Monday, 19 June 2017

When court should decide issue of undervaluation of suit as preliminary issue?

 In the case of The Church of Christ Charitable Trust and Educational Charitable Society v. M/s. Ponniamman Educational Trust, as reported in MANU/SC/0515/2012 : AIR 2012 SC 3912, after referring to the relevant provision, it has been held that --
"In order to consider an application under Order VII Rule 11, the Court has to look into the averments in the plaint and the same can be exercised by the trial Court at any stage of the suit."
5. But in the case of Meenakshisundaram Chettiar v. Venkatachalam Chettiar, as reported in MANU/SC/0016/1979 : 1980 (1) SCC 616, it has been held that --
"The plaintiff is entitled to give a tentative valuation if in spite of his genuine efforts, he is unable to make out an exact valuation, but plaint is liable to be rejected in case of deliberate undervaluation."
6. "Similarly, in the case of Sujir Keshav Nayak v. Sujir Ganesh Nayak, as reported in MANU/SC/0284/1992 : 1992 (1) SCC 731, it has been held that --
"In suit filed before Court of limited pecuniary jurisdiction, defendant has right to raise objection as to undervaluation of the suit which has to be decided as preliminary issue by the Court. It has also been held that if Court, on being prima-facie satisfied that valuation of suit was arbitrary, can direct the suit to be properly valued."
It has been further held that --
"In suits for accounting or for dissolution of partnership and accounting filed in Courts of limited pecuniary jurisdiction the plaintiff must take every care to disclose valuation which is not arbitrary, as the plaint is liable to be rejected on objection of the defendants, but in suits of such nature, filed before Courts of unlimited jurisdiction, the valuation disclosed by the plaintiff can be accepted as correct. This however, does not mean that Court's power to examine the correctness of valuation is taken away. If on perusal of plaint, the Court is prima facie satisfied that the plaintiff has not been fair and valued the suit or relief arbitrarily it is not precluded from directing the plaintiff to value it properly and pay Court-fee on it. Thus, summarizing the law, it has been held as under:
(1) Where the question of Court-fee is linked with jurisdiction, a defendant has a right to raise objection and the Court should decide it as a preliminary issue.
(2) But in those cases where the suit is filed in Court of unlimited jurisdiction, the valuation disclosed by the plaintiff or payment of amount of Court-fee on relief claimed in plaint or memorandum of appeal should be taken as correct.
(3) This does not preclude the Court even in suits filed in Courts of unlimited jurisdiction from examining if the valuation, on averments in plaint, is arbitrary."
7. In the present case, the trial Court with a limited pecuniary jurisdiction, cannot be said to have erred in directing the plaintiff to value the suit as per the guidelines inasmuch as it is very much within the jurisdiction of a Civil Judge even if material would not have been brought to the notice of the Civil Judge, to direct the plaintiff to value the relief as per the market guidelines.
IN THE HIGH COURT OF MADHYA PRADESH (GWALIOR BENCH)
W.P. No. 7303 of 2016
Decided On: 26.10.2016
 Manoj Jain and Ors.
Vs.
Pramod Jain and Ors.

Hon'ble Judges/Coram:
Vivek Agarwal, J.

Citation: AIR 2017 Madhya pradesh 39

1. This Writ Petition has been filed by the petitioner being aggrieved by the order dated 9-8-2016 passed by the Court of 3rd Civil Judge Class-I, Gwalior, whereby application filed by the defendants under Order 7, Rule 11 read with section 151 of Civil Procedure Code, has been partly accepted. Brief facts leading to the present writ petition are that plaintiff has filed a suit for declaration and permanent injunction valuing the suit at ` 8,05,000/- and has sought relief of partition in the suit property. An application was filed by the defendants under Order 7, Rule 11 read with section 151 of Civil Procedure Code, mentioning therein that as per the Collector guidelines issued for valuation of the property in the year 2013-14, valuation of the properties having RCC roof situated at Bharat Talkies Road is ` 48,000/- per square meter and accordingly the plaintiffs are required to value their suit and pay the Court-fee since they have sought partition of the suit property. It has come on record that the plaintiffs have not filed any reply and have orally opposed this application.
2. Learned counsel for the plaintiffs has argued that it is settled principle of law that while deciding an application under Order 7, Rule 11, only plaint averments needs to be seen and no documents filed by the defendants can be looked into. Reliance has been placed to the judgment rendered by the Supreme Court in the case of the Church of Christ Charitable trust and Educational Charitable Society v. M/s. Ponniamman Educational Trust, as reported in MANU/SC/0515/2012 : AIR 2012 SC 3912 and it is submitted that the trial Court erred in taking into consideration the market guidelines produced by the defendants and has thus, erred in partly allowing the application directing the plaintiff to correct the suit valuation as per the guidelines failing which it has been mentioned that suit may be dismissed.
3. Learned counsel for the petitioner has also placed reliance on the order of this Court dated 9-5-2012 passed in Civil Revision No. 339/2011 in the case of Smt. Nirmala Rao and another v. Smt. Laxmi Bai and others.
4. In the case of The Church of Christ Charitable Trust and Educational Charitable Society v. M/s. Ponniamman Educational Trust, as reported in MANU/SC/0515/2012 : AIR 2012 SC 3912, after referring to the relevant provision, it has been held that --
"In order to consider an application under Order VII Rule 11, the Court has to look into the averments in the plaint and the same can be exercised by the trial Court at any stage of the suit."
5. But in the case of Meenakshisundaram Chettiar v. Venkatachalam Chettiar, as reported in MANU/SC/0016/1979 : 1980 (1) SCC 616, it has been held that --
"The plaintiff is entitled to give a tentative valuation if in spite of his genuine efforts, he is unable to make out an exact valuation, but plaint is liable to be rejected in case of deliberate undervaluation."
6. "Similarly, in the case of Sujir Keshav Nayak v. Sujir Ganesh Nayak, as reported in MANU/SC/0284/1992 : 1992 (1) SCC 731, it has been held that --
"In suit filed before Court of limited pecuniary jurisdiction, defendant has right to raise objection as to undervaluation of the suit which has to be decided as preliminary issue by the Court. It has also been held that if Court, on being prima-facie satisfied that valuation of suit was arbitrary, can direct the suit to be properly valued."
It has been further held that --
"In suits for accounting or for dissolution of partnership and accounting filed in Courts of limited pecuniary jurisdiction the plaintiff must take every care to disclose valuation which is not arbitrary, as the plaint is liable to be rejected on objection of the defendants, but in suits of such nature, filed before Courts of unlimited jurisdiction, the valuation disclosed by the plaintiff can be accepted as correct. This however, does not mean that Court's power to examine the correctness of valuation is taken away. If on perusal of plaint, the Court is prima facie satisfied that the plaintiff has not been fair and valued the suit or relief arbitrarily it is not precluded from directing the plaintiff to value it properly and pay Court-fee on it. Thus, summarizing the law, it has been held as under:
(1) Where the question of Court-fee is linked with jurisdiction, a defendant has a right to raise objection and the Court should decide it as a preliminary issue.
(2) But in those cases where the suit is filed in Court of unlimited jurisdiction, the valuation disclosed by the plaintiff or payment of amount of Court-fee on relief claimed in plaint or memorandum of appeal should be taken as correct.
(3) This does not preclude the Court even in suits filed in Courts of unlimited jurisdiction from examining if the valuation, on averments in plaint, is arbitrary."
7. In the present case, the trial Court with a limited pecuniary jurisdiction, cannot be said to have erred in directing the plaintiff to value the suit as per the guidelines inasmuch as it is very much within the jurisdiction of a Civil Judge even if material would not have been brought to the notice of the Civil Judge, to direct the plaintiff to value the relief as per the market guidelines. Thus, in the light of the law laid-down in the case of Sujir Keshav Nayak (supra), no infirmity can be attributed to the order passed by learned trial Court. The judgment of Sujir Keshav Nayak (supra) has not been considered in the case of The Church of Christ Charitable Trust and Educational Charitable Society (supra). Thus, in the light of the principles enunciated in the case of Sujir Keshav Nayak (supra), the trial Court has not erred in issuing necessary directions to the plaintiff to correct the valuation as per market guidelines. Thus, the petition fails and is dismissed.

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