State of Gujarat vs AKHIL BHARATIYA GRAHAK PANCHAYAT

THIS appeal involves the important question regarding the jurisdiction of the Consumer Forums, in respect of the alleged deficiency of services rendered by the judiciary of the State to the litigants,. Therefore, we had heard the arguments of the learned Advocates of both sides two times at length. Having made oral arguments, the learned Advocates of both sides have also given written arguments so as to make our task easier. After giving our anxious consideration and perusing the decisions cited by the learned Advocates, we have delivered this judgment.

CONSIDERING the importance of the matter the District Forum has raised the preliminary issue viz. "Whether the Consumer Forum has jurisdiction to hear this case." In order to appreciate the legal submissions of both the parties, it will be necessary to narrate some facts which have not been disputed by the parties. The complainant is a voluntary Consumer association registered both under the Trust Act as well as under the Society Registration Act and, therefore, has a right to file this complaint. There is no dispute so far the right of the complainant to file the present complaint is concerned. The complainant has further alleged that the State of Gujarat is a State under the Constitution and, therefore, is under legal obligation to provide all the rights conferred upon the citizens. These rights include right to challenge before the Court of law if there is an invasion upon their rights. The complainant further alleged that the opposite party is levying and collecting Court fees under the provisions of Bombay Court Fees Act, and is therefore under statutory obligation to provide adequate number of Courts as well as judges in the proportion to the cases filed in the Civil Court. The arrears of cases are mounting on account of less number of Courts and even if the posts are created Government is keeping the posts vacant for number of years. In short, the dispute raised by the complainant is that though the State is collecting full Court fees under the provisions of Bombay Court Fees Act, the State is neither providing adequate number of Courts and also the State is not appointing judges on the posts already created and on account of both these defaults, the cases are not being taken up for number of years with the result, the litigants are not getting justice in time and are suffering. According to the complainant this is a clear deficiency in services rendered by the Court.

Mr. K.K. Kini, the learned Counsel appearing on be half of the respondent-complainant submitted that the Court fees which has been paid by the civil litigants is nothing but the amount paid for hiring of the services i.e. it is consideration for the services, and dispensation of justice by judge, is rendering of service to the civil litigants. In order words, the submission of the complainant is that the State through judges and Courts is rendering services to the civil litigants. In para 5 of the complaint the complainant has given number of Courts taluka-wise, appellate Court etc. and the number of case filed and pending. All these figures are not disputed since it has been an admitted position that, there is a great arrears of cases and the number of Courts and judges are not adequate to dispose of all the said cases within reasonable period. In para 7 of the complaint the complainant has made a categorical statement that the persons who are approaching the Civil Courts are Consumers and the Court fees which they pay is considered as fees for the services. The litigant is therefore, a consumer, and such case falls within the purview of the Act. The complainant has prayed that the State-opposite party must be directed to appoint adequate number of judges for the dispensation of justice. The present action of the opposite party not to make adequate arrangements of judges after taking consideration is an act against the interest of consumers and therefore, such an order directing the state is necessary. The complainant has further prayed that the complainant should be awarded cost since this litigation is in nature of public interest litigation.

IN pursuance to the summons of the District Fourm the State has filed an application stating that the litigant is not a Consumer, the dispute in the complaint is not a Consumer dispute falling under the Consumer Protection Act, and that the District Forum has no jurisdiction to try the same. IN other words, the State has not given any reply on merits of the complaint, but has raised a preliminary contention that the Consumer Forum has no jurisdiction to hear and decide sucy type of dispute on the ground that the complainant is not a consumer and the dispute is not a consumer dispute within the meaning of the Consumer Protection Act, 1986. The District Forum has heard the preliminary issue raised by the State and has given its finding in favour of the complainant, by holding that, the Forum has jurisdiction to hear the case filed by the complainant. Being aggrieved by this decision and order the State has come in appeal against the said order.

THE decision given by the District Forum on a preliminary issue is not a final order made under Section 14 of the Act and, therefore, the appeal cannot be filed but considering the importance of the issue, we have permitted the State to treat this as a revision application since the question involved is the question of jurisdiction which can be agitated in revision application also. Mr. Champaneri, the learned Advocate appearing on behalf of the appellant has made the following submissions. 1. the civil cases the State is discharging its sovereign functions, through judges to impart justice, and this function cannot be treated as hiring of any service. 2. Rendering justice does not amount to service as contemplated under the Act. 3. Discharging of a sovereign function is not a commercial function. 4. The State is charging fees for regulating the proceedings and this service is available in every State. In elaborating the submissions Mr. Champaneri has stated that while dispensing the criminal justice the State is not charging any fees and the State is making losses. Again, a plaintiff who is without any means to raise money for Court fees can also file Civil Suit as pauper. Fees are not taken as consideration for rendering service, but taken as a tax to meet the expenses of the Courts. The payment of fees does not create relationship of Consumer and provider of services. Mr. Kini has also cited several authorities of the Supreme Court wherein the Hon''ble Supreme Court has made distinction between tax and fees.

RELYING upon the observations of the Supreme Court, his submission is, that, the State is recovering court fees for the services that have to be rendered, and the fees must have some co-relationship with the service to be rendered. In other words, there should be a quid-pro-quo. According to Mr. Kini these decisions are clearly applicable to the facts and circumstances of the present cases particularly when, under the Bombay Court Fees Act, the Court fees are recovered according to the value of the claim made by the plaintiff, in advance, which casts reciprocal obligation on the State to provide adequate number of Courts and judges so that the justice can be rendered within reasonable time, and if such justice is not rendered within reasonable time, it would clearly amount to deficiency in service. Mr. Kini has also relied upon the State Government Resolution No. DCE-1068-58-D dated 17th May, 1972 which provides as under : " The question of fixing the work-load of various Courts in the State was under consideration some time in past. After careful consideration, Government is pleased to lay down the norms of the workload of the various Courts in the accompanying statement. This issues in consultation with the Financial Advisor on this Department File No. DCE-1068/ 58-D dated 28.2.1972. "

ALONGWITH this resolution the statement of workload has been annexed which provides the guidelines to the various Courts. Since we are concerned with Civil Court, we shall reproduce the relevant portion which is meant for Civil Court. 1. City Civil Court sessions cases 80 or Civil Suits Hindu Marriage petitions and L.A. cases 250 or Darkhasts and Misc. matters such as Trust Act applications 1000. 2. Civil Judge S.D. special suits 50 to 55, special Darkhasts 150, Small Cause suits and Misc. applications 400 to 500. 3. Civil Judge, J.D. suits 225 to 250, Darkhasts 500 to 600, Misc. applications 100.

According to Mr. Kini, this Resolution provides the workload for the Courts of the type mentioned in Column 1 and the column of workload mentions, the number of cases pending at any time. The District Forum after considering the arguments of both the parties came to the conclusion that the litigants were consumers in the sense that they pay court fees to obtain reliefs through the State Judicial Administration to enforce various rights against the persons who are residing in the Baroda District. In para 4 of the judgment the District Forum has observed that if the fee is received by the State, then in consideration of the said fee the State is bound to provide services. It is further observed that : " It is an admitted fact that Court fee is being charged from the litigants who intend to file an action before the Civil Court and, therefore, when the State is charging a fee in the nature of Court fee then the State is bound to provide sufficient law Courts so that civil Justice can be displeased with to the residents of Baroda District."

In support of the findings, the District Forum has relied upon the case of Consumer Unity & Trust Society Jaipur v. The State of Rajasthan reported in II (1991) CPJ P. 56 and the case of Southern Pharmaceuticals and Chemicals, Tricluir v. State of Kerala and Ors. 1982 (1) SCR 519 wherein the Supreme Court after considering various decisions distinguished ''fees'' from ''tax'' in these words : " Fees are the amount paid for a privilege, and are not an obligation, but the payment is voluntary. Fees are distinguished from taxes in that the chief purpose of a tax is to raise funds for the support of the Government or for a public purpose, while a fee may be charged for the privilege or benefit conferred, or services rendered to meet the expenses connected therewith. Thus, fees are nothing but payment for some special privilege granted Or service rendered."

" Imposition of fees must have co-relationship with the services rendered by the administration of Civil Justice. If the difference between the cost of administration and Court-fee is about 40 to 45 per cent such fee is a tax and imposition of such tax is not covered by the taxation entry of State List of Schedule 7 of the Constitution and therefore violative of the competence of the State Legislature."

Relying upon these observations of the Hon''ble Supreme Court, the Forum Judges have come to the conclusion that "there is a broad co-relationship between the Court Administration of Civil Justice and levy of Court-fees, then in that case the State is bound to provide Courts for rendering services to its litigants. " State after charging the Court-fee cannot keep the litigants waiting at the doors of Courts for Justice, for number of years, as State is unable to constitute more Courts. In view of the definition of service, by not constituting the Courts as per the norms laid down by the above said GR, and looking to the present workload at Vadodara and Vadodara District, it appears that there is a defective service rendered by the State of Gujarat after charging the Court-fees and, therefore, this Forum has jurisdiction to correct this defective service system and hence this Forum has jurisdiction."

In order to appreciate the observations made by the Hon''ble Supreme Court with regard to tax and fee, it would be necessary to examine certain provisions of the Constitution of India. Under the Constitution, sovereign powers of the State has to be exercised through three Agencies viz. Executive, Legislative and Judiciary. The said functions are thus divided amongst three organs of the State. Each has been given separate powers though not with mathematical precision e.g. in a state of emergency the President can exercise the Legislative power by making ordinance. In order to meet the expenses of the State the Legislature has been given power to raise the revenue by means of taxes. Article 365 of the Constitution provides that no tax shall be levied or collected except by authority of law. Again the Legislative power has been divided between Union and State under Schedule 7. Item 96 in Union list, Item No. 66 in State list and Item No. 47 in concurrent list read as under : " Fees in respect of any of the matters in this List, but not including fees taken in any Court." It may be seen that unlike the tax respective legislature has been given power to levy fees in respect of any matter over which it has legislative power according to the relevant list except the fees taken in the Court whereas the Court is concerned the fees taken before the Supreme Court come under the entry No. 78 of list I and fees taken before the High Court and other Courts come under entry No. 3 of List II. Still, however, the Court fees is also treated as fees and is also subject to the same limitations as other fees imposed by the respective legislatures. It has been held by the Supreme Court in the case of Government of Madras v. Zenith Lamps reported in AIR 1973 SC P. 724 and Omprakash Agrawal v. Giri Raj Kishori reported in AIR 1986 SC P. 726 that the State law would be ultra vires if it doubles the Court fees with an object of raising general revenue or for providing money for roads, building or the like. The gist of all these Supreme Court decisions is that there must be a broad correlation ship with the fees collected and the cost of Administration of justice. Under this entry the legislature cannot tax the litigation or make the litigants pay for the road building or education or other beneficial schemes that a state may have. However there is another disctinction also between the imposition of tax and fees viz. the tax can be imposed by a Money Bill and the imposition of fees by any other kind of Bill. All the three Lists in Schedule 7 of the Constitution maintain this distinction in relation to tax and fees. Having seen the provisions regarding levy of Tax and Fees, we will consider the challenges made by the petitioner in S.C. judgments and the reliefs sought.

IN the case of INdia Mica and Micanite INdustries Ltd. v. State of Bihar which is quoted in para 18 wherein the Hon''ble Supreme Court has pointed that "While a tax invariably goes into the consolidated fund, a fee is earmarked for the specified services in a fund created for the purpose". Concludes the learned Judge at pages 324-325 : - " From the above discussion it is clear that before any levy can be upheld as a fee, it must be shown that the levy has reasonable correlation ship with the services rendered by the Government. IN other words the levy must be proved to be a quid pro quo for the services rendered. But in these matters it will be impossible to have an exact correlation ship. The correlation ship expected is one of a general character and not as of arithmetical exactitude."

These observations are made by the Supreme Court wherein the petitioner had challenged the authority of the State to impose fees without rendering service. In other words, they alleged that though the State has imposed under the guise of fees, and since this fee has no correlation with the services required to be rendered by the State, the fees being in a nature of tax should be considered illegal or ultra vires. Other cases cited by Mr. Kini lay down the same principles against the challenge to the vires of imposition of fees.

WE are in complete agreement with the observations of Hon''ble Supreme Court in all these cases, wherein vires of the fees had been challenged. If the fees are imposed without granting any privilege or if the fees are taken to the general revenue of the State it will be a tax in the guise of fees and such fees having been imposed without bringing a money bill and without following that procedure would no doubt be illegal and invalid. However, it cannot be disputed that compulsory exaction of money is common in both tax and fees. They are imposed under the taxing power of the State, whereas to take the advantage of the privileges offered by the State, one has to pay the fees fixed by the State under the statute. There is no question of any negotiation or bargaining of the fees because fees are also a statutory. levy for obtaining privilege or service offered by the State. It therefore appears that both the complainant as well as the District Forum has fallen into an error applying the observations of the Hon''ble Supreme Court, where the Hon''ble Supreme Court has stated that, the fees are in exchange of the services or the privilege offered by the State and, therefore, it is a consideration for the services required to be rendered by the State. To our opinion these observations are made to decide the legality or vires of the levy of the fees and if there is no correlation between the levy of the fees, and the services offered, in other words if there is no quid pro quo, fee becomes tax and will be held ultra vires and invalid.

IN the instant case even if there is a deficiency in service offered by the State, the remedy for the complainant would be to challenge the Court fees, if proper services are not provided by the State, whose duty and obligations are to cater justice to its citizens. Again, the aggrieved party can have a recourse to the Courts to challenge the validity of the fee, which is not fully spent for civil litigations, but these fees can never be considered a consideration between the Courts and the litigants, or between the State and the litigants, for providing services as contemplated in the definition of Consumer under Section 2(1)(d) of the Consumer Protection Act. To our opinion there is no contractual relationship between the State and the litigants (Consumer) under which the hires the services of the State or the Courts for a consideration (Court fees). The fallacy in the argument of the complainant are : (a) that the State is exercising its sovereign function of providing justice to the citizens and others which is not contractual; and (b) that the Court fees levied by the State is not a consideration as contemplated under the Act. A Court fees is imposed under the taxing power of the State. The complainant cannot have any contract or negotiation. If he wants to avail the privilege offered by the State, he has to pay the court fees prescribed, and if it is more he can challenge the levy, but it will not amount to deficiency in service within the meaning of the Act.

THE Redressal Forums created by the State are in addition to and not in derogatory of provisions of any other law for the time being in force. This additional remedy is available only in respect of the disputes between the Consumer and provider of service. Section 2(1)(d) defines a Consumer with regard to goods as well as services. In this matter we are concerned with the service only. THE Section provides as under : " Consumer" means any person who : - (i) x x (ii) hires any service for a consideration which has been paid or promised or partly promised xxx THE Consumer therefore has to prove that" he has hired any service and that hiring is for a consideration".

Having regard to the scheme of the Act and the definition as stated above, it leaves no doubt that a special Redressal Forum has been created to hear the disputes between the Consumers and provider of services for consideration where the provider of service is a private person, body corporate or Government, since the State has executive power to carry trade and business under Article 298 of the Constitution. It has also been held in several decisions of the Hon''ble Supreme Court that when the State is entering into a contract in respect of any trade or business, it is subject to same rights and obligations like an individual in-as-much as when the State files a suit in the Courts of law the State is also required to pay the Court fees like a private individual.

To our opinion a distinction shall have to be made between the sovereign acts and functions of the State vis-a-vis its commercial functions or activities. When the State is exercising its judicial functions through the agency of courts, and judges are exercising its statutory functions. The court fee levied by the State is the fees for expenses which is in a nature of tax for services but the litigant is not a Consumer within the meaning of Section 2(1)(d)(ii) of the Consumer Protection Act, 1986. Even if the State is not providing adequate service in relation to the fees it recovers from the litigants, it cannot amount to deficiency in service within the meaning of the Act. The complainant can challenge in the appropriate Court the rate of court fees if adequate number of Judges are not provided on the ground of inadequacy of services in relation to the fees charged by the State, but in no case it amounts to deficiency in services under the provisions of Consumer Protection Act.

IN the aforesaid view of the matter, the decision of the District Forum that the litigants were Consumers and service rendered by the Court is a service as contemplated under the Act is erroneous arid deserves to be set aside. The District Forum has, therefore, no jurisdiction to entertain and decide this complaint. We may make it again clear that we have not decided the merits of the complaint and if the complainant is dissatisfied with the judicial services rendered by the Courts he may seek his remedy in the appropriate Court. ORDER The revision is allowed. The order of the District Forum, Vadodara is set aside and the complaint is dismissed. IN the circumstances there will be no order as to costs. Revision allowed.