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Report No. 189

Most of the other States have amended the Court Fees Act, 1870 in application to their States. These are:

(1) Assam

(2) Bihar

(3) Madhya Pradesh

(4) Orissa

(5) Punjab

(6) Haryana

(7) Meghalaya

(8) Uttar Pradesh

(9) Goa

(8) Since a long period of time, rates of fine prescribed under the Indian Penal Code, 1860 and other old penal enactments, have not been increased, though there is considerable reduction in the value of the rupee over all these years.

The Law Commission suggests that amount of fine prescribed under the Indian Penal Code, 1860 and other penal enactments may be enhanced in proportion to reduction in the value of the rupee. It will, to some extent, cover the increased cost of administration of justice.

(9) Administration of justice falls under the Concurrent List (Entry 11A of List III of Seventh Schedule to the Constitution of India). The High Courts and other Courts subordinate are today dealing not only with the cases relating to laws made by the States under the State List and Concurrent List but all the bulk of the cases relating to laws made by the Central Legislature or Parliament under Union List and Concurrent List. For example, the Transfer of Property Act, Contract Act, Sale of Goods Act, Indian Penal Code, Civil and Criminal Procedure Codes, are referable to the Concurrent List and are Central Laws.

The Negotiable Instruments Act is referable to List I and is a Central Act. Cases arising out of these Central Laws are now being disposed of by the subordinate Courts established by the States. As of now Central Government is not bearing any part of the expenditure for subordinate Courts. The Central Government is only bearing the expenses for the Supreme Court and other Courts in the Union Territories. Expenses for the High Court and subordinate Courts in States are borne by the concerned State Government.

The Law Commission is in total agreement with the recommendations made by the National commission to Review the Working of the Constitution (at para 7.8.2) that "the Planning Commission and the Finance Commission must allocate sufficient funds from national resources to meet the demand of the State judiciary in every one of the States".

121We also recommend accordingly.

(10) So far as prevention of vexatious litigation is concerned, there is a State Act of former composite Madras State known as 'Vexatious Litigation (Prevention) Act, 1949 (Madras Act VIII of 1949). It was made on the line of English Statute 16 and 17 Vic. Ch. 30 (now repealed). The said Madras Act VIII of 1949 provides that when the High Court on an application made to it by the Advocate General, is satisfied that any person has habitually and without any reasonable grounds instituted vexatious civil or criminal proceeding, in any Court or Courts, it may, after giving an opportunity of being heard to that person, pass an order that no proceeding civil or criminal shall be instituted by him in any Court without the leave of Court. A five Judge Bench of the Supreme Court upheld the constitutional validity of the said Act in P.H. Mowle v. State of A.P., AIR 1965 SC 1827.

We recommend that, on the line of this above mentioned Madras Act VIII of 1949, a Central Act may be enacted to curb vexatious or frivolous litigation.

(11) As stated in above paragraphs, power of the Central Government and Parliament in respect of Court fees is limited to the Court fee payable in the Supreme Court and other Courts exercising jurisdiction over Union Territories. Rate of Court fees as prescribed in the Court Fees Act, 1870, wherever applicable, has not been revised by the Central Government or Parliament since a long period of time, but the value of the rupee has considerably come down. Therefore, we recommend that the fixed Court fees payable in the Courts exercising jurisdiction over the Union Territories and where it is governed by Schedule 2 of the Central Court Fee Act, 1870, should be enhanced in proportion to the reduction in the value of the rupee.

(12) 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.

We acknowledge the extensive contribution made by Dr. S. Muralidhar, Part-time Member of the Law Commission, in preparing this Report.

We recommend accordingly.

Justice M. Jagannadha Rao

Dr. N.M. Ghatate

Dr. K.N. Chaturvedi

Dated: 25th February, 2004

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