Saturday, 23 November 2019

Leading Bombay HC judgment for determination of forum of appeal in suit for eviction and mesne profits

Tenancy - eviction - Sections 2 and 15 Order 6 Rule 17, Order 7, Order 20 Rules 12 (1) and 12 (2) (as applicable to Maharashtra) of Code of Civil Procedure, 1908 - suit for arrears of rent and mesne profits - decree for possession passed with direction for mesne profits - enquiry conducted under Order 20 Rule 12 for determination of mesne profits - appellant contended that forum of appeal would be determined as per final outcome of enquiry under Order 20 Rule 12 - contention of petitioner rejected - forum of appeal is determined with reference to value of suit and not amount decreed - held, forum of appeal to be determined as per valuation put by plaintiff when suit was filed.


First Appeal No. 397 of 1993 arising out of decree dated 15-7-1993 in Mesne Profit Case No. 7 of 1986

Decided On: 30.11.1998

Syed Saifuddin Vs.  Kasturchand Abhayrajji Golchha

Hon'ble Judges/Coram:
N.J. Pandya, J.N. Patel and A.B. Palkar, JJ.

Citation: 1999 ( 2 ) MhLJ 675,2000(4) B. C.R 582

N.J. Pandya, J.

1. At the admission stage of this appeal, a preliminary point was taken, whether the appeal is maintainable before the High Court or before the District Court. In order to appreciate this controversy ,some facts are required to be noted.

2. The respondent/plaintiff is a landlord, after obtaining permission from the Rent Controller under Clause 13 of the C.P. and Berar Letting of Houses and Rent Control Order, 1949, had issued the quit notice on or about 9-1-1974. As the defendant/appellant did not comply with the same, a suit came to be filed which resulted into decree for possession with a direction for mesne profits.

3. In the suit itself, by way of the arrears of rent and for mesne profits, definite prayer was made and it was valued at Rs. 3,490/-. The details and the break up thereof are to be found in para 3 of the judgment under which the learned Judges of the Division Bench of this Court directed that the matter be placed before the learned Chief Justice for referring it to a larger Bench.

4. This direction came to be issued in view of the following decisions that have been referred to in the course of the judgement in paras 19 to 22.

These cases are:

(i) Ibrahimji Issaji v. Bejanji Jamshedji 20 Bom. 265.
(ii) Shet Kavas Ji v. Dinshaji 22 Bom. 963.
(iii) Gopal v. Chimabai A.I.R. 1938 Bom. 464.
(iv) Ahmedbhai v. Badruddin A.I.R. 1946 Bom. 356.
5. Later on the learned Judges have summarized the situation in para 25 and have expressed themselves of the view that the earlier decision of Kavasji v. Dinshaji is clearly contrary to the subsequent decisions in Gopal v. Chimabai and Ahmedbhai v. Badruddin.

6. Ibrahimji Issaji's case was pertaining to partnership, dissolution and rendition of accounts. On the basis of that at the end of the inquiry when the amount found due exceeded Rs. 5,000/- beyond the pecuniary jurisdiction of the trial Court, it was held that the appeal lay to the High Court and not to the District Court.

7. The second of the cases as set out in para 20, page 14 of the judgement refers to a situation where the suit was valued by the plaintiff at Rs. 130/-. The learned Subordinate Judge found that the property in the suit was worth over a lakh of rupees and the liability came to be determined at Rs. 5,729/-and that the defendant was indebted to the estate in the sum of Rs. 15,199/ - and on that basis a preliminary decree was drawn.

8. When appeal was preferred before the District Court against the said decree, it was returned for being presented to the High Court by the District Judge. While giving its finding and directing that the appeal lay to the District Court, the judgement 6f Ibrahimji Issaji's case referred to and correctness of its ratio was doubted.

9. As noted above, Ibrahim Issaji's case is contrary to the subsequent three decisions, i.e. Shet Kavasji v. Dinshaji; Gopal v. Chimabai and Ahmedbhai v. Badruddin, also follow that very line.

10. In this background, as per para 25, the learned Judges recorded their view as to the necessity of the reference and formulated the following question:

"Whether in the facts and circumstances of the instant case, the appeal would lie to the District Court or the High Court ?"
11. The learned Chief Justice has been pleased to constitute the present Full Bench for the purpose of considering the abovesaid question.

12. It is obvious from the discussion so far and the background that essentially we are called upon to decide and settle the controversy arising out of the decisions of Ibrahimji Issaji v. Bejanji Jamshedji 20 Bom 265 as against the remaining three cases, i.e. Shet Kavasji v. Dinshaji, Copal v. Chimabai A.I.R. 1938 Bom. 464; and Ahmedbhai v. Badruddin A.I.R. 1946 Bom. 356, referred to above.

13. It has been noted in Gopal v. Chimabai's case that the earlier decision, i.e. Ibrahimji Issaji's case was without any reference to section 8 of the Suits Valuation Act. It is an admitted position that the said enactment will govern the case for determining both, the valuation of the suit pertaining to the Court fees as well as pecuniary jurisdiction. Section 8 reads as under:

"8. Court fee value and jurisdiction value to be the same in certain suits.---Where in suits other than those referred to in the Court Fees Act, 1870 (7 of 1870), section 7, paragraphs (v), (vi) and (ix) and paragraph (x), Clause (d), court-fees are payable ad valorem under the Court Fees Act, 1870, the value as determinable for the computation of court-fees and the value for the purposes of jurisdiction shall be the same"
In the aforesaid section, where there is a reference to section 7 of the Indian Court Fees Act, for the State of Maharashtra corresponding reference is to be made to section 6 of the Bombay Court Fees Act with relevant clauses thereof governing the case.

14. As noted above, in the instant case, the matter was that of getting eviction decree against the tenant sought by the landlord and also a decree for arrears of rent with mesne profits. Corresponding provision for all purposes is section 6(12) and the Court Fees to be determined on the basis of the monthly rent reserved and on that basis calculating the rent for entire year next before the date of filing of the suit. Once the valuation is thus arrived at, ad valorem Court fees on the said valuation is to be paid. Section 8 of the Suits Valuation Act would make the said valuation to be the basis for the computation of Court Fees as well as for determining the pecuniary jurisdiction.

15. The subsequent decisions of Bombay High Court following in point of time as and when rendered after the decision given in Ibrahimji's case (supra), they do refer to said section 8 of the Suits Valuation Act and in our view represents the correct position so far as the valuation of the suits is concerned, for Court Fees as well as jurisdiction.

16. Once the suit is thus valued and the jurisdiction of the Court is thus determined at the stage when the suit is instituted, that will be the valuation for the subsequent proceedings in the suit also. Obviously, therefore, the appeal being continuation of the suit, the valuation will govern appeal-as well and for the purposes of forum of appeal that will be the provision to govern the situation. Section 26 of the Bombay Civil Courts Act, 1869 as well as the submission made on behalf of the party who has taken the preliminary objection will now be considered.

17. Section 26 reads as under:

"26. In all suits decided by a Civil Judge of which the amount or value of the subject matter exceeds Fifty thousand rupees the appeal from this decision shall be direct to the High Court".
18. The import and implication of the section, thus is very clear. Where the amount of value of the subject matter of the suit decided by Civil Judge is exceeding Rs. 50,000/- the appeal will lie before the High Court. In other cases, it will not (sic) go before the District Court.

19. The learned advocate appearing for the appellant maintains that the appeal will lie before the High Court for the simple reason that while praying for mesne profits the party would not know the amount and would await the final outcome of the inquiry under Order XX, Rule 12 of the Code of Civil Procedure, only then the amount will be determined and the aforesaid expression of "value of the subject matter" in section 26 should be linked up with the final outcome of the inquiry and on that basis the forum of the appeal should be decided.

20. Elaborating the arguments further and proceeding with another limb of the argument in this regard, it was urged very seriously that inquiry under Order XX, Rule 12 not being a continuation of the suit and being an independent inquiry, that rule of the Code of Civil Procedure cannot be linked up with the valuation as set out in the plaint and must be allowed to have its own valuation dependent upon the final outcome of the inquiry.

21. The argument of the learned Counsel for the appellant, if accepted, is likely to give rise to certain anomalous position. In a suit for accounts filed by a sleeping partner he may not be aware at all of the nature of profits and his possible share. Even if aware, the law permits him to notionally value the claim in the plaint. If such a suit is dismissed, then against the decree on the basis of notional valuation in the plaint, the appeal by defendant would definitely go to the District Court. If the District Court reverses the decree of dismissal and passes a decree for a sum which is more than the limits of pecuniary jurisdiction of the trial Court (Civil Judge, Jr. Dn.) then it may be contended even at the appellate stage that the trial Court had no jurisdiction to entertain the suit. Thus after coming to the conclusion regarding the quantum to be awarded finally to the plaintiff, the Appellate Court will have to return the plaint for presentation to the proper Court. Similar is the case of claim in respect of future mesne profits. Further mesne profits are by their very nature profits or the income derived by the defendant during the pendency of the suit. The cause of action for the same does not accrue when the plaint is presented and in order to enable the plaintiff, a proviso is introduced to make a request to the Court for direction regarding the inquiry into future mesne profits, the quantum of which is not known to anybody at that stage. If after inquiry into future mesne profits the Court comes to a conclusion that the quantum to be awarded is beyond the pecuniary limits of the jurisdiction then it may be contended successfully that the Court had no jurisdiction to pass the preliminary decree as one of the claims made in the paint was beyond the pecuniary jurisdiction of that Court. However, in the same case, an appeal against the dismissal of the suit would nevertheless lie to the District Court. Similarly, in a suit for accounts, the law permits the plaintiff to make a notional valuation and, as already discussed, the valuation for the purpose of jurisdiction is the same which is the valuation for the purpose of Court Fees as it permitted by law. If the contention that the forum of appeal is dependent on the final adjudication of the matter regarding the quantum of accounts or on the final decree then the preliminary decree may be challenged as one without jurisdiction and non est. In fact, in order to avoid such eventualities, provision has been made permitting the plaintiff to have a notional valuation and to pay the fixed Court Fees and the valuation for the purpose of jurisdiction is also to be the same. It is for these simple reasons, in the decision in Ambadas v. Vishnu Govind MANU/MH/0349/1926 : AIR1927Bom83 , the Division Bench of this Court has held that the mere fact that the decree is for an amount exceeding the pecuniary jurisdiction of the Court which passed the decree, is not ipso facto proof that it was beyond jurisdiction and a nullity and the Court is wrong in questioning in execution the validity of such a decree. This judgement is followed in the case of Bindraban Kanhaiyalal Agarwal v. Kasturilal Nyahalchand Sodi and others, MANU/MH/0279/1977 : 1978 Mh.L.J. 561 by emphasising that it is the value of the claim in the plaint which determines pecuniary jurisdiction of a Court and if a suit is properly filed in competent Court there is no bar to prevent the Court from passing a decree for an amount in excess of its pecuniary jurisdiction. Jurisdiction is determined by valuation in plaint and not by result of the suit.

22. The Full Bench of Calcutta High Court has clearly laid down in the case of Bidyadhar Bachar and others v. Manindra Nath Das and others MANU/WB/0098/1925 : AIR1925Cal1076 that where a Judge has in the proper exercise of his jurisdiction passed a decree for possession and also a preliminary decree for mesne profits, he must be held to have jurisdiction to make a final decree in accordance with his decision. This jurisdiction is not limited. If, as a result of the inquiry directed by him, the mesne profits are found to exceed the amount of his pecuniary jurisdiction as regards the value of the suit, the suit is rightly entertained as within the jurisdiction of the Judge and a decree is passed, his power to grant the proper and adequate relief is not affected by any event which increases the value of the relief during the pendency of the suit.

23. In other words, it can be stated that to hold that jurisdiction should depend on the amount for which the final decree is passed, would have the effect and the after the Judge passes a preliminary decree it is found after accounts are taken that the final decree must be for an amount exceeding the pecuniary limit of jurisdiction the entire proceedings before him including the decree passed should be considered as being without jurisdiction. The forum of appeal is determined with reference to the value of the suit and not the amount decreed. The plaintiff is neither required nor bound to state any amount in his application.

24. In fact, in our opinion, these provisions have been made in the Suits Valuation Act as well as in the Bombay Civil Courts Act in order to leave no scope for any ambiguity regarding the forum where the suit is to be filed and consequently the forum before which the decree can be challenged.

25. If we accept the second limb of the argument, obviously it would mean that this is a miscellaneous proceeding, though arising out of a suit, but not a suit at all by implication. Therefore, the Suits Valuation Act will not be applicable to it. This cannot be accepted. There has to be valuation for the Court Fees if not for jurisdiction. Section 15 and Order VII of the Code of Civil Procedure compels the party to evaluate the relief when read with provisions of Civil Courts Act as well as Suit Valuation Act and where the Court Fees are payable, enactment pertaining to that and again thereby the party is bound to evaluate form a relief for which it has come before the Court.

26. The inquiry into the mesne profits has to be seen in the background of the finding, given by a competent Court, in eviction proceedings, coming to a conclusion positively that the tenant is bound and liable to pay an amount towards the mesne profits. After this preliminary finding, resulting into a preliminary decree, the subsequent inquiry under Order XX, Rule 12, Code of Civil Procedure, is carried out under the orders of the Court as set out in that very preliminary decree and once the inquiry has concluded, whatever be the finding that is recorded, will be given a formal expression by the Court in form of a final decree.

27. At this juncture, definition of the word "decree" as set out in subsection (2) of section 2 of the Code of Civil Procedure may be referred to:

"Sec.2(2) 'Decree' means the formal expression of an adjudication which, so far as regards the Court expressing it, conclusively determines the right of the Court expressing it, conclusively determines the rights of the parties with regard to all or any of the matters in controversy in the suit and may be either preliminary or final. It shall be deemed to include the rejection of a plaint and the determination of any question within section 144, but shall not include---

(a) any adjudication from Which an appeal lies as an appeal from an order, or

(b) any order of dismissal for default",

28. Till the inquiry under Order XX, Rule 12, Code of Civil Procedure, so far as the trial Court is concerned, finality is brought out with regard to the prayer of possession. As it happened in the instant case the possession has already been handed over. Not only this, it has attained the finality. But that part of the decree has been executed. So far as the mesne profits are concerned, that too could have been executed along with the said part of the decree of possession provided the figure was determined at that time.

29. As the determination awaited the conclusion of the inquiry under Order XX, Rule 12, Code of Civil Procedure, obviously the final decree in that regard will be passed only at the end of that inquiry. Once it is found that the inquiry is to end into a decree, obviously that decree has to be passed in the suit which is none else but the suit filed by the plaintiff/respondent for eviction and mesne profits before the trial Court. Again we come back to section 8. Section 8 of the Suits Valuation Act was applicable and continued to apply to the suit when it was filed and that position would not change merely because the inquiry was ordered by the trial Court under Order XX Rule, 12.

30. We may refer here to the fact that by local amendment so far as Bombay is concerned, there is a sub-rule (2) added in different words which is to be found in the body of the original Code. Under sub-rule (2) the said inquiry shall result into a final decree. It being a matter of Bombay High Court, the said sub-rule (2) as set out by the High Court is quoted herein below:

"(2) Where an inquiry is directed under Clause (b) or Clause (c) of sub-rule (1) above, a final decree in respect of the rent or mesne profits shall be passed in accordance with the result of such enquiry".
31. In fact it is this final decree which can be appealed so far as the party aggrieved by it is concerned.

32. The learned advocate for the appellant has cited the decision in the case of Satyawan Harnamdas Bhatia v. Santok Singh s/o Sardar Surjan Singh Jolly, MANU/MH/0462/1987 : 1988(4)BomCR358 in support of his submission that the inquiry under Order XX, Rule 12 is not a continuation of the suit. On going through the same, we find that in a way factually the parties therein and the parties before us are in the same position viz., landlord and tenant. There also a decree of eviction was passed and an inquiry under Order XX, Rule 12 was ordered. That decree of possession before it could be executed, was challenged right up to the Second Appeal stage and was confirmed. It was in this background, a Division Bench of this Court was required to consider Order VI, Rule 17 for permitting amendment to the appeal memo read with section 96 of the Code of Civil Procedure provided for First appeal and taking into consideration Order XX, Rule 12(1)(c) of the Code of Civil Procedure, there it has been observed in para 5 as well as 8 that the original decree granting relief of eviction and possession and entitlement to future profits does not attain finality on completion of an enquiry under Order XX, Rule 12. To that extent the original decree becomes final unless reversed in the appeal. In the mesne profit proceedings substantive rights of the parties, such as possession, mesne profits cannot be adjudicated. The proceedings under Order XX, Rule 12 cannot legally be treated as a continuation of the suit proceedings in that background. The decree as passed for eviction, delivery of possession and enquiry into future mesne profits had been confirmed in the Second Appeal and become final. As such, the appeal as preferred against an order fixing quantum of mesne profits cannot be said to be a continuation of the original suit proceedings and those proceedings cannot be used so as to lay a challenge to the original decree.

33. In the mean time inquiry under Order XX, Rule 12 was conducted and the finding given at the end of the inquiry was sought to be challenged by appeal. During the pendency of the appeal as to the finding of mesne profits, statutory change occurred which, according to the tenant, would help him in attacking the decree of eviction which stood confirmed upto the stage of Apex Court, as noted above. The application under Order VI, Rule 17 of the Code of Civil Procedure was moved. By this, the tenant/appellant of the mesne profits proceeding wanted the memo of appeal to be amended so that the challenge of the aforesaid decree of eviction which had become final can again be reconsidered.

34. It is in these backgrounds, in paragraphs 5 and 8, the learned Judges have observed that the proceedings under Order XX, Rule 12 cannot be treated as a continuation of suit, in the sense as an appeal arising out of a decree would be considered as such. This being not the position here, obviously this decision will not help the appellant.

35. By the original decree, the learned Judges, of course, meant the decree of eviction. The party before the learned Judges in the said case of Satyawan, cited supra, by seeking amendment under Order VI, Rule 17 of the Code of Civil Procedure to the appeal memo sought to challenge that very decree which, as recorded above, was already confirmed right up to the stage of Second Appeal. In that context it has been said by the learned Judges that the proceeding arising out of an inquiry under Order XX, Rule 12 cannot be treated as continuation of suit, Obviously, this decision therefore cannot help the appellant.

36. In conclusion, we hold that the inquiry under Order XX, Rule 12(1)(c) read with sub-rule (2) as amended and applicable in State of Maharashtra by virtue of the amendment by the Bombay High Court is to result into a final decree and as such valuation of the appeal will be governed by the valuation put for the relevant relief by the plaintiff at the time when the suit is filed.

37. In that view of the matter, we record our agreement with the reasons and conclusions arrived at by the subsequent decisions of the Division Bench and hold that the appeal would lie to the District Court and not to the High 'Court. Question is answered accordingly.

38. Order accordingly.

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