Why has the Supreme Court ruled against ‘exorbitant’ enrolment fees charged by state Bar Councils?

A detailed explainer on the Supreme Court decision ruling against the exorbitant fee charged by state Bar Councils from young law graduates enrolling to practise as advocates.

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IN a ruling that has come as a big relief to law graduates aspiring to become advocates, the Supreme Court has ruled that state Bar Councils cannot charge an enrolment fee other than what is prescribed under the Advocates Act, 1961.

A two-judge Bench comprising the Chief Justice of India (CJI) Dr D.Y. Chandrachud and Justice J.B. Pardiwala held that the exorbitant fee charged by state Bar Councils was without authority of law, manifestly arbitrary and unreasonable, and thus violated Articles 14 and 19(1)(g) of the Constitution besides ultra vires to the Advocates Act, 1961.

Importantly, the Bench has made it clear that other miscellaneous fees, including but not limited to, application form fees, processing fees, postal charges, police verification charges, ID card charges, administrative fees and photograph fees at the time of admission are to be construed as part of the enrolment fee.

The Bench has also clarified that its ruling will have a prospective effect. This means that advocates who have already paid excessive fees for enrolment will not be entitled to a refund.

Section 24(1)(f) of the Advocates Act sets the enrolment fee payable by general category candidates at ₹750. For Scheduled Caste (SC) and Scheduled Tribe (ST) candidates, the fee is ₹150.

However, state Bar Councils have been charging anywhere between ₹15,000 to ₹42,000 as a pre-condition to enrolment. For instance, the Bar Council of Maharashtra and Goa charges a cumulative fee of ₹15,000 from general category candidates and ₹14,500 from SC and ST candidates.

In Manipur, general category candidates pay ₹16,650 as enrolment fee while candidates from SC and ST categories pay ₹16,050. The Bar Council of Odisha charges ₹42,100 from advocates at the time of enrolment.

The case made by the petitioner before the Supreme Court was straightforward. Petitioner Gaurav Kumar argued that state Bar Councils could not charge an enrolment fee other than what is provided under Section 24(1)(f) of the Advocates Act.

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He also argued that exorbitant enrolment fees prevent law graduates belonging to economically weaker sections of society from getting admitted to the rolls of state Bar Councils.

Arguments made by the Bar Council of India

Before coming to the reasoning offered by the Supreme Court for arriving at its conclusion, it is important to state the defense made by the Bar Council of India (BCI) in support of the exorbitant fee.

Firstly, the BCI justified the exorbitant fee by citing administrative and infrastructure exigencies.

Secondly, it argued that the fee prescribed under Section 24(1)(f) of the Advocates Act was fixed as early as 1993 by the Parliament; thus it fails to account for inflation and is not adequate to meet current financial demands. Unlike other professional bodies that levy an annual subscription fee on members, state Bar Councils rely on the one-time enrolment fee.

Thirdly, the fees charged at the time of enrolment also include additional expenses incurred in the enrolment process such as online data processing fee, identity card fee and verification process fee.

Fourthly, the BCI argued that Section 6(2) lays down the functions of state Bar Councils and places enrolment of advocates exclusively within their domain. Hence, an entity on whom statutory powers or duties have been conferred impliedly possesses incidental powers necessary for its effective exercise.

Fifthly, the BCI argued that state Bar Councils have the power to make rules which includes the power to levy charges for services rendered under the Act.

Sixthly, the BCI argued that merely because a charge is levied at the time of 'enrolment' does not make it an enrolment fee. The 'enrolment fee' charged by most state Bar Councils under Section 24(1)(f) continues to be ₹600 and the remaining amount is usually attributable to additional charges for other services.

Lastly, the BCI argued that it has the power to frame rules to charge reasonable fees under Section 49(1)(ah) and Section 49(h) of the Advocates Act. The term 'any matter' used in Section 49(h) also includes matters relating to the enrolment of an advocate.

Before the Supreme Court, the BCI placed the draft Uniform Rules (For Enrolment and Other Fees To Be Charged By The State Bar Councils) 2023, laying down a uniform fee to be charged by all state Bar Councils at the time of enrolment.

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The BCI wanted the Supreme Court to invoke its inherent power to implement a uniform enrolment fee structure that adequately caters to the financial requirements of state Bar Councils until legislative amendments are made to the Advocates Act. Additionally, it urged the court to direct the Union government to revise the enrolment fee prescribed in Section 24(1)(f).

History behind Section 24(1)(f)

In 1959, the Legal Practitioners Bill, 1959 was introduced in the Indian Parliament. The Bill was referred to a joint committee of the Parliament, which submitted its recommendations in 1960.

The judgment notes that the joint committee recommended renaming the proposed enactment as the Advocates Act because there would only be one class of legal practitioners in India, that is, advocates.

This is because distinctions such as that between a solicitor (who mainly drafts documents for a client) and a barrister (who usually appears in court, and has minimal direct contact with the client) in the British legal system; or that of an attorney no longer exist in the Indian legal system.

The judgment further notes that the joint committee recommended reducing the proposed enrolment fee from ₹500 to ₹250.

"The aim behind reducing the enrolment fee was 'to bring in as many eligible lawyers within its [the legislation's] fold as possible'," the judgment notes.

In 1973, the enrolment fee payable by the members of SC and ST categories was reduced to ₹125. After that, Section 24(1)(f) was amended in 1993 to revise the fees payable by general candidates from ₹250 to ₹750, without increasing the fees payable by candidates belonging to the SC and ST categories. This was the last amendment made to the Advocates Act with regard to the enrolment fees.

The reasoning offered by the Supreme Court to declare exorbitant fees illegal

The Supreme Court found the levy of exorbitant fees for enrolment illegal on multiple grounds. From it being without the authority of law, against substantive equality (under Article 14) to its being manifestly arbitrary (under Article 14).

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The Bench also found it unreasonable and declared it unconstitutional as being violative of the right to practise the profession or to carry on any occupation, trade or business [under Article 19(1)(g)]

State Bar Councils do not have legislative power to prescribe enrolment fees contrary to Section 24(1)(f)

The Bench found that the enrolment fees under Section 24(1)(f) cover "all functions" carried out by state Bar Councils and the BCI under the Advocates Act. State Bar Councils being delegates of the Parliament, they cannot levy fees other than what is provided in the parent Act, the Bench held.

The Bench also observed that the legislative history behind Section 24(1)(f) suggests that the legislature was averse to imposing any charges other than enrolment fees at the time of enrolment. This was in furtherance of the legislative object to foster an inclusive Bar.

Thus, the Bench ruled that imposing miscellaneous fees in the guise of an enrolment fee, which cumulatively exceeds the statutory stipulation under Section 24(1)(f), is contrary to the legislative object of the Advocates Act.

In addition, the Bench also noted that Section 24(1)(f) is a fiscal regulatory provision and has to be construed strictly.

"Parliament has prescribed the enrolment fees in the exercise of its sovereign legislative powers. State Bar Councils and the BCI, being delegates of the Parliament, cannot alter or modify the fiscal policy laid down by the Parliament," the Bench held.

Against substantive equality and manifestly arbitrary

The Bench also found the exorbitant fees against substantive equality and being manifestly arbitrary under Article 14 of the Constitution. The Bench said though enrolment fees and other miscellaneous fees imposed by state Bar Councils fall equally on all persons seeking enrolment, it perpetuates structural discrimination against persons from marginalised and economically weaker sections of society.

The Bench noted that the structure of the Indian legal setup is such that the struggle for getting acceptance in chambers and law firms is greater for those who belong to marginalised sections, first-generation advocates, or law graduates without a degree from a National Law University.

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Referring to a study on the challenges in the legal practice for Dalits in India, the Bench noted that the study suggests that many law students from the Dalit community face English language barriers, reducing their opportunities to practise before the high courts and the Supreme Court where the court proceedings are in English.

The Bench opined that in a legal system that is predisposed against the marginalised, the precondition of paying exorbitant fees in the name of enrolment fees creates a further barrier for many.

The Bench held that dignity is crucial to substantive equality and dignity of an individual encompasses the right of the individual to develop their potential to the fullest.

"The right to pursue a profession of one's choice and earn a livelihood is integral to the dignity of an individual. Charging exorbitant enrolment fees and miscellaneous fees as a pre-condition for enrolment creates a barrier to entry into the legal profession," the Bench underscored.

It added that the levy of exorbitant fees as a pre-condition to enrolment serves to denigrate the dignity of those who face social and economic barriers in the advancement of their legal careers.

The Bench averred that this effectively perpetuates systemic discrimination against persons from marginalised and economically weaker sections by undermining their equal participation in the legal profession. This, the Bench declared, is contrary to the principle of substantive equality.

On the fees being manifestly arbitrary, the Bench held that state Bar Councils, at the time of enrolment, charge fees in contravention of Section 24(1)(f) and the legislative policy of the Advocates Act.

The excessive fees, in the opinion of the Bench, are manifestly arbitrary. It also held that the effect of charging exorbitant enrolment fees as a precondition for enrolment has created entry barriers, especially for people from marginalised and economically weaker sections, to enter into the legal profession.

"The current enrolment fee structure is manifestly arbitrary because it denies substantive equality," the Bench ruled.

Exorbitant fee violative of the right to profession

Article 19(1)(g) of the Constitution provides that all citizens of India shall have the right to practise any profession or to carry on any occupation, trade or business. Article 19(6) subjects the right under Article 19(1)(g) to reasonable restrictions.

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The Bench noted the principles to restrict the right under Article 19(1)(g). They are: the power of the authority to impose restrictions on the right under Article 19(1)(g) is not absolute and must be exercised reasonably; (ii) any fees or licences levied by the authorities must be valid and levied based on the authority of law; and (iii) delegated legislation which is contrary to or beyond the scope of the legislative policy laid down by the parent legislation places an unreasonable restriction in violation of Article 19(1)(g).

Holding the exorbitant fees unreasonable, the Bench pointed out:

Firstly, it is without the authority of law.

Secondly, there are no reasonable criteria behind the decision of state Bar Councils to charge such exorbitant amounts as enrolment fees.

Thirdly, 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.

Given this, the Bench found the current enrolment fee structure charged by state Bar Councils unreasonable and infringing upon Article 19(1)(g).

BCI's resolution is bad in law

In its ruling, the Bench also declared a resolution passed by the BCI in 2013 directing state Bar Councils to charge six ₹1,000 as enrolment fees for general candidates and ₹3,000 for SC and ST candidates as bad in law.

The Bench ruled that the BCI had no authority to pass a resolution revising the enrolment fees charged by state Bar Councils.

It added that merely because the Parliament has not revised the fee mentioned in Section 24(1)(f) does not clothe the BCI with any authority to direct state Bar Councils to charge revised enrolment fees.

It is for the BCI to devise ways to charge fees for its services

The Bench also dealt with the argument of the BCI that it was charging higher fees due to financial and administrative exigencies.

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An unimpressed Bench observed that instead of devising ways and means to charge fees from enrolled advocates for rendering services, state Bar Councils and the BCI have been forcing young law graduates to cough up exorbitant amounts of money as a pre-condition for enrolment.

The Bench added that it is for state Bar Councils and the BCI to devise an appropriate method of charging fees that is fair and just not only for the law graduates intending to enrol, but also for the advocates already enrolled and on State rolls.

The Bench also listed some of the methods through which state Bar Councils and the BCI can collect funds at later stages of an advocate's career. For instance, the Bench said, under the Advocates Welfare Fund Act, 2001, advocates must affix mandatory welfare stamps on vakalatnamas which are used to collect funds for advocate welfare.

"Unlike an enrolment fee charged before a graduate is given a fair chance to earn a living, such sources of income are directly correlated to the advocates' practice," the Bench said.

The Bench also rejected the plea of the BCI to give effect to its draft Uniform Rules (For Enrolment and Other Fees To Be Charged By The State Bar Councils) 2023, laying down a uniform fee to be charged by all state Bar Councils at the time of enrolment. It said no case was made out to exercise its inherent power under Article 142 of the Constitution.