Court Fee Can Wait for Evidence: Supreme Court Refuses to Reject Co-owners’ Plaint Over Ad Valorem Fee

Case at a glance: The Supreme Court has set aside a Punjab and Haryana High Court order that required co-owner plaintiffs to pay ad valorem court fee on a Panchkula house, failing which their plaint would stand rejected. It held that under Order VII Rule 11 CPC only the plaint’s averments matter, the plaint pleaded joint possession, and whether ad valorem or fixed fee is payable depends on facts to be proved at trial.

The suit concerns House No. 417, Sector 11, Panchkula. The plaintiffs claimed that they and defendants 1 and 2 were co-owners with a one-fourth share each after their grandmother died intestate on 1 September 2007. They alleged that in August 2016 the property was transferred into one person’s name through forged documents at the Haryana Housing Board office, and that a loan of Rs 1.5 crore was taken from Yes Bank against it and not repaid. They sought declarations, separate possession of their shares and an injunction.

Defendant No. 2 sought rejection of the plaint under Order VII Rule 11, arguing that because possession was claimed, ad valorem court fee was payable. The trial court at Panchkula rejected the application on 12 April 2022, but the High Court allowed the revision on 19 May 2025 and directed payment of ad valorem fee within two weeks, failing which the plaint would stand rejected.

The Key Question Before the Court

Can a plaint be rejected at the threshold for not paying ad valorem court fee when it pleads that the plaintiffs are in joint possession?

Executants, Non-executants and Possession

The Court reiterated that on an Order VII Rule 11 application “the court has to consider the averments in the plaint only”. The plaint pleaded joint residence and possession, so there was prima facie no ground for rejection.

Applying Suhrid Singh v. Randhir Singh, (2010) 03 SC CK 0012, the Court explained that a non-executant of a deed who is out of possession and seeks possession pays ad valorem fee under Section 7(iv)(c) of the Court Fees Act, 1870, while a non-executant in possession seeking a declaration pays a fixed fee under Article 17(iii) of Schedule II. Which category applies here turns on possession and the nature of the transfer, facts to be proved in evidence. Hence “the question of payability of the court fee is required to be deferred”.

What the Court Actually Held

• The appeal was allowed and the High Court’s order of 19 May 2025 was set aside.
• The trial court’s refusal to reject the plaint was upheld.
• Only the plaint’s averments are relevant under Order VII Rule 11.
• The court-fee question will be decided on the evidence led in the suit.

Why This Judgment Matters

• It protects co-owners from losing their suit at the threshold over a disputed fee question.
• It restates the Suhrid Singh framework on ad valorem versus fixed fee.
• It shows that fee disputes depending on possession are matters for trial.

What Should Advocates Take Away From the Judgment?

For Plaintiffs

• Plead possession clearly in the plaint where you claim to be in joint possession.
• Distinguish whether you executed the challenged instrument.

For Defendants

• Expect fee objections depending on disputed possession to be deferred to trial.
• Lead evidence on possession if you want ad valorem fee imposed.

Key Takeaways

Frequently Asked Questions

Not necessarily. The question will be decided on evidence at trial.

Because it pleaded joint possession, and only the plaint’s averments count at the Order VII Rule 11 stage.

The Court Fees Act, 1870 — Section 7(iv)(c) for ad valorem fee or Article 17(iii) of Schedule II for fixed fee, as applied in Suhrid Singh.

Conclusion