Cannot Arbitrarily Value Damages: Punjab & Haryana High Court Rules Plaintiff Must Pay Ad Valorem Court Fee On Specific Claims

"It is only with respect to the category of suits specified in clause (iv) of Section 7 of the Act that the plaintiff has the liberty of stating in the plaint the amount at which relief is valued and Court-fees would be payable on the said amount." Punjab and Haryana High Court, in a significant ruling, held that a plaintiff claiming a specific amount as unliquidated damages in a civil suit cannot bypass the requirement to pay ad valorem court fees.

Justice Amarjot Bhatti observed that when a plaintiff quantifies their claim for damages, they are bound by the statutory mandate under the Court Fees Act, 1870, to pay the requisite court fee on the claimed amount, rejecting the plea that such fees could be paid only after the final decree.

The petitioners filed a civil suit seeking ₹10 Lakhs in damages for alleged malicious prosecution. While the defendants filed an application under Order 7 Rule 11 of the CPC seeking rejection of the plaint for insufficient court fees, the trial court directed the plaintiffs to make good the deficiency. The petitioners challenged this order in the High Court, contending that since the damages were unliquidated, the court fee could be determined only upon adjudication at the time of the final decree.

The core legal issue before the Court was whether a suit claiming a specific sum as damages falls under Section 7(i) of the Court Fees Act, requiring ad valorem court fees, or if it allows the plaintiff to provide a tentative valuation under Section 7(iv). The Court also addressed whether a plaint can be subjected to rejection under Order 7 Rule 11(c) of the CPC if the plaintiff fails to comply with the court's directive to rectify the stamp duty valuation.

The High Court emphasized that the liberty to value a suit as per the plaintiff's discretion is limited strictly to categories defined under Section 7(iv) of the Court Fees Act. Suits for money, including those for damages or compensation, fall squarely under Section 7(i), which mandates that court fees be computed according to the specific amount claimed by the plaintiff.

Ad Valorem Fee Is Mandatory

The Court noted that since the plaintiffs had explicitly specified the amount of ₹10 Lakhs in their pleadings, they could not treat the suit as one with an indeterminate valuation. Relying on the Supreme Court’s dictum in State of Punjab and others vs. Dev Brat Sharma, the bench clarified that there is no scope for invoking Section 7(iv) when a specific monetary relief is prayed for.

No Absolute Right To Defer Fees

The Court rejected the petitioners' reliance on previous coordinate bench rulings, observing that those decisions did not override the statutory requirement of the Court Fees Act when the claim is quantified. The bench affirmed that the trial court acted within its jurisdiction under Order 7 Rule 11(c) of the CPC in requiring the deficiency to be cleared to avoid rejection of the plaint.

"Once the suit in question was a money suit for compensation and damages falling under clause (i) of Section 7 of the Act, ad valorem Court-fees would be payable on the amount claimed."

The High Court upheld the trial court's order, finding no legal infirmity in the direction to pay the court fee. The petition was dismissed, and the plaintiffs were granted a period of two weeks to comply with the payment, failing which the trial court is entitled to proceed with the rejection of the plaint.

Date of Decision: 24 August 2026