Case Law Details
Johnson Scaria Vs Angamally Service Co-Operative Bank Ltd. (Kerala High Court)
The Kerala High Court considered whether the petitioners were liable to pay the Legal Benefit Fund on appeals and revision petitions filed before the Kerala Co-operative Tribunal under the Kerala Co-operative Societies Act, 1969. The Court observed that Section 76 of the Kerala Court Fees and Suits Valuation Act, 1959 provides for the Legal Benefit Fund in the form of an additional court fee. The principal issue was whether the petitioners could avoid payment of this additional court fee while prosecuting their appeals and revision petitions before the Tribunal.
The Court held that the issue was directly covered by the binding Division Bench judgment in Chackolas Spinning & Weaving Mills Ltd. v. State of Kerala, which had upheld the constitutional validity of the provisions imposing liability to pay the additional court fee towards the Legal Benefit Fund.
Referring to the Division Bench decision, the Court noted that Section 76(1) authorises the State Government to levy an additional court fee on appeals or revisions before tribunals or appellate authorities, other than civil and criminal courts, at a prescribed rate depending on whether the dispute is capable of valuation. The proceeds of the additional court fee, together with a specified portion of the court fee collected on mukhtarnama or vakalathnama, are credited to the Legal Benefit Fund constituted under Section 76(2). Under Section 76(3), the Fund is to be utilised for providing efficient legal services to the people of the State and for social security measures for the legal profession, while Section 76(4) empowers the Government to frame rules for these purposes.
The Court further referred to the Kerala Legal Benefit Fund Rules, 1991, framed under Section 76(4) read with Section 85 of the Act. The Rules provide for the establishment of a Trustee Committee, prescribe the manner in which additional court fees are to be credited to the Fund, and regulate its administration. The Rules also provide that the amount available in the Fund is to be equally apportioned between providing efficient legal services to the public and funding social security measures for the legal profession through the Advocate Welfare Fund. The Rules further identify purposes for which expenditure may be incurred, including facilities for advocates’ clerks, amenities for parties and witnesses, legal aid camps, engagement of advocates in special cases, publication of legal materials, creation of legal awareness, and other measures considered necessary for providing efficient legal services.
The High Court also reproduced the reasoning of the Division Bench that the object of the Legal Benefit Fund is consistent with Article 39A of the Constitution, which requires the State to promote justice based on equal opportunity and provide free legal aid. The Division Bench had held that the levy constituted a fee rather than a tax, observing that there existed a broad and general correlation between the amount collected and the services provided. It further held that precise mathematical equivalence between collections and expenditure was unnecessary and that the levy could not be regarded as disproportionately high.
In view of the authoritative pronouncement of the Division Bench, the High Court held that the petitioners were not entitled to the reliefs sought. The writ petitions were accordingly dismissed.
The Court granted each petitioner three weeks’ time from the date of the judgment to remit the additional court fee payable towards the Legal Benefit Fund under Section 76 of the Kerala Court Fees and Suits Valuation Act, 1959, if they wished to prosecute their appeals or revision petitions before the Kerala Co-operative Tribunal.
FULL TEXT OF THE JUDGMENT/ORDER OF KERALA HIGH COURT
The question raised in these writ petitions is whether the petitioners are liable to pay the Legal Benefit Fund on appeals and revision petitions filed before the Kerala Co-operative Tribunal under the provisions of the Kerala Co-operative Societies Act, 1969. It is clear from a reading of Section 76 of the Kerala Court Fees and Suits Valuation Act, 1959, that the Legal Benefit Fund is in the form of an additional Court fee. The question raised is covered against the petitioners by a Division Bench judgment of this Court Chackolas Spinning & Weaving Mills Ltd. v. State of Kerala; 2006 (1) K_LT 989, wherein the provisions imposing liability to pay an additional Court fee toward the Legal Benefit Fund were held to be constitutional. Paragraphs 5, 6 and 7 of the judgment of the Division Bench in Chackolas Spinning & Weaving Mills Ltd. (supra) read thus:
“5. We are in this case concerned only with the question as to whether the levy of fee is disproportionately high warranting interference by this Court under Article 226 of the Constitution of India. Kerala Court Fees and Suits Valuation Act was enacted to amend and consolidate the law relating to court fees and valuation of suits in the State of Kerala. Chapter VIII of the Act deals with Legal Benefit Fund. Section 76(1) of the Act enables the State Government to levy additional court fee in respect of appeals or revisions to Tribunals or appellate authorities, other than civil and criminal courts, at a rate not exceeding one per cent of the amount involved in the dispute in cases where it-is capable of valuation and in other cases at a rate not exceeding one hundred rupees for each appeal or revision. Sub-section (2) of Section 76 deals with the constitution of a legal benefit fund. The proceeds of the additional court fee levied and collected under Sub-section (1) of Section 76 has to be credited to this legal benefit fund. Further 50% of the court fee levied and collected on mukhtarnama or vakalathnama under Article 16 of Schedule II of this Act has also to be credited to the legal benefit fund. Sub-section (3) of Section 76 specifically stipulates that the fund constituted under Sub-section (2) shall be applied and utilised for the purpose of providing an efficient legal service for the people of the State and to provide ‘social security measures for the legal profession. Sub-section (4) of Section 76 authorises the Government to prescribe rules, so that legal service to the people may be made more efficient and to provide social security measures for legal profession.
6. State Government in exercise of the powers conferred by Sub-section (4) of Section 76 of the Court Fees Act 1959 read with Section 85 of the Act framed the Kerala Legal Benefit Fund Rules, 1991. Rule 4 provides for the establishment of Trustee Committee. The Trustee Committee shall be a body corporate having perpetual succession and a common seal with power to acquire and hold property. Trustee Committee shall consist of the Advocate General of Kerala, the Secretary of the Bar Council, two members of the Bar Council nominated by the Bar Council, Secretary of the Board of Revenue (LR), a nominee of the High Court and the Secretary of the Law Department. Sub-rule (2) of Rule 3 says that the amount of additional court fee levied and collected under Sub-section (1) of Section 76 of the Act shall be added to the Fund as and when such additional court fees are levied and collections are made and the amount will also be made available to the Law Secretary during the beginning of every financial year based on consolidated accounts of collection made in the previous year. The fund shall be deposited in the Public Deposit account as “Fund” in the District Treasury, Thiruvananthapuram in the name of the Legal Benefit Fund Trustee Committee constituted under Rule 4. Rule 11 stipulates that the amount to be credited to the Fund under Section 76 of the Act shall be collected by means of court fee stamps stamped with the words “Legal Benefit Fund” in the required number of different denominations of Court Fee Stamps of 50 paise, Re. 1, Rs. 2, Rs. 5 and Rs. 100 while issuing the same from Treasury Officers and the sale proceeds thereof shall be credited to a particular Head of Account. Sub-rule (2) of Rule 11 stipulates that the amount available in the Fund as on 31st March of every year, shall be equally apportioned for the purposes of providing efficient legal service for the people of the State and to provide social security measures for the legal profession The amount intended to provide for social security measures for the legal profession, shall be entrusted to the Secretary, Bar Council of Kerala who is the Convener of the Advocate Welfare Fund for crediting the same to that Fund constituted under the Kerala Advocates Welfare Fund Act, 1980 for being utilized in accordance with the provision of that Act. Rule 12 stipulates that the matters for which expenditure may be incurred for the purpose of providing an efficient legal service for the people of the State may include provision for working space for the Advocates’ Clerks; resting place and other facilities for the parties and witnesses attending the courts; conducting legal aid camps for people interested in the legal service; expenditure for engaging advocate in special cases; publications relating to legal issues and important decisions of the Kerala High Court to create legal awareness among people of the State and such other matters as the Committee may feel necessary for providing an efficient legal service for the people of the State.
7. The object and purpose of the legal benefit fund is laudable. Article 39A introduced by the 42nd Amendment stipulates that State shall secure that the operation of the legal system promotes justice on a basis of equal opportunity and shall in particular, provide free legal aid, by suitable legislation or schemes or in any other way, to ensure that opportunities for securing justice are not denied to any citizen by reason of economic or other disabilities. The Government, we have already indicated, is collecting fee, which forms part of the Legal Benefit Fund and it cannot be characterised as a tax. The difference between tax and fee has been dealt with in several cases by the Apex Court. The Apex Court in P.M. Ashwathanarayana Setty v. State of Karnataka
AIR 1989 SC 100 held that if the essential character of the impost is that some special service is intended or envisaged as a quid pro quo to the class of citizens which is intended to be benefited by the service and there is a broad and general correlation between the amount so raised and the expenses involved in providing the service, the impost would partake the character of a fee . Reference may also be made to the decision of the Apex Court in Secretary to Government of Madras v. P.R. Sriramulu (1996) 1 SCC 345 and Calcutta Municipal Corporation v. Shrey Mercantile (P) Ltd. (2005) 4 SCC 245. The court held that the correlation between the amount raised through the “fee” and the expenses involved in providing the services need not be examined with a view to ascertaining any accurate, arithematical equivalence or precision in the correlation but it would be sufficient that there is a broad and general correlation. Looking at the object and purpose of the Legal Benefit fund we are not prepared to say that there is no relation between the court fee charged and the services rendered and the levy of fee is not disproportionately high.”
In the light of the authoritative pronouncement of the Division Bench in Chackolas Spinning & Weaving Mills Ltd. (supra), I am of the opinion that the petitioners in these writ petitions are not entitled to the reliefs sought for in these writ petitions.
The writ petitions fail and are accordingly dismissed. Each of the petitioners is granted three weeks’ time from today to remit the additional Court fee payable toward the Legal Benefit Fund in terms of Section 76 of the Kerala Court Fees and Suits Valuation Act, 1959, if they wish to prosecute their appeals/revisions before the Tribunal.
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