Court Costs Act 1870 | Ad Valorem court fees are payable in a suit filed for annulment of a deed of gift: Allahabad HC

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The Allahabad High Court has held that in a suit seeking relief from assessing a deed of gift as null and void, forged and fabricated ad valorem The legal costs are due according to Section 7(iv-A) of the Court Fees Act, 1870 (as applicable in Uttar Pradesh) and not as per remaining section 17 (iii) of Schedule II of the 1870 Act.

For context, residual Article 17 (iii) of Annex II applies to cases where a declaratory judgment is sought without claiming any consequential damages. The provision explicitly states that it would apply to such actions “not otherwise provided for in this law.”

In other words, the Court explained that if a suit is otherwise covered by another provision in the 1870 Act, the above residual clause would not apply.

On the other hand, Section 7(iv-A) of the 1870 Act applies to actions for or relating to cancellation or the determination/annulment of a decree for money or an instrument securing money or other property of such value.

A bench of Judge Kshitij Shailendra also noted that a defendant has a legal right under Section 6(4) of the 1870 Act (as applicable in UP) to raise objections regarding valuation and deficiency of legal fees.

The Court has made that clear Sections 6(3) and 6(4) of 1870 allow objections regarding the adequacy of legal fees to be filed by two categories of persons: officers under Article 24-A and persons other than officers under Article 24-A. A defendant would therefore fall into the category set out in section 6(4) of the 1870 Act.

In this context, the Court also referred to the 2005 judgment of the High Court Ram Krishna Dhandhania and Anr. vs. Civil Judge (Sr. Division) and Ors.where it was held that the defendant is entitled to raise all objections to the valuation and inadequacy of the legal costs.

The Court essentially heard a First appeal submitted by Kaniz Fatima under Section 6-A of the Act of 1870challenging an order of the Civil Judge (Senior Division) Gorakhpur, to force her to pay ad valorem legal costs (based on the market value of the property) in the lawsuit she brought for the annulment of a deed of gift, whereby his song had been executed by fraud.

Before the HC, counsel for the appellant (attorney Pranam K. Ganguli) submitted that she had claimed damages which would fall within the ambit of Section 17 (iii) of Schedule II of the Act of 1870 as applicable in the State of Uttar . pradesh. Because she had not claimed any consequential damages, it was argued that the fixed amount of legal costs she had paid was sufficient.

It was further submitted that the court below erred in making the appeal Section 7(iv-A) of the 1870 Actwhich applies only to the revocation of an instrument, which is not the case here.

Finally, it was argued that a defendant has no right to appeal against court costs.

On the other hand, counsel for the defendant (Lawyer Sheikh Moazzam Inam) contended that since the plaintiff-appellant had claimed damages for annulment of the gift deed, legal costs would be payable under section 7(iv-A) of the 1870 Act and the remainder section 17(iii) of the gift . Schedule II would not apply in this case.

After hearing both sides, the Court dismissed the appellant’s contentions, dismissing the first appeal and affirming the trial court’s order. Civil Judge (Higher Division), Gorakhpur.

Performances

Appellant’s lawyer: Pranab Kumar Ganguli

Defendant’s lawyer: Sheikh Moazzam Inam

Case title – Kaniz Fatima vs Imran Khan

Case quote:

Click here to read/download the order