The Supreme Court on Friday agreed to consider whether state laws permitting the levy of ad valorem court fees without a prescribed ceiling amount to taxation rather than a fee for judicial services.
An ad valorem court fee is a fee charged by a court that is calculated as a percentage or proportion of the money or property value involved in a case.
A Bench of Chief Justice of India Justice Surya Kant and Justice Joymalya Bagchi issued notice on the limited question while hearing a plea by the Kerala High Court Advocates’ Association (KHCAA) challenging provisions of the Kerala Court Fees and Suits Valuation Act, 1959.
The association has argued that the absence of an upper limit could render such levies unconstitutional by turning them into a form of tax.
Senior advocate, appearing for the KHCAA, told the Bench that the Kerala High Court had not adequately examined this issue while rejecting the association’s challenge. He referred to a Delhi High Court ruling that had struck down uncapped ad valorem court fees, arguing that a levy disproportionate to the cost of administering justice could be invalidated.
The Bench agreed to examine the issue and scheduled the next hearing for November 2.
During the hearing, the court also highlighted the need to periodically revise court fees in view of the rising expenditure involved in administering justice.
Chief Justice Surya Kant questioned the disparity between the expenditure incurred on the judicial system and the revenue collected through court fees.
He responded that the Kerala government had exempt itself and its functionaries from paying court fees. The Chief Justice said that requiring the government to pay fees to itself would effectively amount to a transfer between two arms of the same entity.
Justice Bagchi observed that commercial litigation, which requires judicial resources to resolve business disputes, could justify court fees linked to the value of the proceedings.
The Chief Justice also indicated that the court could consider directing states to suitably amend their laws governing court fees.
The association’s petition challenges amendments made to the Kerala Court Fees and Suits Valuation Act in 2025, which substantially increased the fees payable in the state.
The KHCAA had contended that the revisions were arbitrary and excessive, with increases ranging from 400 per cent to 9,900 per cent, potentially restricting access to justice.
The association also questioned the absence of a ceiling on ad valorem fees under both the original legislation and the 2025 amendments.
It argued that imposing such charges in claims seeking compensation for victims of crimes was particularly harsh.
Separately, the plea challenges Section 73A of the Act, which exempts the state government and its functionaries from paying court fees.
The Kerala High Court dismissed the association’s petition in October 2025. The KHCAA subsequently challenged that decision before the Supreme Court.
