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Report No. 189

Chapter VIII

Revision of Court Fees owing to The Devaluation of The Rupee

It is stated in the minutes of the meeting of the Standing Committee of Secretaries held on 19.7.2002 that the Court fees, in a majority of cases, had not been revised for a very long time and currently covered only a fraction of the administrative costs of the judicial process. Amount of Court fees required to be paid in any judicial proceeding are prescribed in the Schedule 1 and 2 of the Courts Fees Act, 1870. Schedule 1 of the Court Fees Act, 1870 prescribe Ad Valorem Court fees, which means Court fees has to be paid according to the value of the subject matter. Schedule 2 prescribe fixed Court fees.

It is true that value of rupee has depreciated considerably in last four decades, but the rate of Court fees has not been revised by any Central enactment for a very long time. However, various States have amended Court fees rates by State amendments to the Court Fees Act, 1870 or in their own Court fees Acts. One of the recent changes is made in Madhya Pradesh. The said State has amended rate of Court fees by M.P. Act 12 of 1997 w.e.f. 1.4.1997.

Now, in M.P. Court fees on filing of plaint etc. have to be paid on the basis of percentage of amount of value of subject matter. Similarly, rate of Court fees in Maharashtra has been revised by amending Bombay Court Fees Act, 1959, by Maharashtra Act No.33 of 1997 w.e.f. 21.2.97. Other States have also amended rate of Court fees from time to time. However, in view of the devaluation of rupee and increase in the rate of inflation, rates of fixed Court fee as prescribed in Schedule 2 of the Court Fees Act, 1870 may be revised so that effect of inflation may be eliminated.

The Law Commission in its 127th Report at p.5-13, has also suggested that because of reduction of value of rupee, Court fee may be increased with certain exceptions. As regards ad valorem court fees, since the levy is a percentage of the value of the claim, it may not be necessary to enhance the percentages consequent upon the devaluation of the rupee. This is because the court fee paid will be proportionate to the claim which in any event would be enhanced to reflect the changed value of the rupee.

However, in the context of fixed court fees there may be a need to revise the charges to reflect the present value of the rupee. At the same time, it requires to be emphasised that any enhancement of Court fee should not adversely affect the right of access to justice. Further, the amount collected by way of Court fee should not be more than the expenditure incurred in administration of civil justice. Subject to these limitations, the amount of fixed Court fee prescribed under Schedule 2 of the Court Fees Act, 1870 may be enhanced in proportion to the extent of devaluation of the rupee.



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