Maj.Gen.Kapil Mehta & Ors v. UOI

order would not be a 'decree' and, therefore, ad valorem court fee was not payable. After discussing the history and background behind DisplacedPersons (DebtsAdjustment) Act, 1951, the Supreme Court observed that it would appear that the intention of the Parliament was to bring out a legislation which would provide for a cheap and expeditious remedy to the displaced persons and entrust the work to a tribunal which-may be able to decide the claims quickly instead of leaving the displaced debtors or creditors to follow the dilatory and cumbersome process of the civil courts. Further, the Act is a beneficial statute meant for advancing the cause of the displaced debtors and creditors by conferring substantial benefits on them ifthey are able to prove their claimsand IA.A. No. 149/2007 & WP No. 3864/2007 in these circumstances, it is clear that the Legislature could never have intended that the claimants should have to pay heavy court fees either in getting their claims adjudicated by the tribunal or even in filing appeals against the decrees of the tribunals. It was further held that under the Act the decree which the tribunal passes is not a decree of the civil court but a decree passed by a tribunal in a proceeding under Section 5 and Section 9 of the Act. Whether a claim is disallowed or allowed, the order passed by the tribunal would be a decree in both cases. But is it a decree for Article 11 of Schedule 11 is the question. In process, Supreme Court also interpreted definition of 'decree'as appearing in Section 2(2) of the CPC as per which the following three essential conditions are necessary

(i) that the adjudication must be given in a suit;

(ii) that the suit must start with a plaint and culminate in a decree; and

(iii) that the adjudication must be formal and final and must be given by a civil or revenue court.

¶7The Apex Court was of the opinion that the Tribunal constituted under the 1951 Act cannot be called a court. The proceedings before the tribunal start with an application and not a plaint and lastly the claim before the tribunal is a proceeding and not a suit. Hence, none of the requirements of a decree are to be found in the decision given by the tribunal even though the Legislaturemay have described the decision as a decree. A mere description of the decision of the tribunal as a decree does not make it a decree within the meaning of LA.A. No. 149/2007& A., the Court Fees Act. Moreover the objection of the Act is to benefit displaced persons by providing them a cheap and expeditious remedy, it was also held that in case of a fiscal statute the provisions must be strictly interpreted giving every benefit of doubt to the subject and lightening as far as possible the burden of court fees on the litigant. Thus where an adjudication given by a tribunal could fall within two provisions of the Court Fees Act, one of which was onerous for the litigant and the other more liberal, the court would apply that provision which was beneficial to the litigant.

¶8The submission of the appellant was that constitution of reference court/tribunal under Section 18 of the Act is also to provide succour to those who are granted lesser compensation by the LAC. He highlighted the facts of his own case and submitted that when such a meagre compensation is awarded to him as against the real market value of the land, asking the appellant to pay ad valorem court fee would be totally unjust and would amount to depriving a person to avail appropriate remedy available in law. The appellant also referred to and relied upon the judgments of the Bombay High Court in Hirji Virji Jangbari v. Covernment of Bombay, AIR 932) 1945 Bombay 348 and Punjab High Court in the case of Kanwar Jagat Bahadur Singh v. The Punjab Estate, AIR 1957 Punjab 32, where those High Courts had taken the vieu/ that fixed court fee is payable. LA.A. No. 149/2007& 2>

¶9The aforesaid submissionsof the appellant appear to be attractive, more particularlywhen these arejexaminedin the contextof the facts of the appellant'scase wherein he was deprivedof his land illegally and the respondentswoke up initiatingthe acquisitionproceedings only after realizingtheir folly that the appellant was dispossessedof his land on the basis of purported notification which did not cover his land. Furthermore,when accordingto the appellanthe is given farcical amount of Rs.24 lacs against his demand and expectationof Rs.60 crores (approx.). No doubt, asking the appellant to pay court fee of Rs.60 lacs even before his claim on merits is considered would be onerous. However, we are concerned here with the legal provisions which govern the case and hold the field.

¶10Arguments of the appellant, we are constrained to note, already stand answered by the Apex Court and other courts in subsequent judgments. We may first referto the judgmentof the SupremeCourt in the case of C.C. Chanshamdas & Ors. v. Collector of Madras, ®

(1986) 4see 305. Significantly,the judgmentsof the Bombay High Court in Hirji VirjiJangbari(supra), the Punjab High Court in Kanwar Jagat BahadurSingh (supra),and also of this Court in MangalSen v. Union of India, AIR 1970 Delhi 44, which had followed the Punjab High Court, were overruled by the SupremeCourt in this case.

¶11When the question of payment of court fee for the land under the Requisitioningand Acquisition of Immovable Property Act, 1952 (which is par! materiawith the Land AcquisitionAct) came up for lA.A. No. 149/2007& WPNo. 3864/2007 A consideration, there were two conflicting views expressed by different High Courts. In the aforesaid judgmentsof the Bclmbay, Punjab and this Court, view tai<en was that in such appeals filed against the award of the reference court, fixed court fee is to be affixed. View of some other High Courts was that ad valoremcourt fee is to be paid. The SupremeCourtwhile overrulingthe judgments of those courts which had taken the view that fixed court fee is payable, affirmed the view that ad valoremcourt fee is payable in such cases. While holdingthis view, the SupremeCourt discussedthe issue in the following manner:- "18. In Satya CharanSurv. State of W.B., Air 1959 Cal 609, the High Court of Calcutta while following the decision in Ananda Lai Chakrabutty case expressly dissented from the view expressed in Hirji VirjiJangbari case. After the Bombay Court Fees Act, 1959 came into force a similar question arose for consideration in C.B.C. Trustv. Union of India, (1968( 70 Bom LR 407 regarding the proper court fee payable on an appeal filed against an award made under the Requisitioning Act. In the Bombay Court Fees Act, 1959 Section 7(1) provided that the amount of fee payable under that Act on a memorandum of appeal against an order relating to compensation under any Act for the time being in force for the acquisition of land for public purposes should be computed according to difference between amount awarded and amount claimed by the appellant. The language of that section was similar to the language of Section 51 of the Act and of Section 8 of the Court Fees Act, 1870. A Division Bench of the High Court of Bombay, which heard the said case held that the court fee payable on the memorandum of appeal preferred against award made under Section 8 of the Requisitioning Act was as prescribed by Article 3 of Schedule I read with Section 7(1) of Bombay Court Fees Act, 1959. They disapproved decision of the Bombay High Court in Hirji VirjiJangbari case and followed decision of the Calcutta High Court in Ananda La! Chakrabutty case. An identical question came before this Court for consideration is Sahadu Cangaram Bhagadev. SpL Deputy Collector, (1971) 1 SCR 146 : (1970) 1 see 685 : AIR 1971 SC 1887. In that case this Court approved the view expressed by the Calcutta High Court in Ananda Lai Chakrabutty case and in C.B.C. Trust case and held that the contention that the award made by the Arbitrator had no effect and, therefore, it could not be consideredas an'order, was not acceptable. The Court proceeded to hold that though lA.A. No. 149/2007 & WP No. 3864/2007 the award was not an order as defined in the Civil Procedure Code, 1908 having not been made by the civil court but since the expression 'order' had not been defined in that Act, tljie award of the Arbitratorwas undoubtedlya formal expression of a decision made by a competent authority which was binding on the parties to the proceedings in which it was made. The learned counsel for the appellants tried to distinguishthis decision from the present case on the ground that while the expression'order' had not been defined in the BombayCourt Fees Act, 1959 which arose for considerationin the said decision, in the present case it had been defined as stated earlier by stating in Section 3(iv) of the Act that the expressionused and not defined in the Act, but defined in the Code of Civil Procedureshould have the meaning respectively assigned to them in the said Code, and in view of the above distinction the decision in Sahadu Cangaram Bhagade case would not govern the present case. We do not find much substancein the abovecontention. On carefullygoingthrough the decision of this Court in Sahadu Qangaram Bhagadecase we find that the decisiondid not reallyturn upon the presence or the absence of the definition of the word 'order' in the Bombay Court Fees Act, 1959 although there is a referenceto this aspect of the matter in the course of the decision. The relevant part of the decisionin SahaduCangaramBhagadecase at page 150 reads like thus: (SCC p. 688, para 3) Section 11 provides for an appeal to the High Court against the award made by the Arbitrator. In the Act there is no provision similar to sub-section

(2) of Section 26 of the Land Acquisition Act, 1894 whereunder every award made by the Land Acquisition Officer is to be deemed to be a decree of court. Therefore, question whether award made under Section 8 of the Act is executable or not is a matter that requires further consideration. For the present, we shall proceed on the basis that it is not executable. But Section of Act requires competent authority to pay the compensation awarded to the person or persons entitled thereto. Therefore we are unable to accept the contention of the learned counsel for the appellant that the award made by the Arbitrator is something which has no effect and therefore it cannot be considered as an order. It is true that it is not an 'order' as defined in the Civil Procedure Code, the same having not been made by a civil court. But the expression 'order' is not defined in the Act. The award of the Arbitrator is undoubtedly a forma! expression of a decision made by a competent authority. Further it is a decision binding on the parties to the proceedings in which it is made. Therefore the question whether the order in question is executable or not appears to us to be irrelevant for the purpose of determining the point in issue. (emphasis added) LA.A. No. 149/2007&

¶19The portion of the judgment of this Court which has been underlined clearly brings out the effect of an award. This Court has held that the award of the Arbitrator is undoubtedly a formal expression of a decision made by a competent authority. We are also of the view that much reliance cannot be placed on the definition clause found in Section 3(iv) of the Act since the definitions given in that section have to be read subject to the context in which the expressions defined therein appear in the Act. Section 3 of the Act states that in the Act 'unless context otherwise requires' words and expressions defined in that section shall carry the meaning given to them in various clauses in that section. It is relevant to note that in Section 51 of the Act which arises for consideration before us the word 'order' does not appear in isolation. The section states that the fee payable under Act on a memorandum of appeal against an order relating to compensation in any Act for the time being in force for the acquisition of property for public purposes shall be computed on difference between amount awarded and amount claimed by the appellants. The 'order' referred to in Section 51 of the Act need not therefore be an 'order' of a civil court as defined in Section

(14) of the Code of Civil Procedure but should be an 'order' relating to compensation under any Act for the time being in force for the acquisition of property for public purposes. There is no doubt that the award passed by the Arbitrator under the Requisitioning Act is a formal expression of a decision made by a competent authority which is binding on the parties and it relates to compensation payable under an Act for the time being in force for the acquisition of property for the public purposes. Hence we are of the view that even though the expression 'order' simpliciter has to be understood in the sense in which that expression is defined in Section 2(14) of the Code of Civil Procedure, the word 'order' found in Section 51 of the Act has to be read differentlyhaving regardto the words which qualify ' that expression in that section, namely, 'relating to w compensationunder any Act for the time being in force for the acquisitionof properties'. The said order need not be an order of a civil court only. It can be of any statutory authority. But it must determine compensation for a property acquired under a law of acquisitionof property for publicpurpose. The award made under Section 8 of the Requisitioning Act satisfies these tests. Vi'e do not, therefore, find any substance in this contention too. Since according to us the appeal before the High Court filed under Section 11 of the RequisitioningAct falls sqarelyunder Section51 of the Act, court fee has to be paid on ad valorem basis as provided in Article 1 of Schedule 1of the Act. It follows that the residuary article i.e. Article 3(iii)(A)

(l)(a) of Schedule11 to the Act is not attracted. The High Court was right in following its earlier decision in Y. Venkanna Choudhary case and directing the appellants to pay court fee on ad valorem basis under Section 51 of the Act." lA.A. No. 149/2007& WPNo. 3864/2007

¶12The judgment of the Supreme Court of Diwan Bros, (supra), on which heavy reliance was placed by the appellant, came up for discussion before the Apex Court again in the case of Indore Development Authority V. Tarak Singh & Ors., 1995 Supp. (3) SCC

¶25That was a case which specifically dealt with appeals under Section 54 of the Act against award of the reference court claiming higher compensation than compensation, awarded by reference court under Section 18 of the Act. In no uncertain terms the Supreme Court held that reference court under Section 18 of the Act was a 'civil courV and by virtue of Section 26(2) its award is a 'decree' within meaning of Section 2(2) of the CPC. This judgment, in fact, clinches the entire issue, raised by the appellant, against him. In this binding precedent, the Supreme Court has given a categoricalopinion that ad valoremcourt fee would be payable in view of Section 8 of the M.P. Court Fees Act, 1870 (which is pan materia with Section 8 of the Court Fees Act, 1870). Following discussion contained in the said judgment would be of use to us "6. The case on hand stands on a higher footing than the one dealt with in Chanshyamdas case. Here, the Subordinate Judge, who deals with the reference,is a civil court under the Central Act to determine compensation. By operation of Section 26(2), his award is a decree within the meaning of Section 2(2) of CPC. It is a formal expression of an adjudication on the compensation awardable or measurement of the land acquired under the Central Act. It is a final adjudication also, unless it can be avoided in any other forum known to law; and it could be avoided only by filing appeal as prescribed in Section 54 of the Central Act.

¶7In this context, it is relevant to note Section 8 of the M.P. Court Fees Act which reads thus: I "8. Fee on memorandum of appeal against order relating to compensation: The amount of fee payable under this Act on a memorandum of appeal against an order relating IA.A. No. 149/2007& ^ to compensationunderAny for the time being in force forf^^ the acquisition of land for public purposes shall b|e computed according to the difference between the amount awarded and amount claimed by appellant." . 13. The earlier judgment of the Supreme Court in Diwan Bros, (supra) was held to be not applicable, as is clear from the following discussion "9. The decision of this Court in Diwan Bros. v. Central Bank of India, (1976) 3 SCC 800 relied on by Shri V.R. Reddy has no application to the facts in this case. Therein, the Special Tribunal was constituted and an application was to be made to the Tribunal for determination of the disputes. In view of the specific language, this Court held that the criteria prescribed under sub-section (2) of Section 2 of the CPC has not been satisfied. Therefore, order is not a decree and application is not a plaint as required by CPC. Therefore, it was held that fixed court fee was required to be paid on memorandum of appeal. But, as stated earlier, since the Act has treated the court under the Central Act as an established civil court of original jurisdiction and conferred the power and jurisdiction to determine conclusively the objection regarding measurement or compensation or title to receive the compensation between the contesting parties, it is a Civil Court under the CPC and the award of the Civil Court is deemed under Section 26 (2) to be a decree within the meaning of sub section (2) of Section 2 of CPC."

¶14This judgment, in fact, leaves no manner of doubt that the court fee payable is ad valorem as per Section 8 of the Court Fees Act; the reference court is a 'civHcourt'; its award is a 'decree' as per Section 26 of the Land Acquisition Act; and thus Article 1 of Schedule I would apply and not Article 17(4) of Schedule II of Court Fees Act. No doubt, provision like this, as already pointed out above, may be onerous to persons like the appellant and would even appear to be unjust. However, the provision, as it stands and is interpreted by the Supreme Court, mandates that ad valorem court fee is payable. IA.A:No. 149/2007& mk We may also point out at this stage that the judgment^the Punjab High Court in Kanwar Jagat Bahadur Singh (supra) was overruled by the Punjab High Court in the same year itselfin the case of Sahdev Singh, RajeshwarSingh v. Punjab State, AIR 1957 Punjab

¶222This view was reiterated by the same High Court in ILR 96(2) Punjab 481 holding that ad valorem court fee is payable. No doubt, thereafter by legislative amendment the States of Punjab &. Haryana have fixed Rs.lOO/- as the court fee payable on such appeals. The remedy, therefore, lies with the Legislatureto correct the situation in case it finds the provisions burdensome. With these observations, this application is disposed of.

¶15WP fC) No. 3864/2007 Since we have held that ad valorem court fee is payable in view of Section 8 of the Court Fees Act, 1870, the question is as to whether this provision is ultra vires.

¶16It was argued by the petitioner that forcing a citizen to pay such substantial ad valorem court fee, who is divested of his land, would clearly be unjust and an unreasonable restriction on his right to approach the court and seek judicial remedy. Such a fee loses the character of 7^6''and assumes the character of a 'tax\ which would clearly be inadmissible, was the contention. Heavy reliance was placed on the judgment of the Supreme Court in the case of P.M. Ashwathanarayana Setty & Ors. v. State of Karnatal<a & Ors., •\ LA.A. No. 149/2007& -X 1989 Supp (1) see 696. In that case, the Apex Court was concerned with levy of court fee under Karnataka Court Fees and Suits Valuation Act, 1959 as well as the Rajasthan Court Fees and Suits Valuation Act,-1961. Under those provisions, court fee payable was 10% of the amount claimed. The court formulated the following three questions which fall for determination "(1) The first question is whether the levies of court fee under Karnataka Act and Rajasthan Act satisfy the requirement of the concept of a 'fee' or partake the character of a 'tax' in absence of any correlationship between the fee and the value of the services by way of quid pro quo?

(2) The second question is whether the levy of court fees on ad valorem basis, without an upper limit, renders the impost a tax, inasmuch as having'regard-to.-lhe very nature of the services, which consists of adjudication of disputes, a state is inevitably reached after and above which ah ad valorem leyy, the proportionate, increase in the value_of the subject matter, ceases to be a 'fee' and becomes a 'tax'?

(3) The last question is whether, insofar as the provisions of Section 29(i) read with entry 20 -is Schedule 1 to the Bornbay Act are concerned, singling-out: of a class of litigation viz;,, applications for grant-of probate and. lettei-s of administration for levy of.ad valorem court fee without the, benefit of the upper .limit of Rs.15,000 prescribed-in Yespect of all" other 7suits and proceedings exposes that class of litigants to a hostile discrimination and is violative of Article 14?"

¶17The aforesaid questions were answered'in the following manner "(1) Fee or Tax A fee is a charge for the special:.service rendered to a class of citizens by government of governmental agencies and is generally based, on the expenses incurred in rendering services. 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 services, the impost would partake^the character of a -fee' notwithstanding-circumstance .that identity of the LA.A. No. 149/2007& WP No. 3864/2007 Page .19of 29 amountso raisedis not alwayskeptdistinguishedbut is nne^ed in the general revenues of the State and notwithstanding the fact that such special services, for which the amount is raised, incidentallyor indirectlybenefit 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 amount raised through the 'fee' and the expenses involved in providing the services need not be examined with a view to ascertaining any accurate, arithmetical equivalence or precision in the correlation; but it would be sufficient that there is a broad and general correlation. The concept of fee does not require for its sustenance that every member of the class on whom the fee is imposed, must receive a corresponding 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 not necessary that every individual composing the class should be shown to have derived any direct benefit. (paras 35 and 36) A fee has also the element of a compulsory exaction which is shared in common with the concept of a tax as the class of persons intended to be benefited by the special services has no volition to decline the benefit of the services. A fee loses it 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. The object to be served by raising the fee should not include objects which are, otherwise, within the ambit of general governmental obligations and activities. The concept of fee is not satisfied merely by showing that the class of persons from whom the fee is collected also derives some benefit from those activities of government. Such . benefit is not one intended as special service to it but derived by it as part of the general public. A fee which at the inception K is supportable as one might shed its complexion as a fee and assume that of a tax by reason of the accumulation of surpluses or the happening of events which tend to affect and unsettle the requisite degree of correlation. (paras 35, 36 and 40) In the present case though the statements of receipt and expenses on the administration of justice do not contain any break up of figures between expenditures on administration of civil justice and criminal justice but having regard to the figures, a reasonable estimate of the proportion of the former is possible and the figures indicate and establish the requisite correlationship between the fee and the value of the services by way of quid pro quo. (para 47)

(2) Ad valorem court fee, without an upper limit: Whether ceases to be a 'fee' and becomes a 'tax'? When a broad and general correlation between totality of the fee on the one hand and the totality of the LA.A. No. 149/2007 & WP No. 3864/2007 expenses of the services on the other is established,the levy will not fail in its essential characterof a fee on the grourid alone that the measure of its distributionon the persons or incidence is disproportionateto the actual services obtainable by them. The argument that the levy of court fee on ad valorembasis involvesan erroneouspostulatethatjudicialtime and the service of the machineryof justice is consumed and utilized in direct proportionto the amount or value of the subject matter, is not acceptable. The correlation of the servicesto the fee cannot be decided on the basis of how the correlationoperates in each individualcase. The conceptual natureof the fee cannotbe testedon the basis of the degreeof quid pro quo in the case of each individualpayer of the fee. There might, conceivably, be cases where a particular individual contributor may not derive any benefit at all, though as a memberof the class he has no option but to make the contribution. There is no force in the contention that beyond a point the impost ceases to have the qualityof a fee. This cannot be a legitimate and permissible ground of invalidation. However, if the scheme of distribution of the burden is so arbitrary,so unreasonableand disproportionateas to offend the requirements of Article 14, the levy will be violationof Article14. (paras49, 67, 68, 69 and 72)

(3) Hostile Discrimination 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 court fee in the present case amounting to Rs.6,14,814 - is discriminatory. There is no intelligible or rational differentia between the two classes of litigations and having regard to the fact that what is ^ recovered is a fee, the purportedclassificationhas no rational nexus to the object. 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 complexity an upper limit of Rs.l5,000 on the court fee is fixed, there is no logical justification for singling out this proceeding for an ad valorem impost without benefit of some upper limit prescribed by the same statute respecting all other litigants. The impost was never sought to be supported or justified as something other than a mere fee, levy of which is otherwise within the State's power or as separate 'fee' for another distinct source. It is purported to be collected and sought to be justified only as court fee and nothing else. The High Court was, therefore, justified in striking down impugned provisions as being violation of Article14. (paras 90 to 93)

¶18Learned counsel for the respondents, on the other hand, pointed out that the aforesaid judgment of the Supreme Court came up for LA.A. No. 149/2007& /2 discussion in subsequent case, namely, Secretary to Coverhment ofMadras &Anr. y. P.R. Sriramulu &Anr., (1996) 1 SCC

¶345In this case the Supreme Court has comprehensively discussed the issue relating to payment of court fee, including the aspect as to when such court fee can assume the character of a tax. It was also a case relating to the Land AcquisitionAct. Certain lands belongingto the respondent Nos. 1 & 2 had been acquired. Those respondents had sought reference under Section 18 of the Act for enhancement of compensation. The reference court increased the compensation to ^ some extent which was not to the satisfactionof the respondents. \ They accordingly preferred appeals to the High Court under Section 54 of the Act for further enhancement of the compensation. As per the provisionsof the Madras Court Fee and Valuation Act, 1955, on such appeals ad valorem court fee @ 7.5% of the total claim, withoutany upper limit, is payable. The respondentsperceivedthis provisionto be highlydiscriminatorywhich compelledthe appellants to pay ad valoremcourtfee at such a higherrate and, therefore,they challengedthe aforesaidprovisionsof levy of court fee as exorbitant, arbitrary,unreasonableand unjustified. It was their submissionthat it had no bearing or relationshipto the cost of administrationof justice and, therefore, though termed as court fee, the amount extracted was really a levy of tax. It was argued by the respondents therein that court fee must be related to cost of administration of justice and cannot be used as a means of taxation for the purpose of raising the revenue to the Government for its LA.A. No. 149/2007& general administration. It was also argued that pattern of levy of court fee prior to 1955 was only to levy an ad valorem fee up to certain limit and thereafter the fee was on a reduced scale and that the scale of fee in other states of the country was also on different basis and not on the basis of ad valorem fee without limit. On the basis of these pleas, prayer was made to declare such a provisionas invalid.

¶19The High Court of Madras found force in the aforesaid submissions ^ and accepting the arguments of the respondentsallowed the writ petition holding that there was no idea of quid pro quo in the levy @ 7.5% flat rate without limit as there was no necessity to raise the court fees as compensation for the cost of service rendered and to meet any increased cost in the administration of civil justice and also that there was no principleof rationalization justifyingdemand at a flat rate. The High Court, thus, opined that under these circumstancesthe impost inherentlybears within more the concept of tax rather than fee, which was grossly disproportionate, unreasonable and arbitrary.

¶20The Supreme Court set aside the aforesaid judgment of the High Court in the appeal preferred by the Government of Madras. Perusal of the judgment would show that the court, in detail, traced the history with regard to the levy of court fees in the country on the litigatingparties since Mughal period and thereafter during the British rule in India. It acknowledged that the administration of justice is lA.A. No. 149/2007& one of the main functions of the State along with large area of activity as in modern times functions of the State have become too extensive. The State has not only to maintain a system of administrationof justicefor the maintenanceof law and order, but it has also to provide a system to enable its citizens to canvass their rights againstthe wrongs done to them as well as to the State itself, statutory bodies and government corporations, which were the largestlitigants. In this backdropthe courtformulatedfour questions which arose for consideration and these are as under "8. In the presentappeal and writ petitionbefore us, it may X be noted that the questions that arise out of the arguments addressed to us by the learned counsel for the parties, may be formulated as under

(1) What is the nature of the fees taken in court within the meaning of Entry 3, List 11, in 7^^ Schedule of the Constitution? Whether the fee so charged is a tax or a fee?

(2) Whether it is a colourable exercise of legislative power, inasmuch as the State in fact is raising tax under the guise of levying a fee because the levy is excessiveto such an extent as to be a pretence of a fee but it is not a fee in reality?

(3) Whether the levy of court fees on ad valorem basis without an upper limit renders impost a tax inasmuch as having regard to the very nature of services, which consist of adjudication of disputes, a state is inevitably reached wherein after and above an ad valorem levy, the proportionate increase in the value of the subject-matter ceasesto be a fee and becomes a tax?

(4) Whether the impugned impositions are fees - there being no correlation between the services and the levy and because State makes a profit out of administration of civil justice as it does not spend the entire money on administration of civil justice but also in administration of criminal justice and a large surplus is left out even after meeting expenses of administration of justice?" /.A.A. No. 149/2007& I

¶21The Courtthereafterproceededto take note of few earlierjudgments wherein the question of fee and tax had come up for consideration and pointed out that in the case of Secy., Covt. of Madras, Home Deptt. V. Zenith Lamp, (1973) 1 SCC 162, the Constitution Bench of the Court had taken the view that the fees taken in courts cannot be equated with taxes. In para 12 of the judgment, earlier decision in the case of P.M. Ashwathanarayana Setty (supra) {on which reliance was placed by the appellant herein} is taken note of and discussed at length. Applying the test laid down in those judgments, the court did not find favour with the view taken by the High Court, as is clear from the following discussion "14. Having regard to decisions and various pronouncements cited above it is difficult to accept reasoning and the view taken by the High Court in the impugned judgment. As discussed above if the essential character of the levy is that some special service is intended as quid pro quo to the class of citizens which is intended to be benefited by the service and a broad and general correlation between the amount so collected and the expenses incurred in providingthe services is found to exist, then such levy would , partake the character of a 'fee', irrespectiveof the fact that such special services for which the amount by levy of fee is collected incidentally and indirectly benefit the general public also. In order to establish the correlation between the amount recovered by way of 'fee' and the expenses incurred in providingthe servicethey should not be examined so minutely or be weighed in golden scale to discern any difference between the two. It is not necessary to ascertain the same with any mathematical exactitude for finding the correlation but the test would be satisfied if a broad and general correlation is found to exist and once such a broad correlation between the totality of the expenses on the services rendered as a whole on the one hand and the totality of the amount so raised by way of the fee, on the other, is established, it would be no part of legitimate exercise in examination of constitutionality of the concept of the impost to embark upon its effect in the individual cases. If the aforesaid relation is found to exist in the levy of the fee, the levy cannot be said to be wanting in its essential character of a fee on the ground that the measure of its distribution on the persons or incidence is disproportionate to the actual services made available to them. In view of this proposition of law the view expressed by the lA.A. No. 149/2007& ^ High Courtthat ad valoremlevy of court fee in an indOtdual case far exceeds the maximum value, in terms of money, qua that contributor and hence the concept of correlation fails and rendersthe levy invalid and illegal cannot be acceptedfor the . simple reason that the correlation is not in the context of individual contributors, the test being its ascertainment on a comprehensivebasis keeping in view the value of the totality of the service, qua the totality of receipts. Accordingto D.D. Marco, the author of the First Principles of Public Finance, page 33, "the fee must be equal in the aggregate to the cost of production of the services. That is the aggregate amount of fees which State collects from individual customers must equal aggregate expenses of production." Thus test of the correlation is to be reckoned at the aggregate level and not at the individual level as is also the view taken in Ashwathanarayana SettycdiSe.

¶15As pointed out earlierwith referenceto the decisionsof this Court the State enjoys the widest latitude where measure of economic regulationsare concerned. These measures for fiscal and economic regulation involve an evaluation of diverse and quite often conflicting economic criteria, adjustment and balancing of various conflictingsocial and economic value and interests. It is for the State to decide what economic and social policy it should pursue. It is settled law that in view of the inherent complexity of the fiscal adjustments, the Courts give a large discretion to legislature in the matter of^ its references of economic and social policies and effectuate the chosen system in all possible and reasonable ways. If two or more methods of adjustment of an economic measure are available, the legislativepreference in favour of one of them cannot be questioned on the ground of lack of legislative wisdom or that the method adopted is not the best or there are better ways of adjusting the competing interests and the claims as the legislature possesses the greatest freedom in such areas. It is also well settled that lack of perfection in a legislative measure does not necessarily imply its constitutionality as no economic measure has so far been discovered which is free from all discriminatory impact and that in such a complex area in which no fool proof device exists, the Court should be slow in imposing strict and rigorous standard of scrutiny by reason of which all local fiscal schemes may be subjected to criticism under the Equal Protection clause. Having regard to these settled principles impugned Judgment of the High Court could not be sustained. (emphasis supplied)" la:A. No. 149/2007 & WP No. 3864/2007

¶22Argumentof the respondentsbased on P.M. AshwathanarayanaSetty (supra)was repelled in the followingwords "20. Learned counsel for the respondents, however, submitted that this Court in the case of Ashwanatha Narayana Setty (supra) ultimatelydid not approve the scheme of ad-valorem levy of Court Fees without upper limit and urged that the said decision cannot be taken as an aid in support of the contention of the appellant that the ad-valorem levy of Court Fee without upper limit is justified and legal. It is true that in the last sentence of para 88 in the said report this Court observed as under: "though the scheme cannot be upheld, at the same time, it cannot be struck down either." While laying emphasis on the aforesaid observation, learned Counsel for the respondents ignored the view expressed in paras just preceding the said observation, wherein it has been emphatically stated that it is difficultto say that the ad-valorem principle which may not be an ideal basis for distribution of a fee can be said to be so irrational so as to incur any unconstitutional infirmity. From the entire discussion of the said decision it is clear that this Court did not strike down the ad-valorem levy of Court Fees without upper limit and at the same time has expressed displeasure with regard to the scheme and it is for this reason that certain suggestions were made in para 95 of the said report in regard to the rationalisation of the Court Fees under the "Rajasthan Act and the Karnataka Act" where the rate of Court Fees was 10 per cent ad-valorem which is not the case here before us."

¶23The Court, thus, upheld the aforesaid provision. At the same time, it would be of interest to point out that in para 21 of the judgment the Court took note of the fact that State of Madras had amended its Court Fee Rules with effect from 11.9.1968 whereby the uniform levy of 7.5% ad valorem court fee had been given up and the slab system with a tapering scale had been adopted. As a parting shot, the Court also made the following pertinent observations "22. Before parting with these matters, we may point out that it could not be disputed that the administration of justice is a service which the State is under an obligation to render to its subject. There can be no two opinions that the amount raised from the suitors by way of fee should not normally exceed the LA.A. No. 149/2007& WP No. 3864/2007 "sk ^ cost of the administrationof justice because, possibl\| there could be no justification with the State to enrich itself from High Court fees or to secure revenue for general administration. The total receipts from the Court fees should be such as by and large can cover the cost of administration of justice. There should also be some measure of uniformity in the scales of Court fees throughout the country as there appears to be a vast difference in the scales of Court fees in various States of the country. The feasibility of a fixed maximum chargeable fee also deserves serious consideration." 'Si

¶24When we apply the aforesaid principles to the facts of this case, it is difficult to accept the submission of the appellant that provision for payment of ad valorem court fee is unjust or arbitrary or it partakes the character of tax. In Delhi, the ad valorem court fee is not only based on slab system u/ith a tapering scale, the amount of court fee payable is also substantially less than the subject matter of the judgments in the cases of P.R. Sriramuiu & Anr. and P.M. Ashwathanarayana Setty (supra). The ad valorem court fee is progressively scaled dou/n which gets significantly reduced and reaches a figure of less than 1% u/ith value of suit at Rs.4 lakhs. From that amount onwards the court fee payable is less than 1%. Such a court fee cannot be treated as extortion in the form of tax. No doubt, in some cases, like the one at hand, even when the court fee scale is not very high, it may act as hardship. However, when the constitutionality of a provision is judged, one cannot go by individual cases. That is never the yardstick to determine such issues. We, therefore, cannot accept the plea of the appellant that Section 8 of the Court Fees Act, 1870 is discriminatory and violative of Article 14 of the Constitution. IA.A. No. 149/2007&WPNo. 3864/2007 •]s H A

¶25Our parting comments still would be that respondent/ Government should.address the issue as to whether court fee in the appeals under Section 54 of the Act should be ad valorem or the appellant should be made to pay the fixed court fee, as has been done by the States of Punjab & Haryana. We hope that due consideration to this aspect shall be given by the authorities at the appropriate level and some decision taken thereon. But for these comments, otherwise, we do not find any mei'it in the writ petition, which is accordingly dismissed. No costs.

¶26LA. Add. No. 149/2007 As we have held that the court fee is payable by the appellant, we grant two months' time to the appellant to make up the deficiency in the court fee. List the appeal on 18^^ December 2008. October x«-, 2008 (^V LA.A. No:149/2007& (A.K. SlKRl) JUDGE (MANMOHAN SINGH) JUDGE Pa5'e-29 r-

Certify that the digital file and physical file have been compared and the digital data is as per the physical file and no page is missing. -j IN THE HIGH COURT OF DELHI AT NEW DELHI + LA. Add. No. 149/2007 & CM No. 7434/2007 \ and WP fC) No. 3864/2007 Reserved on : September 26, 2008 Pronounced on : October «lo. 2008 % 1) LA. Add. No. 149/2007 & CM No. 7434/2007 Major General Kapil Mehra through : VERSUS Union of India & Anr. through : 2) WP fC) No. 3864/2007 Major General Kapil Mehra & Ors. through : VERSUS Union of India through : . . . Appellant In-person. . . . Respondents Mr. Sanjay Poddar, Advocate for the respondent No.l/LAC. Mr. Gaurav Sarin, Advocate for the respondent No.2/DDA. . . . Petitioners Petitioner No.l in-person. . . . Respondent Mr. Sanjay Poddar, Advocate for the respondent/LAC. CORAM THE HON'BLE MR. JUSTICEA.K. SIKRI THE HON'BLEMR. JUSTICEMANMOHANSINGH 1. 2. 3. WhetherReportersof Local newspapersmay be allowed to see the Judgment? To be referred to the Reporter or not? Whetherthe Judgmentshould be reportedin the Digest? IA.A. No. 149/2007 & WP No. 3S64/2nn7 A.K. SIKRK J. 1. CM No. 7434/2007 in LA. Add. No. 149/2007 Tine appellant had moved this application under Section 149 of the Code of Civil Procedure, 1908 seeking extension of time in paying the court fee. Before we deal with the prayer made in this application, it would be apposite to throw some light on the background facts giving rise to filing of this appeal and the writ petition. 2. The respondents issued Notification dated 13.11.1959under Section4 of the Land AcquisitionAct, 1894 (hereinafter referred to as the 'Act') acquiring certain land situated in village Mehrauli. After making the award, possession was taken and while doing this exercise, plot of land situated in Vasant Kunj Residential Scheme in Mehrauli covered • by khasra No. 1300-Minold, 697 New, measuring12 bigha, which belonged to the appellant, was also taken possession of by the respondents. The appellantquestionedthis actionof the respondents on the ground that his land was not covered by the aforesaid notification. WP (C) No. 1134/1992filed by him was allowed vide j judgment dated 30.1.1996 accepting his plea and declaring the i acquisitionproceedingswith respect to the land of the appellant as illegal and quashing the same. The respondents were directed to restorethe possessionof the appellant'sland to him within 90 days. It was also observed that if for any reason it was not possible to restore possession, appellant would be entitled to LA.A. No. 149/2007&WPNo. 3864/2007 Page 2 of29 /i alternate equal area of land. SLP of the DDA filed against that judgment was dismissed by the Supreme Court on 18.11.1996. Even when the land was not restored or alternate land allotted to the appellant, he filed Civil Contempt Petition No. 461/1996 on 16.12.1996. After issuance of the notice in this contempt petition, the respondents issued fresh notification under Section 4 and Section 17 of the Act on 19.2.1997 acquiring the appellant's land. According to the appellant, this was blatantly a mala fide act on the part of the respondentsto circumventthe court orders and to escape the noose of contempt. The respondents, however, justified the action of acquisitioninter alia on the ground that DDA was unable to return the plot as the same had been amalgamatedin the huge residential scheme called Vasant Kunj and the plot of the petitioner had become a part and parcel of Vasant Kunj in March 1987 itself. It was also stated by DDA in its affidavit filed on 26.2.1997 that it was unable to allot an equal area of land elsewhere and the DDA would be paying the market value of the plot as prevalent in Vasant Kunj as on 19.2.1997 when Section 4 notification was issued. Be that as it may, the appellant did not challenge the Notification dated 19.2.1997. The Land Acquisition Collector made his award No. 2/98-99 on 18.9.1998. According to the appellant, the compensation fixed was dismal, low and not the marke