The Supreme Court in the decision of the Cardamom Marketing Corporation and Anr vs. State of Kerala and Ors., held that providing social security to the legal profession becomes an essential part of any legal system which has to be effective, efficient and robust to enable it to provide necessary service to the consumers of justice. The appellants in the case, by the way of two writ petitions, had challenged the Kerala Government’s notification, authorizing the levy of an additional court fee by the tribunal and the appellate authorities constituted by or under the special or local law, other than criminal and civil courts. The Apex court reaffirmed the stand of the High Court in the decision by upholding the validity of the notification.
Facts of the matter
Section 76 (1) of the Kerala Court Fees and Suits Valuation Act, 1959 (referred to as ‘CF Act”) allows the Government “to levy an additional court fee, by notification in the Gazette, in respect of appeals or revisions to tribunals or appellate authorities, other than Civil and Criminal Courts, at a rate not exceeding one percent of the amount involved in the dispute in case where it is capable of valuation and in other cases at a rate not exceeding one hundred rupees for each appeal or revision.” Exercising its power within this provision, the Government of Kerala issued a notification in April 2002 authorizing the tribunals and appellate authorities to levy additional court fee in respect of each appeal or revision at the rate of 0.5% of the amount involved in the dispute in cases where it is capable of valuation, and at the rate of Rs. 50 in other cases. The amount so collected, as per the notification would be credited to the Kerala Legal Benefit Fund constituted under sub-section (2) of the CF Act.
The appellants in the case are two registered dealers under the Kerala General Sales Tax Act, 1963 and/or the Kerala Value Added Tax Act, in the state of Kerala. They contended that the levy under the notification lacked the element of ‘quid pro quo’ or ‘service’ and therefore was not of the nature of a ‘fee’, but rather it was of the nature of a “compulsory exaction or tax”. It was argued on the behalf of the appellants that, the additional court fee, under the impugned notification, which is to be paid on the appeals etc. which are to be filed either under the Kerala General Sales Act or the Kerala Value Added Tax Act did not have any nexus with the ‘object’ under the CF Act. It was contended that the additional court fee collected from the assessees like the appellant was not used to provide any service to the litigants directly, and rather it was used for the benefit of the advocates. Therefore, since the amount collected by the additional court fee had, in turn, no corresponding benefit to the appellants, the fee was impermissible and nature amounted to the compulsory exaction of money from the appellants.
The view of the Apex Court: The Bench comprising of A.K. Sikri J., S. A. Bobde J. and Ashok Bhushan J. examined the relevant portions of the CF Act, 1959, which in relation to the instant case were firstly, Section 3, clause (iii) which defined ‘court’ and secondly, Section 76, dealing with ‘Legal Benefit Fund’. The Court observed that the definition of ‘court’ provided for “notonly civil or criminal courts but also revenue authorities, including the tribunal or other authority having jurisdiction under any special or local laws, to decide questions affecting the rights of the parties.”
Further, the Court even pointed out that the State Government has framed the Kerala Legal Benefit Fund Rules, 1991 and the Kerala Advocates’ Welfare Fund Act, 1980 along with the Rules framed under it. Having examined the relevant portions of the said Acts, the court held that the Legal Benefit Fund under Section 76 of the Court Fee Act, 1959 was for to be applied and utilized for the purposes of providing an efficient legal service for the people of the State and for the purposes of providing social security for the legal profession, and it needs to be provided by the rules prescribed by the government of the State, and the notification is, therefore, intra vires the provisions of the CF Act along with the rates prescribed.
For the purposes of the arguments advanced by the appellants, the Court upheld the view of the High Court along with its decision in Chackolas Spinning & Weaving Mills Ltd. v. State of Kerala. The Entry 3 in State List of the Seventh Schedule of the Constitution till the year 1960, that is in the duration that the Kerala Court Fees and Suits Valuation Act was enacted on receiving the assent of the President of India allowed the State to make provisions for the administration of justice, constitution, and organization of all courts except the Supreme Court and the High Court and make provisions with respect to the fees taken in all courts except to the Supreme Court.
The Court in consonance with the High Court held that since the purposes of the for which the Fund is to be utilized is for providing efficient legal services for the people of the State, it does amount to quid pro quo. The court made references to the significance of maintaining an efficient and able judiciary for a sound and stable administration and for that all the stakeholders needed to be taken care of, including the lawyers.
Having examined the merits of the case, the appeals were dismissed as it became apparent that providing social security to the legal profession becomes an essential part of any legal system which has to be effective, efficient and robust to enable it to provide necessary service to the consumers of justice.
 Cardamom Marketing Corporation and Anr vs. State of Kerala and Ors., AIR 2016 SC 4480. (decided on 1st September, 2016)
 Chackolas Spinning & Weaving Mills Ltd. v. State of Kerala, 2006 (1) KLT 989.