2004 (1) TMI 391 - HC - Companies Law

Issues Involved:
1. Valuation of the appeal for jurisdiction purposes.
2. Jurisdiction of a Single Judge versus a Division Bench under the Allahabad High Court Rules, 1952.
3. Application of the Arbitration and Conciliation Act, 1996, Civil Procedure Code, 1908, and Court Fees Act as amended in U.P. to the valuation of the appeal.

Detailed Analysis:

1. Valuation of the Appeal for Jurisdiction Purposes:
The primal question involved is the valuation of the appeal for jurisdiction purposes. The appeal was initially reported by the stamp reporter as cognizable by a Single Judge based on a valuation below Rs. 1 lakh. However, the respondents contested this valuation, arguing that it exceeds Rs. 1 lakh and thus falls under the jurisdiction of a Division Bench.

2. Jurisdiction of a Single Judge versus a Division Bench:
Chapter V of the Allahabad High Court Rules, 1952, stipulates that a Single Judge has limited pecuniary jurisdiction for appeals up to Rs. 5 lakhs or Rs. 1 lakh, depending on the case. Appeals exceeding these amounts are to be heard by a Division Bench. The dispute arose from an application under section 9 of the Arbitration and Conciliation Act, 1996, which sought an injunction order. The District Judge, Kanpur, had rejected this application, leading to the present appeal.

3. Application of Relevant Legal Provisions:
The appeal's valuation needs to be determined considering the Arbitration and Conciliation Act, 1996, Civil Procedure Code, 1908, and the Court Fees Act as amended in U.P. The appellants argued that the right claimed in the appeal is incapable of valuation and that it is at their discretion to assign any valuation. They cited section 7(iv-B)(A) of the Court Fees Act and legal precedents such as Vasireddi v. Marupudi Butchiah and S. Rm. Ar. S. Sp. Sathappa Chettiar v. S. Rm. Ar. Rm. Ramnathan Chettiar.

The respondents, however, contended that the valuation should be based on the amount affected by the relief sought, referencing section 7(iv-B)(b) of the Court Fees Act. They argued that the bank account with a cash credit limit of Rs. 15 lakhs is the property involved and affected by the injunction sought.

Relevant Provisions and Case Law:
- Section 2(e) of the Arbitration and Conciliation Act, 1996, defines "Court" and includes the High Court in its ordinary and original civil jurisdiction.
- Section 9 of the Act allows a party to apply to a "Court" for interim measures.
- Section 7(iv-B)(b) of the Court Fees Act mandates that suits for injunction should be valued according to the amount at which the relief is sought, with a minimum valuation of 1/5th of the market value of the property involved or Rs. 200, whichever is greater.
- Case law such as Commercial Aviation & Travel Co. v. Mrs. Vimla Panna Lal and Kamaleshwar Kishore Singh v. Paras Nath Singh were cited to support the argument that the valuation should be based on objective standards and not arbitrarily set by the plaintiff.

Conclusion:
The court concluded that the valuation of the appeal should be Rs. 15 lakhs for jurisdiction purposes, as the bank account with a cash credit limit of Rs. 15 lakhs is the property involved and likely to be affected by the injunction sought. The appellants were directed to correct the valuation of the appeal, and the case was to be listed before the appropriate Division Bench. The appeal had not yet been heard on merits, and urgency was noted in the matter.

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