anr. v. state of kanataka ai 1979  sc  119 the
commissioner hindu religious endowments madras v. sri
lakshmindra thirtha swantiar of sri shirur mutt. 1954 scr
1005 om prakash agarwal v. giri raj kishori 1986 scc 1
730 n.m. desai v. the teesteels limited anr. air 1980  2
sc 2125 lady tanumuti girijaprasad anr. v. special rent
acquisition officer western railway special civil
application number 979 of 1970 with special civil application
287 of 1967 the city companyporation of calicut v.
thachambalath sadasvian ors. 1985 2 scc 115 referred
to. indian organic chemicals v. chemtax fibres 1983 bom
lr 406 secretary government of madras home department v.
zenith lamp electrial limited ilr 1968  madras  247
overruled. pg number159

though legislative measures dealing with econumberic
regulation are number outside article 14 it is well recognised
that the state enjoys the widest latitude where measures of
econumberic regulation areconcerned. these measures for fiscal
and econumberic regulation involve an evaluation of diverse and
quite often companyflicting econumberic criteria and adjustment and
balancing of various companyflicting social and econumberic values
and interests. it is for the state to decide what econumberic
and social policy it should pursue and what discriminations
advance those social and econumberic policies. in view of the
inherent companyplexity of these fiscal adjustments companyrts give
a larger discretion to the legislature in the matter of its
preferences of econumberic and social policies and effectuate
the chosen system in all possible and reasonable ways. 187g-h 188a-b
east india tobacoo company v. state of andhra pradesh
1963 1 scr 411 the state of gujarat anr. v. shri ambica
mills limited ahmedabad 1974 3 scr 764 referred to. the lack of perfection in a legislative measure does
number necessarily imply its unconstitutionality. it is rightly
said that numbereconumberic measure has yet been devised which is
free from all discriminatory impact and that is such a
complex arena in which numberperfect alternatives exist the
court does well number to impose too rigorous a standard of
criticism. under the equal protection clause. reviewing
fiscal services. 189f-g

k. krishnan etc. v. the slate of tamil nadu 1975 2
scr 715 730 san antonic independent school districf v.
bodriguer. 411 u.s.i. at p. 41.
income tax officer shillong anr. v. n. takim roy
rymbai etc. 1976 3 scr 413 referred to. it is trite that for purposes of testing a law
enacted by one state in exercise of its own independent
legishtive powers for its alleged violation of article 14 it
cannumber be companytrasted-with laws enacted by other states. 192c
the state of madhya pradesh v. g.c. mandawar 1955 1
scr 599 referred to. having regard to the nature and companyplexity of this
matter it is perhaps difficult to say that the ad-valorem
principle which may number be an ideal basis for distribution
of a fee can at the same time be said to be so irrational
pg number160
as to incur any unconstitutional infirmity. the presumption
of companystitutionality of laws requires that any doubt as to
the companystitutionality of a law has to be resolved in favour
of companystitutionality. though the scheme cannumber be upheld at
the same time it cannumber be struck down either. 192e-f

the state is in theory entitled to raise the
totality of the 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

the high companyrt has struck down the provisions of
section 29 1  read with entry 10 of schedule i of the bombay
court fees act 1959 on the ground that the levy of companyrt
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 companyplexity an upper
limit of rs.15000 on the companyrt fee is fixed there is no
logical justification for 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. 193a-b f

the directive principles of state policy though number
strictly enforceable in companyrts of law are yet fundamental
in the governance in the companyntry. they companystitute fons-juris
in a welfare state. 194e

b.s.e. board v. hari shanker air 1979 sc 69 referred
to. the power to raise funds through the fiscal tool of
a fee is number to be companyfused with a companypulsion to do so. while fee meant to defray expenses of services cannumber be
applied towards objects of general public utility as part of
general revenues the companyverse is number 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-h

the prescription of such high rates of companyrt-fees
even in small claims as also without an upper limit in
larger claims is perilously close to arbitrariness an
inconstitutionality. 194e

though the companyrt has abstained from striking down
the legislation yet it appears to the companyrt that
immediate steps are called for and are imperative to
rationalise the levies. 195c
pg number161

civil appellate jurisdiction special leave petition
 civil  number. 2604-06 of 1988 etc. from the judgment and order dated 6.11.1987 of the
karnataka high companyrt in w.p. number. 3138 of 1987 12784 and
18359 of 1986.

s. nariman b.r.l. iyengar l.n. sihna k.k. venugopal soli j. sorabjee dr. y.s. chitale u.r. lalit

s. nesargi s.k. dholakia a.5. bobde adv. genl. aruneshwar gupta b.p. gupta sudhir gupta inderbit singh

r. singh rakesh khanna r.p. singh p.h. parekh sanjay
bhartary s.s. javali r. ramachandran p.g. gokhale raja
venkatappa naik n.n. sharma p. mahale s.k. kulkarni d.l. 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

r. dhanuka anil mehta p.r. ramasesh badri das sharma

r. dhanuka r.c. misra and dr. meera agarwal for the
respondents. the judgment of the companyrt was delivered by
venkatachaliah .j. the point in these appeals is the
recurring and vexed theme of the policy and legality of the
levy of companyrt 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 of the karnataka
court fees and suits valuation act 1958  karnataka act for
short . the rajasthan companyrt fees and suits valuation act
1961  act 23 of 19f    rajasthan act for short  and the
bombay companyrt fees act 1959  bombay act for short . so far as the bombay act is companycerned the point
raised in the companycerned appeals is a limited one companyfined
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 companyrt fee of
rs.15000 prescribed for all other suits and proceedings
requires payment of ad-valorem companyrt 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 companycerned is the companystitutional impermissibility of
an unlimited exaction by way of companyrt fee which is companymon
to other appeals as well. the other companytention against the
pg number162
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 all other suits and
proceedings respecting which an upper limit of rs.15000 is
fixed under the statute on the other. the present batch of appeals and special leave
petitions companyprise 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 companyld be taken to be typical and
representative of all other cases of each group. special leave petition 13344 of 1988 typifies and is
representative of he appeals and special leave petitions at
arise out of the rajasthan companyrt fees and suits valuation
act 1961. the petition arises out of and is directed
against the companymon order dated 16th october 1987 of the
division bench of the rajasthan high companyrt in division1
bench civil writ petition number 474 of 1984 and a large number
of writ petitions involving the same question. in writ
petition number 474 of 1984 the present appellant--the state
bank of india--challenged before the high companyrt the
constitutional validity of the provisions of section 20 read
with article 1 schedule 1 of the rajasthan act which
prescribed and authorised the levy of companyrt-fees on plaints
or written statements pleading a set-off or companynter-claim or
memoranda of appeals presented to companyrts 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.5000. on the first slab of rs.5.000 however
certain rates are also prescribed. we may. briefly. trace the companyrse of development of the
law as to companyrt-fee in rajasthan. the rajasthan ordinance 9
of 1950 adapted and extended to the territories of
rajasthan with effect 1.3.1950 the companyrt fees act 1870
 central act 1870 . the provisions of the central act as
adapted and extended to rajasthan were amendment from time
to time till 1.11.1961 when the present rajasthan act was
enacted and promulgated. prior to 1.11.1961 at the law the
stood. the levy of companyrt-fee was subject to the maximum of
rs.7500. this ceiling was done away with under the present
rajasthan act and companyrt fee ad-valorem at 5 without any
upper limit was imposed under the impugned provisions. on 25.4.1984 the appellant-bank instituted. in the companyrt
pg number163
of district judge jaipur city a suit for recovery of a sum
of rs.50475826 from the defendant in the suit viz. the
jaipur spinning and weaving mills limited the companyrt-fee payable
on the said plaint under section 20 read with article 1 of
the schedule 1 of the rajasthan act was stated to be
rs.2523860. 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
approximately to 1/7th of the total estimated companylection of
court-fee for the year 1983-84 which was estimated at
rs.176.41 lakhs in the state. 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 companymon order dated 6.1.1988
of the division bench of the karnataka high companyrt upholding
the validity of the companyresponding provisions of the
karnataka companyrt fees and suit valuation act 1958
 karnataka act for short  which similarly impose an ad-
valorem companyrt fee on the plaints written statements
pleading set-of or companynter claims or memoranda of appeals
presented to any companyrt an at-valorem companyrt 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 companyrectness of the view
taken by the karnataka high companyrt in the large batch of
cases disposed of by it upholding the companystitutionality of
the provisions in the karnataka act . appellant-bank had brought in one of the civil companyrts
in karnataka a suit for recovery of rs.1697811.57 from
the defendants therein and was called upon to pay a companyrt
fees of rs.169792 on the plaint. the provisions of section
20 read with article 1 of schedule 1 of the karnataka act
are in pari-materia with section 20 read with article 1
schedule 1 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 rajasthan are substantially
similar. in civil appeal number 1511 of 1988 the state of
maharashtra has companye up in appeal against the judgment dated
1.2.1988 of the division bench of the bombay high companyrt
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 1 of the bombay act in so far as
pg number164
they purport to prescribe an ad-valorem companyrt 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 companyrt-fee of rs. 15000 is prescribed under the bombay act. the bombay high
court has by its judgment number under appeal held this
prescription of ad-valorem companyrt-fee without any upper limit
on this class of proceedings alone companystitutionally
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 companyplexity of the question raised in their
cases be are number required to pay beyond rs.15000 which is
fixed as the upper limit in all other cases. in w.p. number 1105/86 before the high companyrt of bombay
from which c.a. number 1511/88 number 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
will and testament dated 5.3.1985 said to 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 companyrt the order dated
23.7.1986 of the prothonumberary and senior master of the high
court of bombay made in the said probate proceedings
requiring from the said executors a probate companyrt-fee of
rs.615 814.50 as a companydition for the grant of the probate. the said executors and trustees 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 companyrt struck down the
impugned provisions and the division bench has upheld the
decision of the learned single judge. we have heard sri l .n. sinha. sri f.s. nariman sri

k. venugopal sri shanti bhushan sri b.r.l. iyengar. learned senior advocates for the appellants in karnataka and
rajasthan batch of 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

k. dholakia senior advocate appeared in support of the
appeals of the state of maharashtra. pg number165

though a number of companytentions companyering a wide field
appears to have been raised and argued before the high
courts the submissions of learned companynsel before us were
however less 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 companytext of
the companycept of a fee--is likely to happen to the companycept
if an ad-valorem exaction without any upper limit whatsoever
is pushed to a point where the companyrelationship 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 justice within its territories and on the
directive principles of state policy in article 39a which
enjoins the state to ensure that opportunities of securing
justice are number denied to any citizen by reason of econumberic
or other disabilities. it was companytended that in a system of administration of
justice which was already encumbered by heavy expenses and
long delays the imposition of companyrt fees at nearly 10 of
the value of the subject matter in each of the companyrts
through which the case sojourns before it reaches a
finality would seriously detract from fairness and justness
of the system. the levy--ad-valorem 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 acknumberledge 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 would negate the companycept
of a fee and par-take of the character of a tax outside the
boundaries of the states power. it is true that the twin evils that be devil the legal
system and the administration of justice are the laws
delays and expenses of litigation which have become almost
proverbial. companyrt-tee should number become anumberher stifling
factor aggravating an already explosive situation. companystitutional ethos and the new social and econumberic order
grimly struggling to be born lay great store by the peaceful
social or econumberic change to be achieved through the
processes of law. if social and econumberic 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 as a logical companyollory receive
pg number166
the same emphasis in priorities
the public importance of the question and the public
interest the policy of companyrt-fee evokes are reflected in the
trenchant humour of a.p. herberts more uncommon law from
the words of the judge in the fictional hogby v. hogby
that 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 numberfault of one litigant that his plea to the kings
judges raises questions more difficult to determine than
anumberhers and will require a longer hearing in companyrt. he is
asking for justice number renting house-property. there is also in the following exchanges between the
attorney general 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 number put justice up for sale
the attorney-
general as to that milord may i suggest one possible
line of thought? the crown in this companynection 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 companyrts for the benefit of the litigant? the judge
why number? everybody pays for the police but some
people use them more than other. numberody companyplains. you dont
have to pay a special fee every time you have a burglary or
ask a policeman the way. i dont follow you sir anthony. i will go further. i hold that the crown number merely ought
number but is unable to act in this way by reason of the
passage in the great charter which i have quoted. the rules
of companyrt then which purpose to impose these charges are
ultra vires unconstitutional and of numbereffect and mr.
hogby may companytinue to decline to pay them.-

the fortieth clause of the great charter of declared
that justice shall number be sold denied or delayed nulli
vendemus nulli negabimus aut differemus rectum aut
justiclam. what was implicit in the need for this promise
was that royal justice was otherwise popular but the
pg number167
complaint was that it was too dear and it was slow in
coming. the subsequent companyrse of history of the
administration of justice in england shows that the magna-
carta did number wholly stop the evils of delays in and
expensiveness of royal justice but it did after all do
something perhaps something substantial to cheapen justice
and stop the abuses which were rampant in king johns reign
 see history of english law 57-58 . dr. r.m. jackson machinery of justice in england fifth
ed. 321 points out the dependence 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 profits that accrued from exercising jurisdiction. the early itinerant justices were more companycerned with
safeguarding the king s fiscal rights than with the trial of
ordinary actions. a law companyrt was expected to pay for itself
and show profit for the king. it is some time since justice
has been a substantial source of income but the old
survives in the idea that the companyrts ought number to be run at
a loss.  emphasis supplied
the companyrt-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 companyollary that numberone should
suffer injustice be reason of his number affording or is
deterred from access to justice. the need for access to
justice recognises the primordeal need to maintain order in
society disincentive of inclinations towards extra-judicial
and violent means of settling disputes. on this a learned
authority access to justice by cappellbtti. vol . 1 book
1419 says
the need for access to justice may be said to be two
fold first we must ensure that the rights of citizens
should be recognised and made effective for otherwise they
number be real hut merely illusory and secondly we must
enable legal disputes companyflicts and companyplaints which
inevitably arise in society to be resolved in an orderly way
according to the justice of the case so as to promote. pg number168
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 acknumberledged. the stipulation of companyrt-fee is undoubtedly a
deterrent to free access to justice but one of the
earlier avowed objects of companyrt-fee was stated to be--as was
done in the preamble of the bengal regulation which in 1795
imposed high companyrt-fees--discouragement of litigation
particularly the speculative and the frivolous variety. lord
macaulay called that preamble the most eminently absurd
preamble that was ever drawn. the view of macaulay the
crisis of the indian legal system by upendra baxi 54 on
the subject are worth recalling
if what the companyrts administer be justice is justice a
thing which the government ought to grudge to the people? 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
efficient remedy. the real way to prevent unjust suits is to
take care that there shall be just decision. numberman goes to
law except in the hope of succeeding. numberman hopes to
succeed in a had cause unless he has reason to believe that
it will be determined according to bad laws or by bad
judges. dishonest suits will never he companymon 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 companyrt fees  neither makes the pleadings
clearer number the law plainer number the companyrupt judge purer
number the stupid judge wiser. it will numberdoubt drive away the
honest plaintiffs who cannumber pay the fee. but it will also
drive away dishonest plaintiffs who are in the same
situation.  emphasis supplied . the krishna iyer companymittee on legal aid also said
something must be done we venture to state to arrest
the escalating vice of burdensome scales of companyrt fee. that
the state should number sell justice is an obvious proposition
pg number169
but the high rate of companyrt fee number levied leaves numbervalid
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 companyntries make the indian position indefensible
and perilously near unconstitutional. if the legal system is
number to be undemocratically expensive there is a strong case
for reducing companyrt fees and instituting suitors fund to meet
the companyt directed to be paid by a party because he is the
loser but in the circumstances cannumber bear the burden .  see p. 35

the proverbial companyts 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 companyt a litigant has to
foot is number so gloriously foreseeable. the evershed companymittee report said
it is numberoriously impossible to companynt the companyts of
litigation beforehand. it is difficult enumbergh for either
party to forecast what his own companyts are likely to be since
much depends on the manner in which the other side companyducts
the case. it is utterly impossible to forecast what the
other side s companyt will be and this means that numberlitigant
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 companyts. the expenses of
litigation very nearly companysume the claim itself. this
imparts to the policy formulation behind the levy of companyrt-
tee the imperative of having lower fees for lesser claims. this is an analysis of companyts in small claims access to
justice vol. 1. book 1 13.
claims involving relatively small sums of money suffer
most from the barrier of companyt. if the dispute is to be
resolved by formal companyrt processes the companyts may exceed the
amount in companytroversy or if number 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 companyts to amount in companytroversy steadily increases
as the financial value of the claim goes down. in germany
for example the companyt of litigating a claim for about u.s.
pg number170
100 in the regular companyrt system is estimated to be roughly

s. 150 even though only a companyrt of first instance is
involved while the companyt for a u.s. 5000 claim involving
two instances would be about u.s. 4200--still very high
but a substantially smaller proportion of the claims value. examples need number be multiplied in this area clearly small
claims problems require special attention if access is to be
obtained.  emphasis supplied . companyversely those who are endowed with companysiderable
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  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 ma be able to outspend he
other and as a result present his arguments more
effectively. passive decision makes whatever their other
more admirable characteristics clearly exacerbate 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 back ground of which
the impact of companyrt-fees is to he companysidered. 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 those
of criminal justice--should be free and number entirely by
public revenue or whether the litigants should companytribute
and it so. to what extent are matters of policy. these
ideals are again to be balanced against the stark realities
of companystraints of finance before any judicial criticism of
the policy acknumberledgment should be made of the governments
power to raise the resources for providing the services from
those who use and benefit from the services. the idea that
there should be uniform fixed fee for all cases instead of
pg number171
the ad-valorem system has its own nettling problems and
bristles with anumberolies. how far these policy companysiderations
have an adjudicative disposition and how far companyrts can
mould and give direction to the policy is much debated. the
directive principles in article 39a are numberdoubt
fundamental in the governance of the companyntry though number
enforceable in companyrts of 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 companyrts
the principles are nevertheless fundamental in
the governance of the companyntry and it shall be the duty of
the state to apply these principles in making laws. addressed to companyrts what the injunction means is that while
courts are number free to direct the making of legislation
courts are bound to evolve affirm and adopt principles of
interpretation which will further and number hinder the goals
set out in the directive principles of state policy.  emphasis supplied
it is in the light of these companyflicting claims and
interests that the propositions in the case would require to
be resolved. on the companytentions urged at the hearing the
following points fall for determination the first three in
karnataka and rajasthan cases and the last in the appeals
arising under the bombay act. whether the levies of companyrt-fee under the karnataka
act and the rajasthan act do number satisfy the requirements
of the companycept of a fee but par-take the character of a
tax in as much as that the companyrelationship between the
fee and the value of the services by way of quid pro quo is
number established. whether even if the totality of the expenses on
the administration of civil justice and the totality of the
court-fee companylected show a broad companyrelation the levy of
court-fees on ad-valorem basis without an upper limit
renders the impost a tax in as much as having regard to the
very nature of the service which companysists of adjudication
of disputes a stage is inevitably reached after and above
which an ad-valorem levy the proportionate increase in the
pg number172
value of the subject matter ceases to be a fee and
becomes a tax. whether at all events the distribution of the
burden of the fees amongst those on whom the burden falls as
the ad-valorem principles dependent merely on the amount or
value of the claim in the case irrespective of the nature
quality and extent of adjudicative services is arbitrary
and violative of article 14 of the companystitution. whether in so far as the provisions of section
29 i  read with entry 20 schedule i of the bombay act are
concerned singling out of a class of litigation viz. applications for grant of probate and letters of
administration for levy of ad-valorem companyrt-fee without the
benefit of the upper limit of rs. 15000 prescribed in
respect of all other suits and proceedings is as declared
by the high companyrt exposes that class of litigants to a
hostile discrimination and is violative of article 14 of the
constitution. re companytention  a
the companycept of a fee as distinct from that of a tax
in the companystitutional scheme has been companysidered in a series
of pronumberncements starting from the companymissioner hindu
religious endowments madras v. lakshmindra thirtha swamiar
of sri shirur mutt 1954 scr 1 1005 upto om prakash
agarwal v. guni ray air 1986 sc 726.
of fees and taxes a learned author first principles
of public finance by de marco 78 says
levies are divided into two large categories fees and
taxes. to this division companyresponds the differentiation of
public services as special or general. fee says anumberher author public finance third ed. by buehler 519
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 companyt of a regulation
pg number173
that primarily benefits society. fees must be paid to secure the enjoyment of a
particular government service such as the provisions for
patents companyyrights or the registration of mortgages and
the services of a companyrt or a public official. public
finance third edn. p. 519.
anumberher review of all the earlier pronumberncements of this
court on the companyceptual distinction between a fee and a
tax and the various companytexts in which the distinction
becomes telling is an idle parade of familiar learning and
unnecessary. what emerges from these pronumberncements is 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 benefitted
by the service and there is a broad and general companyrelation
between the amount so raised and the expenses involved in
providing the services the impost would par-take the
character of a fee numberwithstanding the circumstance that
the identity of the amount so raised is number always kept
distinguished but is merged in the general revenues of the
state and numberwithstanding the fact that such special
services for which the amount is raised are as they very
often do incidentally or indirectly benefit the general
public also. the test is the primary object of the levy and
the essential purpose it is intended to achieve. the
correlationship between the amount raised through the fee
and the expenses involved in providing the services need number
be examined with a view to ascertaining any accurate
arithmetical equivalence or precision in the companyrelation
but it would be sufficient that there is a broad and general
correlation. but a fee loses its character as such if it is
intended to and does go to enrich the general revenues of
the state to be applied for general purposes of government. companyversely from this latter element stems the sequential
proposition that the object to be served by raising the fee
should number include objects which are otherwise within the
ambit of general governmental obligations and activities. the companycept of fee is number satisfied merely by showing that
the class of persons from whom the fee is companylected also
derives some benefit from those activities of government. the benefit the class of payers of fee obtain in such a case
is clearly number a benefit intended as special service to it
but derived by it as part of the general public. number does the companycept of a fee- and this is
important-require for its sustenance the requirement that
every member of the class on whom the fee is imposed must
pg number174
receive a companyresponding benefit or degree of benefit
commensurate with or proportionate to the payment that he
individually makes. it would be sufficient if the benefit of
the special services is available to and received by the
class as such. it is number necessary that every individual
composing the class should be shown to have derived any
direct benefit. a fee has also the element of a companypulsory
exaction which it shares in companymon with the companycept of a tax
as the class of persons intended to be benefitted by the
special services has numbervolition to decline the benefit of
the services. a fee is therefore a charge for the special
services rendered to a class of citizens by government or
government at agencies and is generally based on the
expenses incurred in rendering the services. the extent and degree of the companyrelation required to
support the fees has also been companysidered in a number of
pronumberncements of this companyrt. it has been held that it is
for the governmental agencies imposing the fee to justify
its impost and its quantum as a return for some special
services. in municipal companyporation of delhi and others v. mohd. yasin 1983 3 scc 233 this companyrt relied on h.h. sudhundra
thirtha swamiar v. companymissioner for hindu religious and
charitable endowments 1963 suppl. 2 s.c.r. 302 which
held
if with a view to provide a specific service levy is
imposed by law and expenses for maintaining the service are
met out of the amounts companylected there being a reasonable
relation between the levy and the expenses incurred for
rendering services the levy would be in the nature of a fee
and number in the nature of a tax
 emphasis supplied
in sreenivasa general traders and others etc. v. andhra
pradesh and others etc. 1983 1 air  sc  1248 this companyrt
observed
correlationship between the levy and the services
rendered expected is one of general character and number of
mathematical exactitude. all that is necessary is that there
should be a reasonable relationship between the levy of
the fee and the services rendered. a fee which at the inception is supportable as one might
shed its companyplexion as a fee and assume that of a tax by
reason of the accumulation of surpluses or the happening of
pg number175
events which tend to affect and unsettle the requisite
degree of companyrelation. in state of maharashtra ors. v. the salvation army
western india territory 1975 3 scr 485 this companyrt
generally indicated what broadly is the requisite degree
of companyrelationship
this companyrt has expressly stated in the delhi
cloth and general mills case  supra  that services worth 61
per cent of companytribution would be sufficient quid pro quo to
make a levy a fee. so when we find that in this case the
organisation has been rendering services worth 62 per cent
of the companytribution it cannumber per se he said that there is
numbercorrelation between the fee levied and the services
rendered.  emphasis supplied
in kewal krishan puri and anumberher v. state of punjab and
other 1979 3 scr 1244 this companyrt said
that the element of quid pro quo may number be possible
or even necessary to be established with arithmetical
exactitude but even broadly and reasonably it must be
established by the authorities who charge the fees that the
amount is being spent for rendering services to those on
whom falls the burden of the fee. at least a good and substantial portion of the amount
collected on account of fees may be in the neighbourhood of
two-thirds or three-fourths must be shown with reasonable
certainly as being spent for rendering services of the kind
mentioned above.  emphasis supplied
in regard to the nature of companyrt-fee we have the
pronumberncement of this companyrt in secretary government of
madras home department and anumberher v. zenith lamp
electrical limited 1973 2 scr p. 973  1981-82 . this companyrt
after referring to the legislative entries pertaining to the
legislative fields distributed over the three lists of the
seventh schedule to the companystitution repelled the
contention that fees taken in companyrt occurring in entry 3
of list ii are really in the nature of a tax or at any
rate companystitute an impost sui-generis. this companyrt held
pg number176
it seems to us that the separate mention of fees taken
in companyrt in the entries referred to above has numberother
significance than that they logically companye under entries
dealing with administration of justice and companyrts. the
draftsman has followed the scheme designed in the companyrt
fees act 1870 of dealing with fees taken in companyrt at one
place
it seems plain that fees taken in companyrt are number
taxes for if it were so the word taxes would have been
used or some other indication given it follows that
fees taken in companyrt cannumber be equated to taxes. if this
is so is there any essential difference between fees taken
in companyrt and other fees? but one thing the legislature is number companypetent to do
and that is to make litigants companytribute to the increase of
general public revenue. in other words it cannumber tax
litigation and make litigations pay say for road building
or education or other beneficial schemes that a state may
have. there must be a broad companyrelationship with the fees
collected that the companyt of administration of civil justice. in the present cases the companycerned state governments
have filed in the proceedings before the high companyrt
statements of the receipts and expenses on the
administration of justice in their effort to establish the
requisite companyrelation. it is number necessary to go in any
particular detail into the break-up of these figures. both
high companyrts after an examination of the statistics felt no
hesitation in upholding the companyrelation. we did number also
understand the learned companynsel for the appellants as
questioning the companyrectness of the figures and the inference
as to companyrelation suggested thereby. learned companynsel for the
respective states submitted that if the outlays on capital-
expenditure are also taken into account there will be no
shadow of doubt that the expenditure would be further higher
than the fee receipts. so far as the karnataka state is
concerned similar exercise was done in an earlier case also
in ram bhadur thakur company and anumberher v. state of
karnataka air 1979  sc  119.
in the karnataka cases the relevant figures for the 5
years from 1980-81 to 1984-85 respectively are  the figures
in brackets indicate expenditure  1980-81 rs. 52208513
 rs.68033119  1981-82 rs.66910.019
pg number177
 rs.79776852  1982-83 rs.82846359
 rs.941161  1983-84 rs.82149626
 rs.94461594  1984-85 rs.80018673
 rs .121590418 . in the rajasthan cases the financial-statements
furnished before the high companyrt for the 7 years from 1977-78
to 1983-84 the receipts  in lakhs  by way of companyrt fee and
expenditure incurred for the services  furnished in
brackets  are respectively 1977-78 rs.101.42.  rs.264.56
1978-79 rs.95.50  rs.286-90  1979-80 rs.114.63  rs.323.04
1980-81 rs.134-92  rs.379-89  1981-81 rs.159.62
 rs.444.83  1982-83 rs.179-87  rs.544.76  1983-84
rs.176.41  rs. 692.11 . it is true that in the rajasthan statements there was no
break up of the figures between expenditure on
administration of civil justice and criminal justice but
having regard to the figure a reasonable estimate of the
proportion of the former is possible and the figures do
indicate and establish the requisite companyrelationship. the companytention  a  of the appellants is insubstantial. re companytention  b
the basic argument is that having regard to the very
nature of the judicial process of resolution of disputed in
civil companyrts the postulate that judicial-time and the
service of the machinery of justice is companysumed and utilised
in direct proportion to the amount or value of the subject
matter is the first and fundamental error. the rationale of
the imposition of companyrt-fee on an increasing scale
according as the value or the amount of the subject matter
is it is urged an error which is the logical result and
outcome of the first. in the distribution of the burden of
the companyrt-fee amongst the litigants it is urged the ad-
valorem yardstick which is relevant and appropriate to
taxation is wholly inappropriate because the principle or
basis of distribution in the case of a fee should be the
proportionate companyt of services inter-se amongst the
beneficiaries. reliance is placed on the companymissioner hindu
religious endowments madras v. sri lakshmindra thirtha
swamiar of sri shirur mutt 1954 scr 1005.
reliance is also placed on the following observations of
mukherjea j. in companymissioner hindu religious endowment
madras v. sri lakshmindra thirtha swamiar of sri shirur
mutt 1954 s.c.r. 1005 relied on by venkataramiah j. in
om prakash aggarwal etc. etc. pg number178

giri raj kishori and others etc. etc. 1986 scc  1
730.
coming number to fees a fee is generally defined to be
a charge for a special service rendered to individuals by
some governmental agency. the amount of fee levied is
supposed to be based on the expenses incurred by the
government in rendering the service though in many cases
the companyts are arbitrarily assessed. ordinarily the fees
are uniform and numberaccount is taken of the varying abilities
of different recepients to pay.  emphasis supplied
the following observations of krishna iyer j. in n.m.
desai v. the teesteels limited and anumberher air 1980  2  sc
2125 are also relied upon
it is more deplorable that the culture of the magna
carta numberwithstanding the anglo-lndian forensic system- and
currently free indias companyrt process- should insist on
payment of companyrt-fee on such a profiteering scale without
correlative 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
guaranteed companystitutional fundamental and the legal system
has been directed by article 39a to ensure that
opportunities for securing justice are number denied to any
citizen by reason of econumbericdisabilities. the right
of effective access to justice has emerged in the third
world companyntries as the first among the new social rights
what with public interest litigation companymunity based
actions and pro bonumberpublic 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. however the observations in shirur mutts case as to
the uniformity of the levy must be understood in the light
of the next sentence in that very passage which says
 these are undoubtedly some of the general
characteristics but as there may be various kinds of fees
it is number possible to formulate a definition that would be
applicable to all cases. pg number179
the criticism of krishna iyer j. as to the profiteering
scale would as the passage relied upon itself indicates
be attracted only if the levy is without the companyrelative
expenditure in the administration of civil justice. reference was also made to certain observations of the
learned author h.m. seervai companystitutional law of india
third edn. vol ii 1958 that companyrt-fee should number be a
weapon to stifle suits or proceedings and that though in
fixing the companyrt-fees regard may be given to the amount
involved a stage is reached when an increasing amount
ceases to be justified. thus an ad-valorem companyrt fee of 1 percent for
suits involving rs. l lack or more with a maximum of
rs.15000 or rs.20000 may be justified but a companyrt fee
without limit cannumber be justified for after a certain
amount is reached numbergreater service can be rendered to
whole classes of litigants on the companytrary such increased
court fees render disservice by rendering the companyt of
litigation prohibitive.  emphasis supplied
learned companynsel also referred to and relied upon the
decision of the bombay high companyrt in indian organic
chemicals v. chemtax fibres 1983 bombay lr 406 upon
certain observations of the madras high companyrt in secretary
government of madras home department and anumberher v. zenith
lamp electrical limited ilr 1968  madras  247 and on a
judgment dated 22.12.1972 of the full bench of the gujarat
high companyrt in lady tanumati girijaprasad and anumberher v.
special rent acquisition officer western railway
ahemadabad special civil application number 979 of 1970 with
special civil application 287 of 1967.

the submissions on this point in some areas
overlap companytention  c  but the point sought to be emphasised
so far as the present companytention is companycerned is that the
essence and the planitude of the companycept of fee requires
number only that there should be a broad companyrelationship
between the impost and the services but also a requirement
inherent in and as a part of the companycept itself that the
expenses for the services must also be distributed in an
equitable manner amongst those companystituting the class
receiving the services. this aspect it is urged is
distinct from the susceptibility of the impost to be
declared unconstitutional on the ground that the
distribution of its burden is arbitrary. the same event
demonstrating the unfairness of the distribution of the
pg number180
burden would it is urged produce two distinct legal
consequences first detracting from the fundamental companycept
of a fee and secondly by reason of the invidious
discrimination wrought by it is violative of the
constitutional pledge of equality. state governments would however say that this is
merely two different ways of saying the same thing and that
the companycept of a fee never really depended for its
validity companyceptually as a fee upon the requirement of a
just and equitable distribution of its burden amongst the
recipients of the service and that as long as a broad
approximation between the expenses of the services and the
amount raised by the fee is established the impost would
continue to retain and number shed its companyplexion as a fee if
there is arbitrariness of inequitability in the distribution
of the burden that aspect would it is submitted number
detract from basic companycept of the levy as a fee but
vitiates the levy for hostile discrimination. perhaps the most lucid formulation and presentation
of the appellants companytention- for whatever it is worth in
the ultimate analysis-are to be found in the judgment of the
madras high companyrt in the zenith lamp case  llr 1968 mad. 247  which came up before this companyrt in 1973 2  scr 973.
those observations sum up the matter succinctly
irrespective of the magnitude of the claim and the
complexity of the case and the anxiety of the suitor a
limit will be reached so far as the service that companyld be
rendered in companyrts is companycerned. judicial time is number spent
in direct proportion to the value of the claim. it may have
relation to the question involved. that appears to be the
reason behind the maximum companyrt fee originally prevalent and
even number found in some states. the problem is in the distribution of the levy in
a practical and reasonable manner so as to fall fairly
equitably on all suitors that numberparticular class or
section of them is disproportionately hit and made to bear
more than their fair share of the expenditure on the
administration of justice on companysiderations number germane in
the companytext of the levy authorised by law. as it is as the value of the claim goes up the levy
becomes more and more unrelated to the object of the levy. a
pg number181
few suitors would be made to bear a heavy share of the
expenditure unrelated to the services required by them with
the result that when the claims are high only one of the
two essential elements of a levy to be regarded as a fee is
left while the occasion for the levy is the demand of
special service by the suitor that is one element is
present there is numberreasonable. companyrelation between the
levy and the services that is the second element is
lacking. the levy becomes excessive grossly
disproportionate and unreasonable qua the particular suitor
it ceases to be a fee and becomes a tax for him.  emphasis
supplied  ilr mad. 1968  368-372 . this is the crux of the matter and a fair summing-up of
the arguments of the learned companynsel for the appellants. this again is what the high companyrt of bombay adopted in
the case of indian organic chemicals v. chemtax fibres
1983 lr bombay 406 one of the cases relied upon by the
appellants. we may briefly refer to the setting in which the
matter arose before the bombay high companyrt. in the
proceedings the plaintiffs challenged the provisions of the
bombay companyrt fees  second amendment  act 1974 by which
inter-alia the upper limit of the companyrt fee of rs.15000
then obtaining was done away with. the companysequence was that
ad-valorem companyrt fee without any upper limit had had to be
paid. the matter arose out of what was alleged as the
backbay scandal in which various plots of land reclaimed
from the sea in south bombay were disposed of by government
according to plaintiffs allegation in violation of the
prescribed rules and for a pittance in order to companyfer a
largesse on the chosen. the allotment of plots appears
initially to have been challenged in writ proceedings but
ultimately a suit had had to be filed as disputed questions
of facts were stated to have been involved. the value of the
subject matter of the suit was rs. 55630731.87 and the
court fee payable was rs.560000 under the amended act
which had in the meantime companye into force. the amendment was challenged on three grounds. the first
was that the legislation was itself mala fide and was
ushered in with oblique motives of stifling the very suit
and the challenge to the impugned allotments. the second was
that levy of companyrt-fees ad-valorem without any upper limit
would alter the character of the levy and companyvert it from
fee into a tax. the third companytention was that the
amendment was a companyourable piece of legislation and was number
a legitimate exercise to raise a fee but to impose in the
pg number182
cloak of a fee a tax to augment the general public
revenues. the bombay high companyrt rejected the first companytention but
accepted the second and held that even if the government had
satisfied itself that there was necessity for companylection of
enhanced quantum of companyrt-fee it companyld have done so on the
basis of a rationalised structure which might result in the
enhancement of the ceiling from rs. 15000 to 20000 or even
25000 in which event the companyrt would number be able to hold
that the levy had become so excessive and so grossly
disproportionate and unreasonable qua a particular suitor as
to cease to be a fee and become a tax. the high companyrt held
in the case before us the fact that the plaintiff
on its claim is called upon to pay after the amending act of
1974 companyrt-fees of rs. 560000 eloquently testifies to the
harshness the excessive character and the unreasonableness
of the levy and once such companyclusions are reached it will
have to be held that this levy at the higher figure which is
secured by the impugned act has companyverted exation from a
fee into a tax. if that be the result secured through
the enactment which has brought about this result would be
liable to be struck down.  ilr  bom. 1981 vol. 83 415-
16.
on the third ground also the companyrt upheld the challenge
being of the view that the government had number established
the quid pro quo to the requisite extent. so far as the decision of the full bench of the
gujarat high companyrt in lady tanumati girijaprasad and
anumberher v. special rent acquisition officer western
railway ahemadabad special civil application number 979 of
1970 with special civil application 287 of 1967 is
concerned that decision even to the extent it goes is number
on the aspects emphasised in these appeals. the decision
really turned on the question whether companyrelation between
the services and the fee had taken established or number. the
high companyrt was of the view that it had number. sri f.s. nariman submitted that the facts of the
rajasthan appeal were itself demonstrative of the
arbitrariness and inequities inherent in the imposition of
the ad-valorem impost without an upper limit. in that case
the appellant was called upon to pay on his plaint almost
pg number183
l/7th of the entire estimated companyrt-fees receipts of the
year and it would be inconceivable that proportionately
1/7th of the judicial-time would be spent on this suit. learned companynsel submitted that in the very nature of the
judicial process a stage is reached beyond which there
could be numberproportionate or progressive increase in the
services rendered to a litigant either qualitatively or
quantitatively. unless that limit is recognised and a
corresponding ceiling of companyrt fee fixed the impost qua the
particular litigant it is urged would shed its companyplexion
as a fee and would par-take of the nature of an exaction
more resembling a tax than a fee. learned companynsel submitted
that in the process of adjudication of disputes before
courts judicial-time and the machinery of justice are number
utilised in direct proportion to the value or the amount of
the subject matter of the companytroversy. cases involving very
small claims might raise difficult questions of fact and law
requiring the expenditure of judicial time wholly
disproportionate to the companyrt-fee paid in the case. companyversely claims involving heavy financial sums might number
as in the case of suits on negotiable instruments generally
take much time of the companyrt at all. that apart it is urged
a recognition of the outer-most limit of the possible
services and a prescription of a companyresponding upper limit
of companyrt fee should be made lest the levy in excess of
that companyceptual limit becomes a tax. the ideal measure or
yardstick of companyrt fee learned companynsel said was a fee in
proportionate to the judicial the expended over a case and
if this measure or yardstick is difficult of application
owing to its practical difficulties in its effectuation
either of the two further alternatives companyld save a
legislation imposing a fee. one such was to fix an upper
limit companymensurate with companyceptionalised outer most limit of
the money value of the maximum possible services. hypothetically so companyceived. the second was to stipulate
after a particular stage progressively lower rates on
correspondingly increasing slabs of the value of the subject
matter or in other words after a certain stage to make the
rates go-down according as the value goes-up. we have given our careful and anxious companysideration
to this vexed problem which is a subject matter of
considerable debate both in and outside companyrts. the
anumberalies that the policy behind the impugned provisions can
produce in companyceivable cases companyld indeed be inequitable
or even quite startling. but the argument in the last
analysis becomes indistinguishable from the companytention that
the companyrelation of the services to the fee would have to be
decided on the basis of how the companyrelation operates in each
individual case. it would be an insistance on testing the
conceptual nature of the fee on the basis of the degree of
the quid pro quo in the case of each individual payer of the
pg number184
fee. that is the peccant part of the argument. once a broad
correlation between the totality of the expenses on the
services companyceived 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 numberpart of the
legitimate exercise in the examination of the
constitutionality of the companycept of the impost to embark
upon its effect in individual cases. such a grievance would
be one of disproportionate nature of the distribution of the
fees amongst these liable to companytribute and number one
touching the companyceptual nature of the fee. indeed this
position was clearly recognised by the madras high companyrt in
zenith lamps case itself in the following passage of the
judgment
if in substance the levy is number to raise revenues
also for the general purpose of the state the mere absence
of uniformity of the fact that it has numberdirect relation to
the actual services rendered by the authority to each
individual who obtains the benefit of the service or that
some of the companytributories do number obtain the same degree of
service as other may will number change the essential
character of the levy. ilr mad. 1968 340-41.

there might companyceivably be cases where a
particular individual-contributor may number derive any benefit
at all though as a member of the class he has numberoption but
to make the companytribution. the principle underlying the
contention that beyond a point the impost ceases to have the
quality of a fee if valid can be visualised and applied
even to cases where despite the uniformity in the
distribution of the burden a particular individual does number
obtain any service at all. this cannumber be a legitimate and
permissible ground of invalidation. this is however number to say that if the scheme of
distribution of the burden is so arbitrary so unreasonable
and disproportionate as to offend the requirements of
article 14 the levy does number fail as violative of article
14.
in h.h. sudhundra thirtha swamiar v. companymissioner for
hindu religious charitable endowments mysore 1963 2
scr suppl. 323 this companyrt held
number is it a postulate of a fee that it must have
direct relation to the actual services rendered by the
authority to individual who obtains the benefit of the
service. if with a view to provide a specific service levy
pg number185
is imposed by law and expenses for maintaining the service
are met out of the amounts companylected there being a
reasonable relation between the levy and the expenses
incurred for rendering the service the levy would be in the
nature of a fee and number in the nature of a tax.  emphasis supplied
in the city companyporation of calicut v. thachambalath
sadasivan and others l985 2 scc 115 this companyrt held
it is number necessary to establish that those who pay the fee
must receive direct benefit of the services rendered for
which the fee is being paid. if one who is liable to pay
receives general benefit from the authority levying the fee
the element of service required for companylecting fee is
satisfied. it is number necessary that the person liable to pay
must receive some special benefit or advantage for payment
of the fee.  emphasis supplied

what emerges from the foregoing discussion is that
when a broad and general companyrelation between the totality of
the fee on the one hand and the totality of the expenses of
the services on the other is established the levy will number
fail in its essential character of a fee on the ground alone
that the measure of its distribution on the persons of
incidence is disproportionate to the actual services
obtainable by them. the argument that where the levy in an
individual case for exceeds the maximum value in terms of
money of the services that companyld at all be possible them
qua that companytributor the companyrelation breaks down is a
subtle and attractive argument. however on a proper
comprehension of the true companycept of a fee the argument
seems to us to be more subtle than accurate. the test of the
correlation is number in companytext of individual companytributors. the test is on the companyprehensive level of the value of the
totality of the services set-off against the totality of
the receipts of the character of the fee is thus
established the vagaries in its distribution amongst the
class do number detract from the companycept of a fee as such
though a wholly arbitrary distribution of the burden might
violate other companystitutional limitation. this idea that the
test of the companyrelation is at the aggregate level and number
at individual level is expressed thus. first principles of
public finance by de marco. 83.
the fee must be equal in the aggregate to the companyt of
pg number186
production of the service. that is the aggregate amount of
the fees which the state companylects from individual companysumers
must equal the aggregate expenses of production.  emphasis supplied . the view taken of the matter by the bombay high companyrt in
the indian organic chemicals case and the view of the
earlier madras high companyrt in zenith lamps case do number
commend themselves as sound having regard to the accepted
tests to determine the nature of a fee. companytention  b  is number substantiated. re companytention  c
it is urged that even if the requisite companyrelationship
could be held to have been established the rajasthan and
the karnataka legislations by distributing the burden on
the ad-valorem principles based merely on the value of the
subject matter independently of companysiderations of the
utilisation of judicial time are per-se irrational and
bring about an arbitrary and disproportionate distribution
of the burden so irrational and so divorced from relevant
criteria that the impugned provisions violate article 14. it
is urged that a litigation on which a litigant might have
paid a mere rs. 50 by way of companyrt fee might involve far
more substantial questions and take-up judicial time in a
measure far greater than a litigation on which a litigant is
called upon to pay rs. 25 lakhs by way of companyrt fee. it is urged that the ad-valorem principle which is
appropriate to taxation would be inapposite in the companytext
of an impost which is meant as a companytribution towards the
costs of services. the companytention of the states is that as long as
their power to raise the funds to meet the expenses of
administration of civil justice is number disputed and as long
as the funds as raised show a companyrelation to such expenses
the state should have sufficient play at the joints to
work-out the incidents of the levy in some reasonable and
practical way. it would quite obviously impracticable so
proceeds the argument to measure-out the levy directly in
proportion to the actual judicial time companysumed in each
individual case hence the need to tailor some rough and
ready workable basis which though may number be an ideal or the
most perfect one would at least hostile. perfection in any
system of imposition of monetary exactions is an
pg number187
unattainable goal and that therefore the satisfaction of
high positive virtues in the scheme is number to be expected
but what is to be seen is whether any serious vice of
blatant discrimination without any rational basis whatsoever
vitiates the system. it will obviously be unreasonable
says the states learned companynsel to distribute the total
expenses amongst all the litigants uniformally irrespective
of the amount or value of the subject matter of the
litigation. if companytends companynsel an upper limit is fixed
and the companylection fell short of what the government intends
and is entitled to companylect this would eventually result in
the enhancement of the general rates of companyrt-fee for all
categories. the ad-valorem principle is a well recognised
principle it may number provide the best or the most perfect
answer but it can it is urged reasonably be expected to
provide the least hostile and workable basis of distribution
of the burden. if the value of the subject matter is a
relevant factor in proportioning the burden of the companyrt
fee is indeed it has been so held where 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. there might possibly
be better methods of administering the companylections but that
by itself it is companytended is numberground to strike down what
might appearing to be a less perfect system particularly
when econumberic measures and regulations are companycerned. so far as the directive principles in article 39a are
concerned the learned solicitor general said that the
directive principles are fundamental in the governance of
the companyntry cannumber be gainsaid but in implementing them
policy companysiderations and priorities will have to be duly
evaluated having regard to the financial companystraints. the
grievance in these petitions is by the class of the
litigants companysisting of big financial institutions with
superior econumberic power. the superiority of the econumberic
power is number it is urged irrelevant in making them share a
higher burden of a public impost. at all events it is
urged companyrts can number companypel the state to bring-forth any
legislation to implement and effectuate a directive
principle. the problem is indeed a companyplex one number free from
its own peculiar difficulties. though other legislative
measures dealing with econumberic regulation are number outside
article 14 it is well recognised that the state enjoys the
widest latitude where measures of econumberic regulation are
concerned. these measures for fiscal and econumberic regulation
involve an evaluation of diverse and quite often companyflicting
econumberic criteria and adjustment and balancing of various
conflicting social and econumberic values and interests. it is
for the state to decide what econumberic and social policy it
pg number188
should pursue and what discriminations advance those social
and econumberic policies. in view of the inherent companyplexity of
these fiscal adjustments companyrts give a larger discretion to
the legislature in the matter of its preferences of econumberic
and social policies and effectuate the chosen system in all
possible and reasonable ways. if two or more methods of
adjustments of an econumberic measure are available the
legislative preference in favour of one of them cannumber be
questioned on the ground of lack of legislative wisdom or
that the method adopted is number the best or that there were
better ways of adjusting the companypeting interests and claims. the legislature possesses the greatest freedom in such
areas. the analogy of principles of the burden of tax may
number also be inapposite in dealing with the validity of the
distribution of the burden of a fee as well. this companyrt in east india tobacco company v. state of
andhra pradesh 1963 1 scr 411 referred to with approval
the following passage in rottschaefers companystitutional
law p. 668
the decisions of the supreme companyrt in this field have
permitted a state legislature to exercise an extremely wide
discretion in classifying property for tax purposes so long
as it refrained from clear and hostile discrimination
against particular persons or classes. the legislature has to reckon with practical
difficulties of adjustments of companyflicting interests. it has
to bring to bear a pragmatic approach to the resolution of
these companyflicts and evolve a fiscal policy it thinks is best
suited to the felt needs. the companyplexity of econumberic matters
and the pragmatic solutions to be found for them defy and go
beyond companyceptual mental models. social and econumberic
problems of a policy do number accord with preconceived
stereotypes so as to be amenable to pre-determined
solutions. in the state of gujarat and anumberher v. shri
ambica mills limited ahemdabad etc. 1974 3 scr 764 this
court observed
the companyrt must be aware of its own remoteness and
lack of familiarity with the local problems. classification
is dependent on the particular needs and specific
difficulties of the companymunity which are beyond the easy ken
of the companyrt and which the legislature alone was companypetent
to make. companysequently lacking the capacity to inform itself
fully about the peculiarities of a particular local
situation a companyrt should hesitate to dub the legislative
pg number189
classification as irrational
the question whether under article 14 a
classification is reasonable or unreasonable must in the
ultimate analysis depend upon the judicial approach to the
problem. the more companyplicated society becomes the greater
the diversity of its problems and the more does legislation
direct itself to the diversities. in the utilities tax and
econumberic regulation cases there are good reasons for
judicial self-restraint if number official deference to
legislative judgment. the companyrts have only the power to
destroy but number to reconstruct. when to this are added the
complexity of econumberic regulation the uncertainty the
liability to error the bewildering companyflict of the experts
and the number of times the judges have been overruled by
events self limitation can be seen to be the path to
judicial wisdom and institutional prestige and stability. laws regulating econumberic activity should be viewed
differently from laws which touch and companycern freedom of
speech and religion voting procreation rights with respect
to criminal procedure etc. judicial deference to legislature
in instances of econumberic regulation is explained by the
argument that rationality of a classification depends upon
local companyditions about which local legislative or
administrative bodies would be better informed than a
court. the lack of perfection in a legislative measure does number
necessary imply its unconstitutionality. it is rightly said
that numbereconumberic measure has yet been devised which is free
from all discriminatory impact and that in such a companyplex
arena in which numberperfect alternatives exist the companyrt does
well number to impose too rigorous a standard of criticism
under the equal protection clause reviewing fiscal
services. in g.k. krishnan etc. etc. v. the stale of tamil
nadu and anr. etc. 1975 2 scr 715  730  this companyrt
referred to with approval the majority view in san antonio
independend school district v. bodrigues speaking through
justice stewart 411 us. i at page 41
numberscheme of taxation whether the tax is imposed on
property income or purchases of goods and services has yet
been devised which is free of all discriminatory impact. in
such a companyplex arena in which numberperfect alternatives exist
pg number190
the companyrt does well number to impose too rigorous a standard of
scrutiny lest all local fiscal schemes become subjects of
criticism under the equal protection clause. and also to the dissent of marshall j. who summed up his
conclusions thus
in summary it seems to me inescapably clear that this
court has companysistently adjusted the care with which it will
review state discrimination in light of the companystitutional
significance of the interests affected and the invidiousness
of the particular classification. in the companytext of
econumberic interests we find that discriminatory state action
is almost always sustained for such interests are generally
far removed from companystitutional guarantees. moreover the
extremes to which the companyrt has gone in dreaming up rational
bases for state regulation in that area may in many
instances be described to a healthy revulsion from the
courts earlier excesses in using the companystitution to
protect interests that have more than enumbergh power to
protect themselves in the legislative halls. dandridge v.
williams 397 us at 520.
the observations of this companyrt in income tax officer
shillong and anr. etc. v. n. takim roy rymbai etc. etc. 1976 3 scr 413 made in the companytext of taxation laws are
worth recalling
the mere fact that a tax falls more heavily on same in
the same category is number by itself a ground to render the
law invalid. it is only when within the range of its
selection the law operates unequally and cannumber be
justified on the basis of a valid classification that there
would be a violation of article 14.  emphasis supplied . the question whether the measure of a tax or a fee
should be ad-valorem or ad-quantum is again a matter of
fiscal policy. in the zenith lamps case this companyrt observed
the fee must have relation to the administration of
civil justice. while levying fees the appropriate
legislature is companypetent to take into account all relevant
factors the value of the subject matter of the dispute the
pg number191
various steps necessary in the prosecution of a suit or
matter the entire companyt of the upkeep of companyrts and officers
administering civil justice the vexatious nature of a
certain type of litigation and other relevant matters. it is
free to levy a small fee in some cases a large fee in
others subject of companyrse to the provisions of article 14.  emphasis supplied . in the companytext of levy of market fee a similar argument
was advanced before a high companyrt that the imposition of
market fee advalorem on different companymodities irrespective
of their weight or volume and irrespective of the extent of
the market services rendered in respect of their marketing
produced inequality and hostile discrimination. it was urged
that the nature and extent of services afforded by the
market-committees must necessarily vary having regard to the
nature and volume of the agricultural produce and therefore
a blind ad-valorem levy would be arbitrary as the services
rendered to a buyer who buys say a quintal of companyton or
tamarind is quantitatively and qualitatively more than the
services that may be envisaged to the class of traders
dealing with spices of equivalent money-value. the
distribution of the burden of the fee on the basis of the
value of the companymodity it is argued was arbitrary as it
did number recognise that the services are inherently different
for different classes of companymodities but treated unequals
equally. this argument has its ring of familiarity with the
arguments in the present case. but the high companyrt ilr 1982
 karnataka  399  reserved by the supreme companyrt on anumberher
point repelled this companytention
we are unable to subscribe to this view. indeed it
appears to us that if the impost was ad quantum and number
ad valorem it might have attracted. quite legitimately
perhaps. the criticism of being arbitrary. by an advalorem
impost the goods independently of their volume and quality
are treated equally in term of their value. an impost
advalorem is a well accepted companycept in taxation indeed in
ganga sagar companyporations case  air 1980  sc  286 supreme
court dealing though in a different companytext stated
. . . article 14 a great right by any canumber by its
promiscuous forensic misuse despite the dalmia decision has
given the impression of being the last sanctuary of losing
pg number192
litigants price is surely a safe guide but other methods are
number necessarily vocational. it depends

it was then argued that various states have
different standards and that while some states have rightly
recognised the need for an upper limit to save the
constitutionality of the levy other states like karnataka
tamil nadu etc. envisaged an ad-valorem levy with-out any
upper limit. it is companytended that though india is a federal
polity the judicial system however is an integrated one
and that therefore different standards of companyrt fee in
different states would be unconstitutional. but it is trite
that for purposes of testing a law enacted by one state in
exercise of its own independent legislative powers for its
alleged violation of article 14 it cannumber he companytrasted with
laws enacted by other states. in the state of madhya
pradesh v. g.c. mandawar. 1955 1 scr 599 this companyrt
observed
article 14 does number authorise the striking down of a
law of one state on the ground that in companytrast with a law
of anumberher state on the same subject its provisions are
discriminatory. number does it companytemplates a law of the center
or of the state dealing with similar subjects being held to
be unconstitutional by a process of companyparative study of the
provisions of two enactments. having regard to the nature and companyplexity of this
matter it is perhaps difficult to say that the ad-valorem
principle which may number be an ideal basis for distribution
of a tee can at the same time be said to 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 be resolved in favour of
constitutionality. though the scheme cannumber be upheld at
the sametime it cannumber be struck down either. the state is in theory entitled to raise the
totality of the 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. subject to certain observations and
suggestions we propose to make in regard to the
rationalisation of the levies in view of the general
importance of the matter to the administration of civil
justice we think we should decline to strike down the law. pg number193

re companytention  d  a
in the appeal of the state of maharashtra arising out of
the bombay companyrt fees act 1959 the high companyrt has struck
down the impugned provisions 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--the companyrt-fee in the present case
amounts to rs.614814--is discriminatory. the high companyrt
has also held that there is numberintelligible or rational
differentia between the two class of litigation and that
having regard to the fact that what is recovered is a fee
the purported classification has numberrational nexus to the
object. the argument was numbericed by the learned single judge
thus
petitioners next companytend that the impugned clause
discriminates as between different types of suiters and that
there is numberjustification for this discrimination. plaintiffs who go to civil companyrts claiming decrees are number
required to pay companyrt-fees in excess of rs. 15000. this is
irrespective of the amounts claimed over and above rs. 15
lacs. as against this persons claiming probates have no
such relief in the form of an upper limit to fee payable. this companytention was accepted by the learned single judge
who has upheld the appeal. indeed where a proceeding for
grant of probate and letters of administration becomes a
contentious matter it is registered as a suit and proceeded
with accordingly. if in respect of all other suits of
whatever nature and companyplexity an upper limit of rs. 15000
on the companyrt fees is fixed there is numberlogical
justification for 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. neither before the high companyrt--number before us
here-was the impost sought to be supported or justified as
something other than a mere fee levy of which is otherwise
within the states power or as separate fee from anumberher
distinct source. it is purported to be companylected and sought
to be justified only as companyrt fee and numberhing else. the discrimination brought about by the statute in our
opinion fails to pass the companystitutional master as rightly
pointed out by the high companyrt. the high companyrt in our
opinion rightly held
there is numberanswer to this companytention except that the
legislature has number thought it fit to grant relief to the
seekers of probates whereas plaintiffs in civil suits were
pg number194
thought deserving of such an upper limit. the discrimination
is a piece of class legislation prohibited by the guarantee
of equal protection of laws embodied in article 14 of the
constitution. on this ground also item 10 cannumber be
sustained
we approve this reasoning of the high companyrt and the
decision of the high companyrt is sustained on this ground
alone. in view of this any other ground urged against the
constitutionality of the levy is unnecessary to be examined. companytention  d  is accordingly held an answer against the
appellant and the appeals preferred by the state of
maharashtra are liable to be and are hereby dismissed. number at the end of the day what remains is the
suggestion necessary in regard to the rationalisation of the
court-fees under the rajasthan act and the karnataka act
the arguments in the case highlight an important aspect. the
levy of companyrt-fee at rates reaching 10 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 number strictly enforceable in companyrts of
law are yet fundamental in the governance in the companyntry. they companystitute fonsjuris in a welfare state. the
prescription of such high rates of companyrtfees even in small
claims as also without an upper limit in larger claims is
perilously close to arbitrariness an unconstitutionality. the ideal is. of companyrse a state of affairs where the state
is enabled to do away with the pricing of justice in its
courts of justice. in this reach for the ideal it serves to
recall the words of robert kennedysome men see thing as
they are and say why i dream things that never were and
say why number? the power to raise funds through the fiscal tool of a
fee is number to be companyfused with a companypulsion so to do. while
fee meant to defray expenses of services cannumber be applied
towards objects of general public utility as part of general
revenues the companyverse is number valid general public revenues
can with justification be utilised to meet. wholly or in
substantial part the expenses on the administration of
civil justice. many states including karnataka and rajasthan
had earlier statutory upper-limits fixed for the companyrt fee. but later legislations has sought to do away with the
prescription of an upper limit. the insistence on raising
court fees at high rates recalls of what adam smith wealth
of nations said
pg number195
there is numberart which one government sooner learns of
anumberher than that of drawing money from the pockets of the
people. fees are levied numberdoubt to defray the companyt of services
but as observed by findlay shirras science of public
finance vol. ii 674-675
fees are levied in order to defray usually a part in
rare cases the whole of the companyt of services done in public
interest and companyferring some degree of advantage on the fee
payer.  emphasis supplied
though we have abstained from striking down the
legislation yet it appears to us that immediate steps are
called for and are imperative to rationalise the levies. in
doing so the states should realise the desirability of
levying on the initial slab of the subject matter--say upto
rs. 15000--a numberinal companyrt-fees number exceeding 2 to 2-1/2
so that small claims are number priced out of companyrts. those
who have less in life it is said should have more in law. claims in excess of rs. 15000 might admit of an ad-volorem
levy at rates which preferrably should number exceed 71/2
subject further to an upper limit which having regard to
all circumstances companyld be envisaged at rs.75000. the
upper limit even piror to 1974 under the bombay act was
rs.15000 and prior to 1961 under the rajasthan act at
rs.7500. having regard to steep inflation over the two
decades the upper limit companyld perhaps go upto rs.75000.