Cost Of Legislation

[Cites 29, Cited by 0]

Law Commission Report

Cost Of Legislation

LAW COMMISSION OF INDIA

ONE HUNDRED TWENTY--EICHTH REPORT
CN

COST OF LITIGATION

1988



CHAPTER I

CHAPTER II

CHAPTER III

CHAPTER IV

NOTES AND
REFERENCES

APPENDIX

CONTENTQ

INTRODUCTION ...

COMPONENTS OF COST OF LITIGATION
COURT FEE AS A COMPONENT OF

COST OF LITIGATION AND

ITS RATIONALISATION ...

ANTICIPATIONS ...

SU!!I'l.T\RY OF ('('NCLHFIONS:/'RE'C'O{1HHN~
DATIONS REPORT OF THE CONNITTEE

OF LAW MINISTERS ON RATIONALISATICN

OF COURT FEE, OCTOBER 1984. ...

PAGE

37

72

77

80



CH1'\i"I'FIR I

IVTRDPUCTTON

1.1. Of the numerous ills with which
judicial system as in vogue in this country
is suffering, the one which has attracted the
attention of all those concerned with Courts
and interested in its functioning is high
cost of litigation in Indian courts. So,

when the Government of India decided to set
up a Judicial Reforms Commission and later on
assigned that task to the present Law
Commission, one of the terms of reference
was:

"8. The cost of litigation with a View
to lessening the burden on the

litigants".
That litigation has become a luxury for the
rich is a self--evident proposition. It is a
trite saying that if the cost benefit ratio
is applied to court litigation, more often
the cost far outweighs the benefit flowing
from the litigation. If a survey is made of
those who have causes to be taken to the
redrersal of grievances but the

court for

prohibitive cost of litigation thwarted them
from undertaking that exercise, the outcome
of the survey would be revealing.

Occasionally, litigation is undertaken not



with a view to vindicate the wronq or
injustice suffered but as an egocentric
activity to heai as much harm on the other

ide as possible. In this situation, cost of
litigation acquires a secondary position.
But excluding this class of cases, cost of
litigation is an important factor in
evaluating the approach of the litigant while
deciding to initiate the litigation. The
problem has also to be viewed from the point
of view of the defendant who is dragged to
the court as to what burden of costs will be
heaped upon him in defending his right. Cost
of litigation has multiple dimensions: (1)
cost to the State in setting up and
maintaining justice system; (2) cost to the
litigant; and (3) cost to the society. In
this report, Lay Commission is primarily

concerned with cost of litigwtion with a View

to lessening the burden on the litigants.

1.2" The burden on the Exchequer for setting

up and maintaining adequate and efficient

justice system has been examined by the Law
1

Commission. The cost borne by the society

for providing effective and efficient justice

system requires analysis and in--depth



examination. That is outside the purview of

this report. The entire emphasis in this

report is on the cost of litigation borne by

the litigants.

1.' what are the road~blocks in access to
justice? They are numerous and diverse. One

' the impediments in access to justice has

bgbw identified as the economic barrier
which, in simple terms, means high cost of
1 aqation. It has become so counter-

productive that numerous litigants, it IS

apprehended, may, for want of wherewithal,

snifvr injustioe, giving up the idea to

arprcrch the court because of the prohibitive
<:o".ts. 'l'hir= is not an idle fantasy.. Even in
an affluent CONHVTA like America, 'it is the

milfiwrs of ﬁisputes an' millions of

dispntwnts effectively excluded because of

nsivoness of the process that are the

major cnsualitiesn Litigation in the formal

is an oxiun ive proposition both for
2
taxpayers and for litigants'. 'The high

Covrts

cost of litigation through the courts may

irritate many litigants. But for some it

constitutes a total bar. No matter how

mer'torious the claim or how worthy the



defence, a low income person (as well as many

middle class) will be unable to
3
litigate most cases'. There is a

in the
movement

afoot in America for reform that will reduce

the cost of litigation. The search for

reform has exposed the fact that a number of

disputes remain unresolved which is not

conducive to the health and well being of a

society. The reform movement aims at

rendering justice more accessible by making

it less expensive"

1.4. It is agreed on all hands that Indian

situation is worse compared to American

situation because India is a developing

country with large population living below

; erty line. To alleviate poverty, numerous
programmes have been undertaken by the State.

These programmes create rights. _The

awareness of these rights has percolated down
to the beneficiaries. But the existence of

right or its awareness hardly brings any
relief. It is the enforcement of the right
to enjoy the benefit flowing from the right
which is important. The moment you come to

enforcement, the courts come in, and with it

the costs. The inability to bear the costs



any attempt at enforcing the right not

makes

worth its while. The programme and the
rights created therein remain a teasing
illusion.

1,5. This disturbing phenomena of rising

cost of litigation attracted the attention of

the Parliament. While Constitution mandated

that the state shall secure and protect, as

effectively as it may, a social order in
which justice shall inform all the

institutions of national life, there was no

effective provision in the Constitution for
translating this promise into reality.
Article 39A was introduced in the
Constitution in the year 19760 It provided
that the State shall secure that 'the
operation of the legal system promotes
justice, on a basis of equal opportunity, and
shall, in particular, provide free legal aid,
by suitable legislation or schemes or in any
other way, to ensure that opportunities for
securing justice are not denied to any
citizen by reason of economic or other
disabilities. In introducing this article,

Parliament showed its awareness that by

numerous statutes, rights, privileges and



.oncessions have been conferred on the

economically and socially disadvantaged

sections of the smciety but they themselves
are not in a position by their own effort to
enforce these rights or enjoy the privileges
and concessions. And till that is done, it
cannot be said that the legal system promotes
justice because justice system is an integral
part of the legal system of the country. No
one who has a right must be denied the
benefit of it. There must be a forum for
enforcement and vindication of this right.
Access to forum must be unimpeded either by
geographical, physical or economic barriers.
The justice system must be easily accessible
to each and every one from whatever strata of
society he comes. Economic or any other
disability should not become a barrier to
access to justice. Economic incapacity for
enforcing rights must be remedied, It can be
done in two ways: (i) considerably reduce the
cost of litigation; and (ii) extend help by

legal aid scheme wherever it'is possible.



l'6, In the days of laisseg faire it was

assumed that if the State establishes Courts,

the State has performed its dutyo The
procedure for civil litigation reflected the
essentially individualistic philoscphy of

rights then prevailing. A right of access to

jr icial protection meant ersentially the
aggrieved individual's formal riqht to
litigate or defend a Claim. Inability to

resort to court to enforce the right was not

taken to be the concern of the State. The

State remained passive vith respect to such
problems as ability to initiate action or to
defend the action adequately. Such an
agproach is inconsistent with the philosophy
of a welfare Stale. Therefore, article 39A
provided for setting up free legal aid
schemes to at least deal with one component
of the cost of licigaticn, namely, lawyer's

fees, But '"_re are numerous components of
cost of litigation and each will have to be
adeowaLely and scientifically examined to
demarcate areas where there is enough leeway
for reducing the cost of litigation. The
approach has to be in contrast with the 19th

century approach. Relieving 'legal poverty"

-- the incapacity of many people to make full

7



of the law and its institutions -- was not

usr
the concern of the State, Justice, like
other commodities in the laissez faire

system, was available only to those who could

afford its cost. Formal, not effective
justice ~ formal, not effective equality -
was all that was sought. This approach has

to be eschewed.

1.7. A constitutional democracy founded on
rule of law must provide a body for
resolution of the disputes arising in the
society. The disputes may be individual in
character or the disputes may arise out of
conflict of interests between groupso In

either situation, there must be an easily

accessible forum for resolution of disputes.

Simmering perpetual disputes would retard the

development and growth of the society.

Expeditious resolution of disputes by an
easily acessible forum would certainly tend
to help development and growth of the

courts are institutions for

society. The

formal resolution of disputes amongst
individuals and groups. This forum, in order
to be effective, useful, efficient and

action--oriented, must be easily accessible to

the lowest amongst the lowliest without the



worry of finding wherewithal for access to

justice. And the forum must be able to

expeditiously resolve the disputes so that

the disputes do not continue to simmer in the

society and the disputants may invest their

time in more productive and creative effort

rather than in fighting fruitless litigation.

Therefore, a justice system worth its name
must be easily accessible, least formal, non-
expensive and ready to resolve the disputes

in a reasonably short time. In its search

for judicial reforms, the Law Commission has
dealt with providing forum which can

expeditiously dispose of cases within a

reasonable time. The present report deals

with removal of economic barriers in access

to the forum.

1.8.» Incidentally, the report also deals
with a reference received from the Department
of Justice in the the Ministry of Law and
Ju 7ceL It appears that the Conference of
Law Ministers of States and Union territories
held in June 1982 at New Delhi set up a
Committee to go into the ' question of
rationalisation of court fee. This Committee
prepared a report on rationalisation of Court

fee. This report was placed as an annexure



to the agenda item on 'abolition of court

fee' in the joint Conference of Chief
Chief Ministers and Law Ministers

lst

Justices,
held at New Del i on 11st August and

September, 1985. It is stated that due to

paucity of time, the subject was not
discussed in the Conference. As stated

earlier amongst the terms of reference drawn

ug tor a Commission which was to be set up to

study and recommend reforms in the justice

system, one of the terms was= 'the cost of
litigation with a view to lessening the
burden on the litigants'. Later on,

Government of India decided to assign the
task of studying reforms in judicial
administration and to make recommendations
thereon to the present Law Commission,
Consequently, it was decided by the Minister
of Law and Justice, Government of India, to
refer the report of the Committee of Law
Ministers on 'Rationalisation of Court Fee'
to the Law Commission for its study and

recommendations. This report would also

dispose of the reference as set out in D.O.
No, 25/4/80/Jus of Additional Secretary,

Ministry of Law and Justice, dated 28/29

April, 1986.

10



CHAPTER II

COMPONENTS OF COST OF LITIGATION

2.1. Before att.mptjng to ascertain the

areas where the expenses are incurred by

litigants in initiating or prosecuting or
defending litigation, it would be worthwhile
to recall the broad heads under which the
litigants have to bear expenditure in
prosecuting or defending litigation. They
may be broadly grouped as unders-

(l) advocate; fees, including the fees
for serving notice wherever it is
necessary;

(2) court fees and process fees;

(3) travelling expenses, etc., of
litigants and witnesses;

(4) costs for obtaining copies of
documents, typing and other
miscellaneous expenses;

(5) costs on account of adjournments;
and

(6) costs payable by the vanquished party

to the successful party.

2.2. Each head may be separately analysed
with a view to spotting areas where the costs

borne by the litigants may be either wholly

ll



eliminated or at least considerably reduceda

The Law Commission is not concerned with all
litigants. Its r-commendations are relevant
for those litigants who can il1~afford the

prevalent costs of litigation and who may be

forced, in the language of article 39A, to

1

give up securing justice, resulting in denial

of justice by reason of economic barrier. It
is this class of marginal litigants that the

Law Ccmmission has kept in focus while

examining the heavy burden of costs of
litigation, The Law Commission is aware that
there is a class of litigants to whom the
quantum of costs is not at all a relevant
factor in pursuing litigation. In fact when
the upponent is from an economically
impoverished class, the well-to~do opponent,
irrespective of the cost of litigation, will
pursue it relentlessly either to tire out the
impoverished litigant or to impose upon him
an unfair and unjust compromise. It is for
this class of litigants coming from the
impoverished segment of society and
designated as economically disadvantaged
class of litigants, for whose benefit rights

have been created or rprivileges and

concessions have been conferred by statutory

1?



and executive orders but who are denied the
same and are unable to enforce the same
through justice system on account of economic
barrier, that the Law Commission is

concernedo Those who have cushion and want

"to spend on litigation as a luxury are not

the concern of the Law Commission" This

report may be understood and appreciated by

keeping in focus those litigants from
impoverished segments of our society, styled
as economically disadvantaged class of
p00; .1»
Advocates' Fees

2.3. In assigning the top place to
advocates' fees as a component of cost of

litigation, the law Commission is influenced
by the fact that members of the top echelons
of legal profession charge fees for services
rendered by them which is not available on a
comparative basis in any other profession.
In the corridors of Bar Association. it is
freely whispered, and without the identity
being disclosed, the Law Commission was
informed, that the top members of the legal
fraternity in the Supreme Court charge more

often at the rate of Rs.1,00,000 per day of

13



four and half working hours. A fee varying
from Rs.5,000 to Rs=l5,000 for appearing in a
matter set down for admission has become
common place; and senior advocates coming
from the top echelons of thc Bar are known to
be appearing in 5 to 10 admission matters per
day on an average. And this fee_ either for
final hearing per day or per admission matter
does not include conference fee. The minimum
fee for giving written opinion varies from
Rs.S,000 per opinion to a conference fee. of

Rs.5,000 per hour. Ordinarily, big

industrial and commercial houses and

corporations and companies have been paying

and are willing to pay the fees on this
scale. "hen it sfuwly tapers down to a level
where the competition is fierce and the

charges are the lowest.

2.4. Payment in the higher bracket is
further encouraged by a peculiar provision in
the Income--tax Act. Section 37(1) of the Act
provides that any expenditure [not being
expenditure cf the nature in sections 30 to
36 and not being in the nature of capital
expenditure or personal expenses of society]

laid out or expended wholly and exclusively

14



for the purposes of the business or

profession shall be allowed in computing the

income chargeable under the head 'profits and

gains of business or profession'. This
provision has come in for interpretation on

numerous occasions before the Privy Council,

Supreme Court, various High Courts and Income

Tax Appellate Tribunal, and expenses on
litigation have been put under the heading
deduction' in computing the

'permissible

profits and gains of business or profession.

The cases are a legion to be mentioned here

1

but a ready reckoner is availableo But
practically every class of litigation

concernin the business or vrofession of the
L

assessee has enjoyed the benefit of exemption

and without a ceiling. This provision has
pushed up lawyers' fees in cases where
corpcrations/ companies are involved in

litigation and it has almost become the
corpo.ltions'/companies" largesse distribution'
method. And the largesse is enjoyed at the
cost of the State by reducing the taxable
profit and enhancing the litigationo There

was also section 8OVV, which has been deleted
with effect from 1-4-1986 by the Finance Act

of 1985, which permitted deduction of

15



incurred on litigation under the Act

expenses
with a ceiling at Rs.5,000. . Shorn of
verbiage, the provision means that one can

fight tax authorities at State's own cost
inasmuch as even if the assesses were to lose
the litigation up to the Supreme Court of
India, the expenses subject to ceiling are

deductible while computing the total income

of the assessee. Such litigants litigating
at State cost have clogged the courts"
docketso Their ability to pay high fees has

so adversely affected the market of legal
services and culture of legal profession that

others who can il1«afford to pay fees at the

vhigl rates are compelled by the environment

to follow the suit and suffer in the process.
Therefore, the question of costs of
litigation may be examined only from the
point of view of the impoverished class of
litigants who suffer double jeopardy in that

they cannot afford to enforce rights by

initiating the litigation for want of.

wherewithal and, in the process, suffer

further injustice, namely, denial of rights,

privileges and concessions.

16



2.5. Petty litigation of simple variety
emanatcs from rural areas inhabited largely
by impoverished class of rural pcor. To
them, more than the court fees, the
advocates" fees/lawyers' charges which have
to be paid in advance set up a formidable
barrier in accrss to justicr, For this class
of litigants, there must be a two--pronged
drive to reduce the cost of litigation under
the h 1 "lawyers' charges":

(1) The State must prescribe floor and
ceiling within which only lawyers'
fees can be charged; and

(2) Legal aid schemes which must ensure
availability of legal aid at State
Costa

Both the approaches may be separately

examined.

2:6. The Advocates Act, 1961, has been
enacted in exercise of the powers conferred
by entry 26 in the Concurrent List of Seventh
Schedule to the Constitution". The Act
provides for a monopoly in the sense that
only those persons whose names have been
enrolled in the State rolls of advocates

maintained by the Bar Council of the State

17



'shal be' entitled as of right to practise

throughout the territories to which the Act

extends, as prc.id€d in section 30.
Undoubtedly section 32 confers power on the

court to permit any person not enrolled as an
advocate under the Act to appear before it in
any particular case. Both these sections
find their place in Chapter IV which appears
not to have been brought into operation as
yet. If thus th; Act confers a monogoly,
since naturally the monopoly has an inbuilt
tendency to abuse its monopolistic character,
the State must have regulatory control over a
monopoly. And such regulatory control may
extend to prescribing the floor and ceiling
in the matter of lawycr's fcesi Now if by
the Act of Parliament, the profession enjoys
a monopoly, indisputably the Parliament will
have power for regulating the conduct of the
members of the monopolistic profession and,
in exercise of this power, the Parliament can
prescribe the floor and cciling in respect of
fees chargeable by lawyers. Today sky is the
limit. In a welfare State, the State must,
in discharge of its trust to its impoverished
sections of society, protect them against a
highly intelligent monopolistic profession.

And now that the legal charges or fees cf

18



lawyers have skyvrockettud, it is time for

the State to intervene and regulate the
profession by prescribing the floor and

Between the floor and ceiling, it

ceiling"
would be open to the lawyer to negotiate his
fees. But if the litigant were to deposit

the fees at the level of ceiling in an
account to be maintained by the Bar
Association of which the lawyer is a member,
it shall be the duty of the lawyer to appear
for the litigant without any further
negotiation about fQLS. he may decline to
undertake the assignment if either there is a
conflict of interest or his hands are fulli
The lawyers describe their legal profession
a noble profession: As a characteristic

as

of nobility, this sacrifice is expected.

2.7, There is an additional reason why the
State must enforce a regulatory measure.
Recently, by the Resolution No. Fo8(l4)%82"
I.C, dated 4th July, 1985, of the Department
of Legal Affairs. Ministry of Law and
Justice, a Committee was set up under the
Chairmanship of Justice Baharul Islam, former
Judge of the Supreme Court of India, to make
recommendations to provide social security

measures to members of the legal profession,

19



Tht Committee was cf a representative

character in as much an th(ft were four

Hembtrs of Rajya Sahha and fcur H mberc of

Lok Sabha as Members of the Committee over

and above the Attorney Gtncral cf India,
Chairman of the Ear Cowncil of India. a
senior advocatr of th- Fvpreme Ceurt,

Chairman of the Lar Council of Delhi and a

"journalist. This Committtc was rvquired to
study in depth all the aspects relating to
the mcasurts of social security to be

provided to the memhurs of legal profession

and submit a report together with its
recommendations within thr period prescribed.

The Cemmittet issued a questionnaire to which

4

there was a widespread response, After the
internal delib2_aticns, the Committee

recommended to provide financial assistance
to the crtnnt of Rs.5OO to junior advocates
for 5 year: from the date of enrolment and to

those who havc not completed 35 years of

\.(_'4
F'

Special provision was rc;ommendud for thr

advocates belonging to Scheduled Castes and

Scheduled Tribes and women lawyers. The
ACom- tee also submitted a draft bill annexed
to its report. The funding programme is

evident from the draft Bills It provides for

20



a levy of membgrship Eze as also levy of a

stamp duty on every vaknlatnama that a lawyer
f is in any litigation of such denomination

as may ts prescribrd. The amount collected

by the sale of such stamps will form part of

the fund. In tff(Ct; nomburs of the legal

to bt provided financial

groftssion havt

assistance b luv' of tax in the form of
Y Y

stamp duty. If the prcfqssion can call upon

th; Government to gxercise its taxing power

for raising a fund to be vxcluniaoly used for
the btnefit of the mcmbcrs of the lcgal

profussicn, irso fqgto the State can enforce

a regulatory measurt providing the floor and

ceiling in the matter oi charging of fresc

To a considerable Lxtcnt, if this

recommendation is implemented, the quantum of
lawytr's charges will go down and it will
havc th( desired effaot of equitable
distribution of legal work amongst various
members of the profession and to reduce

concentration of legal work in the hands of

few mcmbers of tbt profession to the
detriment of a large number of them. These
twin objects can be easily achieved by

prescribing the flcor and ceiling in the
matter of lawyei's charges and once the

litigant is willing to pay, he is entitled to



the services of a lawyer as desired by him

within the meaning of article 22 of the

Constitution.

2.8. Even where floor and ceiling in matter

of lawyer s charges are prescribed and

enforced, yet, in a poverty ridden society
like ours, there will still be a large
segment of potential litigants in search of
its entitlements who would not be able to
afford even the prescribed charges. For
their benefit, the provision of article 39A
has to be fully made operational. Article
39. rescribes a duty of the State to secure
that it shall provide free legal aid by
suitable legislation or schemes or in any
other way to ensure that opportunities for
securing justice are not denied to any

citizen by reason of economic or other

disabilities" The State is aware of its duty

as nandated by article 39A of the

Constitution. In order to translate the
mandate of article 39A into a functioning
scheme to provide free and competent legal
services to the weaker sections of the
society to ensure that opportunities for
securing justice are not denied to any

citizen by reason of economic or other

%%



disabilities, Parliament has enacted the
Legal Services Aut"orities Act, lT87 [Act No.
39 of 1987], which received the assent of the
President on October 11, 1987. Nearly eight
months have rolled by since the Act has been
put on the statute book but, unfortunately,
it has not been brought into operation. The

reasons for this delay are difficult to

discernp However, it must be stated in

favour of the State and the powers that' be
that a legal aid scheme under an executive
order is at present functioning, It is a
skeletal _scheme. The scheme has to be all
comprehensive so that anyone in any part of
India who has suffered injustice by denial of
entitlements or deprivation of his rights

must be ables without the slighest worry

about his economic wherewithal, to initiate
legal action for enforcement of his rights or
to procure his entitlements. The National
Legal Services Authority to be set up under
section 3 of the Act is under a statutory
obligation to lay down policies and
principles for making legal services
available under the irovisions of the Act;

frame the most effective and economical

schemes for the purpose of making legal

23



services available under the provisions of

the Act; utilise the funds at its disposal
and make appropriate allocation of funds to
State authorities and district authorities;
and to take necessary steps by way of social
justice litigation with regard to consumer

protection, environmental protection or other

matter of special concern to the weaker

sections of the society and, for this
purpose, to give training to social workers
in legal skills. when the scheme is made

oprrational, even the poorest among the poor
would be able to secure legal aid without the
worry of finding the wherewithal for
acquiring his entitlements and to vindicate
his rights. In fact, expecting the members
of the impoverished class of litigants to go
in svnrcb r' legal aid is itself a tall
ordbz. The Law Commission, being aware of
the fact that the rural poor find it
difficult CVLH to procure legal aid by
approaching appropriate authorities, has

taken one more step to make the scheme,

whatever that may be, operational.

24



largest sections of the

2.9. The
eeoi nieally any socially disadvantaged

classes of pceple reside in rural areas, For

their btnefit, a participatory model of

has already been recommended by the
2

in August 1986, The report

justice
Law Commission

recommends setting up of a Gram Nyayalaya to

be manned by a legally trained Judge and two

lay Judges, Apart from anything else, the

Gram Nyayalaya has not to wait for peoplt to

come to it in Search of justice but whenever

a disyute is reportcd, to assemble at the

site of the dispute and to resolve the same.

Ours being a society founded on rule of law

cou led with an adversar srstem, resence of
Y )

lawyer in the process of assisting resolution

of dispute is generally considered

indispensable. Now if the Gram Nyayalaya is

to settle at the situs of dispute, how could

litigants coming from the rural poor class

bring their lawyers to the place where the

dispute has occurred? The Law Commission

being aware of this situation has'recommended

that to every such Gram Nyayalaya, the
District Authority, to be set up under the
Legal Services Authority Act, 1587, shall

assign two lawyers whose services would be

5)
. J.'



available to either Sidu in need of lawyer's

services without obligation to make any

payment. If the rural poor are not to pay

court fees in their disputes before the Gram

3

Uyayalaya and will have services of lawyers

assigned by District Authority under the

aforementioned Act without obligation to

4

payr one can confidently say that the two

major components of cost of litigation will

be totally eliminated and the cost of

litigation will percoptibly go down to an

extent whrre it will become wholly bearable"

gourt Fees and Process Fees

2.100 Court fee has acquired high visibility

prof" as a component of cost of litigation

borne by the litigants in View of the

vociferous advvcacy for its abolition by the

then Law Minister, Mr. Jagannath Kaushal. It
is a complex subject and is, therefore,

separately dealt with in the next chapterc

As regards process fees, the simple answer

that the Law Commission would give,in View of
its formulations in the succeeding chapter,is
exemption limit

that those who fall in the

shall not pay process fee and those who will

26



be liable to pay court fees shall pay process

fee at the rate to be prescribed by the High

Courts.
Travelling Expenses; etc.L oi
Litigants and witnesses
2.11. Thu present situation is that the

courts of lowest jurisdiction arr generally
stationed at the headquarters of Taluka or
Tehsil depcnding upon the inflow of work,

Occasionally, a court of lowest jurisdiction

is set up with jurisdiction over 2 to 3
Talukas/Tehsils and the litigants, even from
the area within the jurisdiction of such

court in search of justicc, will have to

travel to the headquarters where the court is
set up. Not only .hc litigants will have to
travel to the court very often but, when the

suit reaches the stage of rtcording evidence,

witnesses have to be taken from the village

to the court and transported back also to be

provided song snack and food. This would
entail heavy cost. Experience shows that
after the suit reaches the stage of hearing
and the witnesses are brought, the suit is
adjourned on numerous occasions entailing the
liability to bring witnesses repeatedly to

the cc c. Not only that but even after the

27



cross--examination of the witnesses has

started, it is n t completed by continuous

hearing of the suit but the suit may be

adjourned with the obligation of the witness

undtr cross--cxamination to appear as many

times in the court as the court would cxycct
his prtscncc or till such timc as it is

recorded that the examination is complete.

Thort is one notorious case in the court at

Ahmedabad where the adjourned cross-

cxamination Covertd a period of a decadea

Unless the witness is summoned and the amount

for procuring his presence is deposited, as

required by rulr 3 of Order 16, the expenses

incur I in bringing witnesses to the court

would not be included in the taxtd costs.

Rule IA of Ordcr 16 permits the party to Leup

witntsses present without obtaining thc

assistance of the court for procuring their

prestnce and if they are kept prtscnt, the

court is under an obligation to examine them

unless it is said that the LVidCHCC of the
is irrelevant or the exercise is for

5
vexation or delay. And thert is a peculiar

witness

tendency among litigants in our country to

bring a numbtr of witnesses even where parol

evidence has little or no relevance and this

28



invisible component of cost of litigation is

sometimes hackwbreaking. There is some

scope for reducing cost under this head.

2.12. Parol evidence has its relevance where

parties are at variance on a fact situation

which cannot bL established by documentar3

eviduncc, such as suits based on tasemontn

whether a particulai passage was in existtncc

and USLHV or a passagt for water was in
existtncu and used over the statutory period
would tntai] examination of vitnessos who
would have intimate knowledge of the
existcnct of passage or water passaqc, as the
case may be. Cases are not unknown where a
large numbtr of witnesses on tithtr side are

called and oxnmincd. Thouqh the Evidwnte Act
does not prescribe numerical strength of
witntssos to prov. a certain fact, yet, in
the use of proof of execution of a document
required by law to be attested; it shall be
obligatory upon the person offering the
document in CVidLnCU to at least examine one

attesting witntss for the purposé of proof of

6
extcution. The proviso to section 68 would
make it incumbvnt upon a ptrson offering to
prove a will to uxamine at least one

29



attesting witness to prove thy same but in

all other cases if the document i: registered

accordinq to thc provisions of the Indian

Rtgistration Act, the rigour of sccticn 68

would be lessened in that the examination of

an attesting witness will not he incumbent

the prrson offcrinq such documcnt in

upon
evidcncti Why tchdtnc}. thtfL[O[L~ to
examint a larqc numbtr of UitnCS3tS to prove

a givcn fact requir(s to he curbtd but till
that is dong, there is a way out to reduce
cost of litigation under this hcadn Where
once the witness is called, his examination
This can

must be completed on the snmt day.

be achicvtd by two simple methods?

2.13. If tht covrt has set down number of
suits for rccording cvidence on a given day
and tbu L _-L finds itself unahlc to dual
with all witntsses, the Court should appoint
a lawytr as a Commissioner diructing him to
record CVidLnCt of witnesses of those who arc
prcsi in thu court. This practice is
followcd in the subordinate courts in the
State of Madhya Pradush. This practice
rcquires to be universally followedg Once

the witness has come in and the evidence is

recordud, ht/she nay rot Lt calltd in again

30



and any fﬂfthtf investment on procuring

witntssus will ht saved. Nuodltss to say

that in the circumstances hnrain mentioned,

the costs of Commissioner shall be borne by

thc State.

2.14. Law (ommission hast HUWLVGI, another

altcrnative suggestion which it has already
made in this behalf. If Gram Nyayalayas are

set up as rccumnendcd by it, it is incumbent

upon such Gram Nyaynlayas to visit thu site

of dispute vhich Ly itself would offer a
solution, In a number of cases emanating
frow rural azuas and rtaching thv courts, the
dispute CLHCILS round a road or {assage to
tht hUUSt or fitld to be Used by men, Cart

and cattlt. Thcs disputcs art anbroilcd in

ttc'nica1 rnlcs and comrlex legal
fcrnulatiwns involving foleign decisions

which havr modulated the law. To avoid all
this wumplicalcd and compltx approach to a
¢im,J; disputt, a Gram Nyayalaya, on receipt
of a disputt of this nature, would assemble,
on a date to ht notified in advance, at tho
sitc of dlS{Ut<? witnesses will be from the
samo locality, Lhﬂ} will bf prcstnt; thty can
be britfly cxanintd, and the dispute can be

resolved as yer the decision of the Gram

31



Nyayalayao This would totally Lliminatc

expenses on trans ort and snack zhargcs for

It will be a saving in timc and

7
both. Vhtﬁ it uomcs to urban

witncsscs.

monay

litigation, the yrohlem is not so complex

because tht courts are in Lha city and thg

witntsses are in thc city and they can be

kupt pr(srnt without rnch lHVLStWCHt.

Thcrufort, if those two suggestions hurnin
made BEL lﬂp1LmLntkd, uXpthSCS on transport

aruﬂ sHinCi;s of' vi tn<,s*w s as» a ormu»oru;nt of

Cost of litigation will b< Ciﬁhcf wholly

eliminated or reduced to such a level as to

bLcom< "carablc.

2.15. In this context, attention must be
drawn to Order '7 of the Codc of Civil

Procedure, 1976, whirh \mPCW([S thy court not

to grant frE.ulwus ndjvurnm(nts and in any

cast on thL ground of the convrnitnce of

lawyer. Provision of Order 17 should be

scrupulously followed and this would further

entail reduction in cost under this head.

Costs for Obtaining Cchies of Documcnts,

Typing and othtr HiSCLl1aHLOUS Expenses

2°16. Documents which are compulsorily

registcrable undnr the provisions of the

32



Indian R-gistration Act, 1308; are rtﬂistcruf

by Rngistzy sat u; under the Act, Copits of

such documtnts can be obtaiwud on payment of

certain chargcs. so Lat the wisdom of the

levy may not be striously qucsticncﬂ because

the Registry r(-n<i_rs public szgzrvic.-v by making

availnbla Cipi.C LE occumtn 3 aftur any
length of time. Rut a*L<r tht ropy is
uobt ' ad; when the documcnt is pr0&un<ﬁ in a
suit 'r vthsr 1zoc~cdinq, court fee is

lcvinblc. This should be '0ta1]) aliminatcd.

any fee mvst Lu a on; yoini

progrxhmeg OHCL
fat is paid fur o¢Laining copits of doF"Wents
which are shoun to HFVC bcun tcuiatcrud and
c"1i<s 0? whicL arc fuznishgd by the
Ltqjnir}, tr: proﬂucticn 0% a c<rtified Copy

Cf °uCh documant nntj "¢L ha swbjuctnd to a
fwtthtr lzvy vi court {Lee Thtrtfmre, any

such Ygvy must be t0ta'ly rcmovcdr

Costs gp gggpggt gﬁ A jpuynmentg

2.17, Nhi?¢ ﬂwalino vith *he qutst1on of
cost incurrad in paying travelling Lxpenses
to witnsvxcs; ntttntion has bccn drawn to
Orﬂer 17 of the Code of Civil Procedure.

Thcrcfcrc, it is not necassary harp to

further dilate cn tht subject save and cxcupt

33



'compensating the

saying that Order 17 must be scrupulously

followed.

Costs payable by the yanquished Party
to the Successful Party,

2.18. To some extent, this method of

successful litigant may

operate as a check on an utterly frivolous

litigation. But it is equally true that

sometimes a genuine claim may fail because of
nonnavailability of reliable evidence, or

occasionally by lapse on procedural front.

:9 wit, if, in a pending suit, the defendant,

or one of the defendants where there are more

than one, dies and his heirs are not brought

on record within the prescribed time, the
8

suit abates. In such a situation, the claim
may be genuinu but gets rejected for failure
on procedural front. Cases are not unknown

where a successful litigant up to the Supreme

Court lost the case when in a pending appeal

the heirs were not brought on record within
the ;' tcribed time and the court declined to
delay on the ground that sufficient

condone

cause was not shown for failure to implead
the heirs or the legal representatives ofthe

deceased party within the prescribed time.

34



Even when on account of this technical

failure a suitor is non--suited, costs are

awarded to the other side. To deny costs to
a successful litigant may appear to be
unjust. But this should not detain the
Commission any more because while taxing
costs, it would have to be ascertained
whether the other side has spent anything on
court fees and if the liligant is in the
exemption limit, nothing till be taxed undtr
the head "court fees". Similarly, if legal
aid has been obtained, nothing would be taxed
under the head "lawyer's charges"n The
remaining expenses would be negligible.
Therefore, the practice of awarding costs to
successful litigant may continue save and
except where the m tttr should be left to the
discretion of the court whtn the successful
litigant is from the affluent section of the
society and the vanquished party may belong
to impoverished section of the society. In
such a situation, the costs should not be
awarded to the affluent successful party.
But if, on the other hand, the successful
litigant is one coming from impoverished
sect: of society, full costs should be

awarded to him against the affluent litigant

on the other sider To tilt the balance in

35



favour of justicn in such a situation, even

compensatory (-sis can be 'warded under

section 35 of the Code of Civil Procedure,

1976.



CHAPTER III
COURT FEE AS A COMPONENT OF
COST OF LITIGATION AND ITS RATIONALISATION
3.1. Entry 3 in State List reads:

"Officers and scrvants of the High Court;
proctdure in rent and revcnux courts; fees

taktn in all Courts vxcupt the Supreme
Court."
'Court fee' thus is a subject within the
jurisdiction of the State. Article 148 of the
Constitution conftrs power on thy Supreme Court,

subject to the provisions of any law made by

Parliament in cxercist of the p(UkfS conferred by

entry 77 of the Union List, to make rules for

regulating gencrally the practice and procedure of

the Court with tht approval of the President.

This kule--making pOWL[ inttr alia includes the

'to the fces to be charged

power to make rules as
l

in rLSpCCt of proceedings therein'. Armed with
this power under entry 3 of the State List, by now

10 States, HBWLIY, Andhra Pradesh, Gujarat. Jammu

and Kashmir, Himachal Pradesh, Karnataka, Kerala,

Maharashtra, Rajasthan, Tamil Nadu and West

Bengal, and the Union territory .of Pondicherry

have anacttd their own laws on Court fee. The

Commission has Come to know that State of Haryana
2

has tnactto its own Court I;e Act 9 In other

States ind Union tcrritorics, the Central Court

37



Foes Act of 1870, as amended from time to time, is
in force.

3.2. Court fee has always bath a very

controversial subject: At the one end of the

spectrum, there are those who assert that it is a

tax on justice and is incongruous in a

constitutional dtmocracy. At the othtr and of the

spectrum, thtrc are those who asstrt that as far

as the administration of civil justice is

concerned, court fee is a fez levied for scrvice

rendered and it may inhcro the concept of quid Egg

As txtremc proposition at both ends of

guoﬁ

spectrum,

thtro is an error in both but when

properly analystd, each yroposition has a «lament

of truth in it. Both the points of View may be

briefly examined.

Law Commission to which work of recommending

3.3.
reforms in justice systtm was assigned by the
Government of India undertook a comprehonsive

examinat' of justice systum in vogue with a view

to recommtnding rtforms in juditial administration

as to removt some of its ugly and undesirable

so

featurust Mounting cost of litigation was
considered an undesirable ftature of justice
system btcaust it became a barrier in access to
justice. Thu situation in this behalf was
analysed. Court its was considered the most

'\



important componrnt of th» (05? of litigation.

The qucstion whet er the icvy of court FLC was

justifitd or not tnaaged thc attention of the

first Law Commission. 'India is, so far as we

know, tht only country under a modern system of

GOV(I'"Lht which dCtLKS n pcrscn who has hcon

dcprivtd of his }r0[Lrty or whosu luual rights

have btcn iniringcd from satkinq rrdress by

imposing a tax on the rumCd§ he szvksr Our States

provide hospitals which give fri< trtatwnnt to

porsovis who say «~ p!1)'Si('al.1\V'/rlnir.Iii:Hi§-"' .if1Ii('t<:("..
\

But if a pcrscn is injured in the matter of his

fundamental or other legal rights, wv bar his
approach to the Courts except on payntnt of a
heavy fCL. The for which w: Charon is so

excessive that a civil litigant staking to enforce

his legal right pays not only thu entire cost of
administration vf civil justice but also tho cost
incurred by th( start in prosecuting and punishing

criminals for crimes with which thv civil litigant

3
has no conntrn ' This sumncd up the approach to

court {er in ISRR.

3.4. T111 thk advent of the British [BIL in

India, levy of court fry was unknown" It was the

British rule that brought in its wake the

regulations which impostd court fccs. Court fees

appear to have been levied in the 18th century by

Ls)
'I3



Madras Regulation III of 1782, Bengal Regulation

XXXVIII of 1795 uﬂd Bombay Regulation of 1802.

Since then it has bacome H rtgular feature of the

administration of justice

3.5g The Preamble to the Bengal Rcgulation

justified the imposition of court fees on the

ground that it would prevent the institution of

frivolous litigation. It stated that the

'imposition of these fees on ttt institution and
trial of suits and petitions presented to the

court is considered as thu bcst mode of putting a

stop to its abuse without obstructing the bringing

"for d of just claims.' Macaulay considered this

statement as indefensible and dnscribed it, 'the

most tminently absurd Preamble that was 'ever

drawn'. In his minute dated 25th June, 1835,

Macaulay recorded: 'If what the courts administer

be injustict, these taxes art defensible or are

objectionable only as being far too lowh They

ought to be raised till they amount to a

prohibitory duty or rather the courts ought to be

shut up and the whole expense of our judicial

establishmtnt savtd to the State: But, if what

the courts administer be justice, is justice a
which the Government ought to grudge to the

4
people?'

thing

40



3:6. subject to Macaulay's caveat, court fee was

conceived as a restraint on frivolous litigation.

However, the Statts have practically considered it
5

a source of revenue. The aver daunting resource

crunch has often provoked upward revision of court
fees, simultaneously pointing a finger to the over

rising cost of administration of justice as

justification for the upward rtvision. The Law

Commission, therefore, was constrained to observe,
6
'the fee is no longer a fat, it is a heavy tax',

In reaching this conclusion, the Commission was

impressed by the fact deduced from analysis of

certain dccrecs SClLCtCd at random that court foes

formed the highest component of taxed costs. The

Commission, after observing that 'it is the

primary duty of th Statt to provide the machinory

for ti administration of jUStlCL and on prinoirlc
it is not proper for the State to charge fees from

suitors in courts', procetded to rtcommend that

'even if court fees are charged, the revenue

derived from them should not exceed tht costs of

administration of civil justice because the making

9

a profit by the State from the administration

of
7

of justice is not justified'.

3°7. The Taxation Enquiry Commission, after

collecting data for the ynar 1954, reached a

41



Conclusion that trptnditurr on administration of

justice is hightr than the receipt from court thus

in Part A States and tht sam3 was the situation in

Part E Stat'' tic. Thtrefore, vhiln in 15S4~55

rcccirt from court fcts in Part A and Part B

States was not sufficient to mart tht expenditure
8

on administration of justice; yct in 1958 the Law

Commission found that receipt from thc court foes

was higher whtn compared to rxpenditurc on
administration of justicr and therefore it
partakts tht characttr of ta" and not fCCu

3.8. Tht COUSU1tﬂtiVu Comrittrt attached to the

Ministry of Law and Justice, at its muttinc in

June 1980. set up a SUb'CONHittuL to go into ch;

qucstion of court fCLS in trial Courts" Thz SvW~

Committee in its report recommendcd abolitiwn (5

court fees. Thu rtcommendntion ct tht Sut~

Committee wré Forwarded to thc Stat; Go"ernm;ntu

for conniﬂtration and hLCPSSaIy action in th;

matter. some States O{}OS£d abolition of court

fees, Somc State Govtrnments did not oppose

abo]ition as such, but dtsircd that the Govcrnvtnt

Govcrnmtnts

of India should compensatt the State
(

x-

at least to thL extant of 50% of loan of revcnuto

3.9. The extrcisu was again vndertaken by a Subv
Committee sat up by the Conference of Law

Ministers which submittud its report in October

42



1984. This Subwcommitteg did not rucomwend
abolition of tourt f«es but [uCUWmLﬂd€d

rationalisation in the stru:turc of court fee,

broadly through reduction in ad vaiorim fee,

exemption of curtain oatcg ries of litigants and

certain categories of casts from payment/levy of

court foe and refund of court fen undur curtain

circumstancts. Anoth r imnortant rtcommendation

of thy COmFittL€ is that thc court fan on first as

wall as stcond apgtals should by 50% of the fee

leviable on thL originrl suit, uhzthcr thc appeal

is by the plaintiff or by the d»Fundant in the

original suit. Thu Ccmmittcc furthtr rccommtndcd

that tho litigants having an annual iLCC"C up to

R°--6,000 may bL exempted from fagntnt of Court

fem, If a State Covornmtnt is ir a gosition to

Cxtmpt litigants haxing inccw« highnr than

Rs.6.0UOF it Ha" ﬂo so Lzcpira in ViLP the ovtrall

impact such an zxtmption mag havr, As rwnards

proof of incomt, an affidavit by th- plaintiff may

be accaytcdi It also rCCCmPundu@ that if a State

Governmtnt finds it feasible to cxtmpt mcmbtrs of
Schedultd Castes and SCUCdUlLd Tribes as a class

from payment of court fee; it may do so"

According to the rtccmmsndation of the Committee,
women may be exempted from payment of court fL( in

matrimonial casts and Childztn may be ~rtzytrd

43



right othtr than habtas ggryusi

from payment of court fat: on suits for
maintenance. Ref(rring vs the rate of Court fee
on writ petitions und<r articla 226 of the
Constitution, it recomrwnﬁcﬂ that on a writ
petition complaininc of violation of fundampntal

thL ftt leviable

shcuiu bg Rs 100 and in tax matters RS"5PD and in
misctllanuous matters Rs.2§0. It did not
recommend any change in the ltvy of process fees
as suchc

3.10" Is the levy of Court fLO a tax on iustice?

The question as posse dots not aﬁmit e( a specific

straight BHSWLK. Administration of justice has
two broad wings: (1) civil jnstict; and (2)
Criminal justicc. Tht obligations of the State in
resptct of both mattrially differ,

3:11. A socitty governed by rulc of law with a
writttn Ccnstitution and an ingrained bill of
rights must havu rxgulatory measures called
Statutes or dclcgateé legislation adopttd by

authorities having the power to do so. Violation

rtgulaticn or rcgulatory measures is gentrally

of

made punishable. A political society, in order to
grow and dLVtlCp, must havt internal peace and
security against external aggression. The
internal peace can be LHSUIQG by laws properly
enforced and, when violatcd, by imposition of

AA

punishment.

or a contravention mas takcn clace. a f0fUm "B3

To determine whcthtr law is violated

t0



not a service rcnddred by tho State

performance of sovvrcign function of tht State and

in cnforccmunt of its duty to provide internal

peace conducivt to growth and devulopmcnto

3.120 Whun it comes to civil justiuc' the

approach has to undergo a change" Civil disputes

include disputes between an individual and

individual, httween individual and qrougs of

individuals, between group of individuals on one

group of individuals on the Othbf hand

hand and

and betwccn individuals and group of irdividuals

on one hand and State on ttt othcr, A written

Constitution with an inbuilt Chaptvr on

fundamental rights and division of powars amongst

Federation and Status providc a iruitiul ground

for disputes cc: wg into exi.t<nce. These

disputes havt to be resolved "ccausc a Continuous

simmer ' dispute is not COLdUCiVh to growth and
devolopmnnt of society. However, when tht
disputes are betwotn two individuals, say an

a husband and a wife, or

employer and an cmploycc,

between members of the same family, it is Opcn to

them to choose their own forun to get the dispute

resolved. An arbitrator appointed by the parties

resolution of dispute partakcs the character

for
of the court because parties agrtc to treat its
decision binding, The costs of such arbitrator

has to be met by the parties who agree to

but it is

refer



'fees' in a particular case depends on the
subject--matter in relation to which fees are
imposed. In this case we are concerned with
the administration of civil justice in a
State. The fees 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 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
vcxatious 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 o JBIS, subject at course to the
provisions of Article 14. 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 roadbuilding or
education or other beneficial schemes that a
State may have. There' must be a broad
ccrrelationship with the fees collected and
the cost of administration of civil

10
justice."

48



Elaborating this position, a Full Bench of the
Gujarat High C Jrt, while examining the
constitutional validity of article 15 in the First
Schedule of the Bombay Court Fees Act, 1959 in its
apglication to the State of Gujarat, observed that
it is for the State to establish that what has
been levied is court fees properly so called and
if there is any enhancement, the state must
justify the enhancement. Upholding the validity
of the levy, the court examined the broad
relationship between the levy of court fee and the
cost of administration of civil justice in order
to determine whether it is a fee or a pretence and
not a fee in reality, The ratio of the case is
that the court fee can be validly levied as the
fee is levied for service rendered. The only
thing to be examined is whether there is a broad
reﬁaticnship between the levy of court fee and the
cost of administration of civil justice. It
unqvcstionably follows that by setting up forum
for rendering civil justice, the State renders
service and is entitled to charge fee for
rendering the service. Therefore, levy of court
fees in civil justice system cannot be dubbed as

tax on justice.

3.13. In a peculiar set of circumstances, the



civil

Supreme Court of India had occasion to pronounce
on the wisdom and rationality of levy of court
fee. 'It even took upon itself some day in future

to decide the constitutionality of price for

access to court justice as being either just or

legal. without expressly stating so, the court

possibly gave vent to its feeling by stating that

when court fee becomes a barrier in access to

justice, the constitutionality of the levy is open

to question. But while giving vent to its

feeling, it did not finally pronounce on the

11

subject. The difference between tax and fee has

come into sharp focus by a catena of decisions.

It was once believed that to justify a levy as fee

for service rendered, there must be an element of

that, when ichallenged, the

guid pro guo and
Legislature must ju tify the levy by pointing out

the receipt and the quantum of service rendered.

Translating this dictum into administration of

justice, it must be shown that the

expenditure on service rendered by administration
of civil justice must bear close relationship with
However, this

the receipt from the court fees.

element of guid pro guo has recently undergone a
change. Undoubtedly, though a fee must have
relation to services rendered or the advantage

conferred, such relation need not be direct; a

mere causal relation may be enough. Further,

50



neither the incidence of the fee nor the service
rendered need be uniform. Quid pgg ggg in the
strict sense is not the one and the only true
index of a fee; nor is it necessarily absent in a

12
tax. It would, therefore, be inappropriate to

compare by statistics the receipt under the head
'court fee' with the quantum of service rendered
evaluated by expenditure incurred in establishing
and maintaining administration of civil justice.

However, there must be some broad relationship

between the two.

3.14. Those who advocate abolition of court fee
appear to be unaware of the fact that there is a
huge lay out on administration of civil justice.
A developing counrry like India, continuously
suffering the resource cruncd, cannot afford to
reach the ideal of abolition of court fee in
administration of civil justice. Nor its total
abolition can ever be appreciated. At the time of
the 14th report of the Law Commission, it was
found that the receipt under the head 'court fees'
exceeded the expense on administration of justice,
though a contrary picture emerges from statistics
obtained from the report of the Taxation Enquiry
Commission, l953--54.13 The situation today is

entirely different. Even the expenditure incurred

51



on administration of civil justice with the
services available as of today is not reimbursed
from the dreaded levy of court feeso what the
emerging scenario would be, would shock anyone out
of his wits if and when the recommendation of the
present Law Commission to increase the present
ratio of 10.5 Judges per million of Indian
population to at least 50 Judges per million of
Indian population is implemented.l4 Once that
recommendation is implemented, which of necessity
must have to be done because at present the
service from administration of civil justice due
to heavy backlog of cases is virtually of no use
to the litigant. Infra--structural services in
administration of justice will have to be enlarged

'I

sufficiently making a further demand on the
15

Exchequera Therefore, the question of total

abolition of court fees though it may be ideal

according to protagonists of abolition as such

does not merit consideration.

36150 The whole approach, however, on court fees
requires a radical changeo Emphasis up till now
has been on levying court fees on the value of the

r

subject matter in dispute or, what is called, ad

valorem court fee. The man behind the litigation

is of no consequence in determining what ought to

be the measure of court fees, nor even the social

52



evaluation of the subject matter of court dispute.
The easy and facile approach is: look at the value
of the subject matter in dispute and a graded
percentage of it should be the court fees. This
approach bristles with a market economy concept.
It means that if A wants so much relief, he must
pay so much court fees irrespective of whether A
comes from the poorest strata of society or middle
level strata or from the affluent class. In
determining court fees, A is never in the picture.
It is the value of the subject matter in dispute
which is the sole guiding criterion, something
akin to sale and purchase of goods. This approach
~ ignoring the litigant and emphasizing the value
of the subject matter in dispute - has presented a
distorted View of civil litigation. To
illustrate, for a poor man the subject matter of
the dispute in terms of money value may be very
small, yet may be a question of life and death for
him. On the other hand, a person in affluent
circumstances may have no consideration for the
value of the subject matter in dispute because he
can afford to pay any amount of court fees and
that subject matter of the dispute itself may be
of little or no importance. But in both the cases
the present approach of looking at thg value of

the subject matter in dispute, ignoring the man

behind the subject matter, has been the gravamen



dispute. The benefit of total exemption from
court fees may be granted in the following
manner:-

(1) No court fee shall be levied in the
proceedings before the Gram Nyayalaya;l7
and

(ii) Marginal farmers, farm labourers,
unemployed industrial workers and those
whose annual income does not exceed
Rs.l2,000 per annum shall be exempt from
payment of court fees.

The Committee recommended that litigants having
annual income up to Rs.6,000 may be exempted from
payment of court fee. It further recommended that
if a state Government is in a position to exempt
litigants having income higher than Rs.6,000, it
may do so keeping in view the overall impact such
an exemption may have. As regards proof of
income, an affidavit by the plaintiff may be
accepted. Its further recommendation was that if
a State Government finds it feasible to exempt --

(i) Scheduled Castes or Scheduled Tribes
litigants who have income higher than
Rs.6000 a year; 3

(ii) Scheduled Castes or Scheduled Tribes as

a class,

3018.   .
ption fro
Qranted t m payment Of court fees
° liti9ents h' '
D" I AAA ' aving an annual income of



court fee, would form two distinct and independent

the difference between an

classes. To ignore

individual and a corporate body is to ignore the
18

realities of the situation. Obviously, in the

case of companies/corporate bodies. the court fee

must be levied at a higher rate than in the case

of an individual. However, there must be a

uniform rate of ad valorem court fees in all the

States for the simple reason that justice should

not cost more in one state and less in another

State, the service being identical. The rate

structure of ad valorem court fee on money suits

may be worked out depending upon the cost of
administration of civil justice and the court fees

payable by those who have the cushion to pay the

same, meaning thereby those who do not belong to

the exempted class.

3.20. It is a sad experience that corporations and

persons belonging to affluent strata of society

use courts for their petty quarrels. In fact,

there is a body of opinion that the maximum

advantage of the writ jurisdiction has been taken

by those trying to evade payment of tax - both

direct and indirect, corporate and industrial

magnates and members belonging to the affluent
strata of society. And unfortunately, they have

been treated on par in the matter of payment of

57



court fees with the poorest amongst the poor when

there was no exen_tion and only the relief from

payment of court fees can be obtained after

declaring oneself an indigent person under order

33, rule 1 of the Code of Civil Procedure, 1976.

Now when exemption limit has been raised and when

it is recommended that no court fee is payable in

any proceeding before the Gram Nyayalaya, the

shortfall in income to meet the expenditure on
administration of civil justice must be made good

by levy of higher court fees on companies,

corporate bodies, those seeking relief from

payment of tax_and members belonging to affluent
sections of society, that is, those who are in
higher income bracket. what ought to be the court
fees and other charges recoverable from them has
been fully worked out by the Law Commission and it

19
would be idle to repeat the same here. That

recommendation may be treated as part of this

report.

3.21. The Committee recommended rate of court.fee

on writ petitions under article 226 of the

Constitution as under:-

(i) Habeas corpus No fee.
(ii) Fundamental rights Rs.l00.
(iii) Tax matters Rs.500.

(iv) Miscellaneous matters Rs.250.

I
\

S8



Undoubtedly the Committee was fully justified in

recommending no ccurt fee on a petition for a writ

And the Law Commission accords

of habeas corgus.

its full support to that recommendation.

3.22. But the Law Commission finds it difficult

to appreciate a levy of court fee of Rs.l00 only

when a petition complaining of denial of

fundamental rights is filed. Amongst the

fundamental rights, the citizen has a right to

practice any profession or to carry on any
20

occupation, trade or business. Prople who are

in any profession or are carrying on business

would be able to pay higher court fees for

vindication of their fundamental right, especially

tht right to carry on profession. who generally

invokes this right may be illustrated by reference

to * some cases? Excel wear, a registered

partnership firm, had set up a factory at Bombay

where it manufactured garments for export

employing about 400 workmen. The firm served a

no' 'e 'on the Government of Maharashtra for its

approval of the intended closure of the
undertaking in accordance with section 25-0(1) of

the Industrial Disputes Act, 1947. The State
Government declined to accord the approval which
led to the filing of the writ petition in the

Supreme Court of India. Should such a concern

59



involved in export business and likely to render

400 workmen jOb1\)S by its unilateral action be

permitted to file a writ petition on a court fee

stamp of Rs.B0 only which now the Committee seeks

21
to revise to Rs.100? Similarly, Lohia Machines

22

Ltd., a vtry flourishing concern, filed a writ

patition in the Suprtme Court, probably paying the

samw amount of court fee, questioning the validity

of rule l9A of the Income~tax Rules, 1962 which,

in the event of succtss, would have benefited the

Company to the tune of crores of rupees. And yet

the court fee paid was the infinitrsimally small

amount of Rs 50 which, under its recommendation,

could now be raistd to Rs.lO0. '?he Law Commission

is of the opinion that it is too much of an

_inJu'1encu to litigants who can afford to pay

aduouately (oi the service they obtain from court.

when tho Snprxmc Court Of India took the View that

a statutory corporation or a company registered

under the Companies Act, 1956 is not a citizen

and, therefore, cannot seek to enforce fundamental

right granted to the citizen by filing a writ

petition, a device was resorted to to make the

company/corporation a petitioner along with one of

its directors. And this device has succeeded.
23
And the giant corporation pays negligible fees.

Therefore, the Law Commission would recommend that

00



not o treat uncquals as equals

when a company/corporation/statutory corporation/a

body composed of individuals but excluding trade

unions seek to enforce any fundamental right, the

court fee payable by it must not be less than

RS.],0OO.

3.23. similarly, where a tax demand is raised and

questioned by way of a reference under the Income-

tax Act or by way of a writ petition, the court

fee lcviable shall be not less than 10% of the

value of the demand involved in the dispute. The

approach of the Law Commisson in this behalf is

in the matter of

court fees. A classification to be valid must be

founded on intelligible differcntia and it must

have nexus with the» objects sought to be

24

achieved. Those who use the court service can

be divided into two classes namely: (i) those who

have cushion and who can afford to pay and enjoy

the service of civil jUStiCL administration, can

11
be classified separately from/tgose who can ill--

afford to pay for the service. This

classification is based on intelligible

differentia and it has a real nexus to the objects

sought to be achieved namely, removal of economic

barriers from access to justice. In the approach

of the Law Commission, there is no violation,

threatened or apprehended, of article 14 of the

61



Constitution. The difftrential treatment in the

matter of payment of Court fees between

corporations, companies and bodies of individuals

and taxpayers on one hand and others on the other
would be justified on the theory of
classification. Such a view was also expressed

before the Committee by the Advocates--General of

Ktrala and west Bengal who asserted that there was

no justification for extending concessions in the

matter of court fees to the companies. They

advocated differential rates of court fees for

payment by individuals and corporate bodics/

They wcrt of the View that there is no

companies.
25

constitutional bar in so doingi

3¢"4n The Committee recommended that the court

I.

fee on first as well as stcond appcals should be

50% of the fee leviable on thc .oriqinal suit,

whether the appta1.is by the plaintiff or the
26

defendant in the original suit. Now it is well-

settled that appeal is a Continuation of a suit.

If that principle is applied, it is gravely
doubted whether any court fees can be levied

depending upon the value of thc.subject matter in

disputes at different stages of the same
litigation. However, since the hoary past, court
fee is leviable on the memo of appeal also, it

would he a sudden about turn if it is totally

62



abolished. Thurcfore, subject to exemption clause

as hcreinabovt st.:ed, the Law Lommission would
concur in the recommtndatior of the Committee in

the matter of court fees lcviable at appellate

stage.

3.25. The Committee also recommended that the

question of levy of nominal fee on tort cases may

be rtferred to the Law Commission for its
27

examination and recommendation. The maximum

litigation for compensation by victims of tort or

by dcptndants in cast of death is under the Motor

Vehicles Act. Section 92A provides that where the

death or >ermancnt disablcment of an' erson has
L 5 P

resulted from an accident arising out of the use

of a motor vehicle or motor vehicles, the owner of

the Vthiclt shall, or, as the c(sc may be, the

owners of the VChiC1LS shall, jointly "and
stvorallyr be liable to pay compensation in
respect of such death or disabltmont in accordance

with tho provisions of the section. This is

L

styled as no fault liability, Section 92B makes

provision for payment of higher compensation where

the death or injury has bten suffered on account

of the tortious Cﬁnduct of the p rson in charge of

vehicle and the owner of the vehicle. Suction 94

makes it obligatory to insure against third party

risks every motor vehicle before being used in a

63



public place. Section 110 empowers the State

Government to set up Claims Tribunals where those

entitled to claim compensation on account of death
in

or bodily injury by the use of motor vehicles

public place may institute their claims. Almost

all the states in India have set up Claims

Tribunals and, with ever expanding surface

translort, on an average 40,000 persons per year

become victims of motor accidents. The petitions
claiming compensation are filed in large numbers.

3.26. when a victim of a motor accident dies on

acc '.t of the injuries suffered by him in the

accident caused by wrongful act, neglect or
default, the wife, husband, parent and child, if
any, of the person whose death shall have been so

caused are entitled to initiate an action for

28

damages. In Indian conditions, generally the

bread~winncr who is on the move out mccts with an
accident and if he dies, the family is rendered
destitute. The wife would generally be a non-
working woman and the children may be minors. The
death of the bread~winner would raise the spectre
of struggle for survival from the next day. Now
if dependants of the deceased are reduced to the
state of destitution and have to initiate an

action for damages and if ad valortm court fees

are levied on the claim for damages, in large

64



numbnr of cascs, either the claimants would have

to resort to Order 33, rule 1, of the Code of

Civil Procedure or givt up the claim. The action

for damages by the dependants of the victim of

accident has to be viewed as an action for social

justice via social security. The principle is of

restitution. These are cases which invoke all

humanitarian considerations. A levy of ad valorem

court furs would be inconsistent with the spirit

both of legislation and the overall humanitarian

consideration that must inform such litigation.

3.27. The Committee has given in a tabulated form

the information received by it from various States

about the lcvy of court fees on petitions by the
victims of the motor accident claiming
compensation. Tht lowest is a court fee of

Rs.1.2S providtd for by the State of Punjab and

Union ttrritory of Chandigarh, whatever be the

quantum of damages claimrd. In other States, the

levy commences from Rs.10 for any amount to a

tixed fee plus certain percentage on graded scale
in differtnt slabs of compensation. The

suggestions received by the Committee were, at the

one end of the spectrum, total exemption from

court fee as recommended by the Government of

Andhra Pradcsh to, at the other' end of the

SpC\.LUm, Rs.200 for claims betwccn Rs.l5,0D0 by

65



Government of Madhya Pradtsh and on a graded scale
29

by Government of Maharashtra. Lcvy of court

fees on petitions claiming compensation filed by
the victims of motor accidents have given rise to
a very nefarious practice of some lawyers sharing
the booty. There are two guiding considerations

why there should be levy of no court fee in the

initial stagc of the pitition before a Motor

Accident Claims Tribunal, namely, that in most of
the cases, the bread winner is either dead or has

suffurcd ptrmcntnt disability and thu income has

stopptd and the family is rendered destitute. And
stcondly, if court fee is levied, the invustmcnt

by Jugal profvssion can hardly be avoided.

3.28" Champcrty if proved constituttsprofcssiunwl
isconduct, and yet 0 what extent it has corroded
the profussional ethics may bi gauged from a

reccnt Case published in the print media,

justifying the contzmptuous epithet 'ambulance

Chasers'. One Manibhai Zcnabhai of Mahudha,
District Nadiad, Gujarat State, met with. an
accident in 1980 in which he lost his riqht leg
and his wife Manguben received tatal injuries and

his son suffered scrious injury. Manibhai

Zonabhai and his injured son cngagtd advocate

Dilip Patti of Nadiad and instituted a claim for

comptnsation in the Motor Accidents Claims

66



Tribunal; Nadiad. The Tribunal awarded Rs.59,02S

The amount was IGCCiVLd by his

5646

to Manihhai.
lawyer and credited it in account Non
maintained in the branch of Rank of India at

Kathalal. Aftcrwards, in settling account of cost

of litigation and his fees, the lawyer paid only
Rs.3,500 to Manibhai, appropriating an amount of
Rs.S5,500 to himself. Claimant Hanibhai called
upon the lawytr to rtnder account and pay up all
the amount deducting only leqally payable fees.
Failing to get any satisfactory rcply, Hanibhai

filtd a suit through his advocate Raojibha' n the

Civil Court prcsided over by Judge Mr. Nankad at
30

Nadiad. Victims of accidents become victims of

aggrandisemcnt because thty are unable to pay

court fees for initiating action Whkﬁ on the
quantum of damages ad valorem court fat is levied.
Thcse are two vital considerations why the Law
Commission is of the firm opinion that no court
fees should be levied except a token amount of
Re.l on petitions by victims of motor accidents
before Motor Accidents Claims Tribunal3'y
Undoubtedly, when the petition tnds in an award in
favour of the claimant, the contesting respondent

should he Callvd upon to pay court fees to the court on the amount awarded. But if the petition is dismissed for any reason, victims or dependents 67 of victims of motor accidents should not be required to yay an' court furs.

3.29. Recently, Parliamint has enacted The Railway Claims Tribunal Act' 1987. The Act ampowurs thr Central Government to establish a Claims Tribunal, to be known as the Railway Claims Tribunal, to ixvrcisv thc jurisdiction, 1 rs and authority ccnfe rr(.d on it by or undm; the Act. sLCtiCH L3 CChi&[S on the Claims Tribunal all such jurisdiction, powurs and authority as ware Lxtrcisahlc before its constitution by any civil court or a Claims Commissioner appdlnttd under the provisions of thc Railways Act, amongst others, fcr comptnsation for loss, dLStfUCtlOH, damage, drtvriuration or HON-dC1iVL[y of animals or goods entrusted to rﬁilway adminittration for carriage by railway and compensation payable under suction SSA Li thr Railways Act. Svction 82A spucifird liability of railway adminisrtration in rvsprct mt accidents to trains carrying p::s::\_nc_;« rs. Anynmz clrximincg ccm;_"ux:i.ati«~n may make an nyplicaticni to the Claims Tribunal. Sub- of SuULlOn 16 provides that every such be section (2) application shall bu in such form and ncc<'n1;'ani<<2 by such d<»<:unu~nLs nr <;th<.r <.vid(.-nce and by such fro in rCSDLCt of thy filing of such application and by such other fiLS for the service 68 vz txpcuticn cf PYUCLSSLS as may be prescribed"

RLQ(iOn 30 which vnfcrs pfwL! t« make rules to H2.» provisions'. of H1: 1\(,L alia Lurty out pxwvidcs that thv rules would prvncrihc thv form L. npp1i«"tiun, the GLCUHEHLS and cthtr tvidence tv ht accompanird with such appliratinn and fee in rssynct vf filing of such npglication and fro for th, SCTViCL gr cxccution of yroctssus under sub- srcticn (2) uf section 16. An unquiry revealed that the Act Cﬁmu into force in Dccembar 1987, but tha: Ruins undyz' tin Act l1avc- still ncn; been frwmnd 3\3U. rut it not by furgcttun that ccmpcnsaticn to victims vt ncriécnts partakxs the (hnrnctnr of S('L'i'\I j\\$:i i(:u «wr 1 L31 i. f ix: CIIE-L" cat c]i sz:t)1<.nu;r1t ans centumplated by €'tiClO 4] of th' Constitution, For s'.u\'h r\1jl"t()[N oht:~.im_d in Um farm of Svcicl jus-itp, if {ML is rcquireﬁ to pay court f1L, in man; cnrvs, rtlicf wiJ1 bn unattainable"

whun thu Rules under the Railway Clnims Tribunal Act, 1937 art framad, hcptfully, the Law Cenmission wculd vxpuct eithtr a provision that no cuuxt fut wculd ht lwvi<d or a token court fee of R0,} may be lcvimd.

3.31. At the hppanl stwgt, IN) vourt fee shall be lcvi<d if Lhu npptal is ccnfintd to 2 claim upto Rs.10,000. For any amount ovur Rsol0.000, a court furs at the rate cf 5% of the amount involved in nypenl should he lnvird. Let it In remembered hrrv that sinea tho naticnnlisation cf general insurance, in View of a statutory provision for compulsory insurance for third party risk, in every pvtition for compensntiwn by victim of motor accident, General Insuranee Lerporation or one of its subsidiary comgnnies is n partyo If the petition culminates in an award, ordinarily costs are QURId(d which would include court Fees and the CtHLIQi Tnsuxnnct Cvrporbtien at its subsidiary will have to pry the Court fats. Therefore, the maximum court fLUS would C(m€ out of the pocket of a public sector undertaking, This is also one of the ccnsidrrnticns why a differential treatment is to be accorded to lqvy of court fees on petitions for ccmpensatimn by victims of motor accidents. 3.32. Apart from thn claim for comptnsation by the victims of meter accident or, whert death has occurred, by tht depandants of the deceased, in almost all tcrt cases, the principle is the principle cf dnmages for civil wrong suffered"

There might be a claim for damages fer tort of defamation, trtspnss, assaultf batteryr wrongful Confinement and alike. In this clnss of ;es, the QULStiCH ef any humanitarian principle permeating tht litigation does not arise. 70 Therefore, subject to exemption clause, keeping in view the individual, ad valorcm court fees should be levied on the claim for damages. 3.33. Subject to the recommendations made herein departing from the recommendations of the Committee, the rest of the recommendations of the Committee are deemed to be endorsed by the Law Commission" The recommendations of the CL zittee are set out in the Aggendix for ready reference. CHAFTER IV ANTICI PATIONS 4.1. The ideal to be pursucd can be summed up in one S€HttHCt: economic disability of any kind shall not pftcludt a man irom having access to justice. whatever strata of the society he comes from, the affluent or the impoverished, each should have access to justice unimpeded by any kind uf economic barrier. Even a developing socitty may have to formulate this as an ideal. If idrnl has to be kept in view, he Law Commission could not have evolved the aiproach it has dons in this report nor the Committee of Law Ministers could have backed out from its 1980 stand of abolition of court fees to 1984 stand of rationalising the same. The approach of the Law Commission, tP*TcfO[L, is generally earthy in this bvhalf, being pragmatic and not dogmatic" The Commission stands on the firm ground of realities in its view, every recommtndation that it b(.'C-'1 U12', , makes -- and by now they are innumerable in terms of figurts w yet each one has kept in view the rtsource crunch of 0 developing society" The Commission, thtreforv, went to the other uxtreme of pointing out from where additional {esources lay out on administration of justice can be 1 gentratedn for 72

4.2. Thwrofcrv, the sevond approavh is to take from WhL[( if is availablv and to uxtcnd it where it is ULCdOd~ That justifits in this report the theory uf cushion and the classification based thireun. That in fact is theory cf taxation which permits hightr brackrt income group paying more tax, thiunh s«rviccn vf the State are available Cqually t< th(SC whv pay and thnse who cannot affurd to pay. This larger princiylo must inform tht cppzccch of the Law Cummissivn till such time abolish as thv State is in a position to tvta}]y Ccnit {cw irztrptctive (E the status nf the persvn, uf the strata from which he i comes and the g(hdLf. The Law Commission hopes that we will be able to reach this iﬂ ~1 in ncnu-tcr~distant future.

4.3. But till thun thc question is what should be the guiding Ccnsideralion. And hCt( the Law Ccmmissiun's nyprnach departs from thv standard accepted ti)? ncw, nnmziy, thv cmphanis on subject matter (f disputt rather than an litigant who comes t( ttt cuurt. Up to now, hrhind thL mountain of 3? vaiuremicm, the litigant has been mado invisihjt. It is the liticant who needs the Scrvicus of the Crnrt. It is his apprrach to the subjcrt mnttur of the dispute, its evaluation, its H place in his lif<~sty1€ .th3ﬁ is 'J x.» mniw ri'~I" A z¥is;u:LL in<WJ1k'iH9 inf}? U'"' '"9Y '"3 of ]it11' (r up vnluw tr =nc d«n1inq in billions. Ent 0 <HsjMnL inv;'vinq a few: YUFLVS nv JOKE or me: v yv<1 nor (K uns in nanv-toc~h2ppy circuucrnnncc. Thtrcfrxe, th< hasic approach has h_gn tt xxmwvq thv mountnin of :g Eqlgggmigﬂ and t( mzku tha invtsihlc litiqnnt xisihlv and he will hy the starting {tint (f all Cvnriﬂerntivn for th. l»;~s*.ic,' .'~;'[')<_.'1(',}:- in this vvuii tans. That is !'£}(1IL

4.'. Pw~ﬁ it nwqd furrhwr innti!iww1ivn7 Thu IV-pnr'rm<r\f « F .1un! ir<\ r£inir:!r3 at Law .1nd Justicv, wbirh fyrwnrdvd thy ruy<rt of the (vHmi'tr« at Law Hinistzrs itsv1f prvvidts the r1ti<na1u frr ihis ~ppr<nrh, Al an invwnvrnivnt mamvnt in th- drv I pm.nL (f thxs cnnntry, in 1?{0; 1!» flux) 7ommjttoc yur uvd fh« id<:ﬂ. The Liv («vw*~siwn rvnld hnvv Yuan very huvpy to he in tuna, w? i h H': 2.: r1:~m(» l 3 ; m"~< Ii f irn .f (Hz.-."«'.'r'(Z C(;UY.'t 1«w'f !w'9 In ¢«r«; tlw Ignr C(1m"j:v:i<Iv*:tL};:ad in, thr CxWWit[L\ ~f thu Law Hinisturs r<n1i%LiCn]1y It pyriiced thz situwtinn and rcfninnd cvurt fees (UH! I-tuwnm nda<?< nl§' r1ti<m111iﬁJti<I1 fh\rx.¢Q

4.Gv Thu Law («mminsirn ﬁtill pursnus the ideal but in pztr 9. . 'I'ln: Law CL mmi ssivn r<~cmnm<:r1c1s that anyunc in rccLi;t of ﬁn incxme up tr Rs.l2rO0O par 74 annum nr tht nthtr vlassem specifically art out in tho rcyurt shall bx totally (rump! frtm P0Ym9"t Of Court tee in any nattir ht any stnqs of the prbcccding. This is abnliticn in favour cf those who dcstrvt it richly. But 0 duvelrping society neuds ILSQUILCS and, therefore, the ccurt fees and the strvicc crnrgcs of civil Gdminintratiun have bLCH considtrably raised in respect of those g«rsuns who will Hut fcul tvcn the slightest handicap in access to courts hucnuse of the rcvistd court fees vr ruvistd KLCLVLKY uf court To \ chnrgus. T! them it is u fly" bite. F1 7, Vi('1 thx; State it i:: an jlJPLrl:W1t in1«t cl' inccuus fur expanding SMIViCUS nf administration pf justice, 2 as rvcummundal in some carlicr rtpcrtse Thtrcfcrc, no rnc cun say that tha apprlnch is utlgian. And that LS the justificat:'.<~n= 4.6. E*ut»ti, tht Law Cnmmi:sion would be extrtmuly hupy} if the State Gcvtrnments LT the Gcvtrnmnnt vf India, #5 the case may bk' View the court fszs as something inczmpptible with, a socizty q<vcrn<d by rule (f law and wguld, thtrcftxt, like tv abolish it.

4.7. After an inordinate delay tf nunrly two ycais since the Ccnstitutiun uf this Ctmmissicn, assintnnue of iive experts was prrvidtd to this Commissi<n by the Gcvernment uf India, each expert 75 having 3 tim( span cf six mcnthn~ Each one of Hmrv undtgrtcx-k tr wrrrk cn different Sf-C"C5--fi€d ttpix 5:' I'r~ I H.C Dhvl.".ki1A fh sci « E thc Faculty «f Lnw, Nnharnja Snyajirnc UHiVulSify at Baroda, Lgrifd ta acsist th< Ccmmissivn by undertaking a 1L»3:u::r'ch (n Hm qut,:'.tiLn cf '('«.L:.t Lf litigation'. Th; Law Cpmmissicn must nxpress its grateful th.':nk:: fur Hurassistancut rcCe:i.ved frzm Prof. Dhulakia, which is h»rcby acknuwlcdgnd. { 2 X4;

(n./x. msm) cnr.1m;m /' ﬁ9'v\,\»-- I\- In "" ' ('v 'H 7-'."\I's]\. l'F'.\'I' I-\!'H"»l'ZR S!-.< RI"/l'!\R':' m:+' v m m , .T='.!'.' 3 I'm 7 6 Norms AND_g_r_:_FERL:NcEs Chapter I l. LCI, 127th R21-('rt on R£.'SL'L1K'(,'-"' Al]C'Cat'i(."n I701." ' infrnshructnrwl Sarvicmﬁin Jndicinl Administration- (A Continuum of ths Report on Manpower Planning iﬁ Judiciary: A Blueprint).

2. F. Cappellottj (Edited), Accass to Justicc,V01 I Book 2,p.¢15.

3. 39,, p.916.

Chapter II (I( - '. -- I 4' For list of cases where litiowtion expenses have been held'to be doduCtib1c,Ch3turvwdi and Pithisari3,Income Tax Law, vo1.2,p.1403 (3rd ed,1983) (2. LCI,ll4th Report rn Gram Nyaynlayn.

3. gg.,para 6.15, p.36

4. ;g., para 6.12,p.35.

5. Mange Ram V. Rrij Hohan and Others, (1083) 4 SCC

36.

6. Indian Evidence Act,1872,SectiCn 6.

7. LCI,1l4th Report an Gram Nyayn1aya,parn 6.6,pp. 30-32.

8. See Order ??,rul«s 3 and 4 of the Cwde of Civil 4 Procedurc,1976.

77 Chagt-.cn__1_1_;

go I Quid 0.0

10. ll.

12.

13.

14.

15. Art:i.<~.1.~ 115(1) (F) , The ('~»nst.H'.1tj"'n Hf.' India. The (jnurt {V-r; (I{n"yarm /'.rnoI1<h1'*n?". Act 1974. LC1,14th Rcport,Vh1ptor ?2,pnrq 1, .187, Report ('f tho (',on~.mittn,-'é <=f 1-mw Min sbétfs ='I1 Ratj.mnli::a+.;inn (-1? Court fee, Octr'-ber 1984:

3-4 P1' -

To ilmst:J'tx(;=é., in Hnryanrx no curt' foe st' mupn were ].evia1"lo under S 110A ('F tho M*t.(~r VohJ'<'l«'."> Ft:

1039 f('[' pqyxmxul-. <4' c<~xnp«-rmmti n (~,1.l_1 10'?" whwn Fm muonduvnm; was J'm:r«w3ucad nrovialinav thﬁt an a1'pliCatiOl'1 for claims ('f cc\mp»nsat1'_:n uptr fwrty th: '1S._')Il'.'3 rupees shall bear' <*<-nth You pf I' 'n rv1p»;éc.<~. arlrl f<~r: avy sum abcvo this :>rt1<'L1m: the C U."t fan shrwll he rnr:---f:m1rth ('f thv :w.m<~ur1t: c1nv:g1x1b]g_- 4:3 mm :_1r._1 \/F1]."1'.'(,!II\ fee <"n the instit-.ut;ir~n of :5u.i.ts3 undm' c<~n1't fvcs ./'xct',.'l.8'70 soc Rule 2?,Funjn% Motor Accident claims Tribunal (liaryrmax Swvonth 1\m~ndm_mt) Rules 197". Sugra 11ot~;~. 3, pnrsx 6, p.-199 _]_:_(._1op I'1"--1 'I2;]'orT'()9 Rcporst rf t:.h~' '1'n_\'at:J'«*n Emmiry (_'.ommissJ'un,1953, VOl.3,p.107, Pr"vce:;:"j_n,::t vf? th; m.«:<?tit1<x CE Cwnsulhwtivcé <'.'.n~mmittee hold on Nmv, 2?, I997 .

v.Z0.nith Lamp 1nd 1973 :}C 7.213.

('f I*hC{L"1s A I R Governmént Blwctricnl Ltd,, M/rt C«:n?:rn.1 C: 11 Fields Ltcl v M/3 Jaswal Crnl C0 1980 (Emppl) SOC 4'71 Ml1!1Ci]""':l C:~rp«:r.1ti(~n wf Delhi and 0t'hc1":: v.r-Iohvl Ynsin,(1Q83) 3 ncc 279.

Sugra nvte 3 at 306: sup__J:a nute 8. LCI, 1?Oth Repurt CH Manpnuzr plnnvinq tn Judiciary: A Blueprint.

12'7t.h P,-)}_(I"t ("U Rosuufrje Alloc-»t.i<'n fvr Infra--.<:tructnrn._1 E;m*\;1'c<~s in Ju11'r:iw.l .7\J.vn:Ilrn':3trn.-..;,<'n -- (A C'.<~ntinuum cf the '.'~y'<"ft vn N.mpow-zr Planninq in Judiciary 2 A R_lr.1op1'int;) .

LCI, 7L5 Chagtér Illggcntql

16. Sugra nctc 4 svCti"n VII,pnra 3,p.40

17. For justification, see LCl,l14th Report on Gram Nyayalaya, para 6.15,p, 36.

18, For detailed rcasvns and justifk:aticn see infra note 19.

19. Fhr a fuller End cumplote recnmmendwtinn On this point, reference may be made to Su ra nﬂte 15; Ch8Pt€F V: P3535 5.15 tm 5.19 and especially para 5.18.

20. Articlc 19(1) (q) Th" Constitutinn of India.

21. Excel wear v.Unicn cf India, (1978) 4 SCC 224.

22. Lohia Machines Ltd, and hL«ther v.Union vf India and Others, (1985) 2 SCC 197.

23. Delhi Clvth and General Mills v.Univn of India,(1983) 3 SCR 438.

24. Sugra nrte 4, para 8.15,p.16.

25. Int'? Special Courts Bil], AIR 1978 SC 478.

26. Sugra nttc 4 section VII, para 11, p.41 27, _2§_q., para: 34, 13.43.

28. Section 1A Fatal Acrid:nts Act, 1855.

29. Sugrg note 4, pw"*' 30.1 and 30.2 at pp.29~31.

30. Gujarat Samachnr Daily published from Ahmedabnd dated June 15, 1988, p.7, c<1umns 5 & 6. mmgmrlv

1. LCI,127th Report on Resnurcu Allocation for Infra-structural Services in Judicial Administration- (A continuum of the Report vn Manpower planning in Judiciary : A Blueprint), Chapter V,

2. ICI,120th Report on Manpower Planning in Judiciary:

A Blueprint; ICI,121st Report on a New Forum for Judicial Appointments; LCI,127th Report,§ggra note 1. 79 £:i'P.e!.1§.i2';

.£1.F3.P.9!£I.i3£;.3'£ii;-. ..CQ&.*£?1£l'§'.f§E._Q.F...1:M..Pi1lB.L3.T.!ﬁBS ON rr<I\TI0NALISATI0N COURT__"EE, ocirossm -19234 Summary o£_ConclusionS/Recgmmqndgjigggi; 9_.t;!!.e.r.a.li

1. Over thv years, several States have raisou one ad Valorom fee on money suits by many times over what was pres» cribed in the Central Court Fees' Act, 1870. The rates vary from State to State and widely in a number of States. A ceiling of h.3000 on ad volorom fee n money suits was prescribed in the said Act of 1870, Now there is n ceiling ranging from $.10,000 to h.15,000 only in 9 States.

(Paras 4,116.4 and 5.5)

2. The Committee recommends rntionnlination in the structure of court ikw>hrondl3'through roductinn in ad valorcm £S€6g§¥§@§t%Encgéo§0f;hmnpS§$tg87ih3y(£floEu§tn}eo?ngn3e;g?$ﬂd of court fee in certain types of cnses Para 5-2

3. Hnving rcgr_:u'(! 'tn the level of dif1'(>r'm1('r: in the socio-~ economic conditions among States, the Committee fools that it mny not be practicable to have uniiorm rate of court fee throughout the countrv in respect of all mnttcrs. (Para 8. 1h) £\<.1.v21.c.u.:eLn..§99r.t..£ss:

4. Kevplng in view the financial Constraints the system of levy in court fee on ad vo%orem bzsis on money suits and othnr 1tems,SuCh as application or grant of probate/letter of adminirtrniion and issue 03 succession oextiiicetc may contin"2 for the present, ( Para 8. 3)

5. The rnto structure of ad vnlorcm fee on money suits in different States may be reviewed and revised so that the rate tapers from 10 percent in the lowest slob to 1 per cent 5; the highest slab. It may be left to tho Stwto Govcrnments to determine the n1~hs for differunt twpering rates. This however does not imply that where the rnte is lower, it nhould be raised to 10 per cent, The 10 percent nd vnlorom rate at the lowest slab is the maximum limit, (Para 5, 8)

6. Though there is no logvl requirement to have a ceiling on court fee, it is desirable to have a ceiling in States where there is no such coiling. A ceiling of m.30,oo0 on Cour"

fee would be appropriate. (Pqrq 8 12) C (C .

. .-nggq ..-u o_.¢.--

The Para Nos. indicated above relate to the above mentioned Report of the Committee.

---u_...-- .. .

Notet 80 Contdooooovooo 'fi

7. The Committee does not recommend any djf rential rates of court fee as between individuals and comp 4185 Corporate bodies. (Para 8. 16)

8.' The rate of court fee on applicwtions for grant of probate/letter of administration may be as under:-

Value of;gropcrty Rate of Court.Fee

(a) Contested gases

(i) Upto k.1 Lakh No fee

(ii) Above %.1 lnkh but not more 1 % of the value in excess of m.T-lakh than %.2 lakhs

(iii) Above M.2 Lnkhs Fee for k.2 lakhs plus 1% t" 5 % Of the remainder; (5% being the maximum); (Taperfing rate for different slabs to be determined by State Governments).

(b) Uncontested cases (1) Upto m.1 lakh No fee

(ii) Above m. 1 lakh §% of the value in excess of %.1 lakh ( Para 9. 8 )

9. The Court fee on application for issue of succession certificate under the Indian Succession Act, 1925 may be e as under:-

(a) Contested Cases (1) Upto m.25,ooo No fee

(ii) Above m.25,ooo 1% to 5% of the value in excess of m.25,o0o (5% being the maximum.

Tnpering rate for diffe-

rent slabs to be determined suitably by the State Governments

(b) Uncontested cases

(i) Upto m.25,0oo No fee

(ii) Above %.25,000 i% of the value in excess of m.25,ooo (Para 9.11)

10. The present system of levying fee on applications for review of ﬁudgment may continue. (Para 10. 3)

11. The court fee on first as well as second appeals should be 50 percent of the fee leviable on the original suit, whether the appeal is by the plaintiff or the defendant in the original suit. (Para 10, 8) 81 :

contd....

.,.,.'.... -...,..... .... -gs ... - . ._.-, r...-._. _...- ,,_

12. Litigants having annual income upto k,6,000 may be exempted from payment of court fee. If a State Government is in position to exempt iitﬁtants having tncome higher than k.6,00U it may do so, keeping in View the overall impact such an exemption may have. As regards proof of income an affidavit (Para 12.4) by the plaintiff may be accepted.

13. If a State Government finds it feasible to exempt:

(i) Scheduled Caste/Scheduled Tribe litigants who have income higher than k.6,000 a year, or

(ii) Scheduled Castes/Scheduled Tribcs as a class, from payment of court fee, it may do so (Para 13. 2)

14. Women mdy be exempted from paymcnt of court fee in matrimonial cases. (Fara 1a and 28,2) 15: Chiidren may be exempted from the payment of court fee on suits for maintenance.

16. The recommendation for exempting litigants with annual income limit of m.6ooo would take care of the interests of most of the indigent litigants. Th- existing provision for exempting an indigent person from payment of court fee and for realising the some in case his suit fails or is withdrawn or is dismissed or when it abates may continue to apply in the case of indigents, if any, with annual income above k.6,000. (Para 16.2)

17. The income limit of %.6,000 per annum recommended by this Committee (vide para 12.h) for exempting litigants from paymert of court fee wouln takc care of tJ€ genuinely need people amongst socially/economically weaker classes. (Para 17)

18. The interests of those living in backward States will be taken care of by the general scheme of exemption 'commended by the Committee on the basis of income limit. =(P; 1 18)

19. Economically handicapped among the physically and mentally handicapped persons will be taken care of by the recommendation made with regard to exemption based on income. (Vnrn 19)

20. General Scheme of exemption based on the limit of income will largely cover the interests of landless persons, debtors bringing suits and proceedings under Money Lenders' Acts. (Para 20)

21. The general scheme of exemption recommended by the Committee on the basis of annual income should take care of the interests of most of the agriculturists who need assistance.

82 CO1ltd.....

.e , v_$ during drcgught ete]'b' COI'tC<3I'I'1ed thnl remission may hr given by the the situation so demands.

So far as Pﬂljif the Committee rccnmmcnds State Governments as sud when (Farm 21) It mwy nut be fair to give any Sp{CiR1 treatment to Government servants. They should stand on the same inwting as other litigants.

(Fare 22)

(ii) Nu wvvwpti n nttd he given to omplnyeus as a class from pﬂymuﬂt of Cwﬂrt {to on mnttrrs pvrtnining tn service eonditjons.

22. (1) (Para 32.3)

23. The y«ncrnl yxcmptinn h-Sod un inenno limit will boavailablc to worhurs too ns it wi1l'hn 3vniLwhlr(fgrgtBg§s. 2h. All liLiH"nts who Filo vnsws bgfnrw the Nyaya Pnncharats mn be oxomwtcd from evmcntof Court fee if not 3 Y I D \ 9 exempted nlrcnly. (Para 24)

25. It will nut be a prnctirqble prnpositiwn to exempt suits of a givrn valuu from court fee. (Para 25.6)

26. Lr_g"]e wir! ("1:'\r,,-S (<:>'C<>pt C'-.'15L.'F in which .'.1UC}1 aid is given also to porsxns hwving incnmw of morw th~n $.5OOO a year) will automatically be v~vcred by the ruCommond:tiun made for exemption based wn snnndl incwmu limit. (para 27.5)

27. To oxuupt 3 litigant frrm pwymsnt Hf court fee or t(' rwrdticté !1'0 «~11 'x smnif fkvr rm vc»vL'F§' mt' DCWTSL*S:Li(H1 <~f' a IlOl1S(:

owned by him even if that be the cnly housu he has, is not practicable and ncnnrdinrly nut recommvnﬂcd. (Porn 33.2) !.L.«.*.U.<.>_U :-:y_.i_n_l LU_r:.t. "99

28. in IK!ﬁ'tCt In' vases vwﬂ:wting tx)zw\tnr avcidents claims, POCOHmCHUﬂTiwH is as Jwllowa:

(i) Thy cnurt lac pbycblg hy thr claimant before the Tribunal should be %.1H uptw %.1 lakh.

(ii) If the amount clnimed vxcvuds m.1 lwkh, the fee should be é per cent vf the amount in excess of k. 1 lakh.

(iii) In cases mvntivncl in (ii) hbovt, 50 percent of the fee may bt paid at the time 3f filing the claim and the remaining 50 per cent may bc paid after the decree is passed.

(iv) In calculating the fee paynblc under (iii) above, the amount decreed, and not the amount claimed (if there be a difference between the two) should be twken into ace unt. anitsblr adjustment may be made, keeping in View th( fnv paid at the timv of prutcr1ing'Lhe claim. (V) At thy utngu of vppeal, fee should h« ynid on the amount of «!i.ffer-.nce bwtwuen the 'I'r1'l=Iun.'I*l'f: 7"'-'..','!I'd and the amount cl:imed in appeul, at the syn; rate : wn a money suit. = _ (per? 90.5)

29. In land ncqnisitiﬂn cnrws, the cvurt mny he as under:-- -93-

(i) A nominal fee to be charged vn an application for "rcfrrence" to thv court against the Collector's award.

In appeal against the decision on "referunCe", 50 per cent (€ the ad velorem fem as on money suits to be charged on the amount of difference between the amount claimed and amount decided by the court. (Para 31.5) _R._u;f_u£15e11lle1:I.i_s§.i.on. 0.£__L".c.*.U__I'12..F.e.e.-

30., The Svh0:~ of rvfund of court fee on casts which are CWJ rUHiSkw1')QtwVU" the \artigm;<u1tside the count ma K be as UﬂduF:-

Comprsnisi cases Fxttnt of refund of fee recommended (8) (i) Before Eraﬁinn of jSSUrS 50%

(ii) Before r cording of cVidcnCv _ 25%

(iii) At any wther stage of pcndency 25%

(b) If the Compromise is reavhed 50% at Stage sf nppenl (Para 36.4)

31. State Governments ma* exnrinc othgr tr3es of cases 3 SI in res ect of which refund is nllowad in SUMO Ste 05 and consider a . a a I 0 E 9 whether Slﬂllﬁf concessions can be given in their respective States, if nut nlrendy given. , (Para 56.5) §

32. All State Govvrn"ontc/Univn Territory Adm' 7strations may unuertnke n review of lists of remissions in cm: . fee issued from tins to timr and enlarge them, if cunsidcred justi- fied. Lists of remission: notified ;y nthcr States may be of help in this rtgnrd. Ihase lists may ho obtained/compiled and circulatvd io all States/Union T~rritorirs by the Department of Justice in the Ministry of Law, Justice and Company Affairs. (Pnra 37.2) 'x£3:91_t.. §;~>..t.i.*2i.o.x.1_§ court for on writ petitions under Article

33. The rritc ('f 226 of the Constitution may be vs underzu

(i) Hnbens Corpus : No fee

(ii) Fundamental rights : k.1OO (119 Tax Hatters : k.5OO

(iv) Miscollnn;nus mntters : &.250/-- (Para 39.h) ﬂiggullnneeus Ngttcrs 3b. Thk qumstlwn of levy of nominal fee on tort cases may be referred to the Law Comuissiun for their examination and recommcndatiwn.

(Para 34.2)

35. It will not be practicable to abolish fee on miscellaneous itcms and therefore fixrd court fee as is being levied at present may cont'ﬁue to be 1evi<d. However, no fee may be chafged on applications for certified copies of (Para 40.2).

,judg1:\ent . _34_

36. with a view to avoiding Wifficultics in calculation and overpnymwnt by litigants when stamps of requisite value of odd denominﬁtiuns urn not nV8il"ble to fixed fee may be in teims of whole rupees LP hwlf ruppcs. (Para #1)

37. Introductiwn of a system, as a general 1 2, by which court foe why he realised in instalments at uifferent The stages of litigation is not practicable in all cases. present system of rcalisin' full court fee at the time of filling oi petitions/suitsﬁappeals maycontinuc unless otherwise specifically laid down in cases where hardship is involved. (e.g. claims before Motor Accident Claims Tribunal). (Para 42.3)

38. The present scheme of levy of process fec( which is, strictly speaking not court fee) may continue. (Para 43)

39. The structure of court fee in States/Union Territories may be rcviowedc and revised as may be necessary every ten years. (Para 44 85

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