“We are inclined to issue directions to all the States to amend their laws suitably,” the Chief Justice said on Friday, as the Supreme Court heard a challenge by Kerala lawyers to steep court fee increases and to ad valorem fees with no upper ceiling under the State’s Court Fee Laws.
New Delhi: Court fees with no upper limit may call for directions to every State, and not to Kerala alone, the Supreme Court indicated on October 16 while hearing the Kerala High Court Advocates’ Association’s (KHCAA) challenge to the State’s revised court fees [Kerala High Court Advocates’ Association v. State of Kerala].
A Bench led by Chief Justice of India Surya Kant, along with Justice Joymalya Bagchi, took up the matter. Senior Advocate K. Parameshwar argued for the Association.
Judicial time, and what it should cost
It was Justice Bagchi who opened the exchange, tying the fee structure to the time courts now give to business disputes. Commercial courts, he said, spend judicial time on disputes about doing business, and the fees should be commensurate with the value of the suit.
“When you have the making of the Commercial Courts Act and hiring out judicial time for commercial disputes, the rate at which court fees should be fixed would be commensurate with the value of the suit.”
The judiciary has to cater to that purpose, Justice Bagchi observed, and added: “It must come at a price.”
Directions for every State
The CJI’s remark came after Parameshwar referred to how the Delhi High Court has approached court fees without a ceiling. CJI Surya Kant said: “We are inclined to issue directions to all the States to amend their laws suitably.”
According to Parameshwar, a court fee notification with no cap can be struck down if the fees are out of proportion to what is needed to run the justice system, and the High Court had not looked into this. Justice Bagchi answered that the High Court had examined Sections 72 to 74 of the State law, which provide exemptions where needed. Counsel held to his point that uncapped ad valorem fees were not examined, and drew the Bench’s attention to paragraph 17 of the judgment, where the Delhi decision is distinguished.
The Bench asks for a comparison
Paragraph 19, Justice Bagchi noted, also distinguishes the Delhi ruling, and he questioned treating uncapped ad valorem fees as a tax in one State alone. CJI Surya Kant told counsel: “You have not placed any comparative chart before us suggesting that there is an unreasonable hike only in the State of Kerala as compared to others.”
The Association, Parameshwar clarified, was pressing the absence of a ceiling and not the rise in individual fee amounts. He relied on the Delhi High Court’s conclusion that uncapped ad valorem fees amount to a tax, drawn from a three-judge Supreme Court decision on the court fee laws of Bombay and Karnataka. The Delhi High Court, he added, had required an upper limit even for motor accident compensation claims, and the Supreme Court Rules themselves cap ad valorem fees.
From the Finance Act to the Supreme Court
The Kerala Finance Act, 2025, in force from April 1, 2025, amended the Kerala Court Fees and Suits Valuation Act, 1959. On April 7, 2025 the KHCAA filed a PIL in the Kerala High Court calling the revision arbitrary and disproportionate, and lawyers called a ‘pen down’ protest for April 9, 2025. The Association also questioned ad valorem fees that carry no ceiling, and the exemption from court fees given to the State under Section 73A.
On October 31, 2025, a Division Bench of Chief Justice Nitin Jamdar and Justice Basant Balaji dismissed the PIL, WP(PIL) No. 14 of 2025. It accepted the State’s case that the fees had been revised after about six decades in view of inflation and the rising cost of administering justice, and recorded the Advocate General’s stand that the 2025 Act left the ad valorem rates in Schedule I untouched and revised only the fixed fees in Schedule II. The Delhi High Court’s 2013 ruling in Delhi High Court Bar Association v. Government of NCT of Delhi, which had struck down a Delhi amendment for want of legislative competence, was distinguished.
Fee or tax: the legal position
Whether a levy bears a broad correlation to the cost of administering justice has long decided the line between a court fee and a tax. The Kerala High Court, in upholding the revision, relied on Supreme Court rulings on that distinction, including Secretary, Government of Madras v. Zenith Lamps and Electrical Ltd. (1973) and P.M. Ashwathanarayana Setty v. State of Karnataka (1989). No order on the merits has been passed by the Supreme Court so far, and the State’s response at this hearing is yet to be recorded.
Case Title: Kerala High Court Advocates’ Association v. State of Kerala (Supreme Court case number awaited)
Bench: Chief Justice of India Surya Kant and Justice Joymalya Bagchi
Date of Hearing: October 16, 2026
Appearances: Senior Advocate K. Parameshwar for the Kerala High Court Advocates’ Association