[The following post is contributed by Gunjan Chhabra, who is an associate with Singhania & Partners, LLP and a graduate of Amity Law School, GGSIPU]
Background and Facts
Recently, the Court Fees Act of 1870 (the 1870 Act) was amended by the Government of NCT of Delhi by the Court Fees (Delhi Amendment) Act, 2012 (the Amendment Act), which came into effect from 1 August 2013. By way of this amendment, the court fee in certain cases were increased at an average of 10 times, and in certain cases, upto 100 times!
It is unclear as to the kind of thought process that seems to have gone behind the recent increase in court fee by the Legislative Assembly of the NCT of Delhi, that aimed at increasing the revenues of Delhi Government from Rs. 30 Crore to Rs. 400 Crores.
The Court Fees (Delhi Amendment) Act, 2012 was challenged in a series of Writ Petitions filed before the Hon’ble High Court of Delhi. The Court declared the Amendment Act as ultra vires the Constitution and accordingly struck it down through its order dated 9 October, 2013 in Delhi High Court Bar Association v. Govt. of NCT of Delhi.
How aptly the amendment was handled by the Delhi High Court tells a tale of its own. If so desired, the Court could have easily disposed off the case in some 4 pages owing to the deficiencies in the amendment. It, however chose to issue a 531-page reasoned decision that may lead to difficulties in salvaging the legislation.
All said and done, the judgment is a well drafted document highlighting the well established principles of law over the years. It demolishes each limb of the amendment part by part.
It begins by describing the legislative competence of the Government of NCT of Delhi. Delhi is a Union Territory having a special status by virtue of an amendment in 1991 which inserted Article 239AA in the Constitution of India. Despite powers being given to the Legislative Assembly of NCT of Delhi, similar to a state, the fact remains that the Parliament has the supreme power to enact laws in the NCT of Delhi. So the question arises: is there any respite if the Legislative assembly of NCT of Delhi wants to enact a law changing a Central law? The answer is yes, and how? With the help of a Presidential assent.
So, when the amendment act did have presidential Assent, why was the Amendment Act still invalid? The answer to this lies in several reasons:-
1. The Presidential assent was invalid. It is true that the court cannot go behind the grant or denial of the assent, but it can go behind the procedure. It can look into the basis of giving the assent, and in doing so it found that the relevant documents were never placed before him. Moreover, the fact that it was repugnant to the Central Law was never brought out
2. Secondly, even if it is assumed by some stretch of imagination that the assent was valid, the whole amendment act was entirely arbitrary and violative of not one but several fundamental rights enshrined in the Constitution, for instance:-
(a) A person owning 1/70th the share of a property would pay a court fee on the entire property in a suit for partition. Many similarly arbitrary provisions enabled the court to term it baseless.
(b) Court fee was now imposed on several stages of an arbitration proceeding, which was not only defeating the very objective of encouraging arbitration, but was also an encroachment on the High Court’s exclusive powers to make rules in this regard under Section 82 of the Arbitration and Conciliation Act. Thus this was clearly outside the legislative competence of the Assembly.
(c) Such exorbitant court fee was clearly a barrier to justice, opening the gates of the Court only to the rich and privileged. This was clearly violative of several Articles such as Article 14, 16, 21, 32, 38, 39A etc. of the Constitution.
3. Thirdly, the Court Fee was more in the nature of a Tax, rather than a fee, and the Legislative Assembly certainly did not have the competence to impose a tax.
The Legislative Assembly could not brush aside judicial review merely by calling the amendment a fiscal policy, when such wide ramifications would follow. This was especially so in the light of the enactment which clearly went against several thousands of precedents, law commission reports, treatises, newspaper reports, and international instruments.
According to the Hon’ble Court, the amendment reflected such utter non-application of mind, that even the Statement of Objects and reasons of the 1870 Act had not been amended. This in light of the fact that the 1870 Act was enacted to reduce court fee as the high court fee was having a regressive effect on the general litigation of the country.
So, what happens if a litigant has already submitted the exorbitant court fee? A refund is possible ofcourse. And as for the amendment of pleadings, nothing of the sort might be required, as a clarificatory endorsement would be affixed by the respective courts thereon.
Experiences of the Past
So, is this the first time that the court fee for a state (read Union Territory in this case), has been revised, and such a hue and cry has been created? The answer to that question is a negative. Previously, there had been amendments in the States of Bombay, Karnataka as well as Rajasthan, that had been challenged in the Supreme Court of India in the landmark judgement of P . M . Ashwathanarayana Setty and Ors . vs . State of Karnataka and Ors. 1988(2) SCALE 844. In that case, the court fee in the State of Rajasthan, Karnataka and Bombay had been increased to ad-valorem fee without any upper ceiling. In those cases, the observation of the Hon’ble Court had been that although the ad-valorem method was not ideal, it was not so irrational so as to attract unconstitutionality.
Possibility of Appeal
Although the Government may prefer an appeal, the chance of success on appeal is unclear. This is because even if shelter of the Supreme Court Judgement was to be taken and it is contended that although the method of calculation may be arbitrary it cannot be so irrational so as to be struck down as unconstitutional, the same would be of no rescue. This is because, the Amendment Act suffers not just from arbitrariness but also from basic lack of legislative competence.