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Subject: Professional Ethics B.A.LL.B-IXth Sem Subject Teacher: Dr. Md. Junaid Study Material of Unit-V Topic: Court Fees Act 1870 Court Fee Definition Court fee may be defined as fee paid purportedly to cover administrative costs, at the start of each new court filing. A fee (such as a “filing fee“) which may be imposed upon a litigant in order begin a lawsuit or start a legal dispute resolution case. The fee may represent covering administrative costs. In India this can refer to stamps that may be attached to court documents which instruct the payment of fees. It may also refer to collections matters. A fee that is imposed on a litigant to contest a case in the court of law. This fees is levied by the government on the people seeking judicial remedies through a legislation. History of the Court Fees The Courts are institutions where the aggrieved go to seek justice. With the establishment of Courts in India, a system evolved for the payment of fees for the adjudication of cases. The rates of stamp fees leviable in courts and offices established beyond the local jurisdiction of the ordinary original civil jurisdiction of the High Courts of Judicature at Fort William in Calcutta, Madras, and Bombay and in proceedings on the appellate jurisdiction of High Courts were governed by the Act XXVI of 1867. However, within a span of about two years, it was considered necessary to make a general reduction in the rates on the institution of civil suits and to rely on the principle of maximum fee which was obtained under the previous law. Also, in order to rectify the repressive effect and to avoid future confusion between stamp-revenue proper and the revenue derived, a comprehensive bill known as the Court Fees Bill was introduced in the Legislature. Now it is known as the Court Fees Act, 1870.
Difference between Court fee and tax The distinction between a tax and a court fee lies primarily in the fact that a tax is levied as a part of a common burden, while a court fee is a payment for special benefit or privilege in respect of adjudication of disputes. Fees confer a special capacity, although the special advantage, as for example in the case of registration fees for documents or marriage licences, is secondary to the primary motive of regulation in the public interest. Public interest seems to be at the basis of all impositions, but in a court fee it is the special benefit which the individual receives. As Seligman says, it is the special benefit accruing to the individual which is the reason for payment in the case of fees; in the case of a tax, the particular advantage if it exists at all is an incidental result of State action. Distinction between the concepts of court fees and tax is functionally premised on the legal principle of quid pro quo. A tax is a non-quid pro quo payment by the people to the government. It is a non-quid pro quo transfer of private income to public coffers. It becomes so because the government even after levying the tax is not obliged to spend it in a certain way or provide a specific service in return of the tax. Therefore, tax is devoid of quid pro quo , wherein any benefit accrued to individuals is incidental and not primary. Court fees, however, are charged for a special service provided to individuals ideally by courts. This highlights the quid pro quo component in the concept of court fees. A court fee is either regulatory in nature. Objective of Court Fees The Court-fees Act, as its name signifies, is an Act primarily passed for the purpose of prescribing the fees which are to be paid in respect of documents to be used in courts. The Act has no preamble whereby its purpose can be ascertained, but there can be no manner of doubt that one of its main purposes is to levy fees for services to be rendered by the courts and public offices. The Act is a fiscal enactment having for its primary object the protection of revenue and not to coerce the subject. The Act not only prescribes the fees but also provides how these fees are to be ascertained or determined, and the conditions under which the documents included in the First and Second Schedules to the Act may be received, filed, registered or used, as the case may be,
court-fees and the value for purposes of jurisdiction shall be the same (except suits u/s 7 (v),(vi),(ix) and (x) clause (d) of the Court-fees Act,1870) Statement Of Objects And Reasons The rates of stamp fees leviable in Courts and offices established beyond the local limits of the ordinary original civil jurisdiction of the High Courts of Judicature at Fort William, Madras and Bombay and in proceedings on the appellate side of such High Courts, were as fixed by Act XXVI of 1867, to a great extent tentative. The experience gained of their working during the two years in which they have been in force, seems to be conclusive as to their repressive effect on the general litigation of the country. It is, therefore, thought expedient to make a general reduction in the rates now chargeable on the institution of civil suits, and to revert to the principle of maximum fee which obtained under the former law. It is proposed also to reduce the valuation fixed by the existing law for the computation of the fee leviable on suits relating to land under temporary settlement or land exempt from the payment of revenue to the Government which is believed to be at least relatively excessive as compared with the valuation of permanently settled land; and to provide for the valuation of suits relating to mere parcels of land which, though forming part of estates under settlement, bear no specific allotment of any portion of the assessment of Government revenue on such estates, at the estimated selling price of such land, as was the rule in those cases under Act X of 1862. The want of some fixed valuation applicable to certain classes on suits, as for example, suits instituted between landlord and tenant to recover a right of occupancy or enforce ejectment, or suits for maintenance or for an annuity the subject-matter of which though not absolutely indeterminable, is certainly not susceptible of ready determination, has given rise to much uncertainty and variety in the procedure adopted by the several Courts in such cases; and the amendment of the existing law in this respect is felt to be urgently called for. Types of Court Fees
There are two kinds of court fees under the Court Fees Act ▪ Ad Valorem Court fees (Schedule 1) – it means according to the valuation. Ad valorem duties are always estimated at a certain per cent, on the valuation of the property as opposed to fixed or specific duties. ▪ Fixed or specific court fees (Schedule 2). Computation of Court Fees-Section Section 7 of the Act contemplates three types of valuation of the subject-matter of a suit. ▪ By valuing it according to its market value. ▪ By ascribing to the subject-matter an artificial value based simply on the certain fixed rule of calculation. ▪ By requiring the plaintiff himself to value the relief he seeks. This section only applies where the ad valorem fee is payable. Here is the detailed breakdown of the rule of computation of court fees in these kinds of suits – ▪ Suits for money – According to the amount claimed. ▪ Suits of maintenance and annuities or other sums payable periodically – Ten times the amount claimed to be payable in a year. ▪ Suits for movable property where the subject matter has a market value – According to the market value at the date of presenting the plaint. ▪ Suits for the possession of land, buildings or gardens – According to market value or (net profit x 15 times), whichever is higher. ▪ Suits for Pre-emption – If instituted under Muslim Personal Law, then according to the market value of the land. ▪ Suits for partition – According to the market value of the share in respect of which the suit has been instituted.
The second rule with regard to the determination of the category of a suit for computation of court-fee is that the allegations and prayers of the plaint are to be looked into and in this regard such allegations are to be assumed to be correct. The third rule to be observed is that the court has to look beyond the mere form and verbiage of the plaint and to arrive at what is the real substance of the claim. Mode of Computation of Court-fees.- Section 7 of the Court-fees Act deals with the mode of computation of the court-fees payable in the various classes of suits and appeals mentioned in it. It contemplates three modes of valuation of the subject-matter of a suit, which are as follows :-
- Valuation according to its actual or market value, in other words, the market value of the subject-matter determines the amount of court- fee payable.
- By ascribing to the subject-matter an artificial value based simply on certain fixed rules of calculation.
- Notional valuation, or valuation at the option of the plaintiff, that is to say, by requiring the plaintiff himself to value the relief he seeks. Section 7 has to be read along with the Schedules. Schedules I and II endeavour to give a comprehensive classification of the various kinds of suits with reference to these heads of classification. These Schedules also provides that the proper fees payable on some documents shall vary according to the courts in which they are filed and that in regard to others there shall be no such variance. Again, in Schedule II, it is mentioned that plaints and appeals in the suits therein specified shall bear the fixed fees prescribed, while in Schedule I are specified various suits in which the plaints and appeals shall bear an ad valorem fee. Section 7 is a handle for the application of the Schedules of the Act. Computation of Court-fee (a) In suit for money : Section 7(i) of Act says :- In suit for money (including suits for damages or compensation or arrears of maintenance, of annuities or of other sums payable periodically) - according to amount claimed. The scope of this clause extends to all suits for money irrespective of whether the amount recoverable is a fixed sum or by instalments or it recoverable periodically or is secured upon any
movable or immovable property. The court-fees payable on such suits should be according to the amount claimed therein. The object of levying ad valorem court-fee on claims for money is to secure revenue. In suits for Maintenance and Annuities : It is provided in section 7(ii) of the Court-fees Act that the amount of fees payable in suits for maintenance and annuities or other sums payable periodically shall be computed according to the value of the subject-matter of the suits, and such value shall be deemed to be ten times the amount claimed to be payable for one year. The court-fees under this clause is payable according to the value of the subject-matter of the suit. But this value is not the market value of the subject-matter nor the present value of the payments to be made periodically. It prescribes a special mode of valuation for the purpose of court-fees and lays down that the value of the subject-matter of the suit is to be regarded as being ten times the amount claimed as payable for one year. Here it is to be noted that the suits for maintenance should be distinguished from suits for arrears of maintenance. The former are valued at the amount claimed as payable for one year under section 7(ii) and the latter at the amount claimed as arrears under Section 7(i). Suit for Moveable properties having market value : Section 7(iii) provides : In suit for movable property other than money, where the subject-matter has market value - according to such value at the date of presenting the plaint. This clause is intended to provide for suits in respect of moveable property (other than money) which has a market value, while suit relating to moveable properties having no market value are covered within scope of clause (iv) (a) of Section 7 of Act. Suits for Moveable properties having no market value : Clause (iv) (a) says in suits for moveable property where the subject- matter has no market value, as for instance, in the case of documents relating to title - according to amount at which the relief sought is valued in the plaint or memorandum of appeal. In Sathappa Chettiar v. Ramanathan Chettiar, AIR 1958 SC 245 , it was observed :- If the scheme laid down for the computation of fees payable in suits covered by the several sub-
joint property is governed for the purposes of court-fee, by Article 17(vi) of Schedule II of the Court-fees Act 1870. This sub-clause does not differentiate between a plaintiff who is in actual possession and one who is merely in constructive possession of the property which is to be partitioned. Partition is the enforcement of the right to share in the joint family estate. This sub- clause is specifically meant to govern suits for the enforcement of the right to share in joint Hindu family estates. Plaintiffs must decide at the outset, the nature of their case and must pay court-fee accordingly. The court-fee cannot be made conditional on the decision in the suit itself. Computation of court-fees in suits for declaratory decree with consequential relief : Section 7(iv)(c) of the Court-fees Act prescribes the amount of fees payable in a suit to obtain a decree or order where consequential relief is prayed. Under this sub-clause the amount of court-fees shall be computed according to the amount at which the relief sought is valued in the plaint or memorandum of appeal. In such suit the plaintiff shall state the amount at which he values the relief sought. This sub-clause is applicable to a suit in which having regard to the substance of the plaint it is incumbent upon the plaintiff to obtain a declaratory decree in order to perfect his right to the consequential relief that he claims, for instance, where the plaintiff seeks relief to which he is not entitled unless and until some decree of document of alienation of property is avoided. A suit in which a declaration in that behalf is claimed is within Section 7(iv)(c). The Court-fees Act, 1870 contemplates suits to obtain declaratory decrees simpliciter and suits to obtain declaratory decrees with consequential reliefs as two distinct categories. While the first category falls under Article 17(iii) of Schedule II, the second one falls under this sub-clause of the clause. Under the former, a fixed court-fee is payable, while in the latter, an ad valorem court-fee on the value of the relief sought is payable. In Laxman Rao v. Dagubai, AIR 1952 MB 147 , it was observed - The court cannot compel a plaintiff to add a prayer for consequential relief and demand ad valorem court-fee on such relief. It can only refuse to grant the declaration asked for if in its opinion consequential relief is necessary. Computation of Court-fee in suit to obtain injunction .- Section 7(iv)(d) of the Court-fees Act provides that the amount of fee payable in a suit to obtain an injunction shall be computed
according to the amount at which the relief sought is valued in the plaint or memorandum of appeal. In such a suit the plaintiff shall state the amount at which he values the relief sought. An injunction is a specific order of the court forbidding the commission of a wrong threatened, or the continuance of a wrongful course of action already begun or in some cases (when it is called a mandatory injunction) commanding active restitution of the former state of things. Thus injunctions may be preventive or mandatory. Preventive injunction may be temporary or perpetual. This clause (iv) (d) applies to those suits in which a perpetual injunction is claimed. It is only in such a case that a decree is necessary and when this clause says of a suit to obtain in an injunction, it speaks of a suit to obtain a decree for injunction. Therefore, a suit in which an application is made under Order 39 of the Civil Procedure Code for grant of temporary injunction, does not fall under this clause merely because such an application is made. But where the suit itself is for an injunction, this clause will come into operation whether the injunction sought for is preventive or mandatory. In suits under this clause, the injunction must be a substantive relief. It may be the sole relief prayed for in the suit or may be coupled with some other relief. In either case, this clause will apply to the prayer for injunction. The relief of injunction may be asked for as substantive relief in addition to a relief of declaration. Even in such a case this clause will apply and not clause (c). Illustrations - (1) A suit for permanent injunction restraining the defendant from erecting permanent structures on the land in suit and for mandatory injunction for the removal of the construction already made alleging that the defendant's interest in the land was not sufficient to entitle him to erect such structures, comes under this clause. (2) A suit for possession of money bonds and for an injunction restraining defendants from drawing money from the bank, falls under this clause. (3) A suit for a permanent injunction restraining the defendant from cutting timber from a jungle belonging to the plaintiff, falls under this clause.
Computation of court-fees payable in suits for possession of land, houses and gardens - As provided in Section 7 (v) of the Court-fees Act the amount of fee payable in suit for possession of lands, houses and gardens shall be computed according to the value of the subject-matter. The value of the subject-matter shall be deemed to be ten times the revenue where - (a) the land forms an entire estate, or definite share of an estate, paying annual revenue to Government, or forms part of such an estate and is recorded in the Collector's register as separately assessed with such revenue; and (b) such revenue is permanently settled. The value of land shall be deemed to be five times the revenue payable where - (a) The land forms an entire estate, or definitive share of an estate, paying annual revenue to Government, or forms part of such estate and is recorded as aforesaid; and (b) such revenue is settled, but not permanently. The value of land shall be deemed to be fifteen times the net profits where - (a) the land pays no such revenue, or has been partially exempted for such payment, or is charged with any fixed payment in lieu of such revenue; and (b) the net profits have arisen from the land during the year next before the date of presenting the plaint. The value of the land shall be deemed to be the market value of the land where the land forms part of an estate paying revenue to Government, but is not a definite share of such estate, and is not separately assessed as above mentioned. The word "Estate" means any land subject to the payment of revenue for which proprietor of farmer shall have executed a separate engagement, shall have been separately assessed with revenue. The value of the house or garden shall be deemed to be the market value of the house or garden.
In the case of Rani Devi v. Trilok Singh, A.I.R. 1980 All. 111 , the plaintiff-respondent claimed himself to be an allottee of the house and not the owner. He also alleged that the defendant- appellant was a trespasser. It was held by Mahavir Singh, J., of the Allahabad High Court that - (a) For suits - (i) by a tenant against a trespasser, or (ii) between the rival tenants, the valuation is to be made in accordance with Section 7(V-B) of the Court-fees Act as amended in U.P. (b) Only in suits is which proprietary possession is claimed, valuation is to be made on market value as given in Section 7 (V-A) of the Act as amended in U.P. Computation of Court-fee in suits to enforce pre-emption. Section - 7 Clause (vi) says in suits to enforce a right of pre-emption the court-fee shall be computed according to value (computed in accordance with clause (v) of this section) of the land, house or garden, in respect of which right is claimed. This clause provides that in suits to enforce right of pre-emption, the Court-fees are payable on the value of the subject-matter (land, houses or garden, as the case may be) in the dispute and such value must be determined in accordance with paragraph (v) of this section. In other words, suits under this clause are governed by Clause (v) of Section 7 of the Court-fees Act. So if a suit for pre-emption is in respect of the sale of land paying revenue to the Government, the Court-fee should be calculated in accordance with Section 7(v) of the Court-fees Act on the value of such land. If the subject-matter of the suit is a distinct plot and not a definite share of a separately assessed estate, the Court-fee is payable on market-value as provided for in Section 7(v)(d) of the Act. Value at the date of sale and not at the time of suit determines Court- fee in pre-emption suits. - In a suit for pre-emption when the Court-fee is to be assessed on market value, the market-value at the time of sale is the value for the purposes of Court-fee and jurisdiction, and not the market- value at the time of the suit. Suits for pre-emption stand on different footings, from ordinarily suits for possession.
Section 7(ix) of Court-fee Act provides - "In suits against a mortgages for recovery of property mortgaged to foreclose; and in suits by a mortgage to foreclose the mortgage, or where the mortgage is made by conditional sale, to have the sale declared absolute - according to principal money expressed to be secured by the instrument of mortgage." The clause provides for three classes of suits, viz, (i) suit against a mortgagee for recovery of the property mortgaged, (ii) suit by a mortgagee to foreclose the mortgage, and (iii) suit, where the mortgage is made by conditional sale, to have the sale declared absolute. In all these three cases the valuation of the suits has to be made according to the principal money expressed to be secured by the mortgage deed. The application of the clause is not confined to any particular kind of mortgage. A suit for redemption of a simple mortgage is within the purview of this clause. The first part of the clause applies not only to suits for redemption but to all suits against the mortgagee for the recovery of mortgaged property. Even a suit for redemption, where one of the questions at issue is whether the mortgage money is paid off, and if not what is the amount remaining due, is within the ambit of the clause. Similarly, where the main relief claimed in the suit is one for redemption of a usufructuary mortgage, but the plaintiff prays that the mortgagee should account for surplus deficiencies caused by him during the course of his management of the mortgaged property, the suit is substantially one for redemption and the court-fee is leviable under this clause, and no separate fee is required in respect of the prayer for account regarding surplus deficiencies. But where a distinct relief in addition to that of redemption is claimed, separate court- fee in respect of it has to be paid. A suit for redemption of a mortgage and mesne profit is, however, not a suit including two or more `distinct subjects' and falls within this clause. The following are some instances where suits have been held not to fall under this clause : (i) A suit to enforce a mortgage by a decree for sale. (ii) A suit by the purchaser of the equity of redemption to get rid of a decree obtained by the collusion of the mortgagor and the mortgagee for a larger amount than what is due.
(iii) A suit for redemption of a pledge. (iv) A suit where a mortgagee seeks to recover possession of the mortgaged land, or to recover money on the basis of a mortgage. Computation of court-fees in suits for specific performance - As provided in clause (x) of section 7 of the Court-fees Act the amount of court-fee shall be computed in suits for specific performance - (a) of a contract of sale - according to the amount of consideration; (b) of a contract of a mortgage - according to the amount agreed to be secured; (c) of a contract of lease - according to the aggregate amount of the fine or premium (if any) and of the rent agreed to be paid during the first year of the term; (d) of an award - according to the amount or value of the property in dispute. So this clause contemplates four classes of cases which are as follows :- (1) In a suit for specific performance of a contract of sale, the court-fee is regulated by the amount of consideration money. [Section 7(x)(a)]. (2) In a suit for specific performance of a contract of mortgage, the court-fee is regulated by the amount agreed to be secured. [Section 7(x)(b)]. (3) In a suit for specific performance of a contract of lease, the court-fee is regulated by the aggregate amount of fine or premium (if any) and of the rent agreed to be paid during the first year of the term. [Section 7(x)(c)]. (4) In a suit for specific performance of an award, the court-fee is regulate by the amount or value of the property in dispute. [Section 7(x)(d)]. The valuation in case of contracts of sale and mortgage will be according to the consideration of the deed of sale or mortgage, as the case may be, in case of lease, such value will be the aggregate of the premium and first year's rent, and in the case of an award, the valuation will be the value or amount of the property in dispute.
(a) Computation of Court-fees payable in suit for delivery by a tenant of a counterpart of a lease.
- Section 7(xi)(a) of the CourtFees Act provides that the amount of fee payable in suit a for the delivery by a tenant of a counterpart of a lease shall be computed according to the amount of the rent of the immovable property to which the suit refers, payable for the year next before the date of presenting the plaint. Computation of court-fees payable in suit to enhance the rent of a tenant having a right of occupancy - Section 7(xi)(b) of the Act lays down that the amount of court-fee payable in a suit to enhance the rent of a tenant having a right of occupancy shall be computed according to the amount of the rent of the immovable property to which the suit refers, payable for the year next before the date of presenting the plaint. Thus this clause applies to suits for enhancement of rent. A suit for commutation of grain rent into money rent of equal value does not fall within this clause ( Chinna Thambiar v. Veerappa Naidu, AIR 1924 Mad. 623 ). This clause does not provide for a suit for assessment of rent which implies that no rent was paid previously by the defendant and such a suit is not governed by this clause. ( Dhanakdhari Tiwari v. Mani Sonnr, AIR 1927 Pat. 123). A tenant having a right of occupancy is a tenant having a right to be in actual physical possession of land and does not include a person having a superior interest. A tenure-holder in Bengal is a person having a superior interest and therefore a suit against him for enhancement of rent is not governed by this clause. (c) Computation of fees payable in suit for delivery by landlord of a lease. - Section 7(xi)(c) of the Act states that the amount of fee payable in suit for the delivery by a landlord of a lease shall be computed according to the amount of the rent of the immovable property to which the suit refers, payable for the year next before the date of presenting the plaint. Memorandum of Appeal The amount of fee payable under this Act on a memorandum of appeal against an order relating to the compensation under any Act for the time being in force for the acquisition of land for public purposes [or against an award made by a tribunal constituted under the United Provinces
Town Improvement Act or any other similar statute - Add in U.P.] shall be computed according to the difference between the amount awarded and the amount claimed by the appellant. Section 8 provides for fee on memorandum of appeal against an order relating to compensation under the Land Acquisition Act 1 of 1984. The amount of such fee has to be computed according to the difference between the amount awarded and the amount claimed by the appellant. This is not a charging section in itself and only provides a rule for the computation of the court- fee payable under the Act in appeal from cases mentioned therein on the assumption that an ad valorem court-fee is chargeable, and lays down the principle on which the court-fee is to be calculated. It is true that Schedule II, Article 17(iv) prescribes generally the fee payable in respect of a suit to set aside an award but this section excludes the application of that provision of law to awards in land acquisition cases, on the principle that the special provision overrides the general provision. In Indore Development Authority v. Tarak Singh, AIR 1995 SC 1828 , it was observed - Ad valorem court-fee, and not a court-fee of Rs. 4 under Article 11, Schedule II, is leviable on a memorandum of appeal from an order accepting the award given by the Collector under the Land Acquisition Act 1894. Similarly, an appeal against an award under Section 11 of the Punjab Requisitioning and Acquisition of Immovable Property Act (11 of 1953) would be governed by Schedule I, Article 1 and would be chargeable with ad valorem court-fee. When the legality was challenged by filing appeal under Section 54, the difference of amount for which appeal was filed, ad valorem court-fees under Section 8 was required to be paid. Valuation of Court Fees-Section 12 Section 12 in the Court-fees Act, 1870
- Decision of questions as to valuation.— (i) Every question relating to valuation for the purpose of determining the amount of any fee chargeable under this Chapter on a plaint or memorandum of appeal, shall be decided by the Court in which such plaint or memorandum, as the case may be, is filed, and such decision shall be final as between the parties to the suit.
