the value of the property should be taken
into account in suits for cancellation of other documents, there
are two modes provided for to compute the value of the subject
matter of the suit, (1) the value of the property and (2) the
amount for which the document was executed.
Mr. Venugopalachari, learned counsel for the petitioners,
submitted that this view is opposed to the one taken in the
decision in Kutumba Sastri v. Sundaramma where the Full
Bench held that in a suit for cancellation of a deed of
conveyance the valuation must be the valuation based on the
market value of the property at the date of the plaint. The Full
Bench was considering the question as to the Court fee payable
in a suit for cancellation of a deed of conveyance and for
possession of the property covered by the deed. The court held
that the plaintiff should value his relief in accordance with the
provisions of S.7(4)(A), and not according to S.7(V) of the old
Court fees Act, 1870. After referring to the difference of
opinion between the various decisions, the Full Bench preferred
the view taken in Bali Reddi v. Khatifulal Sab 59 Mad. 240,
followed in Venkatakrishniah v. All Sahib 48 L.W. 277. S.
7(4-A), of the old Act is slightly differently worded and it runs
as follows:-
"In a suit for cancellation of a decree for money or other
property having a money value, or other document
securing money or other property having such value,
according to the value of the subject matter of the suit,
and such value shall be deemed to be--
if the whole decree or other document is sought to be
cancelled, the amount or the value of the property for
which the decree was passed or the other document
executed,
2
if a part of the decree or other document is sought to be
cancelled, such part of the amount or value of the
property".
It will be seen that the above section relates to a suit for
cancellation of a decree for money or other property having a
money value, or other document securing money or other
property having such value. There was some doubt whether the
third part of the section relating to either document securing
money would include sales. In Balireddy v. Badul Sabar,
Venkatasubba Rao, J. referring to his earlier decision in
Doraiswami v. Thangavelu held that sale deeds would come
within the meaning of this section. Whether this sub-section
includes sale deeds or need not detain us, as S. 40(1) of Madras
Act XIV of 1955 is differently worded and there can be no
doubt that it brings within its purview sale deeds as it relates to
other documents which purports or operates to create, declare,
assign, limit or extinguish any right in moveable or immoveable
property, S. 7(iv-A) of the old Act states that the value be
deemed to be "if the whole decree or other document is sought
to be cancelled, the amount or the value of the property for
which the decree was passed or the other document executed".
The same words are used in S. 40(1) of the new Act. In
construing this sub-clause in S. 7(iv-A) of the old Act, the Full
Bench pointed out in the decision cited above that the suit
within the meaning of the above section should be valued
according to the value of the property, unless there is an
indication to the contrary, must mean its market value. It may
be noted that the court was considering the value of the
property and does not appear to have taken note of the words
"the other document executed".
As already pointed out, S. 7(iv-A) of the Old Act as well
as S. 40(1) of the present Act deal with suits for cancellation of
a decree for money, cancellation of a decree for other property
having a money value and suit for cancellation other document.
In the case of other documents, the clause "the amount or the
value of the property for which the decree was passed" cannot
be held to be applicable and the only clause that can be properly
applied is only the value for which the document was executed.
In the third category in S. 40(1), to the words `other document,
the words `which purports or operates to create, declare, assign,
limit or extinguish' rights in moveable or immoveable property
2
are included. Obviously in suits for cancellation of other
documents referred to in S. 40(1) of the new Act the valuation
should be the value of the other document executed. In
Balireddy v. Abdul Satar the court refers to the section which
says that the value of the subject matter shall be deemed to be
the amount for which the document is executed. But it
confined its discussion to the actual value of the property and
held that it referred only to the market value. This decision also
does not refer to the valuation of the document on the basis of
the amount for which the document is executed."
(emphasis supplied)
20. In Appikunju Meerasayu v. Meeran Pillai (supra), the learned
Single Judge of Kerala High Court relied on the judgment of Madras High
Court in Narasamma v. Satyanarayana AIR 1951 Madras 793 and
observed:
"As I have pointed out earlier, the emphasis in S.40(1) of the
Court Fees Act is regarding the subject matter of this suit and in
respect of that subject matter which admittedly is immovable
property it will have to be valued on the amount or valued as
the property which was no doubt covered by the decree in O.S.
21/1125. But the value or amount must certainly be the market
value as on the date of the filing of the suit."
The same view was reiterated by another learned Single Judge of the
Kerala High Court in Uma Antherjanam v. Govindaru Namboodiripad
and others (supra).
21. In Sengoda Nadar v. Doraiswami Gounder and others (supra), the
learned Single Judge of Madras High Court referred to earlier judgments but
2
disagreed with the view expressed by the other learned Single Judges in
Navaraja v. Kaliappa Gounder (supra) and Arunachalathammal v.
Sudalaimuthu Pillai (supra) and followed the ratio of Full Bench judgment
by recording the following observations:
"With respect, I need hardly add that this is not the correct
reading of the Full Bench decision. He has concluded by stating
that obviously in suits for cancellation of "other documents"
referred to in Section 40 (1) of the present Act, the valuation
should be the value of the other document executed. I have
already pointed out that in the documents just as in the case of
decrees, the distinction is between those that dealt with money
and those that dealt with property. The amount mentioned in the
decree or the document is relevant only when the question is
with regard to the decree for money or document securing
money. But in the case of decrees or documents dealing with
property of money value, the value of the subject-matter of the
suit should be computed on the value of the property for which
the decree was passed or the document was executed. I need not
repeat that the valuation in respect of the property dealt with by
the decree or document should be the market value and such a
market value should be as on the date of suit."
22. In S. Krishna Nair and another v. N. Rugmoni Amma (supra),
another learned Single Judge followed the ratio of Sengoda Nadar v.
Doraiswami Gounder and others (supra) and held that in a suit for
cancellation of decree, the property is to be valued under Section 40(1) of
the Tamil Nadu Court Fees and Suits Valuation Act, 1955 and the court fee
is required to be paid on the market value of the property as on the date of
the plaint.
2
23. In Krishnan Damodaran v. Padmanabhan Parvathy (supra), the
Division Bench of Kerala High Court reiterated the views expressed in
Kutumba Sastri v. Sundaramma (supra), Appikunju Meerasayu v.
Meeran Pillai (supra) and Sengoda Nadar v. Doraiswami Gounder and
others (supra) and held that court fee is payable on the market value of the
property covered by the document and not on the basis of the valuation
given in the document.
24. In P.K. Vasudeva Rao v. Hari Menon (supra), the Division Bench of
the Kerala High Court held as under:
"True, as contended for on behalf of the plaintiff-revision
petitioner, S.40 nowhere uses the expression `market value'.
But it is clear therefrom that the legislative intent is to levy
court-fee on the just equivalent in money of the `other property'
comprised in the decree or portion thereof sought to be set
aside; or dealt with in the `other document' or part thereof
sought to be cancelled. The section opens by saying that `in a
suit for cancellation of a decree for money or other property
having a money value' (emphasis supplied) `fee shall be
computed on the value of the subject matter of the suit'.
`Money value' of a property is its worth in terms of the
currency of the land or in other words, is such money-
equivalent thereof in open market; and not any amount less than
that as where it is overvalued at a fancy-price. It cannot be that
when, what is sought to be cancelled is a decree or part thereof
for `other property', i.e. property other than money, the value of
such property for computation of court-fees is its `money-
value', and when, what is sought to be cancelled is a document
or part thereof in respect of `other property', the value of such
property for such computation is not its `money-value'. Value
of the subject matter, namely, value of the `other property' in
both cases is its money-value.
2
The object of the second and the third paras in sub-section (1)
of S.40 is not to introduce any fiction but to provide for two
situations, namely, (i) where the decree or the document as a
whole is sought to be cancelled and (ii) where only part thereof
is sought to be cancelled. In the first situation, the value of the
subject matter is the amount for which the decree was passed or
the document was executed; or the value of the property
concerning which the decree was passed or the document was
executed. In the second class of cases, the value of the subject
matter of the suit is such part of the amount for which the
decree was passed or the document was executed, in respect of
which part, the decree or the document is sought to be
cancelled; or the value of such part of the property concerning
which the decree was passed or the document was executed, in
respect of which part, the decree or the document is sought to
be cancelled.
Section 40(1) has to be read as a whole. So read: (A) when the
suit is for cancellation of a decree or other document for
money, then the value of the subject-matter of the suit will be:-
(i) the whole amount for which the decree was passed or the
document was executed, if what is sought to be cancelled is the
whole of the decree or the whole of the document; and (ii) such
part of the amount for which the decree was passed or the
document was executed, if only part of the decree or part of the
document is sought to be cancelled; (B) when the suit is for
cancellation of a decree or other document for a property
having money-value, then, the value of the subject-matter of the
suit will be:- (i) if the whole of the decree or the document is
sought to be cancelled - the value of the property covered by
the decree or the document; and (ii) if only part of the decree or
of the document is to be cancelled; value of such part of the
property in respect of which the decree was passed or the
document was executed and to which extent such decree or
such document is to be cancelled. We are not impressed with
the submission that there is a distinction between the
expressions `the value of the property for which the decree was
passed or other document was executed' and `the value of the
property in respect of which the decree was passed or other
document was executed' for the purpose of computation of
court-fees. The scheme of S.40 is to make court-fees leviable
on the sum of money or portion thereof, when what the plaintiff
seeks is to get rid of his obligation and liability therefor or part
2
thereof under a decree passed or a document executed by
cancellation thereof, and on the money-equivalent of the
property or portion thereof, when what he seeks to get rid of is
his obligation and liability in relation to that property or portion
thereof under a decree passed or a document executed in respect
of it by cancellation thereof."
25. In R. Rangiah v. Thimma Setty (1963) 1 Mysore Law Journal 67,
the Division Bench of Mysore High Court interpreted Section 4(iv)(A) of
Mysore Court Fees Act, which is substantially similar to Section 40 of the
Act and held that:
"Now, one thing which is very clear from the paragraphs 1 & 2
of S.4 (iv) A is that in a suit brought for the cancellation of a
document executed for the purpose of securing property, the
Court Fee payable is on the value of such property. Although
those paragraphs do not refer in terms to the market value of the
property, as some of the other parts of the Act do, I have no
doubt in my mind that the word `value' occurring in those
paragraphs has reference to no other value than the market
value. The word `value' when it occurs in an enactment like
the Court Fees Act, has to my mind, particularly known and
definite meaning. That word has reference to the price which
the property will fetch when exposed to the test of competition.
Mr. Gopivallabha Iyengar had to admit that the word
`value' occurring in the first paragraph would have to be
understood as the market value if paragraphs 2 and 3 did not
exist in S.4(iv) A. If, therefore, the word `value' occurring in
the first paragraph means market value, I see nothing in
paragraphs 2 and 3 on which Mr. Gopivallabha Iyengar
strongly relied which can persuade me to take the view that the
word `value' occurring in the first paragraph which, as
ordinarily understood, is the market value, should be
understood differently.
Paragraph 2 does no more than to merely provide that, if
a document is sought to be cancelled in its entirety, the Court
Fee is payable on the value of the whole of the property in
2
respect of which the document is executed. Likewise paragraph
3 merely provides that where the cancellation sought is a partial
cancellation, Court Fee is payable only on the value of the
property in respect of which cancellation is sought. It is for that
purpose that the words "value shall be deemed to be" are used
by the Legislature in the first paragraph of the clause and not
for the purpose of assigning to the word `value' occurring in the
first paragraph a meaning different from that which has to be
ordinarily given to it.
It is no doubt true that the second paragraph of S.4(iv) A
directs that the Court Fee payable in a suit brought for the
cancellation of a document is the Court Fee on the value of the
property `for which' the document was executed. Ordinarily
the expression `for which' occurring in that paragraph might
have justified the interpretation that the amount on which the
Curt Fee has to be paid is the amount specified in the document.
But, that, that would not be correct way of understanding those
words occurring in paragraph 2 of that clause is clear from the
fact that S.4(iv) A does not provide merely for cancellation of a
document executed for a specified consideration such as a sale
deed, but also provides for the payment of Court Fee even in
suits brought for cancellation of other documents such as a deed
of settlement, a gift deed or a trust deed. In the latter category
of cases it would not be appropriate to regard those documents
as executed for a consideration or a specified amount and those
cases would not be cases in which there would be any value
`for which the document is executed.
The second paragraph which requires the payment of
Court Fee on the value of the property `for which' the
document was executed, does not, when properly understood,
direct the payment of such Court Fee on the value for which the
document was executed, but on the value of the property for
which it was executed. In other words, the words `for which'
occurring in that paragraph do not refer to the value but to the
property to which the document relates. The words `for which
occurring in that paragraph, in my opinion, mean `for securing
which', so that what that paragraph directs is the payment of
Court Fee on the value of the property for securing which the
document is executed.
2
That, that is the correct interpretation is indicated by the
word `securing' occurring in the first paragraph of the clause in
the context of a document of which cancellation is sought.
It therefore follows that what is relevant for the purpose
of S.4(iv) A is not the value of the property specified in the
document but its real and actual value when the suit is brought.
It is on that value that the Court fee has to be paid if the suit is
for the cancellation of a document recording a transaction
involving such property."
26. In Pachayammal v. Dwaraswamy Pillai (supra), another Division
Bench of Kerala High Court interpreted Sections 7 and 40 of the Act and
held:
"Section 7 of the Act though deals with determination of
market value, it starts with a saving clause. A reading of
Section 7(1) makes it clear that if there is a specific provision in
the Act for valuing the suit, the Sub-sections (2) to (4) of
Section 7 can have no application. According to the counsel for
the petitioners, Section 40 is an independent provision for
valuation of suits for cancellation of decrees and documents and
in view of Section 7(1), market value of the property is not a
criteria at all. Whenever market value of the property is to be
taken into account, it is specifically stated in the statute.
Sections 24, 25, 27, 29, 30, 37, 38, 45 & 48 etc, specifically
provide that market value of the property involved in the suit is
to be taken as basis for valuation. But, the word 'market' is
conspicuously absent in Section 40. When the section is plain
and unambiguous, courts should not venture to add words to it
to give an entirely different scope to the said provisions never
intended by the legislature. Therefore, it was argued that
concept of "market value of the property' cannot be brought into
Section 40. Learned Counsel invited our attention to the
decisions of the Apex Court in Gurudevdatta VKSSS Maryadit
and Ors. v. State of Maharashtra and Ors (2001) 4 SCC 534
(Paragraph 26) and Padma Sundara Rao (Dead) and Ors. v.
State of T.N. and Ors. (2002) 3 SCC 533 (Paragraphs 14 and
15). It is true that when the words of a statute are clear, plain or
2
unambiguous, i.e. they are reasonably susceptible to only one
meaning, the courts are bound to give effect to that meaning
irrespective of consequences. The rule stated by TINDAL, C.J.
in Sussex Peerage case, (1844) 11 Cl & F 85, p. 143) is in the
following form: "If the words of the statute are in themselves
precise and unambiguous, then no more can be necessary than
to expound those words in their natural and ordinary sense. The
words themselves do alone in such cases best declare the intent
of the lawgiver".
Here, the question is what is clearly stated in Section 40 as the
criteria for valuation of suit filed for cancellation of a
document. Section 40 of the Act mandates that if a suit is filed
for cancelling a document which creates, assigns or
extinguishes the right, title or interest in an immovable
property, if the whole document is to be cancelled, the value of
the property for which the document was executed and if plaint
is only to cancel part of the document, such part of the value of
property for which document was executed is the basis for suit
valuation. Therefore, value depends on the value of property for
which document was executed and sought to be cancelled and
not the value mentioned in the document. Here, a gift deed is
sought to be cancelled. Then on a plain meaning of Section 40,
suit should be valued at the value of the property for which gift
deed was executed and not the value of the document or value
mentioned in the document. If a gift deed is executed out of
love and affection, which is a valid consideration, suit valuation
depends upon not on estimation of value of love and affection
or null value, but, on the value of the property covered by the
gift deed. Then the question is what is the value of property at
the time of filing the suit. In legal terms value of property
means market value of property and when valuation is
considered with regard to suit valuation, it can only be market
value of property at the time of filing the suit and nothing else.
Section 7(1) clearly states that except otherwise provided, court
fee payable under the Act depends on the market value
determined on the date of presentation of plaint. No contrary
indication is made in Section 40."
27. In Smt. Narbada v. Smt. Aashi AIR 1987 Rajasthan 162, the learned
Single Judge of Rajasthan High Court followed the ratio of the Division
3
Bench of Kerala High Court in P.K. Vasudeva Rao v. Hari Menon (supra)
and held that in a suit for cancellation of decree, the court fee is required to
be paid on the market value of the property.
28. In Andalammal v. B. Kanniah (1971) II Madras Law Journal 205,
the learned Single Judge considered the question relating to court fee in the
context of a suit filed for cancellation of a settlement deed on the ground that
the same had been procured by fraudulent misrepresentation. In the
settlement deed, the property was valued at Rs.10,000/-. The learned trial
Court held that the suit should be valued on the market value of the property
as on the date of plaint and not on the basis of the value of suit in the
settlement deed and accordingly directed the plaintiff to pay deficit court fee
after furnishing the market value of the property. The learned Single Judge
referred to Section 40 of the Madras Act and held:
"It is important to mark the words "the amount or value of the
property for which the document was executed". If the
Legislature had said "the amount or value of the property in
respect of which the document was executed", it would be
reasonable to hold that the basis shall be the market value of the
property, regardless of what the document says it is. But as the
section refers to "the amount or value of the property for which
the document was executed", the legislative intent is clear that
the basis for the purpose of valuation shall be the amount or
value mentioned in the document itself. Evidently, the
intention of the Legislature is that when a person seeks to
cancel a document executed by himself, he shall pay Court-fee
upon the value which he has chosen to put upon the property in
the document he seeks to cancel. The word "value" ordinarily
connotes the price set on a thing, and when the Legislature
3
directs that the value of the subject-matter shall be deemed to
be the amount or value of the property for which the document
was executed, I see no warrant for ignoring the plain language
or the section and holding that the value shall be the market
value of the property. In fact, the Legislature has expressly
used the words "market value" in twelve other sections of the
Act in contra distinction to the word "value" used in section
40(1) of the Act. I, therefore, hold that the Court-fee paid by
the petitioner upon the basis of the value of the property as
given in the settlement deed is correct."
29. In Allam Venkateswara Reddy v. Golla Venkatanarayana AIR
1975 A.P. 122, a learned Single Judge of Andhra Pradesh High Court
construed Section 37 of the Andhra Pradesh Court-fees and Suits Valuation
Act, which is pari materia to Section 40 of the Act, and held:
"Section 37(1) contemplated two kinds of suits, viz. suits for
cancellation of decrees, whether they are for money or for
property having a money value and suits for cancellation of
documents creating or extinguishing rights whether in money,
movable or immovable property. It is stated therein that for the
purpose of payment of court-fee in the suit the fee shall be
computed on the basis of the value of the subject-matter of the
suit and that such value shall be deemed to be the one indicated
in clause (a) of Section 37(1) wherein it is mentioned that if the
whole decree or other document is sought to be cancelled, the
amount or value of the property for which the decree was
passed or other document was executed shall be deemed to be
the value for computation of court-fee . From this it is very
clear that for cancellation of a document regarding a property
the value shall be deemed to be the amount for which the
document regarding a property the value shall be deemed to be
the amount for which the document sought to be cancelled was
executed with regard to the property. In the present case, the
two sale deeds in question were executed for a sum of
Rs.18,000/-. Therefore, the court-fee has to be paid on that
amount and not on the present market value of the properties
which are the subject-matter of the two sale deeds. A reading
of Section 37 does not show that the court-fee has to be
3
computed on the basis of the present market value of the
document sought to be cancelled."
30. In view of our analysis of the relevant statutory provisions, it must be
held that the judgments of the Division Bench of Madras High Court and of
the learned Single Judges in Venkata Narasimha Raju v. Chandrayya
(supra), Navaraja v. Kaliappa Gounder (supra), Arunachalathammal v.
Sudalaimuthu Pillai (supra) and Andalammal v. B. Kanniah (supra) as
also the judgment of the learned Single Judge of Andhra Pradesh High Court
in Allam Venkateswara Reddy v. Golla Venkatanarayana (supra) lay
down correct law. In the first of these cases, the Division Bench of Madras
High Court rightly observed that when there is a special rule in the Act for
valuing the property for the purpose of court fee, that method of valuation
must be adopted in preference to any other method and, as mentioned above,
Section 40 of the Act certainly contains a special rule for valuing the
property for the purpose of court fee and we do not see any reason why the
expression `value of the property' used in Section 40(1) should be
substituted with the expression `market value of the property'.
31. The judgment of the learned Single Judge of Madras High Court in
Balireddi v. Khatipulal Sab (supra), which was approved by the Full
Bench of that Court in Kutumba Sastri v. Sundaramma (supra) turned
primarily on the interpretation of Section 7(iv-A) of the Court Fee Act as
3
amended by Madras Act which refers to the value of the property simpliciter
and the Court interpreted the same as market value. Neither the learned
Single Judge nor the Full Bench were called upon to interpret a provision
like Section 40 of the Act. Therefore, the ratio of those judgments cannot be
relied upon for the purpose of interpreting Section 40 of the Act. In
Arunachalathammal v. Sudalaimuthu Pillai (supra), the learned Single
Judge rightly distinguished the judgment of the Full Bench by making a
pointed reference to the language employed in Section 40(1) of the Madras
Act No.XIV of 1955, which is identical to Section 40 of the Act. In
Sengoda Nadar v. Doraiswami Gounder and others (supra) and S.
Krishna Nair and another v. N. Rugmoni Amma (supra), the other
learned Single Judges did not correctly appreciate the ratio of the judgment
of the coordinate Bench in Arunachalathammal v. Sudalaimuthu Pillai
(supra) and distinguished the same without assigning cogent reasons. We
may also observe that if the learned Single Judges felt that the view
expressed by the co-ordinate Bench was not correct, they ought to have
referred the matter to the larger Bench. The judgments of the Division
Benches of Kerala High Court in Krishnan Damodaran v. Padmanabhan
Parvathy (supra), P.K. Vasudeva Rao v. Hari Menon (supra) and
Pachayammal v. Dwaraswamy Pillai (supra) and of the learned Single
Judges in Appikunju Meerasayu v. Meeran Pillai (supra) and Uma
Antherjanam v. Govindaru Namboodiripad and others (supra) also do
3
not lay down correct law because the High Court did not appreciate that the
legislature has designedly used different language in Section 40 of the Act
and the term `market value' has not been used therein. The same is true of
the judgments of the learned Single Judges of Mysore and Rajasthan High
Courts noticed hereinabove.
32. In the result, the appeal is allowed. The 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. The trial Court shall now
proceed with the case and decide the same in accordance with law. The
parties are left to bear their own costs.
.................................J.
[G.S. Singhvi]
.................................J.
[Asok Kumar Ganguly]
New Delhi
May 07, 2010.
