Judicial in-dependence and Judicial Fund Act

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Photo by Mohamed Hassan for Pixabay

Throughout the history of Nepal, the parliament, the law-making organ of the government, has consistently legislated laws deemed crucial for the prevailing circumstances. Whenever the government tables a law in the parliament, it is generally guaranteed to get the majority ‘ayes’.

An original bill or an amendment bill tabled in the parliament is typically passed without amendment to the original draft. However, the implementation phase of such legislation, which is the most essential phase, has been and is a seismic task.

Judicial Fund Act

Many legislations passed by the parliament on paper do not get the opportunity to see the light of the day. Similarly, the Judicial Fund Act, 1986, enacted three decades ago is yet to be implemented. To give effect, the Judicial Fund Act was authenticated and published in the Nepal Gazette on the 10th of November 1966. The law itself provides for the modality of its implementation. Some laws come into force from the day of their publication, some after a certain time, while others are implemented from the date stipulated in the law. The remaining come into force upon a notice regarding its implementation is published in the Gazette. The Judicial Fund Act has the latter clause, i.e. it will come into force once a notice is published in the Gazette, which is yet to be done.

The preamble of legislation sets out the objective behind formulating the law and the goals it intends to fulfil in society. The objective of the Judicial Fund Act as reflected in its preamble is, ‘to refund the returnable court fee, amount for penalty, fine, guarantee or bail; to construct residential buildings for the judges as well as other employees serving in the court; to maintain such buildings and to perform other activities relating to justice’. As such, the Judicial Fund Act endorses the financial independence of the judiciary for its effective functioning and dispensation of justice to the commoners.   

The concept of financial independence and autonomy is not nascent. This idea was originally propounded by Prithvi Narayan Shah during the unification of Nepal. In his book Divya Upadesh, edited by Historian Baburam Acharya and Yogi Naraharinath, Prithvi Narayan Shah has advised the executive branch, the Palace, to refrain from receiving the money collected by the Court. The advice indicates the necessity of the principle of financial independence and the functional autonomy of the judicial organ of the state without having to depend on the executive branch. Yet the principle remains mere words to date.

To achieve the financial independence and autonomy of the judiciary, the Judicial Fund Act envisaged a ‘revolving nature fund’. Such a type of fund is established for specified purposes with the condition of repayments to the fund. The repaid amounts can again be utilised for the purposes for which the fund was created. Two types of amounts are to be deposited in the fund. One is the grant received from the Government of Nepal from time to time. Second is the amount deposited by the parties to a case as a guarantee or bail. The money of the fund is stated to be used for the following purposes under the order of the court – a ) refunding court fee, penalty, fine or other amount, b) refunding amount deposited as a guarantee or bail, c) providing it as a reward or as other amount. Apart from utilising the money for justice purposes, the money can be used for constructing court buildings, residential buildings for the judges and other court employees, maintaining such buildings of the court and acquiring land for the court.

Possible amendments

Apart from the amount stipulated in the Judicial Fund Act, a third type of amount should be added through an amendment to the Act. When registering a plaint, written reply, counterclaim, appeal or other petition for review and revision, a fee is charged and collected by the court from the person who registers such suit. Such a fee is referred to as a court fee. At present the court fee collected is reimbursed to the person filing the suit if they win their case and request in a written form for its reimbursement. If the court decides against the person who filed a suit, then such court fee is not reimbursed and is deposited in the executive’s revenue fund.

The amount deposited in the executive’s revenue fund will not be utilised for the purposes stated in the Judicial Fund Act. This has posed an impediment for the judiciary in acquiring sufficient resources for its financial independence and has required it to be dependent on the executive wing of the government for financial resources. The court fees collected by the court have to be deposited in the judicial fund rather than the executive fund to achieve the independence of the judiciary in a true sense.

Through the amendment of the Judicial Fund Act, other types of amounts can also be deposited. Court fees which need not be returned under the conditions set in the prevailing law can also be deposited in the Fund. If the court fee which can be reimbursed as per law is not claimed by the concerned party within a reasonable time as per law, then such court fee can be deposited in the Fund. In civil matters where the aggrieved party fails to claim the compensation, the fines set by the court from the opposition party within a reasonable time as per law, such amount can also be deposited in the Fund. Both the court fee and the compensation, and fines amount collected in civil matters will further increase the financial resources of the judiciary. The same will assist in implementing the major functions of the Fund stipulated in the Judicial Fund Act.

Another purpose of the fund can be for any other judicial work to be performed by a court as per law. In this regard, the Act has provided a vague and unlimited scope for the judiciary. Such any other judicial work has to be defined either by amending the Act or by formulating a Judicial Fund Regulations. In addition to the purview of the judicial work, the Regulations should also set out the procedure for refunding and making the expenditures from the fund. As stated above either the regulation or any other concerning law should set out the time limit to claim the court fee or other compensation and if not claimed within a certain time, then such amount can be utilised for the objectives of the Fund set out in the Act. The Act has not yet been implemented due to which we are unaware of the challenges it may face on the road. In this regard at first, the Act has to be implemented as soon as possible. To implement the Act a notice in the Nepal Gazette stating the same is not enough. Framing a regulation and implementing the regulation as per the Act is pertinent for fulfilling the objectives set out by the Act.

When both the Act and its regulation come into force in real life, then a swift amendment bill to address the gaps and loopholes prevailing in the Act should proceed in the parliament. As the Act is almost four decades old it requires the addition of the recent trends of the judiciary and to cater to other changes in society that should be endorsed by the Act as per its preamble. This is because all the court fees, fines, and penalty amounts under and outside the domain of the Act are being deposited in the executive’s revenue account. The money deposited in such revenue account allows the executive to spend the money at its pleasure and keeps the judicial under financial peril forever.

The way out  

Supreme Court - court cases
Supreme Court. Photo: Chandra Bahadur Ale

The need for independent finance and funding of the judiciary is also due to the poignant fact that it does not even receive one per cent of the total annual budget of the country. As per the 2022/23 Annual Report of the Supreme Court of Nepal, the Judiciary only receives a mere 0.39 per cent of the total annual budget.

Also, the judiciary is yet to acquire land in the name of the districts courts of Ilam, Lalitpur, Syangja, Rukumkot, Darchula, Morang, Siraha, Nawalpur, Rupandehi, Jajarkot, Bardiya as well as other tribunals. Even though the money may not only be a hindrance to acquiring land for the above courts, it is an essential issue. The budget allocation reflects the attitude of the executive branch of the government in blocking the financial autonomy of the judiciary. It is quite strange that the executive neither wants to implement judicial independence as per the Act nor wants to provide an adequate budget for attaining the objectives of the judiciary in pursuit of justice.   

The Annual Report of the Supreme Court has urged the government the implement the Judicial Fund Act due to the lack of funds for the betterment of the judiciary. Such requests are regularly being made due to the lack of ample budget from the Government. The judiciary is consistently demanding one per cent of the total annual budget as expenditure. Without the government providing the nominal per cent of the total annual budget, justice cannot be served in its truest sense. If the threshold of budget is not met by the government then the question of whether the government is compromising on achieving a welfare state and judicial independence will be raised by the citizens. Ultimately the faith in the judiciary will be at stake too. 

The court fee and fines amount collected through the courts around the country is in millions. Utilization of these amounts by the judiciary for the judiciary will strengthen the judiciary and ultimately assist in achieving a welfare state. Otherwise, the judiciary will have to keep requesting funds from the executive and the executive will keep on delaying the demands to provide an adequate budget and break the promise every year without any explanation and the cycle will go on. Here the food for thought is that even though the Constitution of Nepal has provided for the independence of the judiciary, will the persistent financial dependency of the judiciary enable it to be independent? The answer to this question could be the implementation of the Judicial Fund Act, 1986. As such, the ball is in the court of the Government of Nepal.

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Humagain is a lawyer based in Kathmandu.

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