Justice S.V.N. Bhatti, Justice N.V. Anjaria, Supreme Court
Order VII Rule 11 CPC | Question Of Payment Of Court Fee Must Be Deferred For Evidence When Joint Possession Is Pleaded: Supreme Court
|The Court held that whether plaintiffs are in joint possession to warrant a fixed court fee is a factual question to be threshed out during trial.
The Supreme Court has held that when deciding an application for rejection of a plaint under Order VII Rule 11 of the Code of Civil Procedure, 1908, the determination of court fees cannot be concluded at the threshold if it hinges on disputed factual assertions regarding joint possession and the nature of the challenged conveyance.
The Court emphasized that where the plaint unequivocally pleads joint possession and non-executant status in respect of a disputed transfer document, the plaint cannot be rejected straightaway, and the precise valuation and court fee obligations must be deferred for adjudication after evidence is adduced during the trial.
A Bench comprising Justice S.V.N. Bhatti and Justice N.V. Anjaria while passing the judgment in an appeal arising out of a property dispute originating in Panchkula, Haryana, observed, “…the Court is of the view that the question of payability of the court fee is required to be deferred to be considered and shall depend upon the evidence which may finally be led establishing the determinative facts in that regard”.
Advocate Amit Aggarwal appeared for the appellant and Senior Advocate Manoj Swarup appeared for the respondent.
The original plaintiffs filed a suit seeking a declaration that they, along with the defendants, were co-owners having a one-fourth share each in a residential house purchased from joint family funds. They further sought a declaration that a transfer of the property obtained by one family member was null and void due to fraud, along with prayers for separate possession and a permanent injunction.
Defendant No. 2 filed an application under Order VII Rule 11 of the Code of Civil Procedure, 1908, contending that because the plaintiffs were out of possession and sought separate possession, they were obligated to pay ad-valorem court fee on the market value of the property under the Court Fees Act, 1870. The plaintiffs resisted, maintaining that as non-executants of the fraudulent transfer deed who were in joint family possession, only a fixed court fee was payable.
The Trial Court dismissed the rejection application, holding that the plaint averments explicitly claimed joint possession and non-executant status, thereby exempting them from ad-valorem fees at the preliminary stage based on established precedent. However, the Punjab and Haryana High Court reversed this ruling in revision, concluding that the prayer for separate possession inherently implied a lack of possession, and directed the plaintiffs to deposit ad-valorem court fees within two weeks failing which the plaint would stand rejected. The plaintiffs subsequently approached the apex court.
Setting aside the High Court order, the Supreme Court highlighted that for the purposes of Order VII Rule 11, only the averments in the plaint must be scrutinised. Reaffirming the principles in Suhrid Singh alias Sardool Singh v. Randhir Singh and Others (2010) 12 SCC 112, the Court observed that a non-executant in possession seeking a declaration that a deed is void pays a fixed court fee, whereas a non-executant out of possession seeking consequential possession must pay ad-valorem fees.
“While the case of the plaintiffs in the plaint about they being in joint possession and the assertive statements on that score would not justify the rejection of the plaint even on the ground stated in the application under Order VII Rule 11, CPC. The question of payment of court fee will have to be looked into in segregation, for, the same would depend upon not only the possession aspect or the prayer in that regard, but also the aspects relating to the sale deed claimed to have been executed and the other facts relevant thereto. They are the issues to be threshed out on evidence. Therefore, the question of payment of court fee, whether ad valorem or fixed court fee, could be addressed and considered only upon establishment of such germane facts upon leading of evidence in the suit”, the Bench observed.
The Court allowed the appeal and restored the Trial Court's order refusing to reject the plaint under Order VII Rule 11. It modified the ruling to direct that the specific issue of whether fixed or ad-valorem court fee is payable shall be deferred, considered, and decided by the Trial Court after evidence is led by the parties during trial.
Cause Title: Neelam Sharma and Others v. Amita Passan and Others (Neutral Citation: 2026 INSC 913)
Appearances:
Appellant: Amit Aggarwal, Counsel.
Respondent: Manoj Swarup, Senior Counsel.