Applications under Order VII Rule 11 of the Code of Civil Procedure are a favourite opening move of defendants: if the plaint can be thrown out at the threshold for undervaluation or deficient court fee, the suit ends before it begins. On 21 August 2026, in Neelam Sharma and Others v. Amita Passan and Others, 2026 INSC 913, a Bench of Justice S.V.N. Bhatti and Justice N.V. Anjaria drew the line: where the liability to pay ad valorem court fee itself depends on facts that are in dispute — such as whether the plaintiffs are in joint possession of the property — the plaint cannot be rejected at the threshold, and the court-fee question must be decided after evidence is led.
The suit and the objection
The plaintiffs sued as co-owners of a residential property, claiming one-fourth shares each in what they described as property acquired with joint family funds and held in joint possession with the defendants. They challenged a conveyance executed by one family member in favour of a third party as fraudulent and void, and sought a declaration to that effect together with ancillary relief, including a permanent injunction.
Defendant No. 2 applied under Order VII Rule 11 CPC for rejection of the plaint. The argument was familiar: the plaintiffs were not in possession, they were in substance seeking possession of the property, and they were therefore bound to pay ad valorem court fee on the market value rather than the fixed fee they had paid. The trial court refused to reject the plaint. In revision, the High Court reversed, holding the plaintiffs liable to pay ad valorem fee. The plaintiffs appealed to the Supreme Court.
What the Supreme Court held
The Supreme Court allowed the appeal and restored the trial court's order. Three strands of reasoning stand out from the judgment of Justice Bhatti and Justice Anjaria.
Only the plaint is read
At the Order VII Rule 11 stage the court examines the averments of the plaint alone, taken as correct. Paragraph 4 of the plaint pleaded in terms that the plaintiffs resided jointly with the defendants in the suit property. That pleading of joint possession could not simply be brushed aside.
The Suhrid Singh dichotomy
Applying the settled distinction, a non-executant in possession who seeks a declaration that a deed is void pays fixed court fee; a non-executant out of possession who needs consequential possession pays ad valorem fee. Which side of the line a plaintiff falls on depends on possession — a question of fact.
Disputed facts need evidence
Whether the plaintiffs were truly in joint possession, and the circumstances of the challenged sale deed, are, in the Court's words, "issues to be threshed out on evidence". The court-fee question was therefore segregated and deferred to trial rather than answered at the threshold.
The operative order
The Court set aside the High Court's revisional order and upheld the trial court's refusal to reject the plaint, subject to one modification: the question of court fee "would be considered and decided, after and on the basis of the evidence that may be led in the suit". The plaintiffs thus keep their suit alive, but not the last word on stamping — if the evidence ultimately shows they were out of possession, ad valorem fee can still be exacted.
Why the decision matters in practice
Order VII Rule 11 applications founded on court fee are filed routinely in property litigation across Delhi's district courts and the High Court. This judgment arms plaintiffs with a clear answer where the possession question is genuinely contested: a carefully pleaded case of joint or continuing possession cannot be defeated at the threshold by the defendant's mere assertion to the contrary.
1. Read the plaint
Rejection applications are tested on the plaint's averments and accompanying documents alone.
2. Identify the fee-fixing fact
If fixed versus ad valorem fee turns on possession or the validity of a document, ask whether that fact is admitted or disputed.
3. Disputed — defer
The suit proceeds; the court frames the fee question for decision on evidence.
4. Decided at trial
Deficient fee, if found payable, is directed to be made good then — the suit is not stillborn.
For defendants, the judgment is not a dead end. Where the plaint itself shows the plaintiff to be out of possession — or the possession pleading is a transparent device — rejection remains available. The distinction is between what the plaint says and what the defendant hopes to prove. Advice on either side of an Order VII Rule 11 contest begins with a close reading of the plaint's own words.
Frequently Asked Questions
When can a plaint be rejected for deficient court fee?
Order VII Rule 11(b) and (c) CPC permit rejection where the relief is undervalued or the plaint is insufficiently stamped and the plaintiff fails to correct the deficiency within the time fixed by the court. But the court examines only the averments in the plaint at this stage. Where liability to pay ad valorem fee turns on disputed facts, the question is deferred to trial, as Neelam Sharma reiterates.
What is the difference between fixed and ad valorem court fee in declaration suits?
Broadly, a person in possession who seeks only a declaration — for instance that a sale deed executed by someone else is void — pays a fixed court fee. A person out of possession who must also seek possession as consequential relief pays ad valorem fee on the value of the property. The dividing line is possession, which is precisely why the question often cannot be decided without evidence.
Can the defendant's documents be considered in an Order VII Rule 11 application?
No. It is settled that at the Order VII Rule 11 stage the court reads only the plaint and the documents filed with it, taking the averments to be correct. The defence case, however strong, is irrelevant at that stage. In Neelam Sharma the Supreme Court faulted the High Court for going beyond the plaint, which pleaded joint possession in clear terms.
Does deferring the court-fee question mean the plaintiff escapes it altogether?
No. The Supreme Court expressly kept the question open: the trial court will consider and decide the proper court fee after evidence is recorded. If the evidence shows the plaintiffs were not in possession, ad valorem fee can still be demanded at that stage. What is impermissible is ending the suit at the threshold on an assumption about disputed facts.