Private Settlement; Can Avail Refund of Court Fees

 

The Hon'ble Supreme Court held in a recent judgment of High Court of Judicature at Madras vs. M.C. Subramaniam that irrespective of the settlement procedure i.e. either under Section 89 of Civil Procedure Code (Alternate Dispute Settlement Methods) or out of court settlement without opting for these methods, the parties are qualified to avail the same benefits in the both the cases.

As per Section 69A of Tamil Nadu Court Fees and Suit Valuation Act, 1955 enunciates that the fees paid for the suit shall be refunded when the court refers the parties to settlement under section 89 of CPC.  In the present case, the parties opted for private settlement without the reference of the court for any of the Alternate Dispute Mechanism i.e. Arbitration, Conciliation, Judicial Settlement (Lok Adalat), Mediation. The registry of the High Court did not agree to the demand of returning back the court fees on the pretext that the rules and law does not mention the refund in these cases.

The Hon'ble Supreme Court categorically mentioned that if the refund of the court fees is not allowed in cases where private settlement happened between the parties which apparently saved the resources and court's time, it would "...lead to an absurd and unjust outcome". However, the apex court mentioned that such reasoning will help the Registry and administration in the long term. It was also observed that High Court can refuse to grant the refund in the cases where there are long pendency of litigations and are filed frivolously.

Link for the judgment: https://www.kpalegal.com/private-settlement/

 

Originally posted on www.kpalegal.com on 19th Feb 2021