Costs of administration of justice
The principle that the costs of administration of justice should be met entirely through court fees levied on users is termed as `full cost recovery’. In this chapter it is proposed to examine the practice in some of the commonwealth countries where this principle which was applied long ago, has now been either modified or given up altogether. In fact, a survey of the available literature reveals that the full cost recovery principle has been found to be wholly unsupportable and is not accepted in any country in the Commonwealth or in Europe.
The position in England
In the past, in England, the principle governing the levy of Court fee was that the salaries and pensions of judges were paid by the State out of public funds. It was being accepted that it is the obligation of the State to provide the machinery for the dispensation of justice in all its Courts – civil, criminal and revenue – and that only the other expenses of administration of justice shall be borne by the litigants. (14th Report of Law Commission, p. 505)
In this regard, the Committee on Court Fees in England presided over by Mr. Justice Macnaghten observed as follows:
“The Supreme Court is not merely engaged in the work of dispensing justice to the private suitors who resort there; it administers public justice not only in criminal cases but also in civil maters, such as proceedings on the crown side of the King’s Bench. For the cost of administration of justice, where the public itself is directly concerned, the State ought, it is suggested to provide the necessary funds, since there can be no reason why the private suitors should do so. Though it would no doubt be difficult to calculate exactly how much of the expenditure of the Supreme Court is attributable to the administration of public, as distinguished from private justice, the salaries and pensions paid to the judges may perhaps be taken to represent fairly that figure.” (quoted in the Second Interim Report of the Committee on Supreme Court Practice and Procedure, p. 43)
A learned author Dr. R.M. Jackson points out the dependence of Royal Justice in England in part at least, on the profits earned out of the administration of justice:
“In the past the growth of royal justice was partly due to the profits that accrued from exercising jurisdiction. The early inherent justice 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 profit for the king. It is some time since justice has been a substantial source of income, but the old idea survives in the idea that the Courts ought not to be run at a loss.” (see ‘Machinery of Justice in England’, 5th Ed. p. 324) (emphasis supplied)
Lord Chancellor’s recent suggestion for full cost recovery criticized in England
Detailed prescription addressing the twin policies of access to justice and recovery of full cost is given in the guide published by the Treasury of Her 91Majesty called ‘The Fees and Charges Guide’, published by the Stationery Office in 1993. The Lord Chancellor also announced in Parliament on 15th November, 1998 following principles regarding fees for civil proceedings and access to justice:
(i) Fees should not prevent access to justice
(ii) Protection must be provided for litigants of modest means
(iii) Fees should match the cost of the service for which they are charged
(iv) The pay-as-you-go system should be extended without deterring access to justice
(v) Flat rate fees reflecting the cost of the stage or application should be paid at other charging points
(vi) Issue and enforcement fees should reflect the value of the claim
(vii) Flat rate fees should be set on the basis of average not actual costs
(viii) Fees should be paid by the claimant or where a specific application is made, by the party who made that application
(ix) Fees should be paid in advance
These suggestions have invited serious criticism. In an earlier chapter, reference was made to the decision of the High Court (Queen’s Bench Division) in R v. Lord Chancellor ex parte Witham, (1997) 2 All ER 779 where it was emphasized that the right of access to justice was a common law constitutional right which could only be abrogated by specific statutory provision or by regulations made pursuant to the legislation which specifically conferred the power to abrogate that right. The decision was given in a case that challenged the 1996 amendment by the Lord Chancellor to the Supreme Court Fees Order 1980 which had the effect of repealing a provision which relieved litigants in person who were in receipt of income support from the obligation to pay court fees and permitted the Lord Chancellor to reduce or remit the fee in any particular case of undue financial hardship in exceptional circumstances. While declaring the amendment invalid, the court held that the effect of the 1996 amendment was to “bar absolutely many persons from seeking justice from the courts.” (at p.788)
In September 2002, the Court service published a Consultation Paper recommending a range of increases in the setting of civil Court Fees and seeking to ensure a balance between cost recovery and access to justice. The policy of the Government was stated at para 1.7 of the Executive Summary of Consultation Paper, which is as follows:
“1.7 Government policy is that fees should normally be set to recover the full cost of a service although there may be cases in which Ministers agree a service should recover less than full cost. For the provision of proceedings in the Supreme Court and County Courts and of Family and Insolvency proceedings, allowance is made for automatic exemption for those on mean tested benefits or tax credits; for remission or reduction of fees where hardship would otherwise prevent a case being brought; and for a public subsidy for Family proceedings due to their special nature. These allowances act to meet Government policy of protecting access to justice.”
Again at para 3.2 it is stated:
“Access to justice is protected by automatic exemption for litigants on specified means tested benefits and discretionary remission (in part or in full) for those who do not benefit from exemption but would face exceptional hardship if required to pay fees, or required to pay them in full. A leaflet ‘Court fees and do you have to pay them?’ telling the public more about exemption and remission and how to apply for them is available from any Court office.”
The above policy of the full cost recovery has been criticized by many eminent jurists. Lord Woolf in July 2002 accused the Government of ‘flawed thinking’ over their proposal that Civil Court could fund themselves. He said, the policy was ‘self-evidently nonsense’. No other country in the world had such a policy and the effects were ‘pernicious and dangerous’.
The Civil Justice Council which is an advisory non-departmental public body established under the Civil Procedure Act, 1997 and chaired by the Master of the Rolls, Lord Phillips in November 2002 published advice to the Lord Chancellor on the impact of the Treasury policy of full cost recovery on the Civil Justice System. The reports provide four broad reasons why the Government is wrong to consider that civil justice should be largely self-financing. It says full cost recovery
(a) is not possible without inappropriate cross subsidy;
(b) limits arbitrarily the nature and quality of the service provided within the civil justice system;
(c) may limit access to Courts; and
(d) is wrong in principle.
The Civil Justice Council concluded: “The policy of full cost recovery is relatively recent in historical terms. It is not the approach followed in the major English-speaking common law jurisdiction, nor is it the approach followed in most, if not all, other European jurisdictions.”
“In the view of the Civil Justice Council the policy should be abandoned. The Council accepts that litigants should be charged fees, but they should not be disproportionate in relation to the amount claimed, and proportionality should be the primary factor in determining the level of fees. While it is of course necessary to forecast fee income as accurately as possible, it should not bear any set relationship to Court Service expenditure.”
The Chairman of the Council, Lord Phillips of Worth Matravers, Master of the Rolls, said:
“The policy of full cost recovery in the civil justice system has only existed since the early 1980s and has never been properly debated in Parliament. It is not the approach followed in other major common law jurisdiction, nor is it followed in European jurisdiction.
Whilst it is not wrong to require the citizen to pay Court fees, access to the civil courts must be seen as providing a social and collective benefit, as well as a service to the individual. Fees should be proportionate to the amount at stake.”
In March 2003, the peers in the House of Lords amended the Courts Bill, to require the Lord Chancellor to have regard to access to justice, when fixing court fees. New civil court fees have come into effect from April 1, 2003, designed to balance costs with access to justice, when fixing court fees.
We have referred to the above developments in the United Kingdom only for the purpose showing that the concept of recovery of the expense on the justice delivery system from the litigants has been more or less condemned. It has been pointed out that no civilized system in any commonwealth country or in the continent has come forward with such a concept.
The above views, particularly expressed by Lord Woolf and Lord Phillips are on the same lines as the views of the Law Commission, other Committees, Judges and Jurists etc., to which we have elaborately referred to above.
The position in Australia
In 1999, the Australian Law Reforms Commission (ALRC) took up for consideration a reference made to it that it should “give particular attention to the causes of excessive costs in legal services and to the need for a simpler, cheaper and more accessible legal system.” (Report of the Australian Law Reforms Commission titled Managing Justice: A review of the federal civil justice system Report No.89, Chapter 4 on Legal Costs, para 4.1 – (http://www.austlii.edu.au/au/other/alrc/publications/reports.89/) The ALRC in this Report has pointed out that full cost recovery is not pursued because “the judicial system has a key role in the democratic system of government which goes well beyond the resolution of individual disputes, encompassing progressive development of the law, providing the check on executive authority and protecting human rights.” It further explains why it is not easy to correlate the payments received from the users of the court system to the services provided by the courts. This is because “It is difficult to conceptualise who the users of the service are: whether respondents or applicants, either of whom may benefit from the outcome. There are community benefits in the effective operation of the court system and in precedents created by individual disputes. There are also practical difficulties in developing a court fee structure that reflects the actual costs of the services provided and takes into account the complexity and cost of different matters”.
The ALRC also repelled the suggestion that fee exemption and waivers be more widely applied at the discretion of the court to counteract fee charges. The reason was that: “Court registry staff could have real difficulties investigating and evaluating broader discretionary categories for exemption and waiver”.
In effect, the ALRC has also not supported the demand that there should be full cost recovery. It has realised that “cost factors are easier to identify than to control. The Commission’s research and consultations made clear that there is no single, simple solution which will reduce legal costs in federal jurisdiction, although the Commission had identified a number of strategies for government, courts, tribunals and practitioners which could assist to contain costs in many cases.”
U.S.A
In the United States of America, the issues concerning the judiciary as a whole are dealt with by the Judicial Conference of the United States (JCUS). The JCUS has recently come forward with a Long Range Plan to guide future administrative action and policy development by the JCUS and other judicial branch authorities. Among its recommendations are:
“The Federal courts should obtain resources adequate to ensure the proper discharge of their constitutional and statutory mandates.” The JCUS notes that “chronic failure to provide adequate resources puts federal judges in the unfortunate position of supplicants, constantly begging the Congress for funds”. Reiterating its plea to the Congress that the latter should “refrain from enacting new legislation that adds to the workload of the federal courts without also approving sufficient funds for the judiciary to meet its obligations under that legislation”, it also recommends that alternatively “Congress should be urged to reduce the judiciary’s existing obligations sufficiently to offset the impact of any new legislation with a quantifiable judicial impact”. (Long Range Plan for the Federal Courts, Chapter 8 ‘Resources’, p. 94)
The JCUS has unambiguously expressed its view against increase of user fees to meet additional costs of administration of justice. Its recommendation in this regard is that “the federal courts, including the bankruptcy courts, should obtain funding primarily through general appropriations.” (page 95) This is how the JCUS explains its recommendation (pages 95-96):
“Federal courts are an indispensable forum for the protection of individual constitutional rights; their costs are properly borne by all citizens. Unlike other governmental operations such as national parks, for which substantial funding through user fees may be appropriate, the mission of federal courts could not be performed if users were denied access because of an inability to pay reasonable user fees.”
“At least three reasons support continued reliance on general appropriations instead of user fees. First, given that the frequency of federal court filings can vary substantially from year to year, economic uncertainty about the amount of revenue that can be raised annually through user fees makes user fees an unreliable and, therefore, undesirable source of funding. Second, with that uncertainty, constant fee adjustments might be necessary in order to sustain ongoing judicial programs. Finally, and most importantly, litigants should not be so burdened with fees as to effectively eliminate the access of some low and moderate income users to our federal forum.”
The position in the United States of America is that full cost recovery is not a favoured method of meeting costs of administration of justice. The persistent recommendation has been that these costs should be met through general appropriations.
European jurisdictions
The position in Europe, as noted by the Civil Justice Council in its paper on Full Costs Recovery, is also some what similar. In Spain, for instance, no fees have been charged in civil cases since 1984. In Italy, there was no issue fee for very small money claims, family cases or cases relating to employment and social security. In Sweden, 6% of the total cost of civil cases in courts was met by “registration fees” and the balance of the total cost was paid from central funds.
In relation to Switzerland, the paper notes that “the proportion of costs met from fees varied between cantons and between types of court; the highest proportion in the sample was approximately 40% in the case of the District Courts of the Canton of Zurich, with 10-15% being more typical”.
Indian Experience
Given the existing costs of administration of justice, civil and criminal, is it advisable to revise upwards the existing court fee? But we find that such a question perhaps obfuscates several other supplementary questions that arise. Thus we propose to approach the question posed by raising and attempting to answer the following questions:
(a) Is court fee a fee or a tax? The answer to this will shape the approach to the principal question whether court fees can and should be enhanced to meet the costs of administration of justice.
(b) Can access to justice be for a price?
(c) Does the issue require a different treatment in the context of administration of criminal justice?
(d) Does collection of court fee impede access to civil justice?
(e) Is it fair on the part of State to charge Court fee?
(f) Is there a need for governments providing more money for the better administration of justice?
(g) Does the suggestion already made for total abolition of court fees merit acceptance?
Is court fee a fee or a tax?
Levies can generally be divided into two broad categories: fees and taxes. According to De Marco (‘First Principles of Public Finance’ at p. 78) a ‘fee’ is a “charge for a particular service of special benefit to individuals or to a class and of general benefit to the public, or it is a charge to meet the cost of regulation that primarily benefits society”.
There are various pronouncements of the Supreme Court on the conceptual distinction between ‘fee’ and ‘tax’. It emerges from these pronouncements, that if the essential character of the impost is that some special service is intended or envisaged as a quid pro quo to the class of citizens which is intended to be benefited by the service and there is a broad and general correlation between the amount so raised and the expenses involved in providing the service, the impost would partake the character of a ‘fee’. But it loses its character as such if it is intended to and does go to enrich the general revenues of the State which are meant to be applied for general purposes of government. A Constitution Bench of the Supreme Court in Govt. of Madras v. Zenith Lamps, AIR 1973 SC 724 has held that ‘fees taken in Court’ are not taxes and cannot be equated to taxes (para 30). The Law Commission in 14th Report after examining the amazing figures of collection of Court fees and expenditure in the administration of civil justice has stated that the Court fee that was being charged was, in fact, no longer a fee and that it was a heavy tax (p. 489). This was held not permissible.
Access to justice cannot be for a price
Dicta of the Supreme Court
In Chapter II, we have referred to the principle of ‘access to justice’. Just as the State has to maintain a police force to maintain law and order within the country and for which no special tax or fee is contemplated, the position with regard to the duty of the State to provide a system for ‘administration of justice’ is no different. We may once again refer to the dicta of the Supreme Court.
Speaking through Krishna Iyer J., the Supreme Court in Central Coal Fields Ltd. v Jaiswal Coal Co., AIR 1980 SC 2125 observed that effective access to justice is one of the basic requirements of a system and high amount of court fee may amount to sale of justice. He said (para 2):
“(I)t is more deplorable that the culture of the magna carta notwithstanding, the Ango-American forensic system and currently free India’s court process – shall insist on payment of court fee on such a profiteering scale without corrective expenditure on the administration of civil justice that the levies often smack of sale of justice in the Indian Republic where equality before the law is a 65guaranteed constitutional fundamental and the legal system has been directed by Article 39A “to ensure that opportunities for securing justice are not denied to any citizen by reason of economic………. disabilities”. The right of effective access to justice has emerged in the Third World countries as the first among the new social rights what with public interest litigation, community based actions and pro bono publico proceedings. ‘Effective access to justice’ can thus be seen as the most basic requirement – the most basic ‘human right’ – of a system which purports to guarantee legal rights.”
The learned Judge further observed (para 5):
“The State, and failing it some day the Court, may have to consider from the point of view of policy and constitutionality, whether such an inflated price for access to Court is just or legal.”
In P.M. Aswathanarayana Shetty v. State of Karnataka, 1989 Suppl (1) SCC 696, Venkatachaliah J (as he then was) speaking for the Court stated that a person who lodges a complaint before the police is not expected to pay for the services of the police on the basis whether the subject of complaint is big or small in terms of money. So also in the case of the system of delivery of justice, the State is not supposed to collect fee depending on the nature of the subject matter in dispute. The Court quoted the dictum in the fictional Hogby v. Hogby. We have quoted it in Chapter II but it would be worthwhile to repeat the quotation:
“if the Crown must charge for justice, 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 the 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”
Later in Secy. to Govt. of India v. P.R. Sriramulu, 1996 (1) SCC 345, the Court pointed out that it could not be disputed that the administration of justice is a service which the State is under an obligation to render to its subjects.
Law Commission’s views
The Law Commission in its 14th Report on ‘Reform of Judicial Administration’ (1958) has recommended that providing the mechanism for the administration of justice is the primary duty of the State. It has recommended at para 42 of Chapter 22 as follows:
“It is one of the primary duties of the State to provide the machinery for the administration of justice and on principle it is not proper for the State to charge fees from suitors in courts”. (emphasis supplied)
The Law Commission also observed (at para 8, Chapter 22):
“A modern welfare State cannot with any justification sell the dispensation of justice at a price.”
Court fee is also a limitation and deterrent to access to justice. In the same 14th Report, the Law Commission had observed that if access to the court is dependent upon the payment of court fee and if a person is unable to have access to court, justice becomes unequal. It observed (at p.587):
“Equality in the administration of justice thus forms the basis of our Constitution. Such equality is the basis of all modern systems of jurisprudence and administration of justice. Equality before the law necessarily involves the concept that all the parties to a proceeding in which justice is sought must have an equal opportunity of access to the Court and of presenting their cases to the Court. But access to the Courts is by law made dependent upon the payment of court fees, and the assistance of skilled lawyers is in most cases necessary for the proper presentation of a party’s case in a court of law. In so far as a person is unable to obtain access to a court of law for having his wrongs redressed or for defending himself against a criminal charge, justice becomes unequal and laws which are meant for his protection have no meaning and to that extent fail in their purpose.”
The Law Commission again observed in its 114th Report on ‘Gram Nayayalaya’ (1986), that it is the fundamental duty of every government to provide mechanism for resolution of disputes. The Commission observed (at para 4.3):
“It is the fundamental obligation of every centralized governmental administration to provide for mechanism for resolution of disputes arising within their jurisdiction. No civilized government can escape this responsibility. No government can afford to have their citizens perpetually engaged in finding solution to their disputes by an unending process which may be simultaneously costly and open ended. This fundamental duty can not be disowned under the pretext of non-availability of requisite finance.”
Constitutional Provisions
We may now refer to a few provisions of the Constitution to underscore the importance given to the obligation of the state to provide access to justice.
The Preamble as well as Article 38 of the Constitution of India mandate that the State shall secure and protect as effectively as it may, a social order in which justice (social, economic and political) shall be available to its citizens. For the purpose of translating this promise into reality, Article 39A was introduced in the Constitution in the year 1976 by way of 42nd Amendment to the Constitution. It reads as follows:
“39A – Equal Justice and Free Legal Aid The State shall secure that the operation of the legal system promotes justice, on the basis of equal opportunity, and shall, in particular, provide free legal aid, by suitable 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.”
It has been held by the Calcutta High Court in United Bank of India v Rashyan Udyog, AIR 1990 Cal. 146, that the principle enshrined in Article 38 and 39A, like all other directive principles in Part IV of the Constitution are fundamental in the governance of the country, and that these principles (Art. 38 and 39A) must also to be taken to be fundamental to the administration of justice.
Article 8 of the Universal Declaration of Human Rights, 1948 provides that:
“Everyone has the right to an effective remedy by the competent national tribunals for acts violating the fundamental rights guaranteed him by the Constitution or by law.”
Similarly, clause (3) of Article 2 of International Covenant on Civil and Political Rights, 1966 provides that each State party to the covenant undertakes ‘to ensure that every person whose rights or freedom as recognized violated, shall have an effective remedy’ and ‘to ensure that any person claiming such a remedy shall have his right thereto determined by competent judicial, administrative or legislative authorities, and the State should also ensure to develop the possibilities of judicial remedies”.
The upshot of the above discussion is that it is one of the fundamental obligations of the State to provide effective fora for better administration of justice. Where access to justice is made to depend on the price that a litigant is willing to pay, it would, given the realities of our country, tantamount to denial of access to justice. The state cannot possibly disown its constitutional obligation to provide easy and affordable access to justice on the pretext of non-availability of requisite finance.
Criminal Justice is sovereign function: no Court fee is payable
Administration of justice has two broad wings: (1) Civil Justice and (2) Criminal Justice. The Law Commission in its 127th Report on ‘Resource Allocation for Infrastructural Service in Judicial Administration’ (1988) discussed distinction between civil and criminal justice system. The Commission observed at para 5.1 as follows:
“The distinguishing feature between the civil justice system and criminal justice system lies in the fact that civil justice system provides fora for resolution of disputes between individuals, between individuals and the State, and even between the State and the States where a party complains of wrong being done to it and seeks redress. Administration of criminal justice system partakes the character of a regulatory mechanism of the society whereby the State enforces discipline in the society by providing fora for investigation of crime and punishment.”
The obligations of the State in respect of administration of civil and criminal justice materially differ. In respect of the obligation of the State so far as it relates to administration of criminal justice, the Law Commission in its 128th Report on ‘Cost of Litigation’ (1988), categorically stated that administration of criminal justice is the obligatory duty of the State as part of its sovereign functions. It is also stated in the Report that as it is, being part of the sovereign function of the State, no fee can be levied for performing the same and also because the system does not render any service to the litigant. The Commission stated at para 3.11 as follows:
“It is the State which must ensure internal peace. It is part of its duty to adopt regulatory measures and it is equally part of its duty to set up forum for determining whether a violation of regulatory measures has or has not taken place and a punishment need or need not be imposed. This is the obligatory duty of the State as part of its sovereign functions. This can be broadly comprehended in the expression ‘administration of criminal justice’. Ordinarily this being the part of the sovereign functions of the State, no fee can be levied for performing the same and also because the system does not render any service to the litigant.”
Earlier the Law Commission in 14th Report also recommended (page 508) that the cost of the administration of public justice (criminal justice) should be borne entirely by the State. The Law Commission in 127th Report also stated (at para 5.1) that it is the duty and obligation of the State to set up Courts for administration of criminal justice. The State must pay the entire costs of administration of criminal justice.
Civil Justice – collection of Court fee cannot impede access to justice
This subject is discussed generally in this chapter and the question whether in relation to civil justice, full cost recovery should be made or not, is discussed separately in Chapter V.
In respect of administration of civil justice system, the Law Commission in its 128th Report on Cost of Litigation (1988) has observed at para 3.12 as follows:
“When it comes to civil justice, the approach has to undergo a change. Civil disputes include disputes between an individual and individual, between individual and groups of individuals, between group of individuals on one hand and group of individuals on the other hand and between individuals and group of individuals on one hand and State on the other. A writting (sic written) Constitution with an inbuilt chapter on fundamental rights and division of powers amongst Federation and States provide a fruitful ground for disputes coming into existence. These disputes have to be resolved because a continuous simmering dispute is not conducive to growth and development of society. However, when the disputes are between two individuals, say an employer and an employee, a husband and a wife, or between members of the same family, it is open to them to choose their own forum to get the dispute resolved. An arbitrator appointed by the parties for resolution of dispute partakes the character of the court because parties agree to treat its decision binding. The costs of such arbitrator has to be met by the parties who agree to refer the disputes to arbitrator. The arbitrator renders service to the disputes and charges fees. The position of the State is identical to that of an arbitrator. All parties cannot go continuously in search of an arbitrator. Parties to a dispute may not agree to go for arbitration. The State, therefore, sets up courts for administration of civil justice which term will comprehend all disputes other than those comprehended in administration of criminal justice. The court would be a readily accessible forum for a party complaining of violation of his right or a threatened invasion of his right or denial of his right and he may approach the court and seek redress of his right grievance. The court enjoys the judicial power of the State and can force the attendance of the other side to the dispute and adjudicate the dispute. Nonetheless, the court renders service. And to the extent this is service, fees, for service is chargeable.”
The Supreme Court has pointed out that while Court fee can be collected for purposes of civil justice, this should not be confused with the obligation to collect Court fee. There is no such obligation. In P.M. Aswathanarayana Shetty v. State of Karnataka (supra), it was clearly observed (at para 96):
“The power to raise funds through the fiscal tool of a ‘fee’ is not be confused with a compulsion so to do. While ‘fee’ meant to 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 utilized to meet, wholly or in substantial part, the expenses on the administration of civil justice.” (emphasis supplied)
Is it fair on the part of State to charge Court fee for judicial services?
(Views of Commissions, Judicial dicta, views of Jurists)
There is considerable authority to say that the very concept of charging Court fee for rendering judicial services is no longer acceptable today.
Law Commission’s Reports
In this regard, following recommendations of the Law Commission made in 14th Report (para 42 p. 509) are also worth mentioning:
“(1) It is one of the primary duties of the State to provide the machinery for the administration of justice and on principle it is not proper for the State to charge fees from suitors in courts.
(2) Even if court fees are charged, the revenue derived from them should not exceed the cost of the administration of civil justice.
(3) The making of profit by the State from the administration of justice is not justified.
(4) Steps should be taken to reduce court fees so that the revenue from it is sufficient to cover the cost of the civil judicial establishment. Principles analogous to those applied in England should be applied to measure the cost of such establishment.
The salaries of judicial officer should be charged on the general tax payer.”
The Law Commission in its 128th Report on Cost of Litigation (1988), has observed that high cost of litigation is one of the impediments or road blocks in access to justice. The court fee was considered as the most important component of cost of litigation.
Judicial dicta
The view of the Supreme Court regarding court fee as a limitation on access to justice expressed in P.M. Aswathanarayana Shetty v. State of Karnataka (supra), is worth recalling. The Court said:
“The court fee as a limitation on access to justice is inextricably intertwined 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, equality 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, recognizes the primordial need to maintain order in society as disincentive of inclination towards extra-judicial and violent means of setting disputes.”
The Court further observed:
“The stipulation of court fee is, undoubtedly a deterrent to free access to justice.”
The Court also said:
“Indeed all civilized government recognize the need for access to justice being free.”
The Court also observed (at para 95):
“The levy of court fee at rates reaching 10 per cent ad valorem operates harshly and almost tends to price justice out of the reach of many distressed litigants. The Directive Principles of State Policy, though not strictly enforceable in courts of law, are yet fundamental in the governance in the country. They constitutes fons juris in a welfare State. The prescription of such high rates of court fees even in small claims, as also without an upper limit in large claims, is perilously close to arbitrariness and unconstitutionality. The idea is, of course, a state of affairs where the State is enabled to do away with the pricing of justice in its courts of justice.”
Views of jurists
Need for access to justice has been described by a learned author Cappelleti in his book “Access to Justice”, Vol. I Book 1. He says (at page 419):
“The need for access to justice may be said to be twofold; first, we must ensure that the rights of citizens should be recognized and 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 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.”
Recently, V.R. Krishna Iyer J. in an article published in ‘The Hindu’ dated October 10, 2003 has stated:
“Access to justice is basic to human rights and Directive Principles of State Policy become ropes of sand, teasing illusion and promise of unreality, unless there is effective means for the common people to reach the Court, seek remedy and enjoy the fruits of law and justice.”
On high amount of Court fees in India, a former Chief Justice of Madras observed as follows:
“They (the litigants) pay high Court fees and it is beyond question that the aggregate amount is far more than sufficient to cover the total cost of the administration of civil justice. When I came to India, I was amazed at the high Court fees which litigants were called upon to pay, the position being so different in England.” (Madras Law Journal 1947, Vol. I Journal)
A learned author Findlay Shirras observed in his book ‘Science of Public Finance’, Vol. II at p. 674-675, as follows:
“Fees are levied in order to defray usually a part, in rare cases the whole of the cost of services done in public interest and conferring some degree of advantage as the fee payer.”
Levying high court fees is also criticised by the noted jurist H.M. Seervai, in his book Constitutional Law of India, 3rd Ed. Vol. II p. 1958. He observed that court fees should not be a weapon to stifle suits or proceedings and that though in fixing the court fees regard may be given to the amount involved,
“a stage is reached when an increasing amount ceases to be justified”.
Need for providing more money by the Governments for the better administration of justice
(a) Views of the Supreme Court, the Law Commission and Judicial Pay Commission
There is need that whatever amount is collected in the form of court fees, should be spent on administration of justice. The Supreme Court has observed that the income from court fees is more than the expenditure made in the administration of justice, as per figures made available in the publication of the Ministry of Law and Justice. The Supreme Court in All India Judges Association v. Union of India, AIR 1992 SC 164, after analyzing the concept of Court fees and quoting from a judgment of a Constitution Bench reported in AIR 1973 SC 724, observed as follows (at para 51):
“We adverted to these authorities and the views of this Court to bring support for the view that what is collected as court fee at least be spent on the administration of justice instead of being utilized as a source of general revenue of the States. Undoubtedly, the income from court fees is more than the expenditure on the administration of justice. This is conspicuously noticeable from the figures available in the publication in the Ministry of Law and Justice.” (emphasis supplied)
States are not spending much on the administration of justice. Law Commission in 127th Report on Resource Allocation for Infrastructural Services in Judicial Administration (1988) has stated (at para 5.8): “it is imperative to point out that the State today spends precious little or, to say the least, practically nothing on the administration of justice”. The Commission has pointed out that during 1981-82 barring Manipur and Tripura most of the States spent only between 0.15% (A.P.) to 3.53% (M.P.) of the total tax receipts of the State, on the administration of justice. These figures show that administration of justice has received negligible funds for upkeep as well as its growth. The first National Pay Judicial Commissio chaired by Mr. Justice K.J. Shetty, in its Report dated 11.11.1999 has stated that the expenditure on the judiciary in India in terms of Gross National Product (GNP) is relatively low. It is not more than 0.2%. The Justice Shetty Commission also recommended that as the administration of justice is the joint responsibility of the Centre and the State Governments, the Central Govt. must, in every State share half on the annual expenditure on subordinate Courts. The Supreme Court in All India Judge’s Association case (2002) 4 SCC 247, has stated that no doubt whenever the State Govt. will approach to the Central Govt. or Planning Commission for more funds, such request shall be considered favourably.
(b) Views of National Commission to Review the Working of the Constitution
No doubt, the judiciary has been included as a plan subject by the Planning Commission (Sawant J. in All India Judges case, 1993 (4) SCC 288 at p. 310), but the manner of giving grants by the Central Government is criticized by the National Commission to review the Working of Constitution (NCRWC). In a Consultation Paper on ‘Financial Autonomy of the Indian Judiciary’, the NCRWC after mentioning the observation of Sawant J. in 1993 (4) SCC 288, regarding including of judiciary as a plan subject, has stated (paras 9.15.1 – 9.15.2):
“There is no exclusive grant by the Centre for Court expenditure. All that we have is an insignificant ‘centrally sponsored scheme’ for Courts prepared by the Planning Commission while allotting some monies for each State on population basis.
Further, the present scheme has become nothing but an eye wash for it requires the States to provide matching grant, or else the central grants lapses. Most States are not able to provide matching grant and the result is that the central grant lapses. To put it bluntly, the so called inclusion of judiciary as a plan subject is no inclusion at all as it is totally unrealistic, unplanned and unrelated to the scenario at the grass root level and also at the level of appellate and superior courts.”
Even otherwise, there is no proper planning and adequate financial support for administration of justice in our country. In this regard, National Commission to Review the Working of Constitution in its Report (Vol. I) has observed as follows (at para 7.6.1):
“Judicial administration in the country suffers from deficiencies due to lack of proper planning and adequate financial support for establishing more courts and providing them with adequate infrastructure. For several decades the courts have not been provided with any funds under the Five Year plans nor has the Finance Commission been making any separate provision to serve the financial needs of the courts.” (emphasis supplied)
The NCRWC in its report has also emphasized the need for providing financial support by the Central Govt. in administration of justice. It has recommended that (para 7.8.2):
“Government of India should not throw the entire burden of establishing the subordinate Courts and maintaining the subordinate judiciary on the State Governments. There is a concurrent obligation on the Union Government to meet the expenditure on subordinate Courts. Therefore, the Planning Commission and the Finance Commission must allocate sufficient funds from national resources to meet the demand of the State judiciary in every of the States.”
(c) Empirical Evidence that the Judiciary earns more than it spends
A study of the budgets and working of the Supreme Court and the Allahabad High Court in 1984 revealed some interesting facts (Litigation Explosion in India prepared by Dr.Rajeev Dhavan, published by the Indian Law Institute). The figures for the years 1957 to 1977 (Table III at pages 67-68) showed that the Supreme Court invariably spent less than the sum it received under the head `grant allocated’ and `other receipts’. The amount collected as court fee virtually remained unspent. As regards the judiciary in Uttar Pradesh (including the Allahabad High Court) (Table VI at p. 113), the figures for the years 1961-62 to 1978-79) showed that the income earned by the courts (from judicial stamps and fees on writs, vakalatnama etc.) was always in excess of what was spent on them thus leaving a substantial surplus in each year. Dr.Dhavan who prepared the text comments (at p.112): “The judiciary is India’s best nationalized industry. As a whole it earns more than it spends. In that sense, it can also be described as the `least expensive branch’.”
(d) Views of the Adviser, Planning Commission – Dismal Allocation
As per the information and data given in an article of Mr. Surendra Nath, Adviser, Planning Commission of India, published in ‘The Hindu’ dated July 22, 2003, the Centre’s plan investment in justice started only in the 8th Five Year Plan (1992-97) in compliance with a Supreme Court direction of 1993-94. During the Eighth Plan, the Centre spent about 110 crores on improving judicial infrastructure, such as constructing court rooms etc. An equal amount was spent by the Sates. In the Ninth Plan, about Rs.385 crores were spent by the Centre, and the States also made a matching contribution. This was 0.071 per cent of the total Centre’s Ninth Plan expenditure of Rs.5,41,207 crores. During the Tenth Plan (2002-07), the allocation for justice is Rs.700 crores, which is 0.078 per cent of the total plan outlay of Rs.8,91,183 crores.
(e) Fast-tracking criminal cases
Over two crore cases are pending in about 13000 district subordinate courts. About two-third of these cases are criminal cases. And about a million are sessions cases which involve heinous offences such as murder, rape, dacoity etc. About 30 per cent of sessions cases have been pending for three years or more. When trial gets delayed, witnesses lose interest. They often get coerced and justice becomes a casualty. The conviction rate in offences under the IPC fell from 65 per cent in 1970s to about 40 per cent in 2000. Justice delayed is justice denied. One of the main reason for delay in administering justice is that the courts have to deal with more cases than their capacity. Result is that courts have no options but to give frequent adjournments. Expeditious trial of cases require more Courts.
As mentioned above, this plan investment in the administration of justice is totally inadequate. It was for this reason that the Dept. of Justice approached the 11th Finance Commission for non-plan assistance to set up additional Courts for expediting the trial of long pending sessions cases.
The 11th Finance Commission, after discussing with Law Secretaries of major States, recommended a grant of Rs.502.9 crores under Article 275 of the Constitution of India to set up 1,734 additional Courts known as Fast Track Courts. These Courts are to continue till 2005. The grant covers the entire functioning of fast track Courts. So far States have notified 1,366 fast track Courts and the Central govt. has released about Rs.360 crores. As grants under Article 275 of the Constitution are a devolution to the States, the Union Territories were left out. The Delhi High Court proposed setting up fast track Courts in Delhi and so did the Union Territory of Chandigarh. Funds were provided in the current financial year for setting up fast track Courts in Delhi.
These fast track Courts have been assigned 3,14,777 cases and by June 2003, fast track Courts had disposed of 1,60,487 cases – more than half of the total number of cases transferred to them. It is a significant progress. If the Central Govt. continue to give adequate financial support to the States for better administration of justice, obviously quality of justice will improve and there be no need to put more monetary burden on litigant.
These fast track Courts address the problem of only sessions cases and of cases pending in the Magistrate Courts. Therefore, the Dept. of Justice approached the Twelveth Finance Commission in March 2003 with a proposal to set up fast track magisterial Courts.
In this scenario, more allocation is necessary from the general taxes received by the Government. There is no justification in enhancing the court fee structure. It is true that with the passage of time the cost of administration of justice is increasing but to meet this increased cost of administration of justice enhancing the court fees is not the proper approach. On the contrary, it will be a roadblock to the access to justice, which is recognized as a basic right world over.
Past recommendations for total abolition need reiteration
There was, indeed, a move at one time, for abolition of Court fees altogether. The Consultative Committee attached to the Ministry of Law and Justice, at its meeting in June 1980, set up a Sub-Committee to go into the question of court fees in trial Courts. The Sub-Committee in its report recommended abolition of court fees. The exercise was again undertaken by a Sub-Committee set up by the Conference of Law Ministers which submitted its report in October 1984. This Sub Committee did not recommend abolition of court fees but recommended rationalization in the structure of court fee, broadly through reduction in ad valorem fee, exemption of certain categories of litigants and certain categories of cases from payment/levy of court fee and refund of court fee under certain circumstances. The Law Commission in 128th Report on Cost of Litigation (1988) expressed its views in favour of abolition of court fees. The Commission stated (para 4.6):
“However, the Law Commission would be extremely happy if the State Governments or the Government of India, as the case may be, view the court fees as something incompatible with a society governed by rule of law and would, therefore, like to abolish it.” (emphasis supplied)
There was a proposal to amend the Court Fees Act, 1870 which was examined in detail in 1999 by the Department of Justice. The exercise was undertaken in pursuance of the recommendations of the Expert Group appointed by the Ministry of Home Affairs to review Acts etc. administered by the said Ministry. However, with the approval of the then Minister of Law and Justice, it was decided not to amend the Act.
SOURCE: Law Commission of India Report No. 189-Revision of Court Fees Structure-February 25, 2004
