M. Narayanagowda vs Varghese

Ram Mohan Reddy, J.—Plaintiff in O.S. No. 324/2011 on the file of Additional District and Sessions Judge, Fast Track Court-V, Bengaluru Rural District, Bengaluru, aggrieved by the order dated 18th August 2012 on issue No. 8 directing Plaintiff to pay court fee on market value of the property by filing a separate valuation slip, has presented this petition under Article 227 of the Constitution of India.

Petitioner instituted O.S. No. 324/2011 arraigning respondents as party defendants for declaration, mandatory injunction to demolish the building, permanent injunction and possession of the land measuring 1 gunta in Sy.No. 109/3, and 6 guntas in Sy.No. 109/4 of Bilishivale village, Bidarahalli Hobli, Bengaluru East Taluk. The valuation for the purpose of court fee was on the basis that lands were agricultural lands assessed to land revenue and therefore the market value of the land was to be determined on the basis of Section 7(2)(b) read with Section 24(b) and Section 26(c) of the Karnataka Court Fee and Suits Valuation Act, 1958 (''the Act'' for short) and accordingly paid court fee of Rs. 50/-.

Suit was opposed by filing written statement, inter-alia contending that the court fee paid was insufficient, since the suit schedule property was not an agricultural land, but put to use for construction of building and assessed to Corporation tax under the Karnataka Municipal Corporations Act, 1976, since the defendants had purchased the same as vacant sites and put up construction after taking loans from banks. The Trial Court framed issues of which issue No. 8 reads thus:

"Whether the court fee paid by the plaintiff is sufficient?" 4. It appears that at the first instance, the Court recorded a finding on preliminary issue No. 8 that the court fee paid was sufficient which when called in question in W.P. No. 10215/2012 (wrongly mentioned as W.P. No. 1015/2012), this Court set-aside the order and remitted the proceeding for fresh consideration with a direction to consider the documents filed by the respondents and thereafter pass orders in accordance with law. In compliance with the said order, the Trial Court having considered the material on record, passed the order impugned.

In order to appreciate the contention of the parties, it is desirable to extract the provision of Section 7(2)(b) of the Act which reads thus:

"7. Determination of market value: (1) x x x

(2) The market value of land in suits falling under section 24(a), 24(b), 26(a), 27, 28, 29, 31, 35(1), 35(2), 35(3), 36, 38, 39 or 45 shall be deemed to be-

(a) Where the land forms an entire estate, or a definite share of an estate, paying annual revenue to Government, or forms part of such an estate and is recorded in the Deputy Commissioner''s register as separately assessed with such revenue and such revenue is permanently settled-twenty-five times the revenue so payable:

(b) Where the land forms an entire estate, or a definite share of an estate, paying annual revenue to Government, or forms part of such estate and is recorded as aforesaid, and such revenue is settled, but not permanently- twelve and a half times the revenue so payable;

(c) x x x x

(d) x x x x"

Section 24(a) deals with prayer for a declaration and possession of property to which the declaration relates, fee shall be computed on the market value of the property or on Rs. 1,000/- whichever is higher. Section 24(b) of the Act relates to suit for declaration not falling under Section 25 of the Act wherein the prayer is for a declaration and for consequential injunction and the relief sought is with reference to any immovable property, fee shall be computed on one half of the market value of the property or on Rs. 1,000/- whichever is higher.

Having regard to the aforesaid statutory provisions, it is needless to state that Section 7(2)(a) applies where land is assessed on permanent basis while Section 7(2)(b) is applicable to land assessed but not on a permanent basis. It is also well settled that Courts have to lean in favour of a person who pays fee rather than in favour of State and hold that case falls under Section 7(2)(b) which is more favourable to the litigant than under Section 7(2)(d) which appears to be more onerous. Reference be made to a decision of Division Bench of this Court in Ramachandra Gajanana Hegde Vs. Ganapati Umamaheshwar Hegde and Others, so also in J.M. Narayana and Others Vs. Corporation of the City of Bangalore and Others, , it is held that Section 7 of the Act creates a legal fiction regarding market value of lands that form an entire estate or a definite share of an estate are concerned and paying annual revenue to the Government and Section 7(2)(b) is significant as it implies that the liability to pay revenue must be clear and subsisting one.

Facts of this case clearly disclose that the suit schedule properties are agricultural lands situated in Bengaluru District and for the year 2011-12 when the suit was instituted, assessed to land revenue under the Karnataka Land Revenue Act, 1964, regard being had to the RTC pahani at pages 129 and 130 as well as revenue paid receipts pages 132 and 134, of the paper book. Therefore, in the suit for declaration and possession of the aforesaid immovable property being agricultural land not being garden land covered by Section 7(2)(d), but since assessed to land revenue, falls under Section 7(2).

The Trial Court though noticed the said fact, nevertheless, meandered, observing that the suit schedule properties though agricultural lands but the lands surrounding have been put to use for non agricultural purpose as a layout of residential sites over which buildings are erected and therefore the suit schedule properties are deemed to be part of the layout. This presumptive finding is not only erroneous but absurd. What is required to be seen in the matter of payment of court fee under the Act is the suit schedule property and not the lands surrounds the property as also the purpose for which they are put to. Respondents claim to have put up construction of building on the suit schedule properties, though admittedly in the absence of an order under Section 95 of the Karnataka Land Revenue Act, 1964, permitted diversion of land from agricultural to non agricultural purpose, as well as formation of a lay out of residential sites not authorized and sanctioned by the authority competent under the Karnataka Town and Country Planning Act, 1961 and the rules framed thereunder. The mere fact that BBMP issued a katha certificate and collected tax under the Karnataka Municipal Corporation Act, 1976 does not lead to a presumption that the suit schedule properties are not agricultural lands of assessed to land revenue.

In my considered opinion, the Trial Court went tangent to the point, in controversy, and recorded findings contrary to admitted facts and the prima-facie material available disclosing that the suit schedule properties are assessed to land revenue.

In the light of the decision in Ramachandra Gajanana Hegde''s case (supra) of the Division Bench of this Court, it is necessary to lean in favour of petitioner/plaintiff who is required to pay court fee rather than in favour of State and hold that the payment of court fee is based on Section 7(2)(b) which is more favourable for the plaintiff.

It is needless to state that if after a trial there is material laid before the Trial Court over the factum of the suit schedule properties, diverted from agricultural use to non-agricultural purposes and defendants right over the suit schedule properties to put up construction of the building on the said properties taxed under the Karnataka Municipal Corporations Act, 1976 and not land revenue under the Karnataka Land Revenue Act, 1964, the trial Court is at liberty to direct the plaintiff to pay the court fee accordingly.

In the result, this petition is allowed. The order dated 18th August 2012 is quashed subject to the observations supra.