Non-Executant in Possession Need Not Pay Ad Valorem Court Fee for Declaration of Fraudulent Deeds: P&H HC

High Court of Punjab and Haryana at Chandigarh delivered its ruling in the case of Rajan and Another vs. Sunita Rani. The court, presided by Justice Alka Sarin, upheld the trial court’s dismissal of an application filed by the petitioners seeking rejection of the plaint based on the plaintiff’s failure to affix ad valorem court fee on the market value of the disputed property. The ruling reinforces the legal principles concerning the obligation to pay ad valorem court fee depending on the party's role in the disputed sale deed.

The dispute revolves around a suit filed by Sunita Rani (the respondent) against Rajan and Another (the petitioners). The respondent sought a declaration that a sale deed dated August 3, 2017, executed in favor of petitioner Rajan, and a subsequent transfer deed dated July 31, 2020, in favor of his wife, were illegal, fraudulent, and void. She further sought a permanent injunction to prevent the petitioners from altering or alienating the disputed property or dispossessing her from the premises.

The core legal issue pertained to the petitioners’ contention that Sunita Rani, while seeking the annulment of the sale and transfer deeds, was required to pay ad valorem court fee based on the market value of the property. The petitioners had filed an application under Order VII Rule 11 of the Code of Civil Procedure, 1908 for rejection of the plaint on these grounds. However, the trial court dismissed their application, leading to the current revision petition.

Justice Alka Sarin, in her judgment, referred to the Supreme Court's ruling in Suhrid Singh @ Sardool Singh vs. Randhir Singh & Ors. [2010(12) SCC 112], which clarified the distinction between an executant and a non-executant of a sale deed when it comes to paying ad valorem court fees.

Executant's Responsibility: If the executant of a sale deed seeks to cancel it, they must pay ad valorem court fee based on the property’s value.

Non-Executant's Case: A non-executant (like Sunita Rani) only needs to pay a fixed court fee when seeking a declaration that a deed is void, provided they are in possession of the property. However, if a non-executant also seeks possession of the property, ad valorem court fee becomes applicable.

In this case, the court noted that Sunita Rani was not the executant of the sale deed and was already in possession of the property. She was not seeking possession but merely a declaration that the deeds were void due to fraud. Based on these facts, the court concluded that Sunita Rani was not required to affix ad valorem court fee.

The High Court upheld the trial court’s decision, stating that there was no error in dismissing the application under Order VII Rule 11 CPC. The petitioners' revision was found without merit, and their appeal was dismissed.

Date of Decision: September 25, 2024

Rajan and Another vs. Sunita Rani