The State of Gujarat Vs State Bank of Saurashtra and Another

@JUDGMENTTAG-ORDER

B.C. Patel, J.@mdashState of Gujarat has preferred this Revision Application against the order passed by Civil Judge, Senior Division, Amreli on 3-10-1992 on Court-fee Reference No. 4 of 1992 in Special Civil Suit No. 95 of 1989.

2. Few facts relevant for the purpose of determining the issue in question are as under:--

2.1. Opponent No. 1 herein State Bank of Saurashtra filed a Special Civil Suit No. 95 of 1989 in the Court of Civil Judge, Senior Division, Amreli against the opponent No. 2 herein Karshanbhai Manjibhai Dobaria for recovery of Rs. 35,933/- with interest at the rate of 16% p.a. and cost on 26-9-1989. Opponent No, 1 (hereinafter referred to as the plaintiff) valued the suit at Rs. 35,933/- for the purpose of Court-fees.

2.2. In the plaint, in paragraph 3, it is averred that the opponent No. 2 (hereinafter referred to as the defendant) has, for agricul tural purpose, submitted an application for Cash Credit facilities and Cash Credit Facility of Rs. 1985/- was sanctioned by the plaintiff on 14-6-1987. Some property was mortgaged against this facility. Amount was to be paid with interest at 12% p.a. within a period of one year.

2.3. Again, on 6-7-1988, defendant, by executing another document creating charge on property, obtained Mid-Term Loan facilities to the tune of Rs. 2375/- and Rs. 2250/-have been sanctioned at interest of 11% p.a. and the said amount was to Be repaid within a period of 3 years.

2.4. Again on 10-7-1981, defendant executed another document for creating charge on property in favour of plaintiff and additional cash credit facility of Rs.5000/- was granted by plaintiff which was required to be repaid with interest at 15% p.a.

2.5. On 15-4-1982, defendant executed further agreement and obtained further cash credit facility of Rs. 6000/- from plaintiff,

2.6. On 11-1-1983, defendant executed; another agreement and mid-term loan of Rs. 5000/- have been sanctioned by plaintiff which was repayable with interest at 15% p.a.

2.7. Thus, on different dates, plaintiff granted three different facilities, known as: Cash Credit, Mid-term and Term loan. For these three facilities, defendant executed different agreements for different properties in favour of plaintiff, i.e. Survey No. 65/1 admeasuring 1 Acre 26 Gunthas, Survey No. 65/2 admeasuring 5 Acres and 22 Gunthas, Survey No. 155 admeasuring 2 Acres and 32 Gunthas, Survey No. 156 admeasuring 1 Acre and 32 Gunthas situated at village Barpatoli and Survey No. 1 admeasuring 16 Acres situated at village Sarvda. Thus, it is clear that on different dates, for obtaining different facilities of different nature at different rate of interest, charge has been created over different properties.

2.8. In para 11 of the plaint, it has been specifically mentioned that Rs. 15,280/- is outstanding in the account of the defendant in Cash Credit Account with interest till 30-9-1989; Rs. 7316/ - is outstanding in the account of the defendant in the mid-term loan account till 30-9-1989 and Rs. 13,499/- is outstanding in the Term Loan account with interest till 30-9-1989.

3. Inspecting Officer, Court-fees, Bhav nagar, submitted a report u/s 12(3) of the Bombay Court-fees Act, 1957 pointing out that in all, the Court-fees payable is Rs. 2660/-, as shown in the table below :--

Learned Judge rejected the reference by order dated 3-10-1992.

4. Section 18 of the Bombay Court-fees Act, 1959 (hereinafter referred to as the Act) reads as under:--

18. Multifarious suits.

"Where a suit embraces two or more distinct subjects the plaint or memorandum of appeal shall be chargeable with the aggregate amount of the fees to which the plaints or memoranda of appeal in suits embracing separately each of such subjects would be liable under this Act.

Nothing in the former part of this section shall be deemed to affect the powers conferred by the Code of Civil Procedure, 1908 (5 of 1908), Schedule 1, Order II, Rule 6."

It seems that.the trial Court considered that when two interpretations of a provision in taxing statute are reasonably possible, then the interpretation in favour of the plaintiff has to be adopted and not the one in favour of the revenue. The Court below has also observed that:

The Court should put a liberal interpretation on fiscal statutes like the Court-fees Act so as to lessen and not add to the burden of litigation."

5. What is required to be noted in the instant case is that the Bank has on different dates sanctioned loan under different heads at different rate of interest. The question is: Whether in spite of nature of transactions which are distinct, can it be said to be continuous one account ? As stated above, it is evident from the conduct that on different dates, by entering into different agreements, defendant obtained different types of facilities i.e. loan payable with different rate of interest, payable within one year to three years and the plaintiff granted the same on the understanding that the transactions are different and distinct.

6. Mr. Mehta, learned Additional Government Pleader submitted that as different transactions have been specifically pointed out and also claimed different rates of interest in different account, plaintiff could have filed three separate suits instead of one suit, and had it been so, plaintiff would have been required to pay separate court-fees, but merely by clubbing the amount, can the plaintiff avoid payment of Court-fees in accordance with law ?

7. Mr. Anand, learned advocate appearing for the respondent Bank, submitted that loan facility is given, may be of different nature, but the sum and substance is that loan is given to the defendant and as he failed to repay the loan amount with interest, the same is to be recovered and merely because the loan is granted in three different heads or merely because three or more different agreements have been executed on different dates, it would not change the nature of transaction, .i.e. loan granted to the defendant. Therefore, the Court-fee paid is proper and in accordance with law. It is further submitted that this being taxing statute, it should be construed in favour of the litigant when two views are possible.

8. In the case of Hiralal Motichand Vs. Ganpat Lahanu, , Full Bench of the Bombay High Court had an occasion to consider Section 17 of the Act (in pari materia) to Section 18 of Bombay Court-fees Act). That was a suit for balance on account. In that case, Macdonal, C.J. held as under (at p. 376):--

"It seems to me in a suit for a balance due on a Khata, which would ordinarily contain a number of items, each hem does not constitute a distinct subject. The subject matter of the suit is the balance due on the account and therefore, in this case, the Court-fee payable was the Court-fee payable on the aggregate amount and not on each time item in the khata" (underline emphasised).

The two other Judges of the Court also agreed with the View taken by Macdonal C.J. and Fawcett, J., observed that (at p. 377):

"..... where the tradesman has a bill against a party for any account in which the items are so connected together that it appears that the dealing is not intended to terminate with one contract but to be continuous so that one item if not paid shall be united with another and form one continuous demand, the whole together forms but one cause of action and cannot be divided."

It was argued by learned advocate for opponent No. 1 relying on this observation that in the instant case also, on different dates amount is given, and therefore, it is a continuous account, may be for the purpose of convenience different accounts might have been opened and operated. Cause of action cannot be divided. Therefore, Court-fees which is paid is in accordance with law.

9. Whenever there is an account with a Banker or Shroff or a person from whom a loan is taken by way of a single transaction, or an account is opened, it would be, one account. That account may be continuous i.e. by way of depositing the amount in the said account and again withdrawing from the said account. There may be thus several items either by way of deposit or by way of withdrawals but ultimately it would be one account and in such a case, the Court-fees payable would be on the balance amount and there cannot be any dispute to this proposition. But, in the instant case, as has been pointed out earlier, there is mention in the plaint itself that on different dates different types of loan repayable with different rate of interest is granted and defendant has enjoyed that facilities by creating charge on different properties on different dates, and therefore, can it be said that it is a khata or a single account? In the case of Hiralal (AIR 1992 Bombay 376) (supra) before the Full Bench, the case was of a single account, there nine items debited in the khata which remained undischarged after giving credit for the amounts paid in discharge of the previous hems of the debit. Suit was for a balance due in one account which was continuous, it was not the case of more than one account. It is needless to emphasise that for terminating the three different accounts opened by executing different agreements, one will have to make payment according to the agreed rate of" interest due in all the three accounts and only then all the three accounts can be said to have been terminated. In the instant case, it cannot be said that it is "a continuous account". In the instant case, for example, if the defendant deposits some amount in one account, would it be open for the Bank to divide it into three parts and give credit in three accounts? The answer obviously would be "no" meaning thereby that three accounts are neither "continuous" nor "a khata" (single account). As three separate accounts are being maintained, the amount so deposited is to be credited as per the desire of the account holder. Therefore, it is difficult to say that there is continuity as it is found in asingle account. It cannot be united with another which would form one continuous demand and it is indicative from the nature of transactions and from the plaint. Therefore, the decision of the Full Bench is of no assistance to the learned advocate for the original plaintiff opponent herein.

10. Full Bench of Madras High Court in the case of In Re: D. Lakshminarayana Chettiar and Another, considered the provisions contained in CPC and particularly Section 9, Order 2 Rule 6, Order 1, Rule 2, Order 2, Rule 3, Order I, Rules 1 and 13, and Order 2, Rule 6 and the Court observed that if Section 17 of the Act is read with the aforesaid provisions of the Civil Procedure Code, it shows that Section 17 (in pari materia to Section 18 of the Bombay Court-fees Act) is intended to prescribe Court-fees on consolidated plaint uniting distinct causes of action in respect whereof the plaintiff, if he choses could file separate suits. For applicability of Section 17, separate cause of action was taken as one of the tests and in para 27 of the judgment, the Court has observed as under :--

"(27) From the aforesaid re''sume'' of the Madras decisions the position may be stated thus: In the earlier decisions the expression "subjects in dispute" was defined to mean the cause of action or the subject matter of litigation, i.e., a right which one party claims as against the other and demands judgment of the court upon. The said decisions affording a workable definition of the word "subject" were not brought to the notice of the Full Bench in AIR 1930 Mad 833 (E). The Full Bench did not purport to lay down a rule of universal application. They definitely and in express terms confined the scope of that judgment to a case of possession and mense profits on the sole ground of long practice. The later conflict in cases was mainly due to the misapprehension of the scope of the Full Bench. The fact that the terms "distinct subjects" did not yield to a precise definition gave scope for varying and confiding decisions based on the facts of each case. But the analysis of the aforesaid judgments shows that in most of the cases the existence of separate causes of action was taken as the test, though not the sole test, for applicability of Section 17 of the Act."

Full Bench in para 36 answered the question as under:--

"Distinct subjects" in Section 17, Court fees Act mean distinct causes of action in respect of which separate suits should be filed but for the enabling provisions allowing them to be clubbed up in one suit. The distinctness or identity of the cause of action is the only criterion for the applicability of the section.

Considering this view, it is clear that there are distinct causes of action and it has been described in the plaint specifically in respect of which separate suits should be filed but for the enabling provision allowing to be clubbed into one suit, it cannot be said that Court-fee payable is on the total sum.

11. Mr. Anand, learned advocate placed reliance on a reported decision in the case of D.M. Kaushik Vs. Graduate Gas Service and Others, . In that case, a faulty gas cylinder caused an accident resulting in injuries to several members of a family and the death of one member. A suit for damages was filed by some members against the suppliers of the gas cylinder for certain amount. This amount constituted the total of the different sums claimed by the plaintiffs individually and Court-fee was paid on it. Respondent No. 1 supplied the gas cylinder which was carried by one Ajit Ram. The said cylinder was defective and was leaking before the same was installed by Ajit Ram. As a result of mishandling by Ajit Ram, gas from the same got leaked and caught fire and set the whole room ablaze. As a consequence, the petitioner, his wife, mother and the aunt suffered serious burns and the mother Samyukta Kaushik died in the hospital as a result of those burns. The suit for damages was filed for a total sum of Rs. 55,200/-. The petitioner himself claimed Rs. 22,000/-, his wife Rs. 10,700/-, his aunt Rs. 12,000/ -. Two sons and four daughters of deceased mother claimed Rs. 10,500/- on account of expenses incurred for the deceased and mental injury and torture suffered by her. An issue came to be framed whether the suit is properly valued for purposes of Court-fee and jurisdiction? Cause of action is one and common for all, i.e. supply of a defective cylinder the blasting of which caused injuries to different persons. One suit was filed. The Court, after considering various judgments, observed as under in para 12 of the judgment:

"..... I am of the opinion that in cases where the relief claimed whether in the form of a single item or separate items arises out of the same cause of action and the prayer is for an aggregate amount, Section 17 of the Act cannot be applicable. ''Distinct subjects'' in Section 17 is intimately connected with the cause of action. Where, in a suit more than one causes of action are combined Section 17 will be clearly attracted, but it will be stretching the language of the section a little too far to bring suits based on one cause of action within the ambit of this provision. The use of the qualifying adjective ''distinct'' with the work "subjects" in Section 17 is with a purpose and is quite significant and material. "Distinct subjets" clearly mean such subjects which are quite independent of each other and dp not arise out of or relate to the same set of facts or circumstances. The subjects arising out of the same cause of action, that is, the interconnected and intimately allied. Therefore ''distinct subjects'' must arise out of different causes of action."

As held by the Punjab High Court, identity of the cause of action is the only criterion for application of the section. When there are distinct causes of action in respect of which separate suits should be filed, but if it is clubbed together, and the distinct identity of causes of action remains, then separate court-fees would be required to be paid. In the instant case, the question is not of a solitary incident providing one cause of action and therefore that decision is not a helpful decision to Mr. Anand.

If on account of one wrong several persons are affected by the same wrong, then obviously the cause of action is the same. Therefore in the facts of that case, the Court held that the Court-fee was correctly paid by the plaintiff. While so, in the instant case, cause of action are different and it is clear that the plaintiff itself has drafted the; plaint accordingly. At the cost of repetition, it is required to be observed that if for different types of loan on different dates, different properties were mortgaged by the defendant with the Bank on different dates with different rate of interest, it cannot be said that cause of action is one and therefore also, this judgment is not of any assistance to support the case of Mr. Anand. But, on the contrary, it refers to different causes of action. In the instant case looking to the three independent accounts, subjects are quite independent of each other. Looking to the nature of different accounts, they do not arise out of or relate to the same set of facts or circumstances which may be present in a case arising out of same cause of action. Again same bundle of facts are not there and are not interconnected. One cannot say that existence of similar procedure or facts would constitute one cause of action.

12. The apex Court in the case of Shamsher Singh Vs. Rajinder Prashad and Others, has observed as under in para 4 of the judgment:--

As regards the main question that arises for decision it appears to us that while the court-fee payable on a plaint is certainly to be decided on the basis of the allegations and the prayer in, the plaint and the question whether the plaintiffs suit will have to fail for failure to ask for consequential relief is of no concern to the Court at that stage, the Court in deciding the question of court-fee should look into the allegations in the plaint to see what is the substantive relief that is asked for. Mere astuteness in drafting the plaint will not be allowed to stand in the way of the Court to look at the substance of the relief asked for.

Therefore, the Court will have to consider the substantive relief asked for. According to Mr. Anand, the relief asked for is total amount due, and therefore, the Court-fees are payable on the total amount. In the case of Shamsher Singh (supra) that was a suit filed by a Hindu son against the father and the mortgagee decree holder for a declaration that the mortgage executed by the father in respect of the joint family property was null and void for want of legal necessity and consideration, though couched in a declaratory form, the Court field that in substance is a suit either for setting aside the decree or for a declaration with a consequential relief of injunction restraining the decree-holder from executing the decree against the mortgaged property and the plaintiff is liable to pay ad valorem court-fee u/s 17(iv)(c). A mortgage decree against the father is a good decree against the son and unless the decree is set aside it would remain executable against the son, and it was essential for the son to ask for setting aside the decree. Plaintiffs filed a suit for a declaration that the mortgage executed by their father in favour of the appellant is null and void and ineffectual as against them as the property was a joint Hindu family property and the mortgage had been effected without consideration of family necessity. On this plaint, the plaintiffs paid a fixed court-fee of Rs. 19-50 and the value of the suit for purpose of jurisdiction was given as Rs. 16,000/-. A preliminary objection was raised by the appellant that the suit was not properly valued for the purpose of court-fees and jurisdiction. The apex Court, amongst other decisions also considered the case of Faqir Chand Vs. Harnam Kaur and Another, and the Court observed that:

Consequently when the plaintiffs sued for a declaration that the decree obtained by the appellant against their father was not binding on them they were really asking either for setting aside the decree or for the consequential relief of injunction restraining the decree holder from executing the decree against the mortgaged property as he was entitled to do so. This aspect is brought out in a decision of the Full Bench of the Lahore High Court in Mt. Zeb-ul-Nisa v. Din Mohammad AIR 1941 Lah 97 (FB) where it was held that:

"The mere fact that the relief as stated in the prayer clause is expressed in a declaratory form does not necessarily show that the suit is for a mere declaration and no more. If the relief so disclosed is a declaration pure and simple and involves no other relief, the suit would fall''under Article 17(iii)."

The Court granted the plaintiff three months'' time to pay the necessary court-fees. The decision indicates as to see what is substantive relief that is asked for. Merely because the suit was filed for a declaration or for consequential relief of injunction would not mean that the Court is not entitled to look at the substantive relief that is asked for. This decision casts duty on the Courts to see as to what provision would be attracted in the facts of the case.

13. The Division Bench of this Court (Coram: A.P. Ravani and R. A. Mehta, JJ.) in C.F.R. No. 2 of 1982decided on 1st March, 1985 reported in 1985(22) GLT 113 dealt with Section 18 of the Act. In that case, there were different deposit receipts. They were clubbed together and by one notice demand was made. The court held that it cannot be said that there is only one subject.

In the case of Cotseeds Corporation, Rajkot v. Cotton Corpn. of India reported in 1988(2) Guj LH 140, this Court, (Coram: A.P. Ravani, J.) had an occasion to deal with Section 9(c) of the Act. The Court applied the ratio of Shamsher Singh Vs. Rajinder Prashad and Others, . In that case, two contracts on different dates were executed for different quantities at different rates. One contract was executed on 28-11-1986 for 4500 quintals of cotton seeds at Rs. 51-25 per 20 kgs. Second contract was executed on 8-12-1986 for 450 quintals at Rs. 54-60 per 20 kgs. A suit was filed in the Court of 2nd Joint Civil Judge, J. D. Rajkot. The court directed that amount of Rs. 18,800/- was required to be paid. The plaintiff valued the relief at Rs. 300/- and paid court-fees of Rs. 30/- only. Looking to two different contract, one where the amount of consideration was Rs. 13,78,125/- and the other wherein the amount or consideration was Rs. 1,45,125/-, court-fees of Rs. 15,000/-maximum and Rs. 3800/- respectively were demanded which was challenged. Considering Section 18 of the Act, the Court rejected the contention and observed as under:--

"Section 18 provides for charging court-fees in respect of multi-farious suits. When the suit embraces two or more distinct subjects the court-fees to be levied would be on the basis of calculation on each separate subject and each separate subject is to be clubbed together. In fact such a suit would be bad for multifarious ness, and the Court may order separate trials or make such other order as may be expedient in the interest of justice ..... It is obvious that the subject matter of the suit are two different documents of sale of cotton seeds, one dated 28th November, 1986 and another dated 8th December, 1986. Causes of action arising out of both the aforesaid contracts have been clubbed together. Hence, as provided u/s 18 of the Act the Court-fee has to be levied after evaluation both the subject-matters separately....."

In view of the decisions referred to herein-above, it becomes very clear that a cause of action arises out of different contracts executed on different dates and merely they have been clubbed together it is difficult to accept the contention of the respondent that Court-fees cannot be levied as provided u/s 18 of the Act. Really speaking, the Court ought to have levied the Court-fees after evaluating 3 the subject matters separately.

In the result, this Revision Application is allowed. Plaintiff repsondent No. 1 is granted four weeks'' time to pay the deficit court-fee stamp. Rule made absolute accordingly with no order as to costs.