P L D 1980 Karachi 492 (PLP)

Plaintiffs Nos. 1 to 4 and defendants Nos. 1 and 2 are the shareholders in Rex Talkies Limited, a private Limited Company, registered under the Companies Act, 1913. It appears from the statements made in the plaint that the defendants Nos. 1 and 2 on or about 29th November 1978, without obtaining prior consent from the plaintiffs, and in the alleged violation of Article 16 of Association of the Company, entered into an agreement with defendant No. 3 for the sale of their shares held in the Company, as per agreement dated 29th November, 1978 annexed with the plaint. When the plaintiffs came to know of the said agreement between defendants Nos. 1 and 2 on the one hand and defendant No. 3 on the other, the plaintiffs objected to the said agreement and called upon the defendants Nos. 1 and 2 that if they intended to sell their shares, the plaintiffs were ready to purchase then at the value proposed by defendant No.

3. The plaintiffs also called upon the defendants Nos. 1 and 2 to cancel the alleged agreement and return the money received by them from defendant No.

3. The said request of the plaintiffs having not been accepted by the defendants they chose to file the above suit wherein it was, inter alia alleged that the said agreement was neither legal nor binding on the. plaintiffs. It was further asserted that the defendants were liable to be restrained by a permanent injunction from enforcing, in any manner, the alleged agreement.

2. The plaintiffs valued the above suit at Rs. 51,000 for the purpose of jurisdiction and Rs. 200 for declaration and for Rs. 200 for permanent injunction and for Rs. 200 for mandatory injunction. It was also stated in para. 10 of the plaint that a]though no court-fee was payable on this suit. instituted on the original side of this Court, the court-fee as provided under the Court Pees Act, has been affixed, without prejudice to the said contention. The plaintiffs,- accordingly, paid a sum of Rs. 45 as courtfees. The plaintiffs, however, undertook to pay, if any additional courtfee was found to be so payable by the plaintiffs. An objection to the payment of court-fee of Rs. 45 only was raised by the Office and a reference in this respect was made to the Courts On 15-9-1979, it was observed by my learned brother, Zaffar Hussain Mirza, J. that "the plaint be admitted with the court-fee already paid subject to all just exceptions at the trial".

3. The defendant No. 3 has now filed an application under Order VII, rule II read with section 151, C. P. C. alteging that the reliefs, as claimed, have been under valued by the plaintiffs, and that the plaint has been written on paper insufficiently stamped. It was, therefore, prayed that the plaintiffs be required to correct the valuation and pay the appropriate court-fees, and if they fail to do so within the time fixed by this Court, the plaint may be rejected. In the affidavit filed in support of the said application, it was stated by the defendant No. 3 that the agreement being subject-matter of the suit relates to the transfer of shares for Rs. 67,00,

000. Annexed with this affidavit, the defendant No. 3 also filed particulars of shares held by the plaintiffs. In the counter-affidavit filed on behalf of the plaintiffs, it was submitted that the reliefs claimed by the plaintiffs, in the above suit, were properly valued and that the proper court-fees have been paid by the plaintiffs. I have heard the counsel for the plaintiffs and the defendant No. 3 on the above application.

4. It seems to be settled law that for consideration of an application under Order VII, rule 11, C. P. C. the Court is to confine itself to the averments made in the plaint. If any authority is needed for the same i may be found in P L D 1954 Sind 70, and P L D 1970 Kar.

548. As such, I keep the particulars of shares filed by the defendant No. 3 alongwith his affidavit outside my purview for the purpose of deciding this application made under Order VII, rule

11. C. P. C. Yet, I will be examining the contents of the plaint and the documents which have been referred to in the plaint filed alongwith it, in order to consider and appreciate the question of the proper valuation of the suit and payment of court-fee thereon, in accordance with the provisions of the Court Fees Act, 1870 and the suits valuation Act, 1887.

5. The plaintiffs have sought the following reliefs:- "(a) Declaration that the agreement dated 29th November 1978, between the defendants I and 2 and 3 is without any lawful authority or consent of the plaintiff and against the provisions of Article 16 of Articles of Association of the Company and is thus neither legal nor binding on the plaintiffs; (b) to grant permanent injunction restraining the defendants and or any person acting on their behalf from selling and/or transferring and/or negotiating the sale and/or handing over the possession of the shares and/or properties of the Company by the defendants in violation of Article 16 of the Articles of Association of the Company, to grant mandatory injunction against the defendants requiring the defendants Nos. I and 2 to transfer their shares in the Company in favour of the plaintiffs in accordance with Article 16 of the Article of Association-of the Company."

6. As it would appear from the reliefs claimed, the subject-matter of dispute is the agreement dated 29th November, 1978 between defendants Nos. 1 and 2 as the sellers and defendant No. 3 as the buyer. The plaintiffs are seeking not on a declaration simpliciter that the said agreement is against the provisions of Article 16 of the Articles of Association of the Company and, thus, neither legal nor binding on the plaintiffs, but have also prayed for permanent injunction restraining the defendant from selling or transferring and handing over the possession of the said shares by the defendants. Additionally, the plaintiffs have also prayed for the grant of a mandatory injunction against the defendants requiring the defendants Nos. 1 and 2 to transfer their shares in the Company in favour of the plaintiffs, in accordance with Article 16 of the Article of Association of the Company. The bare reading of the reliefs claimed in the suit will show that the plaintiffs are not only seeking declaration but are also seeking consequential reliefs by way of permanent as well as mandatory injunction, involving transfer of movable property worth Rs. 67,00,000 in their favour.

7. Contentions of the learned counsel for the defendant No. 3 are two-fold. His first contention is that plaintiffs have valued the suit for purpose of jurisdiction at Rs. 51,000 but for purpose of court-fee the suit has been valued, in ail at Rs. 600, that is Rs. 200 for each of the three reliefs whereas under section 8 of the Suit Valuation Act, 1887, the value of suit for purpose of court-fee and jurisdiction is to be the same. His second contention is that the suit has not been properly valued and court-fee paid thereon is insufficient.

8. As regards the first contention that the valuation for purpose of jurisdiction and court-fee must be the same, section .8 of the Suits Valuation Act, 1887 is relevant which is reproduced below:. "court-fee value and jurisdictional value to be the same in certain suits wherein suits other than these referred to in the Court Fees Act, 1870, section 7, paragraph (v), (vi) and (ix) and paragraph (x) clause (d), court-fees are paryable ad valorem under the Court Fees Act, 1870, the value as determinable for the computation of court fees and the value for purpose of jurisdiction shall be the same," As would appear, section 8 of the Suits Valuation Act, 1887, is applicable to all such suits in which ad valorem court-fee is payable other than those specified in the section itself. The valuation fixed for court-fee should be the value for purpose of jurisdiction also. Even if the reliefs sought For by the plaintiffs fell within section 7(iv) (c) and (d) of the Court Fees Act, the plaintiffs in view of the said section 8 of the Suits Valuation Act, 1887 having already fixed the value of the suit for purpose of jurisdiction, were bound to fix the same value for the purpose of court-fees as well it cannot and, in fact, was not contended by the plaintiffs that they ca value the relief for purpose of jurisdiction at one figure and for the purpose of court-fee at another. In this connection, reliance may be placed on decision in Mohammad Aslam Khan v. Mohammad Hussain and others (1) As such the first contention of the learned counsel for the defendant No. 3 is upheld.

9. The second contention that the reliefs sought for in the plaint have not been properly valued and proper court-fees have not been paid, finds (1) P L D 1959 Pesh. 101 support from the contents of the agreement dated 29-11-1978 (Annex `B' to the plaint). The said agreement, inter alia, provides that defendant: Nos. I and 2, being the registered shareholders of 5,000 shares of the face value of Rs. 5,00,000 (five lacs) have agreed to sell, transfer and assign the said 5,000 shares to defendant No. 3 for a total consideration of Rs. 67,00,OOC (sixty-seven lacs) out of which a sum of Rs. 13,00,000 has already been paid by defendant No. 3 to defendants Nos- 1 and 2 and the balance of Rs. 54,00,000 has been agreed to be paid on 31-3-1979. Upon the plain reading of this agreement and in the light of the reliefs sought for by the plaintiffs, as already reproduced from the plaint, it is apparent that the suit for the purpose of court-fee has been arbitrarily valued. In support of this view the learned counsel for the defendant No. 3 has put his reliance on the cases of Mohammad Siddig v. Haji Ahmed & Co. (1) and Haji Gul v. Mst. Aisha (2). In the first case, Mohammad Siddiq v. Haji Ahmed & Co. a Division Bench of the High Court of West Pakistan, Karachi Bench following the Full Bench ruling of the J. C. Court, Sind, in the. case of Lakhumal Deepchand and another v. Deepchand Tolaram and others (3) held as follows:- "It seems to us' that ordinarily in suits falling under section 7(iv) (c) a plaintiff is entitled to put his own valuation but in case the Court comes to the conclusion that it is arbitrarily fixed it can put its own valuation and ask the plaintiff to pay court-fee on the valuation. We are in respectful agreement with the view of Davis, J.C. that absence of the rule under section 9 of the Suits Valuation Act is no bar to the exercise of the power under Order VII, rule 11, C. P. C. and that the question as to what is proper valuation depends upon the circumstances of each suit and the judicial decision of the Court. To hold otherwise would mean to give unlimited power to litigants in drafting their prayers so as to include or -exclude relief with a view to confer jurisdiction on the Court to try the suit." In the other case of Haji Gul v. Mst. Aisha a Single Judge of this Court observed as follows:- "The first contention of Mr. Niazi, is that as the original suit was only for declaration that the respondent was the full owner of the property and not for possession, the court-fee on . the suit was governed by Article 17 (iii) of the. Second Schedule to the Court Fees Act, which prescribes a fixed fee of Rs.

15. This contention is repelled on the short ground that the suit filed by the respondent was not only for a declaration but also for injunction. It was therefore clearly a suit for a declaration with consequential relief, as held by a Full Bench of the said Chief Court in Lakhomal Deepchand and others (A I R 193 Sind 241), and therefore, fell under section 7(iv) and not Article 17(iii) of the Second Schedule. A similar view was taken by a Division Bench of West Pakistan in Mohammad Siddiq and others v. Haji; Ahmed & Company (P L D 1967 Kar. 468), and by the Calcutta High Court in the case reported in A I R 1954 Cal. 34."

10. I may also refer to another decision of this Court reported in P L D 1971 Kar.

682. In this case, a mandatory injunction had been sought in respect of property worth more than Rs. 67,

000. The plaintiff had valued his claim for injunction at Rs. 200 only. This value was held as (1) P L H 1967 Kar. 468 (2) P L D 1973 Kar. 653 (3) A I R 1937 Sind 241 having been fixed arbitrarily, and the plaintiff was ordered to be returned to the plaintiff to be presented to the proper Court.

11. For the foregoing reasons, it is held on the basis of the reliefs sought by the plaintiffs in respect of the said agreement (Annexure `A' toy the plaint) that it was not open to the plaintiffs to put their own arbitrary valuation of the court-fees in the suit and that the suit has been undervalued and court-fee insufficiently paid. I will, therefore, order the plaintiffs to correct the valuation of the suit for the purposes of court-fees and jurisdiction at Rs. 67,00,000 and to amend the plaint accordingly, within one month from the date of this order.

12. As to the payment of court-fees, the learned counsel for the plaintiffs, however, invited my attention to a D.B ruling of this Court in the case of Razzak v. Usman (1). and contended that as held in that case no court-fee was payable on suits filed on the original side of this Court. The relevant observations appear at page 963 of the judgment as below: "I now turn to the question of court-fees on suits in this Court and, as I pointed out, they fall under section 3 of the Court Fees Act, and the word `payable' in the first clause of this section means payable under some provision of law. other than the Court-fees Act." In reply, Syed Sarfraz Ahmed, the learned Assistant Advocate-General has argued that the above judgment is not operative, for, it has been stayed by the Supreme Court. Mr. Nizam Ahmed, the learned Advocate for the plaintiffs, though did not cite any authority on this point on the day of hearing i.e. 17-4-80 but on 21-4-1980, came to my chamber and placed his reliance reported in P L D 1974 Kar. 29 and P L D 1975 Lah 65. (I, however, asked him to intimate the other side as well as the learned A. A.-G. about these citations so that if they should cite some other authority, they may do so).

13. In the first case of Mohammad Ismail v. State (2) the judgment of a learned Single Judge of this Court was followed by another learned Judge of this Court, notwithstanding the plea that an appeal had been filed against the order and leave had been granted by the Supreme court. The learned Single judge was, however, of the view that although "a Single Bench decision of my learned brother is not binding on me but I can certainly take note of it till such time that the judgment is set aside and that their Lordships of .the Supreme Court do so decide I will of course legally and obediently follow such judgment of the Supreme Court. On the other hand I am not prepased to assume that simply because leave has been granted against a judgment that judgment ceases to be good or necessarily wrong. We will accept the law as laid down by the Supreme Court but until such law is laid down the mere grant of leave will not' preclude me from referring such judgment and even following it to some extent or even adopting the reasons on which the judgment of arty learned brother is based."

14. In the other case of Ghulam Jillanl v. Federal Government (3) an argument was advanced in that case by the Deputy Attorney-General that against the judgment of the Lahore High Court in General Abdul Hamid's (1) P L D 1975 Kar. 944 (2) P L D 1974 Kar. 29 (3) P L D 1975 Lab. 65 case the Government had filed a petition for special leave to appeal before the Supreme Court and that- the Supreme Court while granting special leave to. appeal had also suspended the operation of the impugned order in .the meanwhile. According to the Deputy Attorney-General, in that case, the order of the. Supreme Court suspending the operation of the impugned order -meanwhile was binding upon Lahore High Court under Article 189 of the Constitution as it amounted to a `law declared' by that Court. The Division Bench of the Lahore High Court however observed as follows:-- "Thus, the expression "law declared" implies .that -the point decided by the Supreme Court -is - a legal one and of such general or public importance `that it will occupy the place of law for the land: It will be the final decision of the Court on that particular point given after hearing the parties concerned. In other words it will be final adjudication of that particular point and so far as that point is concerned, nothing should remain pending before the Supreme Court after the declaration of that law." 15. 1 am, therefore, of the view .that even if stay, has been granted by the Supreme Court, unless the D.$. decision of this Court (reported in P L D 1975 Kar. 944) is set aide by the Supreme- Court, tire law laid down therein is binding on me apart from the fact that the stay grant :d will anal inter partes in that matter only.

16. The upshot of. the above discussion is- that; if the situation was ,governed by the Court Fetes Act 'this suit would be both undervalued and deficient in payment of court fees:. But, as the things stand today n court-fees are; payable on suits filed on, the original side of this Court. Needless to say that if the Supreme Court hold otherwise or the law it amended retrosectively, the plaintiffs herein will suffer its consequences, whatever that stay be. The application is disposed of accordingly. .K. M. -A. Application disposed of.