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CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2137 of 1988.

From the Judgment and order dated 14.3.1986 of the Delhi High Court in F.A.O. (O.S.) No. 65 of 1986.

Soli J. Sorabjee, S.K. Mehta, P.H. Parekh and M.K.S. Menon for the Appellants.

Rajinder Sachar, K.C. Dua and G.S. Sistan for the Respondents.

The Judgment of the Court was delivered by DUTT, J. Special leave is granted. Heard learned Counsel for the parties.

This appeal is at the instance of the defendants and is directed against the judgment of the Division Bench of the Delhi High Court whereby the Division Bench affirmed the judgment of a learned Single Judge of that Court rejecting the contention of the appellants that the suit was undervalued by the plaintiff-respondent and, accordingly, the plaint should be rejected under clause (b) of Rule 11 of order VII of the Code of Civil Procedure.

The respondent, who is the plaintiff, has filed a suit against the appellants, inter alia, for dissolution of partnership and for accounts. The suit has been valued for the purpose of jurisdiction at Rs.25 lakhs and at Rs.500 for the purpose of court fee.

The appellants filed an application wherein a preliminary objection was raised as to the valuation of the suit. It was contended by them that the relief sought for in the suit had been grossly undervalued and the Court should reject the plaint under order VII, Rule 11(b) of the Code of Civil Procedure. The learned Single Judge of the High Court overruled the said preliminary objection and held that the suit was not undervalued. On appeal by the appellants, a Division Bench of the High Court took the same view as that of the learned Single Judge. The Division Bench placed reliance upon and followed a Full Bench decision of the same High Court in Smt. Sheila Devi & Ors. v. Shri Kishan Lal Kalra & Ors., ILR 1974 Delhi 491 where it has been observed, inter alia, that paragraph (iv) of section 7 of the Court Fees Act gives a right to the plaintiff in any of the suits mentioned in the clauses of that paragraph to place any value that he likes on the relief he seeks, subject, however, to any rule made under section 9 of the Suits Valuation Act and the Court has no power to interfere with the plaintiffs valuation. The Division Bench felt itself bound by the said Full Bench decision and, accordingly, it dismissed the appeal of the appellants. Hence this appeal.

In this connection, we may refer to the provision of order VII, Rule II(b) of the Code of Civil Procedure, which provides, inter alia, that the plaint shall be rejected 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. It is manifestly clear from the provision of order VII, Rule II(b) that a Court has to come to a finding that the relief claimed has been undervalued, which necessarily means that the Court is able to decide and specify proper and correct valuation of the relief and, after determination of the correct value of the relief, requires the plaintiff to correct his valuation within a time to be fixed by the Court. If the plaintiff does not correct the valuation within the time allowed, the plaint is liable to be rejected. The question is whether in a suit for accounts simpliciter, the Court can come to a finding as to the proper and correct value of the relief until the final determination is made. In our opinion, ordinarily it is not possible for the Court at a preliminary stage to determining the value of the relief in a suit for accounts simpliciter. If the Court is itself unable to say what the correct valuation of the relief is, it cannot require the plaintiff to correct the valuation that has been made by him. Indeed, in a suit for accounts it is also difficult for the Court to come to a finding even as to the approximate correct valuation of the relief. In such a case, the Court has no other alternative than to accept plaintiff's valuation tentatively.

In Tara Devi v. Sri Thakur Radha Krishna Maharaj, [1987] 4 SCC 69 it has been laid down by this Court that in a suit for declaration with consequential relief falling under section 7(iv)(c) of the Court Fees Act, the plaintiff is free to make his own estimation of the relief sought in the plaint and such valuation both for purposes of court fee and jurisdiction has to be ordinarily accepted. Further it has been observed that it is only in cases where it appears to the Court on a consideration of the facts and circumstances of the case that the valuation is arbitrary, unreasonable and the plaint has been demonstratively undervalued, the Court can examine the valuation and can revise the same. In that case, the plaintiff had valued the lease-hold interest on the basis of the rent and such valuation was held to be reasonable and not demonstratively arbitrary.