The Supreme Court on Friday agreed to examine concerns raised by the Kerala High Court Advocates' Association (KHCAA) about the validity of laws that allow the Kerala government to impose ad valorem court fees without any upper limit [KHCAA v. State of Kerala].
An ad-valorem court fee is a fee calculated as a percentage of the monetary value of the subject matter of the litigation. The KHCAA has argued that when the State charges such a percentage-based court fee, there should be a maximum ceiling limit.
This is one of the key contentions in a plea moved by the KHCAA before the Supreme Court, which also challenges a court fee hike introduced in Kerala in 2025 as well as the exemption given the State from having to pay court fees.
A Bench of Chief Justice of India (CJI) Surya Kant and Justice Joymlaya Bachi today agreed to issue notice on the limited aspect of whether imposing ad valorem court fees without any upper limit will amount to a form of taxation, thereby making such an imposition impermissible.
KHCAA has argued that if ad valorem fees are imposed without any upper limit, it ceases to be a fee and becomes a form of tax.
During the hearing, the Court also expressed that a periodic revision of court fees was required to meet the increasing costs arising in the administration of justice.
"We are inclined to issue directions to all the States to amend their laws suitably," said CJI Kant during the hearing.
Justice Bagchi added that court fees should be commensurate with the value of commercial suits, considering the judicial time spent adjudicating such disputes.
"There is today a classification in judicial time being taken away for disputes of a commercial nature for the purpose of doing business, and that is the purpose for which the judiciary has to cater. It must come at a price," he said.
As the hearing progressed and KHCAA's counsel raised concerns about uncapped ad valorem court fees being imposed, CJI Kant added,
"Have you seen the gap between the quantum of expenditure for judicial administration and the quantum of recovery of court fees?"
"Then they should ask the State also. They have exempted the State from court fees completely," replied Senior Advocate K Parameshwar, representing the KHCAA.
"(That would be like) the right hand will be paying the left hand," remarked CJI Kant.
The Court proceeded to issue notice, stating,
"Issue notice on the limited aspect (of whether uncapped ad valorem fees can be imposed). "
KHCAA had earlier moved the Kerala High Court in the matter, challenging amendments introduced in 2025 to the Kerala Court Fees and Suits Valuation Act, 1959. The amendments raised court fees in the State.
KHCAA contended that the court fee hike was arbitrary, unreasonable and exorbitant. The resulting increase ranged from 400 per cent to 9,900 per cent and would result in denial of access to justice for the common man, the KHCAA said.
Further, the KHCAA also challenged the imposition of ad-valorem fees in the original Act and later via the 2025 amendment, without any upper limit. The imposition of such uncapped ad valorem fees even in matters relating to compensation for victims of crimes, is particularly egregious, the bar body argued.
The KHCAA further challenged Section 73A of the Kerala Court Fees and Suit Valuation Act which exempts the State government and its functionaries from paying court fees.
In October 2025, the Kerala High Court dismissed the KHCAA's plea. This ruling has now been challenged before the Supreme Court.
KHCAA's counsel, Senior Advocate Parameshwar, today focused his arguments on the imposition of ad valorem fees without any limit. He contended that such uncapped fees have been termed a form of taxation by the Delhi High Court in another case. These aspects were not considered by the Kerala High Court, he added.
"I am on court fees without a cap. (Courts have ruled) that it amounts to a tax. The Delhi High Court struck it down. If the actual court fee without a cap is fixed at a level disproportionate to the requirements of administration of justice, that particular notification can be struck down," he said.
The Court proceeded to issue notice on this limited aspect. The matter is listed next on November 2.
The KHCAA's plea has been filed through advocate A Karthik.
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