'Is Valorem Court Fee Without Cap Valid?' : Supreme Court To Examine Kerala Court Fee Hike On KHCAA Plea

The Supreme Court on Friday issued notice on a petition filed by the Kerala High Court Advocates' Association (KHCAA) challenging the steep increase in court fees in Kerala, including the imposition of ad valorem court fees without an upper ceiling.

A Bench comprising Chief Justice of India Surya Kant and Justice Joymalya Bagchi issued notice on the limited aspect of examining the validity of uncapped ad valorem Court fee.

The Bench was hearing the Association's Special Leave Petition challenging the Kerala High Court judgment dated October 31, 2025, which upheld the amendments introduced through the Kerala Finance Act, 2025, to the Kerala Court Fees and Suits Valuation Act, 1959.

Senior Advocate K Parameshwar, appearing for the KHCAA, primarily questioned the validity of imposing ad valorem court fees without prescribing an upper limit.

He submitted that such a levy, when imposed without a ceiling, could assume the character of a tax rather than a legitimate fee. He relied on a Delhi High Court judgment which struck down similar provisions following a three-judge Bench ruling of the Supreme Court.

Parameshwar also pointed out that the Supreme Court Rules themselves prescribe an upper limit for ad valorem court fees. He argued that court fees must bear a reasonable relationship to the expenditure incurred on judicial administration and the time spent by courts in adjudicating disputes.

The Association also raised concerns about the impact of the levy on compensation proceedings, particularly cases involving death and motor accident claims.

The Bench issued notice limited to the question of the validity of ad valorem court fees imposed without an upper ceiling.

'Judicial Time In Commercial Disputes Must Come At A Price': Justice Bagchi

During the hearing, Justice Joymalya Bagchi observed that court fees in commercial disputes should reflect the value of the litigation and the judicial time spent in resolving business disputes.

With the advent of the Commercial Courts Act, the judge remarked, judicial time devoted to commercial litigation "must come at a price".

He indicated that court fees should be commensurate with the value of commercial suits, distinguishing such proceedings from other categories of litigation.

The observation came in the context of the Association's challenge to the State's power to impose court fees linked to the value of the subject matter of litigation.

Chief Justice Surya Kant observed that the petitioners had not placed a comparative chart before the Court showing how the increase in Kerala's court fees compared with the rates prevailing in other States.

The Chief Justice also sought information regarding the gap between expenditure on judicial administration and the revenue recovered through court fees.

On the exemption granted to the State Government from payment of court fees, the CJI remarked, "The right hand will be paying the left hand."

However, the Court ultimately issued notice limited to the issue of ad valorem court fees without an upper ceiling.

KHCAA Challenges Court Fee Increases Of Up To 9,900%

The Association has challenged the amendments introduced through the Kerala Finance Act, 2025, which revised the Kerala Court Fees and Suits Valuation Act, 1959.

It has contended that the increases, ranging from approximately 400% to nearly 9,900% in certain categories, would impose an unreasonable financial burden on litigants and violate Articles 14 and 21 of the Constitution.

Among the examples cited by the Association are:

• The court fee for writ appeals before the Kerala High Court increased from Rs. 200 to Rs. 1,000.
• The fee for writ petitions increased from Rs. 100 to Rs. 500.
• The fee for anticipatory bail applications increased from Rs. 10 to Rs. 500, representing an increase of 4,900%.

The Association has argued that the State revised the fees without establishing a reasonable correlation between the increased amounts and the actual expenditure incurred on administering justice.

It has also questioned the imposition of ad valorem court fees without an upper limit in proceedings seeking compensation for victims of crimes.

The petition challenges the amendments on the ground that the increased fees could impede access to justice, particularly for litigants seeking compensation or challenging orders affecting their personal liberty.

State Government's Exemption From Court Fees Also Challenged

The Association has also challenged Section 73A of the Kerala Court Fees and Suits Valuation Act, 1959, which exempts the State Government and its functionaries from payment of court fees.

It has argued that the exemption is discriminatory, particularly since the State Government is among the largest litigants in Kerala.

The Association contends that the exemption creates an unequal system in which the State can pursue litigation without bearing the court fee burden imposed on other litigants.

It has also questioned the absence of a similar exemption for the Central Government, arguing that the distinction lacks a rational basis.

The Association further submitted that requiring the State to pay court fees would introduce financial accountability into its litigation decisions and discourage unnecessary litigation.

High Court Had Upheld Court Fee Revision

The Kerala High Court, in its October 31, 2025 judgment, dismissed the KHCAA's public interest litigation challenging the amendment.

The High Court had upheld the State's power to revise court fees, observing that the revision was justified by inflation, depreciation of the rupee and increased expenditure on judicial administration.

The State had defended the revision by pointing out that fixed court fees had not been revised for more than two decades.

It relied on economic indicators, including the Consumer Price Index, the exchange rate of the Indian rupee against the US dollar, average wages in Kerala and gold prices.

The High Court observed that a broad correlation between court fee collection and expenditure on judicial administration was sufficient, and that mathematical exactitude was not required.

It also held that the Association had not produced adequate material to establish that the revised fees resulted in denial of access to justice or violated Articles 14 and 21.

On the challenge to Section 73A, the High Court relied on an earlier Division Bench judgment in Human Rights Protection Forum v. State of Kerala, which had upheld the exemption granted to the State Government.

The High Court, however, observed that the State Government could consider granting full or partial exemptions from court fees to particular classes of litigants, depending on their social or financial circumstances.

The KHCAA petition in the Supreme Court was filed through Advocate-on-Record A Karthik.