# P.M. ASHWATHANARAYANA SETIY & ORS. ETC. ETC v. STATE OF KARNATAKA & ORS

- **Citation:** [1988] Supp. 3 S.C.R. 155
- **Court:** Supreme Court of India
- **Decided:** 1988-09-22
- **Bench:** R.S. Pathak, S. Natarajan, M.N. Venkatachaliah
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/p-m-ashwathanarayana-setiy-ors-etc-etc-v-state-of-karnataka-ors-10027
- **Pages:** 41

## Headnote

Bombay Court Fees Act, 1959-Ad valorem Court fee without
any upper limit had to be paid on grants of probate etc. discriminatory.
Constitution of India. 1950: Court fees-Levy of uniform
ad valorem Levy without prescribing any upper limit-Whether alters
character of levy and converts if from 'fee' into 'tax'-Whether legal and
permissible.
Karnataka Court Fees and Suits Valuation Act, 1958--Rajasthan
Court Fees and Suits Valuation Act, 1961-Bombay Court Fees Act,
1959-Constitutional validity of.
'Tax' and 'fee'-Distinction between governmental agencies
imposing fee to justify impost and its quantum as return for special
services.
Courts cannot compel State to bring forth legislation to implement
and effectuate Directive Principles-Doubt as to constitutionality of
law-To be resolved in favour of constitutionality of the law.
A
B
c
D
E
Karnataka Court Fees and Suits Valuation Act, 1958--Section 20
and Article 1 Schedule I Court Fees-Imposition of-Uniform
F
ad valorem levy at rate of Re.1for every Rs.10-0fthe amount or value
of the subject matter without prescribing any upper limit-Whether
valid, legal and constitutional.
Rajasthan Court Fees And Suits Valuation Act, 1961: Section 20
and Article 1. Schedule I-Court fees-Uniform advalorem impost of G
Rs.5-For every Rs.100-0r part thereof without any upper limitWhether valid, legal and constitutional.
These three groups of special leave petitions/appeals/writ
petitions concern the policy ·and legality of the levy of Court fees under
the provisions of the Karnataka Court Fees and Suits valnation Act,
H
155
156
SUPREME COURT REPORTS
[1988] Supp. 3 S.C.R.
1958, the Rajasthan Court Fees and Suits Valuation Act, 1961 and the
A Bombay Court Fees Act, 1959.
The petitioners from Rajast!tan had challen~ed before the High
Court the constitutional validity of the provisions of section 20 read
with Article 1 Schedule I of the Rajasthan Act which prescribed and
a authorised the levy of court-fees on an uniform ad valorem basis without the prescription of any upper limit. The High Court upheld the
constitutionality of the impugned provision .
. '
The appeal and the special leave petitions from Karnataka are
'
directed against the common order of the Karnataka High Court
upholding the validity of the corresponding provision of the Karnataka
C Act which similarly imposed an ad-valorem court fee without prescribing any upper limit. The writ petitions have challenged the provision directly in this Court.
So far as. the Bombay Act is concerned, the State of Maharashtra
D has come up in appeal against the judgment of the Division Bench of the
Bombay High Court affirming the order of the learned Single Judge
striking down the provisions of section 29(1) read with entry 10 of
Schedule I of the Act in so far as they purport to prescribe an advalorem court fee, without any upper limit, on grants of probate, letters
of administrative etc., while in respect of all other suits, appeal and
IE proceedings an upper limit of court-fee of Rs.15,000 is prescribed. The
High Court held this pre~cription of ad-valorem court-fee without any
upper 'Umit on this class of proceedings alone was constitutionally impermissible in that it sought to single out this class of litigants.
·
-
It was contended on behalf of the peuuoners/appellants that (i)
F the imposition of court fees at nearly 10% of the value of the subject
matter in each of the courts through which the ·case sojourns1 before it
reaches a finality would seriously detract from fairness and justness of
the system; (ii) the exaction of ad-valorem fee uniformally at a certain
percentage of the subject matter without an upper limit or without the
tapering down after a certain stage onwards would negate the concept
d of a fee and part-take of the character of a tax outside the boundaries of
the State's !lower; (iii) the ad-valorem yardstick, which is relevant and
appropriate .to taxation, is wholly inappropriate because the principle
or basis or' distribution in the

## Text

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P.M. ASHWATHANARAYANA SETIY & ORS. ETC. ETC.
v.
STATE OF KARNATAKA & ORS.
SEPTEMBER 22, 1988
[R.S. PATHAK, CJ., S. NATARAJAN AND
M.N. VENKATACHALIAH, JJ.]
Bombay Court Fees Act, 1959-Ad valorem Court fee without
any upper limit had to be paid on grants of probate etc. discriminatory.
Constitution of India. 1950: Court fees-Levy of uniform
ad valorem Levy without prescribing any upper limit-Whether alters
character of levy and converts if from 'fee' into 'tax'-Whether legal and
permissible.
Karnataka Court Fees and Suits Valuation Act, 1958--Rajasthan
Court Fees and Suits Valuation Act, 1961-Bombay Court Fees Act,
1959-Constitutional validity of.
'Tax' and 'fee'-Distinction between governmental agencies
imposing fee to justify impost and its quantum as return for special
services.
Courts cannot compel State to bring forth legislation to implement
and effectuate Directive Principles-Doubt as to constitutionality of
law-To be resolved in favour of constitutionality of the law.
A
B
c
D
E
Karnataka Court Fees and Suits Valuation Act, 1958--Section 20
and Article 1 Schedule I Court Fees-Imposition of-Uniform
F
ad valorem levy at rate of Re.1for every Rs.10-0fthe amount or value
of the subject matter without prescribing any upper limit-Whether
valid, legal and constitutional.
Rajasthan Court Fees And Suits Valuation Act, 1961: Section 20
and Article 1. Schedule I-Court fees-Uniform advalorem impost of G
Rs.5-For every Rs.100-0r part thereof without any upper limitWhether valid, legal and constitutional.
These three groups of special leave petitions/appeals/writ
petitions concern the policy ·and legality of the levy of Court fees under
the provisions of the Karnataka Court Fees and Suits valnation Act,
H
155
156
SUPREME COURT REPORTS
[1988] Supp. 3 S.C.R.
1958, the Rajasthan Court Fees and Suits Valuation Act, 1961 and the
A Bombay Court Fees Act, 1959.
The petitioners from Rajast!tan had challen~ed before the High
Court the constitutional validity of the provisions of section 20 read
with Article 1 Schedule I of the Rajasthan Act which prescribed and
a authorised the levy of court-fees on an uniform ad valorem basis without the prescription of any upper limit. The High Court upheld the
constitutionality of the impugned provision .
. '
The appeal and the special leave petitions from Karnataka are
'
directed against the common order of the Karnataka High Court
upholding the validity of the corresponding provision of the Karnataka
C Act which similarly imposed an ad-valorem court fee without prescribing any upper limit. The writ petitions have challenged the provision directly in this Court.
So far as. the Bombay Act is concerned, the State of Maharashtra
D has come up in appeal against the judgment of the Division Bench of the
Bombay High Court affirming the order of the learned Single Judge
striking down the provisions of section 29(1) read with entry 10 of
Schedule I of the Act in so far as they purport to prescribe an advalorem court fee, without any upper limit, on grants of probate, letters
of administrative etc., while in respect of all other suits, appeal and
IE proceedings an upper limit of court-fee of Rs.15,000 is prescribed. The
High Court held this pre~cription of ad-valorem court-fee without any
upper 'Umit on this class of proceedings alone was constitutionally impermissible in that it sought to single out this class of litigants.
·
-
It was contended on behalf of the peuuoners/appellants that (i)
F the imposition of court fees at nearly 10% of the value of the subject
matter in each of the courts through which the ·case sojourns1 before it
reaches a finality would seriously detract from fairness and justness of
the system; (ii) the exaction of ad-valorem fee uniformally at a certain
percentage of the subject matter without an upper limit or without the
tapering down after a certain stage onwards would negate the concept
d of a fee and part-take of the character of a tax outside the boundaries of
the State's !lower; (iii) the ad-valorem yardstick, which is relevant and
appropriate .to taxation, is wholly inappropriate because the principle
or basis or' distribution in the case of a fee should be the proportionate
cost of services inter-se amongst the beneficiaries; (iv) in the very nature
of the judicial process, a stage is reached beyond which there could be
H no proportionate or progressive increase in the services rendered to a
(
P.M.A. SETTY v. STATE OF KARNATAKA
157
litigant either qualitatively or quantitatively; (v) in the process of A
adjudication of disputes before courts, judicial-time and the machinery
of justice are not utilised in direct proportion to the value or the amount
of the subject matter of the controversy; (vi) a recognition of the outermost limit of the possible services and a prescription of a corresponding
upper limit of court fee should be made, lest the levy, in excess of that
conceptual limit, becomes a tax; and (vii) though India is a federal
B
polity, the judicial system, however, is an integrated one and that therefore different standards of court fee in different States would be
unconstitutional.
The contentions of the State were that (i) as long as their power to
raise the funds to meet the expenses of administration of civil justice
was not disputed and as long as the funds raised show a· correlation to
C
such expenses, the States should have sufficient play at the joints to
work-out the incidents of the levy in some reasonable and practical way;
(ii) it would, quite obviously, be impracticable to measure-out the levy
directly in proportion to the actual judicial time consumed in each
individual case, hence the need to tailor some rough and ready workD
able basis which, though may not be an ideal or the most perfect one,
would at least be the least hostile; (iii) if an upper limit is fixed and the
collection fell short of what the Government intends and is entitled to
collect, this would eventually result in the enhancement of the general
rates of court-fee for all categories; (iv) ifthe value of the subject matter
is a relevant factor in proportioning the burden of the court fee, where
E
the line should be drawn in applying the principle it is more a matter of
legislative wisdom .and preference than of the strict judicial evaluation
and adjudication; and (v) courts cannot-compel the State to bring-forth
any legisliltion to implement and effectuate a Directive Principle.
Dismissing the appeals, writ petitions and the special leave petip
tion, this Court,
HELD: (1) All civilised Governments recognise the need for
access to justice being free. Whether the whole of the expenses of
administration of civil justice also-in addition to those of criminal
justice-should be free and met entirely by public revenue or whether
G
the litigants should contribute and if so, to what extent, are matters of
policy. [170G]
(2) A fee is a charge for the special service rendered to a class of
citizens ~y Government or Government agencies and is ~enerally based
on the expenses incurred in rendering the services. ll74B]
H
158
SUPREME COURT REPORTS
(1988] Supp. 3 S.C.R.
A
The Commissioner, Hindu Religious Endowments, Madras v.
Lakshmindra Thirtha Swamiar of Shirur Mutt., (1954] SCR (1) 1005
and Om Prakash Agarwal v. Guni Ray, AIR 1986 (SC) 726 referred to.
B
(3) It is for the governmental agencies imposing the fee to justify
its impost and its quantum as a return for some special services.
( 4) Once a broad correlation between the totality of the expenses
on the services, conceived as a whole, on the one hand and the totality of
the funds raised by way of the fee, on the other, is established, it would
be no part of the legitimate exercise in the examination of the constitutionality of the concept of the impost to embark upon its effect in indi·
vidual cases. Such a grievance would be one of disproportionate nature
C of.the distribution of the fees amongst those liable to contribute and not
one touching the conceptual nature of the fee. [184A-B]
(5) The test is one of the comprehensive level of the value of the
totality of the service_~, set off against the totality of the receipts. If the
character of the 'fee' is thus established, the vagaries in its Distribution
D amongst the Class, do not detract from the concept of a 'fee' as such,
though a wholly arbitrary distribution of the burden might violate other
constitutional limitations. [185G]
Municipal Corporation of Delhi & Ors. v. Mohd. Yasin., (1983] 3
SCC 233; H.H. Sudhundra Thirtha Swamiar v. Commissioner for
E Hindu Religious & Charitable Endowments., (1963] Supp. 2 SCR 302;
Sreenivasa General Traaers & Ors. v. Andhra Pradesh & Ors., li983J l
AIR (SC) 1248; State of Maharashtra & Ors. v. The Slllvation Army,
Western India Territory, (1975] 3 SCR 485; Kewal Krishan Puri & Anr.
v. State of Punjab & Ors .. _(1979] 3 SCR 1244; Secretary, Government
of Madras, Home Department & Anr. v. Zenith Lamp & Electrical
F
Ltd., ll973] 2 SCR 973; Ram Bahadur Thakur & Co. & Anr. v. State of
Karnataka, AIR 1979 (SC) 119; The Commissioner Hindu Religious
Endowments Madras v. Sri Lakshmindra Thirtha Swamiar of Sri
Shirur Mutt., (1954] SCR 1005; Om Prakash Agarwal v. Giri Raj
Kishori, (1986] SCC 1 730; N.M. Desai v. The Teesteels Ltd. & Anr.,
AIR 1980 (2) SC 2125; Lady Tanumuti Girijaprasad & Anr. v. Special
Rent Acquisition Officer, Western Railway Special Civil Application
G No. 979 of 1970 with Special Civil Application 287 of 1967; The City
Corporation of .Calicut v. Thachambalath Sadasivan & Ors., (1985]
2 sec 115, rererred to.
Indian Organic Chemicals v. Chemtax Fibres, [1983] Born LR
406; Secretary, Uovernment of Madras Home Department v. ·zenith
H
Lamp & Electrial Ltd., ILR 1968 (Madras) 247 overruled.
'
..
P.M.A. SETTY v. STATE OF KARNATAKA
159
( 6) Though legislative measures dealing with economic regulation
are not outside article 14, it is well reco_gnised that the State enjoys the
widest latitude where measures of economic regulation are, concerned.
These measures !'or fiscal and economic regulation involve an evaluation of diverse and quite often conflicting economic criteria and adjustment .. and balancing of various conflicting social and economic values
and interests. It is for the State to decide what economic and social
policy it should pursue and what discriminations advance those social
and economic policies. In view of the inherent complexity ... f these fiscal
adjustments, courts give a larger discretion to the Legislature in the
matter of Its preferences of economic and social policies and effectuate
the chosen system in all possible and reasonable ways. [IS7G-H; ISSA-Bl
East India Tobacoo Co. v. State of Andhra Pradesh, (1963] 1
SCR 411; The State of Gujarat & Anr. v. Shri Ambica Mills Ltd.
Ahmedabad, (1974] 3 SCR 764 referred to.
A
B
c
(7) The lack of perfection in a legislative measure does not
necessarily imply its unconstitutionality. It is rightly said that no
D
economic measure has yet been devised which is free from all discriminatory impact and that is such a complex arena in which no
perfect alternatives exist, the court does well not to . impose too
rigorous a standard of criticism. under the equal protection clause,
reviewing fiscal services. [1S9F-GJ
G.K. Krishnan etc. v. The State of Tamil Nadu, (1975] 2 SCR 715
730; San Antonie Independent School District v. Bodriguer, 411 U.S. 1
at p. 41.
·
Income Tax Officer, Shillong & Anr. v. N. Takim Roy Rymbai
E .
etc., ( 1976] 3 SCR 413, referred to.
F
S. It is trite that for purposes of testing a law enacted by one State
in exercise of its own independent legislative powers for tis alleged violation of Article 14 it cannot be contrasted -with laws enacted by other
States. (192C]
The State of Madhya Pradesh v. G.C. Mandawar, (1955] 1 SCR
599, referred to.
(9) Having regard to the nature and complex,ity of this matter it
is, perhaps, difficult to say tnat the ad-valorem principle which may not
G
"'
be an Ideal basis for distribution of a fee can at the same time be said to
H
A
160
SUPREME·COURT REPORTS
[1988] Supp. 3 S.C.R.
be so irrational as to incur any unconstitutional infirmity. The
presumption of constitutionality of laws requires that any doubt as to
the constitutionality of a law has to he resolved in favour of constitutionality. Though the scheme cannot be upheld, at the same time, it cannot
be struck down either. [192E-F)
B
(IO) The State is in theory entitled to raise the totality of the
c
expenses by way of fee. Any interference with the present yardstick for
sharing the burden might in turn produce a yardstick less advantageous
to litigants at lower levels. [ 192G)
( 11) The High Court has struck down the provisions of section
29(1) read with entry IO of Schedule I of the Bombay Court Fees Act,
1959 on the ground that the levy of court.fee on proceedings for grant of
probate and letters of administration ad-valorem without the upper limit
prescribed for all other litigants is discriminatory. If in respect of all
other suits of whatever nature and complexity an upper limit of
Rs.15,000 on the court fee is fixed, there is no logical justification for
D singling out this proceeding for an ad-valorem impost without the benefit of some upper limit prescribed by the same statute respecting all
other litigants. {!9~A-8; F]
(12) The Directive Principles of State Policy though not strictly
enforceable in courts of law, are yet fundamental in the governance in
E the country. They constitute fons-juris in a Welfare State. [194E]
'
U.B.S.E. Board v. Hari Shanker, AIR 1979 SC 69 referred to.
(13) The power to raise funds through the fiscal tool of a 'fee' is
not to be confused with a compulsion to do so. While 'fee' meant to
p
defray expenses of services cannot be applied towards objects of general
public utility as part of general revenues, the converse is not valid.
General Public revenues can, with justification, be utilised to meet,
wholly or in a substantial part, the expenses on the administration of
civil justice. [194G-HJ
G
(14) The prescription of such high rates of court-fees even in
small claims as also without an upper limit in larger claims is perilously
close to arbitrariness, an inconstitutionality. [194E)
( 15) Though the Court has abstained from striking down the
legislation, yet, it appears to the Court that immediate steps are called
H for·and are imperative to rationalise the.levies. [195C]
P.M.A. SETIY v. STATEOFKARNATAK.A [VENKATACHALIAH, J.] 161
CIVIL APPELLATE JURISDICTION: Special Leave Petition
(Civil) Nos. 2604-06 of 1988 etc.
From the Judgment and Order dated 6.11.1987 of the Kamataka
High Court in W.P. Nos. 3138 of 1987, 12784 and 18359of1986.
F.S. Nariman, B.R.L. Iyengar, L.N. Sihna, K.K. Venugopal,
Soli J. Sorabjee, Dr. Y.S. Chitale, U.R. Lalit, M.S. Nesargi, S.K.
Dholakia, A.s. Bobde, Adv. Genl., Aruneshwar Gupta, B.P. Gupta,
Sudhir Gupta, lnderbit Singh, L.R. Singh, Rakesh Khanna, R.P.
Singh, P.H. Parekh, Sanjay Bhartary, S.S. Javali, R. Ramachandran, ·
P.G. Gokhale, Raja VenkatappaNaik, N.N. Sharma, P. Mahale, S.K.
Kulkarni, D.L. N. Rao, Surya Kant, E.C. Vidvasagar, R.B.
Mehrotra, D.N.N. Reddy, N. Nettar, Kailash Vasdev, G.L..Rawal,
S.C. Birla, Miss C.K. Sucharita, Mohan Katarki, Mrs. Kiran Suri,
K.M.K. Nair, S.N. Bhat, R.P. Wadhwani and A.S. Bhasme for the
Petitioners.
Kuldip Singh, Additional Solicitor General, K.N. Bhat, D.R.
Dhanuka, Anil Mehta, P.R. Ramasesh, Badri Das Sharma, K.R.
Dhanuka, R.C. Misra and Dr. Meera. Agarwal for the Respondents.
The Judgment of the Court ~as delivered by
A
B
c
D
VENKATACHALIAH, J. The point in these appeals is the
E
recurring and vexed theme of the policy and legality of the levy of
Court fees-ad-valorem on the value or amount of the subject-matter of
suits and appeals without the prescription of any upper limit-under the
provisions or the Karnataka Court Fees and Suits Valuation Act, 1958
('Karnataka Act' for short). The Rajasthan Court Fees and Suits Valuation Act, 1961 (Act 23 of 1961) ('Rajasthan Act' for short) and the
F
Bombay Court Fees Act, 1959 ('Bombay Act' for short).
So far as the 'Bombay Act' is concerned, the point raised in the
concerned appeals is a limited one, confined to the question of the
validity of Section 29(1) read with entry 10 of the First-Schedule to the
'Bombay Act' which, without reference to the upper limit of Court Fee G
of Rs.15,000 prescribed for all other suits and proceedings, requires
payment of ad-valorem Court fee on proceedings for grants of probate
and letters of administration. One of the grounds of challenge so far as
this provision in the 'Bombay Act' is concerned, is the constitutional
impermissibility of an unlimited exaction by way of court fee, which is
common to other appeals as well. The other contention against the
H
A
B
c
162
SUPREME COURT REPORTS
[1988] Supp. 3 S.C.R.
validity of Section 29(1) read with Entry 10 of the First-Schedule to the
'Bombay Act' is based on Article 14 of the Constitution on the ground
of discrimination as between the proceedings for grant of probate and
Letters of Administration on the one hand and ail other suits and
proceedings respecting which an upper limit of Rs.15 ,000 is fixed
under the statute, on the other.
2. The present batch of appeals and Special Leave Petitions
comprise of a large number of cases arising under the said three
statutes. We may, however, refer to the facts of some of the cases
which could be tak~n to be typical and representative of all other cases
of each group.
3. Special Leave Petition 13344 of 1988 typifies, and is representative of the appeals and Special Leave Petitions that arise out of
the Rajasthan Court Fees and Suits Valuation Act, 1961. The petition
arises out of and is directed against the common order dated 16th
Octoher, 1987 of the Division Bench of the Rajasthan High Court in
D Division Bench Civil Writ Petition No. 474 of 1984 and a large number
of writ petitions involving the same question. In Writ Petition No. 474
of 1984, the present appellant-The State Bank of India-challenged
before the High Court the Constitutional validity of the provisions of
Section 20 read with Article 1 Schedule I. of the 'Ra jasthan i\ct' which
prescribed and authorised the levy of court-fees on plaints or writtenE statements pleading a set-off or counter-claim or memoranda of appeals presented to Courts an uniform ad-valorem impost of Rs. 5 for
every hundred Rupees or part thereof on the amount or value of the
subject-matter in excess of Rs.5,000. On the first slab of Rs.5,000,
however, certain rates are also prescribed.
F
We may, briefly, trace the course of development of the law as to
Court-fee in Rajasthan. The Rajasthan Ordinance 9 of 1950, adapted
and extended to the territories of Rajasthan, with effect from
1.3.1950, the Court Fees Act, 1870 (Central Act, 1870). The provisions of the Central Act, as adapted and extended to Rajasthan, were
amended from time to time till 1.11.1961 when the present 'Rajasthan
G
Act' was enacted and promulgated. Prior to 1.11.1961, at the law then
stood, the levy of court-fee was subject to the maximum of Rs. 7,500.
This ceiling was done away with under the present 'Rajasthan Act' and
Court fee ad-valorem at 5%, without any upper limit, was imposed
under the impugned provisions.
H
On 25.4.1984 the appellant-bank instituted, in the Court of
P.M.A. SETTY v. STATE OFKARNATAKA [VENKATACHALIAH, J.) 163
District Judge, Jaipur City, a suit for recovery of a sum of
Rs.5,04,75,826 from the defendant in the suit viz., The Jaipur
A
Spinning and Weaving Mills Ltd. The Court-Fee payable on the said
plaint under Section 20 read with Article 1 of the Schedule I of.the
'Rajasthan Act' was stated to be Rs.25,23,860. Incidently, it was
pointed out by Shri F.S. Nariman, learned Senior Advocate for the
appellant that the court-fee payable on this plaint alone would amount
B
approximately to l/7th of the total estimated collection of court-fee for
the year 1983-84 which was estimated at Rs.176.41 lakhs in the State.
4. Special Leave Petitions 832 of 1988 and 833 of 1988-which
are representative of. the Karnataka cases-arise out of and are
directed against the common order dated 6.1.1988 of the Division
Bench of the Karnataka High Court upholding the validity of ihe
corresponding provisions of the Karnataka Court Fees and Suit Valuation' Act, 1958 ('Karnataka Act' for short) wnich similarly impose an
ad-valorem court fee on the plaints, written statements, pleading setoff or counter claims, or memoranda of appeals presented to any
court, an ad-valorem court fee at the uniform rate of Re. 1 for every
Rs.10 of the amount or value of the subject matter in dispute without
prescribing any upper limit.
The Bank of Baroda, the petitioner in the Special Leave Petition
832 of 1988, questions the correctness o_f the view taken by the
Karnataka High Court in the large batch of cases disposed of by it
upholding the constitutionality of the provisions in the 'Kamataka
Act'.
Appellant-bank had brought, in one of the civil courts in
Karnataka, a suit for recovery of Rs.16,97 ,811.57 from the defenda.nts
therein and was called upon to pay a court fees of Rs.1,69,792 on the
plaint. The provisions of section 20 read with Article 1 of Schedule I of
the 'Karnataka Act' are in pari-materia with Section 20 read with
Article 1, Schedule I of the 'Rajasthan Act' except for the rate of fee
which is substantially higher under the 'Karnataka Act'. The questions
that arise in the appeals and Special Leave Petitions from Karnataka
and Ra jasthan are substantially similar.
5. In Civil Appeal No. 1511 of 1988, the State of Maharashtra
has come up in appeal against the Judgment dated 1.2.1988 of the
Division Bench of the Bombay High Court affirming the order dated
20.11.1987 of the Learned Single Judge striking down the provisions of
Section 29( 1) read with entry 10 of Schedule I of the 'Bombay Act' in
c
D
E
F
G
H
164
SUPREME COURT REPORTS
J1988] Supp. 3 S.C.R.
A
so far as they purport to presc~ibe an ad-valorem court fee, without
any upper limit, on grants of probate, letters of Administration etc.,
while in respect of all other suits, appeals and proceedings an upper
limit of court-fee of Rs.15,000 is prescribed under the 'Bombay Act'.
The Bombay High Court has, bx its judgment now under appeal, held
this prescription of ad-valorem bourt-fee without any upper limit on
B
this class of proceedings alone constitutionally impermissible in that it
seeks to single-out this :class of litigants to share a disproportionately
higher share of the burden of fees while all other litigants, whatever
the value of their claim or complexity of the question raised in their
cases be, are not required to pay beyond Rs.15,000 which is fixed as
the upper limit in all other cases.
c
In W.P. No. 1105/86 .before the High Court of Bombay, from
which C.A. No. 1511/88 now before us arises, Mrs. Jyoti Nikul
Jariwala and Jaiprakash Mungaturam Bairajra, Respondents herein,
in their capacity as Executrix and Executor respectively as also the
Trustees, under the Last WiH and Tesiament dated 5.3.1985, said.to
D have been executed by a certain Harihar Jethalal Jariwala alias Sanjiv
Kumar had sought probate of the said will. They challenged, in the
writ-petition before the High Court, the order dated 23.7.1986 of the
Prothonotary and Senior Master of the High Court of Bombay made in
the said probate proceedings requiring from the said Executors a probate court-fee of Rs.6,15,814.50 as a condition for the grant of the
E probate. The said Executors and Tn.stees challenged the legality and
validity of this Memo and also the relevant provisions of the 'Bombay
Act' pursuant to and under the authority of which the said order came
to be made.
Learned Single Judge of the High Court struck down the
F
impugned provi.;ions and the Division Bench has upheld the decision
of the Learned Single Judge.
6. We have heard Sri L.N. Sinha, Sri F.S. Nariman, Sri K.K.
Venugopal, Sri Shanti Bhushan, Sri B.R.L. iyengar, learned Senior
Advocates for the appellants in Karnataka and Rajasthan· batch of
G cases and Sri Kuldip Singh, Additional Solicitor General and Sri
Badridas Sharma, Senior Advocate for the State of Karnataka and
Rajasthan respectively.
Sri Bobde, learned Advocate General, Maharashtra and Sri S.K.
Dholakia, Senior Advocate appeared in support of the appeals of the
H State of Maharashtra. ·
P .M.A. SETfY v. STATE OF KARNA TAK.A [VENKA TACHALIAH, J.]
!65
7. Though a number of contentions covering a wide field
appears to have been raised and argued before the High Courts, the
submissions of Learned Counsel before us were, however, Jess expensive and centred around what was stated to belong to certain basic
values and ideals of administration of justice in a Welfare-State and to
the importance of access to justice and what-in the context of the
concept of a 'fee'-is likely to happen to the concept if an ad-valorem
exaction without any upper limit whatsoever is pushed to a point
where the correlationship between the levy and the service very nearly
breaks down. It ceases, it is said, to be a service and becomes a disservice. Emphasis was also placed on the basic obligations of the State
to administer j.ustice within its territories and on the Directive Principles of St&te Policy in Article 39A which enjoins the State to ensure
that opportunities of securing justice are not denied to any citizen by
reason of economic or other disabilities.
It was contended that in a system of Administration of Justice
which was already encumbered by heavy expenses and long delays, the
imposition of court fees at nearly 10% of the value of the subject
matter in each of the courts through which the case sojourns before it
reaches a finality, would seriously detract from fairness and justness of
the system. The levy-ad-va/orem irrespective of the nature and quality of the adjudicative process the case attracts and without reference
to the demands that it makes on the judicial time-would be, it is
·urged, demonstrably unfair and it would be legitimate to acknowledge
that somewhere in the trail of this unlimited levy the sustaining correlation between the levy and the service rendered is bound to snap. It
was urged that the exaction of ad-valorem fee uniformally at a certain
percentage of the subject matter without an upper limit or without the
rates tapering down after a certain stage onwards wou.ld negate the
concept of a fee and par-take of the character of a tax outside the
boundaries of the Stat~'s power.
8. It is true that the twin evils that be devil the legal system an.d
the administration of justice are the laws' delays_ anc;l;_expenses of litigation which have become almost proverbial. Court-fee should not become :another stifling factor aggravating an alreaci; explosive situation.
· Constitutional ethos and the new social and economic order grimly
struggling to be born lay great store by the peaceful social or economic
change to be achieved through the processes of law. If social and
economic change is of high constitutional priority, then, their effectuation and realisation which are directly proportional to the availability
and efficacy of expeditious and unexpensive legal remedies, must also
A
B
c
D
E
F
G
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A as a logical corollory, receive the same emphasis in priorities:
B
c
D
E
F
G
The public importance of the question and the public interest the
policy of court-fee evokes are reflected in the trenchant humour of
A.P. Herbert's "More Uncommon Law" from the words of the Judge
in the fictional Hogby v. Hogt;y,
"That if the Crown must charge for jusiice, at least the fee
should be like the fee for postage: that is to say, it should
be the same, however long the journey may be. For it is no
·fault of one litigant that his plea to the King's judges raises
questions more difficult to determine than· another's, and
will require a longer hearing in court. He is asking for
justice, not renting house-property."
There is also in the following exchanges between the AttorneyGeneral and the Judge the echo of the argument that State whose
primary duty is to administer justice, should do so out of public
revenues and not put justice up for sale: ·
The AttomeyGeneral:
"As to that, milord, may I suggest one possible line of
thought? The Crown, in this connection, means the whole
body of tax-payers. Would it be fair and equitable if the
general tax-payer had to provide all the facilities of the
·The Judge:
courts for the benefit of the litigant?
·
"Why not? Everybody pays for
th~ police, but some
people use them more than other. Nobody complains. You
don't have to pay a special fee every time you have a
burglary, or ask a policeman the way. I don't follow you,
Sir Anthony.
I will go further. I hold that the Crown not merely ought
not, but is unable, to act in this way, by reason of the
passage in the Great Charter which I have quoted. The
Rules of Court, then, which purpose to impose these
charges are ultra vires, unconstitutional, and of no effect:
and Mr. Hogby may continue to decline to pay them."
9. The fortieth clause of the Great Charter of Runnymede
declared that Justice shall not be sold, denied or delayed: "Nulli Vendemus, nu/Ii negabimus, _aut differemus rectum aut justiciam." What
H
was implicit in the need for this promise was that royal justice was,
•
P.M.A. SEITY v. STATE QF~ATAKA (VENKATACHALIAH, J.] 167
otherwise, popular; but the complaint was that it was too dear and it
was slow in coming. The subsequent course of history of the administration of justice in England shows that the Magna-Carta did not wholly
stop the evils of delays in, and expensiveness of, Royal Justice but it
did, afterall, do something, perhaps something substant;al, to cheapen
justice and stop the ab~ses which were rampant in King John's Reign:
(See History of English Law 57-58).
Dr. R.M. Jackson "Machinery of Justice in England" Fifth Ed.,
324, points out the de.pendence of Royal Justice in England in part
atleast, on the profits of its administration earned:
"In the past the growth of royal justice was partly due to
the profi~s that accrued from exercising jurisdiction. The
early itinerant justices were more concerned with safeguarding the King's fiscal rights than with the trial of ordinary actions. A law court was expected to pay for itself and
show a projit for the king. It is some tin\e since justice has
been a subs.tantial source of income, but the old idea survives in the idea that the courts ought not to be run at a loss."
(Emphasis supplied)
The court-fee as a limitation on access to justice is inextricably
inter-twined with a "highly emotional and even evocative subject
stimulating visions of a social order in which justice will be brought
within the reach of all citizens of all ranks in society, both those blessed with affluence and those depressed with their poverty." It is, it is
said, like a clarion call to make the administration of civil justice
available to all on the basis of equality, equity_ and fairness with its
corollary that no-one should suffer injustice by reason of his not
affording or is deterred from, access to justice. The need for access to
justice, recognises the primordeal need to maintain order in society as
disincenti~e of inclinations towards extra-judicial and violent means of
settling disputes. On this a learned authority "Access to Justice" by
Cappellbtti, Vol. 1, Book I, 419, says:
A
B
c
D
E
F
"The need for access to justice may be.said to be two fold;
G
first, we ·nus! ensure that the rights of citizens should be
recognised at'!d made effective for otherwise they would
not be real but merely illusory; and secondly we must
enable legal disputes, conflicts and complaints which
inevitably arise in society to be resolved in an orderly way
according to the justice of the case, so as to promote
H
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harmony and peace in society, lest they foster and· breed
discontent and disturbance. In truth; the phrase itself,
. "access to justice", is a profound and powerful expression
of a social need which is imperative, urgent and more widespread than is generally acknowledged~"
B
10. The stipulation of court-fee is, undoubtedly a deterrent to
free "access to justice", but one of the earlier avowed objects of courtfee was stated to be-as was done in the preamble of the Bengal
Regulation which in 1795 imposed high court-fees-discouragement of
litigation, particularly the speculative and the frivolous variety. Lord
Macaulay called that Preamble "the most eminently absurd Preamble,
:Uiat was ever drawn". The view of Macaulay "The Crisis of the Indian
C
Legal System" By Upendra Baxi, 54, on the subject are worth
recaililii:
D
H
"If what the courts administer be justice, is justice a thing
which the Government ought to grudge to the people?·: ...
It is undoubtedly a great evil that frivolous and vexatious
suits should be instituted. But it is an evil for which the
Government has only itself and its agents to blame, and for
which it has the power of proving a most effii::ient remedy.
The real way to prevent unjust suits is to take care that
there shall be just decision. No man goes to law except in
the hope of succeeding. No man hopes to succeed in a bad
cause unless he has reason to believe that it will be determined according to bad laws or by bad judges. Dishonest
suits will never be common unless the public entertains an
unfavourable opinion of the administration of justice. And
the public will never long entertain such an opinion without
good reason .... (The imposition of court fees) neither
makes the pleadings clearer nor the law plainer, nor the
corrupt judge purer; nor the stupid judge wiser. It will no
doubt drive away the honest plaintiffs who cannot pay the
fee. But it will also drive away dishonest plaintiffs who are
in the same situation''.
(Emphasis supplied).
The Krishna Iyer Committee on Legal aid also said:
"Something must be done, we venture to state, to arrest
the escalating vice of burdensome scales of court fee. That
the State should not sell justice is an obvious proposition
P.M.A. SETTY v. STATE OF KARNATAKA lVENKATACHALIAH, J.] 169
but the high rate of court fee now levied leaves no valid
alibi is also obvious. The Fourteenth Report of the Law
Commission, the practice of 2 per cent in the socialist
countries, and the small standard filing fee prevalent in
many Western Countries make the Indian position indefensible and perilously near unconstitutional. If the legal
system is not to be undemocratically expensive, there is a
strong case for reducing court fees and instituting suitors
fund to meet the cost directed to be paid by a party because
he is the loser but in the circumstances cannot bear the
burden."
(See P. 35)
11. The proverbial costs of litigation has its own dimensions of
unpredictability. Even as the outcome of a litigation is said to depend
on the "glorious uncertainties of the Law" the size of the bill of cost a
litigant has to foot is, not so, glorionsly foreseeable.
The Evershed Committee Report said:
"It is notoriously impossible to count the costs of litigation
beforehand. It is difficult enough for either party to forecast what his own costs are likely to be, since much depends
on the manner in which the other side conducts the case. It
A
B
c
D
is utterly impossible to forecast what the other side's cost
E
will be, and this means that no litigant can have the least
Idea of what he will have to pay if he loses the case."
Small claims and the small litigants are at a special disadvantage
in the matter of costs. The expenses of litigation very nearly consume
the claim itself. This imparts to the policy formulation behind the levy
p
of court-fee the imperatives of havir,g lower fees for lesser claims. This
is an analysis of costs in small claims: "Access to Justice", Vol. 1,
Book l; 13.
"Claims, involving relatively small sums of money suffer
most from the barrier of cost. If the dispute is to be resolved
G
by formal court processes, the costs may exceed the amount
in controversy or, if not, may still eat away so much of the
claim as to make litigation futile. The data assembled for
the Florence Project show clearly that the ratio of costs to
amount in controversy steadily increases as the financial
value of the claim goes down. In Germany, for example,
H
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D
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the cost of litigating a claim for about U.S. $100 in the
regular court system is estimated to be roughly U.S. $150,
even though only a court of first instance is involved, while
the cost for a U.S. $5,000 claim, involving two instances,
would be about U.S. $4,200-still very high but a substantially smaller proportion of the claim's value. Examples
need not be multiplied in this area; clearly, small claims
problems require special attention if access is to be
obtained."
(Emphasis supplied).
Conversely, those who are endowed with considerable financial
resources that can be utilised for litigation have obvious advantages in
pursuing or defending claims by or against them. It is said: "Access to
Justice", Vol. 1, Book 1, 15.
"Persons or.organisations possessing considerable, or relatively considerable, financial resources than can be utilized
for litigation have obvious advantages in pursuing or
defending claims. In the first place they can afford to litigate. They are, in addition, able to withstand the delays of
litigation. Each of these capabilities, if in the hands of only·
one party, can be a powerful weapon; the threat of litigation
becomes both credible and effective. Similarly, one of two
parties to a dispute may be able to outspend the other and, as
a result, present his argument more effectively. Passive
decision-makers, whatever their other, more admirable,
characteristics, clearly exacetbate this problem by relying
on the parties for investigating and presenting evidence and
for developing and arguing the case."
(Emphasis supplied).
12. These are the realities in the background of which the impact
of court-fees is to be considered. Indeed all civilised Governments
recognise the need for access to justice being free. Whether the whole
of the expenses of administration of civil justice also-in addition to
G
those of criminal justice-should be free and met entirely by public
revenue or whether the litigants should contribute and if so, to what
extent, are matters of policy. These ideals are again to be balanced
against the stark realities of constraints of finance. Before any judicial
aiticism of the policy acknowledgement should be made of the
Government's power to raise the resources for providing the services
Ji from those who use and benefit from the services. The idea that there
~··
P.M.A. SETIY v. STATEOFKARNATAKA [VENKATACHALIAH,J.l 171
should be uniform fixed fee for all cases, instead of the ad-valorem
system, has its own nettling problems and bristles with anomolies.
How far these policy considerations have an adjudicative disposition
and how far courts can mould and give direction to the policy is much
debated. The Directive Principles in Article 39A are, no doubt, funda-
. mental in the governance of the country, though not enforceable in
courts uf law. The following observations of Chinappa Reddy, J. in
U. B.S.E. Board v. Hari Shanker, AIR 1979 SC 69 recognise the limitations of courts:
" ..... the principles are 'nevertheless fundamental in the
governance of the country' and 'it shall be the duty of the
state to apply these principles in making laws'.