A significant clarification has emerged on the valuation of suits seeking declaratory relief against allegedly void sale deeds. The Madhya Pradesh High Court has reaffirmed that plaintiffs who are not parties to a sale deed need not pay ad-valorem court fees based on the sale consideration, reinforcing a long-standing principle that protects access to justice in title disputes.
Background & Facts
The Dispute
The plaintiff filed a suit seeking a declaration that a sale deed executed by defendants No. 21 and 22 in favor of defendant No. 23 is void as against his rights and interests in the property. The plaintiff was not a party to the sale deed and did not seek its cancellation. Instead, he sought only a declaration of his title and the invalidity of the transaction.
Procedural History
- The defendants filed an application under Order 7 Rule 11 CPC challenging the valuation of the plaint.
- They contended that the plaintiff was required to pay ad-valorem court fees based on the sale consideration mentioned in the deed.
- The trial court rejected this application, holding that no such fee was payable.
- The defendants filed a civil revision challenging this rejection.
Relief Sought
The petitioners sought to have the plaint returned for non-payment of ad-valorem court fees, arguing that the suit’s value should be determined by the sale consideration in the deed.
The Legal Issue
The central question was whether a plaintiff, who is not a party to a sale deed and seeks only a declaration that the deed is void against his rights, is required to pay ad-valorem court fees based on the sale consideration under Order 7 Rule 11 CPC.
Arguments Presented
For the Appellant/Petitioner
The petitioners relied on the general principle that suits involving property of ascertainable value must be valued for court fee purposes based on the market or transaction value. They argued that since the sale deed recorded a substantial consideration, the suit’s value must be aligned with it, and failure to pay the corresponding fee rendered the plaint liable to rejection under Order 7 Rule 11 CPC.
For the Respondent/State
The respondent contended that the suit was not for recovery of property or cancellation of the deed, but for a declaration of title based on prior ownership. They emphasized that the plaintiff was not seeking to set aside the deed but merely to assert his own rights against it, and therefore, the suit fell under the category of declaratory suits where only a nominal court fee applies.
The Court's Analysis
The Court examined the nature of the plaintiff’s claim and the distinction between suits for cancellation and suits for declaration. It noted that the plaintiff did not seek to annul the sale deed but only to establish that it did not extinguish his pre-existing title. The Court held that such a claim does not attract ad-valorem court fees.
"Where a suit is filed by a person who is not executant of the sale deed then he is not required to sue for cancellation of sale deed but is only required to seek declaration to avoid the sale deed and in such cases ad-valorem court fees is not required to be paid."
The Court relied on the binding precedent in Suhrid Singh v. Randhir Singh, which clearly delineates that a non-executant seeking only a declaration of title is not bound by the sale consideration for court fee purposes. The trial court had correctly applied this principle, and no error was discernible in its order. The revision was therefore without merit.
The Verdict
The petition was dismissed. The Court held that a plaintiff not party to a sale deed need not pay ad-valorem court fees based on the sale consideration when seeking only a declaration that the deed is void against his rights. The suit is properly valued at a nominal court fee.
What This Means For Similar Cases
Declaration Suits Are Not Valued by Transaction Amount
- Practitioners must advise clients that suits for declaration of title against third-party sale deeds attract only nominal court fees, regardless of the sale consideration.
- Applications under Order 7 Rule 11 CPC seeking rejection on grounds of inadequate court fees will fail if the relief sought is declaratory and not for cancellation or recovery.
Avoid Misapplication of Valuation Rules
- Do not conflate suits for declaration with suits for cancellation or recovery of possession.
- Always plead the nature of relief clearly: if the plaintiff asserts independent title and seeks to negate the effect of a deed, it is a declaratory suit.
- Court fee memoranda must reflect nominal valuation unless the suit seeks affirmative relief like recovery of property or damages based on the sale value.
