M.T. Emerald Sky vs Reliance Industries Ltd. And Anr. on 10 January, 2007

[Cites 22, Cited by 3]

Gujarat High Court

M.T. Emerald Sky vs Reliance Industries Ltd. And Anr. on 10 January, 2007

Equivalent citations: AIR2007GUJ90, AIR 2007 GUJARAT 90, 2007 (4) ABR (NOC) 567 (GUJ) 2007 A I H C (NOC) 331 (GUJ), 2007 A I H C (NOC) 331 (GUJ), 2007 A I H C (NOC) 331 (GUJ) 2007 (4) ABR (NOC) 567 (GUJ), 2007 (4) ABR (NOC) 567 (GUJ), 2007 (4) ABR (NOC) 567 (GUJ.) = AIR 2007 GUJARAT 90, 2007 (3) AKAR (NOC) 355 (GUJ.) = AIR 2007 GUJARAT 90

1. OJ Civil Application No. 140 of 2004 in Admirality Suit No. 5 of 1998 is filed by the applicants - original defendants to pass judgment and decree in terms of prayer (a) and (b) of the counterclaim contending inter alia that the defendants have filed their written statement and counterclaim on 11.12.2006 and inspite of 4 years having lapsed since the service of the counterclaim filed by the defendants, the plaintiffs have failed and neglected to file the written statement to the counterclaim and therefore, they have prayed for judgment and decree relying upon Order VIII Rule 5 r.w. Order VIII Rule 10 of the Code of Civil Procedure; 1908 as according to the defendants - the applicants herein, the averments made in the counterclaim stands controverted.

2. OJ Civil Application No. 150 of 2005 in Admirality Suit No. 5 of 1998 is at the instance of the defendants to permit them to amend the written statement and counterclaim and cure other defects as detailed in Annexure - B and re-verify in terms of verification clause reproduced in Page 0531 Annexure - C. It is also further prayed to permit the defendants to place on record the written statement and counterclaim as amended and re-verified in terms of relief - (a). It is also further prayed to permit the defendants to place on record the copy of the Power of Attorney dated 4.12.1998.

3. OJ Civil Application No. 61 of 2005 in Admirality Suit No. 5 of 1998 is at the instance of the original plaintiffs with a prayer that the written statement and counterclaim filed by the defendants in Admirality Suit No. 5 of 1998 be struck off and to pronounce the judgment on the basis of the facts contained in plaint in the Admirality Suit No. 5 of 1998.

4. Admirality Suit No. 5 of 1998 is filed by the original plaintiffs for a judgment and decree in the sum of Rs. 19.76 Million US $ equivalent to Rs. 83.98 Crores being damages estimating as per the particulars at Exh.H against the defendants. A further decree is also prayed for a sum of Rs. 160 Crores being damages by way of loss of revenue and other like losses as per the particulars Exh.G. A further decree is also sought for a sum of Rs. 13300 Lacs being the damages by way of loss of revenue and other like losses as per the particulars at Exh.I. The said suit came to be filed on 24th November, 1998. It appears that the order of arrest was passed by this Court immediately on 25th November, 1998, however, on furnishing the security by way of bank guarantee the vessel was released. It appears that thereafter a written statement and counterclaim came to be filed by the defendants on 9th December, 2000 and by way of counterclaim, the defendants have prayed for a decree against the plaintiff Nos. 1 and 2 to pay the defendants a sum of Rs. 4.8 Million US $ and the said written statement and counterclaim has been served upon the original plaintiffs on 11.12.2000. It appears that as there was no written statement filed to the counterclaim by the plaintiffs, a notice of motion by way of OJCA No. 140 of 2004 has been taken out by the original defendants to pass judgment and decree in terms of prayers - (a) & (b) of the counterclaim contending inter alia that despite of 4 years having elapsed since the service of the counterclaim filed by the defendants, the plaintiffs have failed and neglected to file the written statement to the defendants' counterclaim by further submitting that owing to the plaintiffs not complying with their obligation to file the written statement to the counterclaim within the time prescribed under the Code of Civil Procedure; 1908, the averments and statement made in the counterclaim stands un-controverted. Thus, according to the defendants they are entitled to judgment and decree under Order VIII Rule 5 r.w. Order VIII Rule 10 of the Code of Civil Procedure. Having served with the said notice of motion, the plaintiffs came out with the notice of motion by way of OJ CA No. 61 of 2005 with a prayer to struck off the written statement and counterclaim filed by the defendants in Admirality Suit No. 5 of 1998 and to pronounce the judgment on the basis of the facts contained in the plaint on the following grounds:

(i) Written statement and counterclaim does not disclose the date on which the same is purportedly filed before this Court.

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(ii) The purported written statement cannot be taken on record as the same has neither been signed nor affirmed by the defendants.

(iii)The purported written statement has not been signed by the advocate on record of the defendants.

(iv) Purported written statement is not dated.

(v) Purported written statement mentions that the same is signed and verified by the constituted attorney, there is no such power of attorney on the record.

(vi) Purported counterclaim also cannot be taken on record as the same has been filed without payment of any Court Fees in respect of the alleged counterclaim of the defendants.

(vii) Purported verification of the purported counterclaim is not at all a verification in law. There is no Power of Attorney of the alleged constituted attorney Shri Mihir D. Parikh on record. The purported counterclaim has not been affirmed or verified before the Officer of this Court as provided by the Gujarat High Court Rules. There is no identification of the deponent of the purported counterclaim by an Officer of this Court with regard to identity of the deponent as provided by the said Rules. No power of attorney is on record of this Court.

(viii) The purported counterclaim is also not as per the prescribed format.

(ix) No particulars of claim have been either exhibited or annexed to the purported counterclaim served on the plaintiffs or on the record of this Court.

5. Having realized their mistake, the notice of motion has been taken out by the defendants being OJ CA No. 150 of 2005 with a request to permit the defendants to amend the written statement and counterclaim and cure other defects as detailed in Annxure - B and to reverify the same in terms of the verification clause contending inter alia that the defects which have been pointed out by the plaintiffs are curable and they are technical defects and if they are permitted to cure, the same would not cause any prejudice to the plaintiffs. It has been submitted that the date of affirmation of the written statement and counterclaim was 9.12.2000, however, by mistake the date was not mentioned above verification and is at the end of the written statement and they may be permitted to state the date of affirmation being 9.12.2000 at the relevant place. It is also submitted that inadvertently the Power of Attorney in favour of constituted attorney of the defendants was not placed on record on the captioned suit and they may be permitted to place on record. So far as the objection raised on behalf of the plaintiffs that no Court Fees has been paid in respect of the counterclaim is concerned, it has been submitted on behalf of the defendants by that by mistake and through oversight, the Court Fees on the counterclaim was not paid and they are ready and willing to pay the Court Fees. It has been submitted on behalf of the defendants that non payment of Court Fees is only a formal defect, which is not fatal Page 0533 and in the interest of justice they may be permitted to pay the court fees on such terms, as may be directed by this Court. By way of OJCA No. 150 of 2005, the defendants have prayed to permit them to amend the written statement and counterclaim and to cure the defects and to permit them to pay the Court Fees by extending the time invoking the provisions of Section 149 of the Code of Civil Procedure as well as granting them one more opportunity to pay the Court Fees as required under Order VII Rule 11 (d) of the Code of Civil Procedure.

6. Shri Mihir Thakor, learned senior advocate appearing for the defendants has relied upon the decision of the Hon'ble Supreme Court in case of Uday Shankar Triyar v. Ram Kalewar Prasad Singh and Anr. and in case of Vidyawati Gupta and Ors. v. Bhakti Hari Nayak and Ors. in support of his submissions and has prayed to allow the defendants to cure the defects in the written statement and counterclaim.

7. Shri Gaurav Banerji, learned Senior Advocate appearing with Shri R.S. Sanjanwala, learned advocate with Shri Jaydeep Majmumdar, learned advocates appearing for the original plaintiffs have fairly submitted that permission to the defendants to cure the defects in the written statement and counterclaim can be granted except permitting the defendants to pay the Court Fees so far as counterclaim is concerned. He has fairly conceded that so far as other defects are concerned, they are curable and they may be permitted to cure the said defects. He has however submitted that so far as extending the time to pay the Court Fees on counterclaim is concerned, the said defect is a fatal and cannot be granted. Thus, considering the above, so far as prayer of the defendants in OJ CA No. 150 of 2005 to permit the defendants to amend the written statement and counterclaim and to cure the defects in the written statement and counterclaim except permitting the defendants to pay the Court Fees on counterclaim are concerned, the same deserves to be granted. Under the circumstances, the defendants are permitted to amend the written statement and counterclaim and to cure the defects in the written statement and counterclaim as prayed for except permitting the defendants to pay the Court Fees on the counterclaim. So far as prayer of the defendants to permit them to pay the Court Fees on counterclaim is concerned, the same is dealt with hereinafter. Under the circumstances, now the only question which is required to be considered and dealt with by this Court is whether in the facts and circumstances of the case, the defendants be permitted to pay the Court Fees on the counterclaim or not.

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8. Shri Mihir Thakor, learned Senior Advocate appearing on behalf of the original defendants has made following submissions in support of his prayer to extend the time to pay the Court Fees on counterclaim:

(i) As per the Order VIII Rule 6 (a) the counterclaim is to be treated as cross suit and to be treated as plaint and therefore, for all practical purposes, counterclaim is a suit/plaint and therefore, considering Order VII Rule 11 (b) & (c) of the Code of Civil Procedure, an opportunity is required to be given to pay the Court Fees.

(ii) The stage of rejection of the counterclaim has never come, as opportunity by the Court is to be given to pay the proper Court Fees as required under Order VII Rule 11 (b) & (c).

(iii) Present application is under Section 149 of the Code of Civil Procedure to extend the time to pay the Court Fees.

(iv) There was no positive malafide on the part of the defendants in not paying the Court Fees on the counterclaim, which was only of Rs. 15,000/- (maximum), more particularly, when full Court Fees was paid by the defendants by filing the Suit No. 18 of 2000.

(v) That there was a bona-fide mistake on the part of the counsel appearing on behalf of the defendants in not paying the Court Fees on the counterclaim as the written statement-cum-counterclaim was filed i.e. counterclaim was made in the written statement itself and therefore, inadvertently and by bona-fide mistake, the Court Fees was not paid and therefore, in absence of any positive mala-fide in not paying the Court Fees, discretion as required to be exercised while extending the time under Section 149 of the Code of Civil Procedure, may be exercised in favour of the defendants.

(vi) That the counterclaim is for 4.8 Million US $ and therefore, there cannot be a mala-fide intention on the part of the defendants in not paying the Court Fees, which comes to Rs. 15,000/- only. To non-suit the defendants on technical ground is not proper and at the most plaintiff can be compensated by payment of costs. There is a genuine counterclaim for a huge sum.

9. Meeting with the contention on behalf of the plaintiffs that there is no explanation with regard to mistake, it is submitted that when it is pointed out that there was a bona-fide mistake and/or inadvertence in not paying the Court Fees on the counterclaim, there cannot be other explanation with regard to mistake or inadvertence.

10. It is also submitted by Shri thakore that SGood Faith is defined under General Clauses Act and unless there are mala-fide intentions, everything is to be treated under the Good Faith.

11. Learned Counsel appearing on behalf of the original defendants has relied upon the following decisions in support of his above submissions:

(i) Mannan Lal v. Mst. Chhotka Bibi (dead) by her legal representative and Ors. .

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(ii) Mahasay Ganesh Prasad Ray and Anr. v. Narendra Nath Sen and Ors. .

(iii) Mohammad Mahibulla and Anr. v. Seth Chaman Lal (dead) by L.Rs. and Ors. .

(iv) Achut Ramchandra Pai and Ors. v. Nayappa Bab Balgaya and Ors. reported in AIR 1914 Bombay Page 249.

(v) Appanna Bala Koregave since deceased through L.Rs. v. Shripal Bandu Koregave since deceased through L.Rs. and Ors. .

(vi) Rai Surendra Nath and Ors. v. Smt. Naraini Devi reported in AIR 1951 Allahabad Pages - 64 & 68 (Paras - 22 to 25).

(vii) Jagat Ram v. Misar Kharaiti Ram and Anr. reported in AIR 1938 Lahore P-361.

(viii) Uday Shankar Triyar v. Ram Kalewar Prasad Singh and Anr. .

(ix) Sri Rathmavarmaraja v. Smt. Vimla .

12. So far as discretion to be exercised by the Court as provided under Section 149 of the Code of Civil Procedure is concerned, he has relied upon the following directions:

(i) Jagat Ram v. Misar Kharaiti Ram and Anr. reported in AIR 1938 Lahore P-361.

(ii) Custodian of Evacuee Property, New Delhi v. Rameshwar Dayal and Ors. .

(iii) Maltex Malsters (P.) Limited v. Allied Engineers .

(iv) Gulam Abbas v. Shri Kalyan Finance Co., Ajmer and Ors. .

(v) Dasondhi Ram and Anr. v. Kaka Ram and Ors. .

(vi) Gurdial Singh v. Mansa Singh and Ors. .

(vii) Noora Loan v. Amir Mir and Ors. reported in AIR 1972 JK Page 56.

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13. Making the above submissions and relying upon the aforesaid decisions and judgments, Shri Thakor, learned Senior Advocate appearing on behalf of the original defendants has prayed to grant time to the defendants to pay the Court Fees and/or to extend the time to pay the Court Fees on the counterclaim and he has requested to exercise the discretion as provided under Section 149 of the Code of Civil Procedure, in favour of the defendants.

14. Learned Counsel on behalf of the defendants has also submitted that even the Office also did not point out any defects with regard to non-payment of the Court Fees on the counterclaim and in fact, the defendants bonafidely moved an application for passing a decree on the counterclaim as no written statement was filed to the counterclaim by the original plaintiffs and only after such an application, the original plaintiffs have moved an application for dismissal of the counterclaim on the ground that there are defects and that Court Fees on the counterclaim is not paid. This shows how the defendants have acted in good faith and their bonafides also, otherwise the defendants would not have even prayed for a decree of counterclaim on non-filing of the written statement by the plaintiffs.

15. Shri Gaurav Banerji, learned Senior Advocate appearing on behalf of the original plaintiffs while opposing the prayer of the original defendants to extend the time to pay the Court Fees on the counterclaim and to allow/permit the defendants to cure the defects has made following submissions:

(i) Defects of not paying the Court Fees is fatal and cannot be cured.

(ii) The provisions of Order VII Rule 11 (b) & (c) of the Code of Civil Procedure would not be applicable in the facts of the present case as the said provision would be applicable in a case where there is a deficiency in paying the Court Fees meaning thereby, lesser amount of Court Fees has been paid and there might be bonafide mistake in paying lesser court fees and in that case said provisions would be applicable and opportunity is to be given to the plaintiffs and/or the defendants in the case of counterclaim to pay the deficit Court Fees.

(iii) So far as discretion to be exercised in an application under Section 149 of the Code of Civil Procedure is concerned, only in a case, where there are bona-fide mistakes, discretion is to be exercised.

(iv) A false statement has been made in paragraph - 8 of the written statement - cum - counterclaim that Court Fees has been paid and therefore, discretion in favour of the defendants is not required to be exercised.

(v) Not only that but inspite of the fact that the Court Fees was not paid on the counterclaim, the original defendants submitted an application for passing the decree on the counterclaim contending inter alia that the plaintiffs have not filed the written statement to the counterclaim.

(vi) No cause has been shown for not paying the Court Fees on the counterclaim except submitting that it is a formal defect and that due to inadvertence, the Court Fees has not been paid.

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(vii) No explanation has been given with regard to the mistake and/or inadvertence. As per Section 4 of the Court Fees Act, the Court Fees is to be paid along with the plaint/counterclaim and if the discretion is exercised, Section 4 of the Court Fees Act would become nugatory.

(viii) There is a distinction between non-payment of Court Fees and insufficiency of Court Fees and in case of insufficiency of Court Fees, there can be some bonafide mistakes and therefore, in that case, discretion may be exercised.

(ix) So far as Section 149 is concerned, it is discretionary and extension of time to pay the Court Fees cannot be claimed as a matter of right.

16. Meeting with the decisions cited on behalf of the defendants in case of Mannan Lal(supra), it is submitted that in the said case, there was some doubt about the quantum of Court Fees and therefore, the said decision will not be of any assistance to the defendants.

17. Shri Banerji, learned Senior Advocate has heavily relied upon the decision of the Full Bench of the Allahabad High Court in case of Rai Surendra Nath and Ors. (supra) and has submitted that the said decision has also been approved by the Hon'ble Supreme Court.

18. Shri Banerji, learned Senior Advocate has relied upon the following decisions in support of his above submissions and has prayed to reject the application submitted by the defendants to extend the time to pay the Court Fees.

i. S. Wajid Ali v. Mt. Isar Bano Urf Isar Fatma .

ii. Buta Singh v. Union of India reported in 1995 (5) Page 5 SCC Page 284.

iii. Oriental Insurance Company Limited v. Mahajibhai M. Patel reported in (1996) 2 GLH Page 715.

iv. Madhav Leasing Finance (P) Limited and Anr. v. Erose Educational Infotech Pvt. Ltd. reported in 68 (1997) DLT P 846.

v. Kuttikkadan Engineering Company v. Hindustan Steel Limited reported in 1997 KLT P 488.

vi. Badri Nath L. Tirath Ram and Anr. v. St. of PEPSU and Ors. reported in 1357 PEPSU 14 : AIR V 44 C 3 Jan.

19. Making the above submissions and relying upon the above decisions, learned Counsel appearing on behalf of the original plaintiffs has requested to dismiss/reject the counterclaim and not to extend the time to pay the Court Fees on the counterclaim.

20. Heard the learned Advocates appearing on behalf of the respective parties.

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21. As stated above, one application is filed by the applicants - original defendants to pass a decree in terms of the counterclaim as no written statement to the counterclaim has been filed. As it was pointed out by the original plaintiffs that there are defects in the written statement and the counterclaim and even the Court Fees have not been paid on the counterclaim, another application has been filed by the applicants - original defendants to amend the written statement and the counterclaim by permitting the defendants to cure the defects and to extend the time to pay the Court Fees on the counterclaim. One application is filed by the original plaintiffs to struck off the written statement and the counterclaim and to pronounce the judgment on the basis of the facts contained in plaint in the suit. It is not disputed that as per the two decisions of the Hon'ble Supreme Court in case of Uday Shankar Triyar (supra) and in case of Vidyavati Gupta and Ors. (supra), all the defects except the defect with regard to payment of Court Fees on the counterclaim, can be cured. As stated hereinabove, the only objection on behalf of the plaintiffs is with regard to considering the prayer of the defendants to extend the time to pay the Court Fees on the counterclaim. According to the learned Counsel appearing on behalf of the original plaintiffs, the said defect is fatal, which cannot be cured. Under the circumstances, this Court is now required to consider the prayer on behalf of the defendants to extend the time to pay the Court Fees on the counterclaim.

22. Before dealing with the aforesaid aspects, one another aspect is also required to be considered i.e. the prayer of the original defendants to pass a decree to the counterclaim on non-filing of the written statement to the counterclaim by the original plaintiffs. It is not in dispute that as on today, the written statement and the counterclaim are defective and the original defendants have prayed to permit them to amend the written statement and the counterclaim and to extend the time to pay the Court Fees on the counterclaim. Thus, when written statement to the defective counterclaim has not been filed, it will not be open for the defendants to pray for a decree on the ground that the written statement to the defective counterclaim has not been filed. Apart from that whether on omission to file written statement straight way decree can be passed is already considered by the Hon'ble Supreme Court and it is held by the Hon'ble Supreme Court that omission to file written statement will not automatically result into passing a decree by the Court and the plaintiff or the defendant as the case may be has to prove his case. For the above, the decisions of the Hon'ble Supreme Court in case of Modula India v. Kamakshya Singh Deo reported in 1988 (6) SCC Page - 619, Ramesh Chand Ardawatiya v. Anil Panjwani and in Page 0539 case of Kailash v. Nanhku and Ors. are required to be referred to. Under the circumstances, the prayer of the defendants to pass a decree on the counterclaim on non-filing of the written statement to the counterclaim (which at present is defective), cannot be granted. Similarly, the prayer of the original plaintiffs to pass a decree considering the averments in the plaint also cannot be granted. Plaintiffs are required to prove their case. Now whether the prayer of the original plaintiffs to struck off the written statement and the counterclaim as they are defective are considered and dealt with hereinafter.

23. The learned Counsel appearing on behalf of the original defendants has relied upon Order VIII Rule 5, Order VIII Rule 10, Order VIII Rule 6(a), Order VII Rule 11(b) & (c) and Section 149 of the Code of Civil Procedure. It is the contention on behalf of the applicants - original defendants that an opportunity is to be given by the Court to the plaintiffs and/or to the defendants (in case of counterclaim) to pay the deficient Court Fees and unless and until, such an opportunity is given, the suit and/or the counterclaim, as the case may be, cannot be dismissed and only if within a stipulated extended time as directed by the Court, the Court Fees is not paid, the suit and/or the counterclaim, as the case may be, can be dismissed. The learned Counsel appearing on behalf of the original plaintiffs has vehemently submitted that provisions of Order VII Rule 11 (b) & (c) would not be applicable in the facts of the present case, as in the present case it is a case of total non-payment of the Court Fees and it is not a case of deficiency in the Court Fees. According to learned Counsel appearing on behalf of the plaintiffs, there can be a bonafide mistake in the payment of Court Fees and there might be shortfall and in that case, Order VII Rule 11 (b) & (c) can be attracted and not in the case of total non-payment of Court Fees. Order VII Rule 11 (b) & (c) of the Code of Civil Procedure reads as under:

Order VIII Rule 11 : Rejection of plaint:

The plaint shall be rejected in the following cases:

(a) X X X

(b) where the relief claimed is undervalued, and the plaintiff, on being required by the Court to correct the valuation within a time to be fixed by the Court, fails to do so;

(c) where the relief claimed is properly valued but the plaint is written upon paper insufficiently stamped, and he plaintiff, on being required by the Court to supply the requisite stamp-paper within a time to be fixed by the Court fails to do so;

(d) X X X.

24. Considering the above provisions, it appears that Clause - (b) of Order VII Rule 11 would be attracted where the relief claimed is under Page 0540 valued and Clause -(c) would be attracted in a case where the relief claimed is properly valued but plaint is written upon paper insufficiently stamped and the plaintiff, on being required by the Court to supply the requisite stamp paper within a time to be fixed by the Court, fails to do so. Thus, on plain reading of Order VII Rule 11 (b) & (c), the said provisions would be attracted only where the plaint is insufficiently stamped. If the plaint is insufficiently stamped then the Court can reject the plaint if the plaintiff fails to supply the requisite stamp paper within a time to be fixed by the Court. Thus, in the case of plaint insufficiently stamped, the Court is required to call upon the plaintiff to supply the requisite stamp paper within a stipulated time and even thereafter if the plaintiff fails to do so, the plaint shall be rejected. Thus, on plain reading of the aforesaid provisions, when there is a case of total non-payment of Court Fees Order VII Rule 11 (b) & (c) would not be attracted.

25. The learned advocate appearing for the applicants - original defendants has then relied upon Section 149 of the Code of Civil Procedure in support of his prayer to extend the time to pay the Court Fees on counterclaim by exercising the discretion as provided under Section 149 of the Code of Civil Procedure. The learned Counsel appearing on behalf of the applicants - original defendants has submitted that in fact, the provisions of Order VII Rule 11 (b) & (c) are relied upon to submit that when in a case of insufficiently stamped plaint, the powers are given to the Court to grant time to the plaintiffs to pay / to supply the requisite stamp paper, the Court is also required to grant reasonable time and/or extend the time to pay the Court Fees even while exercising the powers under Section 149 of the Code of Civil Procedure.

At this stage, the learned Counsel appearing on behalf of the original plaintiffs has submitted that as in a case of total non-payment of the Court Fees, Order VII Rule 11 (b) & (c) will not be applicable and in that case, the provisions of Section 149 of the Code of Civil Procedure may be applicable, however, in that case, it is the discretion of the Court whether in the facts and circumstances of the case, time should be extended to pay the Court Fees or not. Under the circumstances, this Court is required to consider now whether in the present facts and circumstances of the case, the discretion should be exercised in favour of the applicants - original defendants to extend the time to pay the Court Fees on the counterclaim or not. Section 149 of the Code of Civil Procedure, reads as under:

Section 149 :-Power to make up deficiency of Court Fees -

where the whole or any part of any fee prescribed for any document by the law for the time being in force relating to court fees has not been paid, the Court may, in its discretion, at any stage, allow the person, by whom such fee is payable, to pay the whole or part, as the case may be, of such court fee and upon such payment the document, in respect of which such fee is payable, shall have the same force and effect as if such fee had been paid in the first instance.

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26. Shri Mihir Thakor, learned Senior Advocate appearing on behalf of the applicants - original defendants has relied upon the decision of the Hon'ble Supreme Court in case of Madanlal (supra), and Mohammad Mahibulla and another (supra). He has also relied upon two decisions of the Bombay High Court in case of Achut Ramchandra Pai and others (supra) and Appanna Bala Koregave (dead) through L.Rs. (supra). In case of Mananlal (supra), considering Section 149 of the Code of Civil Procedure and dealing with the objections relying upon Section 4 of the Court Fees Act that the Court Fees is to be paid on presentation of the plaint and/or the appeal, the Hon'ble Supreme Court in paras - 12 to 14 has observed that the aforesaid Section 149 of the Code of Civil Procedure mitigates the rigour of Section 4 of the Court Fees Act and it is for the Court to harmonize the provisions of both the court fees Act and Civil Procedure Code by reading Section 149 of the Civil Procedure Code and proviso to Section 4 of the Court Fees Act and allowing the deficit to be made good within a period of time fixed by it. If the deficit is made good no possible objection can be raised on the ground of bar of limitation, as Section 149 expressly provides that the document is to have validity with retrospective effect.

In case of Mahasay Ganesh Prasad Ray and Anr. (supra), the Hon'ble Supreme Court dealing with the submission on behalf of the defendant that by extending the time to pay the deficient Court Fees, their valuable right to plead the bar of limitation would be taken away, the Hon'ble Supreme Court has observed that the power of the High Court to allow the amendment under Section 149 of the Code of Civil Procedure is clearly one in which the plea of bar of limitation may be ignored. The contention therefore that by allowing the amendment the High Court took away the appellant's valuable right to plead the bar of limitation cannot be accepted. It is further observed that it was a matter of discretion for the High Court and by exercising such a discretion any recognized principles of law are not violated and/or by granting leave to amend, no gross injustice has been done. The Hon'ble Supreme Court has further observed that the payment of the Court Fees is a matter primarily between the Government and the plaintiff. In case of Achut Ramchandra Pai and Ors. (supra), the Division Bench of the Bombay High Court has observed that the concession referred to in Section 149 is not restricted to cases where there is a bona fide misunderstanding of the law as to valuation; the inference is that the legislature intended that the Court should have a free and unshackled discretion in the matter.

27. So far as discretion to be exercised while exercising the powers under Section 149 of the Code of Civil Procedure is concerned, in the case of Jagat Ram (supra), the Full Bench of the Lahore Court has observed that the discretion conferred on the Court by Section 149 is normally expected Page 0542 to be exercised in favour of the litigant except in case of Scontumacy or positive malafides or reasons of a similar kind and the question of bonafides in this connection should be construed in the sense that the word is used in the General Clauses Act and not as used in the Limitation Act. In case of Custodian of Evacues Property, New Delhi (supra), the Delhi High Court has also observed that the discretion conferred on the Court by Section 149 is normally expected to be exercised in favour of the litigant except in case of contumacy or positive malafides. It is also further held that for the purposes of judging whether the discretion under Section 149 should or should not be exercised in favour of the litigant, a thing shall be presumed to be done bonafide if it is done honestly, whether it is done negligently or not. In case of M/s. Maltex Malsters (P.) Limited (supra), the Delhi High Court has made similar observations. In case of Gulam Abbas (supra), dealing with Section 149 of the Code of Civil Procedure, the Rajasthan High Court has observed, as under:

The discretion under Section 149 to allow court fee to be paid at any stage being judicial has to be exercised like any other judicial discretion and cannot be exercised in favour of a party who has not acted bonafide or was not under any honest mistake or doubt and the words Sbonafide or Sgood faith have to be taken in the sense contemplated by the General Clauses Act and not as under the Limitation Act and where there has been a mistake not attributable to any malafides the Court may be justified in condoning the delay on reasonable terms and the discretion is normally expected to be exercised in favour of a litigant except in cases of contumacy or positive malafides or reasons of a similar kind.... (Para 8) Where the Court exercises the discretion under Section 149 in favour of a party it does not thereby deprive the other party of any of the vested rights, as, such right might become vested only when either there is no application under Section 149 or when such application is filed the discretion is not exercised in favour of the party making the application. AIR 1953 SC 431 and AIR 1957 Raj 367, Rel. on case law ref.... (Para 11)

28. Similar view also has been taken by the Himachal Pradesh High Court in case of Dasondhi Ram and Anr. (supra), by the Punjab and Haryana High Court in case of Gurdial Singh (supra) and by the J & K High Court in case of Noora Loan (supra).

29. Now, considering the aforesaid various decisions and considering Section 149 of the Code of Civil Procedure, the proposition of law emerges is that while considering the application under Section 149 of the Code of Civil Procedure, normally, the Court is required to exercise the discretion Page 0543 in favour of the litigant unless there are positive malafides and by extending the time to pay the deficient Court Fees, no vested right of the either party has been taken away and the dispute with regard to Court fees is between the State Government and the concerned litigant and that when the discretion is exercised while granting the time to pay the Court Fees under Section 149 of the Code of Civil Procedure, it will relate back to the original presentation.

30. Learned Counsel appearing on behalf of the original plaintiffs while opposing the prayer of the original defendants to extend the time to pay the Court Fees on the counterclaim has heavily relied upon the decision of the Full Bench of the Allahabad High Court in case of S. Wajid Ali (supra), which according to him has been approved by the Hon'ble Supreme Court in case of Mananlal (supra). According to the learned Counsel appearing on behalf of the original plaintiffs, it has been held by the Full Bench of Allahabad High Court that while exercising the power under Section 149 of the Code of Civil Procedure and exercising discretion, the discretion must be a judicial discretion and cannot be arbitrary and the same cannot be claimed as a matter of right. It is submitted by him that where insufficiency in the Court Fees is due to bonafide mistake in calculating the amount payable, or due to circumstances beyond the control of the party concerned, such as robbery, non-availability of Court Fee stamps, etc, the Court will, no doubt use its discretion in favour of the litigant; however, where a litigant is able to pay full Court Fees and yet presents a document insufficiently stamped, the Court should not exercise the discretion in his favour. Relying upon the very judgment, more particularly, paras - 23, 24 and 25, learned Counsel appearing on behalf of the applicants - original defendants has submitted that even in the very judgment the Allahabad High Court has observed that where insufficiently stamped document has been received/filed or used in a Court through mistake or inadvertence time will ordinarily be granted for making good the deficiency. In the said judgment, the Full Bench of the Allahabad High Court has observed as under:

Para - 23, In my opinion, where an insufficiently stamped document has been received, filed or used in a Court, through mistake or inadvertance, time will ordinarily be granted for making good the deficiency.

Para - 24 , Where the deficiency is discovered at the time of the presentaion of an insufficiently stamped document, no hard and fast rule can be laid down as to the circumstances in which the discretion under Section 149 will be exercised by a Court. Each case will have to be decided upon its own facts. All that can be laid down is that ; (a) where insufficiency in court fee is due to a bona fide mistake in calculating the amount payable, or to circumstances beyond the control of the party concerned, e.g. Robbery, non-availability of court fee stamps, etc., the Court will, no doubt, use its discretion in favour of the litigant; and (b) where a litigant is able to pay full court fee and yet presents a document insufficiently stamped either because he Page 0544 expects a compromise in the case or he wants to await the result of some other litigation, or because he negligently failed to bring sufficient money with him for paying the court fee, or for any similar reason; or where he is guilty of contumacy or mala fides, e.g. when he wants to harass the other side by continuing a litigation, time will not be granted.

Para - 25, there may be cases lying between these two extremes. But no general rule can be laid down about them and they will have to be decided according to their own circumstances.

31. Learned Counsel appearing on behalf of the original plaintiffs has also relied upon the decision of the Hon'ble Supreme Court in case of Buta Singh (dead) By L.Rs. (supra), more particularly, observations in para - 9 of the said judgment. It is required to be noted that in the case before the Hon'ble Supreme Court it was found on facts that the party deliberately paid insufficient Court Fees and there was no bonafides on the part of the appellants. Thus, the observations of the Hon'ble Supreme Court in the said decision are considering the facts of that case. Even in the said decision, the Hon'ble Supreme Court has also observed that the bona-fide mistake on the part of the appellant or the applicant in making the deficient Court Fees may be a ground to exercise discretion in favour of the appellant.

32. Learned Counsel appearing on behalf of the original plaintiffs has also relied upon the decision of the Division Bench of this Court in case of Oriental Insurance Co. Ltd. (supra), however, considering the facts before the Division Bench, it appears that in the said case, inspite of the fact that the attention of the learned advocate was drawn by the Registry that there was deficient Court Fees, the Office Objections were not removed and the Court Fees was not paid. Learned Counsel has also relied upon para - 9 of the decision of the Delhi High Court in case of Madhav Leasing Finance (P) Limited and Anr. (supra), however, it is required to be noted that the Delhi High Court has found that there were no bonafides shown. He has also relied upon para - 4 of the judgment of the Kerala High Court in case of Kuttikkadan Engineering Company (supra), however, it is required to be noted that in the said case the Kerala High Court was considering the provisions of Order VII Rule 11 of the Code of Civil Procedure and total non-payment of Court Fees and was not considering the discretion to be exercised under Section 149 of the Code of Civil Procedure. As stated hereinabove, this Court has already taken a view that in case of total non-payment of Court Fees, provisions of Order VII Rule 11 (c) and granting of the opportunity would not arise and for that purpose, Section 149 of the Code of Civil Procedure would be attracted. Similarly, the decision in case of Badri Nath L. Tirath Ram and Another (supra) would also not be helpful to the original plaintiffs as in the said case also the Division Bench was considering whether in case of the total non-payment of Court Fees Order VII Rule 11 would be applicable or not.

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33. Now, considering all the aforesaid decisions, the facts of the present case are required to be considered. The applicants - original defendants have come out with a case that due to bona-fide mistake and inadvertence, the Court Fees on the counterclaim has not been paid. On the other hand, it is the contention on behalf of the original plaintiffs that inspite of the fact that Court Fees has not be paid on the counterclaim, it is submitted in the written statement that the full Court Fees has been paid. It is also the contention on behalf of the plaintiffs that inspite of the fact that Court Fees has not been paid on the counterclaim, it is prayed to pass a decree on the counterclaim on non-filing of the written statement to the counterclaim. It is also the contention on behalf of the original plaintiffs that no explanation is given with regard to mistake or inadvertence and therefore, no discretion should be exercised in favour of the original defendants by extending the time to pay the Court Fees on the counterclaim. Now, considering the decisions which are referred to hereinabove and as observed earlier, while exercising the powers under Section 149 of the Code of Civil Procedure, discretion is to be exercised in favour of a litigant unless there are positive malafides and deliberately the Court Fees has not been paid. When a litigant has submitted that there was a bonafide mistake and due to inadvertence the Court Fees was not paid, there cannot be any other reasons to be pointed out for inadvertence. It is to be noted that in the present case, the applicants - original defendants are defending the suit as well as the counterclaim tooth and nail. It is also required to be noted that the claim of the applicants - original defendants in the counterclaim is for Rs. 4.8 Million US $, which is not a small amount and the Court Fees on the same was required to be paid of Rs. 15,000/- only. It is also required to be noted that earlier the applicants - original defendants had filed Suit being Suit No. 18 of 2000 for limiting the liabilities and had paid full Court Fees. Thus, there cannot be any malafide intention on the part of the applicants - original defendants in not to paying the Court Fees of Rs. 15,000/-. By not paying the aforesaid Court Fees of Rs. 15,000/- only, the applicants - original defendants were not to be benefited. There cannot be other reason for the applicants - original defendants not to pay the Court Fees of Rs. 15,000/-. The applicants - original defendants have clearly come out with a case that as it was a written statement-cum- counterclaim, due to bona-fide mistake and through inadvertence the Court Fees has not been paid. The applicants - original defendants are not required to come out with any other reasons, more particularly, the learned Counsel who was appearing on behalf of the applicants - original defendants has expired, otherwise he could have filed an affidavit and/or pointed out that it was his bona-fide mistake for not paying the Court Fees on the counterclaim. Under the circumstances and in absence of any positive mala-fides, this Court is of the firm opinion that the discretion is to be exercised in favour of the applicants - original defendants by extending the time to pay the Court Fees on the counterclaim by the applicants - original defendants on payment of some costs. It is also required to be noted that at present, the applicants - original defendants are required to pay the Court Fees of Page 0546 Rs. 75,000/-, which was at the relevant time Rs. 15,000/- for which also, the learned advocate appearing on behalf of the applicants - original defendants has submitted that they have no objection. Considering the aforesaid facts and even conduct of the applicants - original defendants that while filing the Civil Suit No. 18 of 2000 praying for limiting the liability, full Court Fees was paid by the applicants - original defendants and there are no positive malafides in not paying the Court Fees on the counterclaim and considering the counterclaim of Rs. 4.8 Million US $ and considering the fact that the Court Fees to be paid was only of Rs. 15,000/- and considering the fact that the applicants - original defendants are seriously contesting the counterclaim, time to pay the Court Fees on the counterclaim is required to be extended by exercising the discretion in favour of the applicants - original defendants. To non-suit the defendants on technical ground is not proper.

34. For the reasons stated above, OJ CA No. 140 of 2004 by which the applicants - original defendants have prayed to pass a decree on the counterclaim is dismissed. OJ CA No. 150 of 2005 by which, the applicants - original defendants have prayed to amend the written statement and the counterclaim and cure the other defects is hereby allowed and the applicants - original defendants are granted 4 weeks time to cure the defects as prayed for and the applicants - original defendants are permitted to place on record the amended written statement and the counterclaim. The applicants - original defendants are also permitted to place on record the copy of the Power of Attorney dated 4.12.1998. The applicants - original defendants are granted 2 weeks time to pay the Court Fees on the counterclaim i.e. Rs. 75,000/- and failing to pay the aforesaid Court Fees within the stipulated time, the counterclaim will be dismissed automatically. As OJ CA No. 150 of 2005 is allowed and even otherwise, for the reasons stated above OJ CA No. 61 of 2005 by which the original plaintiffs have prayed that the written statement - counterclaim filed by the defendants be struck off and to pronounce the judgment on the basis of the facts contained in the Admirality Suit No. 5 of 1998 is hereby dismissed. The applicants - original defendants are directed to pay the costs of all the aforesaid applications to the plaintiffs which is quantified at R.15,000/-, to be paid by the applicants - original defendants within a period of 2 weeks from today.

FURTHER ORDER At this stage, Shri Sanjanwala, learned advocate appearing for the plaintiffs has prayed to stay the judgment and order so as to enable the plaintiffs to challenge the present judgment and order before an Appropriate Forum. Under the circumstances, the operation of the present judgment and order is stayed upto 15th February, 2007. Consequently, the time in favour of the original defendants to amend the written statement and the counterclaim and to pay the Court Fees, as stated above, will start from 15th February, 2007.

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Gujarat High Court