Court Checks Arbitrary Exercise Of Discretion

In a civil case the relief claimed has a strong bearing in determining the jurisdiction. It is usually the privilege of the plaintiff to determine the valuation of the suit for the purpose of jurisdiction. An interesting question that arose in Pfizer Products, Inc v. B.L.& Co & Ors 2007 (34) PTC 294 (Del.) is that whether two valuations are permissible for the plaintiff in the same proceedings.

Pfizer Products claims to be a global research based pharmaceutical company with worldwide performance. The suits have been filed by Pfizer Products against different defendants for injunction, damages, passing off and unfair competition. Pfizer alleges that different defendants are selling products under deceptively similar trademarks. But a common question that arose in all these suits was with regard to the valuation for Court fee and jurisdiction. For the purpose of the Court fees the valuation taken was 5,00,050 and for the purpose of jurisdiction it was valued at 50,00,000.

The main question that arose in this case is that whether the suit is liable to be transferred to the District Court, during the pendency of the suit, as the High Court has an increased pecuniary jurisdiction and the connected question is, if the valuation of Rs. 50,00,000 is taken into account, whether the plaintiff is liable to pay ad valorem Court fee.

Pfizer contented that it is open for the plaintiff to assign different valuation for the purpose of court fee and jurisdiction and the valuation over Rs.50, 00,000 enables the High Court to exercise its jurisdiction. On the other hand the defendants contend that the suit is not properly valued and also that it cannot be even transferred to District Court. The option available for the Pfizer is either to make up the deficiency of the Court fee or treat the plaint as rejected. Pfizer placed reliance on M/s. Commercial Aviation & Travel v. Vimla Pannalal AIR 1988 SC 1636 where in the Apex court had held that it is impossible for a plaintiff to value the relief correctly and hence has upheld different valuation for the purpose of court fee and jurisdiction in a suit for accounts. The defendants on the other hand placed reliance on Abdul Hamid Shamsi v. Abdul Majid AIR 1988 SC 1150 where the apex court held that though the plaintiff is allowed to give his tentative valuation and ordinarily the court is not to examine the correctness of the valuation chosen, the plaintiff cannot act arbitrarily in this matter. Further in Eastman Kodak Company v. M/s M.R. Electronics and Others,1995 (15) PTC 146(Del.)and Automatic Electric Limited v. R.K. Dhawan & Anr. 1999 PTC (19) 81 (Del.) held that where there is a basis available for valuation for the purpose of the Court fee, it is not open for the plaintiff to value it arbitrarily.

The court is very much in consonance with the contentions of the defendants and observes that the valuation is primarily done by Pfizer and they themselves has valued the turnover into thousands of crores and claims damages and infringement. The Court further held that in the light of considered view, the valuation for the purpose of court fee is arbitrary and the based on the sales figures itself it is explicitly clear the amount in excess of Rs.50,00,000 would be due and payable on rendition of account.

The case underlines the fact that, even though certain privileges are awarded to the plaintiff, they are subject to natural principles and cannot be arbitrary.

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