Research › Search › Judgment

Andhra High Court · body

2005 DIGILAW 559 (AP)

J. K. Associates, Secunderabad v. B. Prameela Devi

2005-06-28

L.NARASIMHA REDDY

body2005
L. NARASIMHA REDDY, J. ( 1 ) PLAINTIFF in O. S. No. 1137 of 2000, in the Court of the IV Senior Civil Judge, City Civil Court, Hyderabad, filed this revision, under Article 227 of the Constitution of India, feeling aggrieved by an order passed by the trial Court, in an application filed under Section 11 (2) of Andhra Pradesh Court-Fees and Suits Valuation Act, 1956 (for short "the Act" ). ( 2 ) THE petitioner is a builder. It entered into an agreement with the respondents on 7-9-1997, for the purpose of developing the suit schedule property, by constructing multi-storied complex. Various terms and conditions were agreed upon. It is stated that a sum of Rs. 4,00,000/- was paid to the respondents towards refundable deposit. In addition to that, petitioner claimed that it paid a sum of Rs. 80,000/- towards rent under the agreement. The possession of the property was to be delivered to the petitioner within a particular time, so as to enable ittocommence construction. Alleging that the respondents violated the conditions and did not deliver the possession of the land, the petitioner filed the suitforspecific performance of the agreement, dated 7-9-1997. The suit is pending trial. The petitioner valued the suit at Rs. 4,80,000/-and paid the court-fee on that amount, under Section 39 of the Act. ( 3 ) RESPONDENTS filed I. A. No. 829of 2003, under Section 11 (2) of the Act, alleging that the petitioner is seeking delivery of possession of the land, which is worth Rs. 60,00,000/-, and in that view of the matter, the court-fee ought to have been paid under Section 29 of the Act. The application was resisted by the petitioner. The trial Court allowed the LA. , through its orderdated 25-9-2003. lt required the petitioner to value the suit under Sections 29 (and 39) of the Act and pay the court-fee accordingly. ( 4 ) SRI V. Ravi Kiran Rao, learned counsel for the petitioner, submits that the suit is filed for the relief of specific performance of an agreement, and court-fee thereon is payable under Section 39 of the Act. He contends that in a suit for specific performance, it is the consideration for promise that becomes relevant for the purpose of fixation of court-fee, and not the value of the property involved therein. He contends that in a suit for specific performance, it is the consideration for promise that becomes relevant for the purpose of fixation of court-fee, and not the value of the property involved therein. He contends that the court-fee would become payable under Section 29 of the Act, if only the suit is filed for recovery of possession of a property, as of right, and to be retained after its delivery in the capacity of owner. ( 5 ) SRI P. Shiv Kumar, learned counsel for the respondents, on the other hand, submits that the relief claimed in the suit is such that it entails delivery of the possession of immovable property, and in that view of the matter, the only relevant provision is Section 29 of the Act. He points out that in the prayer of the suit, the petitioner insisted that the possession of the property be delivered to it, and as such, the court-fee ought to have been paid on three-fourths value of it. ( 6 ) THE controversy in this revision is about the provision of the Act, under which the suit is to be valued and court-fee is to be paid. At the beginning of the plaint, the petitioner described the nature of the suit as the one for "specific performance of development agreement". Its grievance is about the nondelivery of possession of the land, in pursuance of the development agreement, so as to enable it to undertake construction. The prayer is for delivery of possession of the suit property of 425 sq. yards, so as to enable it to proceed with the development of the property, or in the alternative, to direct the respondents herein to pay a sum of Rs. 4,80,000/-, with interest. While the petitioner pleads that it is a suit for specific performance simpliciter, the respondents insisted that the relief is for delivery of immovable property. If the contention of the petitioner is to be accepted, the relevant provision for payment of court-fee is Section 39 of the Act, that applies to suits for specific performance. Section 29 of the Act applies to suits for recovery of possession, not otherwise provided for. It is beneficial to extract both the provisions, to appreciate the controversy, in its proper perspective. "29. Section 29 of the Act applies to suits for recovery of possession, not otherwise provided for. It is beneficial to extract both the provisions, to appreciate the controversy, in its proper perspective. "29. Suits for possession not otherwise provided for:- In a suit for possession of immovable property not otherwise provided for, fee shall be computed on three-fourths of the market value of the property or on rupees three hundred, whichever is higher. " "39. Suits for specific performance:- in a suit for specific performance, with or without possession, fee shall be payable,- (a) in the case of a contract of sale, computed on the amount of the consideration; (b) in the case of a contract of mortgage, computed on the amount agreed to be secured by the mortgage; (c) in the case of a contract of lease, computed on the aggregate amount of the penalty or premium, if any, and of the average of the annual rent agreed to be paid; (d) in the case of a contract of exchange, computed on the amount of the consideration, or as the case may be, on the market value of the movable property or three-fourths of the market value of the immovable property sought to be taken in exchange; (e) in other cases, where the consideration forthe promise sought to be enforced has a market value, computed on the market value of the movable property or three-fourths of the market value of the immovable property or where such consideration has no market value, at the rates specified in Section 47. " ( 7 ) SUITS contemplated under Section 29 of the Act, are those where the plaintiff seeks to recover possession, with a view to retain it as owner. This contingency may arise, mostly as a consequence of declaration of title etc. Suits for recovery of possession, within six months of dispossession under Section 6 of the Specific Relief Act, 1963 (see 9 of the 1877 Act) are dealt with under Section 28 of the Act. Under Section 29 of the Act, the court-fee has to be paid on the three-fourths value of the property. Where the property is to be delivered to the plaintiff, for a limited purpose and not in recognition of his title as owner, Section 29 does not get attracted. It would depend upon the purpose for which the delivery is sought. Under Section 29 of the Act, the court-fee has to be paid on the three-fourths value of the property. Where the property is to be delivered to the plaintiff, for a limited purpose and not in recognition of his title as owner, Section 29 does not get attracted. It would depend upon the purpose for which the delivery is sought. ( 8 ) SECTION 39 of the Act is broad in its perspective and covers all the suits, filed for specific performance of an agreement, which in turn, may result in variety of situations. The amount of court-fee payable thereon depends upon the purport of agreements. It is not as if delivery of possession of immovable property, otherwise than in recognition of the ownership of plaintiff, is not contemplated in the suits for specific performance. For example, under clauses (b) and (c) of Section 39 of the Act, the decree is to entail in, the delivery of possession of the land, either for the purpose of mortgage or lease. If delivery of possession alone is the criterion to invoke Section 29, the circumstances stipulated under clauses (b) and (c) of Section 39 would have fallen under Section 29. The instant case falls under clause (e) of Section 39 of the Act, which is residuary in nature. According to this, one of the categories of cases, covered by it, is where the consideration for the promise sought to be enforced has a market value. ( 9 ) IT is not in dispute that the petitioner did not seek delivery of possession of the land in the capacity of owner. The possession of the land was sought only for the limited purpose of developing it, and thereafter, redelivering it to the respondents, subject to the rights of the petitioner, thereon, as per the terms of the contract. The value of the contract in such cases has to be determined, on the basis of the consideration for rights and obligations, defined in the contract. Wherever, the contract provides for liquidated damages in the event of breach, such damages constitute the consideration for the promise as well as the basis for payment of court-fee. In the absence of such clause, the courts are to be guided by the extent of the liability, which either party to the contract is exposed to, in the event of any breach. In the absence of such clause, the courts are to be guided by the extent of the liability, which either party to the contract is exposed to, in the event of any breach. The petitioner categorically stated that it has incurred liability to an extent of Rs. 4,80,000/-, and in fact, it made an alternative prayer for a decree for that amount. Therefore, the consideration for the promise in the contract sought to be enforced, has to be treated as that amount, viz. Rs. 4,80,000/- Viewed from this angle, the court-fee paid by the petitioner was sufficient and it is not under obligation to pay the court-fee under Section 29 of the Act. ( 10 ) FOR the foregoing reasons, the C. R. P. is allowed and the order under revision is set aside. There shall be no order as to costs.