Kanhaiyalal Vs. Jagannath Singh and ors. - Court Judgment

Excerpt:
raiasthan courts fees & suits valuation act, 1961 - section 8--set off & counter claim--distinction between--mortgagee's claim for costs of improvements--whether it is a counter claim and mortgagee has to pay court fee (no).;the main basic difference between a plea, of set off and that of a counter claim is that in the former case it is a ground of defence a shield and not a sword which when established afforde effective answar to the plaintiff's claim either in whole or in part whereas a counter claim is not really a defence to the plaintiff's claim but is a weapon of defence enabling the defendant to en forte his right or claim against the plaintiff as effectively as an independent action of his own. if the defendant could not have filled an action for the enforcement of the.....orderj.p. jain, j.1. this revision application is directed against the order of the civil judge, udaipur dated 9th october, 1969 by which he held that the defendants-mortgagees' claim for cost of the improvements is a counter claim and is chargeable with court-fees under the rajasthan court fees and suits valuation act, 1961.2. the facts leading to this revision application are as follows: daulatsingh and fatehlal mehta mortgaged a house and a shop situated in the town of udaipur for a period of 11 years with possession for rs. 3,499/- in favour of one sohanlal by a mortgage-deed dated 29-1-1938. the mortgagors died and their descendants are jagan-nath singh (plaintiff no. 1), shrimati mangi bai (plaintiff no. 2), smt nathi bai (plaintiff no. 3) and inderlal (defendant no. 2) and.....

Judgment:
ORDER

J.P. Jain, J.

1. This revision application is directed against the order of the Civil Judge, Udaipur dated 9th October, 1969 by which he held that the defendants-mortgagees' claim for cost of the improvements is a counter claim and is chargeable with court-fees under the Rajasthan Court Fees and Suits Valuation Act, 1961.

2. The facts leading to this revision application are as follows: Daulatsingh and Fatehlal Mehta mortgaged a house and a shop situated in the town of Udaipur for a period of 11 years with possession for Rs. 3,499/- in favour of one Sohanlal by a mortgage-deed dated 29-1-1938. The mortgagors died and their descendants are Jagan-nath Singh (plaintiff No. 1), Shrimati Mangi Bai (Plaintiff No. 2), Smt Nathi Bai (Plaintiff No. 3) and Inderlal (defendant No. 2) and Chhoteylal (defendant No. 3). The mortgagee is also said to have died and his heir is Kanhaiya-lal petitioner. After a notice, the plaintiffs filed a suit for redemption of the mortgage against Kanhaiyalal petitioner. Kanhaiyalal inter alia pleaded in his written-statement that he has in-curred a sum of Rs. 9,421/- on account of improvements made by him in the suit property. He, therefore, claimed the recovery of the amount along with the mortgage money. The plaintiffs' contention in the lower court was that the claim of Rs. 9,421/- was in the nature of a counter claim and unless court-fees is paid by him, the plea cannot be entertained. The learned Judge after having heard learned counsel for the parties before him held that the claim set up by the defendant-mortgageewas chargeable with court-fees tinder Section 8 of the Rajasthan Court-fees and Suits Valuation Act, 1961. This order is under challenge before me.

3. None of the plaintiffs has appeared in this Court in spite of notice. I have heard Shri Arjunlal Mehta and his contention is that the claim set up by the defendant-mortgagee was not in the nature of a counter claim, but is a part and parcel of the transaction of the mortgage. It is also submitted by him that the mortgage was in the nature of a usufructuary mortgage and the mortgagee had no remedy by way of sale or foreclosure, nor was the mortgagee entitled to sue for recovery of money. A mortgagee has no right to recover the costs of the improvements by an independent action and as such no court-fees is payable on this claim-He has also relied upon the terms of the mortgage deed dated 29-1-1938 by which the mortgagee was empowered to Incur expenditure for the improvement of the mortgaged property and the costs of the said improvements could be recoverable at the time of redemption.

4. The present suit was filed on 6-11-1967. The provisions of the Rajas-than Court Fees and Suits Valuation Act, 1961 will govern this case. Section 32 of the Act deals with suits relating to mortgages. Section 32(8) reads as follows :--

'(8) in a suit against a mortgagee for redemption of a mortgage, fee shall be computed on the amount due on the mortgage as stated in the plaint.

Provided that, where the amount due on the mortgage is found to be more than the amount on which fee has been paid by the plaintiff, no decree shall be passed until the deficit fee is paid;

Provided further that, in the case of a usufructuary or anomalous mortgage, if the plaintiff prays for redemption as well as for accounts of surplus profits, fee shall be levied separately on the relief for accounts as in a suit for accounts.'

Section 8 of this Act under which the learned trial Judge has directed the defendant-mortgagee to pay the court-See runs as follows :--

'8. Set off or counter claim.-- A written-statement pleading a set off or counter claim shall be chargeable with fee in the same manner as a plaint.'

By the perusal of the two provisions referred to above, it is abundantly clear that in a suit for redemption of mortgage, the court-fees shall be payable on the amount due under the mortgage, and if the defendant has pleaded a setoff or a counter claim, the court-fee shall be chargeable in the same manner as if it was a suit. The only question for my determination is whether the cost of improvements claimed by the mortgagee in this case can be termed as a counter claim.

Like set off, a counter claim is available to a defendant only when the rules of procedure of the court in which the plaintiff brings his action allow a counter claim to be set up- in certain important aspects, a plea of counter claim is different and distinguishable from a set off in its application and its effect. While set off is limited to money claim, there is no such limitation in the case of counter claim. Any claim in respect of which the defendant can bring an independent separate action against the plaintiff can form the subject matter of the plea of counter claim, provided such a plea can be conveniently tried with the plaintiff's claim. Counter claim can be in a suit for injunction, specific performance or for a declaration. The main basic difference between a plea of set off and that of a counter claim is that in the former case it is a ground of defence, a shield and not a sword which when established affords effective answer to the plaintiff's claim either in whole or in part. Whereas a counter claim is not really a defence to the plaintiff's claim but is a weapon of defence, enabling the defendant to enforce his right or claim against the plaintiff as effectively as an independant action of his own. In this connection, reference may be made to the following passage stated in Hals-bury's Laws of England Volume 34 (Third Edition) page 411 para 720 :--

'Subject-matter of counter claim : A counter claim can in general be brought in respect of any claim that could be the subject of an independent action. It is not confined to money claims, or to causes of action of the same nature as in the original action; and. except where a person other than the plaintiff is also made a defendant to it, it need not relate to or be connected with the original subject of the cause or matter. A claim founded on tort may be opposed to one founded on contract and in an action in rem the defendant may set up counter claim in personam. The defendant by his counter claim may ask for any form of relief, for example, a declaration, a vesting order or relief against forfeiture, an injunction, a receiver, specific performance, a revocation of a patent, an account payment of money claim, or damages,'

It is thus abundantly clear that a plea can form the subject-matter of counter claim only if in respect of that claim thedefendant can bring an independent action against the plaintiff. In other words, if the defendant could not have filed an action for the enforcement of the particular right against the plaintiff in an action of his own, the accident of the plaintiff filing some suit against the defendant cannot enable the latter to agitate his right in the form of a counter claim. The sine qua non of the plea of a counter claim is that the defendant should have an independent right to agitate the same in an action of his own.

5. In Motilal Laxman v. Purshot-tam Damddar. AIR 1966 Madh Pra 330 a suit for redemption of mortgage was instituted. The defendants in their defence alleged that they were entitled to Rs. 2,000/- as damages on account of a breach of a contract of sale of the mortgaged property. It was held by the learned Judge deciding the case that in a suit for redemption any item claimed upon an account of the mortgage claim being taken would certainly not be liable to payment of court-fees. But the essential condition is that the rights and liabilities should arise out of the mortgage contract. If the item is claimed on an altogether different contract, such a subsequent contract of sale the set off or the counter claim will be liable to payment of court-fees.

6. In Abdul Majid v. Abdul Ra-shid, AIR 1950 All 201 Malik, C. J. who spoke for the Court observed that the essence of a counter claim is that the defendant should have a cause of action against the plaintiff and the counter claim is in the nature of a cross-action; and not merely a defence to the plaintiff's claim. The facts of the case were that the plaintiff filed a suit for pre-emption and the defendants in their written-statement pleaded that they had spent a certain amount in making improvements to the property and the plaintiff's suit for pre-emption should not be decreed without making the plaintiff liable for that amount. It was held by the Division Bench that the defendant had no cause of action against the plaintiff and no separate action could be maintained on the basis thereof. The claim could be put forward only as defence to the suit and could not be called as a counter claim. No court-fees were therefore payable on the said claim.

7. This Allahabad case was relied upon in Mst. Sehdat v. Abdul Jabar, 1951 Ran LW 219 - (AIR 1951 Rai 155). This was a suit for possession of 1/3 share of the house in dispute by cancellation of the sale on the ground that the plaintiffs' mother as de facto guar-dian was not authorised to dispose it of and, therefore, the sale as regards their share was void. The plaintiffs offered to pay to defendants one-third share out of the amount paid by them to the mortgagee. The defendants pleaded that they had spent Rs. 8,750-8-6p. on repairs and improvements and, therefore, a decree for possession, if at all passed, should be subject to the payment of this amount. The plaintiffs urged in that case that the defendants' plea could not be entertained until court-fee was paid on the amount claimed by them on account of repairs and improvements. The learned Judge agreed with the observations made in AIR 1950 All 201 and held that the claim put forward by the defen-dants could not be considered as a counter claim as a separate suit was not com-petent.

8. Before the learned trial Judge, reliance was placed on behalf of the plaintiffs on Alamelu Ammal v. Thya-rammal, AIR 1961 Mad 355 and on behalf of the defendant on Apparswami Chettiar v, Sri Parvathavardhani Same-tha Ramanatheeswara, AIR 1961 Mad 527 and the learned trial Judge placed reliance on Alamelu Ammal's case. The report of the case relied upon by the learned trial Judge does not contain all the facts in the case. It does not also contain any reasoning and the entire conclusion has been stated in the following words :--

'The contention of the learned counsel appearing for the petitioner, the defendant in the suit, is that the claim of the defendant in the written-statement is neither a set off nor a counter claim and therefore Section 8 is not applicable. I am unable to accept that contention. The defendant has clearly made a claim, which is in the nature of a counter claim against the plaintiff in claiming the value of improvements said to have been ef-fected by him. Even under the old Court Fees Act, the decision in Subra-manya Iyer v. Lakshmana Ayyar, AIR 1951 Mad 742 holds that in cases of this description court-fee is payable.'

if I may say so with respect to the learned Judge, it has not been shown as to how the claim for the cost of improvements effected by the mortgagee has been considered as a counter claim. As noticed above, the present case is a case of usufructuary mortgage. The mortgagee has no right to sue the mortgagor for sale of the property nor has he a right of foreclosure. He cannot even sue for recovery of mortgage money. As a usufructuary mortgage, he is only entitled to retain the usufruct of the property. According to the terms of the contract, he had a rightto Incur expenditure on Improvements and which could only be recovered at the time of redemption of the mortgaged property. In the circumstances of this case, therefore, it is clear to me that the defendant mortgagee had no independent right of action to sue the mortgagor only for the recovery of the cost of improvements. He has to wait till the mortgagor conies to redeem the property. With great respect, I am unable to agree with the view taken in Alamelu Ammal's case AIR 1961 Mad 355. The other case relied upon by the defendant before the trial Judge lays down the principle in my opinion, correctly. This case also discussed Alamelu Ammal's case. Thus in my humble opinion, the claim set up by the defendant-mortgagee cannot be termed as a counter claim and Section 8 of the Rajasthan Court Fees Act will have no application. The claim of the plaintiffs for redemption of the mortgage and the claim set up by the defendant for the recovery of the cost of improvements are based on the same transaction of mortgage. If the mortgagors had not chosen to redeem the property, the defendant-mortgagee's claim for cost of improvements would not have come into existence. Thus, to sum up, the defendant-mortgagee's right to recover cost of improvements is not enforceable in law by an independent action and it could be suitably and correctly put forward in a suit for redemption, and that being so, the mortgagee cannot be called upon to cay court-fees on that amount.

9. In the result, the revision application succeeds. The order passed by the Civil Judge, Udaipur dated 9th October. 1969 is set aside. The claim of the mortgagee for the recovery of the cost of improvements will be adjudicated in the plaintiffs' suit without payment of court-fees. As the non-petitioners have not appeared, there will be no order as to costs.