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PETITIONER: A.K.A.CT.V.CT. MEENAKSHISUNDARAM CHETTIAR

       Vs.

RESPONDENT: A.K.A.CT.V.CT. VENKATACHALAM CHETTIAR

DATE OF JUDGMENT23/02/1979

BENCH: KAILASAM, P.S. BENCH: KAILASAM, P.S. SARKARIA, RANJIT SINGH REDDY, O. CHINNAPPA (J)

CITATION:  1979 AIR  989            1979 SCR  (3) 385  1979 SCC  (1) 616  CITATOR INFO :  R          1987 SC2085  (3,4)  D          1988 SC1150  (4,5)  D          1988 SC1636  (21)  R          1992 SC1526  (3)

ACT:      Court Fees  Act, 1870-S.  7(iv)(f)-Suit  for  accounts- Necessary for  plaintiff to give fair estimate of the amount for which  he sues-Court can reject the plaint under Or. VII r. 11  C.P.C.  if  plaintiff  arbitrarily  and  deliberately undervalues the relief.

HEADNOTE:      The  power   of  attorney   by  which   the   plaintiff constituted the  defendant  as  his  agent,  authorised  the defendant amongst other things to discharge debts and invest moneys on  behalf of the plaintiff. In the suit filed by the plaintiff,  the   relief  claimed   was  for  directing  the defendant  to  render  true  and  correct  accounts  of  all transactions entered into by him and for amounts received by him on behalf of the plaintiff. In his written statement the defendant gave  details of  amounts invested by him in banks and other relevant details.      An issue  whether the suit had been properly valued and proper court-fee  had been  paid was  answered by  the trial court in favour of the plaintiff.      On appeal  by the  plaintiff, the  High Court held that since the plaintiff had quantified the amount payable by the defendant, the  suit should have been valued on the basis of amount quantified  and that  not having  been done, the suit had not been properly valued.      Allowing the appeal, ^      HELD: (1)  The estimate  of the  relief as given by the plaintiff was  adequate and reasonable and was not an under- estimate. [392C]      (2) The  High Court  was in  error in  holding that the plaint was  clear, that  apart  from  the  money  which  the defendant was  liable  to  pay  to  him  as  his  agent  the plaintiff  had   quantified  the   amount  payable   by  the defendant. The  suit was  not only  for  accounting  of  the

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amounts received but also for an account of the transactions of the  defendant  as  power  of  attorney  agent.  Had  the defendant been  able to  establish that in the course of his management he  had invested moneys according to the power of attorney,  he   would  have   properly  accounted   for  his management. The  defendant himself  had stated that the suit was for  accounting of  his management  as power of attorney agent. He  pleaded that  the moneys had been remitted to the plaintiff by investment or otherwise. [389H-390B]      (3) The  amount of  the court-fee  payable in suits for accounts as  provided for  in s.  7(iv)(f) of the Court Fees Act, 1870  is according to the amount at which relief sought is valued  in the  plaint or memorandum of appeal. In a suit for accounts  it  is  not  possible  for  the  plaintiff  to estimate correctly  the amount  which he  may be entitled to because in a suit in which the plaintiff asks for accounting regarding the  management by  a power  of attorney  agent he might not  know the  state of  affairs  of  the  defendant’s management and  the amount  to which he would be entitled to on accounting. [390G-H] 386      (4) Even  where s.  35 of the Tamil Nadu Court Fees and Suits Valuation  Act, 1955  is applicable,  it is  necessary that the plaintiff should give a fair estimate of the amount for which  he seeks relief. Order VII R. 11 CPC casts a duty on the  court to  reject a plaint when the relief claimed is under-valued. [391 D-E]      Chillakuru Chenchurami  Reddy v.  Kanupuru  Chenchurami Reddy, I.L.R. 1969 A.P. 1042 (F.B.), approved.      (5) Before  coming to  the conclusion  that the suit is under-valued the  court will  have to take into account that in a suit for accounts the plaintiff is not obliged to state the exact  amount which  would result  after taking  all the account. If he cannot estimate the exact amount he can put a tentative valuation  upon the  suit for  accounts  which  is adequate and  reasonable. The  plaintiff cannot  arbitrarily and  deliberately   under-value  the  relief.  All  that  is required is  that there must be a genuine effort on the part of the  plaintiff to  estimate his  relief and  the estimate should not be a deliberate under-estimation. [391 H-392 B]

JUDGMENT:      CIVIL APPELLATE  JURISDICTION: Civil  Appeal No. 504 of 1979.      Appeal by  Special Leave  from the  Judgment and  Order dated 22-12-1978  of the  High Court  of Madras at Madras in Appeal No. 408/72.      K. Rajendra Chaudhary for the Appellant.      A. T. M. Sampath for the Respondent.      A. V. Rangam for the Intervener.      The Judgment of the Court was delivered by      KAILASAM, J.-Special Leave Petition (Civil) No. 1021 of 1979 is  filed by  the plaintiff  in the suit O.S. No. 83 of 1969 on  the file  of  the  Subordinate  Judge,  Devakottai, against  the   two  orders  passed  by  the  High  Court  of Judicature at  Madras in Appeal No. 408 of 1972 holding that the suit  had not  been properly  valued for  court-fee  and directing the  petitioner to  pay court-fee on the valuation of Rs.  9,74,598.35 and requiring that the deficit court-fee both on  the plaint  and the  memorandum of  appeal be  paid within six  weeks from the date of the order. On hearing the petitioner we  directed notice  to the  respondents  calling upon them  to show  cause why  special leave  should not  be

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granted and  the appeal  allowed and  remitted to  the  High Court for  disposal  of  all  the  issues.  On  hearing  the respondents we granted Special Leave Petition and the appeal is thus heard.      The appellant  filed the  suit  praying  for  a  decree against the  respondent/defendant to render true and correct account of  all the  transactions of  the respondent  as the petitioner’s agent  from 22nd  January, 1965 and also of all the amounts  received by  him as the agent of the petitioner including the amount recovered by him from Alagappa Chettiar and pay  to the  petitioner the  amount found  due  on  such rendition of accounts. In the written statement filed by the defendant it was con- 387 tended that  the suit  is not  properly  valued  and  proper court-fee has not been paid. The trial court framed an issue as to  whether the  suit had been properly valued and proper court-fee had  been paid. It answered the issue holding that the plaint has been properly valued and proper court-fee has been paid.  The suit was dismissed by the trial court on the ground that  the plaintiff has not proved that the defendant is liable  to account  and  that  the  suit  was  barred  by limitation, On an appeal by the plaintiff to the High Court, the High  Court found  that the  plaint made  it clear  that apart from the money which the defendant is liable to pay to the plaintiff as his agent, the plaintiff has quantified the amount at Rs. 9,74,598.35 as payable by the defendant to him which is made clear in allegations in paragraphs 6,7,8 and 9 of the  plaint and  therefore the  plaintiff ought  to  have valued the  suit at  Rs.  9,74,598.35.  As  the  appeal  was disposed of  on the  ground that  the plaint  had  not  been properly  valued  we  are  concerned  in  this  petition  in determining whether  the conclusion  arrived at  by the High Court is correct.      The High Court has passed its conclusion on a reference to paragraph 6,7,8 and 9 of the plaint. We will now consider the pleadings  in the case. In paragraph 5 it is stated that on 22nd  January, 1965,  the plaintiff  executed  a  General Power of  Attorney at Karaikudi authorising the defendant to transact all  his business, sell his properties, receive the sale price  and other  monies etc.  This paragraph refers to the General  Power of  Attorney executed by the plaintiff in favour of  the defendant on 22nd January, 1965. The terms of the power  of attorney  will be  referred to  in due course. Paragraphs 6,  7, 8  and 9  of the  plaint which  have  been relied on by the High Court may be set out :-           "6. On  27-3-1963, the Plaintiff and the Defendant      retired from  the said  partnership and  the other  two      brothers continued  the business  under the  same name,      Alagappa taking  on the  shares of  the  plaintiff  and      Defendant and  all their  assets  in  the  firm  for  a      consideration of  his paying  $ 6,50,000/-equivalent to      Rs. 16,12,000/-  at the  rate  of  Rs.  248/-  per  100      Dollars to  each  of  them,  so  that  Alagappa  became      entitled to 3/4 share and Annamalai to 1/4 share in the      continuing firm.           7. As  the Plaintiff’s  agent and on behalf of the      Plaintiff, the Defendant on or about 13-4-1965 received      from  Alagappa   $   6,50,000/-   equivalent   to   Rs.      16,12,000/- at  the rate  of 248 rupees per 100 Dollars      for the  1/4th share  of the Plaintiff in the said firm      taken over by Alagappa.           8. The  Defendant from  Madras  has  sent  to  the      Plaintiff at  Kottaiyer Rs. 25,000/- on 25-10-1965, Rs.      1,30,750/- on

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388      7-2-1966, Rs.  25,311.65 on 7-2-1965 (Rs. 25,000/- plus      Rs. 311.65  for interest)  and Rs.  4,36,340/- on 11-8-      1967.           9. The  Defendant as Plaintiff’s agent is bound to      render true and correct account to the Plaintiff of all      the amounts  received by  him  in  the  course  of  the      agency, to  wit, from  22-1-1965 the  amounts  received      from Alagappa. In paragraphs 6 and 7 the plaint refers to the plaintiff and the defendant  retiring from  the partnership  and  Alagappa taking the  shares of  the plaintiff and the defendant for a consideration of his paying equivalent to Rs. 16,12,000/- to each of  the plaintiff  and the defendant. In paragraph 7 it is stated  that the  defendant as plaintiff’s agent received Rs. 16,12,000/-.  Paragraph 8  refers  to  certain  payments which the plaintiff received from the defendant. Paragraph 9 of the plaint states that the defendant as plaintiff’s agent is bound to render true and correct account to the plaintiff of all  the amounts received by him in the course of agency, to wit,  from 22nd  January, 1965  the amounts received from Alagappa. It may be noted that the reliefs sought for is for rendering true  and correct  account to the plaintiff of all the amounts received by him in the course of the agency. The Power of  Attorney was  given on 22nd January, 1965 and thus the relief is not confined to the amount payable by Alagappa alone.      In paragraph  10 which is not taken note of by the High Court the  plaintiff alleged that on 2nd September, 1967 and 4th October,  1967, the  plaintiff wrote  to  the  defendant requiring him  to send  the accounts  of the  agency.  These letters were  refused. Again  on  5th  December,  1967,  the plaintiff issued  a lawyer’s  notice to  render accounts and for payment  of the  amounts due  from him.  This notice was also returned. The defendant did not render any accounts. At this stage  reference may  be made  to the Power of Attorney executed by the plaintiff in favour of the defendant on 22nd January, 1965.      The plaintiff  by the  Power  of  Attorney  dated  22nd January, 1965, constituted the defendant as his Attorney and authorised the  defendant to  act for  the plaintiff.  It is sufficient to state that the power authorises in general the defendant to  manage  all  the  affairs  of  the  plaintiff. Paragraph 3  of the Power of Attorney empowers the defendant to pay  and settle all the debts of the plaintiff and obtain full and  effectual receipts  and  releases  for  the  same. Paragraph 5  empowers the  defendant amongst other things to sign and execute any discharge or release in connection with Charges or  Bills of  Sale. Paragraph  10 gives the power to the defendant  to charge  or mortgage any of the plaintiff’s property and  paragraph 11  to borrow such sums of money and upon such  terms  as  the  Attorney  shall  deem  expedient. Paragraph 19 confers the power 389 on the  defendant to invest moneys upon mortgages or charges of land  etc. In short there can be no dispute that complete power of  management is  given  to  the  defendant  and  the defendant could,  in exercising this power, discharge debts, invest moneys  on behalf  of the  plaintiff  etc.  When  the plaintiff in paragraph 7 of the plaint demanded the agent to render true  and correct account to the plaintiff of all the amounts received  by him  in the  course of  agency i.e.  by virtue of  the power  conferred on  22nd January,  1965, the plaintiff is  entitled  to  know  as  to  what  amounts  the defendant received  during the  course of his management and

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what amounts he had invested or otherwise dealt with. At the date of  the plaint  the plaintiff  was not  aware as to the amount of  moneys that were due by the defendant to him. The letters and the lawyer’s notice sent by the plaintiff to the defendant were  unanswered. If the defendant had invested or otherwise dealt with moneys according to the power conferred on him  nothing would  be due  to the  plaintiff on accounts being taken.  The  relief  claimed  for  in  the  plaint  in paragraph 14(a) of the plaint is for directing the defendant to render  true and correct account of all transactions made by the defendant as the plaintiff’s agent from 22nd January, 1965 and  also for all the amounts received by the defendant on the  plaintiff’s behalf as his agent including the amount recovered by  him from  Alagappa and  pay the plaintiff what may be  found due to him. This paragraph makes it clear that what was  required was  not only  an account  of the  amount recovered by the defendant from Alagappa but also an account of all  the transactions of the defendant as the plaintiff’s agent from 22nd January, 1965.      A reading  of the written statement also makes it clear that the  plaint was  understood by  the defendant as a suit for accounting  of his  management as  a power  of  attorney agent. In paragraph 7 of the written statement the defendant states that  out of 6,50,000 dollars got for the plaintiff’s one-fourth share,  40,000 dollars  were  invested  in  fixed deposit in  plaintiff’s name  with the Indian Overseas Bank, Kuala Lumpur  and 10,000  dollars in  plantiff’s V.  CT.  M. Accounts on  10th April, 1965. On the same day the remaining 6,00,000  dollars   were  invested  with  Alagappa  Chettiar himself who  had credited  the amount  in plantiff’s name in his accounts.  If the  defendant was  able  to  prove  these contentions the  accounts as required by the plaintiff would have been satisfactorily rendered and very little would have been due  by the  defendant to  the plaintiff on accounting. The High Court was in error in coming to the conclusion that the plaint  is clear  that apart  from the  money which  the defendant is liable to pay to him as his agent the plaintiff has quantified  the amount  at Rs. 9,74,598.35 as payable by the defendant  to him.  In our  view, the  plaint  has  been misread.  Though   paragraphs  6,  7  and  8  refer  to  the transactions in which the 390 plaintiff is entitled to Rs. 16,12,000, paragraphs 10,11 and 14(a) make  it clear  that the  suit was  for accounting not only regarding  Rs. 16,12,000 but also for the management by the defendant  as power  of attorney  agent. The  power,  as already noted,  confers a  right on  the defendant to invest moneys. If  the defendant has shown in the written statement itself is  able to  establish that  in  the  course  of  his management he  had invested  moneys according  to the  power conferred on  him, he  would have properly accounted for his management. In  the written  statement the defendant himself had pleaded  that the moneys which he received from Alagappa have been  remitted  to  the  plaintiff  by  investment  and otherwise. The  conclusion arrived  at by the High Court is, therefore, unsupportable.      The provision  relating to  the levy of court-fee for a suit on  accounts is found in section 7(iv) (f) of the Court Fees’ Act, 1870 which runs as follows:-           "7. The  amount of  fee payable  under this Act in      the suits  next hereinafter mentioned shall be computed      as follows:-           (i)   x  x  x           (ii)  x  x  x           (iii) x  x  x

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         (iv)  In suits-                (a) x x x                (b) x x x                (c) x x x                (d) x x x                (e) x x x                (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." Reading this  provision by  itself the  amount of  court-fee payable in  suits for accounts is according to the amount at which  the   relief  sought  is  valued  in  the  plaint  or memorandum of appeal. The plaintiff is required to state the amount at  which he  values the  relief sought. In suits for accounts it  is not  possible for  the plaintiff to estimate correctly the  amount which he may be entitled to for, as in the present  case, when  the plaintiff  asks for  accounting regarding the  management by  a power  of attorney agent, he might not  know the  state of  affairs  of  the  defendant’s management and  the amount  to which he would be entitled to on accounting.  But it is necessary that the amount at which he 391 values  the   relief  sought  for  should  be  a  reasonable estimate. Section  35(1) of  the Tamil  Nadu Court  Fees and Suits Valuation Act, XIV, of 1955, is as follows:-           "In a  suit for accounts, fee shall be computed on      the amount sued for as estimated in the plaint." Sub-section (2) of section 35 provides:           "Where the  amount payable  to  the  plaintiff  as      ascertained in  the suit  is in excess of the amount as      estimated in the plaint, no decree directing payment of      the amount  as so ascertained shall be passed until the      difference between  the fee  actually paid  and the fee      that would  have been  payable had  the suit, comprised      the whole of the amount as ascertained, is paid. If the      additional fee  is not  paid within  such time  as  the      Court may  fix, the  decree shall  be  limited  to  the      account to which the fee paid extends." While section  35(1) permits the plaintiff to pay the court- fee  on   the  amount   estimated  by  him  sub-section  (2) safeguards against  the loss of revenue for it requires that no decree  for  any  amount  in  excess  of  the  amount  as estimated  in   the  plaint   shall  be  passed  unless  the difference between  the fee  actually paid and the fees that would have  been payable had the suit comprised the whole of the amount  as ascertained,  is paid.  But here  again it is necessary that  the plaintiff should give a fair estimate of the amount for which he sues. Order 7, Rule 11, of the Civil Procedure Code,  requires the  court to return the plaint if the relief  claimed is  undervalued. Order  7, Rule 11, runs thus:           "11. The plaint shall be rejected in the following           cases:-           (a)  x   x   x           (b)  where the  relief claimed is undervalued, and                the plaintiff  on being required by the Court                to correct  the valuation within a time to be                fixed by the Court, fails to do so;"           (c)  x   x   x           (d)  x   x   x This section  casts a duty on the Court to reject the plaint when the  relief claimed is undervalued. If on the materials

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available before it the Court is satisfied that the value of relief as  estimated by the plaintiff in a suit for accounts is undervalued  the plaint  is liable  to be rejected. It is therefore necessary that the plaintiff should take care that the valuation is adequate and reasonable taking into account the circumstances  of the  case. In coming to the conclusion that the  suit is  undervalued the  court will  have to take into account that in a suit for 392 accounts the  plaintiff is  not obliged  to state  the exact amount which  would result after the taking of the accounts. If he  cannot  estimate  the  exact  amount  he  can  put  a tentative valuation  upon the  suit for  accounts  which  is adequate and  reasonable. The  plaintiff cannot  arbitrarily and deliberately  undervalue the relief. A full Bench of the Andhra Pradesh  High  Court  in  a  decision  in  Chillakuru Chenchurami  Reddy  v.  Kanupuru  Chenchurami  Reddy,  after elaborate consideration  of the  case law on the subject has rightly observed  that there must be a genuine effort on the part of  the plaintiff  to estimate  his relief and that the estimate should not be a deliberate under-estimation.      On a  consideration of  the entire circumstances of the case we are not satisfied that the estimate of the relief as given by  the plaintiff  is inadequate  or unreasonable or a deliberate under-estimation.  In the  result, we  allow  the appeal set  aside the  judgment of the Madras High Court and remit it  back to  the High  Court for  disposal of  all the issues arising  in the  appeal. The  cost will  abide by the result. N.V.K.                                       Appeal allowed. 393