DETERMINATION OF COURT FEE IN SUITS OF DECLARATORY NATURE PERTAINING TO IMMOVABLE PROPERTY:
In order to determine/ascertain the Court fee in declaratory suits pertaining to immovable property Section 7(iv) (c) and Section 7(v) of the Court fees Act have to be looked into. Section 7(iv) (c) of the Court fees Act lays down that to obtain declaratory decree with consequential relief the plaintiff shall state the amount at which he/she/they value the relief sought for. Simultaneously, Section 7(v) of the Court fees Act lays down that in suits for possession of land, buildings and gardens ad valorem Court fee is payable on the market value of the land in question. Section 7(v) of the Court fees Act is not applicable to cases relating to recovery of possession of immovable property.
To understand this concept let us discuss some cases. In Manzoor Ahmed v. Jaggi Bai, (M.P) (DB) Jabalpur Bench: Arun Mishra and Smt S. Shrivastava, JJ. : 2010 (1) M.P.W.N.356 the main question for consideration of the Learned Court was whether ad valorem Court fee is required to be paid. Document was shown to be void and not voidable. Plaintiff has averred that she was never told about the sale deed which was obtained by playing fraud. She never intended to execute the sale deed, she wanted to obtain loan and taking advantage of her advanced age and disability, sale deed was obtained. No consideration was paid. The averments made in the plaint indicate that document is shown to be void and not voidable. There is a difference in incident of payment of Court fees in case document is voidable at the instance of executants as valorem Court fees is required to paid, not in the case of void document, in such cases injunction which has been prayed flows from the relief of declaration. In case of void document, it is not necessary to seek the relief of cancellation of the document itself, it is only in case of voidable documents, it is necessary to claim such relief. So, we can opine that whenever it is necessary for a plaintiff to avoid an agreement or a decree or a liability imposed, he must seek the relief of having that decree, agreement, instrument or liability set aside and he is not entitled to declaration simplicitor. It is clear from the discussion as above that where a person who is a party to an agreement or transaction and his allegation is that it is not binding on him because it was obtained by misrepresentation or fraud, it is necessary for him to seek consequential relief of setting aside such agreement or transaction and as such the suit falls within purview of Section 7(iv)(c). But the question of avoiding an agreement or an instrument arises only where it is voidable. If it is wholly void a mere declaration that it is so, is sufficient and it is not necessary for the plaintiff to seek the relief of setting aside something which has no existence in law. It is not necessary to ask for relief of setting aside an agreement or an instrument which is wholly void. The question whether the suit is really one for declaration with the consequential relief or not has to be determined by looking at the pleadings of the plaintiff only. The case of the plaintiff in the above stated case was that she did not execute the sale deed in question, that she did not receive any consideration of the sale and that she was not a party to any document of sale. From these facts it would appear that there was no sale at all and the plaintiff merely seeking a declaration that she did not execute the sale deed in question and thus did not transfer any property to the defendants. As such it is not necessary for her to seek relief of setting aside sale deed in question, because, as pointed out above, the question of seeking the relief of setting aside something which has no existence in law does not arise. In such a case bare declaration would be suffice. Voidable transfers remain valid until avoided and, therefore it is necessary to avoid it by seeking the relief of setting it aside. But a transaction which is void ab initio must be deemed to have never taken place. It is not to be regarded as an alienation which is perfect till it is set aside. There is a clear distinction between a fraudulent misrepresentation as to the character of the document and as to its contents. Where the misrepresentation is both as to the contents as well as character of the document, the transaction is wholly void. It depends upon the averments made in each case in the plaint whether ad valorem Court fee is payable or not. Court has to find out whether a transaction is alleged to be void or voidable. In case of void document it is not necessary to seek the relief of cancellation of document. If on averments made in the plaint, substantial relief could not be other than one for declaratory decree and it is coupled with another relief, which follows naturally in the wake of declaration, then the case must be regarded as falling within the ambit of Section 7(iv)(c). Relief of injunction is not consequential relief in all cases, it may be claimed because of the settled position of plaintiff, thus, as valorem Court fee was not required to be paid. In the case as stated above the plaintiff also claimed to be in possession, she is not claiming the relief of possession, thus it could not be said that ad valorem Court fees is required to be paid.
In Suhrid Singh @ Sardool Singh v. Randhir Singh (SC): R.V. Raveendran & R.M. Lodha, JJ. : 2010 AIR (SC) 2807 the appellant filed a suit and in the plaint several elaborate prayers were made: (i) for a declaration that two houses and certain agricultural lands purchased by his father S. Rajinder Singh were co-parcenary properties as they were purchased from the sales proceeds of ancestral properties, and that he was entitled to joint possession thereof; (ii) for a declaration that the ‘will’ dated 14-07-1985 with the codicil dated 17-08-1988 made in favour of the third defendant, and gift deed dated 10-09-2003made in favour of the fourth defendant were void and non-est ‘qua the co-parcenary’; (iii) for the declaration that the sale deeds dated 20-04-2001, 24-04-2001 and 06-07-2001 executed by his father S. Rajinder Singh in favour of the first defendant and sale deed dated 27-09-2003 executed by the alleged power of attorney holder of S. Rajinder Singh in favour of second defendant, in regard to certain agricultural lands (described in the prayer), are null and void qua the rights of the ‘co-parcenary’, as they were not for the legal necessity or for of the family; and (v) for consequential injunctions restraining defendants 1 to 4 from alienating the suit properties. The limited question that arose for consideration of the Hon’ble Apex Court was – what is the Court fee payable in regard to the prayer for declaration that the sale deeds are void and not ‘binding on the co-parcenary’, and for the consequential relief of joint possession and injunction. The Hon’ble Court answered the question by laying down that where the executants of a deed wants it to be annulled, he has to seek cancellation of the deed. But if a non-executant seeks annulment of a deed, he has to seek declaration that the deed is invalid, or non-est, or illegal or that it is not binding upon him. The difference between a prayer of cancellation and declaration regard to deed of transfer/conveyance can be brought about by the following illustration relating to ‘A’ and ‘B’ – two brothers. ‘A’ executes a sale deed in favour ‘C’. Subsequently ‘A’ wants to avoid the sale. ‘A’ has to sue for cancellation of the deed. On the other hand, if ‘B’, who is not the executant of the deed, wants to avoid it, he has to sue for a declaration that the deed executed by ‘A’ is invalid/void and non-est/illegal and he is not bound by it. In essence both may be suing to have the deed set aside or declared as non-binding but the form is different and Court fee is also different if ‘A’ , the executant of the deed, seeks cancellation of the deed, he has to pay ad-valorem Court fee on the consideration stated in the sale deed. If ‘B’, who is non-executant, is in possession and sues for a declaration that the deed is null or void and does not bind him or his share, he has to merely pay a fixed Court fee of Rs19.50 under Article 17(iii) of second schedule of the Act. But if ‘B’, a non-executant, is not in possession and he seeks not only a declaration tha5t the sale deed is invalid, but also the consequential relief of possession, he has to pay an ad-valorem Court fee as provided under Section 7 (iv) (c) of the Act. Section 7 (iv) (c) provides that in suits for a declaratory decree with consequential relief, the Court fee shall be computed according to the amount at which the relief sought is valued in the plaint. The proviso thereto makes it clear that where the suit for declaratory decree with consequential relief is with reference to any property, such valuation shall not be less than the value of the property calculated in the manner provided for by clause (v) of Section7. The Court further observed that, in this case, there is no prayer for cancellation of the sale deeds. The prayer is for a declaration that the deeds do not bind the ‘co-parcenary’ and for joint possession. The plaintiff in the suit was not the executant of the sale deeds. Therefore, the Court fee was computable under Section 7 (iv) (c) of the Act. The trial Court and the High Court were therefore not justified in holding that the effect of the prayer was to seek cancellation of the sale deeds or that therefore Court fee had to be paid on the sale consideration mentioned in the sale deeds.
In Sunil v. Awadh Narayan (M.P) (F.B.): Arun Mishra, Krishna Kumar Lahoti and Alok Aradhe, JJ. : 2011 (1) JabLJ 71 a division bench of Madhya Pradesh High Court referred the following questions for the consideration of the Full Bench: ‘(1) Whether ad-valorem Court fee is not payable when the plaintiff/plaintiffs make an allegation that the instrument is void and hence, not binding upon him/them? (2) Whether the decision rendered in Narayan Singh (Supra) lays down the law correctly that the plaintiff, a party to the instrument is not required to pay ad-valorem Court fee as he has made an allegation that the instrument ?’ The first question which arises for consideration of this bench is whether ad-valorem court fee is not payable when the plaintiff makes an allegation that the instrument is void and hence not bonding upon him. The Full Bench in Santoshchandra and Others v. Smt. Gyansundarbai, 1970 MPLJ 363 expressed the view, ‘thus all these cases lay down proposition that where it is necessary for a plaintiff to avoid an agreement or a decree or a liability imposed, it is necessary for him to avoid that and unless he seeks the relief of having that decree, agreement, document or liability set aside, he is not entitled to a declaration simplicitor. In such cases the question of Court fees has to be determined under Section 7 (iv) (c) of the Act. However, where a plaintiff is not a party to such a decree agreement, instrument or liability and he can not be deemed to be a representative in interest of the person who is bound by that decree, agreement, instrument or liability he can sue for a declaration simplicitor, provided he is also in possession of the property. The matter may be different if he is not in possession of the property. In that event the proviso to Section 42 of the Specific Relief Act might be a bar to the tenability of a suit framed for the relief of declaration simplicitor. But, that would be different aspect. All the same, if the plaintiff is not bound by that decree or agreement or liability and if he is not required to have it set aside, he can claim to pay Court fee under any of the clauses of Article 17, Schedule II of the Court- Fees Act.’ The Full Bench also referred a Special Bench judgment of this Court on difference of opinion between two learned Judges of this Court in Baldeo Singh v. Gopal Singh,1967 MPLJ 242 wherein the Special Bench considering the question held that the Court fee is payable on the plaint as it was framed and not on a plaint as it ought to have been framed. The question of Court fees is distinct and separate from the question of the maintainability of the suit. In that case the suit was filed by a minor for declaration that sale-deed executed by his brother as Karta of Joint Hindu family was void for want of legal necessity. An alternative plea was raised that the sale-deed was void to the extent of the plaintiffs share. The Special Bench held that where the plaintiff sues for a declaration simplicitor that a sale-deed executed by the his elder brother is not binding on him without further seeking any consequential relief, the fact that his claim would be incompetent, because of his failure to seek further consequential relief which he was able to claim does not affect the question of Court fee and he will be liable to pay Court-fee under Article 17 (iii) of Schedule 2 of the Court Fees act and not under Section 7 (iv) (c). The special bench further held that the declaration asked for by the plaintiff in such a case must not be mere garb for the real, substantial or consequential relief intended to be claimed. If it be So, it is competent for the Court to look to the substance of the relief claimed apart from the form and require him to pay the Court –fee which he would be bound to pay in case he had not resorted to a devise in concealing the relief he really wanted. Where the plaintiff is not bound either by a deed or a decree to which he is co-nominee, not a party or privy because of its being void on the allegations made by him then his claim for declaration with reference to his title to the property alleged to be in his possession, will not be taken to involve a claim for a consequential relief. The Special Bench held that Court –fee payable was under article 17 (iii) of Schedule 2 of the Court Fees Act and not under section 7 (iv)(c). The Apex Court considering the difference between void and voidable transactions in Ningawwa v. Byrappa Shiddappa, AIR 1968 SC 956, held that a contract or other transaction induced or tainted by fraud is not void, but only voidable at the option of the party defrauded. Until it is avoided the transaction is valid, so that third parties without notice of the fraud may in the meantime acquire rights and interest in the matter which they may enforce against the party defrauded. The legal position may be different if there is a fraudulent misrepresentation as to the contents of the document or as to its character. With reference to the former the transaction is void while in the case of the latter. it is merely voidable. The Apex Court considering the distinction and meaning of void and voidable in Government of Orissa v. Ashok Transport Agency and Others, 2002 (2) R.C.R (Civil) 665: (2002) 9 SCC 28 held that the expression ‘void’ has several facets. One type of void acts, transactions, decrees are those which are wholly without jurisdiction, ab initio void and for avoiding the same, no declaration is necessary, Law does not take any notice of the same and it can be disregarded in collateral proceedings or otherwise. The other type of void act, e.g. may be transaction against a minor without being represented by a next friend. Such a transaction is a good transaction against the whole world. So far as the minor is concerned, if he decides to avoid the same and succeeds in avoiding it by taking recourse to appropriate proceeding the transaction becomes void from the very beginning. Another type of void act may be one which is not a nullity but for avoiding the same a declaration has to be made. Voidable act id that which is a good act unless avoided e.g., if a suit is filed for a declaration that a document fraudulent and/or forged and fabricated, it is voidable as the apparent state of affairs is the real state of affairs and a party who alleges otherwise is obliged to prove it. If it is proved that the document is forged and fabricated and a declaration to that effect is given, a transaction becomes voidable from the very beginning. There may be a voidable transaction which is required to be set aside and the same is avoided from the day it is so set aside and not any day prior to it. In cases, where legal effect of a document can not be taken away without setting aside the same, it can not be treated to be void but would be obviously voidable. The Apex Court considering similar question in Sneh Gupta V. Devi Sarup (2009) 6 SCC 194 held that if an oder is void or voidable, the same must be set aside. Thus, the compromise/consent decree, which is as good as a contested decree even if void was required to be set aside. If the compromise has been accepted in absence of all the parties the same would be void and the decree based thereupon must be set aside the compromise may be void or voidable but it is required to be set aside by filing a suit within the period of limitation. A consent/compromise decree must be set aside if it has been passed in violation of law. For the said purpose, the provisions contained in the Limitation Act, 1963would be applicable. A Division Bench of this Court in Manzoor Ahmed v. Jaggi Bai, (M.P) (DB) Jabalpur Bench: Arun Mishra and Smt S. Shrivastava, JJ. : 2010 (1) M.P.W.N.356 (supra), considering the question held that the question of payment of ad valorem Court fee depends upon the averments made in the plaint the Court has to find out whether transaction whether transaction is alleged to be void or voidable. It depends upon the averments made, in each case in the plain whether ad valorem Court-fee is payable or not. The Court is to find out whether transaction is alleged to be void or voidable. In case of void document, it is not necessary to seek the relief of cancellation of the document in that case, plaintiff filed a suit for declaration of title and confirmation of possession. She had not claimed the relief for possession, so it was held that ad valorem Court-fee was not required to be paid. The averments made in the plaint had indicated that the document in question was shown to be void not voidable, so ad valorem Court-fee was not required. In case the document is voidable at the instance of executant ad valorem Court- fee is required to be paid but not in the case of void document. In such case injunction which was prayed, flows from the relief of declaration. When the plaintiff makes an allegation that the instrument is void and hence not binding upon him, and if a declaration simplicitor is prayed then he is not required to pay ad valorem Court fee and a fixed Court-fee under Article 17, Schedule II of the Court Fees Act will be payable. This position is well settled by the Apex Court in Ningawwa (Supra) and continued till the decision in Sneh Gupta V. Devi Sarup (2009) 6 SCC 194(supra). The void document which is not binding upon the plaintiff needs to be avoided and in this regard a declaration is sufficient. The Full Bench of this Court in Santoshchandra (Supra) has clarified the position and we respectfully agree with the law laid down by the Full Bench in Santoshchandra (Supra). In view of the aforesaid discussion, there is no doubt that if plaintiff makes an allegation that the instrument is void and hence not binding upon him then ad valorem Court-fee is not payable and he can claim declaration simplicitor for which Court-fee under Article 17 (iii) of Schedule II would be sufficient. To sum up, the questions referred to the Court are answered thus:- (1) Ad valorem Court fee is not payable when the plaintiff makes an allegation that the instrument is void and hence not binding upon him. (ii) The decision rendered in Narayan Singh’s case lays down the law correctly that the plaintiff a party to the instrument is not required to pay ad valorem Court-fee as he had made an allegation that the instrument was void on the ground that the document was forged one and it does not bear the signature of the executant.
Conclusion: The whole concept in a nutshell is that: ‘the executant of deed has to seek its cancellation and pay ad valorem Court fee on the market value of the property or the consideration stated in the sale deed depending upon the circumstances but on the other hand a non-executant who is in possession of the property has to pay fixed Court-fee as stated in Article 17 (iii) Second Schedule of the Court Fees Act, in this very case if the non-executant who is not in possession and seeks possession as a consequential relief the he will be liable to pay ad valorem Court fee on the market value of the property or the consideration stated in the sale deed. Besides, the above when there is a fraudulent misrepresentation as to the character of the document and to its contents the documents becomes wholly void and again in such case fixed Court-fee as stated in Article 17 (iii) Second Schedule of the Court Fees Act is payable. I have made all my sincere efforts to explain the law on this point in shortest possible manner but there might be some better interpretation, for which I am open to all types of suggestions.