MACT-Benefit Of Exemption From Payment Of Court Fees Can Be Claimed Only Before The Tribunals And Not On Appeals: Madras High Court

The two issues that the court considered were whether the Provisions of Rule 24 of the Tamil Nadu Motor Vehicles Accident Claims Tribunal Rules, 1989 would apply to Appeals under Section 173 of the Motor Vehicles Act without giving proof of indigent circumstances and whether the claimants who have obtained exemption can withdraw the amounts deposited without paying the Court Fees.

Discretion of Courts

Rule 1 of the Tamil Nadu Motor Vehicles Accident Claims Tribunal Rules, 1989 talks about the fee that is payable in the case of the claim petition before the Tribunal, and Rule 1A talk about the Court fee that is payable in the case of an appeal. The provisions of Rule 24 (3) deal with the exemption of Court fees before the Claims Tribunal. Rule 24(3) gives discretion to the Claims Tribunal to exempt any party from the payment of fees prescribed under the Act. The Madras High Court through its decision in T.Kanchana Devi Vs. R.D.Mani and others have held that the exemptions sought before the tribunal does not contemplate inquiry as contemplated under Order 33 of the CPC. However, the Tribunal was not free to use this discretion. The Tribunal while exercising its discretion has to exercise it judiciously and with some rationale as held in Aero Traders Pvt Ltd. V. Ravinder Kumar Suri (2004).

In Som Raj and others Vs. State of Haryana and others (1990) the Supreme Court had also observed that:

"Discretion means sound discretion guided by law or governed by known principles of rules, not by whim or fancy or caprice of the authority."

Though the Rules only provide for seeking exemption in case of claim petition before the Tribunal, an applicant may still seek an exemption in case of an appeal under Section 173. In such cases, the grant of exemption shall be as per the manner specified in Order XLIV read with Order XXXIII f the CPC. This was the dicta laid down in the case of R.Govindarajulu and another Vs. S.Dharman and another.

Role of State

Through the discussion, the court also discussed the idea of imposing a court fee for litigation. The object of introducing the concept of court fees was to dissuade unnecessary litigation by levying huge Court fees. The underlying principle is to ensure that the benefit granted reaches the person for whom the benefit has been made and to prevent an unscrupulous person from usurping the benefit unto themselves. The court observed that this system of levy has undergone various changes and now exists in the form of the Court Fees Act, 1867. The levy of court fees is also covered in the Seventh Schedule List II Entry 3 of the Constitution of India.

Therefore, being a State subject, it is for the State to establish what has to be levied as Court Fees and whether such levy is proper. Even in case of enhancement in the Court Fees, it is for the State to justify enhancement. This was also held by the Constitutional Bench in Zenith Lamps and Electricals Ltd. v. The Registrar, High Court, and others (1968). In the above case, the court had also held that the fees taken in the Court are not tax.

Thus, the court observed that there is a need for the Government, which is the main player in the levy of Court fees to step in and make the necessary amendments to Rule 24 (3) of the Tamil Nadu Motor Vehicles Accident Claims Tribunal Rules.

The court also issued guidelines to be followed till such Rules are framed by the Government. The court directed that when a person claims exemption, the court shall obtain an affidavit from the applicant stating that even though he has an occupation, he does not possess the wherewithal to pay the Court fee and also that they do not have any movable or immovable property of value. This affidavit shall be notarized and shall also contain an undertaking that he shall pay the Court fees irrespective of him succeeding in the claim or not.

While granting such exemption, the Tribunals shall record its reasons for granting the exemptions. Further, the award shall specify that the award amount shall be deposited within a specified time and once the award amount is deposited the court fee component shall be first withdrawn and put into a separate Court account. The court also directed that such orders, granting exemptions, shall be marked to the District Collector of the respective District. The court directed the Tribunals to permit withdrawal of award amount only after the claimants produce proof of payment towards court fees.

It was also submitted before the court that the State Government was considering an amendment to Rule 24 thus providing a blanket exemption from payment of Court fee to be recovered after the award is passed. Thus, the court directed the order to be placed before the Chief Secretary for appropriate action if so, deemed fit.