ABDUL HAMID SHAMSI V. ABDUL MAJID (1988) 2 SCC 575: AIR 1988 SC 1150
FACT
The plaintiff, Respondent 1, filed a suit in the City Civil Court, Calcutta, alleging that he was a partner in a partnership business with his brothers, Defendants 1 and 2.
He claimed that after their father's death, Defendants 1 and 2 had effectively excluded him from the business despite his repeated attempts to reconstitute the partnership.
The plaintiff challenged a partnership deed of 1979, alleging false representation by Defendants 1 and 2 to the Income Tax Department.
In the prayer portion of the plaint, the plaintiff sought a declaration of the partnership deed of 1979 as illegal and void, dissolution of the partnership firm, and accounts.
The plaintiff valued the suit at Rs 150, with Rs 50 for declaration, Rs 50 for rendition of accounts, and another Rs 50 for profit share.
Trial court, the issues relating to the correct valuation and pecuniary jurisdiction of the court to entertain 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 dismissed.
Defendant 2 has now come to this Court against the High Court’s order.
ISSUE
The main issue was whether the valuation provided by the plaintiff for the suit was arbitrary and unreasonable and whether the court had the jurisdiction to examine and revise the valuation.
RULE
Even though plaintiffs have the right to provide tentative valuations u/s 7 of the Court Fess Act for suits, these valuations cannot be arbitrary or deliberately undervalued.
HELD
The appellant-defendant argued that the plaintiff's suit sought relief amounting to lakhs of rupees, including substantial sums as the plaintiff's share in business profits and assets like the valuable "Russell Exchange" property. He contended that the plaintiff's tentative valuation of Rs 150 for the entire suit was unreasonably low and did not reflect the true value of the relief sought.
The respondent-plaintiff argued that he had the absolute right to choose any valuation for the suit and that the court had no jurisdiction to examine the matter. [Relying on Section 7(iv)(f) of the Court Fees Act.]
In Meenakshisundaram Chettiar v. Venkatachalam Chettiar [AIR 1979 SC 989], the Court observed: “The plaintiff cannot arbitrarily and deliberately undervalue the relief.”
In, the view was reiterated in Smt. Tura Devi v. Thakur Radha Krishna Maharaj [(1987) 4 SCC 69]: “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 underestimates 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.”
It noted that while the correct amount payable in a suit for accounts can only be ascertained after examining the accounts, the plaintiff is allowed to give a tentative valuation. However, this valuation cannot be whimsical or ridiculous.
The court concluded that the valuation provided by the plaintiff in this case was arbitrary and unacceptable. It remitted the question of valuation back to the trial court for reconsideration.
The trial court was instructed to consider whether the tentative valuation of the suit would exceed its pecuniary jurisdiction and to pass an appropriate order under Order VII of the Code of Civil Procedure.
The appeal was allowed with costs payable by the plaintiff respondent.