BAR COUNCILS CAN’T CLAIM EXORBITANT ENROLLMENT FEE FROM ADVOCATES

 

Bar Councils can’t claim exorbitant enrollment fee FROM ADVOCATES

The general prescription is that a Law Graduates, in order to practice law in courts, shall have to enroll themselves as Advocate under the roll of various State Bar Councils. The Bar Council of India is the apex body and the terms of enrollments are determined by the Bar Councils. Thus, only after enrollment as Advocate, the law graduates can start their practice in law, subject to the framed rules and guidelines, like All India Bar Examination. The fee payable at the time of enrollment to the Bar Councils, in order to be eligible to practice as an Advocate, has always been a topic of debate and the Supreme Court, now, have dealt with the issues and a guideline is formulated while hearing a matter captioned as  Gaurav Kumar  Vs Union of India and Ors , Writ Petition (C) No. 352 of 2023 along with batch of petitions such as T.C.(C) No. 28 of 2023. The matter is of utmost significance, given large number of law graduates are likely to be impacted from it.

The proceedings under Article 32 of the Constitution was initiated on the challenge to the validity of the enrolment fees charged by State Bar Councils (SBCs). The grievance being 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 Advocates Act was enacted to amend and consolidate the law relating to legal practitioners and constitute a common Bar for the whole country. The SBC  and the Bar Council of India have thus came in being. Section 6 of the Advocates Act endows SBCs with powers to regulate its sphere. These functions entails regulating entry into and conduct of legal professionals, including admission of advocates to their rolls, preparation and maintenance of rolls, determination of cases of misconduct against advocates on the rolls and safeguarding the rights, privileges and interests of advocates. The SBCs are also  empowered and obligated to organize legal aid for the poor, promote and support law reform, conduct academic discourses, and publish journals and papers on matters of legal interest.

Chapter III of the Advocates Act relates to the entry and enrolment of advocates. In terms of Section 17 SBCs are obligated to prepare and maintain a roll of advocates. In order to seek admission, an application for admission as an advocate on a State roll is made to the SBCs. The SBCs in turn issues a certificate of enrolment to every persons who are enrolled in the roll of advocates. Section 24 of the Advocates Act prescribes the qualifications and conditions for a person to be admitted as an advocate.

24. Persons who may be admitted as advocates on a State roll.—(1) Subject to the provisions of this Act, and the rules made thereunder, a person shall be qualified to be admitted as an advocate on a State roll, if he fulfils the following conditions, namely:—

(a) he is a citizen of India:

Provided that subject to the other provisions contained in this Act, a national of any other country may be admitted as an advocate on a State roll, if citizens of India, duly qualified, are permitted to practise law in that other country;

(b) he has completed the age of twenty-one years;

(c) he has obtained a degree in law—

(i) before the [12th day of March, 1967], from any University in the territory of India; or

(ii) before the 15th day of August, 1947, from any University in any area which was comprised before that date within India as defined by the Government of India Act, 1935; or

[(iii) after the 12th day of March, 1967, save as provided in sub-clause (iii-a), after undergoing a three-year course of study in law from any University in India which is recognised for the purposes of this Act by the Bar Council of India; or

(iii-a) after undergoing a course of study in law, the duration of which is not less than two academic years commencing from the academic year 1967-68, or any earlier academic year from any University in India which is recognised for the purposes of this Act by the Bar Council of India; or]

[(iv) in any other case, from any University outside the territory of India, if the degree is recognised for the purposes of this Act by the Bar Council of India; or] [he is a barrister and is called to the Bar on or before the 31st day of December, 1976; [or has passed the articled clerk's examination or any other examination specified by the High Court at Bombay or Calcutta for enrolment as an attorney of that High Court;] or has obtained such other foreign qualification in law as is recognised by the Bar Council of India for the purpose of admission as an advocate under this Act];

(d)        he fulfils such other conditions as may be specified in the rules made by the State Bar Council under this Chapter;

[(e)       he has paid, in respect of the enrolment, stamp duty, if any, chargeable under the Indian Stamp Act, 1899 (2 of 1899), and an enrolment fee payable to the State Bar Council of [six hundred rupees and to the Bar Council of India, one hundred and fifty rupees by way of a bank draft drawn in favour of that Council]:

Provided that where such person is a member of the Scheduled Castes or the Scheduled Tribes and produces a certificate to that effect from such authority as may be prescribed, the enrolment fee payable by him to the State Bar Council shall be [one hundred rupees and to the Bar Council of India, twenty-five rupees].

[Explanation.—For the purposes of this sub-section, a person shall be deemed to have obtained a degree in law from a University in India on the date on which the results of the examination for that degree are published by the University on its notice-board or otherwise declaring him to have passed that examination.]]

 

The grievance of the petitioners in the batch of petitions as aforementioned were that are that SBCs charge enrolment fees stipulated under Section 24(1)(f) of the Advocates Act to admit law graduates on their State roll. At the time of enrolment, the SBCs also charge various “fees” and “charges” in addition to the enrolment fees in the form of library fund contributions, administration fees, identity card fees, welfare funds, training fees, processing fees, certificate fees, etc. The amount of fees charged by the SBCs differ significantly. This results in a situation where a law graduate has to pay somewhere between Rupees fifteen thousand to Rupees forty-two thousand (depending upon the SBC) as cumulative fees at the time of enrolment. The petitioners has assailed the aforesaid stipulations under Article 32 of the Constitution, thereby seeking a declaration that the fees charged by the SBCs at the time of enrolment violate Section 24(1)(f) of the Advocates Act. The Supreme Court had also transferred with itself the petitions dealing with similar issues from the High Court of Kerala, the High Court of Judicature at Madras at Madurai, and the High Court of Judicature at Bombay.

Issues before the Supreme Court

 

a. Whether the enrolment fees charged by the SBCs are in contravention of Section 24(1)(f) of the Advocates Act? and

b. Whether payment of other miscellaneous fees can be made a pre-condition for enrolment?

 

Contentions of BCI

a.      Bar Councils require adequate operational funds to effectively discharge their functions including funds for day-to-day functioning su8ch as administrative expenses, staff salaries, infrastructure maintenance and technological advancements. Inadequate funding will hinder the ability of SBCs to comply with their statutory obligations under the Advocates Act;

b.      The enrollment fee prescribed under Section 24(1)(f) was fixed by the legislature in 1993 and has not been modified since. 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, SBCs rely on the one-time enrolment fee;

c.      The fees charged by SBCs at the time of enrollment include additional expenses incurred in the enrolment process along with the enrolment fee prescribed by the Act, such as online data processing fee, identity card fee and verification process fee. Therefore, the fees charged do not violate Section 24(1)(f) and are linked to the services being rendered by the SBCs;

d.      As enrolment of advocates are exclusively within their domain. Thus, it is implied that an entity on whom statutory powers or duties have been conferred also inherently possesses incidental powers necessary for its effective exercise;

e.      The Act, more particularly section 15 provides SBCs with the power to make rules to carry out the purposes of Chapter II of the Act (including Section 6). This general power to frame Rules includes the power to levy charges for services rendered under the Act;

f.       The fact that a charge is levied at the time of ‘enrollment’ does not make it as an enrollment fee. The ‘enrollment fee’ charged by most SBCs under Section 24(1)(f) continues to be six hundred rupees and the remaining amount is usually attributable to additional charges for other services. SBCs may be directed to comply with Section 24(1)(f) while charging an ‘enrollment fee’. But this must be distinguished from other charges levied at the time of enrolment. Such charges are permissible provided they pass the test of quid pro quo in terms of services rendered in return for the charges levied; and

g.      In terms of Section 49(1) (ah) and Section 49(h) The BCI has the power to frame rules to charge reasonable fees

 

 

Thus, in addition, the BCI (Bar Council of India) had contended that the Supreme Court under its extraordinary powers under Article 142 may implement a uniform enrolment fee structure that adequately caters to the financial requirements of the SBCs till such time, legislature suitably amends the provisions of Advocates Act. It was also prayed by BCI, that alternatively, the Supreme Court may direct the Union Government to revise the enrolment fee prescribed in Section 24(1)(f).

The Supreme Court has thus analysed the contentions from the legal stand point.

In O N Mohindroo v. Bar Council of Delhi, 1968 SCC OnLine SC 3,   a Constitution Bench held that the Advocates Act was enacted by Parliament under the legislative field of Entries 77 and 78 of List I. It was observed that the object of the Advocates Act is to constitute one common Bar for the whole of the country and to provide machinery for its regulated functioning. It was further observed that the expression “persons entitled to practice” under Entries 77 and 78 of List I includes within its scope the determination or prescription of qualifications and conditions entitling a person to practice as an advocate before the Supreme Court or the High Courts.

In Bar Council of U P v. State of U P, (1973) 1 SCC 261  the issue before a three-Judge Bench of Supreme Court was whether the State legislature could impose stamp duty on the certificate of enrolment issued by the SBCs. It was held that the enrolment fee payable under Section 24(1)(f) is covered by Entry 96 in List I. Concerning the imposition of stamp duty, it was held that stamp duty payable on the certificate of enrolment cannot be regarded as a condition prescribed for enrolment because it pertains to the domain of taxation.30 It was held that the State Legislature was competent to levy stamp duty under Entry 44 of List III of the Seventh Schedule.

The provisions of the Advocates Act indicate that it provides a complete machinery32 to deal with the admission and enrolment of advocates. The SBCs are vested with sufficient powers to ensure effectual and complete implementation of the enactment. In Dr Haniraj L Chulani v. Bar Council of Maharashtra and Goa1996) 3 SCC 342 , the Supreme Court held that the Advocates Act provides a complete code for regulating the legal education and professional qualifications of an aspirant seeking entry into the legal profession.

 

Bar Councils cannot levy fees beyond the express stipulation of law

 

In para no. 58 of Gaurav Kumar(Supra)  It is held by the Supreme Court that while acting as a delegate of Parliament, the SBCs and the BCI can frame rules under the Advocates Act. However, any rule enacted by the SBCs is only ancillary and cannot be so exercised to bring into existence substantive rights, obligations or disabilities not contemplated by the provisions of the parent enactment.(ref: Kunj Behari Lal Butail v. State of H P, (2000) 3 SCC 40).  Further, the rules must align with the object and purpose of the Advocates Act, namely, the creation of a common bar and regulation of legal practitioners and their qualifications, enrolment, right to practice, and discipline. Therefore, delegated authority must strictly conform to the provisions of the statute under which it is framed.

It is held in J K Industries Ltd. v. Union of India, (2007) 13 SCC 673 that a delegate cannot alter or change the legislative policy. In Rajnarain Singh v. Patna Administration Committee, (1954) 2 SCC 82 it is held that a delegate cannot override the provisions of the parent enactment either by exceeding the legislative policy or making provisions inconsistent with the enactment.

The Supreme Court has held in S Seshachalam v. Bar Council of Tamil Nadu(2014) 16 SCC 72 that young law graduates seeking to enter litigation start from a position of disadvantage. Hon’ble Justice R Banumathi summed up the struggle of young advocates in apt words:

“26. The profession of Law is a noble calling. The legal fraternity toils day and night to be successful in the profession. Although it is true that slowly working one's way up is the norm in any profession, including Law, but initially young advocates have to remain in the queue for a prolonged period of time and struggle through greater hardships. Despite being extremely talented, a number of young lawyers hardly get proper opportunity or exposure in their profession. New entrants to the profession in the initial stages of the profession suffer with the meagre stipend which young lawyers may receive during their initial years, coupled with the absence of a legislation concerning this, they struggle to manage their food, lodging, transportation and other needs. Despite their valiant efforts, they are unable to march ahead in their profession. It is only after years of hardwork and slogging that some of the fortunate lawyers are able to make a name for themselves and achieve success in the profession. For the majority of the legal fraternity, everyday is a challenge. Despite the difficult times, the lawyer who sets up practice straight after enrolment, struggles to settle down … in the profession. Some of the lawyers remain struggling throughout their lives yet choose to remain in the profession. It is something like “riding a bicycle uphill with the wind against one”.

 

In paragraph no. 101 & 102 in Gaurav Kumar (Supra), the Supreme Court has thus held as under:

 

“101. We can cull out the following principles from the above discussion:

 

(i) the power of the authority to impose restrictions on the right under Article 19(1)(g) is not absolute and must be exercised in a reasonable manner;

(ii) any fees or licences levied by the authorities must be valid and levied on the basis of 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).”

 

“102. According to the current enrolment fee structure of the SBCs, an advocate has to pay anywhere between Rupees fifteen thousand to Rupees forty-two thousand as a pre-condition to enrolment. As held in the above segments of this judgment, the SBCs charge enrolment fees in excess of the stipulated fee prescribed under Section 24(1)(f). The excess enrolment fee imposed by the SBCs is without authority of law. Compounded with this there are no reasonable criteria behind the decision of the SBCs to charge such exorbitant amounts as enrolment fees. The SBCs 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 marginalized and economically weaker sections of the society. Therefore, the current enrolment fee structure charged by the SBCs is unreasonable and infringes Article 19(1)(g)”.

 

It is also observed by the Supreme Court in Gaurav Kumar (Supra) as under:

104. 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. For instance, 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 enrollment 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 operative part of the judgment in Gaurav Kumar (Supra) are as under as contained in para 109:

“109. In view of the above discussion, we conclude that:

 

a.       The SBCs cannot charge “enrolment fees” beyond the express legal stipulation under Section 24(1)(f) as it currently stands;

 

b.       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;

 

c.       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; and

 

d.       This decision will have prospective effect. The SBCs are not required to refund the excess enrolment fees collected before the date of this judgment.

 

The aforesaid discussion is self explanatory. The SBCs and the BCI are accordingly directed by the Supreme Court 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). It was also made clear that this was not a case the Supreme Court was required to invoke its extraordinary power under Article 142 of Constitution of India.

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                                           Anil K Khaware

Founder &Senior Associate

Societylawandjustice.com