Holding

In a suit for accounts, a plaintiff may give a tentative valuation but the court may reject an arbitrary or manifestly unreasonable valuation and may direct the trial court to reassess it for pecuniary jurisdiction.

Summary

The plaintiff, a former partner, sued his brothers for dissolution of a partnership and for accounts, alleging they had excluded him and falsified a partnership deed. He valued the suit at a nominal Rs.150 (Rs.50 each for declaration, accounts, and profit) and paid the corresponding court fee. The defendants contended that this valuation was arbitrarily low, rendering the suit beyond the court's pecuniary jurisdiction, and the High Court dismissed their revision. On appeal, the Supreme Court held that while a plaintiff in a suit for accounts may state a tentative valuation under Section 7(iv)(f) of the Court Fees Act, the court may reject a valuation that is arbitrary or manifestly unreasonable. The Court remitted the matter to the trial court to reconsider the valuation and, if necessary, determine the correct jurisdiction under Order VII of the CPC. The appeal was allowed and costs were awarded to the plaintiff.

Issues considered

Whether a plaintiff in a suit for accounts under Section 7(iv)(f) of the Court Fees Act may assign any valuation, even if arbitrary, and whether the court can examine and reject such valuation.
Whether an arbitrary valuation affects the pecuniary jurisdiction of the court.
Whether the trial court should be directed to reassess the valuation and jurisdiction under Order VII of the CPC.

Legislation cited

Code of Civil Procedures. Order VII
Court Fees Act, 1870s. 7(iv)(b), s. 7(iv)(f)

Subjects

partnership dissolutionaccountscourt feesvaluationpecuniary jurisdictiontentative valuationCourt Fees ActCPC Order VII

Judgment

ABDUL HAMID SHAMSI A
v.
ABDUL MAJID AND OTHERS

APRIL 12, 1988

[A.P. SEN AND LALIT MOHAN SHARMA, JJ.] B

- Court Fees Act, 1870. Section 7(iv)(b)-Suit for accounts-
Plaintiff not obliged to state exact amount that may result after taking all
accounts-But not permitted to choose unreasonable and arbitrary
figure-It is open to the Court to reject such figure, though ordinarily
the Court does not examine the correctness of the valuation.
c
The father and brothers of Respondent No. I were running a
proprietary business, which was later converted into a partnership firm
by a regular deed. On the de"ath of the father, the two brothers had
eff~ctively taken control of the business and excluded Respondent No.
I. The suggestion to reconstitute the partnership made repeatedly by D
Respondent No. I had been ignored.

The two brothers represented before the Income Tax Officer that a
uew deed of partnership had been executed on IS. I.1979 to be effective
- > from I. J .1979 in which Respondent No. I had no interest and on that
basis the Income Tax Officer passed an order. In the suit filed by E

-- Respondent No. I, he challenged the partnership deed as being illegal
and void and prayed for a decree for dissolution of the partnership firm
and for accounts. Valuation of the suit was put as Rs.ISO i.e., Rs.SO
each for declaration, rendition of accounts, and for profit to the share
of the plaintiff. Court fee was paid accordingly.
F
The defendants in the suit denied the allegations made in the
plaint and also challenged the valuation as being grossly undervalued
and arbitrary. The issue relating to the correct valuation and pecuniary
jurisdiction of the Court was decided in favour of the plaintiff. The
defendants challenged the order by a Civil Revision Application which
was dismissed by the High Court. G
-·A,. This appeal by special leave is against the High Court's order. On
behalf of the appellant, it was contended that while relief to the tune of
lakhs of rupees had been claimed, the plaint had been tentatively valued
for Rs.SO only, which is preposterous. The contention of Respondent
No. I was that a Plaintiff has the absolute right to put on the plaint any H
507
508 SUPREME COURT REPORTS [1988] 3 S.C.R.

A value he wishes and the court has no jurisdiction to examine the matter:

Allowing the appeal, this Court,

HELD: I. It is true that in a suit for accounts the correct amount
payable by one party to the other can be ascertained only when the
B accounts are examined and it is not possible to give an accurate valua-
tion of the claim at the inception of the suit. The plaintiff is, therefore,
allowed to give his own tentative valuation. Ordinarily the Court shall
not examine the correctness of the valuation chosen, but the plaintiff
cannot act arbitrarily in this matter. If a plaintiff chooses whimsically a
- '

ridiculous figure it is tantamount to not exercising his right in this
C regard. In such a case it is not only open to the Court hut its duty to
reject such a valuation. [5120-E]

2. In the instant case the valuation put by the plaintiff'·off the
plaint is arbitrary and unacceptable. However, the question is remitted
to the trial court for reconsideration. It is open to the trial court to take
D into consideration the statement in the plaint that the plaintiff has been
ousted from the partnership business. If the court comes to the conclu-
sion that the tentative valuation of the suit would he beyond its
pecuniary jurisdiction, it shall pass an appropriate order under Order
VlloftheCodeofCivilProcedure. [512F-G] A ~

E Smt. Tara Devi v. Sri Thakur Radha Krishna Maharaj, [1987] 4
SCC 69; Meenakshisundaram Chettiar v. Venkatachalam Chettiar,
[I 979 I 3 SCR 385, relied on. ..._

Aizaz Ahmad v. Nazirul Hasan, AIR 1935 Allahabad 849; Attar
Singh v. Manohar Singh, ILR (1947) Nagpur 933; Mata Ram v. Daulat
F ILR (1938) Nagpur 588 (F.B.); Salahuddinhyder v. Dhanooliil, [1945]
ILR XXIV Patna 334; Shama Pershad Sahi v. Sheopershad Singh XLI
l.C. 95 (Patna); Gouri Lal and others v. Raja Babu, AIR 929 Patna
616,approved.

Krishnaji Hari v. Gopal Narayan. AIR 1936 Bombay 166 and
G Ishwarappa v. Dhanji, AIR 1932 Bombay I II, overruled.

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1004
of 1988.

From the Judgment and Order dated 2.12.1987 of the High
H Court of Calcutta in Civil Order No. 2506 of 1987.
ABDUL HAMID v. ABDUL MAJID [SHARMA, J.] 509

S.N. Kacker, N. Choudhary and Rathin Das for the Appellant.
A
A.P. Chatterjee, Deepak Mitra and G.S. Chatterjee for the
Respondents.

The Judgment of the Court was delivered by
B
SHARMA, J. The jurisdiction of the City Civil Court, Calcutta
to entertain a suit being T.S. No. 520 of 1983 filed by the respondent
No. 1 is under challenge in the present appeal, on the ground that the
correct value of the suit is beyond the pecuniary jurisdii;tion of the
Court. The plaintiff-respondent No. J has alleged that he is a partner
of a partnership business along with his brothers defendant Nos. 1 and
2. Originally it was a proprietary business belonging to Abdul Samad, C
father of the plaintiff and defendant Nos. land 2, and was later con-
verted into a partnership firm by a regular deed. During his life time
the business was under the control of Abdul Samad, but on his death
the defendants Nos. 1 and 2 have effectively taken charge of the busi-
ness and excluded the plaintiff. A suggestion to re-constitute and part- D
nership made and repeated by the plaintiff has been ignored. In reply
to the plaintiff's letter seeking information the defendant no. 2-
petitioner has stated in his letter to. the plaintiff that he (the plaintiff)
has no interest in the firm. In paragraph 11 of the plaint it is stated that
he has on enquiry discovered that the defendants nos. 1 and 2 have
been falsely representing before the Income-Tax department, inter E
alia, that a new deed of partnership had been executed on 15 .1.1979 to
be effective from 1.1.1979 in which the plaintiff has no interest. The
Income-Tax Officer passed an order on 26th December 1981 on the
basis of the false allegations made by the defendants. The plaintiff has
challenged the aforementioned partnership deed of 1979. In paragraph
16 ·of the plaint the amount of profit from the business has been F
described as "huge". In the prayer portion of the plaint the ·plaiiitiff
prayed for .declaring the partnership deed of 1979 as illegal and void
and for passing a decree for dissolution of the partnership firm and for
accounts. The valuation of the suit was put as Rs.150 being the sum of
Rs.50 for declaration, Rs. 50 for rendition of accounts and another
sum of Rs. 50 for profit to the share of the plaintiff arising out of the G
business. Court fee was accordingly paid.

2. The defendants no. 1 and 2, besides denying the plaint allega-
tions made by the plaintiff, challenged the valuation given by the
plaintiff as grossly undervalued and arbitrary. The issues relating to
the correct valuation and pecuniary jurisdiction of the court to enter- H

,,,-
510 SUPREME COURT REPORTS [1988] 3 S.C.R.

A tain 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 dismis-
sed. The defendant no. 2 has now come to this Court against the High
Court's order. Special leave is granted.
B
3. Mr. Kacker, the learned counsel for the appellant, has con-
tended that it is manifest that relief to the t.une of lacs of rupees has
been claimed by the plaintiff in the suit. He said that the plaintiff has
laid claim to a sum of Rs.l,26,796.72 besides another sum of over
Rs.84,000 as his share in the profit for a particular period by reference
to the proceeding of the Income-Tax department mentioned in
-
c paragraph 11 of the plaint, and it is, therefore, preposterous on his
part to suggest in paragraph 19 of the plaint that it could be tentatively
valued at Rs.50 only. According to the defence case which is chal-
lenged as incorrect by the plaintiff, the plaintiff requested for and was
allowed a larger share 'in the well established and reputed business of
D auctioneer known as "Russell Exchange" and its assets and goodwill
as well as the amount lying in the Habib Bank, Karachi Branch, solely
and absolutely'. The "Russell Exchange" building is a very valuable
property near Park Street in the city of Calcutta. A copy of the Profit
and Loss Account for the calendar year 1979 attached by the plaintiff
to the additional affidavit filed on his behalf before this Court men-
E tions figures in lacs.
A·
4. Mr. Arun Prakash Chatterjee, the learned counsel for the
plaintiff-respondent no. l, has argued that the suit is governed for the
purpose of court fees by s. 7(iv)(f) of the Court Fees Act, and the
plaintiff has the absolute right to put on the plaint any value he wishes
F to and the court has no jurisdiction to examine the matter. In other
words, it is the sweet-will of the plaintiff to choose any figure he likes
and thus decide finally the court which shall have jurisdiction to enter-
tain the suit without reference to the subject matter of the litigation,
the nature and extent of the relief claimed or any other factor. He has
relied upon the decision of this Court in Smt. Tara Devi v. Sri Thakur
G Radha Krishna Maharaj, [1987] 4 SCC 69, and Meenakshisundaram
Chettiar v. Venkatachalam Chettiar, [1979] 3 SCR 385. Reference was
also made to Krishnaji Hari v. Copa/ Narayan, AIR 1936 Bombay 166
and lshwarappa v. Dhanji, AIR 1932 Bombay 111. Mr. Chatterjee
claimed that the different High Courts in the country have consistently
confirmed this right of the plaintiff and he has not discovered any
H decision to the contrary.
ABDUL HAMID v. ABDUL MAJID [SHARMA, J.[ 511

5. We are afraid, the interpretation put by the learned counsel
A
on the decisions of this Court is not correct and cannot be accepted.
None of the two cited judgments relied upon by Mr. Chatterjee helps
him. It is true that in a suit for accounts the plaintiff is not obliged to
state the exact amount which would result after taking all the accounts
and he may, therefore, put a tentative valuation upon the suit, but he
is not permitted to choose an unreasonable and arbitrary figure for B
that purpose. At page 392 of the judgment in Meenakshisundaram
Chettiar v. Venkatachalam Chettiar, (supra) this Court while taking
note of the plaintiff's right to give a tentative valuation on the suit,
observed:

"The plaintiff cannot arbitrarily and deliberately under-
value the relief." c
In Smt. Tara Devi v. Sri Thakur Radha Krishna Maharaj, [1987] 4 SCC
69, the view was reiterated thus at page 70:

" ..... The plaintiff however, has not been given the abso- D
lute right or option to place any valuation whatever on such
relief and where the plaintiff manifestly and deliberately
under-estimates 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
" E

6. So far as the opinion of the High Courts is concerned, it is not
uniform. The argument, "that the plaintiff can give an arbitrary valua-
tion in the plaint, and that the court is bound to accept that" made on
behalf of the plaintiff before the Allahabad High Court in Aizaz
~ . Ahmad v. Nazirul Hasan, AIR 1935 Allahabad 849, was rejected, after F
-· observing that there was some authority for the extreme view as urged
in two Calcutta decisions but later a different view was taken by the
said Court as also by the Allahabad Court. In Attar Singh v. Manohar
Singh, ILR (1947) Nagpur 933, the plaintiff non-applicant before the
High Court filed a suit for dissolution of partnership and accounts
valuing at Rs.150 as has been done in the case before us. The G
defendant's objection to the valuation was rejected by the trial court
J··~ "on the ground that the court was powerless to challenge the
• valuation put by the plaintiff on the relief claimed in the suit.'' The
Full Bench decision in Mata Ram v. Dau/at, ILR (1938) Nagpur 588
(F .B.) was attempted to be distinguished on the basis that it was a case
covered bys. 7(iv)(c). of the Court Fees Act and not bys. 7(iv)(f). The H
512 SUPREME COURT REPORTS 119881 3 S.C.R.

A High Court while repelling the argument pointed out that the principle
underlying both the clauses (c) and (f) of s. 7(iv) is substantially the
same and the Filll Bench decision governed the case. Accordingly it
was held that when the valuation put by the plaintiff appears to be
arbiirary and unreasonable the court may reject it and leave the
plaintiff to correct the valuation or have the suit rejected. Similar was
B the view of the Patna High Court in suits covered by s. 7(iv)(c) in
Salahuddinhyder v. Dhanoolal, I1945 I ILR XXIV Patna 334, and
Shama Pershad Shahi v. Sheopershad Singh XL!, I.C. 95 (Patna). In
Gouri Lal and others v. Raja Babu, AIR 1929 Patna 626, the respon-
dent filed a suit praying for accounts from appellant no. 1. Rejecting
his claim to put any valuation under s. 7(iv)(f) of the Court Fees Act
the High Court observed that when a plaintiff is required to place the
c valuation on his claim he must state a valuation which need only be
approximately correct but qualified it by saying that, "it must not be i--
'
arbitrary or manifestly inadequate."
7. It is true that in a suit for accounts the correct amount payable
by one party to the other can be ascertained only when the accounts
D are examined and it is not possible to give an accurate valuation of the
claim at the inception of the suit. The plaintiff is, therefore, allowed to
give his own tentative valuation. Ordinarily the Court shall not
examine the correctness of the valuation chosen, but the plaintiff can-
not act arbitrarily in this matter. If a plaintiff chooses whimsically a
ridiculous figure it is tantamount to not exercising his right in .this
E regard. In such a case it is not only open to the Court but its duty to
reject such a valuation. The cases of some of the High Courts which
have taken a different view must be held to be incorrectly decided.
8. The learned counsel for the parties have placed before us the
materials on the record at considerable length and we do not have any
F hesitation in holding that the valuation put by the plaintiff (respondent
before u~) on the plaint is arbitrary and unacceptable. We, however,
do not propose to examine the matter further and remit this question
r
\ J

to be reconsidered by the trial court. While examining the issue it will
be open to the trial court to take into consideration the statement in
the plaint that the plaintiff has been ousted from the partnership busi-
ness. If the court comes to the conclusion that the tentative valuation
-·
G
of the suit would be beyond its pecuniary jurisdiction, it shall pass an
appropriate order under Order VII of the Code of Civil Procedure.
The appeal is accordingly allowed with costs payable by the plaintiff-
respondent.

G.N. Appeal allowed.