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Report No. 189

Chapter VI

Whether There is a Need to Revise the Court fees Structure in order to Build Financial Disincentives to Discourage Vexatious Litigation

Consistent view - court fee not to be increased as a disincentive to litigation

The Department of Justice and the Standing Committee of Secretaries (SCOS) has suggested that there is an urgent need to stop frivolous litigation which increases the burden of arrears on the courts. It was also suggested in the Eighth meeting of the Standing Committee of Secretaries, held on 24th July, 2002 that there is a need to build financial disincentives in the legal system so as to discourage vexatious litigation. It appears that, to achieve the objective of discouragement of vexatious litigation, the revision of court fees structure has been suggested. But, this approach has not been accepted by the Law Commission of India or the Courts in India and abroad.

In fact, Lord Macaulay had described this concept as 'absurd' as long been as 1835. In fact when it was stated in the Statement of Objects and Reasons of the Bengal Regulation, 1795 that the imposition of high rates of court fees is to put a stop to groundless and frivolous and speculative cases, Lord Macaulay in his minute dated the 25th June, 1835 described the preamble of Bengal Regulation, 1795 as "the most eminently absurd preamble, that was ever drawn".

The view of Lord Macaulay, has since been referred to with approval by the Law Commission of India in its 14th Report on 'Reform of Judicial Administration" (Chapter 22, para 5). Indeed, the Supreme Court in Secy. to Govt. of Madras v. P.R. Sriramulu, 1996(1) SCC 345 and P.M. Ashwathanarayana Shetty v State of Karnataka, (1989 Supp. (1) SCC 696) also affirmed the same view. It is worthwhile to refer to this aspect in some detail.

Lord Macaulay had said:

"It is undoubtedly a great evil that frivolous and vexatious actions 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 providing a most sufficient remedy".

He further stated:

"Why did dishonest plaintiffs apply to the courts before the institution fee was imposed? Evidently because they thought that they had a chance of success. Does the institution of fee diminish that chance? Not in the smallest degree. It neither makes pleadings clearer, nor the law plain.... It will no doubt drive away dishonest plaintiff who cannot pay the fee. But it will also drive away honest plaintiffs who are in the same situations".

The view of the Lord Macaulay has been kept at the highest pedestal. The Law Commission, in its 14th Report (Chapter 22, para 6) has observed that there is no substance in the argument that rates of high court fees are to be introduced so as to prevent frivolous litigation. The Law Commission observed thus:

"29. The argument that it is necessary to impose high court fees to prevent frivolous litigation, already referred to has no substance. These increases have been generally justified, as far as we know, on the ground of the need of increased revenue by reason of the increased cost of the administration of justice". (Chapter 22, para 29).

After three decades, a similar view were expressed by the Law Commission in its 128th Report on Cost of Litigation (1988) (para 3.6). Agreeing with the view of Lord Macaulay and reiterating the view of the Law Commission of India expressed in its 14th Report, and of the Supreme Court, the Commission is of the view that, enhancement in the court fee to prevent frivolous or vexatious litigation cannot and has never been accepted as a reason in the last nearly one hundred and fifty years. Further, the Supreme Court in Secy. to Govt. of Madras v. P.R. Sriramulu, (1996) 1 SCC 345 has also deprecated the concept of enhancement of court fees for preventing frivolous litigation. The court observed as follows:

"In the beginning the imposition of the (court) fee was nominal but in the course of time it was enhanced gradually under the impression that it would prevent the institution of frivolous and groundless litigation and as an effective deterrent to the abuse of process of the court without causing any impediment in the institution of just claims.

However insignificant this view may be that the levy of fees would have a tendency to put a restraint on frivolous litigation, that view at any rate had the merit of seeking to achieve a purpose which was believed to have some relevance to the administration of justice. Since about past two decades the levy of court fees on higher scales would seem to find its justification, not in any purpose related to the sound administration of justice, but in the need of the State Government for revenue as a means for recompense". (para 6).

It was thus pointed out that the argument that increase in Court fee was meant to foster the due administration of justice was given a go bye very soon when the legislatures started increases in Court-fee as a measure of recompense of its expense.

Earlier the Privy Council in Rachappa Subrao v Shidappa Venkatrao, (AIR 1918 PC 188) had also critically observed that the provisions of the Court Fees Act, instead of arming the litigant, tended to secure revenue for the benefit of the State.

The Commission does not find any reason to take a different view than the one expressed by the Supreme Court and the Law Commission in its 14th and 128th Reports that the underlying real reason for enhancement of court fees appears to be the collection of more revenue by the States which is not sound public policy. On the other hand, higher court fee will discourage the honest and genuine poor litigant.

The aspect that now requires to be addressed is whether there are alternatives available to curb vexatious litigation without having to resort to the device of increasing user/court fees. The next chapter addresses itself to this.

Revision of Court Fees Structure Back

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