All Miscellaneous Amounts Charged By Bar Councils For Enrolment Are 'Enrolment Fees' : Supreme Court
While setting clear limits on the State Bar enrolment fees, the Supreme Court clarified that any amount collected by them from lawyers as a pre-condition to enrol them would amount to 'enrolment fee'.The bench comprising CJI DY Chandrachud, Justices JB Pardiwala and Manoj Misra observed that the money collected by Bar Councils in the name of verification fee, building fund, benevolent fund...
While setting clear limits on the State Bar enrolment fees, the Supreme Court clarified that any amount collected by them from lawyers as a pre-condition to enrol them would amount to 'enrolment fee'.
The bench comprising CJI DY Chandrachud, Justices JB Pardiwala and Manoj Misra observed that the money collected by Bar Councils in the name of verification fee, building fund, benevolent fund etc., which are stated to be one-time payments, at the time of enrolment, would be enrolment fee.
"Thus, all the miscellaneous fees collected from a candidate at the time of enrolment essentially serve as a pre-condition to the process of enrolment. Section 24(1) specifically lays down the pre-conditions subject to which an advocate can be enrolled on State rolls. Since Section 24(1)(f) specifies the amount that can be charged by the SBCs as an enrolment fee, the SBCs and the BCI cannot demand payment of fees other than the stipulated enrolment fee as a pre-condition to enrolment, " the Court stated.
"It is clarified that the only charges permissible at the stage of enrolment are those stipulated under Section 24(1)(f) of the Advocates Act. All other miscellaneous fees, including but not limited to, application form fees, processing fees, postal charges, police verification charges, ID card charges, administrative fees, photograph fees etc. charged from the candidates at the time of admission are to be construed as part of the enrollment fee. The fees charged under these or any similar heads cannot cumulatively exceed the enrolment fee prescribed in Section 24(1)(f)."
The court acknowledged that SBCs and BCI rely heavily on enrolment fees to function. These fees cover various costs, including staff salaries. However, the court found that charging high fees before enrolment is unfair to young law graduates.
"We are cognizant of the fact that the SBCs and the BCI depend entirely on the amount collected from candidates at the time of enrolment for performing their functions under the Advocates Act, including payment of salaries to their staff. According to the legislative scheme of the Advocates Act, the Bar Councils must only charge the amount stipulated under Section 24(1)(f) as an enrolment fee. Instead of devising ways and means to charge fees from enrolled advocates for rendering services, the SBCs and the BCI have been forcing young law graduates to cough up exorbitant amounts of money as a pre-condition for enrolment."
The Advocates Act of 1961 under S. 24(1)(f) prescribes the enrollment fee payable to the State Bar Council as Rs. 600/- and Rs 150/- towards the Bar Council of India for advocates belonging to the general category. For advocates belonging to SC/ST categories, the amounts are Rs.100 and Rs.25 respectively. A detailed chart on the state-wise fee chargeable by different bar councils can be accessed here. In some States, the enrolment fee goes to the extent of Rs.40,000.
The Court emphasized that Bar Councils should find other ways to collect fees from enrolled advocates for their services. The bench has advised SBCs and BCI to develop fair methods for charging fees. These methods should consider both new law graduates and already enrolled advocates. The court pointed out that there are existing ways to collect funds from practising advocates.
"Once the advocates are enrolled on the State rolls, the Bar Councils can charge fees for the services provided to the advocates in accordance with the provisions of the Advocates Act. It is for the SBCs and the BCI to devise an appropriate method of charging fees that is fair and just not only for the law graduates intending to enroll, but also for the advocates already enrolled on the State rolls. There are several reasonable ways by which the SBCs and BCI can and already do collect funds at later stages of an advocate's career."
The bench observed that the Advocates Welfare Fund Act 2001 was one example of fair source funds. This Act requires advocates to use mandatory welfare stamps on vakalatnamas. These stamps help collect funds for advocate welfare. Unlike high enrolment fees, this method is linked to an advocate's actual practice.
SBCs And BCI To Ensure That Compliance To S. 24(1)(f) Of Advocates Act 1961 Is Not Diluted By Direct Or Indirect Means: Court Directs
The Court has expressly stated that the mandate of a limited prescribed fee for enrolment charged by SCBs under S. 24(1)(f) cannot be undermined through direct or indirect means. The Court specifically directed that SBCs cannot charge enrollment or miscellaneous fees that exceed the amount prescribed in Section 24(1)(f).
Furthermore, the Supreme Court declined to exercise its power under Article 142 to enforce the BCI Draft Enrolment Rules in their current form.
The SBCs and the BCI are directed to ensure that the fees charged at the time of enrollment comply with Section 24(1)(f) and the provision is not defeated either directly or indirectly under the garb of different nomenclatures. The SBCs cannot charge an enrolment fee or miscellaneous fees above the amount prescribed in Section 24(1)(f). No case is made out for this Court to exercise its power under Article 142 to implement the BCI Draft Enrolment Rules in their current form.
Clarification on SBCs Obligations Towards The Advocates Welfare Fund Act 2001
The Court has clarified that SBCs' obligations under the Advocates Welfare Fund Act 2001 remain unchanged. This Act was created to establish a welfare fund for the benefit of advocates. According to Section 15 of the Act, SBCs are required to contribute 20% of the enrolment fees they collect to this welfare fund annually.
The court has explained that the present decision does not affect the SBCs' responsibility to collect fees as per the limits set under S. 24(1)(f) of the 1961 Act and to contribute to the welfare fund as mandated by law.
This decision will not have any effect on the obligation of the SBCs under Section 15 because they will continue to charge the enrolment fee as stipulated under Section 24(1)(f).
The Court further clarified that the effect of the present decision will be prospective in nature and that the SCBs and BCI need not refund any prior enrolment fees.
Other reports related to the judgement can be read here.
Case Details : Gaurav Kumar v. Union of India W.P.(C) No. 352/2023 and connected cases.
Citation : 2024 LiveLaw (SC) 519