A bench of the Supreme Court comprising of Justice Anil R. Dave and Justice L. Nageswara Rao held that Section 102 of the Code of Civil Procedure 1908, does not apply to cases where the subject matter of the suit is anything more than mere recovery of money or anything other than recovery of money.
Section 102 of the Civil Procedure Code reads as follows:
“102. No second appeal in certain cases. No second appeal shall lie from any decree, when the subject matter of the original suit is for recovery of money not exceeding twenty-five thousand rupees.”
In the present case of Nagarpalika Thakurdwara v. Khalil Ahmed & Ors., Khalil Ahmed had filed a case in the Court of Civil Judge (Junior Division), claiming to be residing outside the municipal limits of Nagar Palika Thakurdwara, District Moradabad and thus praying that Nagar Palika be permanently restrained by way of a permanent injunction from recovering house tax amounting to Rs. 11,006.07/-, from those outside the limits of the municipal boundary. Further also impliedly praying for a declaration to the effect that they were not liable to pay any tax to the Nagar Palika under the provisions of the Uttar Pradesh Municipalities Act, 1916. This suit was dismissed whereupon Khalil Ahmed and others preferred a first appeal before Court of Additional District Judge, which came to be allowed. Being aggrieved by this judgment of the Court of First Appeal, the Nagar Palika preferred a second appeal before the High Court of Judicature at Allahabad. The High Court dismissed the case right away on grounds that that the claim in the second appeal was less than Rs. 25,000/- and by virtue of the provisions of Section 102 of the Code of Civil Procedure, 1908, no second appeal would lie from any decree when the subject matter of the original suit is for recovery of money not exceeding Rs. 25,000/-.
The Supreme Court set aside the judgement of the High Court and held that the High Court ought not to have dismissed the second appeal. The Supreme Court held that the case was not only for recovery of money but also for a declaration and permanent injunction.
The court observed as follows:
“15. So as to avail advantage of the provisions of Section 102 of the CPC, the subject matter of the original suit should be only recovery of money and that too, not exceeding Rs.25,000/-. If the subject matter of the suit is anything other than recovery of money or something more than recovery of money, provisions of Section 102 of the CPC cannot be invoked.”
The Court further discussed that the purpose for enactment of Section 102 of CPC was to reduce the quantum of litigation so that courts may not have to waste time where the stakes are very meagre and not of much consequence. However, since the present case was not only for recovery of money but also for declaration and permanent injunction, Section 102 would not be attracted. Furthermore, court was also supposed to decide on the issue as to the location of the property which would then determine the question whether the municipality was entitled to levy tax on those properties. If the properties were not within the municipal limits, the Nagar Palika could have been permanently restrained from recovering any tax under the Act in respect of those properties. Thus the final outcome of the case would have far-reaching consequences, and therefore it was not just a case of recovery of money less than Rs. 25,000/-.
The Court thus set aside the impugned order and remitted the matter back to the High Court to decide the matter afresh and also directed the High Court to decide the matter within a period of six months from receipt of the judgment.
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