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Parikh Ratilal Chandulal and Co. and ors. Vs. Ramanbhai Ranchhodbhai and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtGujarat High Court
Decided On
Judge
Reported in(1981)22GLR857
AppellantParikh Ratilal Chandulal and Co. and ors.
RespondentRamanbhai Ranchhodbhai and ors.
Cases ReferredAnne Venkatasubba Rao v. Anne Bhujangayya and Anr.
Excerpt:
- - if the agreement remained outstanding and the relief sought for by the plaintiff regarding the avoidance of that agreement was not granted various consequences might follow but in substance as well as in form the present suit cannot be said to be a suit to obtain substantive relief of monetary gain or prevention of monetary loss. shah relied upon the case of gujarat safe deposit co. 1946 madras at page 104 where it is observed that a fiscal legislation like the court-fees act must be strictly construed and where there is any doubt, the benefit of it should be given to the tax-payer......7 and it was submitted that when an application is submitted to the court for setting aside the award, monetary loss is sought to be prevented. it was submitted that if such an application succeeds, the decree in terms of the award is not passed, but if such an application fails a decree in terms of the award is passed and, therefore, what the defendant by submitting such an application desires is that he wants prevention of monetary loss to him. that is a substantive relief capable of being valued in terms of monetary gain and, therefore, according to the learned asstt. govt. pleader, mr. m.b. shah, article 7 would be attracted and ad valorem fees are required to be paid. in our view such a reading of article 7 would not be proper. the reason is that it would be reading too much in.....
Judgment:

S.L. Talati, J.

1. This Revision Application raises only one question which is required to be determined. The question is whether ad valorem court fees are required to be paid when an application to set aside an award under Arbitration Act, 1940 is filed in the Court.

2. The learned Civil Judge (S.D.) Bharuch by an order dated 12-9-1978 passed in Miscellaneous Civil Application No. 30 of 1975 came to the conclusion that such an application requires ad valorem court fees to be paid. As a result an order was passed that an amount of Rs. 72/-may be paid as court fees. The amount is a small amount but it raises a question of importance and, therefore, Revision Application was filed and our brother Judge S.B. Majmudar has by a detailed order placed this matter before the Division Bench for deciding this controversy. That is how this matter is before us.

3. For the purpose of deciding this question Articles 3 and 7 of Schedule I of the Bombay Court-Fees Act, 1959 are required to be considered. They are as under:

_____________________________________________________________________________________

No. Proper fee

1 2 3

_____________________________________________________________________________________

3. Plaint, application or petition (includ A fee on the amount or value of the

ing memorandum of appeal), to set aside award sought to be set aside or modi-

or modify any award otherwise then fied, according to the scale pre-

under the Arbitration Act, 1940. scribed under Article 1.

7. Any other plaint, application or peti- A fee on the amount of the mon-

tion (including memorandum of appeal), etary gain or loss to be prevented,

to obtain substantive relief capable of according to the scale prescribed

being valued in terms of monetary gain under Article 1.

or prevention of monetary loss, including

cases wherein application or petition is

either treated as a plaint or is described

as the mode of obtaining the relief as

aforesaid.

_____________________________________________________________________________________

Now it is agreed that the case does not fall under Article 3. On behalf of the State, the learned Advocate Mr. M.B. Shah laid great stress on Article 7 and it was submitted that when an application is submitted to the Court for setting aside the award, monetary loss is sought to be prevented. It was submitted that if such an application succeeds, the decree in terms of the award is not passed, but if such an application fails a decree in terms of the award is passed and, therefore, what the defendant by submitting such an application desires is that he wants prevention of monetary loss to him. That is a substantive relief capable of being valued in terms of monetary gain and, therefore, according to the learned Asstt. Govt. Pleader, Mr. M.B. Shah, Article 7 would be attracted and ad valorem fees are required to be paid. In our view such a reading of Article 7 would not be proper. The reason is that it would be reading too much in that Article. Firstly when an application to set aside an award succeeds it would never mean that the litigation has come to an end. What happens is that there could be two types of awards. An award may be as a result of arbitration outside the court or an award may be an award pending the suit. In a case where parties enter into an arbitration agreement while the suit is pending and an award is passed and an application is submitted to set aside that award and that application succeeds it may happen because of various reasons and the result may be that another arbitrator may be appointed or that the Court may decide the suit on its merits. When an award is passed which is not the subject-matter of the suit and the award is set aside by such application there also parties can enter into an agreement of arbitration and another arbitrator can be appointed. Also it might happen that the parties may not choose to enter into an arbitration agreement and ultimately on the original cause of action a new suit can be filed. Therefore, by merely filing an application to set aside an award and succeeding in it there is not a result which directly follows, which prevents any monetary loss.

4. Reference was made to certain Rulings which are required to be referred to at this stage. The first Ruling is a case of Inderlal Panwarmal v. Khialdas Shewaram and Ors. reported in 11 G.L.R. at page 948. It was a case where the plaintiff had filed suit for a declaration that the writing passed by him in favour of defendant No. 1 was illegal, ultra vires, null and void ab initio and not binding on the plaintiff and the same was inoperative and ineffective because it was taken from him under coercion. Consequential relief was also prayed for. That relief was a relief for permanent injunction. The recital in the document was about the payment of the consideration of Rs, 17,600/- and the Registrar of the City Civil Court came to the conclusion that the plaintiff must pay court fees on that subject-matter of the suit. Revision was filed in this Court. It may be stated that the case before us is not a parallel case. However, the observations made in the case are useful in deciding this case and, therefore, we have referred to this case and those observations are as under.

But it is one thing to say that as a result of the declaration granted by the Court upon the plaintiff's suit, he would get some relief regarding the alleged payment of monetary consideration by defendant No. 1 to the plaintiff and it is another thing altogether to say that the substance of the suit was to obtain the relief capable of being valued in terms of monetary gain or prevention of monetary loss. The substance of the suit was to avoid the alleged agreement and the rest were purely the consequences flowing from such cancellation or avoiding of the agreement by the Court. If the agreement remained outstanding and the relief sought for by the plaintiff regarding the avoidance of that agreement was not granted various consequences might follow but in substance as well as in form the present suit cannot be said to be a suit to obtain substantive relief of monetary gain or prevention of monetary loss. Under these circumstances, it is obvious that Article 7 of the First Schedule of the Bombay Court Fees Act does not apply to the present case.

In the case before us also the substance of the petition is to get the award set aside. The passing of a decree or not passing of the decree are the mere consequences which are going to follow. Therefore, substantive re-lief of monetary gain or prevention of monetary loss is absent. Under these circumstances we are of the opinion that the present case would not be governed by Article 7 of Schedule I of the Bombay High Court Fees Act.

5. The learned Assistant Government Pleader, Shri M.B. Shah relied upon the case of Gujarat Safe Deposit Co. Ltd., v. Mustafa Mohmed Dabhi and Ors. reported in 19 G.L.R. at page 769. The passage on which the reliance was placed is as under :

It must also be realised that when an application is made by a party to set aside the award, ad valorem court-fees would be payable or it would fall under Article 7 of Schedule I inasmuch as the party concerned seeks the substantive relief either for preventing a monetary loss or securing a monetary advantage in respect of a relief which would then be capable of monetary evaluation.

We may say at this stage that it was a matter where an application seeking permission of the Court to file an award was pending and the question which was required to be determined was whether such an application does or does not fall under Article 7 of Schedule I of the Bombay Court-fees Act. It was held that no ad valorem court-fees was payable on such an application. While deciding that no ad valorem court-fees were required to be paid on that application seeking permission of the Court to file an award, the observation as quoted above were made. Apart from the fact as to whether the above observations are obiter or not, with great respect to the Single Judge who decided the matter we do not agree with the observations that when an application is made by a party to set aside the award, ad valorem court-fees would be payable or it would fall under Article 7 of Schedule I inasmuch as the party concerned seeks the substantive relief either for preventing a monetary loss or for securing a monetary advantage in respect of a relief which would then be capable of monetary evaluation. There is one more reason for coming to this conclusion arid that reason is that if the legislature wanted to fix ad valorem court-fees for a petition to set aside the award, the legislature could have dons so in Article 3 itself. In Article 3 of Schedule J of the Bombay Court-fees Act, 1959 it is specifically excluded that no ad valorem court-fees would be charged to set aside or modify any award otherwise then under the Arbitration Act, 1940. After so excluding it in Article 3, the Legislature could not have conceivably included it in Article 7 without making a clear mention thereof. In fact it is clear from reading the two Articles that it was never intended that ad valorem court-fees should be charged on an application to set aside any award under the Arbitration Act, 1940.

6. Our attention was also invited to a case The Gujarat State Financial Corporation v. Natson . and Ors. reported in : [1979]1SCR372 . It was a case under Section 31(1) of the State Financial Corporation Act and the question was whether the case would be governed by Article 7 of Schedule I of the Court-fees Act. It was held' the substantive relief in an application under Section 31(1) is something akin to an application for attachment of property in execution of a decree at a stage posterior to the passing of the decree.

7. The learned Assistant Government Pleader Shri Shah referred to a judgment in a case Premchand Gordhandas Valla v. The Rajpipla Nagrik Sahakari Bank Lid. and Anr. reported in 20 G.L.R. at page 389. There the question was a question under Section 6(iv)(j) of the Bombay Court Fees Act. It was decided that 'Susceptible', means' capable of taking, receiving'. Therefore,' susceptible of monetary evaluation' means' capable of admitting of monetary evaluation'. We may only say that an award passed by the Registrar's Nominees under the Gujarat Co-operative Societies Act is itself a decree capable of being executed and the words used in Section 6(iv)(j) are entirely different then the words used in Article 7 of Schedule I of the Bombay Court-fees Act, 1959.

8. We may also refer to a case Anne Venkatasubba Rao v. Anne Bhujangayya and Anr. reported in A.I.R. 1946 Madras at page 104 where it is observed that a fiscal legislation like the Court-fees Act must be strictly construed and where there is any doubt, the benefit of it should be given to the tax-payer. Here the question is whether an application to set aside an award is an application which directly brings about the result which is a substantive relief capable of being valued in terms of monetary gain or prevention of monetary loss. We are of the opinion that these are the consequences which may or may not follow. Under these circumstances the case would not be covered by Article 7 of Schedule I of the Bombay Court-fees Act, 1959 and, therefore, ad valorem court-fees would not be required to be paid.

9. The result would be that the Revision Application is required to be allowed and the order passed by the Civil Judge (S.D.), Bharuch dated 12-9-1978 in Miscellaneous Civil Application No. 30 of 1975 is set aside. Rule is accordingly made absolute with no order as to costs.


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