Whether amendment in court fees Act have retrospective effect?

Civil - Payment of Court-fee - Appellant held liable to pay Court-fee as per Court Fees (Madhya Pradesh Amendment) Act, 1997 - Reference made under Section 5 of the Court Fees Act, 1870 - Held, Court Fees (Madhya Pradesh Amendment) Act, 1997 was not retrospective in operation - It did not apply to those suits which were filed prior to its commencement i.e. 1st April, 1997 - It did not apply to those appeals arising out of suits filed prior to 1st April, 1997 - Reference was answered accordingly.

IN THE HIGH COURT OF MADHYA PRADESH (JABALPUR BENCH)

First Appeal No. 463/98

Decided On: 24.02.2000

Appellants: The Chairman, Gramin Vidyut Sahkari Samiti Maryadit and two Ors.
Vs.
Respondent: Rajesh Kushwaha and four Ors.

Hon'ble Judges/Coram:
Sreesh Chandra Pandey, J.

This is a reference under Section 5 of the Court Fees Act, 1870 (henceforth 'the Act'). The Taxing Officer was of the opinion that the appellant was liable to pay court fees at the rate of Rs. 1,430/- on the valuation of Rs. 12,170/- and not at the rate of Rs. 1,260/- as would be leviable after commencement of Amendment Act No. 12 of 1997, dated 1-4-1997. This Amendment Act of 1997 has modified the Article 1-A of Schedule I to the Act, reducing the amount of court fees payable on valuation of Rs. 12,170/- to Rs. 1,260/-. The appellants would be liable to pay Rs. 1,430/- on the same amount if the amended Article 1-A of Schedule I aforesaid was not applied to the case at hand. The order passed in this reference shall also govern the question of payment of court fees in the connected First Appeal Nos. 464/98, 465/98 and 467/98, as well as the appeals wherever the question of payment of court fees answered by this reference is involved.

Ordinarily, the view of the Taxing Officer would be final in a given case. However, looking to the general importance of the case, the matter has been referred to under Section 5 of the Act.

I have heard Shri VS. Chaudhary, learned counsel for the appellants and Shri Ravish Agrawal, Advocate, as Amicus Curiae. Nobody else appeared to help this Court on behalf of the Bar or the State Government.

Both the learned counsel argued that the Taxing Officer is not correct in requiring the appellants to pay more court fees when the relevant schedule of the Act stood amended requiring the appellants to pay less court fees on the date of filing the appeal, i.e. 21st of September, 1998. It was argued that the amendment became operative from the date it came into force and it would apply to all these appeals which were filed subsequent to the amendment, irrespective of the fact, what court fees was paid initially on the plaint. In other words, the amendment was retrospective in the sense that it applied to all the suits filed before the commencement of the Act.

Having heard the counsel, and after considering the matter in all its broadest perspective, I am of the opinion that the opinion of the Taxing Officer has to be accepted as against the contentions of the learned counsel, who opposed the acceptance of the reference, for the following reasons.

The Taxing Officer has rightly referred to the decision of Nagpur High Court in the case of Arjuna Govinda v. Amrita Keshiba and Ors., reported in AIR 1956 Nag 281 for the proposition that right of appeal is a substantive right as distinguished from a mere procedural right. It inheres in a party at the time of the filing of initial proceedings or the plaint in a suit. It continues till the civil suit is finally disposed of exhausting all rights initially vested in a party at the time of filing of the suit or the proceedings. This inherent right can be taken away by making an express provision in the amending Act. If such a provision is made expressly or it is implied then operation of the amending Act would be retrospective, affecting the vested right of the parties in all pending action. In absence of an express or implied provision, the procedural right may be taken away with the retrospective effect, but not a substantive right. The proposition follows from the rule of interpretation that no party has a vested right to a particular procedure. However, it is equally well established that same cannot be said a substantive right. If it is a vested right then the Legislature can take it away by saying in so many words or by clear intendment. This proposition was accepted by a Full Bench of Nagpur High Court in Radhakisan Laxminarayan Toshnival v. Shridhar Ramchandra Alshi and Ors., reported in AIR 1950 Nag 177. It is of no use to multiply the cases on this point because Five-Judge Bench of Supreme Court in the case of Garikapati Veeraya v. N. Subbiah Choudhry and Ors. MANU/SC/0008/1957: AIR 1957 SC 540, by majority has applied the above principle. In that case, the Supreme Court was required to consider whether a decision in a suit filed in the year 1949, was appealable to the Supreme Court as of right because it involved property worth more than Rs. 10,000/-. It was objected to that it would not be so appealable on the date of filing of the appeal. The amended provisions did not permit filing of appeal to Supreme Court merely because the property was worth Rs. 10,000/- or more. The requirement was that the value of the property should be Rs. 20,000/- or more. The Supreme Court by majority held that the appeal lay as of right. In doing so, the Supreme Court accepted the decision of the Privy Council in Colonial Sugar Refining Co. Ltd. v. Irving 1905 AC 369. S.R. Das, C.J., speaking for the majority, laid down the five propositions after exhaustively considering the relevant previous authorities. He overruled the earlier decisions laying down the contrary view. These propositions are reproduced at page 553 of the AIR report as follows :--

(i) That the legal pursuit of a remedy, suit, appeal and second appeal are really but steps in a series of proceedings all connected by an intrinsic unity and are to be regarded as one legal proceeding.

(ii) The right of appeal is not a mere matter of procedure but is a substantive right.

(iii) The institution of the suit carries with it the implication that all rights of appeal then in force are preserved to the parties thereto till the rest of the career of the suit.

(iv) The right of appeal is a vested right and such a right to enter the superior Court accrues to the litigant and exists as on and from the date the lis commence and although it may be actually exercised when the adverse judgment is pronounced such right is to be governed by the law prevailing at the date of the institution of the suit or proceeding and not by the law that prevails at the date of its decision or at the date of the filing of the appeal.

(v) This vested right of appeal can be taken away only by a subsequent enactment, if it so provides expressly or by necessary intendment and not otherwise."

The amendment was brought upon by the Court Fees (Madhya Pradesh Amendment) Act, 1997 of which the following is the Statement of Objects and Reasons :--

"Statement of Objects and Reasons.-- The Finance Minister while presenting the Budget for the year 1997-98, had in this speech announced that the State Government has decided to augment revenue by levying tax including enhancement of rate of Court Fees.

It is, therefore, proposed to amend the Court Fees Act, 1870 (No. VII of 1870) in its application to the State of Madhya Pradesh, suitably. Hence this Bill."

It would be clear that the amendment was brought with the avowed intention i.e. "augmenting the revenue" by enhancing the rate of Court Fees. The general object of the amendment of substituting new Article 1-A of Schedule I of the Act was to increase the ad valorem levy of the court fees on plaints and consequently, on the appeals of same value. The amendment was not for reducing the court fees. It appears that the Legislature, in order to make general enhancement, has levied 10% on Rs. 10,000/- plus 12% on the amount or value in excess of Rs. 10,000/- upto Rs. 5 Lacs. It may be that the appellant is required to pay less amount because his valuation of appeal is Rs. 12,170/- which is more than Rs. 10,000/-. There appears to be a marginal benefit in a given case although the Legislature wanted to increase the court fees generally. The decrease in the court fees is not universal. Take the case of a person required to pay court fees on the valuation of Rs. 50,000/-. He would be required to pay Rs. 5,800/- instead of Rs. 4,505/- which is more than what was fixed earlier. There is progressive enhancement of court fees under the new amendment on higher valuation. An amendment which was meant to enhance the court fees cannot be said to be in benefit of the litigant. It is expressly for enhancing the revenue of the State. It has, therefore, to be strictly construed. Nor can benefit be given to the appellants alone. If the new Amendment Act is applied from the date of commencement to cases where the suit was already pending on the date of commencement, a number of plaintiffs shall be required to pay higher court fees in most of the cases. There may be reduction of court fees in the cases like that of the appellants. The intention was to enhance the court fees. Therefore, the contention raised on behalf of the appellants is rejected. The persons like the appellants shall be liable to pay marginally more fee under the old law than most of the persons who would be governed by the Amendment. Therefore, it would not be correct to say that the intention of the Legislature was to reduce the court fees. The question of giving effect to intention of Legislature by holding it to be retrospective in operation does not arise.

Accordingly, I am of the view that the Court Fees (Madhya Pradesh Amendment) Act, 1997 (No. 12 of 1997) is not retrospective in operation. It does not apply to those suits which were filed prior to its commencement i.e. 1st April, 1997; and consequently, it does not apply to those appeals arising out of suits filed prior to 1st April, 1997. Let the cases be sent back to the Taxing Officer, who shall, in the light of reference answered in all these cases, require the learned counsel for the appellants to pay the deficit of court fees within a reasonable time. The reference is answered accordingly.

Before parting with the case, I express my debt of gratitude to Shri Ravish Agrawal, Advocate, who appeared Amicus Curiae and helped me in rendering this opinion.

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