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of <h1>Supreme Court clarifies special procedures under State Financial Corporations Act, 1951</h1> <h3>GUJARAT STATE FINANCIAL CORPN. Versus NATSON MANUFACTURING CO. PVT. LTD.</h3> The Supreme Court clarified that proceedings under sections 31 and 32 of the State Financial Corporations Act, 1951 are not akin to suits for recovery of ... - Issues Involved:1. Nature of proceedings u/s 31 and 32 of the State Financial Corporations Act, 1951.2. Appropriate court fee payable on applications made u/s 31 of the Act.Summary:1. Nature of Proceedings u/s 31 and 32 of the State Financial Corporations Act, 1951:The Supreme Court examined the nature of proceedings u/s 31 and 32 of the State Financial Corporations Act, 1951. The Corporation, set up by the state of Gujarat, made applications u/s 31(1) in various District Courts for reliefs such as the sale of property, transfer of management, or interim injunctions. The Court clarified that these applications are not akin to suits for recovery of mortgage money by sale of mortgaged property. Instead, they are special procedures for enforcement of claims by the Financial Corporation. The reliefs sought do not result in a money decree but are specific actions like sale of property, transfer of management, or injunctions, which are not capable of monetary evaluation. The Court emphasized that the proceedings are not in the nature of money recovery but are more akin to execution applications.2. Appropriate Court Fee Payable:The main contention was whether the applications u/s 31(1) should bear ad valorem court fees or a fixed fee. The Corporation argued for a fixed fee of 65 paise under Article 1 of Schedule II of the Bombay Court Fee Act, 1959, while the State contended for ad valorem fees under Article 1 or Article 7 of Schedule I. The High Court had ruled in favor of ad valorem fees, equating the applications to suits for monetary gain or prevention of monetary loss. However, the Supreme Court disagreed, stating that the applications u/s 31(1) do not seek substantive relief capable of being valued in monetary terms. The Court concluded that the applications should be covered by the residuary Article 1(c) of Schedule II, thus bearing a fixed court fee of 65 paise. The High Court's decision was set aside, and the appeal was allowed.Conclusion:The Supreme Court allowed the appeal, setting aside the High Court's order and the orders of various District Judges, except the District Judge, Broach. The Court emphasized the importance of equal access to justice and the unpalatability of heavy court fees. Each party was ordered to bear its own costs due to the misconception on both sides regarding the nature of the applications u/s 31(1).
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