PAY FOR RELIEF
As a party to the sale deed, X is required to pay court fee on ad valorem basis (based on the value of the property set out in the sale deed). As a result, the higher the total sale price, the greater would be the court fees payable by X. The court fees payable by Y (who is not a party to the sale deed) would depend on whether or not he has possession of such property. In case Y has possession of the property, and sues for a declaration that the sale deed is invalid, he has to pay a fixed nominal court fee as prescribed under the Court Fees Act, 1870. However, if Y is not in possession of the property, and seeks the relief of declaration along with the relief of regaining possession, Y has to pay court fees on ad valorem basis, ie, on the value of the property.
Sale price vs market value
Recently, an interesting issue on the method of calculation of court fees in a suit for cancellation of sale deed under t he provisions of Andhra Pradesh Court Fees and Suits Valuation Act, 1956, came up in Polamrasetti Manikyam and Another vs Teegala Venkata Ramayya and another (2014). In this case, the Supreme Court heard arguments on whether valuation of the suit should be done on the basis of current market value or on the basis of value of the property mentioned in the sale deed. The apex court held that in a suit for cancellation of sale deed, court fee is to be calculated on the basis of value of the property given in the sale deed. This ruling has important implications given that market value of property rises, even steeply, with time.