Property Dispute and Suit Valuation: Supreme Court Rules on Jurisdiction in Civil Injunction Cases

The Supreme Court recently delivered a significant ruling in the case of Bharat Bhushan Gupta v. Pratap Narain Verma & Anr., which dealt with a property dispute involving a suit for mandatory and prohibitory injunction and recovery of damages. The judgment clarifies key aspects related to suit valuation, pecuniary jurisdiction, and the discretionary power of plaintiffs in valuation. The ruling overturned a High Court order that had directed the return of the plaint for filing in a court with appropriate jurisdiction based on the market value of the disputed property.

The case stemmed from a dispute between family members regarding the occupation of a property in Uttam Nagar, New Delhi. The plaintiff sought the eviction of the defendants, alleging that they were initially granted permissive occupation as licensees but later refused to vacate. The case raised an important legal question about whether a suit for mandatory injunction could be valued at the plaintiff’s discretion under the Court Fees Act or whether it should be based on the market value of the property.

Background of the Case

The appellant, Bharat Bhushan Gupta, filed a suit in the Court of Senior Civil Judge, South West District, Dwarka, New Delhi, seeking:

Mandatory injunction: Directing the defendants to remove themselves and their belongings from specific portions of the property.
Prohibitory injunction: Restraining the defendants from creating third-party rights or raising construction.
Recovery of damages: Claiming Rs. 1 lakh for unauthorized occupation and seeking additional damages at Rs. 1 lakh per month.

The plaintiff valued the suit for the purpose of court fees at Rs. 250 for each injunction relief and Rs. 1 lakh for damages. However, during cross-examination, he estimated the market value of the property at Rs. 1.8 crores. This led the defendant to file an application under Order VII Rule 11 of the CPC, arguing that the suit should be dismissed for lack of pecuniary jurisdiction.

Petitioner’s Arguments

The appellant Bharat Bhushan Gupta contended that:

The suit was correctly valued under Section 7(iv)(d) of the Court Fees Act, 1870, which allows a plaintiff to determine the value of an injunction suit.
The relief sought was for mandatory injunction and not for possession, making the market value of the property irrelevant to suit valuation.
The Trial Court rightly dismissed the defendant’s application, holding that only the plaint should be examined when determining suit valuation.
The High Court incorrectly relied on the plaintiff’s statement about market value to order the return of the plaint.

Respondent’s Arguments

The respondents Pratap Narain Verma & Anr. argued that:

The suit was essentially one for possession disguised as an injunction suit.
The market value of the property was Rs. 1.8 crores, which exceeded the pecuniary jurisdiction of the Trial Court.
The valuation of Rs. 250 per injunction relief was arbitrary and failed to meet legal standards.
The High Court correctly ruled that the suit should be presented in a court with proper pecuniary jurisdiction.

Key Observations of the Supreme Court

The Supreme Court provided the following crucial observations:

“It remains trite that it is the nature of relief claimed in the plaint which is decisive of the question of suit valuation. The market value does not become decisive merely because an immovable property is the subject-matter of litigation.”

Read also: https://judgmentlibrary.com/supreme-court-quashes-high-court-order-on-land-acquisition-in-ayodhya-faizabad-case/

The Court emphasized that suits for mandatory injunction against licensees can be valued at the plaintiff’s discretion under Section 7(iv)(d) of the Court Fees Act. It referred to precedent cases, including:

Maria Margarida Sequeira Fernandes v. Erasmo Jack de Sequeira (2012): Affirming that a suit for mandatory injunction is distinct from a title suit for possession.
Sant Lal Jain v. Avtar Singh (1985): Holding that a licensor can seek a mandatory injunction for eviction if the suit is filed promptly.
Mulk Raj Khullar v. Anil Kapur (2013): Allowing discretion in suit valuation for injunction relief.

Final Judgment and Directions

The Supreme Court ruled in favor of the appellant and set aside the High Court’s order. The key rulings included:

The suit for mandatory injunction was properly valued under Section 7(iv)(d) of the Court Fees Act.
The plaintiff’s statement about market value during cross-examination was irrelevant to determining court jurisdiction.
The Trial Court’s decision to reject the defendant’s application was upheld.
The case would continue before the Trial Court without requiring re-filing in a different jurisdiction.

Conclusion

This judgment provides critical clarity on suit valuation in property disputes involving injunctions. By reaffirming that a plaintiff’s valuation in injunction suits should be respected, the Court has ensured that legal proceedings remain fair and not unnecessarily burdened by arbitrary challenges to jurisdiction. The ruling protects the plaintiff’s right to access justice without undue procedural hindrance.

The decision will serve as a guiding precedent for future cases involving injunction relief and pecuniary jurisdiction, ensuring that property disputes are adjudicated based on the nature of relief sought rather than the market value of the underlying property.

Petitioner Name: Bharat Bhushan Gupta.
Respondent Name: Pratap Narain Verma & Anr..
Judgment By: Justice Dinesh Maheshwari, Justice Vikram Nath.
Place Of Incident: Uttam Nagar, New Delhi.
Judgment Date: 16-06-2022.

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