Legal News • Supreme Court of India
Supreme Court: Disputed Court-Fee Liability Cannot Justify Rejection of Plaint Under Order VII Rule 11 CPC
New Delhi | 25 August 2026 | 2026 INSC 913
Key holding
A plaint cannot be rejected at the threshold merely because a defendant alleges that ad valorem court fee is payable, where the correct fee depends on disputed facts that require evidence.
Case information
| Case | Neelam Sharma and Others v. Amita Passan and Others |
| Bench | Justice S.V.N. Bhatti and Justice N.V. Anjaria |
| Proceeding | Civil Appeal No. 11223 of 2026, arising from SLP (C) No. 31540 of 2025 |
| Neutral citation | 2026 INSC 913 |
| Provision | Order VII Rule 11, Code of Civil Procedure, 1908 |
A Bench of Justice S.V.N. Bhatti and Justice N.V. Anjaria set aside a Punjab and Haryana High Court order requiring the plaintiffs to deposit ad valorem court fee within two weeks, failing which their plaint was to stand rejected. The reportable judgment was delivered on 21 August 2026.
Property dispute and the court-fee objection
The plaintiffs instituted a civil suit concerning a residential property in Panchkula. They sought declarations regarding co-ownership and their respective shares, challenged an alleged transfer of the property as fraudulent, sought separate possession to the extent of their shares and prayed for consequential permanent injunction.
According to the plaint, the property had been purchased by their predecessor from joint family funds and stridhan. The plaintiffs alleged that the property was later transferred through forged or otherwise invalid documents and mortgaged to secure a substantial bank loan. Crucially, they pleaded that they were co-owners in joint possession and that they were not executants of the document whose validity they questioned.
One defendant applied under Order VII Rule 11 CPC for rejection of the plaint, contending that the plaintiffs were not in possession and were therefore required to pay ad valorem court fee on the market value of the property. The Trial Court rejected the application, holding that an Order VII Rule 11 inquiry is confined to the plaint and cannot be decided on the defence version.
The Punjab and Haryana High Court reversed the Trial Court. It treated the prayer for separate possession as attracting ad valorem court fee and directed payment within two weeks, with automatic rejection of the plaint in default.
Order VII Rule 11 inquiry is confined to the plaint
The Supreme Court reiterated that an application under Order VII Rule 11 must ordinarily be tested on the averments contained in the plaint. The defendant’s disputed factual assertions and supporting material cannot be used to displace the plaintiff’s pleaded case at that preliminary stage.
Reading the plaint as a whole, the Court found an unequivocal plea of joint possession. That assertion could not be treated as disproved merely because the defendants alleged otherwise. No basis therefore existed at the threshold to accept the defendant’s court-fee objection and reject the plaint.
Executant and non-executant distinction
The Bench applied the principle explained in Suhrid Singh alias Sardool Singh v. Randhir Singh, (2010) 12 SCC 112. An executant seeking cancellation of an instrument ordinarily stands differently from a non-executant who seeks a declaration that the instrument is void, illegal or not binding upon that person. Possession and the form of consequential relief may also affect whether fixed or ad valorem court fee is payable.
The Court did not finally rule that only fixed court fee was payable. It held that the issue depended upon determinative facts, including possession and the legal character of the impugned transfer, which had to be established through evidence. The question was therefore deferred rather than used to terminate the suit at inception.
Operative directions
- The appeal was allowed.
- The High Court’s order dated 19 May 2025 was set aside.
- The Trial Court’s refusal to reject the plaint was upheld.
- The court-fee question remains open for decision after evidence is led.
Why the ruling matters
The judgment reinforces that rejection under Order VII Rule 11 is a threshold remedy and cannot become a short trial on contested facts. A court-fee objection must be examined with reference to the plaintiff’s pleaded status, possession, role in the disputed instrument and the precise relief claimed.
The decision does not establish a universal rule that every non-executant may pay only fixed court fee. Its narrower significance is that where the applicable fee turns on facts that remain genuinely disputed, the suit should not be extinguished before those facts are proved.