Multi-Millionaires / Affluent Persons can't be permitted to sue as an Indigent Person [Case Law]

Code of Civil Procedure, 1908 - Order XXXIII Rule 1 - Court Fees and Suits Valuation Act, 1959 (Kerala) - Section 4A - Suits may be instituted by an indigent person - Balance Court Fee - The benevolent provisions under Order XXXIII of the Code are intended to help the poor litigants who are unable to pay the requisite court fee to file a suit because of their poverty - Those provisions are not meant for misuse by multi-millionaires - They are not intended for use by affluent persons.

Held:- The Code confers the benefit on persons without 'sufficient means'. It refers not to a person without any means. Whether a person is without sufficient means would depend on the facts of the case. The court has to ascertain if the plaintiff is capable of raising the court fee in normal circumstances. Capacity to raise money and not actual possession of funds is what the court has to look into. Capacity to raise funds could cover all forms of realisable assets which a person could in the normal circumstances convert into cash and utilise for the litigation without detriment to his normal existence. Possession of "sufficient means' refers to possession of sufficient realisable property which will enable the plaintiff to pay the court fee. What is intended and provided is that justice shall not be denied to a person for the reason that he is not having sufficient means to pay the court fee. True, what is intended is not capacity to raise funds by any means but by normal and available lawful means. True, one need not deprive himself of the sole means of livelihood or alienate all his assets and pay the court fee. But, at the same time, malafide avoidance of immediate payment of court fee has to be checked and curbed. [Para 21]

Facts of the Case

The suit was instituted for granting a decree for realisation of an amount of Rs.10,83,98,600/- from the defendants with interest at the rate of 12% per annum on the principal amount of Rs.7,97,81,997/-from the date of the suit till the date of realisation. The total amount of court fee payable by the appellant on the plaint was Rs.18,02,386/-. The appellant/plaintiff paid one-tenth of this amount at the time of institution of the suit as per Section 4A of the Kerala Court Fees and Suits Valuation Act, 1959. He was bound to pay the balance court fee of Rs.16,22,146/- within fifteen days from the date of framing of the issues in the suit.

IN THE HIGH COURT OF KERALA AT ERNAKULAM

C.R P.N.RAVINDRAN, J & R.NARAYANA PISHARADI, J.

Dated this the 3rd day of April, 2018

(AGAINST THE ORDER OF THE ADDL. SUB JUDGE, KOTTAYAM, DATED 31.03.2017 IN I.A.NO.1701/2015 IN O.S.NO.6/2014) 

APPELLANT/PETITIONER/PLAINTIFF

P.K. KURIAKOSE

BY ADVS.SRI.G.SREEKUMAR (CHELUR) SRI.NANDAGOPAL S.KURUP 

RESPONDENTS/RESPONDENTS/DEFENDANTS 1 TO 9: 

1. MR. ASGAR SHAKOOR PATEL, NATASHA, 52-HILL ROAD, BANDRA WEST, MUMBAI - 400 050.

2. PATEL REAL ESTATE DEVELOPERS PVT LTD., WHICH IS A COMPANY INCORPORATED UNDER THE COMPANIES ACT, 1956 WITH REGISTERED OFFICE AT DOOR NO. 6280, 2ND FLOOR ABOVE DHANALAKSHMI BANK, PALARIVATTOM, ERNAKULAM, INDIA, REPRESENTED BY ITS MANAGING DIRECTOR.

3. PATEL HOLDING LTD., WHICH IS A COMPANY INCORPORATED UNDER THE COMPANIES ACT, 1956 WITH REGISTERED OFFICE AT NATASHA, 52 HILL ROAD, BANDRA WEST, MUMBAI, MAHARASHTRA, INDIA - 400 500, REPRESENTED BY ITS MANAGING DIRECTOR.

4. NATASHA CONSTRUCTION PROJECTS PVT LTD., WHICH IS A COMPANY INCORPORATED UNDER THE COMPANIES ACT, 1956 WITH REGISTERED OFFICE AT 52 HILL ROAD, BANDRA WEST, MUMBAI, MAHARASHTRA, INDIA - 400 500 REPRESENTED BY ITS MANAGING DIRECTOR.

5. NATASHA CONSTRUCTION PVT LTD., WHICH IS A COMPANY INCORPORATED UNDER THE COMPANIES ACT, 1956 WITH REGISTERED OFFICE AT 52 HILL ROAD, BANDRA WEST, MUMBAI, MAHARASHTRA, INDIA - 400 500 REPRESENTED BY ITS MANAGING DIRECTOR.

6. NATASHA HOMES PVT LTD., WHICH IS A COMPANY INCORPORATED UNDER THE COMPANIES ACT, 1956 WITH REGISTERED OFFICE AT UNIT NO.4, IST FLOOR, ACLON CHAMBERS, D.B. BANDODKAR MARG, PANJI, GOA, INDIA - 403 001, REPRESENTED BY ITS MANAGING DIRECTOR.

7. VAIKOM BUILDER AND PROPERTIES PVT LTD., A COMPANY INCORPORATED UNDER THE COMPANIES ACT, 1956 WITH REGISTERED OFFICE AT DOOR NO. 6280, 2ND FLOOR ABOVE DHANALAKSHMI BANK, PALARIVATTOM, ERNAKULAM-682 025 INDIA, REPRESENTED BY ITS MANAGING DIRECTOR.

8. THE BHRAMAMANGALAM BUILDERS AND PROPERTIES LTD., WHICH IS A COMPANY INCORPORATED UNDER THE COMPANIES ACT, 1956 WITH REGISTERED OFFICE AT DOOR NO. 6280, 2ND FLOOR ABOVE DHANALAKSHMI BANK, PALARIVATTOM, ERNAKULAM-682 025, INDIA, REPRESENTED BY ITS MANAGING DIRECTOR.

9. THE POOTHOTTA BUILDERS AND PROPERTIES PVT. LTD., WHICH IS A COMPANY INCORPORATED UNDER THE COMPANIES ACT, 1956 WITH REGISTERED OFFICE AT DOOR NO. 6280, 2ND FLOOR ABOVE DHANALAKSHMI BANK, PALARIVATTOM, ERNAKULAM-682 025, INDIA, REPRESENTED BY ITS MANAGING DIRECTOR.

R1 BY ADV. SRI.BABU PAUL (CAVEATOR) R2-R9 BY ADV. SRI.BABU PAUL 

JUDGMENT 

R. Narayana Pisharadi, J.

This appeal is filed by the plaintiff in the suit O.S.No.6 of 2014 on the file of the Court of the Additional Subordinate Judge, Kottayam. The respondents in the appeal are the defendants in the suit.

2. The suit was instituted for granting a decree for realisation of an amount of Rs.10,83,98,600/- from the defendants with interest at the rate of 12% per annum on the principal amount of Rs.7,97,81,997/-from the date of the suit till the date of realisation. The total amount of court fee payable by the appellant on the plaint was Rs.18,02,386/-. The appellant/plaintiff paid one-tenth of this amount at the time of institution of the suit as per Section 4A of the Kerala Court Fees and Suits Valuation Act, 1959. He was bound to pay the balance court fee of Rs.16,22,146/- within fifteen days from the date of framing of the issues in the suit.

3. The defendants entered appearance in the suit and filed a written statement. The issues in the suit were framed on 28.10.2015. On that date, the court below directed the plaintiff to pay the balance amount of court fee within fifteen days and posted the suit to 20.11.2015. On 20.11.2015, the plaintiff filed the application I.A.No.1701 of 2015 in the lower court for granting him permission to continue the suit as an indigent person.

4. The material averments in the affidavit filed by the plaintiff in support of the application I.A.No.1701 of 2015 are the following: It is not possible for him to pay the balance amount of court fee due to his financial stringency. He owns 3.36 acres of land and a residential building having an area of 10,000 square feet and also 1.81 acres of nilam, having a total value of Rs.3,87,05,000/-. These properties do not yield any income. It is not possible to sell or encumber these properties to raise money. Most of these properties are attached in Arbitration Case No.329 of 2015 instituted against him by Tata Capital Financial Services Limited for realisation of an amount of Rs.4,62,55418/- from him. The remaining properties are also attached in a suit for realisation of money instituted against him by Capital Investments in the Sub Court, Muvattupuzha. The plaintiff has got no liquid cash with him. The amount in his name in the bank is not more than Rs.5,000/-. The plaintiff meets his daily necessities with the help of his friends and relatives. At the time of institution of the suit, he was conducting a foreign exchange business having goodwill. But, due to some unwanted interference by the Reserve Bank of India at the instance of some rival businessmen, huge loss occurred in his business and it was closed. The plaintiff is not conducting any business at present. He has no source of income to pay the balance amount of court fee. The agricultural income from all his properties is less than Rs.20,000/- per year.

5. The defendants filed objections to the aforesaid application contending that the petition is not maintainable at a stage after the institution of the suit and that the attempt of the plaintiff is only to protract the proceedings in the suit O.S.No.452 of 2012 filed against him by the defendants. They also contended that the plaintiff has to prove that his properties are under attachment. They contended that the plaintiff paid an amount of Rs.1,14,00,000/- in favour of Tata Capital Financial Services Limited in connection with Arbitration Case No.329 of 2015. They further contended that the plaintiff gets a monthly income of more than Rs.2,00,000/- by letting out his residential building for shooting films and serials and that he has got sufficient means to pay the court fee.

6. During the enquiry in the application conducted by the lower court, the plaintiff was examined as PW1 but no documents were marked on his side. On the side of the defendants, DW1 was examined and Exts.B1 to B3 documents were marked. After appreciating the evidence adduced by the parties and the rival contentions raised by them, the lower court found that the plaintiff has failed to discharge his burden that he does not have sufficient means to pay the balance amount of court fee and consequently, dismissed the application. The lower court also directed him to pay the balance court fee within ten days. Aggrieved by this order, the plaintiff has come up in appeal.

7. We have heard the learned counsel for the appellant and also the respondents and perused the records.

8. Learned counsel for the appellant contended that though the appellant owns large extent of properties, he is not in a position to raise the money for payment of balance court fee by selling the properties as the properties are under attachment in different cases. Learned counsel would also contend that the appellant has no capacity to raise the huge amount payable by him as balance court fee and that the lower court went wrong in dismissing the petition filed by him for granting permission to sue as an indigent person.

9. Per contra, the learned counsel for the respondents contended that the appellant owns large extent of properties and a residential building having an area of 10,000 square feet and he has got sufficient means to pay the balance amount of court fee. Learned counsel would further contend that the appellant has not produced any documents to prove that the properties owned by him are under attachment. Learned counsel further contended that the appellant did not produce his bank pass books or statements of bank accounts to prove the amount held by him in the banks. The sum and substance of the contention of the learned counsel for the respondents is that the appellant is an affluent person, that he is a multimillionaire, that he has the financial capacity to pay the balance amount of court fee and that the attempt of the appellant is only to evade payment of court fee in the suit after obtaining interim orders against the defendants.

10. Order XXXIII Rule 1 of of the Code of Civil Procedure, 1908 (hereinafter referred to as 'the Code') reads as follows: 

“1.Suits may be instituted by an indigent person - Subject to the following provisions, any suit may be instituted by an indigent person.

Explanation I.-- A person is an indigent person,-- (a) if he is not possessed of sufficient means (other than property exempt from attachment in execution of a decree and the subject - matter of the suit) to enable him to pay the fee prescribed by law for the plaint in such suit, or (b) where no such fee is prescribed, if he is not entitled to property worth one thousand rupees other than the property exempt from attachment in execution of a decree, and the subject - matter of the suit.

Explanation II.-- Any property which is acquired by a person after the presentation of his application for permission to sue as an indigent person, and before the decision of the application, shall be taken into account in considering the question whether or not the applicant is an indigent person.

Explanation III.-- Where the plaintiff sues in a representative capacity, the question whether he is an indigent person shall be determined with reference to the means possessed by him in such capacity.' 

11. Order XXXIII Rule 2 of of the Code reads as follows: 

"2. Contents of application. - Every application for permission to sue as an indigent person shall contain the particulars required in regard to plaints in suits; a schedule of any movable or immovable property belonging to the applicant, with the estimated value thereof, shall be annexed thereto; and it shall be signed and verified in the manner prescribed for the signing and verification of pleadings." 

12. The suit is for realisation of an amount of Rs. 10,83,98,600/- from the defendants. The total amount of court fee payable on the plaint is Rs. 18,02,386/-. Section 4A of the Kerala Court Fees and Suits Valuation Act, 1959, provides that the amount of fee to be paid on plaint at the time of institution of suit shall be one - tenth of the amount chargeable under the Act and the balance amount shall be paid within such period, not later than fifteen days from the date of framing of issues or where framing of issues is not necessary, within such period not exceeding fifteen days as may be specified by the Court. At the time of institution of the suit, the appellant paid one-tenth of the court fee payable by him. The issues in the suit were framed by the court below on 28.10.2015 and it directed the appellant to pay the balance court fee within 15 days and adjourned the suit to 20.11.2015. The appellant filed the application I.A.No.1701 of 2015 on 20.11.2015 for granting him permission to continue the suit as an indigent person.

13. As mentioned above, Section 4A of the Kerala Court Fees and Suits Valuation Act, 1959 provides that the amount of fee to be paid on plaint at the time of institution of suit shall be one - tenth of the amount chargeable under the Act. The plaintiff has to pay the balance amount within such period, not later than fifteen days, from the date of framing of issues. Section 4A of the Kerala Court Fees and Suits Valuation Act only postpones the payment of court fee. Court fee is payable on the valuation of the suit as on the date of the suit, at such rate of fee liable to be paid as on the date of the suit. There may be cases where a plaintiff may pay one - tenth of the court fee at the time of presentation of the plaint and may, quite honestly, hope to pay the balance court fee within time. Such a belief of the plaintiff would not bind him forever, precluding him from getting the benefit of the benevolent provisions of Order 33 of the Code. Later, he may not have sufficient means to pay the court fee. It can happen due to various reasons. In such cases, law would and should come to his rescue and grant leave to continue the suit as an indigent person in so far the balance court fee is concerned. In such cases, the fiction by which the date of institution of the suit is related back to the date of application for leave to sue as an indigent person, would not deprive the plaintiff of the right to avail the benefit of Order 33 of the Code. The honest belief of the plaintiff, at the time of institution of the suit , that he would be able to pay court fee at a later point of time, would not debar him from claiming the benefit of Order 33 of the Code, if subsequently it is found that he is unable to pay the balance court fee (See Andrews v. Hassan : 2006 (3) KLT 807 and Jayaraj v. Kalyani : 2010 (4) KHC 833). When one – tenth court fee due at the stage of institution of the suit was paid and the plaintiff thereafter faced a situation where he claimed exemption from payment of balance court fee, it is sufficient that the plaintiff files an interlocutory application with an affidavit supporting such application and containing the ingredients necessary for claiming such relief (See Shankarankutty Nair v. Uma Devi Amma: 2015 (3) KLT 537). Therefore, there is no merit in the contention of the defendants that the plaintiff cannot file an application to sue as an indigent person at a stage subsequent to the insititution of the suit.

14. If the plaintiff pays one-tenth of the court fee at the time of institution of the suit and if he later files application for granting permission to sue as an indigent person and if he has fraudulently sold his property after the institution of the suit and diverted the money without paying the balance court fee, then the application filed by him for granting permission to sue as an indigent person is liable to be dismissed. In the case of loss of assets, properties or resources after filing the suit, under circumstances in which the plaintiff cannot be blamed at all or in cases where it cannot be said that there was any contumacious conduct on the part of the plaintiff, the Court would have jurisdiction to allow an application under Order 33 Rule 1 of the Code, even at the stage when the fee becomes payable. If it is proved that the plaintiff had sufficient means to pay the court fee at the time of institution of the suit, the plaintiff has to prove change of circumstances and all other relevant facts so as to claim exemption from paying the balance court fee at the stage when it becomes payable (See Jayaraj v. Kalyani : 2010 (4) KHC 833).

15. In the instant case, the suit was instituted on 10.01.2014. On 20.11.2015, the plaintiff filed the application I.A.No.1701 of 2015 in the lower court for granting him permission to continue the suit as an indigent person. Ext.B2 document produced by the defendants in the lower court shows that on 20.12.2016 the plaintiff sold a portion of his property for a consideration of Rs.3,50,000/-. Ext.B3 document produced by the defendants in the lower court shows that on the same day he sold another item of property for a consideration of Rs.1,90,000/-. It was on 30.01.2017 that the plaintiff gave evidence as PW1 during the enquiry conducted in the application. At that time, he did not disclose the transactions of sale of property made by him. He also did not disclose the purpose for which he utilized the sale proceeds. Contumacious conduct on the part of the plaintiff is thus evident.

16. In the affidavit filed in support of the application, the plaintiff has averred that at the time of filing the suit he was conducting a foreign exchange business having goodwill but due to the interference by the Reserve Bank of India, the business was stopped. But, he has stated in examination – in-chief (proof affidavit) that even before the institution of the suit the foreign exchange business conducted by him was stopped due to adverse circumstances. Both these statements cannot stand together. PW1 has not clarified which is the true statement. He also did not produce records relating to the business conducted by him.

17. In the affidavit filed in support of the application, the plaintiff has admitted that he owns 3.36 acres of dry land and a residential building having an area of 10,000 square feet and also 1.81 acres of wet land. Even according to the plaintiff, the estimated value of the properties owned by him is Rs.3,87,05,000/-, that is, nearly four crores rupees. But, according to the plaintiff, these properties do not yield any income and most of these properties have been attached in Arbitration Case No.329 of 2015 instituted against him by Tata Capital Financial Services Limited for realisation of an amount of Rs.4,62,,55418/- from him and in a suit instituted against him by Capital Investments in the Sub Court, Muvattupuzha. The plaintiff did not produce any document before the lower court to prove that the properties owned by him have been attached in these cases.

18. In the affidavit filed in support of the application, the plaintiff has averred that the amount in deposit in his bank account is not more than Rs.5,000/-. When examined as PW1, in cross examination, he has stated that he has account in three banks. He did not produce the bank pass books or bank account statements to prove his plea that the money in deposit in his bank accounts is not more than Rs.5,000/-.

19. When examined as PW1, in cross examination, the plaintiff has stated that he had paid one crore and sixty lakhs rupees to Tata Capital Financial Services Limited pursuant to the settlement arrived at in Arbitration Case No.329 of 2015 and this amount was paid after the date 06.05.2016. He has stated that this amount was raised by selling the property of his mother-in-law and by borrowing from three of his friends. The plaintiff did not produce at least a copy of the document by which his mother-in-law sold her property. He should have produced the relevant documents to prove his boanafides.

20. The plaintiff has admitted that he owns a residential building having an area of ten thousand square feet and that there is a swimming pool inside that house. He could not give any satisfactory answer to the question put to him in the cross examination as to how he meets the expenses for maintenance of the house and payment of the electricity charges.

21. The Code confers the benefit on persons without 'sufficient means'. It refers not to a person without any means. Whether a person is without sufficient means would depend on the facts of the case. The court has to ascertain if the plaintiff is capable of raising the court fee in normal circumstances. Capacity to raise money and not actual possession of funds is what the court has to look into. Capacity to raise funds could cover all forms of realisable assets which a person could in the normal circumstances convert into cash and utilise for the litigation without detriment to his normal existence. Possession of "sufficient means' refers to possession of sufficient realisable property which will enable the plaintiff to pay the court fee. What is intended and provided is that justice shall not be denied to a person for the reason that he is not having sufficient means to pay the court fee. True, what is intended is not capacity to raise funds by any means but by normal and available lawful means. True, one need not deprive himself of the sole means of livelihood or alienate all his assets and pay the court fee. But, at the same time, malafide avoidance of immediate payment of court fee has to be checked and curbed.

22. An immunity from a litigation unless the requisite court fee is paid by the plaintiff is a valuable right for the defendant (See M. L. Sethi v. R. P. Kapur : AIR 1972 SC 2379). The benevolent provisions under Order XXXIII of the Code are intended to help the poor litigants who are unable to pay the requisite court fee to file a suit because of their poverty (See Union Bank of India v. Khader International Construction: AIR 2001 SC 2277). Those provisions are not meant for misuse by multi-millionaires like the appellant. They are not intended for use by affluent persons like the appellant.

23. In Mathai M. Paikeday v. C. K. Antony: AIR 2011 SC 3221, the Supreme Court has held as follows: 

“To sum up, the indigent person, in terms of explanation I to R.1 of O.33 of the Code of Civil Procedure, is one who is either not possessed of sufficient means to pay court fee when such fee is prescribed by law, or is not entitled to property worth one thousand rupees when such court fee is not prescribed. In both the cases, the property exempted from the attachment in execution of a decree and the subject - matter of the suit shall not be taken into account to calculate financial worth or ability of such indigent person. Moreover, the factors such as person's employment status and total income including retirement benefits in the form of pension, ownership of realizable unencumbered assets, and person's total indebtedness and financial assistance received from the family member or close friends can be taken into account in order to determine whether a person is possessed of sufficient means or indigent to pay requisite court fee. Therefore, the expression 'sufficient means' in O.33 R.1 of the Code of Civil Procedure contemplates the ability or capacity of a person in the ordinary course to raise money by available lawful means to pay court fee”.

24. The decision in Mathai M. Paikeday's case (supra) would indicate that financial assistance received from the family members or close friends can be taken into account by the court in order to determine whether a person is possessed of sufficient means or indigent to pay the requisite court fee. The appellant has got a plea that he received financial assistance from his mother-in-law and three of his friends to pay an amount of one crore and sixty lakhs rupees to Tata Capital and Financial Services Limited, after he filed the application for granting permission to sue as an indigent person. As noticed earlier, in order to prove his bonafides, he should have produced the relevant documents to prove such a plea. He did not even produce a copy of the document relating to sale of the property of his mother-in-law to prove that it was not from other sources that he obtained the said amount. He did not examine any of his friends from whom he had allegedly received financial assistance. He did not even produce the bank pass books or bank account statements to prove the amount held by him in deposit in the banks.

25. In the instant case, on an anxious consideration of the averments in the affidavit filed by the plaintiff in support of the application and the testimony of the plaintiff (PW1) in the lower court, we are of the view that he is a person who has got the capacity to raise the money payable by him as court fee in the suit. The lower court has, in our view, rightly dismissed the application made by him for granting permission to continue the proceedings in the suit as an indigent person.

Consequently, the appeal fails and it is dismissed, but without costs. However, we grant the appellant/plaintiff two months time from today to pay the balance amount of court fee payable on the plaint.