Supreme Court rules State Bar Councils cannot charge exorbitant fee as enrollment

New Delhi [India], July 30 (ANI): The Supreme Court on Tuesday directs that current enrolment fee structure charged by the State Bar Councils (SBCs) is unreasonable as it causes excessive financial burdens on young law graduates at the time of enrolment and causes economic hardships, especially for those belonging to the marginalised and economically weaker sections of society.

The Supreme court held that “The State Bar Coucuils cannot have unbridled powers to charge any fees given the express legislative policy under Section 24(1)(f)”.

Imposing excessive financial burdens on young law graduates at the time of enrolment causes economic hardships, especially for those belonging to the marginalised and economically weaker sections of society. Therefore, the current enrolment fee structure charged by the SBCs is unreasonable and infringes Article 19(1)(g),” a bench of Chief Justice of India Dhananjaya Y Chandrachud and justices J B Pardiwala said.

The top court order came while closing petitions challenging the validity of the enrolment fees charged by State Bar Councils. The grievance of the petitioner was that the fees charged by the SBCs at the time of admission of persons on State rolls are more than the enrolment fee prescribed under Section 24(1)(f) of the Advocates Act 1961.

The top court ruled that SBCs cannot charge “enrolment fees” beyond the express legal stipulation under Section 24(1)(f). The court further said that Section 24(1)(f) specifically lays down the fiscal pre-conditions subject to which an advocate can be enrolled on State rolls. The SBCs and the BCI cannot demand payment of fees other than the stipulated enrolment fee and stamp duty, if any, as a pre-condition to enrolment, the top court said.

The decision of the SBCs to charge fees and charges at the time of enrolment in excess of the legal stipulation under Section 24(1)(f) violates Article 14 and Article 19(1)(g) of the Constitution, the top court said.

The court made it clear that this decision will have prospective effect and the SBCs are not required to refund the excess enrolment fees collected before the date of this judgement.

“The result of this decision would have entitled advocates who have paid the excess enrolment fee to a refund from the SBCs.115 The SBCs have been levying the enrolment fees for a considerable duration and utilising the collected amounts to carry out their day-to-day functioning. Therefore, we declare that this judgement will have prospective effect. Consequently, the SBCs are not required to refund the excess enrolment fees collected before the date of this judgement,” the top court said.

The top court also 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 enrolment fee. The fees charged under these or any similar heads cannot cumulatively exceed the enrolment fee prescribed in Section 24(1)(f), the top court said.

The Advocates Welfare Fund Act was enacted to provide for the constitution of a welfare fund for the benefit of advocates, the top court noted.

Section 3 provides that the appropriate government shall constitute an Advocates Welfare Fund. Section 15 mandates the SBCs to pay annually to the welfare fund an amount equal to twenty per cent of the enrolment fee received by it under Section 24(1)(f) of the Advocates Act

“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 top court said.

“The SBCs and the BCI are directed to ensure that the fees charged at the time of enrolment 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 enrollment fee or miscellaneous fees above the amount prescribed in Section 24(1)(f),” the top court said.