PETITIONER:
A.K.A.CT.V.CT. MEENAKSHISUNDARAM CHETTIAR
Vs.
RESPONDENT:
A.K.A.CT.V.CT. VENKATACHALAM CHETTIAR
DATE OF JUDGMENT23/02/1979
BENCH:
KAILASAM, P.S.
BENCH:
KAILASAM, P.S.
SARKARIA, RANJIT SINGH
REDDY, O. CHINNAPPA (J)
CITATION:
1979 AIR 989 1979 SCR (3) 385
1979 SCC (1) 616
CITATOR INFO :
R 1987 SC2085 (3,4)
D 1988 SC1150 (4,5)
D 1988 SC1636 (21)
R 1992 SC1526 (3)
ACT:
Court Fees Act, 1870-S. 7(iv)(f)-Suit for accounts-
Necessary for plaintiff to give fair estimate of the amount
for which he sues-Court can reject the plaint under Or. VII
r. 11 C.P.C. if plaintiff arbitrarily and deliberately
undervalues the relief.
HEADNOTE:
The power of attorney by which the plaintiff
constituted the defendant as his agent, authorised the
defendant amongst other things to discharge debts and invest
moneys on behalf of the plaintiff. In the suit filed by the
plaintiff, the relief claimed was for directing the
defendant to render true and correct accounts of all
transactions entered into by him and for amounts received by
him on behalf of the plaintiff. In his written statement the
defendant gave details of amounts invested by him in banks
and other relevant details.
An issue whether the suit had been properly valued and
proper court-fee had been paid was answered by the trial
court in favour of the plaintiff.
On appeal by the plaintiff, the High Court held that
since the plaintiff had quantified the amount payable by the
defendant, the suit should have been valued on the basis of
amount quantified and that not having been done, the suit
had not been properly valued.
Allowing the appeal,
^
HELD: (1) The estimate of the relief as given by the
plaintiff was adequate and reasonable and was not an under-
estimate. [392C]
(2) The High Court was in error in holding that the
plaint was clear, that apart from the money which the
defendant was liable to pay to him as his agent the
plaintiff had quantified the amount payable by the
defendant. The suit was not only for accounting of the
amounts received but also for an account of the transactions
of the defendant as power of attorney agent. Had the
defendant been able to establish that in the course of his
management he had invested moneys according to the power of
attorney, he would have properly accounted for his
management. The defendant himself had stated that the suit
was for accounting of his management as power of attorney
agent. He pleaded that the moneys had been remitted to the
plaintiff by investment or otherwise. [389H-390B]
(3) The amount of the court-fee payable in suits for
accounts as provided for in s. 7(iv)(f) of the Court Fees
Act, 1870 is according to the amount at which relief sought
is valued in the plaint or memorandum of appeal. In a suit
for accounts it is not possible for the plaintiff to
estimate correctly the amount which he may be entitled to
because in a suit in which the plaintiff asks for accounting
regarding the management by a power of attorney agent he
might not know the state of affairs of the defendant's
management and the amount to which he would be entitled to
on accounting. [390G-H]
386
(4) Even where s. 35 of the Tamil Nadu Court Fees and
Suits Valuation Act, 1955 is applicable, it is necessary
that the plaintiff should give a fair estimate of the amount
for which he seeks relief. Order VII R. 11 CPC casts a duty
on the court to reject a plaint when the relief claimed is
under-valued. [391 D-E]
Chillakuru Chenchurami Reddy v. Kanupuru Chenchurami
Reddy, I.L.R. 1969 A.P. 1042 (F.B.), approved.
(5) Before coming to the conclusion that the suit is
under-valued the court will have to take into account that
in a suit for accounts the plaintiff is not obliged to state
the exact amount which would result after taking all the
account. If he cannot estimate the exact amount he can put a
tentative valuation upon the suit for accounts which is
adequate and reasonable. The plaintiff cannot arbitrarily
and deliberately under-value the relief. All that is
required is that there must be a genuine effort on the part
of the plaintiff to estimate his relief and the estimate
should not be a deliberate under-estimation. [391 H-392 B]
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 504 of
1979.
Appeal by Special Leave from the Judgment and Order
dated 22-12-1978 of the High Court of Madras at Madras in
Appeal No. 408/72.
K. Rajendra Chaudhary for the Appellant.
A. T. M. Sampath for the Respondent.
A. V. Rangam for the Intervener.
The Judgment of the Court was delivered by
KAILASAM, J.-Special Leave Petition (Civil) No. 1021 of
1979 is filed by the plaintiff in the suit O.S. No. 83 of
1969 on the file of the Subordinate Judge, Devakottai,
against the two orders passed by the High Court of
Judicature at Madras in Appeal No. 408 of 1972 holding that
the suit had not been properly valued for court-fee and
directing the petitioner to pay court-fee on the valuation
of Rs. 9,74,598.35 and requiring that the deficit court-fee
both on the plaint and the memorandum of appeal be paid
within six weeks from the date of the order. On hearing the
petitioner we directed notice to the respondents calling
upon them to show cause why special leave should not be
granted and the appeal allowed and remitted to the High
Court for disposal of all the issues. On hearing the
respondents we granted Special Leave Petition and the appeal
is thus heard.
The appellant filed the suit praying for a decree
against the respondent/defendant to render true and correct
account of all the transactions of the respondent as the
petitioner’s agent from 22nd January, 1965 and also of all
the amounts received by him as the agent of the petitioner
including the amount recovered by him from Alagappa Chettiar
and pay to the petitioner the amount found due on such
rendition of accounts. In the written statement filed by the
defendant it was con-
387
tended that the suit is not properly valued and proper
court-fee has not been paid. The trial court framed an issue
as to whether the suit had been properly valued and proper
court-fee had been paid. It answered the issue holding that
the plaint has been properly valued and proper court-fee has
been paid. The suit was dismissed by the trial court on the
ground that the plaintiff has not proved that the defendant
is liable to account and that the suit was barred by
limitation, On an appeal by the plaintiff to the High Court,
the High Court found that the plaint made it clear that
apart from the money which the defendant is liable to pay to
the plaintiff as his agent, the plaintiff has quantified the
amount at Rs. 9,74,598.35 as payable by the defendant to him
which is made clear in allegations in paragraphs 6,7,8 and 9
of the plaint and therefore the plaintiff ought to have
valued the suit at Rs. 9,74,598.35. As the appeal was
disposed of on the ground that the plaint had not been
properly valued we are concerned in this petition in
determining whether the conclusion arrived at by the High
Court is correct.
The High Court has passed its conclusion on a reference
to paragraph 6,7,8 and 9 of the plaint. We will now consider
the pleadings in the case. In paragraph 5 it is stated that
on 22nd January, 1965, the plaintiff executed a General
Power of Attorney at Karaikudi authorising the defendant to
transact all his business, sell his properties, receive the
sale price and other monies etc. This paragraph refers to
the General Power of Attorney executed by the plaintiff in
favour of the defendant on 22nd January, 1965. The terms of
the power of attorney will be referred to in due course.
Paragraphs 6, 7, 8 and 9 of the plaint which have been
relied on by the High Court may be set out :-
“6. On 27-3-1963, the Plaintiff and the Defendant
retired from the said partnership and the other two
brothers continued the business under the same name,
Alagappa taking on the shares of the plaintiff and
Defendant and all their assets in the firm for a
consideration of his paying $ 6,50,000/-equivalent to
Rs. 16,12,000/- at the rate of Rs. 248/- per 100
Dollars to each of them, so that Alagappa became
entitled to 3/4 share and Annamalai to 1/4 share in the
continuing firm.7. As the Plaintiff’s agent and on behalf of the
Plaintiff, the Defendant on or about 13-4-1965 received
from Alagappa $ 6,50,000/- equivalent to Rs.
16,12,000/- at the rate of 248 rupees per 100 Dollars
for the 1/4th share of the Plaintiff in the said firm
taken over by Alagappa.8. The Defendant from Madras has sent to the
Plaintiff at Kottaiyer Rs. 25,000/- on 25-10-1965, Rs.
1,30,750/- on
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7-2-1966, Rs. 25,311.65 on 7-2-1965 (Rs. 25,000/- plus
Rs. 311.65 for interest) and Rs. 4,36,340/- on 11-8-
1967.9. The Defendant as Plaintiff’s agent is bound to
render true and correct account to the Plaintiff of all
the amounts received by him in the course of the
agency, to wit, from 22-1-1965 the amounts received
from Alagappa.In paragraphs 6 and 7 the plaint refers to the plaintiff and
the defendant retiring from the partnership and Alagappa
taking the shares of the plaintiff and the defendant for a
consideration of his paying equivalent to Rs. 16,12,000/- to
each of the plaintiff and the defendant. In paragraph 7 it
is stated that the defendant as plaintiff’s agent received
Rs. 16,12,000/-. Paragraph 8 refers to certain payments
which the plaintiff received from the defendant. Paragraph 9
of the plaint states that the defendant as plaintiff’s agent
is bound to render true and correct account to the plaintiff
of all the amounts received by him in the course of agency,
to wit, from 22nd January, 1965 the amounts received from
Alagappa. It may be noted that the reliefs sought for is for
rendering true and correct account to the plaintiff of all
the amounts received by him in the course of the agency. The
Power of Attorney was given on 22nd January, 1965 and thus
the relief is not confined to the amount payable by Alagappa
alone.In paragraph 10 which is not taken note of by the High
Court the plaintiff alleged that on 2nd September, 1967 and
4th October, 1967, the plaintiff wrote to the defendant
requiring him to send the accounts of the agency. These
letters were refused. Again on 5th December, 1967, the
plaintiff issued a lawyer’s notice to render accounts and
for payment of the amounts due from him. This notice was
also returned. The defendant did not render any accounts. At
this stage reference may be made to the Power of Attorney
executed by the plaintiff in favour of the defendant on 22nd
January, 1965.The plaintiff by the Power of Attorney dated 22nd
January, 1965, constituted the defendant as his Attorney and
authorised the defendant to act for the plaintiff. It is
sufficient to state that the power authorises in general the
defendant to manage all the affairs of the plaintiff.
Paragraph 3 of the Power of Attorney empowers the defendant
to pay and settle all the debts of the plaintiff and obtain
full and effectual receipts and releases for the same.
Paragraph 5 empowers the defendant amongst other things to
sign and execute any discharge or release in connection with
Charges or Bills of Sale. Paragraph 10 gives the power to
the defendant to charge or mortgage any of the plaintiff’s
property and paragraph 11 to borrow such sums of money and
upon such terms as the Attorney shall deem expedient.
Paragraph 19 confers the power
389
on the defendant to invest moneys upon mortgages or charges
of land etc. In short there can be no dispute that complete
power of management is given to the defendant and the
defendant could, in exercising this power, discharge debts,
invest moneys on behalf of the plaintiff etc. When the
plaintiff in paragraph 7 of the plaint demanded the agent to
render true and correct account to the plaintiff of all the
amounts received by him in the course of agency i.e. by
virtue of the power conferred on 22nd January, 1965, the
plaintiff is entitled to know as to what amounts the
defendant received during the course of his management and
what amounts he had invested or otherwise dealt with. At the
date of the plaint the plaintiff was not aware as to the
amount of moneys that were due by the defendant to him. The
letters and the lawyer’s notice sent by the plaintiff to the
defendant were unanswered. If the defendant had invested or
otherwise dealt with moneys according to the power conferred
on him nothing would be due to the plaintiff on accounts
being taken. The relief claimed for in the plaint in
paragraph 14(a) of the plaint is for directing the defendant
to render true and correct account of all transactions made
by the defendant as the plaintiff’s agent from 22nd January,
1965 and also for all the amounts received by the defendant
on the plaintiff’s behalf as his agent including the amount
recovered by him from Alagappa and pay the plaintiff what
may be found due to him. This paragraph makes it clear that
what was required was not only an account of the amount
recovered by the defendant from Alagappa but also an account
of all the transactions of the defendant as the plaintiff’s
agent from 22nd January, 1965.A reading of the written statement also makes it clear
that the plaint was understood by the defendant as a suit
for accounting of his management as a power of attorney
agent. In paragraph 7 of the written statement the defendant
states that out of 6,50,000 dollars got for the plaintiff’s
one-fourth share, 40,000 dollars were invested in fixed
deposit in plaintiff’s name with the Indian Overseas Bank,
Kuala Lumpur and 10,000 dollars in plantiff’s V. CT. M.
Accounts on 10th April, 1965. On the same day the remaining
6,00,000 dollars were invested with Alagappa Chettiar
himself who had credited the amount in plantiff’s name in
his accounts. If the defendant was able to prove these
contentions the accounts as required by the plaintiff would
have been satisfactorily rendered and very little would have
been due by the defendant to the plaintiff on accounting.
The High Court was in error in coming to the conclusion that
the plaint is clear that apart from the money which the
defendant is liable to pay to him as his agent the plaintiff
has quantified the amount at Rs. 9,74,598.35 as payable by
the defendant to him. In our view, the plaint has been
misread. Though paragraphs 6, 7 and 8 refer to the
transactions in which the
390
plaintiff is entitled to Rs. 16,12,000, paragraphs 10,11 and
14(a) make it clear that the suit was for accounting not
only regarding Rs. 16,12,000 but also for the management by
the defendant as power of attorney agent. The power, as
already noted, confers a right on the defendant to invest
moneys. If the defendant has shown in the written statement
itself is able to establish that in the course of his
management he had invested moneys according to the power
conferred on him, he would have properly accounted for his
management. In the written statement the defendant himself
had pleaded that the moneys which he received from Alagappa
have been remitted to the plaintiff by investment and
otherwise. The conclusion arrived at by the High Court is,
therefore, unsupportable.The provision relating to the levy of court-fee for a
suit on accounts is found in section 7(iv) (f) of the Court
Fees’ Act, 1870 which runs as follows:-“7. The amount of fee payable under this Act in
the suits next hereinafter mentioned shall be computed
as follows:-(i) x x x
(ii) x x x
(iii) x x x
(iv) In suits-
(a) x x x
(b) x x x
(c) x x x
(d) x x x
(e) x x x
(f) for accounts-
According to the amount at which the relief sought
is valued in the plaint or memorandum of appeal.
In all such suits the plaintiff shall state the
amount at which he values the relief sought.”
Reading this provision by itself the amount of court-fee
payable in suits for accounts is according to the amount at
which the relief sought is valued in the plaint or
memorandum of appeal. The plaintiff is required to state the
amount at which he values the relief sought. In suits for
accounts it is not possible for the plaintiff to estimate
correctly the amount which he may be entitled to for, as in
the present case, when the plaintiff asks for accounting
regarding the management by a power of attorney agent, he
might not know the state of affairs of the defendant’s
management and the amount to which he would be entitled to
on accounting. But it is necessary that the amount at which
he
391
values the relief sought for should be a reasonable
estimate. Section 35(1) of the Tamil Nadu Court Fees and
Suits Valuation Act, XIV, of 1955, is as follows:-
“In a suit for accounts, fee shall be computed on
the amount sued for as estimated in the plaint.”
Sub-section (2) of section 35 provides:
“Where the amount payable to the plaintiff as
ascertained in the suit is in excess of the amount as
estimated in the plaint, no decree directing payment of
the amount as so ascertained shall be passed until the
difference between the fee actually paid and the fee
that would have been payable had the suit, comprised
the whole of the amount as ascertained, is paid. If the
additional fee is not paid within such time as the
Court may fix, the decree shall be limited to the
account to which the fee paid extends.”
While section 35(1) permits the plaintiff to pay the court-
fee on the amount estimated by him sub-section (2)
safeguards against the loss of revenue for it requires that
no decree for any amount in excess of the amount as
estimated in the plaint shall be passed unless the
difference between the fee actually paid and the fees that
would have been payable had the suit comprised the whole of
the amount as ascertained, is paid. But here again it is
necessary that the plaintiff should give a fair estimate of
the amount for which he sues. Order 7, Rule 11, of the Civil
Procedure Code, requires the court to return the plaint if
the relief claimed is undervalued. Order 7, Rule 11, runs
thus:
“11. The plaint shall be rejected in the following
cases:-
(a) x x x
(b) 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;”
(c) x x x
(d) x x x
This section casts a duty on the Court to reject the plaint
when the relief claimed is undervalued. If on the materials
available before it the Court is satisfied that the value of
relief as estimated by the plaintiff in a suit for accounts
is undervalued the plaint is liable to be rejected. It is
therefore necessary that the plaintiff should take care that
the valuation is adequate and reasonable taking into account
the circumstances of the case. In coming to the conclusion
that the suit is undervalued the court will have to take
into account that in a suit for
392
accounts the plaintiff is not obliged to state the exact
amount which would result after the taking of the accounts.
If he cannot estimate the exact amount he can put a
tentative valuation upon the suit for accounts which is
adequate and reasonable. The plaintiff cannot arbitrarily
and deliberately undervalue the relief. A full Bench of the
Andhra Pradesh High Court in a decision in Chillakuru
Chenchurami Reddy v. Kanupuru Chenchurami Reddy, after
elaborate consideration of the case law on the subject has
rightly observed that there must be a genuine effort on the
part of the plaintiff to estimate his relief and that the
estimate should not be a deliberate under-estimation.
On a consideration of the entire circumstances of the
case we are not satisfied that the estimate of the relief as
given by the plaintiff is inadequate or unreasonable or a
deliberate under-estimation. In the result, we allow the
appeal set aside the judgment of the Madras High Court and
remit it back to the High Court for disposal of all the
issues arising in the appeal. The cost will abide by the
result.
N.V.K. Appeal allowed.
393