1. This Rule raises the question ofcourt-fees payable by the plaintiff. The plaintiff instituted the suit claiming the Bijniraj Estate which was under the management of the Courtof Wards together with certain movable properties. The suit as originally instituted was for declaration only and when it was held by theCourt that a purely declaratory suit was barred 'toy the proviso to Section 4, Specific Relief Act, the plaintiff filed a petition for amendment by adding a prayer for possession and giving up his claim to certain movable properties and also one item of immovable property which has been described as Monoharpur Chak which has been resumed by the Government. The question of court-fees arose when the plaintiff sought to add the prayer for possession.
2.It is common ground that the court-fee payable should be determined by Article 7, Para. 5 of the Court-Fees Act. The plaintiff valued his claim at Rs. 2,17,271/- odd on the footing that according to the administration report of the Court of Wards which was managing the estate, the net profits which had arisen, from the properties during the year next before the date of presentation of the plaint amounted to Rs. 20,723-10-11 pies and three times this amount represented the market value of the property. The value of the immovable properties was thus stated to be Rs. 60,171/- odd to which the plaintiff added certain additional items about which there is no dispute between the parties. According to the plaintiff, the market value is three times the net profits, because under the provisions of the Assam Abolition of Zemindary Act the owners of estate are to receive three times the net profits as compensation.
3. The defendants challenged the valuation made by the plaintiff on the ground that the net profits as shown in the administration report of the Court of Wards are wrong, that on a proper estimate the net profits would be much higher and that the provisions of the Assam Abolition of Zemindary Act did not afford a proper criterion for determining the market value of the properties in dispute.
4. It is admitted that the properties described in Sen. A of the plaint are impartible. According to the administration report of the Court of Wards, the gross collection of the estate is Rs. 6,43,875/-. The total cost of management including litigation expenses and audit fees amounts to Rs. 1,79,000/-. The Subordinate Judge has held that the cost of management is too high and has reduced it to Rs. 96.500/- by making an allowance of 15 percent. upon gross collection, with the result that the net profit has been increased by Rs. 82,500/-. On this basis, the net profits of the estate have been found to be Rs. 1,03,000/- and the plaintiff has been directed to pay court-fees on 15 times this amount, that is, on Rs. 15,45,000/-. The maximum court-fee of Rs. 10,000/- under the Court-Fees Act becomes payable as soon as the valuation reaches the figure of Rs. 11,00.000/-. The plaintiff has accordingly been directed to pay the maximum court-fee. Against this order the plaintiff has obtained the present Rule.
5. Mr. Mitter appearing in support of the Rule has argued that under Section 7 Para. 5 of the Court-Fees Act the Court has to find the net profits which have actually arisen during the year next beforethe institution of the suit and has no jurisdiction to ascertain the net profits that ought to have arisen, Mr. Gupta appearing for the opposite parties has, on the other hand, contended that the expression 'net profits' in Section 7 Para. 5 means the gross collection minus the expenses reasonably incurred for collection.
6. Under Section 7, Para. 5 of the Court-Pees Act the plaintiff has to pay court-fees upon 15 times the net profit which has arisen from the lands during the year next before the institution of the suit, or if the Court thinks that such profits have been wrongly estimated, 15 times such amount as the Court may assess as such profits, or according to the market value of the land, whichever is lower. Upon the materials on the record, it appears to us that the rival contentions put forward by the petitioner and the opposite parties, as noted, above, do not require any decision in this case, because even if we accept the contention of the petitioner, as noted above, he is not entitled to succeed. Prom the statement of valuation filed by the petitioner under Section 8A of the Court-Fees Act, we find that for the purpose of calculating the net profits which have arisen from the lands, the plaintiff has various items. Mr. Gupta has argued that the plaintiff is not entitled to deduct items Nos. 4, 5 and 6 of the list of disbursements as shown in the statement of valuation. The gross collection of the estate, as we have already stated, is Rs. 6,43,875/-. From this figure the plaintiff has deducted Rs. 36,780/- as the maintenance and educational allowances of the junior members of the impartible estate; Rs. 648/- as the maintenance allowance paid to widows forming charge on the estate and Rs. 69,473-13-0 as recurring expenditure for medical and educational institutions founded and maintained by the estate in commemoration of the memory of ancestors (Vide items Nos. 4, 5 and 6 of the list of disbursements in the statement of valuation. The total of these three items is Rs. 1,02,901/- odd. If we hold that these three items cannot be deducted from the gross collection for calculating net profits, the net profits, as shown in the statement of valuation, viz., Rs. 20,723 odd, would be increased by the aforesaid amount. We have, therefore, to consider the meaning of the expression 'net profits which have arisen from the land' as used in Section 1 Para. 5 of the Court-fees Act.
7. In our opinion, the expression 'net profits' means the difference between the gross collection and the expenses incurred for collection, management and preservation of the estate including expenses incurred for payment of statutory public charges, for example, revenue, cesses, taxes, local rates and, the like. Litigation costs and audit fees may be deducted as expenses incurred for the management of the estate, but we cannot hold that maintenance and education allowances paid to junior members of the family and widows and grants to medical and educational institutions can be deducted for arriving at the net profits of the estate. Mr. Mitter has argued that under the Hindu Law relating to impartible estate the maintenance of junior members is a charge on the estate and can, therefore, be legitimately deducted. We cannot, however, accept this contention. In order to entitle the plaintiff to deduct any amount from the gross collection it must be shown that the amount spent had some connection with the collection of rent or management and preservation of the estate.
8. Mr. Mitter has relied upon the decision of the Judicial Committee in the case of -- 'Bejoy Singh Dudhuria v. Commr. of Income-tax, Calcutta', , for the propositionthat under the Indian Income-tax Act the amount paid to any member of the family as maintenance allowance does not form part of the income of the assessee. In our opinion, that decision does not throw any light on the point which we have to consider in the present case. In this case we have to consider the meaning of net profits arising from the lands and not the income of an individual. We are inclined to hold that unless the expenses are incurred in connection with the earning of profits, they cannot be taken into account in ascertaining the net profits arising from the land. This is also the view taken by Chandrasekhara Ayyar J. in the case of -- 'Ratnavelu Pillai v. Varadaraja Pillai', AIR 1942 Mad 585 (B). The disbursements shown in items Nos. 4, 5 and 6 of the list of disbursements in the statement of valuation are not expenses incurred for earning the profit, but in our opinion they were disbursements made out of the net profits. In this view of the matter, we hold that the plaintiff is not entitled to claim the deductions as mentioned in items Nos. 4, 5 and 6 of the disbursements in the statement of valuation and therefore the plaintiff has wrongly estimated the net profits. The net profits shown by the plaintiff in the statement of valuation, that is, Rs. 20,723/- odd, should be increased by Rs. 1,02,901/- odd, which is the total of items Nos. 4, 6 and 6, as stated above. The total net profits will thus amount to Rs. 1,23,624/-odd. The plaintiff should be directed to pay court-fee on 15 times this amount unless, of course, the market value is lower. The Subordinate Judge has found that the market value of the properties is Rs. 92,00,000/- on the basis of the valuation put by the plaintiff in the plaint as originally filed. Mr. Mitter has contended that the plaintiff has abandoned his claim to some of the items of the original plaint and accordingly the value to the claim has reduced. He has further argued that the original valuation was adopted by the plaintiff from another plaint in a suit instituted by defendant 1. Whatever may be the reason for the plaintiff's valuing the properties at Rs. 92,00,000/-, the statement in the original plaint is an admission which binds the plaintiff unless the plaintiff shows it to have been wrongly made.
In our opinion, the plaintiff has failed to show that the admission was wrongly made by him. Prom the plaint as originally filed, we find that the value was stated to be Rs. 92,00,000/-. Subsequently, there was an application for amendment of the plaint by adding two schedules, viz., Schedules D and E. The total value of the properties included in Schedule D was about Rs. 3,00,000/-pdd. The total value of the properties included in Schedule is Rs. 4,00,000/- odd. The total value of all the properties after the amendment thus comes up to little over Rs. 99,00,000/-. The plaintiff has abandoned his claim to the properties described in Schedule E and also the claim to Monoharpur Chawk which is included in Schedule A. The annual demand in respect of Monoharpur Chawk as stated in the statement of valuation is Rs. 10,000/-. Therefore, the market value of the Monoharpur Chawk and all the properties described in Schedule E will have to be deducted from the total value of the properties as described in the plaint. Even if we assess the value of the Monoharpur Chawk at Rs. 2,00,000/- at 20 years' purchase, we find that the plaintiff is entitled to claim a deduction of a little over Rs. 6,00,000/-on account of the abandonment of a part of his claim. This will bring down the value of the properties to little over Rs. 92,00,000.
9. It now remains for us to dispose of the contention that the market value of the property should be assessed at three times the profits. Under the Assam Acquisition of Zemindary Act, the compensation payable by the State has been fixed at three times the net profits. We agree (with the learned Subordinate Judge in holding that this does not furnish a proper standard for assessing the market value under the Court-fees Act. As a result, we hold that the market value of the properties in dispute cannot be less than 15 times the net profits that have arisen from the land during the year next before the institution of the suit. The plaintiff will, therefore, have to pay court-fees upon 15 times the net profits as determined by us, that is, 15 times Rs. 1,23,624/-. In order to obtain any relief in this Rule, the plaintiff will have to show that the valuation of the properties claimed by him is less than Rs. 11,00,000/-. In our opinion, the plaintiff has failed to prove that, with the result that the plaintiff will have to pay maximum court-fee of Rs. 10,000/- upon the plaint.
10. We, therefore, affirm the decision of the learned Subordinate Judge though on different grounds. This Rule is accordingly discharged, but in the circumstances of this case, there will be no order as to costs.
11. The plaintiff will have to pay the deficitcourt-fees within a period of three months fromthis date.