CASE: Commercial Aviation & Travel Company & Ors vs Vimal Pannalal 1988 AIR

1636

NAMES OF PARTIES:

Petitioner: Commercial Aviation & Travel Company & Ors

Respondent: Vimal Pannalal

JUDGE:

Dutt, M.M. (J), Misra Rangnath

BACKGROUND:

The case of Commercial Aviation & Travel Company & Ors. vs Vimal Pannalal was heard by
the Supreme Court of India on July 13, 1988. The appeal was filed by the defendants against
the judgment of the Delhi High Court. The main issue in the case was whether the suit filed
by the plaintiff for dissolution of partnership and accounts was undervalued for the purpose
of court fees.

FACTS:

The plaintiff filed a suit in the Delhi High Court seeking the dissolution of the partnership
and accounts. The plaintiff valued the suit at Rs. 25 lakhs for jurisdiction and at Rs. 500 for
court fees. The defendants raised a preliminary objection, contending that the relief sought in
the suit had been undervalued and requested the court to reject the plaint under Order VII,
Rule 11(b) of the Code of Civil Procedure.

The learned Single Judge of the High Court rejected the preliminary objection and held that
the suit was not undervalued. The defendants appealed to a Division Bench, which affirmed
the decision of the Single Judge, relying on a previous Full Bench decision of the High Court.

ISSUES:

Whether the suit filed by the plaintiff was undervalued for court fees.

Whether the court had the power to interfere with the plaintiff’s valuation of the relief sought.

HOLDING:

In suits mentioned under section 7(iv) of the Court Fees Act, the plaintiff has the right to
value the relief sought, subject to any rules made under the Suits Valuation Act. In a suit for
accounts, it is difficult for the plaintiff to value the relief until the accounts are taken
accurately. The court cannot interfere with the plaintiff’s valuation unless there are objective
standards or positive materials on the face of the plaintiff.
In this case, the Supreme Court recognized the practical difficulties in valuing suits for
accounts, where the exact amount due cannot be determined until the accounts are taken. By
affirming the plaintiff’s right to determine the value of the relief sought, the court ensured
that plaintiffs are not burdened with arbitrary valuation requirements that may hinder access
to justice.

RATIONALE:

The judgment also clarified that the court should not interfere with the plaintiff’s valuation
unless there are objective standards or positive materials on the face of the plaintiff. It
prevents the court from being overly intrusive in determining the value of the relief and
maintains the plaintiff’s autonomy in assessing the value of their claims.

DICTA:

The court held that in suits for accounts, it is not possible to determine the correct value of
the relief at a preliminary stage. The Supreme Court emphasized that the plaintiff cannot
whimsically choose a ridiculous figure for the suit. Still, in the absence of objective standards
or positive materials, the plaintiff’s valuation of the relief sought should be accepted. The
Court upheld the principle that the plaintiff has the right to value the relief subject to any
rules made under the Suits Valuation Act.

PARTY’S ARGUMENTS:

The defendants argued that in a suit for accounts, the plaintiff could not arbitrarily value the
suit according to their whims. They contended that there was an objective standard or positive
material on the face of the plaint, and the valuation of the relief, ignoring such an objective
standard, was demonstratively arbitrary.

The plaintiff relied on the Full Bench decision of the High Court, which held that the plaintiff
had the right to place any value on the relief sought, subject to any rules made under the Suits
Valuation Act. They argued that the court had no power to interfere with the plaintiff’s
valuation.

JUDGEMENT:

The Court dismissed the appeal and upheld the lower courts’ decisions. The apex court held
that in suits mentioned under section 7(iv) of the Court Fees Act, it is difficult to lay down a
standard of valuation. The legislature has not provided any standard of valuation in the Act.
Therefore, the plaintiff has the right to value the relief sought, subject to any rules made
under the Suits Valuation Act.

The Supreme Court also observed that in a suit for accounts, it is almost impossible for the
plaintiff to accurately value the relief. Until the accounts are taken, the plaintiff cannot
determine the exact amount that may be due to them. The court noted that Order VII, Rule
11(b) of the Code of Civil Procedure requires the court to come to a finding that the relief
claimed has been undervalued. In a suit for accounts, the court can’t determine the correct
value at a preliminary stage.