Supreme Court Holds Plaint Cannot Be Rejected Over Court Fee When Ad Valorem Liability Turns on Disputed Facts

In a decision that reinforces the narrow scope of Order VII Rule 11 of the Code of Civil Procedure, 1908, the Supreme Court has held that a plaint cannot be rejected at the threshold on the ground of insufficient court fee where the very question of whether ad valorem fee is payable itself depends on disputed factual issues that can only be resolved during trial. A Bench comprising Justice S.V.N. Bhatti and Justice N.V. Anjaria set aside a judgment of the Punjab and Haryana High Court which had ordered rejection of a plaint seeking a declaration of joint ownership for want of ad valorem court fee.
The ruling in Neelam Sharma and Others v. Amita Passan and Others [2026 LiveLaw (SC) 855] restores the Trial Court’s order refusing to reject the plaint and clarifies that the sufficiency of court fee, in a suit involving contested claims of possession and challenge to an alleged sale deed, is a matter to be examined on the basis of evidence and not summarily disposed of at the pleadings stage.
Background of the Dispute
The Plaintiffs instituted a suit seeking a declaration of joint ownership over a property which they claimed to have inherited from their grandmother. According to their pleadings, they were in joint possession of the suit property along with the Defendants. The Plaintiffs further alleged that, acting in collusion with Defendant no. 2, a sale deed had been falsely executed in favour of a third party in respect of the property.
The Plaintiffs valued the suit for the purpose of court fee on a fixed basis, as is ordinarily permissible when the Plaintiff is a co-owner in possession seeking a declaration of joint title. Defendant no. 2 filed an application under Order VII Rule 11 CPC, contending that since the Plaintiffs were, in substance, questioning the sale deed executed in favour of a third party, they were bound to pay ad valorem court fee on the value of the property and that the plaint was liable to be rejected for failure to do so.
The Trial Court dismissed the Defendant’s Application. However, in a civil revision, the Punjab and Haryana High Court reversed that view and directed rejection of the plaint on the ground that ad valorem court fee was payable. The Plaintiffs carried the matter to the Supreme Court.
The Supreme Court’s Analysis
Setting aside the High Court’s Order, the judgment authored by Justice Anjaria began by reiterating the settled principle that at the stage of an application under Order VII Rule 11 CPC, the Court is required to confine its inquiry strictly to the averments made in the plaint. Materials placed on record by the Defendant in support of a rejection application cannot be taken into account. The High Court, the Bench held, had erred precisely by giving credence to such extraneous material while directing rejection of the plaint.
On a prima facie reading of the pleadings, the Court found that nothing in the plaint compelled the conclusion that ad valorem court fee was payable. The Plaintiffs had asserted joint possession, claimed joint title through inheritance and questioned a sale deed which, according to them, had been engineered through collusion. Whether such assertions of possession would ultimately survive and whether the sale deed had legal effect against the Plaintiffs, were matters to be established by evidence.
Court Fee and Order VII Rule 11: A Question for Trial
The Bench emphasised that the question of court fee, in the given fact-situation, could not be examined in isolation from the substantive controversy in the suit. It observed that the issue would depend not only on the aspect of possession or the framing of the prayer, but also on the circumstances surrounding the alleged sale deed and other related facts. These, the Court held, were issues that had to be threshed out on evidence and therefore the question of whether the Plaintiffs were required to pay ad valorem fee or fixed court fee could be addressed only after such germane facts were established through the trial.
Accordingly, the mere assertion by the Defendant that ad valorem fee was payable, based on his own version of the facts, could not become a ground for rejecting the plaint at the threshold. The scheme of Order VII Rule 11 CPC, which permits rejection only in a narrow set of circumstances apparent from the plaint itself, does not accommodate such an inquiry into disputed facts.
Reliance on Suhrid Singh
The Court drew support from its earlier decision in Suhrid Singh alias Sardool Singh v. Randhir Singh and Others (2010), which lays down the principle that when a Plaintiff who is not a party to an impugned sale deed seeks a declaration that the sale deed does not affect his interest, he is not required to pay ad valorem court fee on the value of the property; a fixed court fee is sufficient. Applying that principle, the Bench noted that the Plaintiffs in the present case were admittedly not parties to the alleged sale deed executed by the Defendants in favour of a third party. Consequently, the non-payment of ad valorem court fee could not, on that basis alone, frustrate the suit.
Conclusion and Takeaways
Allowing the appeal, the Supreme Court restored the Trial Court’s Order dismissing the Defendant’s Application under Order VII Rule 11 CPC, subject to the modification that the question of payment of court fee shall be considered and decided after and on the basis of the evidence led in the suit.
The decision serves as an important corrective in an area where defendants frequently seek to short-circuit litigation by invoking court-fee objections at the very threshold. It reaffirms three well-settled propositions: first, that Order VII Rule 11 DEFs are to be decided on the plaint alone; second, that a co-owner in possession seeking a declaration of joint title may generally maintain the suit on fixed court fee and third, that where the sufficiency of court fee itself turns on facts in dispute, that question must await the trial, not decide it. The judgment, therefore, safeguards the Plaintiff’s right to a full adjudication on the merits, while leaving the ultimate question of fee open to be revisited in light of the evidence that emerges.
Shomdeepta Chanda
Associate
The Indian Lawyer & Allied Services

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