Market Value Of Property Must Be Determining Factor Under Commercial Courts Act, Not Court Fee Value: Kerala High Court
story The Kerala High Court has held that the market value of the property must be the determining factor under Section 12 (1)(c) of the Commercial Courts Act, and not the valuation adopted for the purpose of court fees under the Kerala Court Fees and Suits Valuation Act, 1959. Full View
The Kerala High Court has held that the market value of the property must be the determining factor under Section 12 (1)(c) of the Commercial Courts Act, and not the valuation adopted for the purpose of court fees under the Kerala Court Fees and Suits Valuation Act, 1959.A Full Bench comprising Justice Sathish Ninan, Justice C.S. Dias, and Justice C.S. Sudha delivered the judgement...
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A Full Bench comprising Justice Sathish Ninan, Justice C.S. Dias, and Justice C.S. Sudha delivered the judgement while answering a reference in ICR (CRP) No.11 of 2025, CRP No.133 of 2024, and OP(C) No.753 of 2024.
The Court considered whether the valuation adopted for the purpose of payment of court fees under the Kerala Court Fees and Suits Valuation Act, 1959, is to determine the specified value of the property under Section 12(1)(c) of the Commercial Courts Act, 2015.
For context, the Commercial Act stipulated that all suits relating to a commercial dispute of a specified value is to be treated by a commercial court. Section 12(1)(c) of the Commercial Courts Act provides the manner of determination of the “specified value” of the subject matter of Commercial Dispute.
The determination of the “specified value” is of significance since, even if the dispute satisfies the definition of a commercial dispute under Commercial Courts Act, unless the value of the subject matter of the commercial dispute is of “specific value”, the suit will not fall within the jurisdiction of the commercial court.
The issue was referred to the Full Bench by a Division bench. In Surendran v. Kunhimoosa (2021 SCC OnLine Ker 9808) and Hindustan Petroleum Corporation Ltd. v. Muhammed Illiyas (2022 (6) KHC 68), single and division benches of the Kerala High Court had earlier held that the valuation adopted for the purpose of court fees should also be treated as the “specified value” under the Commercial Courts Act. These rulings had relied on decisions from the Delhi High Court in Soni Dave v. Trans Asian Industries Expositions Pvt. Ltd., (AIR 2016 Del 186) and that of Karnataka High Court in Fine Footwear Pvt. Ltd. v. Skechers USA Inc., (2019 SCC OnLine Kar 1024).
The Full Bench observed that in the earlier judgments referred, it was concluded that the “subject matter” of the suit is not property but it is the value of the right which the plaintiff seeks to enforce. Citing the Full Bench ruling in Victoria v. Yesuraj Kumar (2017 (5) KHC 319), the Court observed that “subject matter” includes both the cause of action and the relief claimed.
“Therefore, it is beyond cavil that the “subject matter” of a suit is not the property in respect of which the suit is laid; it refers to the right, the relief claimed, and even the cause of action.” the bench noted.
The Bench invoked Section 53(1) of the Court Fees Act, which explicitly provides that where “any other law” prescribes a mode of determining jurisdictional valuation, that method prevails. The Court thus observed that the Commercial Courts Act provides a specific mode for determination of the value of the subject matter for the purpose of jurisdiction and hence the same shall prevail to determine the specified value.
“Of course, valuation for the purpose of court fees is to be as provided under the Court Fees Act. There is no inconsistency or incongruity in referring to CC Act for the purpose of valuation for jurisdiction and to the Court Fees Act for valuation for payment of court fee. The above is only in accordance with the express provision under Section 53(1) of the Court Fees Act.” the Court observed.
Therefore, there is no incongruity in using market value for jurisdiction under the Commercial Courts Act, while continuing to compute court fees under the Kerala Court Fees Act.
The Bench considered the Supreme Court's decision in Bharat Bhushan Gupta v. Pratap Narain Verma [(2022) 8 SCC 333], which had emphasized that suit valuation under the Court Fees Act is governed by the relief claimed, not the property's market value. However, the judges noted that the apex court was not dealing with the Commercial Courts Act.
“The Apex Court was considering the issue of valuation based on the provisions of the Court Fees Act. We have noticed that, regarding valuation, the scheme of the CC Act, unlike that of the Court Fees Act, is structured property-wise and not relief-wise.”, it noted.
The Court thus held that, to determine the specified value under Section 12(1)(c) of the Commercial Courts Act, the Valuation for the purpose of court fees under the Court Fees Act is not determinative, and the valuation of ascertainment of the specified value is the market value of the immovable property.
Case Title: Abdullakutty Haji v H Musthafa and connected matters
Case No: ICR (CRP) 11/ 2025 and connected matters
Citation: 2025 LiveLaw (Ker) 606
Counsel for Petitioner: B Krishnan, R Parthsarathy
Counsel for Respondent: L Rajesh Narayan, Manu Vyasan Peter, P B Krishnan (Sr.), P B Subramanyan, Sabu George, N Anusree, Meera P, Aiswarya Mohan
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