SUKUMARAN NAIR v. RAGHAVAN NAIR — 1970 DIGILAW 94 (KER)

Judgment :- 1. The point for determination in this Civil Revision Petition is whether in an appeal from a decree for redemption on payment of value of improvements to the defendant, where the appellant-defendant challenges bonafide both the right of redemption and the amount of value of improvements, court-fee should be paid on the principal sum secured by the mortgage as well as upon the amount which the appellant seeks to enhance the sum decreed as value of improvements, when such amount exceeded the principal sum secured by the mortgage. 2. The above question was raised in the lower appellate court to which the defendant-appellant filed the appeal against the decree for redemption on payment of value of improvements to the petitioner. The petitioner was in possession of the plaint schedule property under a mortgage. While so, the suit was instituted by the respondent for redemption and recovery of possession of the suit property. The amount of the mortgage secured by the mortgage deed was Rs. 500/-. The trial court passed a decree for redemption on payment of the said sum of the mortgage amount and also on payment of Rs. 15,714.06 as value of improvements. Against that judgment and decree, the petitioner filed the appeal in the lower appellate court questioning the right of redemption as well as making a claim for enhanced value of improvements. In doing so, the petitioner paid court fee on the mortgage amount and he had also paid court-fee as if to set aside the commissioner's report valuing the same under S.50 of the Kerala Court Fees and Suits Valuation Act, 1959 (Act 1.0 of 1960), which will hereinafter be referred to as the present Act. In the trial court, the respondent had paid court-fee only on the mortgage amount. However, when the appeal was filed there was an office note to the effect that the court-fee paid under S.50 was not correct, and that the appeal being in the Sub Court, a court fee of Rs. 100/-should be paid on the enhanced value of improvements. This office note was not considered by the lower appellate court as it is evidenced by a later order dated 1-8-67 to the effect that the question of court-fee would be considered along with the appeal. (This is a wrong procedure). 100/-should be paid on the enhanced value of improvements. This office note was not considered by the lower appellate court as it is evidenced by a later order dated 1-8-67 to the effect that the question of court-fee would be considered along with the appeal. (This is a wrong procedure). But, when the court-fee Examiner checked the records, he found that the court-fee paid under S.50 was not correct and that the full amount of Rs. 100/- under S.50 should be paid on the memorandum of appeal towards enhanced amount of the value of improvements in addition to the court-fee which was paid on the mortgage amount. The lower appellate court considered this question on the basis of the court fee Examiner's check slip on 30-11-1967 and directed the petitioner to pay the additional court fee as required by S.50 of the Act. But, later on 4th March 1970 after the appeal was heard, again the lower appellate court suo mote reopened the court-fee question and stated that the court fee shall be paid on an ad valorem basis on the entire amount of the enhanced value of improvements which the petitioner claimed in the appeal. It is the said order which is impugned in this revision petition. 3. Two questions have been argued in this case. One question is that when both the right of redemption and claim for improvements were disputed in appeal, the court-fee need be paid only on the amount of the mortgage secured by the mortgage deed and that no separate court-fee shall be payable on the value of improvements in appeal. The next point argued was that once there was a.decision by a court, whether it is in appeal or in the suit, under S.18(2) of the present Act, the court is precluded from considering the question of court fee again either suo motu or at the instance of the parties. The first question requires a detailed consideration. It may be noted that the existing law on this aspect of the question was based upon the provisions of the Travancore-Cochin Court fees Act, 1125, or the Central Court fees Act, 1870. The relevant section in the Travancore-Cochin Court Fees Act, is S.3(9) while the relevant section in the Central Act is S.7(ix). It may be noted that the existing law on this aspect of the question was based upon the provisions of the Travancore-Cochin Court fees Act, 1125, or the Central Court fees Act, 1870. The relevant section in the Travancore-Cochin Court Fees Act, is S.3(9) while the relevant section in the Central Act is S.7(ix). S.3(ix) reads as follows: "In suits against a mortgagee for the recovery of the property mortgaged, according to the principal money expressed to be secured by the instrument of mortgage". Section 7(ix) referred to above reads as follows: "In suits against a mortgagee for recovery of the property mortgaged according to the principal money expressed to be secured by the instrument of mortgage." It was on the basis of these provisions that the court-fee was assessed in suits for redemption in the area where the respective Acts were in operation. In a decision reported in Ramsahay v. Kanhaiyalal (AIR. 1937 Nagpur 295) the following question was raised for consideration: "If a mortgagor sues to pay for redemption with surplus profits, he has admittedly to pay court-fee under S.7 (ix), Court fees Act, on the principal sum expressed in the mortgage deed. If his suit is dismissed and he claims the same relief in appeal, would it be logical to say that the subject matter has altered in appeal? The contention must obviously be rejected as unreasonable. Why then should the subject matter of appeal be treated as different when the defendant mortgagee contests the decree both on the point of redemption and the correctness of the accounts?" According to that decision the mortgagor sued for recovery of the property mortgaged which necessarily involved the taking of accounts of profits. So, if he makes a separate prayer for the payment of the amount sued, he will not thereby cause the suit to embrace another subject distinct from the subject, his claim for the recovery of the mortgaged property. On the basis of the reasoning it was held that though there was a prayer for redemption as well as for the amount, taking of the account of the profits, the court fee need be paid only on the amount of mortgage. On the basis of the reasoning it was held that though there was a prayer for redemption as well as for the amount, taking of the account of the profits, the court fee need be paid only on the amount of mortgage. (This question so far as this State is concerned is now covered by the proviso (2) of sub-section (8) of S.33 of the present Kerala Act.) But, still, the principle behind the decision is based upon the theory that the subject matter of the suit did not change from the claim for recovery of the property mortgaged even if there was a separate prayer to recover the mesne profits. 4. That the instrument of mortgage provides for payment of value of improvements or the law provides for such payment at the time of such redemption did not change the subject matter of the suit. This view was stated by Krishna Iyer J. in a decision reported in Sambhu Namboodiri v. Gopalan Nair (1970 KLR. 16). At page 19, the observation is as follows: "Where an instrument of mortgage provides for payment of value of improvements at the time of redemption or the law provides for such payment at the time of eviction, the value of the improvements is not to be taken into account in ascertaining the subject matter of the suit under S.33 (8). Payment of the value of improvements is the legal obligation of the mortgagor at the time of redemption arising under the contract or under the law specially providing for it. Setting off of the value of improvements towards the mortgage money may also be part of his right. All reliefs flowing out of or are an integral part of the right of redemption can be claimed without payment of separate court fee." 5. The principle as to how court-fee has to be assessed in similar cases has been very clearly stated in a decision reported in Pachaya Kkal v. Shanmugha Velayudhasami (AIR. 1943 Madras 146). The third clause below are the cases which ordinarily come in appeal with regard to the claim for redemption combined with a prayer for recovery of property and claim for value of improvements, which are set forth at page 149 of the above decision. 1943 Madras 146). The third clause below are the cases which ordinarily come in appeal with regard to the claim for redemption combined with a prayer for recovery of property and claim for value of improvements, which are set forth at page 149 of the above decision. It is as follows: (1) that if in an appeal against a decree in a suit brought for redemption the appeal relates only to the amount payable and not to the right of redemption, court-fee must be paid ad valorem on the amount claimed to be payable; (2) if the appeal purports to dispute both the right of redemption and the amount payable but in substance relates only to the amount payable, again court-fee must be paid ad valorem on the amount claimed but (3) if the right of redemption and the amount payable are disputed in appeal and both grounds are grounds in substance and not merely in form the court-fee payable will be as for a suit under S.7, Cl. (ix) Court-fees Act. 6. In Jangumia v. Hashamsaheb (AIR. 1945 Bombay 504) the relevant observation is as follows: "When a suit is filed for redemption of mortgaged property, and the right of redemption is disputed, and the suit is accordingly dismissed, the appeal by the mortgagor raises precisely the same points as those raised by him in the trial court; in such a case the appeal has to be valued for the purpose of court-fee in accordance with cl. (ix) of S.7, ie. on the principal money expressed to be secured by the instrument of mortgage. Similarly, if a suit for foreclosure by the mortgagee is dismissed, and the plaintiff-mortgagee files an appeal, the point to be considered in appeal is the same as that in the trial court, viz. the right to foreclose, and the court-fee payable on the memorandum of appeal must be in accordance with the provisions of Cl. (ix) of S.7, that is, on the principal money expressed to be secured by the instrument of mortgage. But it may happen that the suit in its appeal stage may be of a different nature from what it was in the trial court. (ix) of S.7, that is, on the principal money expressed to be secured by the instrument of mortgage. But it may happen that the suit in its appeal stage may be of a different nature from what it was in the trial court. Although the original suit may be one for redemption or foreclosure, there may be no question raised of in appeal as to the right to redeem or to foreclose, and the appeal may merely be in respect of the amount which the trial court has held to be payable. Such an appeal would not be one falling within the provisions of cl. (ix) of S.7. In such an appeal, the plaintiff or the defendant merely challenges the amount to be paid or received without questioning the right to redeem or foreclose. To such an appeal, cl. (ix) of S.7, does not apply, as the suit in its nature and the subject matter of the appeal is the liability which is imposed by the trial court to pay a certain sum, and which liability the appellant seeks to avoid. The memorandum of appeal would in such a case be governed not by cl. (ix) of S.7, but by Art.1 of Schedule.l. Accordingly in an appeal from a decree in a redemption suit, when the right to redemption is no longer in dispute, and the appellant merely seeks to reduce the liability imposed upon him by the trial court, the court fee must be paid under Schedule.l, Art.1 on the memorandum of appeal on the amount in respect of which he seeks to avoid liability." 7. In Abdul Hai v. Shyamkishore (AIR. 1952 Allahabad 176) it was held that in an appeal against the decree for redemption, the court fee payable is only ad valorem on the principal money expressed to be secured on the instrument of mortgage and not on the amount by which the decree is challenged. 8. In Vasudeva v. Anantheshwar Temple (AIR. In Abdul Hai v. Shyamkishore (AIR. 1952 Allahabad 176) it was held that in an appeal against the decree for redemption, the court fee payable is only ad valorem on the principal money expressed to be secured on the instrument of mortgage and not on the amount by which the decree is challenged. 8. In Vasudeva v. Anantheshwar Temple (AIR. 1962 Mysore 155) where it was a case for eviction with value of improvements the following view was expressed: "If in a suit for possession the defendant claims compensation for improvements as a condition precedent to his being asked to vacate the property in question and the court either disallows the compensation or grants an amount less than that claimed by the defendant the latter in preferring an appeal in respect of the amount of compensation is really asking the appellate court to decide that the plaintiff is not entitled to possession without the payment of the compensation claimed by the defendant. In other words the appeal essentially relates to possession. The court-fee paid by the appellant on the basis of the relief for possession is adequate". 9. In Pathumma v. Mohidin (AIR. 1928 Madras 929) a similar case as in the present one arose for determination. The defendant against whom a decree for eviction had been made appealed to the High Court against the refusal of the lower appellate Court to grant him the value of improvements. The appellant paid the same court fee in the second appeal as was paid in respect of the plaint by the plaintiff. In the memorandum of second appeal there was aground taken as regards the title of the plaintiff. The High Court held that the memorandum could not be held as one merely confined to the amount of compensation and that, even if it was so, if it was sought to be enforced merely as a condition precedent to a right of possession, the subject matter in dispute would still be only the claim for possession. So when a decree for redemption as well as value of improvements was passed, the subject matter of the suit will not be altered if the aggrieved party filed an appeal therefrom disputing the right of redemption as well as the claim for improvements. In the instant case, the petitioner had disputed in substance the right of redemption and had also claimed enhanced value of improvements. In the instant case, the petitioner had disputed in substance the right of redemption and had also claimed enhanced value of improvements. That being so, the petitioner is bound only to pay court-fee on the amount of mortgage secured by the mortgage deed as the subject matter of the suit will not make any change in appeal. However, in this case, the lower court has fixed the court-fee to be paid under the order dated 30-11-1967 which did not require any change as no appeal or revision against it had been filed by the parties. But, at the same time, the petitioner is not liable to pay any enhanced court fee on the value of improvements in addition to what he had already paid. 10. The next contention is that the lower appellate court was not correct in suo motu reconsidering the question as to court fee after an order was passed under S.18 (2) of the Kerala Act on 30-11-1967. Ordinarily, there are three stages at which the court can enquire into the question whether a plaint or appeal has been properly valued. (1) Before the registration of the plaint or appeal. In that case the court can decide on the materials and allegations available in the plaint or the memorandum of appeal the court fee payable, the decision being however subject to review, further review and correction in the manner specified under S.12 (1) of the present Act. (2) After the suit or appeal has been registered, an issue can be raised on that question, either by the defendant or the respondent by taking objection to the sufficiency of the court fee paid. The court shall decide the matter, when the decision will be binding on the court that renders it. This is covered by S.13 of the present Act. (3) Even in such a case it would be open to the court-fee Examiner to ask for a fresh decision under S.18. But once the decision has been given on the report of the court fee Examiner, no further review or re-consideration is passible except by an appellate court under S.16 of the present Act. A decision under S.18 (2) of the Court Fees Act would be final so far as the court is concerned. The lower appellate court passed the impugned order suo motu after the court answered the Court fee Examiner's check slip on 30-11-1967. A decision under S.18 (2) of the Court Fees Act would be final so far as the court is concerned. The lower appellate court passed the impugned order suo motu after the court answered the Court fee Examiner's check slip on 30-11-1967. The learned Subordinate Judge stated that under S.12 (1) the Court has the jurisdiction to consider the question as to the court fee at any stage of the proceedings in appeal. The lower court is not correct in the view. The consideration as regards the court fee under S.12 (I) is the stage before the plaint or the memorandum of appeal is admitted to be filled in court and not thereafter. Thereafter, the court is bound to consider the claim as to court-fee on the basis of the other provisions in the Act. S.12 (1) is definite on the point as it states that "the decision being however subject to review, further review and correction in the manner specified in succeeding sections". So, the right to review, further review and correction would depend upon the provisions of Sub-sections (2) and (3) of S.12 as well as under S.13. There was no occasion to consider the claim as to court-fee in this case under those sections. The court was, however, called upon to consider the court fee under S.18. Under that section, the court considered the question on 30-11-1967. The court had no further right to consider the question during the pendency of the appeal as the decision was final by that court under S.18(2) of the present Act. S.12(1) and S.18(2) of the present Act are similarly worded as the corresponding sections in the Central Act. In a decision reported in Janaki Ammal v. Rangachari (1961) ILR. Madras 369) it was pointed out that the appellate court was wrong both in regard to the procedure adopted as well as the decision of the court as, according to the decision, if the decision had been given on the report of the Court fee Examiner no further review or reconsideration was possible except by appellate court under the requisite provisions of the Act. Decisions given under S.18(2) of the Court Fees Act would be final as far as that court was concerned. Decisions given under S.18(2) of the Court Fees Act would be final as far as that court was concerned. The sentence in the last line of S.18(2) that "it shall be lawful for the court to review an earlier decision given by the court on the same question" refers to the decisions made by the Court either under S.12 or S.13 of the Act and not on a previous decision referred to in S.18. Therefore, I find that the court below was not correct in reconsidering the question of court fee-under S.18 (2) of the present Act. 11. The court fee is now payable under S.33(8) of the Kerala Court Fees Act. S.33(1) reads as follows:-"In a suit to recover the money due on a mortgage, fee shall be computed on the amount claimed. Explanation: It is immaterial that sale of the mortgaged property is not prayed for." Sub-section (8) of S.33 reads as follows: "In a suit against a mortgagee for redemption of a mortgage, fee shall be computed on the amount due on the mortgage as stated in the plaint or on one-fourth of the principal amount secured under the mortgage, whichever is higher: Provided that, where the amount due on the mortgage is found to be more than the amount on which fee has been paid by the plaintiff, no decree shall be passed until the deficit fee is paid: I Provided further that, in the case of a usufructuary or anomalous mortgage, if the plaintiff prays for redemption as well as for accounts of surplus profits fee shall be levied separately on the relief for accounts as in a suit for accounts." 12. The fact that the second proviso to Sub section (8) has called upon the plaintiff to pay court-fee for accounts of surplus profits does not lead to the conclusion that the defendant is bound to pay court-fee on enhanced value of improvements in appeal. There is no direct section in the Court-fees Act calling upon the defendant to pay court-fees in appeal on the value of improvements which he claims in addition to what has been decreed in his favour by the trial court. It cannot be said that the claim for redemption and the claim for value of improvements embrace two or more distinct and different causes of action as required by sub-section (3) of S.6 of the present Act. It cannot be said that the claim for redemption and the claim for value of improvements embrace two or more distinct and different causes of action as required by sub-section (3) of S.6 of the present Act. But, both the claims may be rested under sub-section (2) of S.6 as more reliefs than one have been included in the same cause of action. Proviso to S.52 also does not lead to the conclusion that separate court-fee is liable to be paid on the value of improvements and the explanation (4) to S.52 is relied upon to show that in appeal different court fees had to be paid. This explanation will apply only if the prayer in the appeal is different from the prayer made in the suit. In this case, the subject-matter of the appeal is the same in the court of the first instance and the appellate court. On a consideration of the matter, I am of the opinion that no change has been brought about in the existing law with regard to the payment of court-fee on the enhanced value of improvements, which is claimed by the defendant in appeal. It follows therefore that the order of the court below calling upon the petitioner to pay additional court fee on the enhanced value of improvements cannot be sustained. 13. In the result, the revision petition is allowed and the order by the lower court is set aside. However, the order dated 30-11-1967 directing the petitioner to pay court-fee on the basis of the court fee Examiner's check slip will stand. No costs.