Variede vs Ayyappakutty

Koshi, C.J.—This matter comes before us now on an objection raised by the Plaintiff-Appellant to the report of the office in regard to an alleged insufficiency of the court-fee paid on the memorandum of appeal. The suit giving rise to the appeal was to redeem two mortgages, one in the sum of Rs. 375 and the other Rs. 39-6-0. The Plaintiff-Appellant is the purchaser of the rights of the puisne mortgagee court-auction purchaser of the plaint schedule property. The case he sought to make out in his plaint was that the mortgage-money was wiped off by the profits of the property and that he was entitled to recover large amounts from the Defendant as balance. An amount of Rs. 1000 was also claimed in lieu of damages on account of waste alleged to have been committed by the Defendant after he obtained possession of the property.

The Defendant is a person standing in the shoes of a prior mortgagee purchaser. In the prior mortgagee''s suit the subsequent mortgagee, that is, the Plaintiff''s predecessor in interest was not made a party. The Defendant obtained possession of the properties in 1110 and the Plaintiff claimed profits from the date of the commencement of the Defendant''s possession. The suit was contested on various grounds but the right of redemption was not called in question. The lower Court repelled most of the claims the Plaintiff advanced and passed a decree in these terms:

The Plaintiff is entitled to recover the property after paying to the Defendant Rs. 3437-2-3 with interest at 6 per cent, from 30-4-1114 till today less the mesne profits at 12 per year from 30th Vrischigam 1114 till today. The Plaintiff has lost on almost all the main issues. So he shall pay the costs of the Defendants and suffer his own.

The price for redemption has been fixed with reference to the amount of the prior charge subject to which the sale in the puisne mortgagee''s suit was held.

The Plaintiff-Appellant while not impugning the lower Court''s decision that the Defendant was entitled to the amount above mentioned towards the prior charge in his favour, seeks to reduce the net price for redemption by reiterating the claim for profits and damages. The lower Court definitely found against the claim for damages and as for mesne profits it held that the Plaintiff could get the same only from 30th Vrischigam 1114 and that at the rate of Rs. 12 per year. The Plaintiff claimed profits at Rs. 100/- per year. The memorandum of appeal sets out the claim for damages at Rs. 1000 and that for profits at Rs. 3,425-4-0. The two together would not only wipe out the amount of the prior charge but also leave a margin in Plaintiff''s favour.

Though these two amounts have been claimed court-fee is paid only on the amount of the two mortgages, namely, (Rs. 375 + Rs. 39-6-0) Rs. 414-6-0. The memorandum of appeal states:

The subject-matter of the appeal is redemption of two mortgages and court-fees need be paid and is paid on the principal amounts secured by the instruments of mortgage and the other reliefs are incidental to the main relief of redemption.

Sufficient ingenuity is also shown in describing the claim for profits. That claim is worded thus:

Profits of the properties with interest thereon liable to be accounted for at the rate of Rs. 100, per year... Rs. 3,425-4-2.

A large volume of case-law has gathered round the question arising for decision on this reference. The question is whether under circumstances set forth above the memorandum of appeal should be stamped u/s 3(9), Travancore-Cochin Court-Fees Act, 1125, (a provision corresponding to Section 7(ix), Indian Court-Pees Act, 7 of 1870) according to the principal money expressly secured by the two instruments of mortgages, or on the amount or value of the subject- matter in dispute in the appeal. The dispute in the appeal relates solely to the true price of redemption. Notwithstanding a discordant note struck in some decisions of the Allahabad High Court, it appears to us to be settled law in the various High Courts in India, that if in an appeal from a decree for redemption the Plaintiff or the Defendant merely challenges the amount to be paid on redemption without questioning the right of redemption, the court-fee payable is on the additional amount claimed or on the amount in respect of which the liability is sought to be avoided. By this appeal what the Plaintiff-Appellant seeks to obtain is the reduction of the price for redemption fixed by the lower Court by repeating before this Court the claim he made before the lower court for damages and profits. In substance a decree for Rs. 4,425-4-0 is asked for in the appeal. If it succeeds the Defendant will not only lose the amount of the prior charge the lower Court found to be due to him but will also have to pay the Plaintiff the difference.

A suit might change its nature in appeal and this is one of such cases. In an appeal arising from a suit for redemption of a mortgage where only the amount of the price of redemption is in dispute, the subject-matter in the appeal does not remain the same as the subject-matter in the suit.

Mr. T.S. Venkiteswara Iyer, the learned Counsel for the Appellant admitted that the balance of judicial opinion was against his contention, but he sought to distinguish those cases by placing emphasis on the difference in the opening words of the relevant section of the Travan- core-Cochin Court-Fees Act, 1125 and those of its counter-part in the Court-Fees Act, 1870. While Section 7, Indian Court-Fees Act opens with the words "the amount of fee payable under this Act in the suits next hereinafter mentioned shall be computed as follows"; the opening words of Section 3, Travancore-Cochin Court-Fees Act state that "the amount of fee payable under this Act in suits, original or appeal, shall be computed as follows."

The introduction of the words ''original or appeal'' is an innovation in the Travancore-Cochin Court- Fees Act and it was borrowed from the Travancore Court-Fees Act, 6 of 1087.

This innovation does not in our opinion make the rule regarding court-fee applicable to appeals of the present nature filed in Court of this State any the different from that obtaining elsewhere. Section 3(9) so far relevant to the point at issue when written out in full reads that the amount of fee payable in suits, original or appeal, against a mortgagee for the recovery of the property mortgaged shall be computed according to the principal money expressed to be secured by the instrument of mortgage. To make this provision applicable to an appeal from a decree for redemption, the appeal must be for the recovery of the property mortgaged. Here the recovery has already been decreed on certain terms and the dispute in the appeal concerns only the terms. The amount or value of the subject-matter in dispute is an ascertained sum and where the amount is so ascertained, the court-fee payable is an ''ad valorem'' fee.

Earlier decisions bearing on the question held that Section 7(ix), Court-fees Act, 1870, does not apply to appeals. Even without any legislative change recent cases have discarded that narrow construction and yet proceeded to hold that in appeals of the present nature court-fee should be paid ''ad valorem'' on the amount in dispute. The latest case is a decision of a Division Bench of the Bombay High Court reported in - Jangumiya Suleman Madiwale Vs. Hashamsaheb, In that case the trial Court held that the Defendants mortgagees were entitled to an amount of Rs. 9,150 in addition to the amount admitted by the mortgagors, Plaintiffs in the suit. In the appeal while challenging the decision for the payment of the additional amount which represented a prior charge the mortgagees had redeemed, court-fee was paid only on the principal money expressed to be secured by the instrument of mortgage; namely Rs. 1000/-.

The District Judge dismissed the appeal for noncompliance with his direction to pay ''ad valorem'' fee on the amount in dispute. The matter was taken to the High Court of Bombay and there Rajadhyaksha J. after an elaborate review of the case-law held that the District Judge''s view that ''ad valorem'' court-fee should be paid on the amount in dispute was correct. Though the judgment does not take a definite view as to whether the word ''suit'' in Clause (ix) of Section 7 includes appeals the cases where conflicting opinions on the point have been expressed are all referred to and at p. 507 of the report, the learned Judge stated:

But even though the word "suit'' in Clause (ix) of Section 7 may be held to include appeals, we are of opinion that an appeal of the kind we have before us is excluded from the purview of that clause and this has been the view of all the High Courts in India including those Courts which have held that the appeals are governed by that clause.

Later on at pp. 508 and 509 the learned Judge has said:

Although we are of opinion, as at present advised that Clause (ix) of Section 7 may apply to appeals from redemption suits, we think the applicability of that clause must depend on the precise nature of the dispute in appeal. When a suit is filed for redemption of a mortgaged property and the right to redemption is disputed and the suit is accordingly dismissed, the appeal by the mortgagor raises precisely the same points, as those raised by him in the trial Court: in such a case the appeal has to be valued for the purposes of court-fees in accordance with Clause (ix) of Section 7, i.e., on the principal money expressed to be secured by the instrument of mortgage. Similarly if a suit for foreclosure by the mortgagee is dismissed and the Plaintiff-mortgagee files an appeal, the point to be considered in appeal is the same as that in the trial Court viz., the right to foreclosure and the court-fee payable on the memorandum of appeal must be in accordance with the provisions of Clause (ix) of Section 7.

When a suit to redeem a mortgage is decreed and the Defendant appeals, the subject-matter of the appeal is the Plaintiff''s right to redeem; in such a case also, the court-fee payable on the memorandum of appeal must be in accordance with the provisions of clause (ix) of Section 7 that is, on the principal money expressed to be secured by the instrument of mortgage. But it may happen that the suit in its appeal stage may be of a different nature from what it was in the trial Court. Although the original suit may be one for redemption or foreclosure, there may be no question raised in appeal as to the right to redeem or to foreclose, and the appeal may merely be in respect of the amount which the trial Court has held to be payable. Such an appeal would not be one falling within the provisions of clause (ix) of Section 7.

In such an appeal the Plaintiff or the Defendant merely challenges the amount to be paid or received without questioning the right to redeem or foreclose. To such an appeal, in our opinion, clause (ix) of Section 7 does not apply, as the suit in its appeal stage has clearly changed its nature and the subject-matter of the appeal is the liability which is imposed by the trial Court to pay a certain sum and which liability the Appellant seeks to avoid. The memorandum of appeal would in such a case be governed not by clause (ix) of Section 7, but by Article 1 of Sch. 1, Court-Fees Act.

It has to be remembered that Section 7 lays down the principles for the fixation of amounts on which the court-fee is payable. It does so merely for the purpose of reducing each claim which is referred to in that section to a money value for fiscal purposes. In a suit for redemption, for instance, it is not possible when the suit is instituted to find out exactly what amount the mortgagor would be liable to pay in order to secure redemption. Interest may have to be calculated, there may have been repayment, the mortgagee may have effected certain improvements upon the land and ultimately the sum found to be payable by the mortgagor may be very considerably more than the principal money expressed to be secured by the instrument of mortgage. On the other hand it may be found to be negligible. In either case, Section 7, clause (ix) lays down that, the court-fee must be paid on the principal money expressed to be secured by the instrument of mortgage.

But these considerations do not arise when the actual liability has been determined by the trial Court and an appeal is preferred only in respect of fee amount found due by the trial Court. The case is somewhat analogous to a suit for accounts, provided for in Section 7, clause (iv) in which the Plaintiff is entitled to value his relief at any figure he likes and to pay court fee thereon. But when after taking accounts the liability of the parties is ascertained and an appeal is preferred either to avoid that liability or to secure a decree for a higher amount than that ordered by the trial court, the court-fee payable on the memorandum of appeal is on the subject matter in dispute in the appeal; viz., the amount the liability of which is sought to be avoided or the amount by which, the sum decreed by the trial court is sought to be increased.

At page 510 the learned Judge goes on to say:

The view that we take viz., that in an appeal from a decree in a redemption suit, when the right to redemption is no longer in dispute and the Appellant merely seeks to reduce the liability imposed upon him by the trial Court, the court-fees must be paid on the memorandum of appeal on the amount in respect of which he seeks to avoid liability, is one which has the support of almost all the High Courts in India. Some High Courts, such as the High Courts of Lahore, Allahabad and Madras base it on the ground that the court-fee payable on the memorandum of appeal is governed by Article 1 of Sch. 1. But even those High Courts, such as those of Lucknow and Nagpur which consider that the word "suit" in clause (ix) of Section 7 includes appeals, hold that when a suit to redeem has been decreed and the Plaintiff in appeal merely challenges the amount to be paid, the court-fee payable on the memorandum of appeal will be on the subject-matter in dispute, i.e., on the amount in respect of which the Appellant seeks to avoid liability.

After referring to the decisions of the various High Courts, the discussion is wound up at page 511 in these words:

It would thus appear that the current of decisions of most of the High Courts in India is in favour of the view which we take and against the view taken by Westropp C.J. in the note printed in the report in - ''Umarkhan v. Mahom- med Khan'' 10 Bom 41 (B) and by Sargent C.J., in - ''Gopal v. Gangaram'' 1891 Bom P.J. 218 (C). Our view brings this Court in a line with other High Courts in India and we therefore, hold that the court-fee payable on the memorandum of appeal must, in a case like the present, be governed by Article 1 of Sch. 1, Court-Fees Act. The learned District Judge was right in calling upon the Appellants to pay the court-fee on Rs. 9,150, the amount in respect of which the Plaintiff Appellants sought to avoid liability.

In this Bombay case an elaborate discussion was necessitated by the contrary view set out in the case mentioned in the above extract. In fact almost all decisions of the various High Courts Which have a bearing on the question have been reviewed in that case.

Among the cases relied upon by Rajadhyaksha J. is a decision of the Nagpur High Court by Vivian Bose J., as the learned Judge then was, reported as - AIR 1937 6 (Nagpur) The question whether the expression ''suits'' used in clause (ix) of Section 7 included appeals as well and the question as to the proper court-fee payable on an appeal from a redemption decree where the right of redemption was not challenged arose there. The answer we give here to the latter question conforms to the view the learned Judge took in that case. On the former question, differing from the decisions in Madras and Allahabad as also in his own Court the learned Judge held that the expression ''suits'' in clause (ix) of Section 7 included appeals as well, as the expression has been used to cover the entire litigation from beginning to the end. For us that discussion is not helpful except for the conclusion as our Act expressly states that the term ''suits'' includes not only original suits but also appeals. The contention that the variations between the opening words, of Section 7, Indian Court-Fees Act and those of Section 3, Travancore-Cochin Court-Fees Act must lead to a difference in views is not correct is very well illustrated by this decision. As noticed above the learned Judge has definitely held that the expression ''suits'' in clause (ix) of Section 7, Indian Court-Fees Act includes appeals also and the change introduced in the opening words of Section 3, Travancore-Cochin. Court-Fees Act, does not mean more.

On this question whether the expression ''suits" used in clause (ix) of Section 7, Indian Court-Fees Act, includes appeals as well, the two cases so far cited rely upon a decision of the Oudh Judicial Commissioner''s Court reported as - ''Sangat Baksh Singh v. Rawat Dijdeo Baksh Singh'' AIR 1922 OU 82 . Rajadhyaksha J., has quoted with approval relevant passage occurring at page 83 of the report. It is unnecessary to reproduce them here.

On the question of court-fee, the discussion in - AIR 1937 6 (Nagpur) is, if we may say so with respect, very instructive and it may with advantage be quoted here:

What then is to happen, when in an appeal neither the mortgagor nor the mortgagee challenges either the right to redeem or the right to sell or foreclose, as the case may be, but only the amount of the price fixed for redemption? Such a relief is neither, for foreclosure, nor for sale, nor is it for redemption; those are all admitted; the only dispute is with reference to the difference between the amount fixed in the lower Court, and the amount claimed in appeal.

The claim does not come under C1. (ix) as is explained in - ''Onkar v. Lakmichand'' 5 Nag LR 130 at p. 132 (F), nor does it fall under any other provision in the Act. It is, therefore, not. "otherwise provided for," and so court-fees must be paid on the memorandum of appeal in accordance with Article 1, Sch. 1. There is no difficulty in ascertaining the amount thus in dispute. It is a fixed and certain sum and so court-fee must be paid ''ad valorem on that sum''.

The correct process of reasoning is really this: One looks to the charging section, Section 6, first, for that authorises the levy of the fee. There we are referred to the schedules. Article 1, Sch. 1 deals with a memorandum of appeal and directs that unless it is otherwise provided for, court-fees must be paid ''ad valorem'' on the value of the subject-matter in dispute. In the case of appeals, that can only mean the dispute in appeal.

In the case of a mortgage where the right to redeem or foreclose is challenged, that is provided for in Section 7(ix) for ''suit'' there includes ''appeal'' and so court-fees have to be paid in accordance with its provisions. But when none of these is challenged then the matter is not "otherwise provided for" in the Act and so the fees must be paid ad valorem, on the value of the subject-matter in appeal.

The learned Judges in - ''AIR 1922 Oudh 82 (E)'', express themselves on this question:

It does not, however, follow from this view of the law that where plaints are chargeable under clause (ix) of Section 7 read with Article 1 of the 1st schedule of the Court-Fees Act, the memorandum of appeal filed against decrees passed in such suits are invariably chargeable in the same manner. As has been pointed out in the case of - ''Ram Lakshman Rai v. Bandan Rai'', Legal Ramembrancer, Vol. 1, Page 162 (G) and in - ''Mohammed Hussain v. Sayed Jahan Beg'' AIR 1902 Ou 87 (H), a suit may change in its nature in appeal, and though the original suit may be for redemption or foreclosure, there may be no question raised in appeal as to the right to redeem or foreclose and the appeal may be merely in respect of the amount which the Court of first instance has held to be payable. In such a case the suit in appeal would clearly not be a suit falling within the provisions of clause (ix) of Section 7 and the amount or value of the subject-matter in dispute would not be computed in accordance with the provisions of that clause but would be a specific sum, the court-fee payable on which would be ''ad valorem'' in accordance with the provisions of Article 1, Sch. 1 of the Act.

A Division Bench of the Chief Court of Oudh accepted the above rule in - AIR 1931 353 (Oudh) So did the Lahore High Court in -- ''Har Lal v. Siri Ram'' AIR 1931 Lah 633 (J).

So far we have been confining our attention to cases which interpret the term "suits" in clause (ix) of Section 7 as including appeals also. To us that is not a matter of construction but our statute itself is to that effect. An appeal of the kind before us, is, for reasons found mentioned in the cases cited above, excluded from the purview of that clause. In the Bombay case besides the Nagpur, Lahore and Oudh cases mentioned already, the Allahabad, Madras and Patna decisions which take the same view as that decision took on the question of court-fee are also cited and followed. We do not desire to encumber this order with all those citations.

Before noticing the dissentient note in the Allahabad High Court, a Madras decision in which the same conclusion as to court-fee as we have taken here may also be cited. The Bombay decision does not refer to it. The Madras case is - Pachayakkal and Another Vs. Shanmughavelayudhasami Gopanna Mannadiar and Others, . The head-note to the case which alone need be noticed here reads thus:

If an appeal against a decree in a suit brought for redemption 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. 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 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 u/s 7(ix).

The Bombay case refers to - Nepal Rai v. Debl Prasad'' 27 All 447'' (L) and - ''Raghbir Prasad- v. Shanker Bux Singh'' AIR 1914 All 520 (FB) (M), as laying down the same view as adopted in that case on the question of court-fee. ''Hefiz Ahamad v. Sobha Ram'' 6 All 488 (N), -''Mahadeo Prasad v. Gorakh Prasad'' 30 All 547 (O)and - ''Baji Lal v. Gobardhan Singh'' 31 All 265 (P), also enunciate the same rule. A contrary view was taken in - ''Pirbhu Narain Singh v. Sita Ram'' 13 All 94 (Q)and that is the view which the Appellant''s Counsel has been pressing upon us for acceptance. There the appeal was of the same kind as the one before us and Sir John Edge C.J. said that in such appeals the question of court-fee will depend upon whether the Plaintiff or the Defendant was the Appellant. The correctness of that view was questioned not only in subsequent Allahabad decisions but also in other Courts. See for instance ''Reference under Court-Pees Act, 1870, 29 Mad 367 (R).

Mr. Venkiteswara Iyer also invited our attention to Abdul Haq and Others Vs. Shamshuddin and Others, and- Kishen Lal Vs. B. Preduman Kishen Singh, in support of his contention. These two cases have been followed in a very recent case reported as - Abdul Hai and Another Vs. Shyam Kishore and Others, . Kishen Lal Vs. B. Preduman Kishen Singh, , refers to - AIR 1937 6 (Nagpur) and - Pachayakkal and Another Vs. Shanmughavelayudhasami Gopanna Mannadiar and Others, '', and distinguishes them with the remark that these rulings based on Acts which are not in the same form as the Act in that Province. In that case the appeal was of the same kind as the one before us, that is, the dispute was only as to the price of redemption. That decision followed - Abdul Haq and Others Vs. Shamshuddin and Others, '', and that refers to the legislative changes introduced in U.P. by inserting a definition section, Section 2 and by altering Section 7 (ix). The alteration in Section 7 (ix) has no bearing on the present question, but in 1938 a definition section was inserted by U.P. Act 19 of 1938 and clause 4 thereof states: "suit" includes a first or second appeal from a decree in a suit and also a Letters Patent Appeal.

It is by applying this definition that it was held in - Abdul Haq and Others Vs. Shamshuddin and Others, '', that the court-fee payable on appeal from a decree in a redemption suit was ''ad valorem'' on the principal money secured by the instrument of mortgage. There, however, it was the right of redemption which was in dispute and in such appeals it is the uniform view of all Courts that the court-fee payable is ''ad valorem'' on the mortgage-money. In - Abdul Hai and Another Vs. Shyam Kishore and Others, also the appeal was similar to the one before us. In following - Abdul Haq and Others Vs. Shamshuddin and Others, the two subsequent cases overlook the distinction drawn between an appeal where the price of redemption is alone in dispute. We have referred to a line of cases where, without any legislative change to the effect that the expression "suit" in Section 7 (ix) will include appeals also, Courts have held that in appeals where the price for redemption is alone in dispute clause (ix) of Section 7 cannot be held to be applicable. Such appeals are not against decrees granting recovery of the property mortgaged or refusing that relief.

In - Kishen Lal Vs. B. Preduman Kishen Singh, , the learned Judges said that the position was really unsatisfactory when they had to call upon the Appellant in an appeal from a decree for redemption of a mortgage for Rs. 2,000/- to pay court-fee "ad valorem'' on that sum when the amount in dispute in the appeal was only Rs. 500/-. It 95 observed that the Legislature might go into the question and consider the amendment of the Qourt-Fees Act. The long line of Allahabad cases laying down the contrary rule, cited in an earlier paragraph of this order, was left unnoticed. Allsop J. who pronounced the order of the Divi sion Bench followed his own decision in Abdul Haq and Others Vs. Shamshuddin and Others, which he had given sitting as a single Judge. That the two appeals differed in their nature was omitted to be noticed, The latest case� in �� Abdul Hai and Another Vs. Shyam Kishore and Others, notices the Oudh cases we cite in this order but dismissed them summarily on the ground that the expression �suit� has subsequently been defined by the Legis lature to include first and second appeals as also Letters Patent Appeals. It is worthy of notice that the Oudh cases had given to the expression �suit� in Clause (ix) of Section 7, Court-Fees Act, 1870, a meaning which the U.P. Legislature subsequently adopted.

We cannot in the circumstances accept the view the Allahabad High Court expressed in - Chhatradhari Ahir and Others Vs. Uttam Chand and Others, '' and - Abdul Hai and Another Vs. Shyam Kishore and Others, or that Sir John Edge C.J. enunciated in - '' 13 All 94 (Q)

Before concluding, reference may also be made as to how the question stood under the Travancore and Cochin case-law. There is no decision of this Court bearing on the point. Under the decisions of the erstwhile Travancore High Court where the plaint in a suit for redemption included a prayer for recovery of certain amount the mortgage-money as also the money claimed had to be taken into account for purposes of court-fee and jurisdiction. In other words both reliefs in the suit had to be valued for the court-fee and jurisdiction. See - ''Kochummini v. Marthandan'' AIR 1948 KERLR 809 (V). As such a controversy similar to the one we have before us could not have arisen in that jurisdiction. The practice was to pay ''ad valorem'' court-fee on the amount in dispute in the appeal. In Cochin the prevailing view was the same as we have adopted here. The latest case on the point is that reported in - ''Kunjunni Panicker v. Sankaran'' AIR 1929 KERLR 495 (W).

The office note that proper court-fee has not been paid on the memorandum of appeal is, therefore, right. The Appellant should have paid ''ad valorem'' court-fee on the sum of Rs. 4,425-4-0 which forms the subject-matter in dispute in this appeal. He has paid court-fee on Rs. 414-6-0 alone. The deficit court-fee will be made good within a month from this date failing which the appeal will be put up for orders the day after the expiration of the period. The Appellant is also directed to the State an Advocate''s fee of Rs. 50/- as costs in this reference.