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PETITIONER: ABDUL HAMID SHAMSI

       Vs.

RESPONDENT: ABDUL MAJID AND OTHERS

DATE OF JUDGMENT12/04/1988

BENCH: SHARMA, L.M. (J) BENCH: SHARMA, L.M. (J) SEN, A.P. (J)

CITATION:  1988 AIR 1150            1988 SCR  (3) 507  1988 SCC  (2) 575        JT 1988 (2)    69  1988 SCALE  (1)694  CITATOR INFO :  R          1988 SC1636  (23)  R          1992 SC1526  (3)

ACT:      Court  Fees  Act,  1870.  Section  7(iv)  (b)-Suit  for accounts-Plaintiff not  obliged to  state exact  amount that may result  after taking  all accounts-But  not permitted to choose unreasonable  and arbitrary  figure-It is open to the Court to  reject such  figure, though  ordinarily the  Court does not examine the correctness of the valuation.

HEADNOTE:      The father  and  brothers  of  Respondent  No.  1  were running a  proprietary business,  which was  later converted into a  partnership firm  by a regular deed. On the death of the father,  the two  brothers had effectively taken control of  the   business  and   excluded  Respondent  No.  1.  The suggestion to  reconstitute the  partnership made repeatedly by Respondent No. 1 had been ignored.      The two  brothers represented  before  the  Income  Tax Officer that  a new deed of partnership had been executed on 15.1.1979 to  be effective from 1.1.1979 in which Respondent No. 1  had no  interest and  on that  basis the  Income  Tax Officer passed an order. In the suit filed by Respondent No. 1, he  challenged the  partnership deed as being illegal and void  and  prayed  for  a  decree  for  dissolution  of  the partnership firm and for accounts. Valuation of the suit was put as Rs.150 i.e., Rs.50 each for declaration, rendition of accounts, and  for profit  to the  share of  the  plaintiff. Court fee was paid accordingly.      The defendants  in the suit denied the allegations made in the  plaint and  also challenged  the valuation  as being grossly undervalued and arbitrary. The issue relating to the correct valuation  and pecuniary  jurisdiction of  the Court was decided  in favour  of  the  plaintiff.  The  defendants challenged the  order by  a Civil Revision Application which was dismissed by the High Court.      This appeal  by  special  leave  is  against  the  High Court’s order.  On behalf of the appellant, it was contended that while  relief to  the tune  of lakhs of rupees had been claimed, the  plaint had  been tentatively  valued for Rs.50

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only, which  is preposterous.  The contention  of Respondent No. 1  was that a Plaintiff has the absolute right to put on the plaint any 508 value he wishes and the court has no jurisdiction to examine the matter.      Allowing the appeal, this Court, ^      HELD: 1.  It is  true that  in a  suit for accounts the correct amount  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. The  plaintiff  is,  therefore, allowed to  give his own tentative valuation. Ordinarily the Court shall  not examine  the correctness  of the  valuation chosen, but  the plaintiff  cannot act  arbitrarily in  this matter. If  a plaintiff  chooses  whimsically  a  ridiculous figure it  is tantamount to not exercising his right in this regard. In  such a case it is not only open to the Court but its duty to reject such a valuation. [512D-E]      2. In  the  instant  case  the  valuation  put  by  the plaintiff on  the  plaint  is  arbitrary  and  unacceptable. However, the  question is  remitted to  the trial  court for reconsideration. It  is open to the trial court to take into consideration the statement in the plaint that the plaintiff has been  ousted from the partnership business. If the court comes to  the conclusion that the tentative valuation of the suit would  be beyond  its pecuniary  jurisdiction, it shall pass an  appropriate order  under Order  VII of  the Code of Civil Procedure. [512F-G]      Smt. Tara  Devi v.  Sri Thakur  Radha Krishna  Maharaj, [1987] 4 SCC 69; Meenakshisundaram Chettiar v. Venkatachalam Chettiar, [1979] 3 SCR 385, relied on.      Aizaz Ahmad  v. Nazirul  Hasan, AIR 1935 Allahabad 849; Attar Singh  v. Manohar  Singh, ILR  (1947) Nagpur 933; Mata Ram v.  Daulat ILR (1938) Nagpur 588 (F.B.); Salahuddinhyder v. Dhanoolal,  [1945] ILR XXIV Patna 334; Shama Pershad Sahi v. Sheopershad  Singh XLI  I.C. 95  (Patna); Gouri  Lal  and others v. Raja Babu, AIR 929 Patna 626, approved.      Krishnaji Hari  v. Gopal  Narayan. AIR  1936 Bombay 166 and Ishwarappa v. Dhanji, AIR 1932 Bombay 111, overruled.

JUDGMENT:      CIVIL APPELLATE  JURISDICTION: Civil Appeal No. 1004 of 1988.      From the Judgment and Order dated 2.12.1987 of the High Court of Calcutta in Civil Order No. 2506 of 1987. 509      S.N. Kacker,  N.  Choudhary  and  Rathin  Das  for  the Appellant.      A.P. Chatterjee,  Deepak Mitra  and G.S. Chatterjee for the Respondents.      The Judgment of the Court was delivered by      SHARMA, J.  The jurisdiction  of the  City Civil Court, Calcutta to  entertain a  suit being  T.S. No.  520 of  1983 filed by  the respondent  No. 1  is under  challenge in  the present appeal,  on the ground that the correct value of the suit is  beyond the pecuniary jurisdiction of the Court. The plaintiff-respondent No.  1 has alleged that he is a partner of a  partnership business along with his brothers defendant Nos. 1  and 2.  Originally it  was  a  proprietary  business belonging to  Abdul  Samad,  father  of  the  plaintiff  and defendant Nos.  1 and  2, and  was later  converted  into  a

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partnership firm by a regular deed. During his life time the business was  under the  control of  Abdul Samad, but on his death the  defendants Nos.  1 and  2 have  effectively taken charge  of  the  business  and  excluded  the  plaintiff.  A suggestion  to   re-constitute  and   partnership  made  and repeated by  the plaintiff has been ignored. In reply to the plaintiff’s letter  seeking information the defendant no. 2- petitioner has stated in his letter to the plaintiff that he (the plaintiff) has no interest in the firm. In paragraph 11 of the plaint it is stated that he has on enquiry discovered that  the   defendants  nos.  1  and  2  have  been  falsely representing before  the Income-Tax  department, inter alia, that  a  new  deed  of  partnership  had  been  executed  on 15.1.1979  to  be  effective  from  1.1.1979  in  which  the plaintiff has  no interest. The Income-Tax Officer passed an order on  26th December  1981 on  the  basis  of  the  false allegations  made  by  the  defendants.  The  plaintiff  has challenged the  aforementioned partnership  deed of 1979. In paragraph 16  of the  plaint the  amount of  profit from the business has been described as "huge". In the prayer portion of  the  plaint  the  plaintiff  prayed  for  declaring  the partnership deed of 1979 as illegal and void and for passing a decree  for dissolution  of the  partnership firm  and for accounts. The  valuation of the suit was put as Rs.150 being the sum  of Rs.50  for declaration,  Rs. 50 for rendition of accounts and  another sum  of Rs. 50 for profit to the share of the  plaintiff arising out of the business. Court fee was accordingly paid.      2. The  defendants no.  1 and  2, besides  denying  the plaint allegations  made by  the plaintiff,  challenged  the valuation given  by the plaintiff as grossly undervalued and arbitrary. The  issues relating to the correct valuation and pecuniary jurisdiction of the court to enter- 510 tain the  suit were  taken up as preliminary issues and were decided  in   favour  of   the  plaintiff.   The  defendants challenged the  order by a civil revision application before the Calcutta  High Court  which was  dismised. The defendant no. 2  has now  come to  this Court against the High Court’s order. Special leave is granted.      3. Mr.  Kacker, the  learned counsel for the appellant, has contended that it is manifest that relief to the tune of lacs of  rupees has  been claimed  by the  plaintiff in  the suit. He  said that the plaintiff has laid claim to a sum of Rs.1,26,796.72 besides  another sum of over Rs.84,000 as his share in  the profit for a particular period by reference to the proceeding  of the  Income-Tax department  mentioned  in paragraph  11   of  the   plaint,  and   it  is,  therefore, preposterous on  his part  to suggest in paragraph 19 of the plaint that  it could  be tentatively  valued at Rs.50 only. According  to  the  defence  case  which  is  challenged  as incorrect by  the plaintiff, the plaintiff requested for and was allowed  a larger  share ’in  the well  established  and reputed business  of auctioneer  known as "Russell Exchange" and its  assets and  goodwill as well as the amount lying in the Habib  Bank, Karachi Branch, solely and absolutely’. The "Russell Exchange" building is a very valuable property near Park Street  in the  city of  Calcutta. A copy of the Profit and Loss  Account for the calendar year 1979 attached by the plaintiff to  the additional  affidavit filed  on his behalf before this Court mentions figures in lacs.      4. Mr. Arun Prakash Chatterjee, the learned counsel for the plaintiff-respondent  no. 1, has argued that the suit is governed for the purpose of court fees by s. 7(iv)(f) of the Court Fees  Act, and the plaintiff has the absolute right to

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put on  the plaint  any value he wishes to and the court has no jurisdiction to examine the matter. In other words, it is the sweet-will  of the  plaintiff to  choose any  figure  he likes and  thus decide  finally the  court which  shall have jurisdiction to  entertain the suit without reference to the subject matter  of the  litigation, the nature and extent of the relief  claimed or  any other factor. He has relied upon the decision  of this  Court in Smt. Tara Devi v. Sri Thakur Radha   Krishna    Maharaj,   [1987]    4   SCC    69,   and Meenakshisundaram Chettiar v. Venkatachalam Chettiar, [1979] 3 SCR  385. Reference  was also  made to  Krishnaji Hari  v. Gopal Narayan, AIR 1936 Bombay 166 and Ishwarappa v. Dhanji, AIR  1932  Bombay  111.  Mr.  Chatterjee  claimed  that  the different High  Courts  in  the  country  have  consistently confirmed this  right  of  the  plaintiff  and  he  has  not discovered any decision to the contrary. 511      5. We are afraid, the interpretation put by the learned counsel on  the decisions  of this  Court is not correct and cannot be  accepted. None  of the two cited judgments relied upon by  Mr. Chatterjee helps him. It is true that in a suit for accounts the plaintiff is not obliged to state the exact amount which  would result after taking all the accounts and he may,  therefore, put a tentative valuation upon the suit, but he  is not  permitted  to  choose  an  unreasonable  and arbitrary figure  for that  purpose.  At  page  392  of  the judgment  in  Meenakshisundaram  Chettiar  v.  Venkatachalam Chettiar, (supra)  this  Court  while  taking  note  of  the plaintiff’s right to give a tentative valuation on the suit, observed:           "The plaintiff cannot arbitrarily and deliberately           under-value the relief." In Smt.  Tara Devi  v. Sri  Thakur  Radha  Krishna  Maharaj, [1987] 4 SCC 69, the view was reiterated thus at page 70:           "..... The  plaintiff however,  has not been given           the  absolute   right  or   option  to  place  any           valuation whatever  on such  relief and  where the           plaintiff  manifestly   and  deliberately   under-           estimates the  relief the  court  is  entitled  to           examine the  correctness of the valuation given by           the plaintiff  and to  revise the  same if  it  is           patently arbitrary or unreasonable ....."      6. So  far  as  the  opinion  of  the  High  Courts  is concerned, it  is  not  uniform.  The  argument,  "that  the plaintiff can give an arbitrary valuation in the plaint, and that the  court is  bound to  accept that" made on behalf of the plaintiff before the Allahabad High Court in Aizaz Ahmad v. Nazirul  Hasan, AIR  1935 Allahabad  849,  was  rejected, after observing  that  there  was  some  authority  for  the extreme view  as urged in two Calcutta decisions but later a different view  was taken  by the  said Court as also by the Allahabad Court. In Attar Singh v. Manohar Singh, ILR (1947) Nagpur 933,  the plaintiff  non-applicant  before  the  High Court filed  a  suit  for  dissolution  of  partnership  and accounts valuing  at Rs.150  as has  been done  in the  case before us.  The defendant’s  objection to  the valuation was rejected by  the trial  court "on  the ground that the court was  powerless   to  challenge  the  valuation  put  by  the plaintiff on the relief claimed in the suit." The Full Bench decision in Mata Ram v. Daulat, ILR (1938) Nagpur 588 (F.B.) was attempted to be distinguished on the basis that it was a case covered  by s.  7(iv)(c). of the Court Fees Act and not by s. 7(iv)(f). The 512 High Court while repelling the argument pointed out that the

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principle underlying  both the  clauses (c)  and (f)  of  s. 7(iv) is  substantially the same and the Full Bench decision governed the  case. Accordingly  it was  held that  when the valuation put  by the  plaintiff appears to be arbitrary and unreasonable the court may reject it and leave the plaintiff to correct  the valuation or have the suit rejected. Similar was the  view of the Patna High Court in suits covered by s. 7(iv)(c) in  Salahuddinhyder v.  Dhanoolal, [1945]  ILR XXIV Patna 334, and Shama Pershad Shahi v. Sheopershad Singh XLI, I.C. 95  (Patna). In  Gouri Lal and others v. Raja Babu, AIR 1929 Patna  626, the  respondent filed  a suit  praying  for accounts from  appellant no.  1. Rejecting  his claim to put any valuation  under s.  7(iv)(f) of  the Court Fees Act the High Court  observed that  when a  plaintiff is  required to place the  valuation on  his claim he must state a valuation which need only be approximately correct but qualified it by saying  that,  "it  must  not  be  arbitrary  or  manifestly inadequate."      7. It  is true  that in a suit for accounts the correct amount 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. The  plaintiff is,  therefore, allowed to give his own  tentative valuation. Ordinarily the Court shall not examine the  correctness of  the valuation  chosen, but  the plaintiff cannot  act  arbitrarily  in  this  matter.  If  a plaintiff chooses  whimsically a  ridiculous  figure  it  is tantamount to  not exercising  his right  in this regard. In such a case it is not only open to the Court but its duty to reject such  a valuation.  The cases  of some  of  the  High Courts which  have taken a different view must be held to be incorrectly decided.      8. The  learned counsel  for the  parties  have  placed before us the materials on the record at considerable length and we  do not  have any  hesitation  in  holding  that  the valuation put by the plaintiff (respondent before us) on the plaint is  arbitrary and  unacceptable. We,  however, do not propose  to  examine  the  matter  further  and  remit  this question to  be  reconsidered  by  the  trial  court.  While examining the  issue it  will be  open to the trial court to take into consideration the statement in the plaint that the plaintiff has  been ousted from the partnership business. If the  court  comes  to  the  conclusion  that  the  tentative valuation  of   the  suit  would  be  beyond  its  pecuniary jurisdiction, it shall pass an appropriate order under Order VII  of   the  Code   of  Civil  Procedure.  The  appeal  is accordingly allowed  with costs  payable  by  the  plaintiff respondent. G.N.                                         Appeal allowed. 513