Madras High Court
T.Kamalam vs The Purasawalkam Permanent Fund Ltd on 25 December, 2014
Author: P.R.Shivakumar
Bench: P.R.Shivakumar
IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 25.12.2014 CORAM THE HONOURABLE MR. JUSTICE P.R.SHIVAKUMAR C.R.P (NPD).No.386 of 2013 1.T.Kamalam 2.L.Barani 3.L.Prabhakaran ...Petitioners Vs. The Purasawalkam Permanent Fund Ltd., Rep. by its Managing Director Having their registered office at No.173, Vellala Street Purasawalkam ...Respondent Civil Miscellaneous Appeal filed under Article 227 of Constitution of India against the order and decreetal order dated 21.12.2012 of XVII Additional Judge, City Civil Court, Madras passed in C.M.P.No.842 of 2010 in A.S.No.74 of 2010. For Petitioners :Mr.M.Rajaraman For Respondent :M/s.K.Sridhar Associates J U D G M E N T
The plaintiff in the original suit O.S.No.2363 of 2006 decided by the XVIII Assistant Judge, City civil Court, Chennai are the petitioners in the present revision. They had availed a loan of Rs.3,00,000/- from the Purasawalkam Permanent Fund Ltd., the respondent herein, by mortgaging the suit property in favour of the respondent herein under the mortgage deed dated 17.11.1994. Claiming that the amount due under the mortgage on the date of filing of the suit was Rs.1,46,338.30 and expressing their preparedness to pay the said amount for the discharge of the mortgage debt, the revision petitioners had filed the above said suit for redemption of mortgage and also for permanent injunction. The respondent herein/defendant filed a written statement contending that the computation made by the revision petitioners/plaintiffs was not correct and that as on 30.06.2006, a sum of Rs.10,87,819.51 was due under the mortgage.
2. The learned trial Judge, after trial, accepted the case of the revision petitioners herein/plaintiffs and held that the amount due on the mortgage as on the date of filing of the suit was only Rs.1,46,338.30. Based on the said finding, the learned trial Judge held that the revision petitioners/plaintiffs were entitled to the relief of a preliminary decree for redemption quantifying the amount due under the mortgage to be Rs. 1,46,338.30 and directing payment of the said amount together with an interest at the rate of 6% per annum from the date of plaint and also issued necessary directions. As against the said preliminary decree dated 15.04.2009 passed by the trial Court, the respondent herein/defendant preferred an appeal in A.S.No.74 of 2010 which came to be assigned to the XVII Additional Judge, City Civil Court, Chennai for disposal according to law. The appeal was valued at Rs.1,47,388.30, being the amount declared to be due by the trial Court and Rs.1000/- towards the value of the relief of injunction and paid a Court fee of Rs.11,055/- on the memorandum of appeal. The revision petitioners/plaintiffs, who were respondents in the appeal, filed a miscellaneous petition in C.M.P.No.842 of 2010 in A.S.No.74 of 2010 questioning the correctness of the valuation of the remedy sought for in the appeal and the Court fee paid thereon and also the pecuniary jurisdiction of the appellate Court to entertain the appeal and praying for deciding the said issues as preliminary issues. The learned appellate Judge, namely learned XVII Additional Judge, City Civil Court, Chennai, after hearing, held that the valuation of the appeal made on par with the valuation found in the plaint was correct and rejected the contentions of the revision petitioners/respondents in the appeal/plaintiffs. Accordingly, the learned XVII Additional Judge, City Civil Court, Chennai dismissed the said miscellaneous petition C.M.P.No.842 of 2010 by his order dated 21.12.2012. Questioning the correctness, legality and sustainability of the said order and contending that the said order came to be passed with material irregularity in exercising jurisdiction conferred on the appellate Court, the revision petitioners have brought forth this revision invoking the supervisory jurisdiction of this Court under Article 227 of the Constitution of India.
3. Both the parties are represented by counsel. The arguments advanced by Mr.M.Rajaraman, learned counsel for the revision petitioners and also by Mr.Sridhar, learned counsel for the respondent were heard. The materials available on record submitted by the Court below for reference in this Civil Revision Petition were also perused.
4. This revision has arisen out of an order passed by the appellate Court holding the valuation made in the appeal and the Court fee paid thereon being equivalent to the value adopted in the plaint and the Court fee paid in the trial Court were proper. Controversy in this case is whether in an appeal arising from a preliminary decree for redemption of mortgage, Court fee to be paid shall be computed on the basis of the value given in the plaint or on the amount found to be due by the trial Court or the value of the disallowed portion of the claim made by the mortgagee.
5. The revision petitioners herein, as plaintiffs, filed the suit for redemption of mortgage and for injunction. The relief of redemption of mortgage was valued on par with the amount admitted by the mortgagors to be due under the mortgage. The relief of injunction was notionally valued at Rs.1000/-. So far as the value of the relief of redemption and the relief of injunction in the trial Court is concerned, there is no dispute with regard to its correctness. Section 34 of the Tamil Nadu Court Fees and Suits Valuation Act,1955 deals with the suit relating to Mortgages. The relevant clause is Sub-clause 8,which reads as follows:
"var _gaq=_gaq||[];_gaq.push(['_setAccount','UA-12938612-2']);_gaq.push(['_setDomainName','legalcrystal.com']);_gaq.push(['_setAllowLinker',true]);_gaq.push(['_trackPageview']);(function(){var ga=document.createElement('script');ga.type='text/javascript';ga.async=true;ga.src=('https:'==document.location.protocol?'https://':'http://')+'stats.g.doubleclick.net/dc.js';var s=document.getElementsByTagName('script')[0];s.parentNode.insertBefore(ga,s);})();8) In a suit against a mortgagee, for redemption of mortgage fee shall be computed on the mount 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.
Provided further that, in the case of a usufructuary or anomalous mortgage, if the plaintiff prays for redemption as well as for account of surplus profit, fee shall be levied separately on the relief for accounts as in a suit for accounts."
The second proviso does not get attracted as it is not a suit for redemption of usufructuary or an anomalous mortgage and for accounts of surplus profit. It is a simple suit for redemption of mortgage. Hence, the relief of redemption was valued at Rs.1,47,388.30, the amount due under the mortgage as stated in the plaint. The said amount is more than the 1/4th of the principal amount secured under the mortgage. Therefore,the valuation made and Court fee paid thereon in the trial Court were in accordance with the said provision. The trial Court also accepted the contention of the plaintiffs that the amount due under the mortgage was as stated in the plaint. Hence,the second proviso regarding payment of deficit Court fee by the plaintiff for passing of the decree did not arise. Now the defendant/mortgagee has chosen to challenge the decree on the ground that the amount found by the trial Court to be due under the mortgage was not correct and that a higher amount was due under the mortgage. It was claimed by the respondent herein/defendant before the trial Court that the amount due under the mortgage on 30.06.2006 was Rs.10,87,819.51. Therefore, the claim in the nature of counter claim made by the respondent herein/defendant in the suit for redemption was for Rs. 10,87,819.51. Since it was a suit for redemption,the defendant was not liable to pay Court fee of such claim on the amount claimed by the defendant to be due. However, since the trial Court negatived the claim of the defendant regarding the quantum of amount due under the mortgage, according to the submission made by the learned counsel for the revision petitioners,the extent to which the mortagee's claim was negatived should be taken as the subject matter of appeal and Court fee should be paid on the value of such subject matter. Section 52 of the Tamil Nadu Court Fees and Suits Valuation Act,1955 deals with the valuation of the appeals:
"52.The fee payable in an appeal shall be the same as the fee that would be payable in the Court of first instance on the subject-matter of the appeal:
Provided that, in levying fee on a memorandum of appeal against a final decree by a person whose appeal against the preliminary decree passed by the Court of first instance or by the Court of appeal is pending, credit shall be given for the fee paid by such person in the appeal against the preliminary decree.
Explanation (1).-- Whether the appeal is against the refusal of a relief or against the grant of the relief, the fee payable in the appeal shall be the same as the fee that would be payable on the relief in the Court of first instance.
Explanation (2).-- Costs shall not be deemed to form part of the subject-matter of the appeal except where such costs form themselves the subject-matter of the appeal or relief is claimed as regards costs on grounds additional to, or independent of, the relief claimed regarding the main subject-matter in the suit.
Explanation (3).-- In Claims which include the award of interest subsequent to the institution of the suit, the interest accrued during the pendency of the suit till the date of decree shall be deemed to be part of the subject-matter of the appeal except where such interest is relinquished.
Explanation (4).--Where the relief prayed for in the appeal is different from the relief prayed for or refused in the Court of first instance, the fee payable in the appeal shall be the fee that would be payable in the Court of first instance on the relief prayed for in the appeal.
Explanation (5).-- Where the market value of the subject-matter of the appeal has to be ascertained for the purpose of computing or determining the fee payable, such market value shall be ascertained as on the date of presentation of the plaint."
6. The section is to the effect that the fee payable in the appeal shall be the same as the fee that would be payable in the Court of first instance on the subject matter of the appeal. Explanation No.1 is to the effect that where an appeal is against the refusal of a relief or against the grant of relief, the fee payable in the appeal shall be the same as the fee that would be payable on the relief in the Court of first instance. A consideration of the entire section including the explanation will make it clear that it is an erroneous assumption that the valuation of the appeal shall be the same as the valuation of the plaint in the suit from which the appeal has arisen. The position can be made clear by following illustrations.
a) In a suit for recovery of money, the value of the appeal shall include the amount found due as on the date of suit and interest awarded subsequent to the institution of the suit till the date of decree. It shall be clear from explanation 3 to Section 52. This shall be the procedure for valuation of appeal preferred by the defendant who suffered the decree or the plaintiff who suffered the counter claim.
b) Suppose, a plaintiff makes a claim in a money suit for a sum of Rs.10,00,000/- and the entire claim of the plaintiff is negatived by the trial Court and an appeal is filed, the appeal shall be valued at the same rate as claimed in the plaint. But, in case a decree is passed for a lesser amount, then the amount claimed by the plaintiff being Rs.10,00,000/- and the decree being one for Rs.5,00,000/-, in preferring an appeal against the disallowed portion, the plaintiff shall not be asked to pay Court fee for the amount for which the trial Court itself has granted the decree. Only the disallowed portion, namely Rs.5,00,000/- in the illustrations stated above shall be the value of the appeal preferred by the plaintiff.
c) Suppose the defendant admits liability to some extent, say for example upto Rs.5,00,000/- in a claim of Rs.10,00,000/- and disputes the claim over and above the said admitted portion and the suit is decreed in entirety, namely Rs.10,00,000/-, in an appeal preferred by the defendant, the subject matter of the appeal shall be the amount decreed over and above the admitted portion, namely Rs.5,00,000/- and the interest on the said amount from the date of plaint upto the date of decree. It will be unethical to ask the defendant to pay Court fee for the admitted portion of the claim also.
7) If the issue raised by the revision petitioners is viewed in the light of the above said illustrations, it will make it clear that the subject matter of the appeal preferred by the respondent herein is not the same as found by the trial Court to be due under the mortgage or as stated to be due in the plaint. The respondent herein did not admit the claim of the revision petitioners/plaintiffs that the amount due under the mortgage was only Rs. 1,46,338.30 and on the other hand, it was contended by the respondent that the amount due under the mortgage was Rs. 10,87,819.51. The claim of the respondent herein/appellant before the lower appellate Court should be taken as Rs.9,41,481.21 (Rs.10,87,819.51 Rs.1,46,338.30). The same shall be the subject matter of the appeal. The amount to be paid as Court fee in a suit for recovery of the above said amount shall be the amount of Court fee payable in the appeal. For the reasons stated above, this Court finds the contention of the learned counsel for the petitioners to be sound and tenable.
8.However, the learned counsel for the respondent made a meek attempt to contend that the relief sought for in the suit was for redemption of mortgage and the relief of redemption granted by the trial Court alone is sought to be challenged in the appeal; that the appeal filed against the quantification of the amount due under the mortgage cannot be termed an appeal against a money decree and that therefore, the valuation made in the appeal and the Court fee paid thereon were correct.
9. This Court is not in a position to countenance the above said argument. Section 33 (8) of the Tamil Nadu Court Fees and Suits Valuation Act,1955, which was discussed above, makes it clear that the value of a suit for redemption shall be the amount due as per the statement in the plaint or 1/4th of the principal amount secured by the mortgage whichever is higher. It was subject to a modification that in case the Court finds a higher amount to be due, decree in favour of the mortgagor for redemption shall not be passed before the mortgagor /plaintiff pays the deficit Court fee taking the amount declared to be due as the value of the relief in the suit. Though the suit for redemption is for the enforcement of the right of the mortgagor to redeem the mortgage on discharge of mortgage debt, in a way it assumes the character of a suit for money so far as mortgagee is concerned as the decree contemplated in a suit for redemption is a preliminary decree for quantification of the amount due under the mortgage followed by a direction to pay the amount within a time to be fixed by the Court and a further direction that in case of default, the mortgagee shall be entitled to bring the property for sale. In Appendix D to the Code of Civil Procedure, Form Nos.7A and 7C are provided for a preliminary decree for redemption where on default of payment by mortgagor a decree for sale is passed. The form of final decree for sale in a suit for redemption on default of payment by mortgagor is found in Form No.7E. The said form will also give a clue that suit for redemption, wherein a preliminary decree is passed for redemption with a direction for sale of the mortgaged property in case of default in payment, should be taken as a money decree on the point of view of the mortgagee. When a mortgagee is claiming that the amount found by the trial Court to be due under the mortgage is not correct and a higher amount should have been found to be due, then the claim made in the appeal should be taken only as a claim for money to the extent disallowed by the trial Court. In this regard, in Pachayakkal And Anr. vs Shanmughavelayudhasami Gopanna reported in (1942) 2 MLJ 785, a learned Single Judge of this Court has made the following observations:
"The position seems clear (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 Section 7, Clause (ix) of the Court-Fees Act. It follows from the above that the petitioners have to pay court-fee in respect of their appeals in proportion to the amounts they have claimed to be payable to them."
The said decision came to be rendered when the earlier Court fees Act, 1870 was in force. Section 7(ix) of the 1870 Court fees Act reads as follows:
" to redeem. - (ix) In suits against a mortgagee for the recovery of the property mortgaged,;
to foreclose.- and in suits by a mortgagee to foreclose the mortgage, or, where the mortgage is made by conditional sale, to have the sale declared absolute-
according to the principal money expressed to be secured by the instrument of mortgage."
10. Under the old Act suits for foreclosure and suits for redemption had to be valued and ad valorem Court fee should be paid on the Principal money secured under the mortgage. There is a deviation from the said Section in the new Act. Section 33(8) of the 1955 Act says that the value of the relief of redemption shall be valued at the amount stated to be due under the mortgage as per the statement found in the plaint or at one fourth of the Principal amount secured by the mortgage, whichever is higher. The schedule to the old Act says that the Court fee payable on the memorandum of appeal shall be on the amount or value of the subject matter in dispute. The subject matter in dispute in an appeal against a decree for redemption shall be the amount claimed by the mortgagee and disallowed by the Court unless the appeal is solely on the ground that irrespective of the amount due, the mortgagor has lost his right to redeem. If those principles are applied properly, then we can safely come to the conclusion that the amount in dispute in the appeal is the difference between the claim made by the respondent herein/appellant(defendant) and the amount awarded by the trial Court which is Rs.9,41,481.21 (Rs.10,87,819.51 Rs.1,46,338.30). The same alone shall be the value of the subject matter of the appeal, so far as the relief of redemption is concerned. Since the relief of injunction granted by the trial Court is also challenged, notional value of Rs.1000/- was also added. Accordingly, the total value of the subject matter of the appeal works out to Rs.9,42,481.21 for which amount the respondent/appellant should have paid the Court fee.
11. The learned lower appellate Judge failed to properly appreciate the issue and committed an error in holding that the valuation of the subject matter of the appeal was correctly made and that the Court fee paid thereon was correct. The said finding of the lower appellate Court can be termed not only erroneous and infirm but also as an exercise of jurisdiction with material irregularity capable of being corrected by this Court in exercise of its power of superintendence over the subordinate courts under Article 227 of the Constitution of India.
In the result, the revision petition is allowed the impugned order of the learned XVII Additional Judge, City Civil Court, Chennai dated 21.12.2012 made in C.M.P.No.842 of 2010 is set aside and C.M.P.No.842 of 2010 is allowed in part. The value of the appeal is fixed at Rs. 9,42,481.21 (Rs.9,41,481.21 + Rs.1000/-) and court fee shall be paid on the said amount. The respondent herein/appellant before the lower Appellate Court is directed to pay the deficit Court fee based on the said valuation. Time for payment of Court fee is four weeks from the date of receipt of a copy of this order. No costs. Connected M.P.No.1 of 2013 is also closed.
25.12.2014 Index:yes/no Internet:yes/no gpa To XVII Additional Judge, City Civil Court, Chennai Note to office: Issue order copy on 25.02.2014 (today) P.R.SHIVAKUMAR.J., gpa C.R.P (NPD).No.386 of 2013 25.12.2014