Writ petition allowed. High Court quashed Trial Court order allowing set-off without court fee. Proceedings stayed until duty to pay fee is discharged.
Petition allowed. Trial Court proceedings stayed. Defendants must pay court fee on set-off or ignore the claim.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
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IN THE HIGH COURT OF KARNATAKA AT BANGALORE
DATED THIS THE 5TH DAY OF AUGUST 2014
BEFORE
THE HON’BLE MR. JUSTICE ANAND BYRAREDDY
WRIT PETITION No.35362 OF 2014 (GM-CPC)
BETWEEN:
K.C. Nagarajappa, S/o. late K. Channappa, Aged about 48 years, Advocate and Tax Consultant, No.657/8C-1, Binny Company Road, Davanagere-570 001, Residing at No.267/2, Ashirvad Junjappa Temple Road, Chikkanahalli New Extension, Nituvalli Post, Davanagere-577 002. …PETITIONER
(By Shri D.P. Mahesh, Advocate)
AND:
C.M. Mallikarjunachar, S/o. Mallachar, Aged about 52 years, Document Writer, Binny Company Road,
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Davanagere-577 001. …RESPONDENT
This Writ Petition is filed under Articles 226 and 227 of the Constitution of India praying to quash the order dated 10.06.2014 passed in O.S.No.282/2008 by the learned Principal Civil Judge (Jr.Dn), Davanagere vide Annexure-A to the writ petition.
This Writ Petition is coming on for preliminary hearing this day, the court made the following:
O R D E R
The petition coming on for preliminary hearing, the matter is considered for final disposal. The issue involved is whether court fee is attracted on a set-off pleaded by the defendant - the respondent herein; There is no such determination in that regard by the Trial Court in proceeding to accept the set-off on record, to which written statement has been filed by the plaintiff - the petitioner herein. Issues having been framed thereafter without addressing the requirement of payment of court fee on the set-off and the matter having advanced further where the stage of the suit was cross-
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examination of the defendant, and the present plaintiff having raised an objection that there was no court fee paid on the setoff, the Trial Court has passed an order holding that since the matter was set down for cross-examination of DW-1 and since the plaintiff has raised the contention at that stage, the court has proceeded to further opine that if at all the defendant was liable to pay the court fee, it can be recovered at a later stage as well and since the matter has reached the fag end of the proceedings, has directed the parties to proceed with the matter.
“19.7 The position regarding Court fee may be summarised thus:
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(i) A defendant who wants to claim set-off or make a counter-claim should state specifically in the written statement that he is claiming set-off or making a counter-claim. He should show the valuation regarding the set-off or counter-claim for purposes of Court fee and pay Court fee. The Court shall decide whether the Court fee paid on the written statement is proper as done in the case of plaint under Section 14 read with Section 11 of the KCF Act.
(ii) The amount sought to be set-off or the subject-matter of counter-claim should be specified. If the claim of defendant is for damages, then the amount claimed should be stated. The claim for set-off or counter-claim cannot be tentative. Making a tentative claim, followed by ascertainment of the amount due and direction to pay Court fee on the difference after judgment (between the amount found due and the tentative claim) is permissible only where the relief sought is for accounts or for dissolutions of partnership or for mesne profits under Sections 33, 34 and 42 of the KCF Act.
(iii) If the relief of set-off or counter-claim is properly valued, but only a part of the Court fee is paid thereon by the defendant, the Court shall fix a time for payment of deficit Court fee as contemplated under
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Order 7, Rule 11(c) of the CPC. If there is no valuation and if no Court fee is paid, then there is no need for the Court to grant time for payment of the Court fee under Order 7, Rule 11 or any other provision of the CPC.
(iv) Where no Court fee is paid, there is no need to frame any issue on the set-off claimed or counterclaim. On the other hand, if necessary Court fee is paid by defendant, after giving due opportunity to the plaintiff to file his defence (written statement) regarding such claim for set-off or counter-claim, the Court should frame appropriate issues thereon in addition to the issues on the claim in the plaint, and then proceed with the evidence.
(v) Where no Court fee is paid, it is impermissible for the Court to examine the claim for set-off or counter-claim in the judgment and grant relief and then permit the defendant to pay Court fee.”
hereinabove, it would be pertinent to note that in the present case on hand, the issues had been framed with regard to the setoff claimed by the defendant as well and the matter was at the
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stage of cross-examination of the defendant. The plaintiff having raised the objection belatedly notwithstanding it was the bounden duty of the court in the first instance to have ascertained whether the court fee was paid on the set-off and if no court fee was paid on the set-off, the question of framing an issue on the set-off did not arise. It is to be noticed that in the written statement filed by the plaintiff to the set-off, there was a specific contention that no court fee has been paid on the setoff. Since an issue has been framed though no court fee has been paid, it cannot permit the defendant to urge the set-off without collecting the requisite court fee. Therefore, it is not open to the court to have opined that the court fee could be determined and collected at a later stage when the law contemplates otherwise.
Accordingly, the petition is allowed. The further proceedings are stayed till the Trial Court determines and collects the court fee payable on the set-off. If the defendants
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should fail to pay the court fee, the Court shall proceed further,
ignoring the set-off claimed.
Sd/JUDGE
KS
2 issues framed by the court
Whether the Trial Court was justified in allowing proceedings involving a set-off without requiring payment of court fee on it, given that issues were framed based on an unprotected valuation.
Whether the High Court can quash an order allowing set-off where no court fee was paid and the matter was already at the stage of cross-examination.
Colour shows how this judgement treated each authority
The State Trading Corporation of India Limited vs. Vanivilas Co-operative Sugar Factory LimitedRelied on¶20
(2001) 5 KLJ 570
5 provisions across 2 enactments
K.C. Nagarajappa
C.M. Mallikarjunachar
Anand Byrareddy
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
