Report No. 236
IV - CERTAIN DETAILS RELATING TO CORPORATE LITIGATION
4.1 Before proceeding to discuss the alternative option available, the Commission would like to place on record certain data/statistics relating to the Court-fee revenue and the corporate cases filed in the Supreme Court. The overall revenue from the court-fees for the years 2007-08, 2008-09 and 2009- 10 is Rs. 119 lakhs, 128 lakhs and 133 lakhs, respectively. The total budgetary allocation to the Supreme Court during the preceding year (2009) was above Rs. 100 crores. The Commission, after making some efforts, could obtain the details of cases filed in two months, i.e., January and February 2010 in order to identify distinctly the civil appeals (including those relating to taxation and other special Acts) instituted by the companies/corporations. The appeals attract the maximum fee of Rs.2,000/-
4.2 The Special Leave Petitions (SLPs-Civil) registered in the month of January 2010 were 2507 and those in February were 2187. Out of them, 123 SLPs-Civil in January and 185 in February relate to private sector companies. During the same period, as many as 449 and 235 SLPs (Civil) were those filed by public sector companies/undertakings. Thus, as far as Companies other than PSUs are concerned, the average number of SLPs (Civil) filed in a month works out to about 150 cases. Most of the cases filed by the companies including PSUs are taxation matters and appeals under special enactments relating to Telecom Disputes, Electricity Regulation, Consumer Disputes etc.
For the SLPs, a nominal fixed fee is charged as in the case of Writ petitions in the High Courts. When the SLPs are admitted after hearing, those SLPs will be converted into civil appeals and for civil appeals, the maximum fee presently chargeable is Rs.2,000/. About 50% or more SLPs are generally rejected at admission stage. Thus, assuming about 70 or 80 cases of private sector companies are numbered as civil appeals, the court-fees revenue presently being fetched from the companies whose appeals are so entertained is to the tune of about 1.60 lakhs per month (about 19 lakhs per year).
4.3 We shall notice the pattern of institution fee payable for the appeals filed under various special Acts to the statutory Tribunals such as CEGAT, ITAT, TDSAT, Electricity Appellate Tribunal, Consumer Disputes Appellate Tribunal. The maximum fee is Rs.10,000/-. However, for the appeals to Securities Appellate Tribunal7 and Competition Appellate Tribunal8, the maximum fee payable ranges between Rs.1.5 lakhs and Rs.3 lakhs, respectively with a minimum of Rs. 500 and Rs. 1000. Very few appeals under the said two Acts are presently pending in the Supreme Court.
For appeals to the High Court arising out of ITAT's orders (under the Income-tax Act) and other taxation statutes, the fee charged by the High Courts including the Delhi High Court is nominal. At the stage of appeal to the Tribunal also, the fee paid is quite small, as noted earlier. In no State or Union territory, the ad valorem court-fee is charged in respect of appeals/references arising under taxation and other fiscal enactments. Normally, the appeals arising under the said enactments involve heavy stakes and they are mostly filed by companies, trusts, firms and societies. The other category of appeals which involve heavy stakes filed by companies and firms are those under the Arbitration and Conciliation Act, 1996. As per the information received from the Supreme Court Registry number of cases registered up to October in the year 2010 under the said Act is 478.
7 Rule 9(2) of the SecuritiesContracts (Regulation) (Appeal to Securities Appellate Tribunal)Rules, 2000
8 GSR No. 387(E), Rule 4(2) of the Competition Appellate Tribunal (Form and Fee for filing an appeal and fee for filing compensation applications) Rules, 2009
4.4.1 That there should be an upper limit or ceiling to the courtfees charged is a generally accepted norm and that principle is adopted in almost all the court-fees Acts including the Courtfees Act of 1870. The absence of such ceiling, the Supreme Court pointed out in Ashwathanarayana Setty's case, would be "perilously close to arbitrariness". The appeals filed by the companies in the Supreme Court should also be governed by the said principle and it would not be proper and rational to dispense with that principle in respect of any category of civil appeals filed by the companies or others.
4.4.2 Interestingly, the case of Central Coal Fields Ltd. Vs. Jaiswal Coal Co. (AIR 1980 SC 2125) illustrates how the high quantum of court-fee without maximum limit caused problems to a PSU to file an appeal. The Supreme Court observed, "if the Central Government or its agent discovered that the court-fee was disastrously back-breaking, one should have expected it, as the promoter of inexpensive justice for the people, to undertake uniform legislation reducing the scale of court-fees consistently with economic justice and civilized processual jurisprudence..." (para 3)
4.5 The Commission would like to restate the well-settled principle that court-fee should not be viewed as the chief source of revenue to run the courts. It is trite that the cost of administration of justice, being a sovereign function essential to the democratic system of governance cannot be evaluated in terms of the court-fees generated. Secondly, court-fee ought not to be viewed as a means to check vexatious litigation. Even if a part of the litigation is vexatious, an abnormal increase in the quantum of court-fee would cause hardship to genuine litigants. In this context, the Commission would like to mention that it is undertaking a separate study on the subject of costs and appropriate amendments to Code of Civil Procedure so that the court will be in a position to impose heavy costs on frivolous and vexatious litigation.