ORDER : 1. The application in A.No.68 of 2018 has been filed by the plaintiff to amend the correct section of law in the plaint. 2. It is the contention of the applicant that while valuing the suit, the suit was valued under section 27(c) of the Tamilnadu Court Fees and Suits Valuation Act instead of under section 25(d) of the Tamilnadu Court Fees and Suits Valuation Act. Hence, prayed for amendment to add correct section of law. 3. The application in A.No.35 of 2017 has been filed by the defendants for directing the plaintiffs to make good the deficit in payment of Court fee by properly valuing the suit under section 40 of the Tamil Nadu Court Fees and Suits Valuation Act 1955 and direct the respondents to deposit to the credit of the suit a sum of Rs.4,54,68,000/- along with interest at 21% per annum from 30.11.2013 till the date of deposit and to strike off the plaint in C.S.No.758 of 2016 on the ground of abuse of process of law. 4. In the application it is stated that the first applicant company and the second applicant firm are closely held family concerns of the applicants and they are engaged in the business of supply of iron and steel. The respondent is a building contractor and during the course of its business had purchased iron and steel from the first and second applicant company for which payments are yet to be made. That apart, the respondents have to repay various amount from the applicants in the form of unsecured loans, share application money and share investments. The respondent entered into two loan repayment agreements on 30.11.2013 with the first applicant and the second applicant and agreed to repay a sum of Rs.1,23,00,000/- and Rs.1,15,00,000/- respectively on or before 31.03.2015 and 31.03.2014 respectively along with interest at the rate of 18% per annum till the date of payment as per the agreement and in the event of default in payment as agreed, interest has to be paid at the rate of 21% per annum till the date of payment. Simultaneously, with the execution of these two loan repayment agreements, all the individual applicants had entered into a share purchase agreement dated 30.11.2013 and under which all the shares held by individual applicants in the respondent company were to be purchased by Mr.Rekesh P.Seth, the then Managing Director of the respondent company and Mr.Pananlal Chordia, the then Director of the respondent company at Rs.10/- per share, working out to Rs.2,00,00,000/-. It is their further case that the fourth applicant has paid a sum of Rs.10,00,000/- towards share application money for purchase of shares in the respondent company. However, the respondent as well as its Directors started to renege on their promises and assailed the said agreements by filing two suits before the City Civil Court, Chennai in O.S.No.7024 of 2014 and O.S.No.7025 of 2014 and sought declaration that the agreement dated 30.11.2013 entered into between the applicants and respondent are null and void. However, both the suits have been dismissed for default on 08.09.2015. Thereafter, a police complaint has also been filed by the applicants. The respondent filed a Writ Petition in W.P.No.32898 of 2014 forbearing the police from exasperating the respondent in civil disputes with the applicants and the same is pending. 5. While this was the position, after lengthy negotiations and intervention of well-wishers, the applicants and the respondent entered into a memorandum of settlement dated 10.01.2015 under which the respondent has acknowledged that it owed a sum of Rs.4,54,68,000/- to the applicants and that the parties had agreed to settle their disputes upon payment of Rs.3,30,00,000/- by the respondent to the applicant on or before 31.10.2015 vide four cheques dated 31.10.2015. The agreement further provides that upon payment of entire sum of Rs.3,30,00,000/-, the applicants shall transfer the entire shares to the respondent herein and it is once again made clear in the agreement that the transfer will be effected only upon the entire amount of Rs.3,30,00,000/- being paid in full and not in parts. It is also agreed to withdraw all the pending litigation between the parties to the agreement. However, no payment was made by the respondent. As per the agreement, the cheques were given by the respondent for which receipts have also been issued. As a result 4 complaints have filed by the complainant. It is also agreed to withdraw all the pending litigation between the parties to the agreement. However, no payment was made by the respondent. As per the agreement, the cheques were given by the respondent for which receipts have also been issued. As a result 4 complaints have filed by the complainant. When the matter stood thus, the respondent has filed the present suit for declaration that the memorandum of understanding dated 10.01.2015 is null and void as being against the provisions of the Companies Act. 6. It has been the endeavour of the respondent to frustrate all the attempts made by the applicants to recover the legitimate dues. It has become the habit of the respondent to entice the applicants into signing valid and binding agreements undertaking to repay all the amounts legitimately due to the applicants and thereafter to raise frivolous and vexatious grounds of challenge before the Courts of Law and thus abuse the due process of law. It is the contention of the applicants that the suit should be valued under section 40 of the Tamilnadu Court Fees and Suits Valuation Act. The acknowledgement of debt and method of payment is independent and completely distinct from the obligation of the applicants to transfer the shares held by them back to the respondent. Thus the agreement dated 10.01.2015 is an acknowledgement of debt and a promise to pay the debt by the respondent and this has nothing to do with Section 68 of the Companies Act, 2013. Hence, it is the contention of the applicants that the Court Fee has to be valued correctly under section 40 of the Tamilnadu Court Fees and Suits Valuation Act and the deficit Court Fee has to be paid and Rs.4,67,168/- with interest to be deposited to the credit of the suit and to strike of the plaint. 7. The learned counsel for the applicants/defendants in the suit submitted that having acknowledged the liability in writing, it is the habit of the respondent to some how or other avoid the contract legally entered. Now the suit has been filed to avoid the contract which had been legally entered between the parties. The contention of the applicants that the memorandum of the Settlement deed dated 10.01.2015 is reneged. After negotiation wherein the respondent has admitted his liability for a sum of Rs.4,54,68,000/-. Now the suit has been filed to avoid the contract which had been legally entered between the parties. The contention of the applicants that the memorandum of the Settlement deed dated 10.01.2015 is reneged. After negotiation wherein the respondent has admitted his liability for a sum of Rs.4,54,68,000/-. Having acknowledged the liability and agreed to pay a sum of Rs.3,30,00,000/- in full quit and also issued 4 cheques which were dishonoured, therefore, it is the contention of the learned counsel that the suit ought to have been valued under section 40 of the Tamilnadu Court Fees and Suits Valuation Act and the Court Fee has to be paid on the value of the document, when a person seeking to avoid a document. It is the further contention of the learned counsel that now the plaintiff has come before this Court to avoid the document on the ground that the document is not valid under section 68 of the Company's Act. It is the contention of the counsel that there is an acknowledgement of debt by the plaintiff and it is completely distinct from the obligation of the applicants to transfer the shares held by them back to the respondent and Section 68 of the Companies Act does not prohibit sale of shares. Hence, submitted that the suit ought to have been valued under section 40 of the Tamilnadu Court Fees and Suits Valuation Act. 8. The learned counsel appearing for the respondent/plaintiff would submit that the respondents are holding 40% of the shares and the agreement dated 10.01.2015 shows that the agreement was mainly entered for the purpose of transfer of 40% of the shares to the plaintiff which is prohibited under section 68 of the Companies Act. Hence, sought for declaration in the suit on the ground that the agreement is not valid in law. According to the learned counsel, as the agreement is not valid, no right whatever has been created on the agreement. Therefore, it is the contention of the learned counsel that there is no need to pay the Court Fee on the value mentioned in the agreement. In support of his contentions he relied upon the judgment reported in 1996 (1) CTC 55 [Tmt.Kasthuri Radhakrishnan and 2 others Vs. A.Radharkishnan and 4 others] and AIR 1971 Guj 86 [Inderlal Panwarmal Vs. Khialdas Shewaram and others]. 9. In support of his contentions he relied upon the judgment reported in 1996 (1) CTC 55 [Tmt.Kasthuri Radhakrishnan and 2 others Vs. A.Radharkishnan and 4 others] and AIR 1971 Guj 86 [Inderlal Panwarmal Vs. Khialdas Shewaram and others]. 9. The suit has been laid for declaration to declare the memorandum of agreement dated 10.01.2015 as null and void and illegal. The suit has been valued under section 27(c) of Tamilnadu Court Fees and Suits Valuation Act and a Court Fee of a sum of Rs.28,625/- has been paid. The main allegation in the plaint show as if the third defendant, while she was the Managing Director of the plaintiff company held till 02.03.2012, thereafter, she held the office as a Director till 03.09.2013 on which date she had resigned. When third defendant was a director of the plaintiff company, all the disputes arose between the parties. Various cases have also been instituted against the parties. Therefore, the agreement for purchase of shares for a consideration of Rs.3,30,00,000/- was entered. As a security four cheques were issued on 31.10.2015. 10. The suit has been valued for declaration under section 27(c) of the Tamilnadu Court Fees and Suits Valuation Act. Of course, the provision instead of Section 25(d), Section 27(c) has been mentioned. Mere wrong mentioning of the provision of law will not make any difference. Be that as it may. A clever drafting of the plaint show as if the memorandum of agreement dated 10.01.2015 has been entered between the parties for purchase of the shares held by the defendant for a sale consideration of Rs.3,30,00,000/-. Therefore, the sale of shares is prohibited under section 68 of the Companies Act. It is useful to extract the memorandum of agreement dated 10.01.2015 entered between the plaintiff and the defendants. The relevant clause in the agreement are extracted below. “1. Therefore, the sale of shares is prohibited under section 68 of the Companies Act. It is useful to extract the memorandum of agreement dated 10.01.2015 entered between the plaintiff and the defendants. The relevant clause in the agreement are extracted below. “1. As a meter of Full and Final Settlement of all disputes between the parties, the Party of the First Part agrees that it owes the Nadkishore Group the sum of Rs.4,54,68,000/- (Rupees Four Crores fifty four lakhs and sixty eight thousand only) and after much discussions and deliberations between both the parties, it is agreed to settle this at a figure of Rs.3,30,00,000/- (Rupees three Crores and Thirty lakhs only) and the payment for the same to be made by the Party of the first part on or before 31st October 2015, in the following manner and as requested by the Nandkishore Group. a. Cheque No.114921 dated 31.10.2015 for Rs.1,00,00,000/- drawn on SBT in favour of Mr.Nandakishore Sonthalia. b. Cheque No.114922 dated 31.10.2015 for Rs.1,00,00,000/- drawn on SBT in favour of Mr.Nandakishore Sonthalia. c. Cheque No.114923 dated 31.10.2015 for Rs.1,00,00,000/- drawn on SBT in favour of M/s.M.G.M.Steels d. Cheque No.114924 dated 31.10.2015 for Rs.1,00,00,000/- drawn on SBT in favour of M/s.Bhagwandas Metals Ltd. 2. The consideration mentioned above will be paid by the Party of the First Part to the Nandkishore Group and on doing so Nandkishore Group shall transfer their entire share holding to the party of the First Part. However, the transfers will be affected only once the entire consideration is paid and will not be done in parts. 3. These cheques have been given only for security purpose and the Party of The First Part will clear the consideration prior to these dates in a phased out manner and collect back the respective cheque for which consideration has been cleared. In case of failure to clear consideration before the cheque date,, the drawees can deposit the security cheque on the due date. 4. The Party of the First Part and Nandkishore Group confirm that on signing this agreement all legal actions and action taken in other forms cease t exist and all pending litigations/petitions/complaints are to be mandatorily withdrawn within a period of two weeks of entering into his agreement. 5. 4. The Party of the First Part and Nandkishore Group confirm that on signing this agreement all legal actions and action taken in other forms cease t exist and all pending litigations/petitions/complaints are to be mandatorily withdrawn within a period of two weeks of entering into his agreement. 5. Nandkishore group further agrees that no interest will be payable on these sums by the Party of First Part and the figure agreed upon above is the final figure. 6. The Party of the First Part and Nandkishore Group further confirm that this agreement supersedes the agreement signed by them on 30th Day of November 2013. 7. All the parties to t his agreement agree and acknowledge that the present agreement has been entered into and executed voluntarily and without any duress or undue influence on the part of the parties hereto. The parties unanimously agree and acknowledge they have read and understood the present agreement and that they have been each represented in the preparation, negotiation and execution of this agreement by lawyers of their choice and that they are fully aware of the legal and binding effect of this agreement.” 11. The above recitals and terms of the agreement clearly show that the plaintiff has in fact admitted that he owed about a sum of 4,54,68,000/- and out of the above amount payable to the defendants, he has agreed to settle the entire issue for a sum of Rs.3,30,00,000/- in full quit. Towards the above payment, he has also given four cheques. The entire reading of the agreement clearly indicate that the agreement is primarily entered in the form of acknowledgement of liability and for payment of the amount. Even though, the clause -II in the agreement reads after the payment made by the plaintiff, the defendant shall transfer the share held by the defendants to the plaintiff, the above transfer will come into operation only if the earlier part of the agreement namely, the payment of the debt which has been acknowledged in writing by the plaintiff are fulfilled. Therefore, this Court is of the view that the contention of the plaintiff in the plaint that the very agreement itself is executed for purchase of shares cannot be countenanced. 12. It is further to be noted that such agreement is not totally barred under section 68 of the Companies Act. Therefore, this Court is of the view that the contention of the plaintiff in the plaint that the very agreement itself is executed for purchase of shares cannot be countenanced. 12. It is further to be noted that such agreement is not totally barred under section 68 of the Companies Act. Though there is some restriction for purchase of own shares by the company, such transaction is not void abinitio. At the most, lead to the penal consequences under sub clause II of Section 68 of the Companies Act. Therefore, the contention of the learned counsel for the plaintiff that the agreement itself is against the law cannot be countenanced. It is further to be noted that as discussed above, the very memorandum of agreement is not entered for mere purchase of shares only, but for the various amounts due by the plaintiff to the defendant. The recitals as extracted above clearly show that the share transfer is subject to the payment of earlier dues. Therefore, the contract, namely the agreement dated 10.01.2015 cannot be an agreement of transfer of shares alone. Therefore, the contention of the learned counsel in this regard has no basis. The suit itself has been laid to cancellation of the agreement. Section 40 of the Tamilnadu Court Fess and Suits Valuation Act reads as follows : “S.40 Suits for Cancellation of decrees, etc. [1] In a suit for cancellation of a decree for money or other property having a money value, or other document which purports or operates to create, declare, assign, limit or extinguish, whether in present or in future, any right, title or inerest in money, movable or immovable property, fee shall be computed on the value of the subject-matter of the suit, and such value shall be deemed to be - If the whole decree or other document is sought to be cancelled, the amount or value of the property, for which the decree was passed or other document was executed; If a part of the decree or other document is sought to be cancelled, such part of the amount or value of the property. [2] If he decree or other document is such that the liability under it cannot be split up and the relief claimed relates only to a particular item of property belonging to the plaintiff or to the plaintiff's share in any such property, fee shall be computed on the value of such property or share or on the amount of the decree, whichever is less.” 13. Admittedly, the plaintiff has acknowledged his liability in writing to the tune of 4,54,68,000/- and towards the above liability, he has agreed to settle Rs.3,30,00,000/- in full quit towards his liability. Now he seeks to avoid such contract, where the contract which created right in favour of the defendant by way of acknowledgement of debt in writing. Therefore, in my mind, when a person seeks to avoid such contract, which has already created a right in respect of the tile or interest in money, movable or immovable property, the Court Fee shall be computed on the value of the document which was executed. Admittedly, by executing the document a right has been created in favour of the defendants. The recitals in the document also shows that the plaintiff had voluntarily executed the document without any undue influence or coercion etc. When a person has consciously entered into an agreement and created a right in favour of others and to avoid such contract, necessarily he has to pay the Court Fee on the value of the document. Therefore, I am of the view that the suit should have been valued under section 40 of the Tamilnadu Court Fees and Valuation Act, 1955. 14. The learned counsel for the respondent/plaintiff relied upon the judgment reported in 1996(1) CTC 55 [Tmt.Kasthuri Radhakrishnan and 2 others Vs. A.Radharkishnan and 4 others] and contended that mere agreement does not create any right or interest. Therefore, Court Fee need not be paid under section 40 of the Act. On a careful perusal of the above judgment, this Court taking into consideration of the fact that the agreement which sought to be avoided was only an agreement to sell, as the same does not create any charge or interest as per section 54 of the Transfer of Property Act. This Court held that as per Section 40 of the Tamilnadu Court Fees and Suits Valuation Act will not apply. This Court held that as per Section 40 of the Tamilnadu Court Fees and Suits Valuation Act will not apply. Therefore, the above judgment is not applicable to the facts of this case. Wherein, in this case, the plaintiff has consciously acknowledged his liability to pay the amount to the tune Rs.3,30,00,000/-. When he seeks to avoid such document, he has to necessarily pay the Court Fee on the value of the document. 15. Another judgment relied by the learned counsel in AIR 1971 Guj 86 [Inderlal Panwarmal Vs. Khialdas Shewaram and others]. in which the learned Single Judge of the Gujarat High Court has also taken into consideration of the fact that the alleged agreement said to have been obtained under coercion and when no consideration was passed, has held that the Court fee paid is correct. Whereas in this case, the plaintiff himself has consciously quantified the amount payable to the defendants and has also entered into an agreement. Further very agreement itself shows that there was no coercion or undue influence etc. 16. In the judgment reported in 2017 (11) Supreme Court Cases 853 [J.Vasanthi and others Vs. N.Ramani Kanthammal (dead) represented by legal representatives and others] “The singular issue that gains significance in this case is that the original plaintiff was a party to the transaction. Section 40 of the Act, as we notice, provides that in a suit for cancellation of a document, the court fee has to be computed on the value of the subject-matter of the suit and such value shall be deemed to be the whole decree or other document which is sought to be cancelled, the amount or value of the property for which the decree was passed or other document was executed. It also spelt out that a part of the decree or other document is to be cancelled, such part of the amount or value of the property. On a careful scrutiny of the provision, it is limpid that it refers to the decree or other document and in that context, it uses the word “value”. The stand of the respondents before the High Court as well as before this Court is that the documents were sought to be declared as null and void on the ground of fraud and, therefore, Section 40 of the Act would not be attracted. The stand of the respondents before the High Court as well as before this Court is that the documents were sought to be declared as null and void on the ground of fraud and, therefore, Section 40 of the Act would not be attracted. In this regard, we may notice certain decisions of the High Court of Madras. 18. The High Court posed two questions, namely, (i) whether in the suit filed for declaration that the sale deeds are invalid, court fee paid under Section 25(d) of the Act is incorrect, and (ii) whether the impugned order directing the plaintiff to pay the court fee under Section 40 of the Act suffers from any infirmity warranting interference. Dealing with the factual matrix, the High Court observed: (Chellakannu case, SCC OnLine Mad para 11) “…..Thus, the plaintiff himself is a party to the sale deed; when the party himself seeks to get rid of the sale deeds in substance it amounts to cancellation of decree. The plaintiff might seek to avoid the sale deeds if he is not a party to the sale deeds. But, since the plaintiff himself is a party to the sale deeds before he is suing for any relief, the plaintiff must first obtain the cancellation of the sale deeds.” And again: (SCC OnLine Mad paras 12 & 15) “12. The word “Cancellation” implies that the persons suing should be a party to the document. Strangers are not bound by the documents and are not obliged to sue for cancellation. When the party to the document is suing, challenging the document, he must first obtain cancellation before getting any further relief. Whether cancellation is prayed for or not or even it is impliedly sought for in substance, the suit is one for cancellation in the present case, when the plaintiff attacks the sale deeds as having been obtained from him under fraud and misrepresentation the plaintiff cannot seek for any further relief without setting aside the sale deeds. *** 15. The allegation on the plaint in substance amounts to cancellation of the document. Though the prayer is couched in the form of seeking declaration that the document is not valid and not binding, the relief in substance indirectly amounts to seeking for cancellation of the sale deed. The learned District Munsif was right in ordering payment of court fee under Section 40 of the Act. Though the prayer is couched in the form of seeking declaration that the document is not valid and not binding, the relief in substance indirectly amounts to seeking for cancellation of the sale deed. The learned District Munsif was right in ordering payment of court fee under Section 40 of the Act. This revision petition has no merits and is bound to fail.” Being of this view, the High Court dismissed the civil revision and directed the plaintiff to pay court fee with further stipulation that unless paid, the plaint would stand rejected. 24. The decisions in Suhrid Singh and Shailendra Bhardwaj have to be understood in their proper perspective. There was U.P Amendment in Shailendra Bhardwaj. In Suhrid Singh the Court was dealing with a different situation. Be that as it may, the valuation of a suit and payment of court fee shall depend upon the special provision in a State if provided for. The view taken by the Madras High Court in Chellakannu, in our considered opinion, is the correct exposition of law. 27. On a perusal of the decision in Rathnavarmaraja, we find that the controversy had arisen with regard to proper valuation and the stand of the defendant was that the court fee had not been properly paid and in that context, the Court has held what as we have reproduced hereinabove. The issue being different, the said decision is distinguishable. We may reiterate that proper valuation of the suit property stands on a different footing than applicability of a particular provision of an Act under which court fee is payable and in such a situation, it is not correct to say that it has to be determined on the basis of evidence and it is a matter for the benefit of the Revenue and the State and not to arm a contesting party with a weapon of defence to obstruct the trial of an action. It is because the Act empowers the defendant to raise the plea of jurisdiction on a different yardstick. 28. In the ultimate analysis, we arrive at the conclusion that the appeal is to be allowed, the impugned orders passed by the trial court and the High Court, being unsustainable are to be set aside and we so direct. The trial court is directed to grant three months' time to the plaintiff to pay the requisite court fee. 28. In the ultimate analysis, we arrive at the conclusion that the appeal is to be allowed, the impugned orders passed by the trial court and the High Court, being unsustainable are to be set aside and we so direct. The trial court is directed to grant three months' time to the plaintiff to pay the requisite court fee. There shall be no order as to costs. 17. From the above dictum, when the party to the document seeks cancellation of such document, I am of the view that the suit should be valued on the value of the document. 18. Accordingly, this application in A.No.35 of 2017 is allowed and the plaintiff shall pay the Court Fee to the value of the document dated 10.01.2015, i.e., for admitted amount of Rs.3,30,00,000/- and pay the remaining Court Fee on the above amount within a period of two months, failure to pay the such Court Fee, the suit will be rejected. Till such time, the interim Orders already granted by this Court is extended till then. The registry is directed to calculate the Court Fee and to receive the remaining Court Fee within such period. In view of the Orders passed in application in A.No.35 of 2017, the application in A.No.5068 of 2018 is dismissed. The registry is directed to list the main suit on 26.09.2018.