Valuation of commercial suit for pecuniary jurisdiction in case of specific performance.

With the advent of the Commercial Courts Act, lot of confusion has cropped up regarding the construction of certain provisions of the Act. The confusion is due to the fact that there is considerable departure from the regular procedure prescribed in CPC regarding certain matters to be dealt with by the commercial courts in India. I intend to deal with a particular confusion regarding the payment of court fees, valuation of suits for jurisdiction vis-a-vis the ‘specified value’ as prescribed under the Act.

The Commercial Courts Act states that commercial disputes above a specified value are to be tried by commercial courts and not the regular civil courts. There is a mechanism prescribed to derive the specified value in order to deduce pecuniary jurisdiction of commercial courts. Section 12 provides the criteria for determining the specified value in different types of suits. For example- if the suit relates to immovable property or a right therein, the specified value is determined in relation to market value of the property on the date of filing of the suit. Let’s take a scenario here- I wish to file a suit for specific performance of agreement to sell of immovable property. Section 21 of the Act gives overriding effect to the provisions of the Act over any other law. If the agreement to sell is of property to be used solely in trade or commerce, then the dispute over it is a commercial dispute as per the definition of commercial dispute in the Act. Thus, one would argue that the jurisdiction of the court is to be decided by the value of the immovable property.

However, Court Fees Act says that for specific performance of agreement to sell, court fee is as per the amount of consideration in the agreement. This consideration can, in certain cases, be different from the market value of the property. Suits Valuation Act says that for determining pecuniary jurisdiction of a civil court in case of suit for agreement to sell, valuation will be as per Court Fees Act. Therefore valuation for both court fees and pecuniary jurisdiction, normally, would be the amount of consideration in the agreement to sell. This valuation may be different from the market value of the property and thus, the specified value in the Commercial Courts Act.

One may also argue that because of non-obstante clause in Commercial Courts Act, specified value and not valuation as per Suits Valuation Act, should be considered.

Delhi High Court, however, states that non-obstante clause is meant to act only in case of repugnancy and is not meant to stop operation of all other laws if they are not inconsistent with the subject Act, which in this case is Commercial Courts Act. Meaning thereby, that a commercial court has to look at the Court Fees Act and the Suits Valuation Act to arrive at the valuation of the suit based on consideration amount in the agreement to sell and not the market value of property to determine its jurisdiction.

I have doubts regarding the said application of non-obstante clause in this case as it has rendered the ‘specified value’ in Commercial Courts Act redundant. Further, there is a clear inconsistency in Suits Valuation Act and the Commercial Courts Act regarding the valuation of suit for pecuniary jurisdiction in the given example of specific performance of agreement to sell; in which case, the provisions of Commercial Courts Act must prevail, given the non-obstante clause.

One can understand that the court fees would be payable as per the consideration amount as mandated in Court Fees Act; but, the valuation has to be as per the specified value as mandated by the Act.

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