Setty & Ors Vs. State of Karnataka & Ors  INSC 294 (22 September 1988)
M.N. (J) Venkatachalliah, M.N. (J) Pathak, R.S. (Cj) Natrajan, S. (J)
1989 AIR 100 1988 SCR Supl. (3) 155 1989 SCC Supl. (1) 696 JT 1988 (4) 639 1988
INFO : F 1990 SC 913 (27)
Court Fees Act, 1959-Ad valorem Court fee without any upper limit had to be
paid on grants of probate etc.
Constitution of India 1950: Court fees--Levy of uniform
ad valorem levy without prescribing any upper limit--Whether alters character
of levy and converts if from `fee' into `tax'--Whether legal and permissible.
Court Fees and Suits Valuation Act, 1958-- Rajasthan Court Fees and Suits Valuation
Act, 1961--Bombay Court Fees Act, 1959-Constitutional validity of.
and `fee'- Distinction between governmental agencies imposing fee to justify
impost and its quantum as return for for special services.
cannot compel State to bring forth legislation to implement and effectuate
Directive Principles--Doubt as to constiutionality of law--To be resolved in favour
of constitutionality of the law.
Court Fees and Suits Valuation Act, 1958- Section 20 and Article 1 Schedule 1
Court Fees--Imposition- of-Uniform ad valorem levy at rate of Rs. 1 for every Rs.
10--Of the amount or value of the subject matter without prescribing any upper
limit-Whether valid, legal and constitutional.
Court Fees And Suits
Valuation Act, 1961:
20 and Article 1 Schedule 1--Court fees--Uniform ad- valorem impost of
Rs.5--For every Rs. 100 art thereof without any upper limit-- Whether valid,
legal and constitutional.
three groups of special leave petitions/appeals/writ petitions concern the
policy and legality of the levy of Court fees under the Provisions of the
Karnataka Court Fees and Suits valuation Act, 1958, the PG NO 155 PG NO 156
Rajasthan Court Fees and Suits Valuation Act, 1961 and the Bombay Court Fees
petitioners from Rajasthan had challenged before the High Court the
constitutional validity of the provisions of section 20 read with Article 1
Schedule 1 of the Rajasthan Act which prescribed and authorised the levy of
court-fees on an uniform ad valorem basis without the prescription of any upper
limit. the High Court upheld the constitutionality of the impugned provision.
appeal and the special leave petitions from Karnataka are directed against the
common order of the Karnataka High Court upholding the validity of the
corresponding provision of the Karnataka Act which similarly imposed an ad-valorem
court fee without prescribing any upper limit. The writ petitions have
challenged the provision directly in this Court.
as the Bombay Act is concerned, the State of Maharashtra has come up in appeal
against the judgment of the Division Bench of the Bombay High Court affirming
the order of the learned Single Judge striking down the provisions of section
29(1) read with entry 10 of Schedule I of the Act in so far as they purport to
prescribe an ad- valorem court fee, without any upper limit, on grants of
probate, letters of administrative etc., while in respect of all other suits,
appeal and proceedings an upper limit of court-fee of Rs.15,000 is prescribed.
The High Court held this prescription of ad-valorem court-fee without any upper
limit on this class of proceedings alone was constitutionally impermissible in
that it sought to single out this class of litigants.
contended on behalf of the petitioners/appellants that (i) the imposition of
court fees at nearly 10% of the value of the subject matter in each of the
courts through which the case sojourns before it reaches a finally would
seriously detract from fairness and justness of the system;
the exaction of ad-valorem fee uniformly at a certain percentage of the subject
matter without an upper limit or without the tapering down after a certain
stage onwards would negate the concept of e fee and part-take of the character
of a tax outside the boundaries of the State's power; (111) the ad-valorem
yardstick, which is relevant and appropriate to taxation, is wholly
inappropriate because the principle or basis of distribution in the case of a
fee should be the proportionate cost of services inter-se amongst the
the very nature of the Judicial process, a stage is reached beyond which there
could be no proportionate or progressive increase in the services rendered to a
litigant either qualitatively or PG NO 157 quantitatively;
the process of `adjudication of disputes before courts, judicial-time and the
machinery of justice are not utilised in direct proportion to the value or the
amount of the subject matter of the controversy;
recognition of the outermost limit of the possible services and a prescription
of a corresponding upper limit of court fee should be made, lest the levy, in
excess of that conceptual limit, becomes a tax; and
India is a federal polity, the judicial system, however, is an integrated one
and that therefore different standards of court fee in different States would
be unconstitutional .
contentions of the State were that
long as their power to raise the funds to meet the expenses of administration
of civil justice was not disputed and as long as the funds raised show a
correlation to such expenses, the States should have sufficient play at the
joints to work-out the incidents of the levy in some reasonable and practical
it would, quite obviously, be impracticable to measure-out the levy directly in
proportion to the actual judicial time consumed in each individual case, hence
the need to tailor some rough and ready workable basis which, though may not be
an ideal or the most perfect one, would at least be the least hostile;
an upper limit is fixed and the collection fell short of what the Government
intends and is entitled to collect, this would eventually result in the
enhancement of the general rates of court-fee for all categories;
the value of the subject matter is a relevant factor in proportioning the
burden of the court fee. where the line should be drawn in applying the
principle it is more a matter of legislative wisdom and preference than of the
strict judicial evaluation and adjudication; and
cannot-compel the State to bring-forth any legislation to implement and
effectuate a Directive Principle.
the appeals, writ petitions and the special leave petition, this Court,
I) All civilised Governments recognise the need for access to justice being
free. Whether the whole of the expenses of administration of civil justice
also--in addition to those of criminal justice--should be free and met entirely
by public revenue or whether the litigants should contribute and if so, to what
extent, are matters of policy. [170G]
fee is a charge for the special service rendered to a class of citizens by
Government or Government agencies and is generally based on the expenses
incurred in rendering the services. [174B] PG NO 158 The Commissioner, Hindu
Religious Endowments, Madras v. Lakshmindra Thirtha Swamiar of Shirur
Mutt.,  SCR (1) 1005 and Om Prakash Agarwal v. Guni Ray, AIR 1986 (SC)
726 referred to.
is for the governmental agencies imposing the fee to justify its impost and its
quantum as a return for some special services.
Once a broad correlation between the totality of the expenses on the services,
conceived as a whole, on the one hand and the totality of the funds raised by way
of the fee, on the other, is established, it would be no part of the legitimate
exercise in the examination of the constitutionality of the concept of the
impost to embark its effect in individual cases. Such a grievance would be one
of disproportionate nature of the distribution of the fees amongst those liable
to contribute and not one touching the conceptual nature of the fee. [184A-B]
The test is one of the comprehensive level of the value of the totality of the
services, set off against the totality of the receipts. If the character of the
`fee' is thus established, the vagaries in its Distribution amongst the Class,
do not detract from the concept of a `fee' as such, though a wholly arbitrary
distribution of the burden might violate other constitutional limitations. [185G]
Municipal Corporation of Delhi & Ors. v. Mohd . Yasin.,  3 SCC 233;
H.H. Sudhundra Thirtha Swamiar v. Commissioner for Hindu Religious & Charitahle
Endowments.,  Supp. 2 SCR 302; Sreenivasa General Traders & Ors. v.
Andhra Pradesh & Ors.,  1 AIR (SC) 1248; State of' Maharashtra &
Ors. v. The Salvation Army, Western India Territorv
 3 SCR 485; Kewal Krishan Puri & Anr. v. State of Punjab & Ors.  3 SCR 1244;
of' Madras, Home Department & Anr. v.
Zenith Lamp & Anr. v. State of Kanataka, AI 1979 (SC) 119; The Commissioner
Hindu Religious Endowments Madras v. Sri Lakshmindra Thirtha Swantiar of Sri Shirur
Mutt.,  SCR 1005; Om Prakash Agarwal v. Giri Raj Kishori,  SCC 1
730; N.M. Desai v. The Teesteels Ltd. & Anr., AIR 1980 (2) SC 2125; Lady Tanumuti
Girijaprasad & Anr. v. Special Rent Acquisition Officer, Western Railway
Special Civil Application No. 979 of 1970 with Special Civil Application 287 of
1967; The City Corporation of Calicut v. Thachambalath
Sadasvian & Ors.,  2 SCC 115, referred to.
Organic Chemicals v. Chemtax Fibres,  Bom LR 406 Secretary, Government of
Madras Home Department v. Zenith Lamp & Electrial Ltd., ILR 1968 (Madras) 247 overruled.
Though legislative measures dealing with economic regulation are not outside
article 14, it is well recognised that the State enjoys the widest latitude
where measures of economic regulation are,concerned. These measures for fiscal
and economic regulation involve an evaluation of diverse and quite often
conflicting economic criteria and adjustment and balancing of various
conflicting social and economic values and interests. It is for the State to
decide what economic and social policy it should pursue and what
discriminations advance those social and economic policies. In view of the
inherent complexity of these fiscal adjustments, courts give a larger
discretion to the Legislature in the matter of its preferences of economic and
social policies and effectuate the chosen system in all possible and reasonable
188A-B] East India Tobacoo Co. v. State of Andhra Pradesh,  1 SCR 411; The State of Gujarat & Anr. v. Shri Ambica Mills
Ltd. Ahmedabad,  3 SCR 764 referred to.
The lack of perfection in a legislative measure does not necessarily imply its
unconstitutionality. It is rightly said that no economic measure has yet been
devised which is free from all discriminatory impact and that is such a complex
arena in which no perfect alternatives exist, the court does well not to impose
too rigorous a standard of criticism. under the equal protection clause. reviewing
fiscal services. [189F-G ] G.K. Krishnan etc. v. The Slate of Tamil Nadu 
2 SCR 715 730; San Antonic Independent School Districf v. Bodriguer. 411 U.S.I.
at p. 41.
Tax Officer, Shillong & Anr. v. N. Takim Roy Rymbai etc.  3 SCR 413,
is trite that for purposes of testing a law enacted by one State in exercise of
its own independent legishtive powers for its alleged violation of Article 14
it cannot be contrasted-with laws enacted by other States.
The State of Madhya Pradesh v. G.C. Mandawar,  1 SCR 599, referred to.
Having regard to the nature and complexity of this matter It is, perhaps,
difficult to say that the ad-valorem principle which may not be an ideal basis
for distribution of a fee can at the same time be said to be so irrational PG
NO 160 as to incur any unconstitutional infirmity. The presumption of
constitutionality of laws requires that any doubt as to the constitutionality
of a law has to be resolved in favour of constitutionality. Though the scheme
cannot be upheld, at the same time, it cannot be struck down either. [192E-F]
The State is in theory entitled to raise the totality of the expenses by way of
fee. Any interference with the present yardstick for sharing the burden might
in turn produce a yardstick less advantageous to litigants at lower levels.
The High Court has struck down the provisions of section 29(1) read with entry
10 of Schedule I of the Bombay Court Fees Act, 1959 on the ground that the levy
of court fee on proceedings for grant of probate and letters of administration
ad-valorem without the upper limit prescribed for all other litigants is
discriminatory. If in respect of all other suits of whatever nature and
complexity an upper limit of Rs.15,000 on the court fee is fixed, there is no
logical justification for singling out this proceeding for an ad-valorem impost
without the benefit of some upper limit prescribed by the same statute
respecting all other litigants. [193A-B; F]
The Directive Principles of State Policy though not strictly enforceable in
courts of law, are yet fundamental in the governance in the country. They
constitute fons-juris in a Welfare State. [194E] U.B.S.E. Board v. Hari Shanker,
AIR 1979 SC 69 referred to.
The power to raise funds through the fiscal tool of a `fee' is not to be
confused with a compulsion to do so.
`fee' meant to defray expenses of services cannot be applied towards objects of
general public utility as part of general revenues, the converse is not valid.
General Public revenues can, with justification, be utilised to meet, wholly or
in a substantial part, the expenses on the administration of civil justice.
The prescription of such high rates of court-fees even in small claims as also
without an upper limit in larger claims is perilously close to arbitrariness, an
Though the Court has abstained from striking down the legislation, yet, it
appears to the Court that immediate steps are called for and are imperative to rationalise
the levies. [195C] PG NO 161 & CIVIL APPELLATE JURISDICTION: Special Leave
Petition (Civil) Nos. 2604-06 of 1988 etc.
the Judgment and Order dated 6.11.1987 of the Karnataka High Court in W.P. Nos.
3138 of 1987, 12784 and 18359 of 1986.
B.R.L. Iyengar, L.N. Sihna, K.K. Venugopal, Soli J. Sorabjee, Dr. Y.S. Chitale,
U.R. Lalit, M.S. Nesargi, S.K. Dholakia, A.5. Bobde, Adv. Genl., Aruneshwar
Gupta, B.P. Gupta, Sudhir Gupta, Inderbit Singh, L.R. Singh, Rakesh Khanna,
R.P. Singh, P.H. Parekh, Sanjay Bhartary, S.S. Javali, R. Ramachandran, P.G. Gokhale,
Raja Venkatappa Naik, N.N. Sharma, P. Mahale, S.K. Kulkarni, D.L. N. Rao, Surya
Kant, E.C. Vidvasagar, R.B. Mehrotra, D.N.N. Reddy, N. Nettar, Kailash Vasdev,
G.L. Rawal, S.C. Birla, Miss C.K. Sucharita, Mohan Katarki, Mrs. Kiran Suri,
K.M.K. Nair, S.N. Bhat, R.P. Wadhwani and A.S. Bhasme for the Petitioners.
Singh, Additional Solicitor General, K.N. Bhat, D.R. Dhanuka, Anil Mehta, P.R. Ramasesh,
Badri Das Sharma, K. R. Dhanuka, R.C. Misra and Dr. Meera Agarwal for the
Judgment of the Court was delivered by VENKATACHALIAH, .J. The point in these
appeals is the recurring and vexed theme of the policy and legality of the levy
of Court fees--ad-valorem on the value or amount of the subject-matter of suits
and appeals without the prescription of any upper limit--under the provisions
of the Karnataka Court Fees and Suits Valuation Act 1958 ("Karnataka Act'
for short). The Rajasthan Court Fees and Suits Valuation Act, 1961 (Act 23 of
19f)]) (`Rajasthan Act' for short) and the Bombay Court Fees Act, 1959 (`Bombay
Act' for short).
as the `Bombay Act' is concerned, the point raised in the concerned appeals is
a limited one, confined to the question of the validity of Section 29(1) read
with entry 10 of the First-Schedule to the `Bombay Act' which, without
reference to the upper limit of Court Fee of Rs.15,000 prescribed for all other
suits and proceedings, requires payment of ad-valorem Court fee on proceedings
for grants of probate and letters of administration. One of the grounds of
challenge so far as this provision in the `Bombay Act' is concerned, is the
constitutional impermissibility of an unlimited exaction by way of court fee,
which is common to other appeals as well. The other contention against the PG
NO 162 validity of Section 29(1) read with Entry 10 of the First- Schedule to
the `Bombay Act' is based on Article 14 of the Constitution on the ground of
discrimination as between the proceedings for grant of probate and Letters of
Administration on the one hand and all other suits and proceedings respecting
which an upper limit of Rs.15,000 is fixed under the statute, on the other.
present batch of appeals and Special Leave Petitions comprise of a large number
of cases arising under the said three Statutes. We may, however, refer to the
facts of some of the cases which could be taken to be typical and
representative of all other cases of each group.
Leave Petition 13344 of 1988 typifies, and is representative of he appeals and
Special Leave Petitions at arise out of the Rajasthan Court Fees and Suits
Valuation Act, 1961. The petition arises out of and is directed against the
common order dated 16th October, 1987 of the Division Bench of the Rajasthan
High Court in Division1 Bench Civil Writ Petition No. 474 of 1984 and a large
number of writ petitions involving the same question. In Writ Petition No. 474
of 1984, the present appellant--The State Bank of India--challenged before the
High Court the Constitutional validity of the provisions of Section 20 read
with Article 1 Schedule 1 of the `Rajasthan ,Act which prescribed and authorised
the levy of court-fees on plaints or written statements pleading a set-off or
counter-claim or memoranda of appeals presented to Courts an uniform ad- valorem
impost of Rs.5 for every hundred Rupees or part thereof on the amount or value
of the subject-matter in excess of Rs.5,000. On the first slab of Rs.5.000
however certain rates are also prescribed.
may. briefly. trace the course of development of the law as to Court-fee in
Rajasthan. The Rajasthan Ordinance 9 of 1950, adapted and extended to the
territories of Rajasthan with effect 1.3.1950, the Court Fees Act, 1870
(Central Act, 1870). The provisions of the Central Act, as adapted and extended
to Rajasthan, were amendment from time to time till 1.11.1961 when the present
`Rajasthan Act' was enacted and promulgated. Prior to 1.11.1961, at the law the
stood. the levy of court-fee was subject to the maximum of Rs.7,500. This
ceiling was done away with under the present Rajasthan Act and Court fee ad-valorem
at 5%, without any upper limit was imposed under the impugned provisions.
25.4.1984 the appellant-bank instituted. in the Court PG NO 163 of District
Judge, Jaipur City, a suit for recovery of a sum of Rs.5,04,75,826 from the
defendant in the suit viz., The Jaipur Spinning and Weaving Mills Ltd. The
Court-Fee payable on the said plaint under Section 20 read with Article 1 of
the Schedule 1 of the `Rajasthan Act' was stated to be Rs.25,23,860. Incidently,
it was pointed out by Shri F.S. Nariman, learned Senior Advocate for the
appellant that the court-fee payable on this plaint alone would amount
approximately to 1/7th of the total estimated collection of court-fee for the
year 1983-84 which was estimated at Rs.176.41 lakhs in the State.
Special Leave Petitions 832 of 1988 and 833 of 1988-- which are representative
of the Karnataka cases--arise out of and are directed against the common order
dated 6.1.1988 of the Division Bench of the Karnataka High Court upholding the
validity of the corresponding provisions of the Karnataka Court Fees and Suit
Valuation Act, 1958 (`Karnataka Act' for short) which similarly impose an ad- valorem
court fee on the plaints, written statements, pleading set-of or counter
claims, or memoranda of appeals presented to any court, an at-valorem court fee
at the uniform rate of Re.1 for every Rs.10 of the amount. or value of the
subject matter in dispute without prescribing any upper limit.
Bank of Baroda, the petitioner in the Special Leave Petition 832 of 1988,
questions the correctness of the view taken by the Karnataka High Court in the
large batch of cases disposed of by it upholding the constitutionality of the
provisions in the `Karnataka Act' .
had brought, in one of the civil courts in Karnataka, a suit for recovery of
Rs.16,97,811.57 from the defendants therein and was called upon to pay a court
fees of Rs.1,69,792 on the plaint. The provisions of section 20 read with
Article 1 of Schedule 1 of the `Karnataka Act' are in pari-materia with Section
20 read with Article 1, Schedule 1 of the `Rajasthan Act' except for the rate
of fee which is substantially higher under the `Karnataka Act'. The questions
that arise in the appeals and Special Leave Petitions from Karnataka and
Rajasthan are substantially similar.
Civil Appeal No. 1511 of 1988, the State of Maharashtra has come up in appeal
against the Judgment dated 1.2.1988 of the Division Bench of the Bombay High
Court affirming the order dated 20.11.1987 of the Learned Single Judge striking
down the provisions of Section 29(1) read with entry 10 of Schedule 1 of the
`Bombay Act' in so far as PG NO 164 they purport to prescribe an ad-valorem
court fee, without any upper limit, on grants of probate, letters of
Administration etc., while in respect of all other suits, appeals and
proceedings an upper limit of court-fee of Rs. 15,000 is prescribed under the
`Bombay Act'. The Bombay High Court has, by its judgment now under appeal held
this prescription of ad-valorem court-fee without any upper limit on this class
of proceedings alone constitutionally impermissible in that it seeks to
single-out this class of litigants to share a disproportionately higher share
of the burden of fees while all other litigants, whatever the value of their
claim or complexity of the question raised in their cases be, are not required
to pay beyond Rs.15,000 which is fixed as the upper limit in all other cases.
W.P. No. 1105/86 before the High Court of Bombay, from which C.A. No. 1511/88
now before us arises, Mrs. Jyoti Nikul Jariwala and Jaiprakash Mungaturam Bairajra,
Respondents herein, in their capacity as Executrix and Executor respectively as
also the Trustees, under the Last Will and Testament dated 5.3.1985, said to
have been executed by a certain Harihar Jethalal Jariwala alias Sanjiv Kumar
had sought probate of the said will. They challenged, in the writ-petition
before the High Court, the order dated 23.7.1986 of the Prothonotary and Senior
Master of the High Court of Bombay made in the said probate proceedings
requiring from the said Executors a probate court-fee of Rs.6,15 814.50 as a
condition for the grant of the probate.
said Executors and Trustees challenged the legality and validity of this Memo
and also the relevant provisions of the `Bombay Act' pursuant to and under the
authority of which the said order came to be made.
Single Judge of the High Court struck down the impugned provisions and the
Division Bench has upheld the decision of the Learned Single Judge.
have heard Sri l .N. Sinha. Sri F.S. Nariman, Sri K.K. Venugopal, Sri Shanti Bhushan,
Sri B.R.L. Iyengar.
Senior Advocates for the appellants in Karnataka and Rajasthan batch of cases
and Sri Kuldip Singh, Additional Solicitor General and Sri Badridas Sharma,
Senior Advocate for the State of Karnataka and Rajasthan respectively.
learned Advocate General, Maharashtra and Sri S.K. Dholakia, Senior Advocate
appeared in support of the appeals of the State of Maharashtra.
Though a number of contentions covering a wide field appears to have been
raised and argued before the High Courts, the submissions of Learned Counsel
before us were, however, less expensive and centred around what was stated to
belong to certain basic values and ideals of administration of justice in a
Welfare-State and to the importance of access to justice and what--in the
context of the concept of a `fee'--is likely to happen to the concept if an ad-valorem
exaction without any upper limit whatsoever is pushed to a point where the correlationship
between the levy and the service very nearly breaks down. It ceases, it is
said, to be a service and becomes a disservice. Emphasis was also placed on the
basic obligations of the State to administer justice within its territories and
on the Directive Principles of State Policy in Article 39A which enjoins the
State to ensure that opportunities of securing justice are not denied to any
citizen by reason of economic or other disabilities.
contended that in a system of Administration of Justice which was already
encumbered by heavy expenses and long delays, the imposition of court fees at
nearly 10% of the value of the subject matter in each of the courts through
which the case sojourns before it reaches a finality, would seriously detract
from fairness and justness of the system. The levy--ad-valorem irrespective of
the nature and quality of the adjudicative process the case attracts and
without reference to the demands that it makes on the judicial time--would be,
it is urged, demonstrably unfair and it would be legitimate to acknowledge that
somewhere in the trail of this unlimited levy the sustaining correlation
between the levy and the service rendered is bound to snap. It was urged that
the exaction of ad-valorem fee uniformally at a certain percentage of the
subject matter without an upper limit or without the rates tapering down after
a certain stage onwards would negate the concept of a fee and par-take of the
character of a tax outside the boundaries of the State's power.
true that the twin evils that be devil the legal system and the administration
of justice are the laws' delays and expenses of litigation which have become
almost proverbial. Court-tee should not become another stifling factor
aggravating an already, explosive situation.
ethos and the new social and economic order grimly struggling to be born lay
great store by the peaceful social or economic change to be achieved through
the processes of law. If social and economic change is of high constitutional
priority, then, their effectuation and realisation which are directly
proportional to the availability and efficacy of expeditious and unexpensive
legal remedies, must also as a logical corollory, receive PG NO 166 the same
emphasis in priorities:
public importance of the question and the public interest the policy of
court-fee evokes are reflected in the trenchant humour of A.P. Herbert's
"More Uncommon Law" from the words of the Judge in the fictional Hogby
v. Hogby, "That if the Crown must charge for justice, at least the fee
should be like the fee for postage that is to say, it should be the same,
however long the journey may be. For it is no fault of one litigant that his
plea to the King's judges raises questions more difficult to determine than
another's and will require a longer hearing in court. He is asking for justice,
not renting house-property." There is also in the following exchanges
between the Attorney General and the Judge the echo of the argument that State
whose primary duty is to administer justice, should do so out of public
revenues and not put justice up for sale:
Attorney- General: "As to that, milord, may I suggest one possible line of
thought? The Crown, in this connection, means the whole body of tax-payers.
Would it be fair and equitable if the general tax-payer had to provide all the
facilities of the courts for the benefit of the litigant? The Judge:
not? Everybody pays for the police, but some people use them more than other.
Nobody complains. You don't have to pay a special fee every time you have a
burglary, or ask a policeman the way. I don't follow you, Sir Anthony.
go further. I hold that the Crown not merely ought not, but is unable, to act
in this way, by reason of the passage in the Great Charter which I have quoted.
The Rules of Court, then, which purpose to impose these charges are ultra vires,
unconstitutional, and of no effect: and Mr. Hogby may continue to decline to
fortieth clause of the Great Charter of declared that Justice shall not be
sold, denied or delayed: "Nulli Vendemus, nulli negabimus, aut differemus
rectum aut justiclam. " What was implicit in the need for this promise was
that royal justice was, otherwise, popular; but the PG NO 167 complaint was
that it was too dear and it was slow in coming. The subsequent course of
history of the administration of justice in England shows that the Magna- Carta
did not wholly stop the evils of delays in, and expensiveness of, Royal Justice
but it did, after all, do something, perhaps something substantial, to cheapen
justice and stop the abuses which were rampant in King John's Reign:
History of English law 57-58).
R.M. Jackson "Machinery of Justice in England" Fifth Ed., 321, points
out the dependence of Royal Justice in England in part atleast, on the profits
of its administration earned:
the past the growth of royal justice was partly due to the profits that accrued
from exercising jurisdiction.
early itinerant justices were more concerned with safeguarding the King s
fiscal rights than with the trial of ordinary actions. A law court was expected
to pay for itself and show profit for the king. It is some time since justice
has been a substantial source of income, but the old survives in the idea that
the courts ought not to be run at a loss.
supplied) The court-fee as a limitation on access to Justice is inextricably
inter-twined with a "highly emotional and even evocative subject
stimulating visions of a social order in which justice will be brought within
the reach of all citizens of all ranks in society. both those blessed with
affluence and those depressed with their poverty." It is, it is said, like
a clarion call to make the administration of civil justice available to all on
the basis of equality, equity and fairness with its corollary that no-one
should suffer injustice be reason of his not affording or is deterred from
access to justice. The need for access to justice, recognises the primordeal
need to maintain order in society disincentive of inclinations towards
extra-judicial and violent means of settling disputes. On this a learned
authority "access to Justice" by Cappellbtti. Vol . 1, Book 1,419
need for access to justice may be said to be two fold; first, we must ensure
that the rights of citizens should be recognised and made effective for
otherwise they not be real hut merely illusory; and secondly we must enable
legal disputes, conflicts and complaints which inevitably arise in society to
be resolved in an orderly way according to the justice of the case so as to
168 harmony and peace in society, lest they foster and breed discontent and
disturbance. In truth, the phrase itself, "access to justice", is a
profound and powerful expression of a social need which is imperative, urgent
and more widespread than is generally acknowledged."
The stipulation of court-fee is, undoubtedly a deterrent to free "access
to justice", but one of the earlier avowed objects of court-fee was stated
to be--as was done in the preamble of the Bengal Regulation which in 1795
imposed high court-fees--discouragement of litigation, particularly the
speculative and the frivolous variety. Lord Macaulay called that Preamble
"the most eminently absurd Preamble, that was ever drawn". The view
of Macaulay "The Crisis of the Indian Legal System'' By Upendra Baxi, 54,
on the subject are worth recalling:
what the courts administer be justice, is justice a thing which the Government
ought to grudge to the people? vexatious suits should be instituted. But it is
an evil for which the Government has only itself and its agents to blame, and
for which it has the power of proving a most efficient remedy. The real way to
prevent unjust suits is to take care that there shall be just decision. No man
goes to law except in the hope of succeeding. No man hopes to succeed in a had
cause unless he has reason to believe that it will be determined according to
bad laws or by bad judges. Dishonest suits will never he common unless the
public entertains an unfavourable opinion of the administration of justice. And
the public will never long entertain such an opinion without good reason ....
(The imposition of court fees) neither makes the pleadings clearer nor the law
plainer, nor the corrupt judge purer, nor the stupid judge wiser. It will no
doubt drive away the honest plaintiffs who cannot pay the fee. But it will also
drive away dishonest plaintiffs who are in the same situation".
Krishna Iyer Committee on Legal aid also said:
must be done, we venture to state, to arrest the escalating vice of burdensome
scales of court fee. That the State should not sell justice is an obvious
proposition PG NO 169 but the high rate of court fee now levied leaves no valid
alibi is also obvious. The Fourteenth Report of the Law Commission, the
practice of 2 per cent in the socialist countries, and the small standard
filing fee prevalent in many Western Countries make the Indian position
indefensible and perilously near unconstitutional. If the legal system is not
to be undemocratically expensive, there is a strong case for reducing court
fees and instituting suitors fund to meet the cost directed to be paid by a
party because he is the loser but in the circumstances cannot bear the burden .
The proverbial costs of litigation has its own dimensions of unpredictability.
Even as the outcome of a litigation is said to depend on the "glorious
uncertainties of the Law" the size of the bill of cost a litigant has to
foot is, not so, gloriously foreseeable.
Committee Report said:
notoriously impossible to count the costs of litigation beforehand. It is
difficult enough for either party to forecast what his own costs are likely to
be, since much depends on the manner in which the other side conducts the case.
It is utterly impossible to forecast what the other side s cost will be, and
this means that no litigant can have the least idea of what he will have to pay
if he loses the case." Small claims and the small litigants are at a
special disadvantage in the matter of costs. The expenses of litigation very
nearly consume the claim itself. This imparts to the policy formulation behind
the levy of court- tee the imperative, of having lower fees for lesser claims.
is an analysis of costs in small claims: `Access to Justice, Vol. 1. Book 1;
involving relatively small sums of money suffer most from the barrier of cost.
If the dispute is to be resolved by formal court processes, the costs may
exceed the amount in controversy or, if not, may still eat away so much of the
claim as to make litigation futile. The data assembled for the Florence Project
show clearly that the ratio of costs to amount in controversy steadily increases
as the financial value of the claim goes down. In Germany, for example, the
cost of litigating a claim for about U.S. PG NO 170 $100 in the regular court
system is estimated to be roughly U.S. $150, even though only a court of first
instance is involved, while the cost for a U.S. $5,000 claim, involving two
instances, would be about U.S. $4,200--still very high but a substantially
smaller proportion of the claim's value.
need not be multiplied in this area; clearly, small claims problems require
special attention if access is to be obtained.
those who are endowed with considerable financial resources that can be utilised
for litigation have obvious advantages in pursuing or defending claims by or
against them. It is said: "Access to Justice". Vol. 1. Book 1 15.
or organisations possessing , or relatively considerable, financial resources
than can be utilized for litigation have obvious advantages in pursuing or
defending claims. In the first place they can afford to litigate. They are. in
addition, able to withstand the delays of litigation. Each of these
capabilities, if in the hands of only one party, can be a powerful weapon; the
threat of litigation becomes both credible and effective. Similarly one of two
parties to a dispute ma be able to outspend he other and, as a result present
his arguments more effectively. Passive decision makes, whatever their other,
more admirable, characteristics, clearly exacerbate this problem by relying on
the parties for investigating and presenting evidence and for developing and
arguing the case" ( Emphasis supplied).
These are the realities in the back ground of which the impact of court-fees is
to he considered. Indeed all civilised Governments recognise the need for
access to justice being free. Whether the whole of the expenses of
administration of civil justice also--in addition to those of criminal
justice--should be free and not entirely by public revenue or whether the
litigants should contribute and it so. to what extent, are matters of policy.
These ideals are again to be balanced against the stark realities of
constraints of finance before any judicial criticism of the policy
acknowledgment should be made of the Government's power to raise the resources for
providing the services from those who use and benefit from the services. The
idea that there should be uniform fixed fee for all cases, instead of PG NO 171
the ad-valorem system, has its own nettling problems and bristles with anomolies.
How far these policy considerations have an adjudicative disposition and how
far courts can mould and give direction to the policy is much debated. The
Directive Principles in Article 39A are, no doubt, fundamental in the
governance of the country, though not enforceable in courts of law. The
following observations of Chinappa Reddy, J. in U.B.S.E. Board v. Hari Shanker,
AIR 1979 SC 69 recognise the limitations of courts:
principles are `nevertheless fundamental in the governance of the country' and
`it shall be the duty of the state to apply these principles in making laws'.
to courts, what the injunction means is that while courts are not free to
direct the making of legislation, courts are bound to evolve affirm and adopt
principles of interpretation which will further and not hinder the goals set
out in the Directive Principles of State Policy." (Emphasis supplied) It
is in the light of these conflicting claims and interests that the propositions
in the case would require to be resolved.
the contentions urged at the hearing, the following points fall for
determination, the first three in Karnataka and Rajasthan cases, and the last
in the appeals arising under the Bombay Act'.:
Whether the levies of court-fee under the "Karnataka Act" and the
"Rajasthan Act" do not satisfy the requirements of the concept of a
`fee' but par-take the character of a `tax', in as much as that the correlationship
between the fee and the value of the services by way of quid pro quo, is not
even if the totality of the expenses on the administration of civil justice and
the totality of the court-fee collected show a broad correlation, the levy of
court-fees on ad-valorem basis, without an Upper limit, renders the impost a
tax, in as much as having regard to the very nature of the service, which
consists of adjudication of disputes, a stage is inevitably reached after and
above which an ad-valorem levy, the proportionate increase in the PG NO 172
value of the subject matter, ceases to be a `fee' and becomes a `tax'.
Whether, at all events, the distribution of the burden of the fees amongst
those on whom the burden falls as the ad-valorem principles, dependent merely
on the amount or value of the claim in the case irrespective of the nature,
quality and extent of adjudicative services, is arbitrary and violative of
Article 14 of the Constitution.
Whether, in so far as the provisions of section 29(i) read with Entry 20
Schedule I of the `Bombay Act' are concerned, singling out of a class of
litigation viz., applications for grant of probate and letters of
administration for levy of ad-valorem court-fee without the benefit of the
upper limit of Rs. 15,000 prescribed in respect of all other suits and
proceedings is, as declared by the High Court, exposes that class of litigants
to a hostile discrimination and is violative of Article 14 of the Constitution.
Re: Contention (a):
concept of a 'fee' as distinct from that of a `tax' in the Constitutional
scheme has been considered in a series of pronouncements starting from The
Commissioner, Hindu Religious Endowments, Madras v. Lakshmindra Thirtha Swamiar
of Sri Shirur Mutt,  SCR 1 1005 upto Om Prakash Agarwal v. Guni Ray, AIR
1986 SC, 726.
`Fees and Taxes' a learned author, First Principles of Public Finance, by De
Marco 78 says:
are divided into two large categories: fees and taxes. To this division
corresponds the differentiation of public services as special or general".
Fee" says another author, Public Finance, Third Ed., by Buehler, 519:
a charge for a particular service of special benefit to individuals or to a
class and of general benefit to the public, or it is a charge to meet the cost
of a regulation PG NO 173 that primarily benefits society." "Fees
must be paid to secure the enjoyment of a particular government service such as
the provisions for patents, copyrights, or the registration of mortgages, and
the services of a court or a public official". Public Finance, Third Edn.,
review of all the earlier pronouncements of this court on the conceptual
distinction between a `fee' and a `tax' and the various contexts in which the
distinction becomes telling is an idle parade of familiar learning and
unnecessary. What emerges from these pronouncements is that if the essential
character of the impost is that some special service is intended or envisaged
as a quid pro quo to the class of citizens which is intended to be benefitted
by the service and there is a broad and general correlation between the amount
so raised and the expenses involved in providing the services, the impost would
par-take the character of a `fee' notwithstanding the circumstance that the
identity of the amount so raised is not always kept distinguished but is merged
in the general revenues of the State and notwithstanding the fact that such
special services, for which the amount is raised, are, as they very often do,
incidentally or indirectly benefit the general public also. The test is the
primary object of the levy and the essential purpose it is intended to achieve.
The correlationship between the amount raised through the `fee' and the
expenses involved in providing the services need not be examined with a view to
ascertaining any accurate, arithmetical equivalence or precision in the
would be sufficient that there is a broad and general correlation. But a fee
loses its character as such if it is intended to and does go to enrich the
general revenues of the State to be applied for general purposes of Government.
from this latter element stems the sequential proposition that the object to be
served by raising the fee should not include objects which are, otherwise,
within the ambit of general governmental obligations and activities.
concept of fee is not satisfied merely by showing that, the class of persons
from whom the fee is collected also derives some benefit from those activities
benefit the class of payers of fee obtain in such a case is clearly not a
benefit intended as special service to it but derived by it as part of the
Nor does the concept of a fee- and this is important-require for its sustenance
the requirement that every member of the class on whom the fee is imposed, must
PG NO 174 receive a corresponding benefit or degree of benefit commensurate
with or proportionate to the payment that he individually makes. It would be
sufficient if the benefit of the special services is available to and received
by the class as such. It is not necessary that every individual composing the
class should be shown to have derived any direct benefit. A fee has also the
element of a compulsory exaction which it shares in common with the concept of
a tax as the class of persons intended to be benefitted by the special services
has no volition to decline the benefit of the services. A fee is, therefore, a
charge for the special services rendered to a class of citizens by Government
or Government at agencies and is generally based on the expenses incurred in
rendering the services.
The extent and degree of the correlation required to support the fees, has also
been considered in a number of pronouncements of this court. It has been held
that it is for the governmental agencies imposing the fee to justify its impost
and its quantum as a return for some special services.
Municipal Corporation of Delhi and Others v. Mohd. Yasin,  3
SCC; 233 this court relied on H.H. Sudhundra Thirtha Swamiar v. Commissioner
for Hindu Religious and Charitable endowments,  Suppl. 2 S.C.R. 302 which
with a view to provide a specific service, levy is imposed by law and expenses
for maintaining the service are met out of the amounts collected there being a
reasonable relation between the levy and the expenses, incurred for rendering
services, the levy would be in the nature of a fee and not in the nature of a
tax ......" (Emphasis supplied) In Sreenivasa General Traders and others
etc. v. Andhra Pradesh and Others etc.,  1 AIR (SC); 1248 this court
between the levy and the services rendered/expected is one of general character
and not of mathematical exactitude. All that is necessary is that there should
be a "reasonable relationship" between the levy of the fee and the
services rendered." A fee which at the inception is supportable as one
might shed its complexion as a fee and assume that of a tax by reason of the
accumulation of surpluses or the happening of PG NO 175 events which tend to
affect and unsettle the requisite degree of correlation.
State of Maharashtra & Ors. v. The Salvation Army, Western India Territory,  3 SCR; 485 this court
generally indicated what, broadly, is the requisite degree of correlationship:
court has expressly stated in the Delhi Cloth and General Mills case (supra)
that services worth 61 per cent of contribution would be sufficient quid pro
quo to make a levy a fee. So, when we find that in this case the organisation
has been rendering services worth 62 per cent of the contribution, it cannot
per se he said that there is no correlation between the fee levied and the
services rendered." (Emphasis supplied) In Kewal Krishan Puri and another
v. State of Punjab and other,  3 SCR 1244 this
the element of quid pro quo may not be possible, or even necessary, to be
established with arithmetical exactitude but even broadly and reasonably it
must be established by the authorities who charge the fees that the amount is
being spent for rendering services to those on whom falls the burden of the
least a good and substantial portion of the amount collected on account of
fees, may be in the neighbourhood of two-thirds or three-fourths must be Shown
with reasonable certainly as being spent for rendering services of the kind
mentioned above." (Emphasis supplied) In regard to the nature of court-fee
we have the pronouncement of this court in Secretary, Government of Madras,
Home Department and Another v. Zenith Lamp & Electrical Ltd.,  2 SCR;
p. 973 (1981-82). This court after referring to the legislative entries
pertaining to the legislative fields distributed over the three lists of the
Seventh Schedule to the Constitution, repelled the contention that `fees taken
in court' occurring in Entry 3 of List II are really in the nature of a `tax'
or at any rate constitute an impost sui-generis. This Court held:
176 "It seems to us that the separate mention of "fees taken in
Court" in the Entries referred to above has no other significance than
that they logically come under entries dealing with administration of Justice
and courts. The draftsman has followed the scheme designed in the Court Fees
Act, 1870 of dealing with fees taken in court at one place......."
"It seems plain that "fees taken in court" are not taxes, for if
it were so, the word `taxes' would have been used or Some other indication
given .....It follows that "fees taken in court" cannot be equated to
`Taxes'. If this is so, is there any essential difference between fees taken in
court and other fees? ...." "But one thing the Legislature is not
competent to do, and that is to make litigants contribute to the increase of
general public revenue. In other words, it cannot tax litigation, and make
litigations pay, say for road building or education or other beneficial schemes
that a State may have. There must be a broad correlationship with the fees
collected that the cost of administration of civil justice." In the
present cases, the concerned State Governments have filed in the proceedings
before the High Court statements of the receipts and expenses on the
administration of Justice in their effort to establish the requisite
correlation. It is not necessary to go, in any particular detail, into the
break-up of these figures. Both High Courts, after an examination of the
statistics felt no hesitation in upholding the correlation. We did not also
understand the learned counsel for the appellants as questioning the
correctness of the figures and the inference as to correlation suggested
thereby. Learned counsel for the respective States submitted that if the
outlays on capital- expenditure are also taken into account, there will be no
shadow of doubt that the expenditure would be further higher than the fee
receipts. So far as the Karnataka State is concerned, similar exercise was done
in an earlier case also in Ram Bhadur Thakur & Co. and another v. State of
Karnataka, AIR 1979 (SC); 119.
Karnataka Cases the relevant figures for the 5 years from 1980-81 to 1984-85
respectively are: (the figures in brackets indicate expenditure) 1980-81 Rs.
5,22,08,513 (Rs.6,80,33,119); 1981-82 Rs.6,69,10.019 PG NO 177
(Rs.7,97,76,852); 1982-83 Rs.8,28,46,359 (Rs.9,41,161); 1983-84 Rs.8,21,49,626
(Rs.9,44,61,594); 1984-85 Rs.8,00,18,673 (Rs .12,15,90,418).
Rajasthan cases the financial-statements furnished before the High Court for
the 7 years from 1977-78 to 1983-84, the receipts (in lakhs) by way of court
fee and expenditure incurred for the services (furnished in brackets) are
respectively: 1977-78 Rs.101.42. (Rs.264.56); 1978-79 Rs.95.50 (Rs.286-90);
1979-80 Rs.114.63 (Rs.323.04); 1980-81 Rs.134-92 (Rs.379-89); 1981-81 Rs.159.62
(Rs.444.83); 1982-83 Rs.179-87 (Rs.544.76); 1983-84 Rs.176.41 (Rs. 692.11).
true that in the Rajasthan statements there was no break up of the figures
between expenditure on administration of civil justice and criminal justice;
but having regard to the figure, a reasonable estimate of the proportion of the
former is possible and the figures do indicate and establish the requisite correlationship.
contention (a) of the appellants is insubstantial.
Re: Contention (b) The basic argument is that having regard to the very nature
of the judicial process of resolution of disputed in civil courts, the postulate
that judicial-time and the service of the machinery of justice is consumed and utilised
in direct proportion to the amount or value of the subject matter is the first
and fundamental error. The rationale of the imposition of court-fee on an
increasing scale, according as the value or the amount of the subject matter,
is, it is urged, an error which is the logical result and outcome of the first.
In the distribution of the burden of the court-fee amongst the litigants, it is
urged, the ad- valorem yardstick, which is relevant and appropriate to
taxation, is wholly inappropriate because the principle or basis of
distribution in the case of a fee should be the proportionate cost of services
inter-se amongst the beneficiaries. Reliance is placed on The Commissioner,
Hindu Religious Endowments, Madras v. Sri Lakshmindra
Thirtha Swamiar of Sri Shirur Mutt,  SCR, 1005.
is also placed on the following observations of Mukherjea J., in Commissioner
Hindu Religious Endowment, Madras v. Sri Lakshmindra Thirtha Swamiar of Sri Shirur
Mutt,  S.C.R. 1005, relied on by Venkataramiah, J. in Om Prakash Aggarwal
178 v. Giri Raj Kishori and others etc. etc.  SCC (1); 730.
now to fees, a "fee" is generally defined to be a charge for a
special service rendered to individuals by some governmental agency. The amount
of fee levied is supposed to be based on the expenses incurred by the
government in rendering the service, though in many cases the costs are
arbitrarily assessed. "Ordinarily, the fees are uniform and no account is
taken of the varying abilities of different recepients to pay." (Emphasis
supplied) The following observations of Krishna Iyer J. in N.M. Desai v. The Teesteels
Ltd. and another, AIR 1980 (2) SC: 2125 are also relied upon:
is more deplorable that the culture of the magna carta notwithstanding the anglo-lndian
forensic system- and currently free India's court process- should insist on
payment of court-fee on such a profiteering scale without correlative
expenditure on the administration of civil justice that the levies often smack
of sale of justice in the Indian Republic where equality before the law is
guaranteed constitutional fundamental and the legal system has been directed by
Article 39A "to ensure that opportunities for securing justice are not
denied to any citizen by reason of economic......disabilities." The right
of effective access to justice has emerged in the Third World countries as the first among the
new social rights what with public interest litigation, community based actions
and pro bono public proceedings. "Effective access to justice can thus be
seen as the most basic requirement- the most basic `Human Right'--of a system
which purports to guarantee legal rights." However, the observations in Shirur
Mutt's case as to the uniformity of the levy must be understood in the light of
the next sentence in that very passage which says:
These are undoubtedly some of the general characteristics, but as there may be
various kinds of fees, it is not possible to formulate a definition that would
be applicable to all cases." PG NO 179 The criticism of Krishna Iyer J. as
to the `profiteering scale' would, as the passage relied upon itself indicates,
be attracted only if the levy is "without the correlative expenditure in
the administration of civil justice." Reference was also made to certain
observations of the learned author H.M. Seervai Constitutional Law of India,
Third Edn. Vol II, 1958 that court-fee should not be a weapon to stifle suits
or proceedings and that though in fixing the court-fees regard may be given to
the amount involved, "a stage is reached when an increasing amount ceases
to be justified." ".......Thus, an ad-valorem court fee of 1 percent
for suits involving Rs. l lack or more with a maximum of Rs.15,000 or Rs.20,000
may be justified; but a court fee without limit cannot be justified, for after
a certain amount is reached, no greater service can be rendered to whole
classes of litigants; on the contrary, such increased court fees render
disservice by rendering the cost of litigation prohibitive." (Emphasis
supplied) Learned counsel also referred to and relied Upon the decision of the
Bombay High Court in Indian Organic Chemicals v. Chemtax Fibres,  Bombay
LR; 406 upon certain observations of the Madras High Court in Secretary,
Government of Madras, Home Department, And Another v. Zenith Lamp &
Electrical Ltd., ILR 1968 (Madras); 247 and on a judgment dated 22.12.1972 of
the FUll Bench of the Gujarat High Court in Lady Tanumati Girijaprasad and
another v. Special Rent Acquisition Officer, Western Railway, Ahemadabad,
Special Civil Application No. 979 of 1970 with Special Civil Application 287 of
The submissions on this point, in some areas, overlap contention (c) but the
point sought to be emphasised so far as the present contention is concerned, is
that the essence and the planitude of the concept of `fee' requires not only
that there should be a broad correlationship between the impost and the
services but also a requirement, inherent in and as a part of the concept
itself, that the expenses for the services must also be distributed in an
equitable manner amongst those constituting the class receiving the services.
This aspect, it is urged, is distinct from the susceptibility of the impost to
be declared unconstitutional on the ground that the distribution of its burden
is arbitrary. The same event demonstrating the unfairness of the distribution
of the PG NO 180 burden would, it is urged, produce two distinct legal
consequences: first, detracting from the fundamental concept of a fee and,
secondly, by reason of the invidious discrimination wrought by it is violative
of the constitutional pledge of equality.
State Governments would, however, say that this is merely two different ways of
saying the same thing and that the concept of a `fee' never really depended for
its validity, conceptually as a `fee', upon the requirement of a just and
equitable distribution of its burden amongst the recipients of the service and
that as long as a broad approximation between the expenses of the services and
the amount raised by the fee is established, the impost would continue to
retain and not shed its complexion as a fee If there is arbitrariness of inequitability
in the distribution of the burden, that aspect would, it is submitted, not
detract from basic concept of the levy as a `fee' but vitiates the levy for
Perhaps the most lucid formulation and presentation of the appellants
contention- for whatever it is worth in the ultimate analysis-are to be found
in the Judgment of the Madras High Court in the Zenith Lamp Case, (lLR 1968
Mad., 247) which came up before this court in 1973(2) SCR, 973.
observations sum up the matter succinctly:
of the magnitude of the claim and the complexity of the case and the anxiety of
the suitor, a limit will be reached so far as the service that could be
rendered in courts is concerned. Judicial time is not spent in direct
proportion to the value of the claim. It may have relation to the question
involved. That appears to be the reason behind the maximum court fee originally
prevalent and even now found in some states." "......The problem is
in the distribution of the levy in a practical and reasonable manner so as to
fall fairly equitably on all suitors, that no particular class or section of
them is disproportionately hit and made to bear more than their fair share of
the expenditure on the administration of justice, on considerations not germane
in the context of the levy authorised by law." "As it is, as the
value of the claim goes up, the levy becomes more and more unrelated to the
object of the levy. A PG NO 181 few suitors would be made to bear a heavy share
of the expenditure unrelated to the services required by them with the result
that, when the claims are high, only one of the two essential elements of a
levy to be regarded as a fee is left While the occasion for the levy is the
demand of special service by the suitor that is, one element is present, there
is no reasonable. correlation between the levy and the services that is, the
second element is lacking. The levy becomes excessive, grossly disproportionate
and unreasonable qua the particular suitor it ceases to be a fee and becomes a
tax for him." (Emphasis supplied), ILR, Mad., 1968 (368-372).
is the crux of the matter and a fair summing-up of the arguments of the learned
counsel for the appellants.
again, is what the High Court of Bombay adopted in the case of Indian Organic
Chemicals v. Chemtax Fibres,  LR Bombay, 406, one of the cases relied
upon by the appellants.
may, briefly, refer to the setting in which the matter arose before the Bombay
High Court. In the proceedings, the plaintiffs challenged the provisions of the
Bombay Court Fees (Second Amendment) Act, 1974 by which, inter-alia, the upper
limit of the court fee, of Rs.15,000 then obtaining was done away with. The
consequence was that ad-valorem court fee, without any upper limit, had had to
be paid. The matter arose out of what was alleged as the `Backbay Scandal' in
which various plots of land reclaimed from the Sea in South Bombay were disposed of by Government,
according to plaintiffs' allegation, in violation of the prescribed rules and
for a pittance in order to confer a largesse on the chosen. The allotment of
plots appears initially, to have been challenged in writ proceedings; but
ultimately a suit had had to be filed as disputed questions of facts were
stated to have been involved. The value of the subject matter of the suit was Rs.
5,56,30,731.87 and the court fee payable was Rs.5,60,000 under the amended Act
which had, in the meantime, come into force.
amendment was challenged on three grounds. The first was that the legislation was
itself mala fide and was ushered in with oblique motives of stifling the very
suit and the challenge to the impugned allotments. The second was that levy of
court-fees ad-valorem without any upper limit would alter the character of the
levy and convert it from `fee' into a `tax'. The third contention was that the
amendment was a colourable piece of legislation and was not a legitimate
exercise to raise a fee but to impose, in the PG NO 182 cloak of a fee, a tax
to augment the general public revenues.
Bombay High Court rejected the first contention; but accepted the second and
held that even if the Government had satisfied itself that there was necessity
for collection of enhanced quantum of court-fee, it could have done so on the
basis of a rationalised structure which might result in the enhancement of the
ceiling from Rs. 15,000 to 20,000 or even 25,000 in which event the court would
not be able to hold that the levy had become so excessive and so grossly
disproportionate and unreasonable qua a particular suitor as to cease to be a
fee and become a tax. The High Court held:
the case before us the fact that the plaintiff on its claim is called upon to
pay after the amending Act of 1974 court-fees of Rs. 5,60,000 eloquently
testifies to the harshness, the excessive character and the unreasonableness of
the levy and once such conclusions are reached, it will have to be held that
this levy at the higher figure which is secured by the impugned Act has
converted exation from a `fee' into a `tax'. If that be the result secured
through the enactment, which has brought about this result would be liable to
be struck down." (ILR), Bom.; 1981 Vol. 83; 415- 16.
third ground also the court upheld the challenge, being of the view that the
Government had not established the quid pro quo to the requisite extent.
far as the decision of the Full Bench of the Gujarat High Court in Lady Tanumati
Girijaprasad and another v. Special Rent Acquisition Officer, Western Railway, Ahemadabad,
Special Civil Application No. 979 of 1970 with Special Civil Application 287 of
1967, is concerned, that decision, even to the extent it goes, is not on the
aspects emphasised in these appeals. The decision really turned on the question
whether correlation between the services and the fee had taken established or
not. The High Court was of the view that it had not.
Sri F.S. Nariman submitted that the facts of the Rajasthan appeal were itself
demonstrative of the arbitrariness and inequities inherent in the imposition of
the ad-valorem impost without an upper limit. In that case the appellant was
called upon to pay on his plaint almost PG NO 183 l/7th of the entire estimated
court-fees receipts of the year and it would be inconceivable that,
proportionately, 1/7th of the judicial-time would be spent on this suit.
counsel submitted that in the very nature of the judicial process, a stage is
reached beyond which there could be no proportionate or progressive increase in
the services rendered to a litigant either qualitatively or quantitatively.
Unless that limit is recognised and a corresponding ceiling of court fee fixed,
the impost qua the particular litigant, it is urged, would shed its complexion
as a fee and would par-take of the nature of an exaction more resembling a tax
than a fee. Learned counsel submitted that in the process of adjudication of
disputes before courts, judicial-time and the machinery of justice are not utilised
in direct proportion to the value or the amount of the subject matter of the controversy.
Cases involving very small claims might raise difficult questions of fact and
law requiring the expenditure of judicial time wholly disproportionate to the
court-fee paid in the case.
claims involving heavy financial sums might not, as in the case of suits on
negotiable instruments generally, take much time of the court at all. That
apart, it is urged, a recognition of the outer-most limit of the possible
services and a prescription of a corresponding upper limit of court fee should
be made, lest the levy, in excess of that conceptual limit, becomes a tax. The
ideal measure or yardstick of court fee, learned counsel said, was a fee in
proportionate to the judicial the expended over a case and if this measure or
yardstick is difficult of application owing to its practical difficulties in
its effectuation, either of the two further alternatives could save a
legislation imposing a fee. One such was to fix an upper limit commensurate
with conceptionalised outer most limit of the money value of the maximum
so conceived. The second was to stipulate after a particular stage,
progressively lower rates on correspondingly increasing slabs of the value of
the subject matter or in other words, after a certain stage, to make the rates
go-down according as the value goes-up.
have given our careful and anxious consideration to this vexed problem which is
a subject matter of considerable debate both in and outside courts. The
anomalies that the policy behind the impugned provisions can produce in
conceivable cases could, indeed, be inequitable or even quite startling. But,
the argument, in the last analysis, becomes indistinguishable from the
contention that the correlation of the services to the fee would have to be
decided on the basis of how the correlation operates in each individual case.
It would be an insistance on testing the conceptual nature of the fee on the
basis of the degree of the quid pro quo in the case of each individual payer of
the PG NO 184 fee. That is the peccant part of the argument. Once a broad
correlation between the totality of the expenses on the services, conceived as
a whole, on the one hand and the totality of the funds raised by way of the
fee, on the other, is established, it would be no part of the legitimate
exercise in the examination of the constitutionality of the concept of the
impost to embark upon its effect in individual cases. Such a grievance would be
one of disproportionate nature of the distribution of the fees amongst these
liable to contribute and not one touching the conceptual nature of the fee.
Indeed this position was clearly recognised by the Madras High Court in Zenith
Lamp's case itself in the following passage of the Judgment:
in substance, the levy is not to raise revenues also for the general purpose of
the State the mere absence of uniformity of the fact that it has no direct
relation to the actual services rendered by the authority to each individual
who obtains the benefit of the service, or that some of the contributories do
not obtain the same degree of service as other may, will not change the
essential character of the levy." ILR Mad.,
There might, conceivably, be cases where a particular individual-contributor
may not derive any benefit at all, though as a member of the class he has no
option but to make the contribution. The principle underlying the contention
that beyond a point the impost ceases to have the quality of a fee, if valid,
can be visualised and applied even to cases where, despite the uniformity in
the distribution of the burden, a particular individual does not obtain any
service at all. This cannot be a legitimate and permissible ground of
is, however, not to say that if the scheme of distribution of the burden is so
arbitrary, so unreasonable and disproportionate as to offend the requirements
of Article 14, the levy does not fail as violative of Article 14.
H.H. Sudhundra Thirtha Swamiar v. Commissioner For Hindu Religious &
Charitable Endowments, Mysore,  2 SCR Suppl. 323 this court
is it a postulate of a fee that it must have direct relation to the actual
services rendered by the authority to individual who obtains the benefit of the
service. If with a view to provide a specific service, levy PG NO 185 is
imposed by law and expenses for maintaining the service are met out of the
amounts collected there being a reasonable relation between the levy and the
expenses incurred for rendering the service, the levy would be in the nature of
a fee and not in the nature of a tax." (Emphasis supplied) In The City
Corporation of Calicut v. Thachambalath Sadasivan and
others, [l985] 2 SCC, 115 this court held:
is not necessary to establish that those who pay the fee must receive direct
benefit of the services rendered for which the fee is being paid. If one who is
liable to pay receives general benefit from the authority levying the fee the
element of service required for collecting fee is satisfied. It is not
necessary that the person liable to pay must receive some special benefit or
advantage for payment of the fee.
What emerges from the foregoing discussion is that when a broad and general
correlation between the totality of the fee on the one h;and and the totality
of the expenses of the services on the other is established, the levy will not
fail in its essential character of a fee on the ground alone that the measure
of its distribution on the persons of incidence is disproportionate to the actual
services obtainable by them. The argument that where the levy, in an individual
case, for exceeds the maximum value, in terms of money, of the services that
could at all be possible, them, qua that contributor, the correlation breaks
down is a subtle and attractive argument. However, on a proper comprehension of
the true concept of a fee the argument seems to us to be more subtle than
accurate. The test of the correlation is not in context of individual
test is on the comprehensive level of the value of the totality of the
services, set-off against the totality of the receipts of the character of the
`fee' is thus established, the vagaries in its distribution amongst the class,
do not detract from the concept of a `fee' as such, though a wholly arbitrary
distribution of the burden might violate other constitutional limitation. This
idea that the test of the correlation is at the "aggregate" level and
not at "individual" level is expressed thus. First Principles of
Public Finance by De Marco. 83.
fee must be equal, in the aggregate to the cost of PG NO 186 production of the
service. That is the aggregate amount of the fees which the State collects from
individual consumers must equal the aggregate expenses of production."
view taken of the matter by the Bombay High Court in the Indian Organic
Chemicals case and the view of the earlier Madras High Court in Zenith Lamp's
case do not commend themselves as sound, having regard to the accepted tests to
determine the nature of a `fee'.
(b) is not substantiated.
Contention (c) It is urged that even if the requisite correlationship could be
held to have been established, the Rajasthan and the Karnataka legislations, by
distributing the burden on the ad-valorem principles based merely on the value
of the subject matter, independently of considerations of the utilisation of
Judicial time, are per-se irrational and bring about an arbitrary and
disproportionate distribution of the burden so irrational and so divorced from
relevant criteria that the impugned provisions violate Article 14. It is urged
that a litigation, on which a litigant might have paid a mere Rs. 50 by way of
court fee, might involve far more substantial questions and take-up judicial time
in a measure far greater than a litigation on which a litigant is called upon
to pay Rs. 25 lakhs by way of court fee.
urged that the ad-valorem principle which is appropriate to taxation would be
inapposite in the context of an impost which is meant as a contribution towards
the costs of services.
The contention of the States is that as long as their power to raise the funds
to meet the expenses of administration of civil justice is not disputed and as
long as the funds as raised show a correlation to such expenses, the State,
should have sufficient play at the joints to work-out the incidents of the levy
in some reasonable and practical way. It would, quite obviously impracticable,
so proceeds the argument, to measure-out the levy directly in proportion to the
actual judicial time consumed in each individual case; hence the need to tailor
some rough and ready workable basis which though may not be an ideal or the
most perfect one, would at least hostile. Perfection in any system of imposition
of monetary exactions is an PG NO 187 unattainable goal and that, therefore,
the satisfaction of high positive virtues in the scheme is not to be expected
but what is to be seen is whether any serious vice of blatant discrimination
without any rational basis whatsoever vitiates the system. It will, obviously,
be unreasonable, says the States' learned counsel, to distribute the total
expenses amongst all the litigants uniformally irrespective of the amount or
value of the subject matter of the litigation. If, contends counsel, an upper
limit is fixed and the collection fell short of what the Government intends and
is entitled to collect, this would eventually result in the enhancement of the
general rates of court-fee for all categories. The ad-valorem principle is a
well recognised principle; it may not provide the best or the most perfect
answer; but it can, it is urged, reasonably be expected to provide the least
hostile and workable basis of distribution of the burden. If the value of the
subject matter is a relevant factor in proportioning the burden of the court
fee, is indeed it has been so held, where the line should be drawn in applying
the principle it is more a matter of legislative wisdom and preference than of
the strict judicial evaluation and adjudication. There might possibly be better
methods of administering the collections but that by itself, it is contended,
is no ground to strike down what might appearing to be a less perfect system
particularly when economic measures and regulations are concerned.
as the Directive Principles in Article 39A are concerned, the learned Solicitor
General said that the directive principles are fundamental in the governance of
the country cannot be gainsaid, but in implementing them, policy considerations
and priorities will have to be duly evaluated, having regard to the financial
constraints. The grievance in these petitions is by the class of the litigants
consisting of big financial institutions with superior economic power. The
superiority of the economic power is not, it is urged, irrelevant in making
them share a higher burden of a public impost. At all events, it is urged,
courts can not compel the State to bring-forth any legislation to implement and
effectuate a Directive Principle.
The problem is, indeed, a complex one not free from its own peculiar
difficulties. Though other legislative measures dealing with economic
regulation are not outside Article 14, it is well recognised that the State
enjoys the widest latitude where measures of economic regulation are concerned.
These measures for fiscal and economic regulation involve an evaluation of
diverse and quite often conflicting economic criteria and adjustment and
balancing of various conflicting social and economic values and interests. It
is for the State to decide what economic and social policy it PG NO 188 should
pursue and what discriminations advance those social and economic policies. In
view of the inherent complexity of these fiscal adjustments, courts give a
larger discretion to the Legislature in the matter of its preferences of
economic and social policies and effectuate the chosen system in all possible
and reasonable ways. If two or more methods of adjustments of an economic
measure are available, the Legislative preference in favour of one of them
cannot be questioned on the ground of lack of legislative wisdom or that the
method adopted is not the best or that there were better ways of adjusting the
competing interests and claims.
Legislature possesses the greatest freedom in such areas. The analogy of
principles of the burden of tax may not also be inapposite in dealing with the
validity of the distribution of the burden of a `fee' as well.
This Court in East India Tobacco Co. v. State of Andhra pradesh  1 SCR
411 referred to with approval the following passage in Rottschaefer's
"Constitutional Law", p. 668:
decisions of the Supreme Court in this field have permitted a State legislature
to exercise an extremely wide discretion in classifying property for tax
purposes so long as it refrained from clear and hostile discrimination against
particular persons or classes." The Legislature has to reckon with
practical difficulties of adjustments of conflicting interests. It has to bring
to bear a pragmatic approach to the resolution of these conflicts and evolve a
fiscal policy it thinks is best suited to the felt needs. The complexity of
economic matters and the pragmatic solutions to be found for them defy and go
beyond conceptual mental models. Social and economic problems of a policy do
not accord with preconceived stereotypes so as to be amenable to pre-determined
solutions. In The State of Gujarat and Another v. Shri Ambica Mills Ltd., Ahemdabad
Etc.,  3 SCR 764 this court observed:
court must be aware of its own remoteness and lack of familiarity with the
local problems. Classification is dependent on the particular needs and
specific difficulties of the community which are beyond the easy ken of the
court, and which the legislature alone was competent to make. Consequently,
lacking the capacity to inform itself fully about the peculiarities of a
particular local situation, a court should hesitate to dub the legislative PG
NO 189 classification as irrational...." ".....The question whether,
under Article 14, a classification is reasonable or unreasonable must, in the
ultimate analysis depend upon the judicial approach to the problem. The more
complicated society becomes, the greater the diversity of its problems and the
more does legislation direct itself to the diversities. In the utilities, tax
and economic regulation cases, there are good reasons for judicial
self-restraint if not official deference to legislative judgment. The courts
have only the power to destroy but not to reconstruct. When to this are added
the complexity of economic regulation, the uncertainty the liability to error,
the bewildering conflict of the experts, and the number of times the judges
have been overruled by events, self limitation can be seen to be the path to judicial
wisdom and institutional prestige and stability." "Laws regulating
economic activity should be viewed differently from laws which touch and
concern freedom of speech and religion, voting procreation, rights with respect
to criminal procedure etc. Judicial deference to legislature in instances of
economic regulation is explained by the argument that rationality of a
classification depends upon local conditions about which local legislative or
administrative bodies would be better informed than a court." The lack of
perfection in a legislative measure does not necessary imply its
unconstitutionality. It is rightly said that no economic measure has yet been
devised which is free from all discriminatory impact and that in such a complex
arena in which no perfect alternatives exist, the court does well not to impose
too rigorous a standard of criticism, under the equal protection clause,
reviewing fiscal services. In G.K. Krishnan etc., etc., v. The Stale of Tamil Nadu
and Anr. etc.,  2 SCR, 715 (730) this Court referred to, with approval,
the majority view in San Antonio Independend School District v. Bodrigues
speaking through Justice Stewart,, 411 US. I at page 41):
scheme of taxation, whether the tax is imposed on property, income or purchases
of goods and services, has yet been devised which is free of all discriminatory
impact. In such a complex arena in which no perfect alternatives exist, PG NO
190 the court does well not to impose too rigorous a standard of scrutiny lest
all local fiscal schemes become subjects of criticism under the Equal
Protection Clause." and also to the dissent of Marshall, J. who summed up
his conclusions thus:
summary, it seems to me inescapably clear that this court has consistently
adjusted the care with which it will review state discrimination in light of
the constitutional significance of the interests affected and the invidiousness
of the particular classification. In the context of economic interests we find
that discriminatory state action is almost always sustained, for such interests
are generally far removed from constitutional guarantees. Moreover, "the
extremes to which the court has gone in dreaming up rational bases for state
regulation in that area may in many instances be described to a healthy revulsion
from the court's earlier excesses in using the Constitution to protect
interests that have more than enough power to protect themselves in the
legislative halls." Dandridge v. Williams, 397 US at 520.
observations of this court in Income Tax Officer, Shillong and Anr. Etc. v. N. Takim
Roy Rymbai Etc. Etc.  3 SCR; 413 made in the context of taxation laws are
mere fact that a tax falls more heavily on same in the same category, is not by
itself a ground to render the law invalid. It is only when, within the range of
its selection, the law operates unequally and cannot be justified on the basis
of a valid classification, that there would be a violation of Article 14."
The question whether the measure of a tax or a `fee' should be ad-valorem or
ad-quantum is again a matter of fiscal policy.
Zenith Lamp's Case this court observed:
fee must have relation to the administration of civil justice. While levying
fees the appropriate legislature is competent to take into account all relevant
factors, the value of the subject matter of the dispute, the PG NO 191 various
steps necessary in the prosecution of a suit or matter, the entire cost of the
upkeep of courts and officers administering civil justice, the vexatious nature
of a certain type of litigation and other relevant matters. It is free to levy
a small fee in some cases, a large fee in others, subject of course to the
provisions of Article 14." (Emphasis supplied).
context of levy of market fee, a similar argument was advanced before a High
Court that the imposition of market fee advalorem on different commodities
irrespective of their weight or volume and irrespective of the extent of the
market services rendered in respect of their marketing produced inequality and
hostile discrimination. It was urged that the nature and extent of services
afforded by the Market-Committees must necessarily vary having regard to the
nature and volume of the agricultural produce and therefore a blind ad-valorem
levy would be arbitrary as the services rendered to a buyer who buys say a
quintal of cotton or tamarind is quantitatively and qualitatively more than the
services that may be envisaged to the class of traders dealing with spices of
equivalent money-value. The distribution of the burden of the fee on the basis
of the value of the commodity, it is argued, was arbitrary as it did not recognise
that the services are inherently different for different classes of commodities
but treated unequals equally. This argument has its ring of familiarity, with
the arguments in the present case. But the High Court ILR 1982 (Karnataka): 399
(reserved by the Supreme Court on another point repelled this contention:
unable to subscribe to this view. Indeed it appears to us that if the impost
was 'ad quantum" and not "ad valorem" it might have attracted. quite
legitimately perhaps. the criticism of being arbitrary. By an advalorem impost,
the goods independently of their volume and quality are treated equally in term
of their value. An impost advalorem" is a well accepted concept in
taxation Indeed in Ganga Sagar Corporation's case (AIR 1980 (SC), 286 Supreme
Court dealing, though in a different context stated:
. . .
Article 14, a great right by any canon by its promiscuous forensic misuse,
despite the Dalmia decision has given the impression of being the last
sanctuary of losing PG NO 192 litigants Price is surely a safe guide but other
methods are not necessarily vocational. It depends
was then argued that various States have different standards and that while
some States have rightly recognised the need for an upper limit to save the
constitutionality of the levy, other States like, Karnataka, Tamil Nadu, etc.
envisaged an ad-valorem levy with-out any upper limit. It is contended that
though India is a federal polity, the judicial
system, however, is an integrated one and that therefore different standards of
court fee in different States would be unconstitutional. But it is trite that
for purposes of testing a law enacted by one State in exercise of its own
independent legislative powers for its alleged violation of Article 14 it
cannot he contrasted with laws enacted by other States. In The State of Madhya Pradesh v. G.C. Mandawar. [ 1955] 1 SCR;
599 this court observed:
14 does not authorise the striking down of a law of one State on the ground
that in contrast with a law of another State on the same subject its provisions
are discriminatory. Nor Does it contemplates a law of the Center or of the
State dealing with similar subjects being held to be unconstitutional by a
process of comparative study of the provisions of two enactments.'
Having regard to the nature and complexity of this matter it is, perhaps,
difficult to say that the ad-valorem principle which may not be an ideal basis
for distribution of a tee can at the same time be said to be so irrational as
to incur any unconstitutional infirmity. The presumption of constitutionality
of laws requires that any doubt as to the constitutionality of a law has to be
resolved in favour of constitutionality. Though the scheme cannot be upheld, at
the sametime, it cannot be struck down either.
The State is in theory entitled to raise the totality of the expenses by way of
fee. Any interference with the present yardstick for sharing the burden might
in turn produce a yardstick less advantageous to litigants at lower levels.
Subject to certain observations and suggestions we propose to make in regard to
the rationalisation of the levies in view of the general importance of the
matter to the administration of civil justice, we think we should decline to
strike down the law.
Re: Contention (d) A In the appeal of the State of Maharashtra arising out of
the Bombay Court Fees Act, 1959, the High Court has struck down the impugned
provisions on the ground that the levy of court fee on proceedings for grant of
probate and letters of administration ad-valorem without the upper limit
prescribed for all other litigants--the court-fee in the present case amounts
to Rs.6,14,814--is discriminatory. The High Court has also held that, there is
no intelligible or rational differentia between the two class of litigation and
that having regard to the fact that what is recovered is a fee, the purported
classification has no rational nexus to the object. The argument was noticed by
the Learned Single Judge thus:
next contend that the impugned clause discriminates as between different types
of suiters and that there is no justification for this discrimination.
who go to civil courts claiming decrees are not required to pay court-fees in
excess of Rs. 15,000. This is irrespective of the amounts claimed over and
above Rs. 15 lacs. As against this, persons claiming probates have no such
relief in the form of an upper limit to fee payable." This contention was
accepted by the Learned Single Judge who has upheld the appeal. Indeed, where a
proceeding for grant of probate and letters of administration becomes a
contentious matter, it is registered as a suit and proceeded with accordingly.
If in respect of all other suits of whatever nature and complexity an upper
limit of Rs. 15,000 on the court fees is fixed, there is no logical
justification for singling out this proceeding for an ad- valorem impost
without the benefit of some upper limit prescribed by the same statute
respecting all other litigants. Neither before the High Court--nor before us
here-was the impost sought to be supported or justified as something other than
a mere fee, levy of which is otherwise within the State's power or as separate
'fee' from another distinct source. It is purported to be collected and sought
to be justified only as court fee and nothing else.
discrimination brought about by the statute, in our opinion, fails to pass the
constitutional master as rightly pointed out by the High Court. The High Court,
in our opinion rightly, held:
is no answer to this contention, except that the legislature has not thought it
fit to grant relief to the seekers of probates, whereas plaintiffs in civil
suits were PG NO 194 thought deserving of such an upper limit. The
discrimination is a piece of class legislation prohibited by the guarantee of
equal protection of laws embodied in Article 14 of the Constitution. On this
ground also item 10 cannot be sustained " We approve this reasoning of the
High Court and the decision of the High Court is sustained on this ground
alone. In view of this any other ground urged against the constitutionality of
the levy is Unnecessary to be examined.
(d) is accordingly held an answer against the appellant and the appeals
preferred by the State of Maharashtra
are liable to be and are hereby dismissed.
Now at the end of the day, what remains is the suggestion necessary in regard
to the rationalisation of the court-fees under the 'Rajasthan Act' and the
'Karnataka Act The arguments in the case highlight an important aspect. The
levy of court-fee at rates reaching 10% ad-valorem operates harshly and almost
tends to price justice out of the reach of many distressed litigants. The
Directive Principles of State Policy, though not strictly enforceable in courts
of law, are yet fundamental in the governance in the country.
constitute fonsjuris in a Welfare State. The prescription of such high rates of
courtfees even in small claims as also without an upper limit in larger claims
is perilously close to arbitrariness, an unconstitutionality.
ideal is. of course, a state of affairs where the state is enabled to do away
with the pricing of justice in its courts of justice. In this reach for the
ideal it serves to recall the words of Robert Kennedy:"Some men see thing
as they are and say why, I dream things that never were and say why not? "
The power to raise funds through the fiscal tool of a fee is not to be confused
with a compulsion so to do. While 'fee meant to defray expenses of services
cannot be applied towards objects of general public utility as part of general
revenues, the converse is not valid General Public revenues can, with
justification, be utilised to meet. wholly or in substantial part, the expenses
on the administration of civil justice. Many States including Karnataka and
Rajasthan had earlier, statutory upper-limits fixed for the court fee.
later legislations has sought to do away with the prescription of an upper
limit. The insistence on raising court fees at high rates recalls of what Adam
Smith Wealth of Nations said:
195 "There is no art which one government sooner learns of another than
that of drawing money from the pockets of the people.
are levied no doubt to defray the cost of services but as observed by Findlay Shirras
Science of Public Finance, Vol. II, 674-675:
are levied in order to defray usually a part, in rare cases the whole of the
cost of services done in public interest and conferring some degree of
advantage on the fee payer.
supplied) Though we have abstained from striking down the legislation, yet, it
appears to us that immediate steps are called for and are imperative to rationalise
the levies. In doing so the States should realise the desirability of levying
on the initial slab of the subject matter--say upto Rs. 15,000--a nominal
court-fees not exceeding 2 to 2-1/2% so that small claims are not priced out of
Courts. "Those who have less in life' it is said should have more in
in excess of Rs. 15,000 might admit of an ad-volorem levy at rates which, preferrably,
should not exceed 71/2% subject further to an upper limit which, having regard
to all circumstances, could be envisaged at Rs.75,000. The upper limit even piror
to 1974 under the Bombay Act was Rs.15,000 and prior to 1961 under the
Rajasthan Act' at Rs.7,500. Having regard to steep inflation over the two
decades the upper limit could perhaps go upto Rs.75,000.
that limit is reached, it is appropriate to impose on gradually increasing
slabs of the value of the subject matter, progressively decreasing rates, say
from 7-l/2/% down to 1/2% in graduated scales. The Governments concerned should
bestow attention on these matters and bring about a rationalisation of the
these observations and directions we dismiss the appeals, writ petitions and
special leave petitions, but in the circumstances, without an order as to
Appeals & Petitions dismissed.