1. This is a reference under Section 5, Court-fees Act, 1870. The question is what is the proper court-fee on a certain memorandum of appeal.
2. The appellants were impleaded as defendants in a suit for sale on a mortgage upon the allegation that they were subsequent mortgagees. They claimed to be prior mortgagees, but the trial Court found that they are subsequent mortgagees and decreed the plaintiff's suit against all the defendants.
3. The appellants appeal to this Court against the decree. The relief sought by the appeal is expressed as follows:
That the Hon'ble Court will be pleased to declare that the mortgage deeds held by Bhulla and Kundan are in effect prior to that of the plaintiff and allow the appeal with costs throughout.
4. The appeal is valued at Rs. 1,600, but a court-fee of Rs. 10 only has been paid. The Stamp Reporter objects that an ad-valorem court-fee is payable on the value of the subject-matter in dispute in the appeal, namely, Rs. 1,600, and there is therefore a deficiency of Rs. 95 in the court-fee paid.
5. It is contended for the defendant-appellants that they seek a mere declaration that they are prior mortgagees, and do not pray for any consequential relief, and therefore the court-fee of Rs. 10 is correct under Article 17 (iii), Section 2.
6. I hold that the clause mentioned has no application to the facts of this case. That clause applies to a memorandum of appeal in a suit to obtain a declaratory decree where no consequential relief is prayed. In the present case we have a memorandum of appeal in a suit of a totally different nature, namely, a suit for sale on a mortgage. If the appellants' contention were accepted, I think it would be always possible for a defendant, against whom a decree has been passed, to appeal against the decree on payment of a fixed court-fee of Rs. 10, by the simple device of asking for a mere declaration that the decree is erroneous and not binding upon him. Supposing a money decree for Rs. 10,000 is passed against a defendant, he might in his appeal ask for a mere-declaration that the decree is erroneous and that he is not liable to pay anything' to the decree-holder, and might thus-claim to file the appeal on a fixed court-fee of Rs. 10 only.
7. Whatever may be the view of the appellate Court regarding the form in which the relief sought by the appeal has been framed, I think it is clear that Article 17(iii), Section 2 has no direct application, and I see no reason for applying the principle of that clause by way of analogy.
8. The appellants obviously seek to get the decree of the trial Court modified in their favour so as to get the property sold subject to their mortgage for which they claim priority. I think the substance of the relief sought, and not merely its form, must be considered. Their interest in the property is valued at Rupees 1,600 and this must be the value of the subject-matter in dispute in the appeal.
9. The appellants rely on Rup Chand v. Fateh Chand  33 All. 705, but that ruling is clearly distinguishable upon the facts. They also support to rely on Mahund Ram v. Ruqaiya Khatun : AIR1931All251 , but the decision is against them rather than in their favour. The appellant asked the Court to grant a declaration and to modify the trial Court's decree accordingly. It was held that the case was governed by Section 7(4) (c), Court-fees Act and court-fee was, payable ad valorem on the appellant's valuation of the relief sought. The view that the appellants must pay an ad valorem court-fee on the value of the subject-matter in dispute in the appeal finds support in Moti Begam v. Har Prasad  47 I.C. 311, Premstikh Das v. Shah Gopi Saran  4 Pat. L.J. 323, and Venhappa v. Nara Simha  10 Mad. 187.
10. I hold that the appellants must pay an ad valorem court-fee on Rs. 1600 and make good the deficiency of Rs. 95. This sum is exclusive of the court-fee payable in respect of ground No. 3, the liability for which is not contested.