JUDGMENT <NAME>, C.J.

(1) Two questions have been referred by <ORG> for the opinion of <ORG>. They are:

(1)Whether the Court has power to interfere in the plaintiff's valuation of relief for the purpose of court-fee under Section 7(iv) of the Court Fees Act; and (2)If so, (A)when would such interference be justified, and (B)what should be the criterion for the re-determination of the value ?

(2) The reference came to be made in the following circumstances. <NAME>, <NAME> and <NAME> are real brothers. <NAME> filed a suit originally in <ORG>, Delhi, in December, 1968. He subsequently died and his wife and five children were brought on record as his legal representatives. The suit has since been transferred to the original side of this <ORG> and re-numbered as Suit No. 35 of 1971. The defendants in the suit are (1) <NAME> (2) <NAME>, (3) <NAME>, (4) <NAME> & Company, and (5) <ORG> <NAME> Wine Merchants (P) Ltd. An amended plaint was filed, and the prayers therein were (1) "for rendition of accounts of profits of the partnership <NAME> & Company (P) Ltd. from April 19, 1967, up to date and for the recovery of the amount found due on rendition of accounts". (2) for "a decree for perpetual injunction in favor of the plaintiffs against defendants I and 3 restraining them from withdrawing any amount from the partnership <NAME> & Company (P) Ltd., <NAME> Wine Merchant and <NAME> Wine Merchants (P) Ltd. in contravention of clause 10(b) of the Partnership Deed dated April 19,1967, viz. Rs. 1500.00 per month and the amount of income-tax of defendant I and the amount of income-tax of defendant 3"; (3) for costs of the suit; and (4) "for future interest on the amount decreed on account of profits from the date of the institution of the suit till realization. The suit was valued in paragraph 23 of the amended plaint as follows:-

"VALUEof the suit for purposes of Court-fees and jurisdiction is fixed at Rs. 400.00 as stated below :- (i) For accounts of the profits Rs. 200.00 (ii) For perpetual injunction Rs. 200.00 Value of the suit for accounts for the purposes of court-fee has been fixed tentatively, the plaintiff will pay court-fee on the amount decreed on account of their shares of profits. Court-fee of Rs. 40/ has been paid."

(3) <NAME> filed Suit No. 105 of 1970 on the original side of <ORG> on April 4, 1970, against (1) <NAME>, (2) to (2)(e). the widow and five children of late <NAME>, (3) <NAME>, and (4) M/s. <ORG> The plaintiff prayed as under in paragraph 46 of the amended plaint:-

"(1)(a)-that it be declared that the business of <ORG> along with its relevant liquor license was, till 19-4-67, a business of <ORG>, of which the plaintiff and the 1st and the 2nd defendants were co-parceners, and prior to that, the business of <ORG>, since 3-6-1946, was similarly a business of the Joint Hindu family in the same manner and that since 19-4-1967, the. said business run in the name of <ORG>, <ORG> and <ORG>s (P) Ltd. are partnership businesses of the plaintiff and the defendants;

(B)That in case it be found that the partnership agreement dated 19-4-67 is for any reason void, illegal or ineffective, then it may be declared that the said business still continues to be joint family business.

(C)In the alternative, it be declared that the business carried on in the name <ORG> and <ORG> since 1-9-1966, and prior thereto, in the name of <ORG>, since 3-6-46, were partnership business as per deeds of partnership dated 14-3-1947, 27-4-1950, 7-11-1956, 1-7-1904, 1-7-1966, and 19-4-1967, and the plaintiff has all along been a partner in the said concerns.

(2)That it be declared that the parties are bound by the partnership deed, dated 19-4-1967, and the plaintiff is entitled to participate in the business of M/s. Kishan Lal & Company, <ORG>, and <ORG>s (P) Ltd., under the terms of the deed of partnership dated 19-4-1967, and a perpetual injunction be issued against the defendants restraining them from interfering with the right of the plaintiff to participate in the business of the said concerns and to draw his dues under the terms of the said deed.

(3)That a perpetual injunction be issued against the defendants not, to violate the terms of the partnership deed, dated 19.4.1967, and, in any case, not to pay to the defendant No. 1 for himself and his son, the defendant No. 3, anything in excess of Rs. 1500.00 per mensem and the actual amount of income-tax payable by the said defendant No. 1 and 3 in terms of the partnership deed, dated 19.4.1967.

(4)That the defendants be directed to render true and full accounts of <ORG> Kishan Lal & Company for the period since 1.7.1966. <ORG> since 9.10.1969 and <ORG>s (P) Ltd. from 16.5.1971 onwards till date, and the said defendants be fixed with responsibility for losses suffered by the plaintiff on account of acts of commission and omission, mismanagement, mis-feasance, illegalities, etc. and the same be also accounted for.

(5)"That none of the employees taken in service of <ORG> Kishan Lal & Company, <ORG> and <ORG>s (P) Ltd. since 19.4.1967, without the consent of the plaintiff, be allowed to remain in service and should not be paid any emoluments hereafter and a perpetual injunction be issued to that effect.

(6)That defendants be restrained from using the lease-hold premises named Banarsi Krishna Mansion, held on lease by <ORG> <NAME> & Sons, for any purpose other than that of <ORG> <NAME> & Co.

(7)A perpetual injunction be issued against defendants restraining them from changing the name of the family partnership business, as the case might be, under the L-2 license in .dispute, from <ORG> to <NAME>, Wine Merchant and <NAME> Wine Merchants (P) Ltd. and using the stock-in-trade, good-will, business premises and other assets, etc. of the said M/s <NAME> & Co., Wine Merchants, or those of <ORG> or of <ORG> for their exclusive purpose or purposes, other than those of M/s <NAME> & Co. in which the plaintiff has, and always had, interest as hereinbefore stated.

(8)It be declared that the business of <ORG> and <ORG>s (P) Ltd. and the L-2 licenses in favor of <ORG> and <ORG>s (P) Ltd. are, in fact the properties of <ORG> <ORG> and <ORG> was, and <ORG>s (P) Ltd. are a mere smoke screen behind which the defendant No. 1 is operating with a view to exclude the plaintiff and defendant 2 of their legitimate rights and interests and to derive illegal gains at their expenses.

(4) The plaintiff also claims costs of this suit." The suit was valued in paragraph 44 as follows :--

(1) Declaration Re. Joint Hindu Family business Court fee paid . . . .. Rs. 20.00 Jurisdictional value. . . . Rs. 50,000.00 (2) Declaration and injunction Re. Partnership deed dated 19-4-67. Jurisdictional value . . . . Rs. 200.00 Court-fee paid . . . . Rs. 20.00 (3) Injunction Re. violation of terms Jurisdictional value. . . . Rs. 200.00 Cour fee-paid . . . . Rs. 20.00 (4) Re. Accounts Jurisdictional value . . . . Rs. 200.00 Court-fee paid . . . . Rs. 20.00 (5) Injunction Re. employees. Jurisdictional value. . . Rs. 200.00 Court-fee paid . . . . Rs. 20.00 (6) injunction Re. promises. Jurisdictional value. . . . Rs. 200.00 Court-fee Paid . . . . Rs. 20.00 (7) Injunction re. name Jurisdictional value . . . . Rs. 200.00 Court-fee Paid . . . . Rs. 20.00 (8) Declaration regarding <ORG> Jurisdictional value . . . . Rs. 200.00 Court-fee paid . . Rs. 20.00 Under Order 7, Rule 7 Civil Procedure Code the plaintiff would be entitled to about Rs. 5,00,000.00 on taking accounts."

(5) <NAME> also filed another Suit No. 429 of 1971 on the original side of <ORG> in October, 1971, against (1) <ORG>, (2) The Lt. Governor, Union Territory of Delhi, (3) The Commissioner of Excise, (4) The Collector of Excise, (5) <NAME>, (6) to (II), the widow and five children of late <NAME>, (12) <NAME>, and (13) <ORG> The plaintiff prayed in paragraph 60 of the amended plaint that :

"(I)it be declared that the L-4 license, in the first instance, when L. <NAME> died on June 2, 1946, was the property of the H.U.F. of which the plaintiff and <NAME> and <NAME> were members, and continued to be so till April 18, 1967, notwithstanding the various partnership deeds entered into between them: or, in the alternative, if it be held that they were partners under the various partnership deeds, dated 14-3-47, 27-4-50, 1-7-66, and 19-4-67, then the license in question was the property of the partnership aforesaid, as indicated in the said deeds;

(II)it be declared that the plaintiff and <NAME> and <NAME> were co-licensees of the L-2 license from 1-7-66 till 2-4-71 in respect of the business M/s Kishan Lal & Co. Wine Merchants, carrying on business in the business premises Banarsi Krishna Mansion, Chandni Chowk, Delhi, (III)it be declared that the following orders passed by the Excise authorities as aforesaid are illegal, ultra vires, arbitrary and mala fide and are, therefore, null and void;

(1)Dated 8-7-69 passed by the Excise Commissioner..

(2)Dated 9-10-1969 passed by the Collector of Excise.

(3)Dated 31-3-71 passed by the Collector of Excise.

(4)Dated 1-4-71 passed by the Lt. Governor.

(5)Dated 6-4-71 passed by the Excise Commissioner.

(6)Dated 15-5-71 or thereafter passed by the Lt. Governor, and the authorities were actuated with the sole object of benefiting the defendant No. 5 at the cost of the plaintiff and the late <NAME>.

(IV)it be declared that the L-2 license, which was issued in the name of <NAME> on 2-4-71 or in favor of <NAME> Wine Merchants Private Ltd. on or about 15-5-71 is, should be deemed to be, the property of the plaintiff and Sarvshri <NAME>, heirs of <NAME> and <NAME>, and not the exclusive property of either Shri <NAME> or <NAME> Wine Merchants Private Ltd. and a perpetual injunction be issued against the defendants 1 to 4 directing them to enter the name of the plaintiff and the heirs of Shri <NAME> in the L-2 license;

(V)A perpetual injunction be issued against the defendant No. 5 restraining him from interfering with the rights of the plaintiff and the heirs of late <NAME> to participate in the wine business carried on in any name or under any L-2 liquor license in the business premises in Banarasi Krishna Mansion, Chandni Chowk, Delhi, until the firm is legally dissolved;

(VI)It be declared that the plaintiff and <NAME> and <NAME> were the lessees of the premises in Banarsi Krishna Mansion, Chandni Chowk, Delhi, after the death of <NAME> in 1946 and the lease-hold rights continue to remain their property, notwithstanding the alleged arrangement arrived at between the defendant No. 5 and the landlord of the said premises and restraining the defendant No. 5 to treat the tenancy rights otherwise than this or using the said premises for his exclusive user; and (VII)decree for Rs. 101.00 be passed in favor of the plaintiff and against the defendants No. 1 to 4. <ORG> may grant such other relief as it deems fit in the circumstances of the case. The plaintiff also claims costs of this suit."

The plaintiff valued the suit in paragraph 59 as follows :

"THATthe value of the subject matter of the suit for purposes of Court-fee and jurisdiction is as follow:-

(1) Re-declaration about L-4 license, etc. Value for the purpose of jurisdiction . . . Rs. 20,000.00 Court-fee (fixed). . . . . . . . Rs. 20.00 (2) Re. declaration about the L-2 license. Value for the purposes of jurisdiction . . . Rs. 20,000.00 Court-fee (fixed) . . . . '. . . Rs. 20.00 (3) Re. declaration about the various orders, etc. . . . . . . . Rs. 20,000.00 Court-fee (fixed) . . . . . . Rs. 20.00 (4) Re. declaration and injunction about the L-2 license. Value for purpose of jurisdiction . . . . Rs. 20,000.00 Court-fee paid . . . . . . Rs. 20.00 (5) Re. perpetual injunction. Value for purpose of Court-fee and jurisdiction . . . . . . . Rs. 200.00 Court-fee paid . . . . . . . Rs. 20.00 (6) Re. the premises Banarsi Krishna Mansion, Chandni Chowk, Delhi. Value for the purpose of jurisdiction . . Rs. 20,000.00 Court-fee paid . . . . . . . Rs. 20.00 (7) Re. recovery of Rs. 101.00 Value for purposes of Court-fee and jurisdiction . . . . . . . . Rs. 101.00 Court-fee paid . . . . . . . Rs. 15.00 As stated in the order of reference the three suits are a sequel to the disputes that arose between the three brothers, and broadly Stated the questions that the suits raise are as to the status of certain properties including liquor business, the extent of the right and interest of the brothers in the said property and of their title to it, the entitlement of the brothers to the prefits of the business, to participation in it, the validity of certain orders made by the excise authorities in relation to the liquor license and matters connected therewith and arising out of it.

(6) The three suits were consolidated and as many as 38 issues were framed, some of which were directed to be treated and determined as preliminary issues. Issue No. 6 in each of the suits Nos. 105 of 1970 and 429 of 1971 and Issue No. 31 in Suit No. 35 of 1971 were among the preliminary issues, and they related to the propriety of the valuation of the suits for purposes of Court-fee and jurisdiction.

(7) The defendants in all the three suits pleaded before the learned Judge that the reliefs claimed by the plaintiffs in the suits had not been properly valued for purposes of court-fees and jurisdiction in-as-much as the plaintiffs had valued the reliefs for the purposes of court-fees under Section 7(iv)(b) , (c), (d) and (f) of the <ORG>-fees Act : at a nominal figure notwithstanding the fact that the plaintiffs in all the suits ex fade made out that the value of the subject matter of the suits runs into lakhs of rupees. They contended that even though the plaintiffs were entitled to place their valuation on the reliefs under Section 7(iv)(b) , (c), (d) and (f), such a right was not unfettered and the <ORG> had a power and indeed an obligation under Order Vii Rule 11 (b) of the Code of Civil Procedure to consider if having regard to the allegations made in the plaint, the plaintiffs had valued the reliefs in such a manner that it had no reasonable relationship to the reliefs which the plaintiffs in fact sought or may eventually be held entitled and to require the plaintiffs to value the reliefs according to law and pay the deficit court-fee. On the other hand; the plaintiffs contended that they had an unfettered right to. place any valuation on the reliefs claimed by them for purposes of. court-fee under Section 7(iv)(b) , (c), (d) and (f) of the <ORG>-fees Act except in so far as the High <ORG> may. regulate the matter of valuation by appropriate rules under Section 9 of the Suits Valuation Act, 1887, and that the valuation placed by the plaintiffs was beyond judicial review and the <ORG> had no power to interfere in such a valuation. It was also contended that no objective criteria would be available for the determination of the value of the relief in such cases and the lack of power in the <ORG> to interfere in the plaintiff's valuation is implicit in the practical difficulty that would be involved in the re-determination of the valuation. It was further contended by them that the reliefs had been valued by the plaintiffs in accordance with the provisions of the rules framed by the High <ORG> of Judicature at Lahore which are still applicable to the Union Territory of Delhi by virtue of the provisions in Section. 7 of the Delhi High <ORG> Act , 1966.

(8) It was stated in the order of reference that there was some controversy before the learned Judge on the question as to the applicability to the Union Territory of Delhi of the rules made by <ORG> at Lahore under Section 9 of the Suits Valuation Act, 1887, with regard to the manner of determination of the value of certain types of suits, but that the learned Judge considered it unnecesary to pursue that matter at that stage because the said rules, though prima facie applicable to Delhi by virtue of the provisions in Section 7 of the Delhi High Court Act, 1966, were not determinative of the questions that have arisen, because the said rules did not lay down the manner of determination or the criterion in respect of all types of suits that are envisaged by Section 7(iv) of the Court-fees Act, and for the purpose of determining the propriety of the valuation of the reliefs in the present suits and the questions in relation thereto, resort would have to be had to the provision in Section 7(iv) and it would be necessary to consider its true manner and scope.

(9) The learned Judge observed that the questions as to the extent of the right of the plaintiffs to value the reliefs for purposes of <ORG>-fees under Section 7(iv) of the <ORG>-fees Act, the power of the <ORG> to interfere in such valuation and the circumstances which would justify such an interference have been the subject matter of considerable judicial conflict, and that he therefore, considered that it would be proper that the questions are referred to <ORG>, the conflict being between some Full Bench decisions of certain High <ORG>s. In that view, the learned Judge referred the two questions which have already been set out earlier in this judgment for the opinion of <ORG>.

(10) We may state that the learned counsel for both the parties addressed arguments before us only on the two questions referred. They were agreed that <ORG> has only to express its opinion on the two questions referred, and that it would be for the trial Judge to go into the question as regards the correctness of the valuation in the three suits in the light of the said opinion.

(11) The first question for consideration is whether the Court has power to interfere with the plaintiff's valuation of the relief sought for i "7(IV)In suits -

(A)for movable property where the subject matter has no marketalue, as, for instance, in the case of documents relating to title;

(B)to enforce the right to share in any property on the ground that it is joint family property;

(C)to obtain a declaratory decree or order, where consequential relief is prayed;

(D)to obtain an injunction;

(E)for a right to some benefit (not herein otherwise provided for) to arise out of land; and (F)for accounts -

according to the amount at which the relief is valued in the plaint or memorandum of appeal.

INall such suits the plaintiff shall state the amount at which he values the relief sought."

(12) Section 7 of the Court-fees Act provides for the computation of the amount of court-fee payable under the Act in the suits mentioned in the various paragraphs of the Section. As pointed out by <CITATION> in Note I in their Commentary on Section 7 of the Court-fees Act, an analysis of the said paragraphs shows that the section adopts three modes of valuation of a suit, viz. (1) by valuing the subject matter according to its market value (vide paragraph (iii), (v) (d) and (e), etc.); (2) by giving to the subject matter an artificial value based on specified rules of calculation (vide paragraph (v) (a), (b) and (c); and (3) by requiring the plaintiff himself to value the relief he seeks (vide paragraph (iv). We are concerned here with the last mode. Paragraph (iv) contains clauses (a) to (f) each of which deals with a particular kind of suit. But, the court-fee payable under all the clauses is to,be computed according to one general rule which is given at the end of the paragraph. It requires the plaintiff in any of the suits mentioned in the various clauses to state the amount at which "he values the relief sought", and the amount of court-fee payable to be computed according to the said amount at which "the relief sought is valued" in the plaint. In other words, it requires the plaintiff himself to value the relief he seeks.

(13) It is, however, contended that though under Section 7(iv) of the Courts-fees Act it is for the plaintiff to value the relief he seeks, he has not the right to place any valuation that he likes, that by virtue of the provision in Order Vii Rule ll(b) of the Code of Civil Procedure, or at any rate in its inherent power referred to in Section 151 of the Code of Civil Procedure, the Court has the power to consider if, having regard to the allegations made in the plaint, the plaintiff has valued the relief he seeks in such a manner that it has a relationship to the relief sought or which may eventually be granted, and to require the plaintiff to value the relief according to law and pay the deficit court-fee. Order Vii Rule ll(b) reads as follows:- R. 11 The plaint shall be rejected in the following cases:-

(A)........................

(B)where the relief claimed is undervalued and the plaintiff, on being required by the <ORG> to correct the valuation within a time to be fixed by the <ORG>, fails to do so;

(C)........................

(D)........................"

(14) Clause (b) of Rule 11 assumes and refers to the general power of the <ORG> to require the correction of the valuation where the relief claimed is undervalued. But, it cannot be disputed that the said general power can be taken away in given cases by a statutory provision, and the question before us is whether the statutory provision in Section 7(iv) of the <ORG>-fees Act has taken away the aforesaid general power of the <ORG> in respect of the suits mentioned in its clauses (a) to (f). The answer to the said question would depend upon the interpretation of the provision in Section 7(iv) . Similar is the position with the inherent power of the <ORG> preserved by Section 151 of the Code of Civil procedure which is also subject to the statutory provision in Section 7(iv) of the <ORG>-fees Act. Therefore, neither order Vii Rule 11 (b) nor Section 151 of the Code of Civil procedure can be of any assistance in interpreting the scope and effect of Section 7(iv) of the <ORG>-fees Act.

(15) Our attention has also been drawn to Order Vii Rules 1(g) and (i), 2 and 7, and to Order 20 Rules 12,16, and 17 of the Code of Civil Procedure. Order Vii Rules l(g) and (i), 2 and 7 read as follows :- "R. 1 The plaint shall contain the following particulars :-

(A)..............................

(B)........................

(C).................................

(D)...........................

(E)........................

(F)...........................

(G)the relief which the plaintiff claims;

(H).........................

(I)a statement of the value of the subject-matter of the suit for the purposes of jurisdiction and of court-fees, so far as the case admits.

(16) R.2 Where the plaintiff seeks the recovery of money, the plaint shall state the precise amount claimed. But, where the plaintiff sues for mesne profits, or for an amount which will be found due to him on taking unsettled accounts between him and the defendant, the plaint shall state approximately the amount sued for.

R.7.Every plaint shall state specifically the relief which the plaintiff claims............"

(17) Rule 1 (g) merely requires that the plaint should contain the relief which the plaintiff claims. Rule 7 also merely requires that plaint should state the relief which the plaintiff claims. They have thus no bearing on the question of valuation of the relief and the court-fee payable thereon. Rule 1(i) requires that the value of the subject matter of the suit for the purposes of jurisdiction and court-fees, so far as the case admits, should be stated in the plaint. Similarly, the second part of Rule 2, which is the relevant portion in the present context, requires that in suits for mesne profits or for amount found due on taking unsettled accounts, the plaint should state approximately the amount sued for. It has to be noted that Order Vii Rule 1(i) speaks of "value of the subject-matter of the suit", Order Vii Rule 2 speaks of "the amount sued for", and paragraph (iv) of section 7 of the <ORG>-fees Act speaks of "the amount at which he values the relief sought". It may be that in some suits the "relief" claimed or sought may be synonymous with "the subject-matter" in the suit. But, there can be suits in which the "relief" may not be synonymous with the "subject-matter". In fact. Order Vii Rule I of the Code of Civil Procedure itself makes this distinction in-as-much as clause (g) refers to "relief" while clause (i) refers to "subject-matter". Paragraph (iv) of Section 7 of the <ORG>-fees Act with which we are now concerned refer to the "relief sought" in the various suits mentioned in its clauses (a) to (f), and not to the "subject-matter" of those suits. Therefore, it would not be appropriate to treat Order Vii Rule l(i) which refers to "subject-matter" as having any bearing in considering the question of valuation for the purposes of jurisdiction and <ORG>-fees in the case of the suits mentioned in paragraph (iv) of he <ORG>-fees Act which refers to "relief". This view gains support also from the fact that Rule l(i) itself restricts the applicability of the requirement therein to some suits only as is clear from the words "so far as the case admits".

(18) As regards the second part of Order Vii Rule 2, it has to be noted that it expressly refers only to two kinds of money suits, viz. suits for mesne profits and suits for account. So far as a suit for mesne profits is concerned, if the claim is for a definite amount, it would be covered by paragraph (i) of Section 7 of the Court-fees Act. If the claim involves the taking of accounts, it would be covered by paragraph (iv) (f) of Section 7 . A suit for account mentioned in the second part of Order Vii Rule 2 would be covered clause (f) of paragraph (iv) of Section 7 of the Court-fees Act. However, all that the second part of Order Vii Rule 2 requires is that the plaint should state "approximately" the amount sued for. In other words, the said provision itself recognises that the amount which will be found due on taking unsettled accounts cannot be stated precisely by the plaintiff at the stage of filing the plaint and, therefore; requires the amount to be stated only "approximately". The provision is nol thus of much significance so far as the question under reference is concerned.

(19) The provisions in Order 20 Rules 12, 16, and 17 of the Code of Civil Procedure provide for the passing of decree for possession of immovable property and mesne profits, for an account between a principal and an agent, and for directing an account to be taken, respectively. They have no bearing on the question of valuation for the purposes of court-fee tha,t is under consideration.

(20) We have thus only. Section 7(iv) of the <ORG>-fees Act on a consideration of the scope and effect of which the question under consideration has to be answered. A plain reading of paragraph (iv) of Section 7 shows that it requires the plaintiff in any of the suits mentioned in the various clauses thereof to state the amount at which "he values the relief sought", and the amount of court-fee payable to be computed according to the said amount at which "the relief sought is valued" in the plaint. It is implicit in it, and it is also not disputed, that the paragraph requires the plaintiff himself to value the relief he seeks. The only question for consideration is wheather the plaintiff has the right to place any valuation that he likes. The paragraph does not by itself impose any restriction or condition as regards the valuation by the plaintiff? When the statutory provision itself has not imposed any such restriction or condition, it would not be proper, in our opinion, for a <ORG> to introduce such a restriction or condition into the section. The plain language of the provision gives an unrestricted choice to the plaintiff to value the relief. It would not, therefore, be proper for a <ORG> to say that the relief was undervalued and to correct the said valuation invoking the general power mentioned in Order Vii Rule ll(b) or the inherent power saved by Section 151 of the Code of Civil Procedure. The provision in paragraph (iv) of Section 7 of the <ORG>-fees Act which gives a free hand to the plaintiff to place any valuation that he likes and does not place/any restriction or condition has, in our opinion, so far as the suits mentioned in that paragraph are concerned, the effect of taking away the general power of the <ORG> under Order Vii Rule 11(b) of the Code of Civil Procedure and the inherent power to correct an under-valuation. The general power and the inherent power stand modified by the special statutory provision in Section 7(iv) of the <ORG>-fees Act. In other words, in, our opinion, paragraph (iv) of Section 7 of the <ORG>-fees Act gives a right to the plaintiff to place any valuation that he likes on the relief he seeks, and the <ORG> has no power to interfere with the plaintiff's valuation. This view is quite in conformity with the nature of the suits mentioned in clauses (a) to (f) of paragraph (iv) of Section 7 . All the said suits are such that it is not possible for the plaintiff to specify the precise value of the relief he seeks in each of the said suits. A perusal of the various clauses (a) to (f) shows the same. That was why the legislature obviously thought it fit to leave to the plaintiff to place any valuation the likes on the relief he seeks in such suits. It was sought to be argued that the aforesaid view would permit the plaintiff to place any arbitrary or fanciful value on the relief he seeks. When the nature of the suit is such that no precise value can be placed on the relief sought, arid for that reason there cannot be any definite standard by which it can be said that the relief has been under-valued or not, the question of the valuation being arbitrary or fanciful does not arise. To say in such a, case that the valuation placed by the plaintiff is arbitrary or fanciful and seek to interfere with the same would amount to a re-writing of the statutory provision in paragraph (iv) of Section 7 of the <ORG>-fees Act which a <ORG> cannot do. So far as suits for mesne profits and suits for accounts are concerned, Section 11 of the <ORG>-fees Act provides that if the profits or the amount decreed are or is in excess of the profits claimed or the amount at which the plaintiff values the relief sought, the decree shall not be executed until the difference between the fee actually paid and the fee which would have been payable had the suit comprised the whole of the profits or the amount so decreed shall have been paid to the proper officer. In that Way, so, far as the said suits are concerned, the legislature has taken care to safeguard the revenue and to see that the plaintiff does no get away with a decree for an amount in his favor without paying adequate court-fee therefore. No question, of a decree for an amount being passed arises in the other suits mentioned in clauses (a) to (e) of paragraph (iv) of Section 7 of the <ORG>-fees Act. Thus, the view taken by us above seems to be the proper one to be taken on a plain interpretation of the relevant provisions ( Sections 7(iv) and II) in the <ORG>-fees Act .

(21) <NAME>, learned counsel for the defendants, urged that the use of the words "valued" and "values" in paragraph (iv) of Section 7 of the <ORG>-fees Act itself shows that the valuation by the plaintiff should be a proper valuation in the sense that it has a reasonable relationship to the relief sought by the plaintiff or may eventually be granted to the plaintiff, and that the <ORG> can, therefore, consider whether the valuation by the plaintiff was proper. This argument is not tenable. The paragraph does not say that the valuation should be proper, , merely says "the amount at which the plaintiff values". To introduce the word "proper" would be to re-write the paragraph. The learned counsel referred to the decision of the Supreme <ORG> in <CITATION> 1958 S.d. 245(1), and pointed out the following observation in paragraph 14:- "NOW,it would be clear that the conversion of the plaintiff's alleged undivided share in the joint family properly into his separate share cannot be easily valued in terms of rupees with any precision or definiteness. That is why legislature has left it to the option of the plaintiff to value his claim for the payment of court-fees. It really means that in suits falling under Section 7(iv)(b) the amount stated by the plaintiff as. the value of his claim for partition has ordinarily to be accepted by the <ORG> in computing the court-fee payable in respect of the said relief. In the circumstances of this case, it is unnecessary to consider whether, under the provisions of this Section, the plaintiff has been given an absolute right or option .to place any valuation whatever on his relief".

(22) The learned counsel submitted that the words "ordinarily to be accepted by the <ORG>" indicate that according to this decision, though the valuation by the plaintiff is to be "ordinarily" accepted, the <ORG> is not bound to accept the same if it finds the valuation to be arbitrary or fanciful, and in such a case it can direct the plaintiff to value the relief properly. We are unable to accept the submission. The last words in the observation set out above clearly show that the Supreme <ORG> expressly stated that it was not necessary for it to decide the question. The observation cannot, therefore, be regarded as a decision on the point. On the other hand, in the earlier portion of paragraph 14 as well as in the first part of the a,bove observation clear reference was made to the nature of the suits falling under paragraph (iv) of Section 7 , and the difficulty in valuing the relief in the said suits with any precision or definiteness, and more than all it was clearly stated that the legislature has left it to the option of the plaintiff to value his claim for the payment of court-fees. As stated by us earlier, once it is accepted that the valuation is left to the option of the plaintiff and the difficulty in valuing the relief with any precision or definiteness is also accepted, there is no standard by which the valuation by the plaintiff can be evaluated and characterised as improper or abritrary or fanciful. The above decision is not thus of any assistance to the learned counsel,' and is in no way contrary to the view taken by us.

(23) Now, the question of valuation for the purpose of court-fees under paragraph (iv) of Section 7 is to some extent baked with the question of valuation of suits coming under the various clauses in paragraph (iv) of Section 7 of the Court-fees Act for the purposes of jurisdiction under the provisions of the Suits Valuation Act , 1887. Therefore, before adverting to the decisions of the various <ORG>, it is necessary to refer to the relevant sections of the Suits Valuation Act . They are Sections 3 , 4 , 8 and 9 . Section 3 of the said Act gives power to <ORG> to make rules for determining the value of land for jurisdictional purposes in respect of certain suits mentioned in the section. Section 4 provides, inter alia, that the value for purposes of jurisdiction of suits coming under paragraph (iv) of Section 7 of the. Court-fees Act shall not exceed the limits indicated by the Rules made by <ORG> under Section 3 where the suits relate to land or to interest in land in regard to which <ORG> has made any such rules. These two sections would be attracted only if the suits falling under paragraph (iv) of Section 7 of the Court-fees Act relate to land or to interest in land. We are not directly concerned with these two sections in the present case and, therefore, it is not necessary to deal with them further.

(24) Section 8 of the Suits Valuation Act provides that the valuation of suits coming under paragraph (iv) of Section 7 of the Court-fees Act is to be the same for purposes of Court-fees as well as jurisdiction. Under Section 9 of the Suits Valuation -Act, the High Court is given power to make rules concerning the valuation of the suits mentioned in the section and the subject matter of which is not capable of being satisfactorily valued for purposes of the Court-fees Act and the Suits Valuation Act . In exercise of the power conferred by Section 9 , <ORG> (now Punjab and Haryana) made the following rules regarding suits for accounts:-

"3.Suits in which the plaintiff in the plaint asks for accounts only, not being:

(I)suits to recover the amount which may be found due to the plaintiff on taking unsettled accounts between him and the defendant :

(II)suits of either of the kinds described in Order Xx, Rule 13 of the Code of Civil Procedure:

VALUE(a)-for the purposes of the Court-fees Act , 1870. . . 200.00 (B)For the purposes of the Suits Valuation Act , 1887, and the Punjab Courts Act, 1918 . . 1000.00

4.(i) Suits in which the plaintiff in the plaint seeks to recover the amount which may be found due to the plaintiff on taking unsettled accounts between him and the defendant;

(II)Suits of either of the accounts described in Order Xx, Rule 13 of the Code of Civil Procedure:

Value for the purpose of Court-fee:-

(A)As determined by the Court-fees Act , 1870.

Value for the purpose of jurisdiction:-

(B)For the purposes of the Suits Valuation Act , 1887, and the Punjab <ORG>s Act, 1918, as valued by the plaintiff in the plaint subject to determination by the <ORG> at any stage of the trial.

(25) Mr. <NAME>, learned counsel for the defendants, sought to contend that the above rules framed by <ORG> are not applica,ble to the suits in which the present reference has been made. The reply of Mr. <NAME>, learned counsel for the plaintiffs. was that the said rules are applicable in view of the provision in Section 7 of the Delhi High Court Act. It is, however, a contention which need not be considered for answering the questions under reference, and may be urged before the learned trial Judge if so advised.

(26) As pointed out in paragraph 15 of the judgment in the case of 5. Rm. Ar. S. Sp. Sathappa Chettiar (supra), (1) the effect of the provision in Section 8 of the Suits Valuation Act is "to make the value for the purpose of jurisdiction dependent upon the value as determinabte for computation of court-fees", and "the computation of court-fees in suits falling under Section 7(iv) of the <ORG>-fees Act depends upon the valuation that the plaintiff makes in respect of his claim". Also, "once the plaintiff exercises his option and values his claim for the purpose of court-fees, that determines the value for jurisdiction" and "not vice versa". In other words, the value for the purpose of court-fee under Section 7(iv) of the <ORG>-fees Act should be fixed first, and then by virtue of Section 8 of the Suits Valuation Act the same value would be the value for the purpose of jurisdiction. However, if there are rules made by <ORG> under Section 9 of the Suits Valuation Act and the same are applicable, the valuation for the purpose of court-fees under Section 7(iv) of the <ORG>-fees Act will have to be made according to such rules. So far as the rules made, by <ORG> are concerned, it has to be noted that Rules 3 and 4 set out above contemplate separate valuation for the purpose of court-fees and for the purpose of jurisdiction. So, if the said rules are applicable, the valuation for purpose of court-fees would be separate from the valuation for the purpose of jurisdiction as provided in the said rules. It has also to be noted that under Rule 4, in the case of suits to which it applies the value for the purpose of court-fee is to be as determined by the <ORG>-fees Act . That means that as regards suits falling under Section 7(iv) of the <ORG>-fees Act, the value for the purposes of court-fee would be the value as fixed by the plaintiff. The value for the-purpose of jurisdiction would be the value fixed by the plaintiff in the plaint "subject to determination by the <ORG> at any stage of the trial". In other words, if Rule 4 applies, the value for the purpose of court-fee would be the value as fixed by the plaintiff in the plaint and the same cannot be interfered with by the <ORG>, while the Value for the purpose of jurisdiction would normally by the value fixed by the plaintiff in the plaint subject, however, to determination by the <ORG> at any stage of the trial. This is the position that emerges on the view taken by us as regards the scope a,nd effect of paragraph (iv) of Section 7 of the <ORG>-fees Act, reading the said paragraph along with Sections 8 and 9 and the Rules framed under Section 9 of the Suits Valuation Act in case they are applicable.

(27) Coming now to the decisions of the various <ORG>, we find that the <ORG> of Lahore, Bombay, Madras, Mysore, Rangoon, Hyderabad, and <ORG> have taken the same view as the one we have taken above, viz., that the legislature purposely allowed the plaintiff to fix his own valuation for the purpose of court-fees in the suits falling under paragraph (iv) of Section 7 of the Court-fees (subject, however, to any rules made under Section 9 of the Suits Valuation Act) in-as-much as the said suits are such that the relief claimed therein cannot be valued definitely, and that the Court has no power to interfere with the plaintiff's valuation under order Vii Rule 11(b) of the Code of Civil Procedure, as the said provision applies only to cases in which there is a definite standard by which it can be seen if the relief has been under-valued or not. Reference may be made to the following decisions:-

1.LAHORE (In this case the effect of Rule 4 made by <ORG> under Section 9 of the Suits Valuation Act was also considered).

II.BOMBAY III.MADRAS IV.MYSORE V.RANGOON VI.HYDERABAD

1.Manchinna Shantamma v. <NAME>, A.I.R 1955 Hyderabad 23(FB), <NAME>, <NAME> and <NAME>, JJ. (19) VII.PESHAWAR

1.Mt. Najab Sultan v. <NAME>, Air 1942 Peshawar 4, <NAME> and <NAME> (20) (28) In the decision mentioned above, earlier decisions of the respective <ORG> were considered and were either followed or distinguished or over-ruled. It is not, therefore, necessary to refer to the said earlier decisions.

(29) A contrary view is said to have been taken by the High Courts of Allahabad, Calcutta, Nagpur, Patna, Jammu and Kashmir, Orissa, Madhya Pradesh, <ORG>, <ORG> and <ORG>, to the effect that even in the suits falling under paragraph (iv) of Section 7 of the Court-fees Act, the Court has the power to consider whether the plaintiff has undervalued the relief and, if so, to require the plaintiff to correct the same. The decisions cited by the learned counsel are the following :- 1.ALLAHABAD (30) In this decision, <ORG> clearly stated at page 503 that the question as to whether or not the plaintiff can put an arbitrary or fictitious valuation on the relief which he seeks, did not arise in that case at all. 2. <NAME> v. <NAME>, , <ORG> and <NAME>, J. (22).

(31) In this case, it was held at page 414 Column 2 that (1) where the valuation of the suit for purpose of jurisdiction is contested, the value must be determined by the <ORG>, and (2) that where the valuation can be ascertained correctly, the palintiff cannot be allowed to put an arbitrary value upon his claim, nor can he be allowed to over-value or under-value his claim with a view to choose his forum. The decision was thus concerned' with the question of valuation for the purpose of jurisdiction and was not concerned with the question before us.

THISdecision was concerned with and based upon Section 7(iy)(b) , second proviso, as amended in U.P. in 1938.

THISdecision was concerned with Section 7(viA) as amended in U.P. in 1938.

<NAME> and <NAME>, <NAME>. (25) THISdecision also was concerned with Section 7(iv)(b) . second proviso, as amended in U.P.

6.Chief Inspector of Stamps, U.P. v. <NAME>, , <NAME>, <NAME>, <NAME>, <NAME>, <NAME>, <NAME> and <NAME>, JJ. (26) (32) This decision was concerned with Section 7(iv)(a) as amended in U.P. The above decisions of <ORG> were thus based on the language of the provisions as amended in U.P. which was different from the provisions in the un-amended Section 7(iv) of the Court-fees Act applicable in Delhi.

II.CALCUTTA in this decision, it was held that in a suit turn injunction it is open to the applicant for leave to appeal to His Majesty in Council to show what the real value of the subject-matter of the suit is, notwithstanding the fact that fot the purpose of the Court-fees Act ( Section 7 paragraph (iv) (d) the value of the suit was fixed at a sum less than the appealable amount. No reason or ground was mentioned in support of the said view, and even otherwise the decision was not concerned with the question before us and cannot, therefore be of any assistance to the learned counsel for the defendants in the present case.

(33) In this decision, it was held that in a suit for injunction, the court-fee is to be computed according to the amount at which the relief is valued in the plaint unless the same appears to be arbitrary or inconsistent with the value of the reliefs claimed. It was merely stated at page 970 Col. 2 that that was the view the learned Judges took of the law. There was no discussion and no answer was given to the question as to how in view of the nature of the suits mentioned in paragraph (iv) of Section 7 of the Court-fees Act, it can be said that the value given in the plaint by the plaintiff in such suits is arbitrary or fanciful in the absence of a standard for the determination of the real or proper value of the relief claimed.

(34) In this decision, however, it was held that under Section 7(iv)(c) and (d) of the Court-fees Act , the plaintiff is entitled to put his own valuation, and it was pointed out that the remedy lies in the rule making power of <ORG> under Section 9 of the Suits Valuation Act. It thus supports the view taken by us.

(35) In this, <NAME>, J. who delivered the main judgment clearly stated at page 450 Col. 2 that he adhered to the view expressed in the case of <NAME> (supra). So, this decision cannot be said to have taken a view contrary to the viewiaken by us. It appears that in Bengal Section 8-C has since been added expressly giving power to the <ORG> to revise and determine the correct valuation, if in its opinion the "subject-matter" of the suit has been wrongly valued. In this case, the question referred to <ORG> was as under :- "WHETHERthe <ORG> is authorised to interfere with any value put on a relief sought by the plaintiff in a suit which falls under Section 7(iv)(c) , <ORG>-fees Act , if the Valuation so put by the plaintiff appears to be arbitrary and unreasonable."

(36) <NAME>, C.J. who delivered the main judgment clearly pointed out at page 57, Col. I that the question assumed that the suit was of the type mentioned in Order 7, Rule 11(b) of the Code of Civil Procedure, and that the valuation appeared to be arbitrary and unreasonable. The full Bench considered the quesstion on that assumption and answered the question in the affirmative. With due respect, we have to point out that there was no consideration in the judgment as to how in suits of the types mentioned in Section 7(iv) of the Court-fees Act, the valuation put by the plaintiff on the relief sought by him can be characterised as arbitrary or fictitious when there is no standard for the correct and precise valuation of the relief. We are. therefore, unable to agree with the aforesaid decision. The said <ORG> decision has been followed in-

(37) In this decision, it was held that in a suit to obtain a declaratory decree with consequential relief falling within Section 7(iv)(c) , the court is empowered under the law to revise the valuation put by the plaintiff and if on such revision it is of opinion that the valuation is insufficient or arbitrary, it has jurisdiction to fix a right value. In doing so, the full Bench merely followed an earlier decision of <ORG> of the same Court. The said decision itself was based on certain still earlier decisions of that Court. In none of them was any answer given to the question as to how the value given by the plaintiff to the relief sought by him in a suit under one of the clauses of Section 7(iv) of the Court-fees Act can be characterised as arbitrary when it is not capable of any precise or definite valuation. The same view was simply reiterated in-

V.JAMMU And Kashmir (38) In this decision, the decision of <ORG> in <CITATION> 1948 Nagpur 223, (32) and the decision of <ORG> in <NAME> v. S. <NAME>, , (39) were merely followed. We have already referred to the decision of <ORG>. The decision of <ORG> was concerned with Section 36 of the Madras Court-fees Act in which it was provided that the plaintiff showed "estimate" the value of his share in the partnership, while Section 7(iv) of the Court-fees Act applicable in Delhi leaves it to the plaintiff to "state the amount at which he values the relief sought" and does not require him to "estimate". Where the plaintiff is to estimate the value, it can probably be said that he has a duty to estimate as correctly as possible and not in any manner he likes. But, where he is allowed to state the amount at which he values the relief sought, and no qualifying words or words of limitation are used in the section, he has to be held to be free to state such amount as he likes. This aspect has not been noticed in <NAME> case.

<NAME> (39) In this decision, the learned Judge merely followed the practice of <ORG> of Patna on the ground that the said practice was being all along followed in <ORG> of Orissa.

VII.MADHYA Pradesh INthis decision, the learned Judge merely followed the decisions of <ORG> of Nagpur.

(40) In this decision also, the decisions of <ORG> were merely followed.

VIII.SIND (41) In this decision, it was held that a suit for a declaration and an injunction is a suit for consequential relief within the meaning of Section 7(iv)(c) of the <ORG>-fees Act, and that in such a suit it is not open to the plaintiff to put any arbitrary value upon the injunction sought and pay court-fee on such value. At page 242 Col. 1., while noticing the view of <NAME> in the decision that in the absence of rules framed under Section 9 of the Suits Valuation Act, the court would have no standard whereby to determine whether there was an under valuation or not, <NAME> merely observed that in his opinion the absence of such rules is no bar to the exercise of the power under Order 7 Rule 11 Civil Procedure Code ., and the question as to what is a proper valuation depends on the circumstances of each suit and the judicial discretion of the <ORG>, and that the <ORG> has jurisdiction to revise a valuation. With due respect, we are unable to see how the difficulty pointed out by <NAME>, J. is resolved by such a mere expression of opinion without any reasons in support thereof. For reasons already stated, we are unable to agree with the view of <ORG>.

IX.OUDH (42) In this case, the learned Judge observed that there was no direct authority for the <ORG> to interfere with the valuation set up by a plaintiff who seeks a relief under Section 7(iv)(c) or (d) of the <ORG>-fees Act , unless the <ORG> can take advantage of Section 151 of the Code of Civil procedure, and that there could be no doubt that that section may be brought into use if a plaintiff makes an absurd and outrageous misrepresentation as to the value of his suit in order to have it tried by some particular <ORG>. It has to be noted that the learned Judge did not consider whether the general inherent power of the <ORG> has been taken away by necessary implication by reason of the specific and special provision in Section 7(iv) of the Special Act viz. the <ORG>-fees Act , and also how in a suit falling under one or the other of the clauses in Section 7(iv) of the <ORG>-fees Act, the valuation given by the plaintiff to the relief sought by him can be characterised as an absurd or outrageous misrepresentation when the very nature of the suit is such that the relief cannot be precisely specified or determined and no standard is available. We are. therefore, unable to agree with the view expressed by the learned Judge.

2.Subedar Singh v. <NAME>, Air 1948 Oudh 297, <NAME>, J. (45).

(43) In this decision, the decision in <NAME> case and the decisions of <ORG> of Allahabad, Nagpur, Patna and Sind were merely followed.

<NAME> (44) In this decision, the learned Judicial Commissioner merely followed the decisions of <ORG> of Patna and Nagpur.

(45) Mr. <NAME> referred to two decisions of <ORG>. They are In the former case, while dealing with the question as to whether the counsel in that case had committed a bona fide error in putting down the valuation in memorandum of appeal, <NAME>, C.J. observed as under at page 1955 : "NOW,it is well known that in a suit for accounts, the plaintiff is not obliged to state the exact amount which would result after the taking of accounts. He may do so if he is able to; but if he is not, he can put a tentative valuation upon his suit for accounts taking care that the valuation is adequate and reasonable in all the circumstances of the case. But, the rule also obtains that if the amount which is found is larger than the amount at which he stated his tentative valuation, he must file the appeal against the larger amount and in the forum before which an appeal of that valuation can go. This rule does not apply where the amount decreed is below the valuation in the original <ORG>."

(46) The above observations were made in the context of Rule 4 in Chapter 3B of Vol. I of the Rules and Orders of the High <ORG> of Punjab and the question of valuation for determination of the forum for appeal. Their Lordships were not concerned with the interpretation of the provisions in Section 7(iv) of the <ORG>-fees Act, and the observations cannot, therefore, be regarded as a decision or expression of an opinion on the question before us. In the later case, it was only held in the context of the facts of that case that the <ORG> in deciding the question of court-fee should look into the allegations in the plaint to see what is the substantive relief that is asked for. The decision has no bearing on the question with which we are concerned.

(47) For the foregoing reasons, our answer to the first question that has been referred is in the negative, i.e. that Paragraph (iv) of Section 7 of the <ORG>-fees Act gives a right to the plaintiff in any of the suits mentioned in the clauses of that paragraph to place any valuation that he likes on the relief he seeks, subject, however, to any rules made under Section 9 of the Suits Valuation Act, and the <ORG> has no power to interfere with the plaintiff's valuation.

(48) In view of the above answer to the first question, the second question does not arise. We answer the reference accordingly.


ORDER <NAME> (J), Member

1. <ORG> (appellants in Appeal No 534/96) are aggrieved by confiscation, by the Commissioner of <ORG>, of a consignment of 'Video Magnetic Tapes in Hubs' covered by Shipping Bill No. 426772 dated 8.4.94 (with option for redemption on payment of a fine of Rs. 50,000/-). They are also aggrieved by imposition of personal penalty of Rs. 1 lakh by the Commissioner. <NAME>, partner of <ORG>, is the appellant in Appeal No. C/535/96 wherein he challenges the personal penalty of Rs. 50,000/- imposed on him by the Commissioner of <ORG>.

2. The relevant facts of the case are that <ORG> <ORG> had imported 'Video Magnetic Tapes in pancakes' in terms of Advance Licence No. 0302672 dated 12.2.92 under the <ORG> Scheme (<ORG> Book No. 058442 dated 7.4.92) and cleared the goods free of duty under Bill of Entry No 8535 dated 25.2.94 for the purpose of manufacture of Video Magnetic Tapes in hubs, which were to be exported in discharge of export obligation under the said Scheme; that, in discharge of the export obligation, they presented a consignment of what was declared as "Video Magnetic Tapes in hubs" for export under Shipping Bill No 426772 dated 8.4.94; that these goods were detained and examined, whereupon it appeared to <ORG> authorities that the consignment contained old used and junk video magnetic tapes in hubs of no commercial value and which did not appear to have been made out of the imported raw material (Video Magnetic Tapes in Pancakes); that <ORG> Agent of <ORG> <ORG> stated to the SIIB of <ORG> (who investigated the case) that they had filed the Shipping Bill at the instance of <NAME>, partner of the exporting firm; that <NAME>, in his statements dated 25.4.94 and 8.11.94 under Section 108 of the <ORG> Act, admitted that the goods covered by the above Shipping Bill had been purchased by him from various suppliers of old and used hubs and tapes; that <NAME> further admitted that he had sold off a part of the raw materials imported by his firm in October, 1993 and had thereby earned a profit of Rs. 180/- to Rs. 190/- per pancake; that <NAME> further admitted that neither his exporting firm nor his supporting manufacturers viz. <ORG> Dipen Textiles Private Ltd, Palghar, Thane had carried out any manufacturing activity and that the junk tapes alongwith hubs were only purchased by him; that the Central Excise officers who searched the premises of <ORG> Dipen Textiles Pvt Ltd recovered 63 packages each containing 320 Video Magnetic Tapes in hubs valued at Rs. 9,37,728/- and detained the same; that Shri <NAME> admitted that the said quantity of Video Magnetic Tapes in hubs had been manufactured by <ORG> Dipen Textiles at Palghar in May 1994 out of the imported Video Magnetic Tapes in Pancakes; that it appeared to the Department that <ORG> <ORG> had removed the raw material from their premises to the premises of <ORG> Dipen Textiles Pvt Ltd; that Central Excise officers seized the above 63 packages (each containing 320 Video Magnetic Tapes in hubs) under panchnama dated 10.10.94 under Section 110 of the <ORG> Act; that the DGFT authorities by letter dated 17.10.94 informed the <ORG> that the Advance Licence and the <ORG> book of <ORG> <ORG> had been cancelled; that, on account of the cancellation of Advance Licence and <ORG> book, the <ORG> authorities considered the import of the raw material cleared free of duty under three Bills of Entry dated 22.2.93, 8.10.93 and 25.2.94 to be unauthorized as the same were covered by the Negative List of import items under the relevant Exim Policy; that it appeared to the <ORG> authorities that <ORG> <ORG> had deliberately misdeclared the goods covered by Shipping Bill No 426772 dated 8.4.94 to make it appear that the said goods had been manufactured out of raw material (Video Magnetic Tapes in pancakes) cleared under Bill of Entry No 8535 dated 25.2.94; that the said authorities held the view that the misdeclared goods were liable to confiscation under Section 113(d) and (i) of the <ORG> Act read with Section 3(3) of the Export Trade (Control) Order, 1998; that <ORG> <ORG> and Shri <NAME> had rendered themselves liable to penalty under Section 114(i) of the Act.; that, consequent upon cancellation of the Advance Licence and <ORG> book, the imported Video Magnetic Tapes in pancakes, which were cleared without payment of <ORG> duty, became chargeable to duty to the extent of over Rs. 21 lakhs; that <ORG> <ORG> and Shri <NAME> were also liable for penalty under Section 112 of the Act; that their CHA, <ORG> P.N. Shipping Agency, having aided and abetted the attempted fraudulent export of second hand goods by <ORG> <ORG>, had rendered themselves liable to penalty under Section 114(i) of the Act; and that a show-cause notice was issued to <ORG> <ORG>, <ORG> Dipen Textiles Pvt Ltd and Shri <NAME> proposing to:-

i) confiscate the goods covered by Shipping Bill No 426772 dated 8.4.94 under Section 113(d) of the Customs Act read with Section 3(3) of the Export Trade (Control) Order, 1998;

ii) confiscate the Video Magnetic Tapes on Pancakes converted into Video Magnetic Tapes in Hubs at Palghar under Section 111(d) and (o) read with Section 120(1) of the Customs Act;

iii) impose personal penalties under Sections 114(i) and 112(a) of the Act on the noticees;

iv) recover duty of customs on the Video Magnetic Tapes on pancakes cleared under all the three Bills of Entry.

The <ORG> was also called upon to show cause why personal penalty should not be imposed on them under Section 114(i) of the Customs Act.

3. The Commissioner of <ORG>, after considering the written submissions submitted by the noticees in reply to the show-cause notice and after hearing their Counsel, passed the impugned order dated 27.6.96. As regards the raw material, the order held it not liable to confiscation and dropped the demand of duty. The order also held <ORG> and <ORG> <ORG> (CHA) not liable to be penalized. However, confiscation was ordered of the 63 packages containing 20160 Video Magnetic Tapes in hubs covered by Shipping Bill No 426772 dated 8.4.94 under Section 113(d) and (i) of the <ORG> Act with option under Section 125 of the Act for redemption of the goods on payment of a fine of Rs. 50,000/-. Moreover, personal penalties of Rs. 1 lakh and Rs. 50,000/- were also imposed on <ORG> <ORG> and <NAME> respectively under Section 114(i) of the <ORG> Act. Hence these appeals of <ORG> <ORG> and <NAME>.

4. We have heard both the sides. The learned Counsel for the appellants submitted that Video Magnetic Tapes in hubs confiscated by the Commissioner were freely exportable as they were not mentioned in the Negative List of Exports in Chapter XVI of the Export Import Policy 1992-97. Section 113(d) and (i) of the Customs Act were not applicable to such a case where the goods were not dutiable. Clause 3(3) of the Export (Control) Order, 1988 was also not applicable to the goods which did not figure in Schedule I or Schedule III of the Export (Control) Order and were not governed by the Licensing Policy contained in the relevant Exim Policy. The goods, therefore, were not liable to be confiscated under Section 113(d) and (i) of the Customs Act . In this connection, the learned Counsel relied on the decisions of this <ORG> in the cases of <CITATION> [2001 (136) ELT 1398] and <CITATION> [2001 (137) ELT 1010]. The Counsel argued that where there was no prohibition for exporting the goods, the goods were not liable to confiscation under Section 113(d) of the Customs Act. He relied on the <ORG>'s decision in <CITATION> [1996 (83) ELT 302], which was upheld by <ORG> [2000 (115) ELT A-219]. It was further submitted that, as the goods which were declared as Video Magnetic Tapes in hubs were found to be so on visual examination, there was no misdeclaration on the part of the appellants, nor had they any intention to misdeclare the goods. The confiscation of the goods and imposition of penalty on the appellants were, therefore, not sustainable. It was not possible to ascertain by mere visual examination whether the goods were old and used. Neither any test report nor any expert opinion was relied upon to establish that the goods were old and used. The panch witnesses were only ordinary laymen with no technical knowledge or expertise to certify the nature of the goods. It was not correct on the part of the Commissioner to rely on the statements of panch witnesses as to the nature of the goods without giving the appellants an opportunity of cross-examining them. The Counsel added that the repeated requests made by the appellants for cross-examination of the panchas were only ignored by the Commissioner. The Department failed to discharge their burden of proving that the goods were old and used. The Counsel further submitted that the Commissioner had heavily relied on the confessional statements of <NAME> dated 25.4.94 and 8.11.94 which, according to the appellants, had been recorded under duress, coercion and threat. Though the statements were retracted subsequently, the retraction was ignored by the Commissioner.

5. The DR vehemently defended the order of the Commissioner by submitting that the appellants had confessed their guilt in unequivocal terms in their statements dated 25.4.94 and 8.11.94 and these statements were never retracted by them. In view of the admission, by the appellants, of their offence alleged in the show-cause notice, any further evidence was not required to prove the offence. The DR relied on the decision of <ORG> in <CITATION> [1997 (90) ELT 31(Cal.)] and submitted that the appellants had, by declaring the high FOB value of Rs. 10,14,949/-for the old/used Video Magnetic Tapes in hubs of no commercial value, had indulged in redeclaration of value (overinvoicing) which amounted to violation of Section 11 of the Customs Act, attracting the provisions of Section 113 of the Act. The DR pointed out that the decision of <ORG> had been followed by the <ORG> in the case of <CITATION> [2002 (141) ELT 282]. He concluded by submitting that there was nothing wrong with the confiscation of the goods or with the imposition of penalties on the appellants.

6. In his rejoinder, the learned Counsel for the appellants argued that the judgment of <ORG> was not applicable to the instant case. According to him, the said judgment had been rendered by the consent of parties. <ORG> had not examined the confiscability of any goods under Section 113(d) or (i) of the Customs Act . The observations contained in para 20 of <ORG> judgment were in the nature of obiter dicta and did not provide any binding ratio. It was further argued that the view expressed by <ORG> in para 20 of its judgment was contrary to the law laid down by <ORG> in <CITATION> [AIR 1970 SC 1597] which was followed by this <ORG> in the case of <ORG> v. Commissionersf [Order No. C-1/3977-84/WZB/2000 dated 4.11.2000 in Appeal Nos. C/363-364/2000 Bom].

7. We have carefully examined the submissions. Admittedly, the Video Magnetic Tapes in hubs covered by Shipping Bill No 426772 dated 8.4.94 had been presented by the appellants through their <ORG> for export under the DEEC Scheme towards discharge of export obligation (under Notification No. 159/90-Cus dated 30.3.1990 under the said Scheme) vis-a-vis raw material (Video Magnetic Tapes in pancakes) which they had cleared earlier without payment of <ORG> duty on the strength of Advance Licence No. 0302672 and DEEC Book No. 058442. The said goods covered by the Shipping Bill for export were described as Video Magnetic Tapes in hubs. Visual examination of the goods showed that they were old and used ones. <NAME>, partner of the firm viz. <ORG> Dipen Enterprises, in his statements dated 25.4.94 and 8.11.94, admitted that the goods had been purchased from various suppliers of old and used hubs and tapes. He also admitted that, under the DEEC Scheme, they should have exported new product. He further admitted that he had disposed of a part of the raw material imported earlier in the month of October, 1993, for monetary consideration and had thereby made an estimated profit of Rs. 180/-to Rs. 190/- per pancake. He also produced records showing sale of 879 pancakes at the rate of Rs. 660/-per pancake making net income of over Rs. 5.8 lakhs. He admitted that such unauthorized disposal of the raw material imported under the DEEC Scheme was illegal. Regarding the nature of the export goods, he stated that he was not aware as to whether they were in serviceable condition. He stated that neither the exporting firm nor their supporting manufacturers (<ORG> Dipen Textiles) had carried out any manufacturing activity in their respective premises in relation to the said goods. <NAME> admitted his guilt and prayed for a lenient view. These statements of <NAME> have been claimed to have been retracted by him. It was claimed that the statements dated 25.4.94 and 8.11.94 were retracted on 26.4.94 and 9.11.94 respectively and that the 'retracting letters' were sent to the investigators (<ORG>, New Custom House, Bombay) under certificate of posting. The impugned order says that there was nothing on record to show that the appellants had retracted the statements dated 25.4.94 and 8.11.94. We have also found no evidence of any 'retracting letter' having been received by the departmental investigators. None of the officers in the investigating team (<ORG>) was examined by the appellants to prove their point. We are also at a loss to understand as to why the appellants did not resort to an effective mode of dispatch which was acknowledgeable by the addressee. Annexure 'J' to the memorandum of appeal is a 'certificate of posting' bearing the postal date-seal on which the date is not legible. It has been claimed by the appellants that this document is evidence of their retracting letter dated 26.4.94 having been sent to the <ORG>. Annexure 'L' to the memorandum of appeal is another 'certificate of posting' which also carries a postal seal on which the date is not legible. It has been claimed that this document proves dispatch of the appellants' retracting letter dated 9.11.94 to the <ORG>. By no stretch of imagination can a certificate of posting issued by postal authorities to the sender be considered as evidence of receipt of the postal article by the addressee. Therefore, in this case, there is no sustainable evidence of any retraction of the statements dated 25.4.94 and 8.11.94. The statements have been rightly relied upon by the adjudicating authority. <NAME> clearly admitted that the export goods covered by the shipping bill had not been manufactured by <ORG> Dipen Enterprises or even by their supporting manufacturers <ORG> Dipen Textiles Pvt Ltd and that the goods had been purchased from the local market. He never claimed that the goods were new and unused. On the other hand, he conceded that he did not know as to whether the goods were in serviceable condition. He even went to the extent of admitting that the suppliers of the goods had told him that the goods were old and used ones. Therefore, the fact that the Video Magnetic Tapes in hubs seized by the departmental officers had not been manufactured out of the raw material imported duty-free under the DEEC Scheme and were old/used second hand goods procured from the local market stands proved. The appellants were admittedly aware of the legal requirement that the export goods under the DEEC Scheme should be new and not old and used ones. The Shipping Bill described the goods as Video Magnetic Tapes in hubs only. The FOB value (Rs. 10,14,949/-) of the old goods declared in the Shipping Bill was undisputedly that of new goods. The appellants have never had a case that old/used video magnetic tapes in hubs had any appreciable commercial value. For all these reasons, the case of the <ORG> that the appellants had misdeclared and overvalued the goods has to be sustained.

8. It has been held by <ORG> in the case of <NAME> (supra) that misdeclaration of value of goods by exporter amounts to violation of prohibition deemed to have been imposed under Section 11 of the Customs Act attracting the provisions of Section 113 of the Act. This view of <ORG> is contained in para 20 of its judgment, which reads as under:-

"Similarly, under the Foreign Trade (Regulation) Rules, 1993 which have been framed under the Foreign Trade (Development and Regulation) Act , 1992 Rule 2(i) provides that 'value' would have the same meaning as was assigned to it in Section 2(41) of the act. Thus the procedure for determination of value under Section 14 of the act is brought in for the purposes of the 1993 Rules. Rule 11 of the 1993 Rules clearly states that the value of the goods must be stated whether the goods are liable to duty or not and such statement must be certified as being correct. If therefore an incorrect declaration is made this would be a violation of Rule 11 of the 1993 Rules. If an incorrect declaration of the value is made this would violate Section 11 of the 1992 Act which forbids the export or import of goods in violation of the Rues. This in turn would attract the provisions of Sections 111 and 13 of the Act as goods imported or exported contrary to law and give <ORG> the power to investigate the correct value of the gods in question and for that purpose utilize the method prescribed under Section 14(1) ."

The above ruling of <ORG> has been followed by this <ORG> in the case of <NAME> (supra). It was pointed out by the Counsel that <ORG>'s ruling was not followed by the <ORG> in the case of <CITATION> [2001 (137) ELT 916]. It was not followed in the case of <ORG> (supra) either. We find that, in both the cases, the Bench relied on the <ORG>'s Larger Bench decision in <CITATION> [2000 (121) ELT 754]. But the view taken by the 3-Member larger bench in <ORG> has been overruled by a larger bench of Five Members of the <ORG> in the case of <CITATION> [2001 (127) ELT 81]. The latter larger Bench relied on <ORG> judgment in <NAME> case and also distinguished <ORG> decision in <CITATION> [2000 (115) ELT A-219]. In the result, it is the decision of <ORG> that should be followed in the instant case. On a reading of the apex court's judgment in <ORG> (supra) relied on by the learned counsel, we are unable to accept his argument that <ORG> decision is hit by the said judgment of the apex court. In the result, we hold that the appellants had contravened Section 11 of the Customs Act (thereby attracting the penal provisions of Section 113 of the Act) by overvaluing the export goods in the Shipping Bill with an oblique purpose. The Commissioner has rightly invoked the provisions of Section 113 to confiscate the goods. In the facts and circumstances of the case, we do not find any reason to interfere with the quantum of redemption fine imposed by him under Section 125 in lieu of confiscation. Further, a personal penalty under Section 114 (i) of the Customs Act would be liable to be imposed on <ORG> as they had rendered the goods liable to confiscation under Section 113 of the Act. The penalty of Rs. 1 lakh imposed on <ORG> by the Commissioner, however, appears to be on the higher side in the facts and circumstances of the case. We reduce it to Rs. 50,000/-.

9. <NAME> is a partner of the exporting firm, <ORG>. A separate penalty has been imposed on him by the Commissioner under the same provision of law. According to settled law, identical penalties on the firm and its partner on the same ground are unwarranted. Therefore, we set aside the penalty imposed on <NAME>.

10. In the result, Appeal No. C/534/96 is dismissed, but with a reduction of the quantum of penalty on the appellant to Rs. 50,000/-. Appeal No. C/535/96 is allowed.