Court Fees Act, 1870

Section 7 (iv)
Court Fees Act, 1870
Section 7 (iv) — Suits Valuation Act — Section 9 — Rule 4

Delhi High Court Original Side Rules 1967 were framed by the Delhi High Court in exercise of its powers conferred by Sections 122 and 129 of the Code of Civil Procedure, 1908 and Section 7 of the Delhi High Court Act, 1966 and all other powers enabling it to make the rules. These rules govern the practice and procedure for the exercise of its ordinary original civil jurisdiction. After the enforcement of these rules, the Courts functioning on its original civil jurisdiction had to follow the practice and procedure as laid down in these rules. Chapter 3 speaks of valuation of suits. Chapter 3 Part (C) lays down rules regulating the manner of determining the value of suits for purposes specified in Section 9 of the Act, 1887. These rules were made by the High Court under the powers conferred under Section 9 of the Act and all other powers in that behalf, for determining for the purposes specified therein, the value of the subject matter of certain classes of suits which do not admit of being satisfactorily valued and for the treatment of such classes of suits as if their subject matter were of the value in the manner stated in the rules so framed. Rules 3 & 4 are relevant to ascertain whether the plaintiff can value the suit for rendition of accounts separately for court fees and for jurisdiction. Rules 3 & 4 read:-

"3. Suits in which the plaintiff in the plaint asks for accounts only not being: (i) Suits to recover the amount which may be found due to the plaintiff on
taking unsettled accounts between him and the defendant, (ii) Suits of either of the kinds described in Order XX, Rule 13 of the Code
of Civil Procedure.
Value — (a) For the purposes of the Rs. Court-fees Act, 1887. ...200
(b) For the purposes of the Suits Valuation Act, 1887, and the Punjab
Courts Act, 1918.....1,000

4. (i) Suits in which plaintiff in the plaint seeks to recover the amount which
may be found due to the plaintiff in taking unsettled accounts between
him and the defendant, (ii) Suits of either of the kinds described in Order XX, Rule 13 of the Code
of Civil Procedure:
(a) Value for the purpose (a) As determined of Court-fee by the _________________________________Court-fees Act, 1870._______________
(a) Value for the purpose (b) For the of jurisdiction purpose of the
Suits Valuation Act, 1887, and the Punjab Courts Act, 1918, as valued by the plaintiff in the plaint, subject to determination by the Court at any stage of the trial.[Para 13]

Since the High Court of Delhi has framed rules under Section 9 of the Act empowering the plaintiff to value its suit for the purposes of court fees as determined by the Court Fees Act and to value for purposes of jurisdiction as valued by the plaintiff in the plaint separately. Valuation for purposes of jurisdiction so fixed by the plaintiff in the plaint is subject to determination by the Court at any stage of the trial. [Para 15]

I am in full agreement with the view expressed by Vijender Jain, J. on the aforesaid issue. In my considered view, that truly reflects position as laid down by the Apex Court in Abdul Hamid Shamsi v. Abdul Majid case (supra) and M/s Commercial Aviation and Travel v. Vimla Pannalal case (supra). There can be no doubt about the proposition that insofar as the valuation for purposes of Court fees is concerned in a case for rendition of accounts under Section 7(iv) of the Court Fees Act, it has been left to the plaintiff to affix valuation. At the same stage, it has been held that this valuation cannot be arbitrarily. In the present case, the plaintiffhimself has valued the turn over into thousands of crores and claims damages for infringement of the trademark of the plaintiff and passing of. These damages havt not been quantified but accounts have been claimed from the defendants for allegedly using the trade marks improperly and making profits to the detriment of the plaintiff. With such reputation world-wide and the grievance of the plaintiff, it can hardly be stated that the amount which would be found due on rendition of accounts can be said a meager amount as alleged ofRs. 5,00,050 for purposes of Court Fees. The most material fact is that for purposes of suit valuation, the plaintiff in para 42 himself has stated that it is expected that at the time of rendition of accounts the plaintiff shall be entitled to an amount in excess ofRs. 50,00,000. This is not only a hope but is based on the turnover of the plaintiff running into thousands of crores. Thusfinding in para 24 of the judgment in M/s Commercial Aviation and Travel v. Vimla Pannalal case (supra) would of little assistance to the plaintiff. [Para 46 (12)]

We fully endorse and adopt the view taken by the two learned Single Judges and with respect find ourselves unable to accept the reasoning of the Division Bench in Wockhardt v. M/s Raj Medicos (supra-14) and Fenner India Ltd. v. Salbros Enterprises Pvt. Ltd. (supra-10), which was followed in P.M. Diesels Ltd. v. Patel Field Marshal Industries (supra-12), as these three judgments had failed
to notice the law laid down by the Hon'ble Supreme Court in the cases of Commercial Aviation (supra-6) and Abdul Hamid Shamsi (supra-5). In the normal course, if a Division Bench does not agree with another Division Bench the matter ought to be referred to a Larger Bench. However, since we have found the Division Bench in Fenner India (supra-10) case not to have noticed the binding judgments of the Hon'ble Supreme Court in Commercial Aviation (supra-6) and Abdul Hamid Shamsi (supra-5), we have laid down the law by following the above judgments of the Hon'ble Supreme Court, as summed up below:-

(a) Section 7 clause (iv) of the Court Fees Act is an exception to all the clauses of Section 7 of the Act, as in all other clauses, the court fees has to be paid ad-valorem on the value of the relief sought. This departure from normal rule has been made deliberately for the simple reason that in case of suits under clause (iv) of Section 7 of the Act it is not possible to give an exact money valuation. It is therefore undeniable that under the terms of this Section the plaintiff is to state the amount at which he values the relief sought by him when his case is within the ambit of the said clause. The reason behind this provision seems to be that in cases in which the plaintiff is given option to value his claim, it is really difficult for the Court to value the claim with any precision or definiteness. In a suit for accounts, the correct amount which may be payable by one party to the other can be ascertained only when the accounts are examined and it is not possible to give an accurate valuation of the claim at the inception of the suit. Therefore, the plaintiff has been allowed to assess his own valuation.
(b) Section 8 of the Act makes it clear that in a suit filed under Section 7(iv) of the Court Fees Act, the value as determinable for the computation of the court fees and the value for the purposes of jurisdiction shall be the same.
(c) Section 9 of the Act empowers the High Court to make rules with the previous sanction of the State Government directing that suits of a particular class shall for the purpose of the Court Fees Act and any other enactment for the time being in force to be treated, as if their subject matter were of such value as the High Court thinks fit to specify in this behalf.
(d) High Court can frame rules under Section 9 of the Act when it is of the opinion that the valuation as fixed under Section 7 of the Court Fees Act is such that it does not admit of being satisfactorily valued. This Section acts like a proviso to Section 8 of the Act.
(e) Section 7 of the Delhi High Court Act extended rules and orders framed by the Punjab High Court as applicable to Delhi. Delhi High Court framed its own rules under Section 9 of the Act which are incorporated in Chapter III, Part C, Delhi High Court Rules, Practice and Procedure. Rule 4 as framed therein is applicable in suits for accounts of the nature before us. According to these rules, value for the purposes of court fees is as determined by the Court Fees Act, 1870 and value for the purposes of jurisdiction for the purposes of Suits Valuation Act, 1887 and the Punjab High Court Act, 1918, as valued by the plaintiff in the plaint
subject to the determination by the Court at any stage of the trial.
(f) In view of the Rule 4 as framed by the High Court of Delhi, the plaintiff is at liberty and is allowed to give his own tentative valuation for the purposes of court fees and jurisdiction. Generally, the Court cannot examine the correctness of the valuation as placed by the plaintiff, but the Court is empowered at any stage of the case to reject under Order 7 Rule 11 (b) the valuation as fixed by the plaintiff, if it is of the view that plaintiff has valued the suit arbitrarily capriciously and has chosen to give a ridiculous figure which is not borne out from the record tantamounting to not exercising his discretion reasonably in this regard. The plaintiff has not been given absolute right or option to place any valuation whatever on such relief and where he manifestly and deliberately undervalues and underestimates the same the Court is not silent and impotent spectator thereof and has clear jurisdiction to interfere. Any stage of the trial would certainly include even the time when the suit is first taken up for consideration by the court.
(g) Before rejecting the valuation as fixed by the plaintiff the Court has to see if there is positive material or objective standard on the record to indicate that he has undervalued the suit but if there is no positive material or objective standard, the Court has to accept the plaintiffs valuation. [Para 48]