P. P. S. Pillai v. Catholic Syrian Bank — 1999 DIGILAW 668 (KER)

Judgment :- P.K. Balasubramanyan, J. This appeal is by the plaintiff in O.S.103 of 19t9 on the file of the Subordinate Judge's Court of Cochin. The appeal is filed under O. XLIIIR. l(a) of the Code of Civil Procedure. The appeal challenges the 'judgment of the lower appellate court' in A.S.10 of 1993 filed by the appellant directing a return of that appeal to the appellant. According to the appellant the order passed by the lower appellate court returning the appeal to the appellant came under O. XLIII R. l(a) of the Code of Civil Procedure which provides for an appeal against an order under R.10 of O. VII of the Code returning a plaint for representation in the proper court. We are not quite certain whether the appeal could be maintained under O. XLIII R. l(a) of the Code of Civil Procedure in this case. But in any view jurisdiction is available to this court under S.115 of the Code of Civil Procedure to consider whether the lower appellate court has exercised its jurisdiction properly or has acted outside its jurisdiction in returning the Memorandum of Appeal to the appellant. We are therefore not inclined to decide the question whether the appeal filed at the instance of the appellant invoking O. XLIII R.I (a) of the Code is maintainable or not. 2. The appellant, the plaintiff in the suit was the partner of Hi-Seas Fishing Company, a partnership firm. The firm had financial dealings with the first defendant Bank. The Bank filed a suit against the firm and its partners including the present plaintiff for recovery of the amounts due to it. That suit O.S.23 of 19t4 was decreed and the first defendant Bank took out execution of that decree. In that context the plaintiff filed the present suit seeking a declaration that the decree in O.S.23 of 19t4 dated 27.6.19t5 on the file of the Subordinate Judge's Court of Cochin was bad and unenforceable being vitiated by fraud and illegal and unsustainable for the grant of a mandatory injunction restraining the first defendant Bank from taking any coercive measures against the plaintiff in pursuance of the decree in O.S.23 of 19t4 for recovery of the amounts due to it from the plaintiff under that decree. According to the plaintiff there was a compromise discussion with the officials of the first defendant Bank regarding the repayment of the loan and even while the discussion was going on the suit O.S.23 of 19t4 was filed by the first defendant seeking recovery of the amounts due under the transactions. The officials of the Bank agreed to sanction a further loan subject to certain conditions and the plaintiff signified his agreement to fulfill 1 those conditions. The plaintiff was assured by the first defendant Bank that the suit O.S.23 of 19t4 would be ended. There arose some disputes regarding the actual amounts due. Meanwhile the plaintiff came to know that the suit O.S.23 of 19t4 filed by the first defendant Bank had ended in a decree. But the first defendant Bank assured the plaintiff that the agreement to be finalised will be implemented and no steps would be taken to execute the decree in O.S.23 of 19t4. Even while the discussions were going on, the plaintiff received notice from the execution court in execution of the decree in O.S.23 of 19t4 which came as a bolt from the blue. According to the plaintiff only when he came to know that he had been taken for a ride. The plaint avers that the decree passed by the Subordinate Judge's Court of Cochin in O.S.23 of 19t4 had been fraudulently obtained by the first defendant Bank and it is bad and unsustainable in law and is liable to be declared as illegal, invalid and unenforceable and is liable to be set aside by the court in the present suit. The passing of the decree in O.S.-23 of 19t4 and the appropriation of the fixed deposit available with the Bank and the levying of the execution of the decree in O.S.23 of 19t4 had given rise to the cause of action for the present suit. In its written statement the first defendant Bank denied the plaint averments and denied that any agreement had been arrived at between the parties. It was also denied that any assurance was given about the decreeing of O.S.23 of 19t4 or its execution. The Bank was competent to adjust the amounts available to it towards the liability. In its written statement the first defendant Bank denied the plaint averments and denied that any agreement had been arrived at between the parties. It was also denied that any assurance was given about the decreeing of O.S.23 of 19t4 or its execution. The Bank was competent to adjust the amounts available to it towards the liability. According to the first defendant, the plaintiff and other partners sought a settlement of the dispute and there were some negotiations but the plaintiff did not comply with the conditions stipulated by the first defendant Bank and therefore the first defendant Bank could not proceed with the negotiations for settlement and had to proceed with the suit O.S.23 of 19t4 and the execution thereof. There was no compromise either to withdraw the suit or not to execute that decree. The plaintiff could not obtain a decree for a declaration that the decree in O.S.23 of 19t4 was vitiated by fraud or illegality. There was no fraud in the matter of obtaining the decree in O.S.23 of 19t4. The said decree was valid and binding on the parties including the plaintiff and was executable. The plaintiff had no cause of auction to maintain the present suit. The valuation of the suit was not correct. The suit ought to have been valued on the amount of the decree. The suit as framed was not maintainable and it was barred by res judicata. 3. The trial court raised an issue whether the valuation of the suit was proper and the court fee paid was sufficient. It also raised an issue whether the suit was barred by res judicata. A further issue raised was whether the first defendant Bank had obtained in decree in O.S.23 of 19t4 by playing fraud and whether the said decree was liable to be declared as illegal and unenforceable. It is somewhat surprising that no issue was raised on the maintainability of the suit and on the question whether the plaint disclosed a cause of action for challenging the prior decree to which the plaintiff was eo nominee a party on the ground of fraud which appears to be the basis on which the relief in the plaint is grounded. 4. 4. The trial court did not deal with issue No.1 relating to the propriety of the valuation and the sufficiency of the court fee paid initially as contemplated by S.12 of the Kerala Court Fees and Suits Valuation Act as expounded by this court in Sumithra v.Kamala Bair (I.L.R.1979 (2) Kerala 124) and We-Build Pvt. Ltd. v. C. Komoleswaron (1981 K.L.T. 773). But it considered the issue along with the other issues in the suit and rendered a finding that the valuation of the suit was not proper and the court fee paid was not sufficient. The trial court then observed that if this issue had been considered as a preliminary issue the plaintiff would have got an opportunity to pay the deficit court fee so as to prosecute the suit. But the plaintiff had not insisted on hearing the issue as a preliminary issue. But since the issue was taken up for decision along with the other issues, the plaintiff was not entitled to get an opportunity to amend the valuation of the suit and to pay the deficit court fee. Though the trial court found that the suit was not barred by res judicata by virtue of the decision in O.S.23 of 19t4, it held that the interest charged by the first defendant Bank was not excessive and was only the proper interest that was due, that the balance amount shown in the ledger account produced in the earlier suit O.S.23 of 19t4 was the actual amount due from the firm, that the plaintiff had not established that the adjustment of the fixed deposit towards the loan amount was in any manner illegal and improper and that the plaintiff has failed to establish that the decree in O.S.23 of 19t4 was illegal or void and that the plaintiff was not entitled to get a declaration to the effect that the judgment and decree obtained by the first defendant in O.S.23 of 19t4 was illegal and unenforceable. The plaintiff was not entitled to get the injunction and hence the suit was liable to be dismissed. The trial court thus dismissed the suit It is against this dismissal that the plaintiff filed the appeal in the District Court, Emakulam as A.S.10 of 1993. 5. The plaintiff was not entitled to get the injunction and hence the suit was liable to be dismissed. The trial court thus dismissed the suit It is against this dismissal that the plaintiff filed the appeal in the District Court, Emakulam as A.S.10 of 1993. 5. Before the District Judge at the hearing of the appeal a contention was raised that the suit was under valued by the plaintiff and if the suit were to be properly valued by the plaintiff, the appeal would not lie before the District Court and the appeal could not be proceeded with. The finding rendered by the trial court on the relevant issue was also pressed into service. On behalf of the plaintiff the finding by the trial court on issue No. {relating to valuation and court fee was challenged. One of the grounds raised was that the trial court ought to have decided that issue as a preliminary issue and could not have decided it at the final stage. The District Court observed that for deciding that question it had to go into the correctness of the finding of the trial court and for deciding that question the appellate court has to exercise the appellate jurisdiction. For exercise of such appellate jurisdiction there must be a validity presented appeal and the court should have the pecuniary jurisdiction to entertain such an appeal. The court therefore took the view that before it went into the merits of the appeal it had to decide the question of the maintainability of the appeal in that court if the suit were properly valued for the purpose of jurisdiction. The appellate court referring to two decisions of the Supreme Court cited before it proceeded to consider what was the substantive the relief that was being sought for by the plaintiff in the present suit. After referring to the decision of this Court in Sreekumaran v. State of Kerala (1996 (1) K.L.J. 5t6) on the scope of S.25(d)(i) and S.25(d)(ii) of the Court Fees Act the appellate court held that even if the relief claimed was accepted as only one for declaration that earlier decree is void and illegal, even then the court fee was payable on the amount covered by that decree which would be the value of the subject matter of the present suit. Regarding the relief of injunction also the court held that the said relief also had to be valued in terms of the proviso to S.27(c) of the Court Fees Act. Further finding that if such valuations were adopted, the" appeal arising from the suit would have been beyond the pecuniary jurisdiction of the District Court, the District Court returned the appeal to the appellant. The court proceeded to note that in view of S.107(2) of the Code of Civil Procedure it had all the powers of the trial court and could exercise the power under O.VII R.10 of the Code of Civil Procedure. The court adjourned the appeal to another day so as to enable the appellant before it to take recourse to the provisions of O. VII R.10A(2) of the Code in case the appellant wanted to take advantage of that position. 6. Before us learned counsel for the plaintiff contended that neither the trial court at the final stage nor the appellate court had jurisdiction to decide that the valuation adopted in the plaint and the court fee paid thereon was not correct. According to counsel once the question of valuation and court fee is omitted to be decided by the trial court at the preliminary stage, that court could not again go into that question. Counsel relied on S.12(5) of the Court Fees Act to point out that all questions as to value for the purpose of determination of the jurisdiction of the court arising on the written statement of a defendant shall be heard and decided before evidence is recorded affecting such defendant on the merits of the claim. A literal reading of S.12(5) of the Act appears to suggest that the objection that the question of valuation should be determined first preliminarily, is one available to the defendant and is not one which can be taken advantage of by a plaintiff who had undervalued his plaint. The words before evidence is recorded affecting such defendant on the merits of the claim." (emphasise supplied) indicate this. The words before evidence is recorded affecting such defendant on the merits of the claim." (emphasise supplied) indicate this. On the scheme of S.12 with particular reference to sub-ss.(2) and (5) of S.12, it appears to us that once a defendant has raised a question of under valuation of the plaint in the written statement originally filed and the court has raised an issue on that question, the defendant can insist that the issue be heard before evidence is taken on merits affecting him and the court in that case is obliged to take a decision. It cannot be postulated that merely because the court did not answer the issue preliminarily which had already been raised, it is precluded from answering that issue against the plaintiff at a later stage. Sub-s.(3) of S.12 enabling a newly added defendant to raise the question even if evidence is taken and sub-s.4 of S.12 which enables the appellate court to consider the correctness of the order passed by the trial court affecting the fee payable on the plaint also indicate that the trial court continues to have jurisdiction to decide the question whether the plaintiff has properly valued the suit. It is true that in We-Build Pvt. Ltd. v. C. Kamaleswaran (1981 K.L.T. 773) this court has held that if the issue is not decided preliminarily the court could ignore the question as not one arising in the case and in deleting it on that ground. But this court did not say that the court is bound to delete that issue or is incompetent to answer that issue without answering the other issues raised in the case. With respect, we do not consider We-Build Pvt. Ltd. v. C. Kamaleswaran (19t1 K.L.T. 773) as authority for the position that once the issue relating to the valuation of the suit is not answered by the trial court preliminarily, it is bound to ignore that issue or not to answer that issue at all. The right given to the defendant under S.12(5) of the Act to insist on the issue being heard before evidence is recorded affecting him does not enable a plaintiff who has under valued his suit to contend that once the under valuation has escaped the notice of the court initially, the court cannot thereafter find that the suit is under valued. 7. 7. We may also notice a decision of this court in Mathew v. Cicily (1981 K.L.T. 713) where the question was considered whether the appellate court had jurisdiction to consider the sufficiency of the court be payable on the plaint at any stage of the appeal. Wherein after following the earlier decisions of this court which were approved in We-Build Pvt. Ltd. v. C. Kamaleswaran (1981 K.L.T. 773) the learned judge held that in an appeal the question of the correctness of the valuation can be considered either at an intermediate stage or at the time the appeal comes up for hearing finally and that was the combined effect of S.12(2) and S.12(3) read with S.16 of the Court Fees Act. This was on the basis that a respondent in the appeal was not called upon to file a written statement and hence there was no question of his being precluded from pointing out at the final hearing that the suit was under valued. 8. The decision in A.C. Krishnan v. Nambisan's Dairy Pvt. Ltd. (1996 (2) K.L.J. 52t) is only to the effect that the defendant had to take the objection to the valuation of the suit only at the time when he files the written statement and once such an objection is not taken in the written statement, it could not be belatedly raised at the time of the hearing of the appeal. In the case on hand the objection was taken in this original written statement itself. We do not understand this case as an authority for the position that the issue raised on an objection to valuation raised in the written statement cannot be answered along with the other issues. In Pankajaksha Kurup v. Fathima (1998 (1) K.L.T. 668) the Full Bench did not answer the question regarding the scope of S.25 of the Court Fees Act and remitted that question to be decided by the trial court. All that was decided in that case was that if a decree was null and void, it was not necessary to set aside the said decree. A prayer for declaration was sufficient and court fee did not have to be paid under S.40 of the Court Fees Act. 9. In the present case, the objection to valuation was raised by the defendant at the very inception in its written statement. A prayer for declaration was sufficient and court fee did not have to be paid under S.40 of the Court Fees Act. 9. In the present case, the objection to valuation was raised by the defendant at the very inception in its written statement. The court framed issue No.1 "whether the valuation of the suit is proper and the court fee paid is sufficient?" on that plea, along with the other issues. Going by the scheme of S.12 the defendant could have insisted that before recording the evidence affecting the defendant on the merits of the claim the court was bound to answer the issue. The court also should have normally dealt with that issue at the threshold and if it found that the valuation was not proper ought to have directed the plaintiff to rectify the valuation. But the fact that was not done either at the instance of the defendant who did not insist on taking advantage of S.12(5) of the Court Fees Act or by itself would not mean that the court is not called upon to answer the issue framed in that behalf. In our view, the court has the duty to ensure that the plaint is properly valued and a proper court fee is paid. As observed by the Supreme Court in ML. Sethi v. R.P. Kapur (A.I.R.1972 SC 2379) every defendant has "an immunity from a litigation unless the requisite court fee is paid by the plaintiff and it is a valuable right available to him. Anything that takes away that immunity in a proceeding is a proceeding in which the defendant is vitally interested and hence he is entitled to call upon the court to deny relief to the plaintiff unless the proper valuation is adopted by the plaintiff. The relief could be granted to the defendant by the court either by the process of rejection of the plaint under O. VII of the Code of Civil Procedure or by refusing relief to the plaintiff on the ground that the suit is not properly valued and calling upon him to do so to entitle him to relief if he is otherwise found entitled to relief. Viewed in that perspective, we are of the view that the trial court was perfectly t justified in considering the question whether the suit was properly valued and the requisite court fee was paid or not. Viewed in that perspective, we are of the view that the trial court was perfectly t justified in considering the question whether the suit was properly valued and the requisite court fee was paid or not. While answering the issue against the plaintiff, the trial court held that since the issue was being taken up along with the other issues, the plaintiff was not entitled to get an opportunity for amending the valuation and to pay the deficit court fee. That view of the trial court cannot be upheld. In a sense, it was really the failure of the court to deal with the issue preliminarily after having received it that led to the situation. Moreover, once the court adjudicates that the suit is not properly valued and the court fee is not properly paid, the plaintiff would be entitled to an opportunity to rectify the defect found by the court and to pursue his claim for relief. 10. As we noted, the trial court held that the plaintiff had not properly valued the suit, the trial court took note of the decision of the Supreme Court in Shamsher Singh v. Rajinder Prashad (A.I.R.1973 SC 2384) to the effect "While the court fee payable on a plaint is certainly to be decided on the basis of al legations and the prayer in the plaint and the question whether the plaintiff's suit will have to fail for failure to ask for consequential relief is of no concern to the court at that stage, the court in deciding the question of court fee can look into the allegations in the plaint to see what is the substantive relief that is asked for. Mere astuteness in drafting the plaint will not be allowed to stand in the way of the court looking at the substance of the relief asked for." The trial court took note of the decision in Leelavathi v. Natarajan (A.I.R.1980 SC 691) to the effect that all the material allegations contained in the plaint should be construed and taken as a whole while deciding whether the suit has bee n properly valued and the proper court fee has been paid. The court came to the conclusion that ! the plaintiff was bound to value the suit at the amount covered by the decree in OS. 23 of 19t4 in support of his relief of declaration. The court came to the conclusion that ! the plaintiff was bound to value the suit at the amount covered by the decree in OS. 23 of 19t4 in support of his relief of declaration. Finding the main issues against the plaintiff, the trial court dismissed the suit. It is in the appeal from that decree that learned Additional District Judge on the objection being raised by the defendant took the view that if the suit is properly valued on the basis of the finding rendered by the trial count with which he was in agreement, the appeal could not be entertained by the District Court and passed an order deciding to return the appeal and asking the appellant-plaintiff to appear to receive the return. 11. In view of our conclusion on the question whether the trial court was justified in answering the issue regarding valuation along with the other issues, the argument of counsel for the plaintiff that the appellate court had no jurisdiction to consider that question cannot be accepted. But of course, an objection to jurisdiction on the basis of valuation may be an objection that may come within the purview of S.21 of the Code of Civil Procedure and unless it is shown that there has been a failure of justice the appellate court may not be entitled to interfere with the decree on mat ground alone. This position is clear from the decision of the Supreme Court in Kuan Singh w. Chaman Paswan (A.I.R.1954 SC 340). But that position in law would not in any manner affect the jurisdiction of the appellate court to consider whether the finding on issue No.1 framed in this case on the propriety of the valuation of the suit is connect in la w or not. If the appellate court comes to the conclusion that the trial court was right in holding that the valuation was not proper, the appellate court is entitled to confirm that finding. If the appellate court comes to the conclusion that the trial court was right in holding that the valuation was not proper, the appellate court is entitled to confirm that finding. S.12(4) of the Court Fees Act confers jurisdiction of the appellate court Jo consider either of its own motion or on the application of any of the parties the correctness of the order passed by the trial court affecting the fee payable on the plaint If the court of appeal decides that the fee paid in the lower court was not sufficient, the appellate court shall require the party liable to pay the deficit court fee within the time as may be fixed by it. The further provision is that if the deficit fee is not paid within the time fixed and the default is in respect of a relief which has been dismissed by the lower court, the appeal shall be dismissed. In the case on hand therefore the appellate court, after considering the correctness of the finding rendered by the trial court, should have directed the appellant-plaintiff to correct the valuation and to pay the deficit court fee within a time to be fixed by that court and only thereafter could either dismiss the appeal or proceed with it in terms of S.12(4)(c) of the Court Fees act But if at that stage the appellate court finds that it has no jurisdiction to entertain the appeal on the basis of the corrected valuation, it could return the appeal for presentation to the proper court. The error if any committed by the lower appellate court in this case can only be in not giving the plaintiff-appellant time to correct the valuation and to pay the court fee both on the pliant and on the Memorandum of Appeal and thereafter deal with the appeal in terms of S.12(4)(b) and (c) of the Court Fees Act and if on correction of the valuation and payment of court fee, ids found that the appeal is beyond the jurisdiction of the court to return the appeal for presentation to the proper court. The return of the appeal straightaway may not be justified. 12. The plaintiff has filed the suit for a declaration that the decree in O.S.23 of 19t4 of the Subordinate Judge's Court of Cochin is bad and unenforceable being vitiated by fraud. The return of the appeal straightaway may not be justified. 12. The plaintiff has filed the suit for a declaration that the decree in O.S.23 of 19t4 of the Subordinate Judge's Court of Cochin is bad and unenforceable being vitiated by fraud. The said relief clearly comes under S.25 of the Kerala Court Fees and Suits Valuation Act. There is also a prayer for a consequential injunction restraining enforcement of that decree. The plaintiff has valued the relief of declaration under S.25(d)(ii) of the Court Fees Act and the relief of injunction under S.25(d)(ii) and S.27{c) of the Court Fees Act. Regarding the relief of declaration the plaintiff has proceeded on the basis that the subject matter of the suit is not capable of valuation and has adopted S.25(d)(ii) of the Act. The lower appellate court has referred to the decision of the Division Bench in Sreekumaran v. State of Kerala (1996 (2) KLT 21) to come to the conclusion that the plaintiff should have valued the relief of declaration at the amount covered by the decree in O.S.23 of 19t4. In Sreekumaran v. State of Kerala (1996 (2) KLT 21) this court had considered the scope of S.25(d)(i) and S.25 (d) (i) of the Court Fees Act and has held that the word 'property' in S.25(d) (i) of the Act would also mean money and also a right to a property or a liability. This court took the view that if the amount demanded was a specific sum, the subject matter of the suit for declaration would be the liability and the plaintiff was bound to value the relief of declaration on that basis. In the light of that decision, we are of the view that the lower appellate court and the trial court were right in holding that the plaintiff was bound to value the relief of declaration under S.25(d)(i) of the Act and not under S.25(d)(ii) of the Act. The lower appellate court has also held that the relief of injunction should be valued under the proviso to S.27(c) of the Court Fees Act since the relief of injunction is not claimed as a consequential or ancillary relief. That view of the appellate court cannot be sustained. The plaintiff is not entitled to an injunction independent of the relief of declaration he has sought for. That view of the appellate court cannot be sustained. The plaintiff is not entitled to an injunction independent of the relief of declaration he has sought for. His right to the injunction essentially flows out of his entitlement to get the declaration regarding the decree in O.S.23 of 19t4 which is sought to be enforced against him and to which he was a party. We therefore hold that the relief of injunction has been properly valued by the plaintiff. 13. In the light of our conclusions as above, the plaintiff has to be directed to pay the court fee due on the plaint under S.25(d)(i) of the Act treating the amount covered by the decree in O.S.23 of 19t4 as the value of the subject matter of the suit. On a scrutiny of the judgment of the trial court we also find that court has not applied its mind to the question whether a person who is eonominee a party to the suit and who has suffered a decree can file a fresh suit for a declaration that the decree obtained against him is not valid and if he can under what circumstance he can approach the court with another suit. In fact we are somewhat surprised to find the trial court not even raising an issue on whether the suit as framed is maintainable. That court also does not appear to have applied its mind on what is the fraud contemplated by law before finding that a decree validly obtained could be said to be vitiated by fraud. Equally we find that the trial court has not properly considered the question of the bar whether it be by way of res judicata or otherwise created by the decree in O.S.23 of 19t4. Similarly the aspect whether the court is entitled to go into the question whether the amount decreed in O.S.23 of 19t4 was correct or not in a subsequent suit has also been lost sight of by the trial court. Similarly the aspect whether the court is entitled to go into the question whether the amount decreed in O.S.23 of 19t4 was correct or not in a subsequent suit has also been lost sight of by the trial court. Under such circumstances, we think that the proper course to adopt is to set aside the finding of the trial court on issues 2 and 6 and direct that court to reconsider those issues along with a specific issue to be framed whether the suit filed by the plaintiff in the present form is maintainable and to answer those issues also for a proper disposal of the present litigation launched by the plaintiff. But the trial court will have to proceed with this in this manner only if the plaintiff pays the court fee on its plaint in terms of our conclusion that he is bound to pay court fee under S.25(d)(i) of the Court Fees Act. We grant the plaintiff a period of two months from this date to correct the valuation and to pay the requisite court fee in the trial court. We therefore modify the decision of the lower appellate court directing the return of the appeal to the appellant. But we hold in agreement with the lower appellate court that the plaintiff is bound to correct the valuation and to pay the court fee in terms of S.25(d)(i) of the Court Fees Act. We vacate the finding of the trial court on issues 2 and 6 and remit the suit to the trial court so as to enable the plaintiff to correct the valuation and to pay the requisite court fee within two months from this date and direct the trial court to dispose of the suit afresh in the light of the finding that it may enter on the two issues directed to be reconsidered and on the additional issue indicated in this judgment. It will be open to the plaintiff to challenge all the issues decided by the trial court including those issues directed to be reconsidered in any appeal that he may be constrained to file against the ultimate decision of the trial court. It will be open to the plaintiff to challenge all the issues decided by the trial court including those issues directed to be reconsidered in any appeal that he may be constrained to file against the ultimate decision of the trial court. Of course if the plaintiff fails to correct the valuation and pay the requisite court fee, it is open to the court to act under O. VII of the Code of Civil Procedure and to deal with the plaint on that basis. We direct the parties to appear in the trial court on 24.1.2000.