1. Suit for specific performance settled via mediation under Section 89 CPC — Dispute over entitlement to full refund of court fees under Central versus State legislation. (Para 3 )
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2024 Supreme(SC) 1213
SUPREME COURT OF INDIA
C.T. RAVIKUMAR, SANJAY KAROL, JJ.
Sanjeevkumar Harakchand Kankariya – Appellant
Versus
Union Of India & Ors. – Respondents
Civil Appeal No. 14742 of 2024 (Arising out of Special Leave Petition (Civil) No. 1904 of 2015)
Decided on : 19-12-2024
Advocates appeared:
For the Petitioner(s): Mr. Sandeep Sudhakar Deshmukh, AOR
For the Respondent(s): Mr. Vikramjeet Banerjee, A.S.G. Mr. Akshay Nain, Adv. Mr. Akshit Pradhan, Adv. Mr. Bhuvan Mishra, Adv. Ms. Ruchi Gour Narula, Adv. Ms. Aarushi Singh, Adv. Ms. Pooja Kumari, Adv. Mr. Arvind Kumar Sharma, AOR Ms. Rukmini Bobde, Adv. Mr. Siddharth Dharmadhikari, Adv. Mr. Aaditya Aniruddha Pande, AOR Ms. Soumya Priyadarshinee, Adv. Mr. Amlaan Kumar, Adv. Mr. Vinayak Aren, Adv. Mr. Jatin Dhamija, Adv. Mr. Naveen Kumar Bhardwaj, Adv.
For the Petitioner(s): Mr. Sandeep Sudhakar Deshmukh, AOR
For the Respondent(s): Mr. Vikramjeet Banerjee, A.S.G. Mr. Akshay Nain, Adv. Mr. Akshit Pradhan, Adv. Mr. Bhuvan Mishra, Adv. Ms. Ruchi Gour Narula, Adv. Ms. Aarushi Singh, Adv. Ms. Pooja Kumari, Adv. Mr. Arvind Kumar Sharma, AOR Ms. Rukmini Bobde, Adv. Mr. Siddharth Dharmadhikari, Adv. Mr. Aaditya Aniruddha Pande, AOR Ms. Soumya Priyadarshinee, Adv. Mr. Amlaan Kumar, Adv. Mr. Vinayak Aren, Adv. Mr. Jatin Dhamija, Adv. Mr. Naveen Kumar Bhardwaj, Adv.
IMPORTANT POINT
Alternate Dispute Resolution (ADR) – Refund of court fees – Section 89 CPC nowhere correlates settlement of disputes by alternate mechanisms to amount of money that may be saved by parties in so far as court fee is concerned.
Headnote:
Civil Procedure Code, 1908 – Section 89 – Court Fees Act , 1870 – Section 16 – Constitution of India – Entry 11A List III and Article 142 – Alternate Dispute Resolution (ADR) – Refund of court fees – Entry 11A List III cannot govern refund of court fees when a matter is settled by methods of alternate dispute resolution – Section 89 CPC nowhere correlates settlement of disputes by alternate mechanisms to amount of money that may be saved by parties in so far as court fee is concerned – Only purpose is resolution of dispute by means prescribed therein, aiding reduction of pendency and backlog of cases – Refund of court fees, either partial or complete, is a benefit, incidental to resolution of dispute – Added pecuniary advantage may serve as a reason to galvanize and buoy position of ADR, leading increasing number of persons involved in disputes to opt therefor, however, that aspect is not in realm of primary considerations when examining growth of ADR, or object and purpose of introduction of Section 89 into CPC – Simply because refund under CFA, 1870 is statutorily prescribed, to be given when a dispute is settled by way of Lok Adalat, does not mean by exact situation be adopted to settlement of a dispute by mediation – Lok Adalat and mediation are two distinct methods and cannot be equated – In case in hand, in exercise of power Article 142 of Constitution of India, refund of court fees ordered but it will not be a binding precedent. (Paras 14.2, 20, 21 and 24)
Facts of the case:
Present appeal questions the correctness of the judgment and order dated 1st October, 2014 passed by High Court of Judicature at Bombay (Aurangabad Bench) between self-same parties, whereby High Court refused prayer of appellant herein seeking writ, order, order or direction to State of Maharashtra to initiate a complete refund of court fees of all litigants including appellant whose proceedings before Civil Courts were disposed of in accordance with Section 89 of Code of Civil Procedure 1908.
Findings of Court:
Considering fact that original dispute was settled amicably and that amount of court fees involved is not excessive, in peculiar facts of this case, for it not to be a binding precedent, same can be refunded to him. Ordered accordingly.
Result : Appeal dismissed.
Legal Category Hierarchy
Table of Contents
2. Court fees are governed by Entry 3, List II; administration of justice under Entry 11-A, List III does not override State competence regarding court fees. (Para 9 , 10 , 11 , 12 , 13 , 14 , 15 , 16 , 17 , 18 , 19 , 20 )
3. Legislative competence for court fees resides with the State under Entry 3, List II, rendering State legislation valid despite contrary provisions in Central legislation. (Para 12 , 13 , 21 )
4. Appeal dismissed; however, the court exercised jurisdiction under Article 142 to grant the appellant a refund of the court fees. (Para 21 , 24 )
5. Does administration of justice under Entry 11-A, List III include the power to regulate court fee refunds?
No. The court held that administration of justice pertains to the investment of general, territorial, and pecuniary jurisdiction and the organization of courts. Court fees are explicitly governed by Entry 3, List II of the State List. (Para 10 , 11 , 12 , 13 )
6. Does a refund provision for Lok Adalats under the LSA Act, 1987 apply to settlements reached via mediation under Section 89 CPC?
No. The court ruled that Lok Adalats and mediation are distinct methods of dispute resolution. A statutory refund for Lok Adalats does not automatically extend to mediation settlements. (Para 16 , 17 , 18 , 19 , 20 )
7. How is the conflict between a Central Act and a State Act resolved when the subject is in the State List?
If the legislative competence is clearly provided under the State List (Entry 3, List II), the State legislation is valid. The doctrine of repugnancy applies primarily to the Concurrent List. (Para 11 , 12 , 13 )
JUDGMENT :
SANJAY KAROL, J.
Leave granted.
THE CHALLENGE
2. This appeal questions the correctness of the judgment and order dated 1st October, 2014 passed by the High Court of Judicature at Bombay (Aurangabad Bench) between the self-same parties, whereby the High Court refused the prayer of the appellant herein seeking -
(a) a writ, order, order or direction to the State of Maharashtra to initiate a complete refund of court fees of all litigants including the appellant whose proceedings before the Civil Courts were disposed of in accordance with Section 89 of the Code of Civil Procedure 19081[Hereinafter ‘CPC’];
(b) quashing of notification dated 8th May, 2013 issued by the Law and Judiciary Department, Government of Maharashtra bearing No. HCA.2010/C.R 87/D192[Hereafter, “the impugned notification”] as contrary to the provisions of the Court Fees Act, 18703[CFA, 1870] read with certain provisions of the Legal Services Authorities Act, 19874[LSA Act, 1987];
(c) a declaration to the effect that Respondent No.2 i.e. State of Maharashtra had no authority in law to issue a notification contrary to the provisions of the CFA, 1870; and
(d) that all such notifications and rules running contrary thereto be quashed and set aside.
THE FACTUAL AND LEGAL BACKGROUND
3. The factual background which led the appellant to prefer the writ petition before the High Court was that he had entered into an agreement to sell a certain property located at Aurangabad. However, the said Agreement could not be performed and as such, he preferred Special Civil Suit No.274 of 2013 before the Court of the Civil Judge, Senior Division, Aurangabad, praying for a direction of specific performance of the contract. The dispute was referred to mediation under Section 89 CPC and, amicably resolved. The terms of settlement were presented to the Court and the Civil Suit was disposed of in terms of the said compromise. A request for refund of court fees was allowed only to the extent of 50%.
3.1 The appellant contended before the High Court that the learned Civil Court fell in error by allowing refund only to the extent of 50% in view Section 16 of the CFA, 1870. It was further contended that as per Section 21 of the LSA Act,1987 when a matter is referred to Lok Adalat under Section 20(1) of the said Act and a compromise or settlement is arrived at therein, the Court Fee paid in such a matter shall also be refunded in accordance with CFA, 1870. Still further it was argued that the said Act being a Central legislation, would override the State enactment.
3.2 The High Court’s observations can be summarized thus:-
(a) The CFA, 1870 is a pre-constitutional enactment which no longer applies to the State of Maharashtra after the enactment of the Bombay Court Fees Act, 19595[Hereinafter, BCFA, 1959.]. In reaching this conclusion, reliance was placed on a judgment of a co-ordinate bench in Pushpabai Shankerlal Sura v. The Official Liquidator, Sholapur Oil Mills Ltd. , 1968 SCC OnLine Bom 62.
(b) The use of CFA, 1870 in LSA, 1987 is a case of “legislation by incorporation”, the same analogy cannot be applied to the orders passed by courts on settlement of disputes. Decrees passed by courts on the basis of settlement cannot be equated to awards passed by Lok Adalat. Since the BCFA, 1959 would be applicable, no error can be found in the State issuing a notification under Section 43 (2) thereof.
3.3 Disposing of the writ petition, the Court made the following observations:
“16. While disposing of the writ petition, we deem it appropriate to recommend the State Government to issue necessary notification or to bring out necessary amendment incorporating provision in respect of refund of Court fees to the extent of 100% in respect of the matters which are disposed of by the Courts on adaptation of any of the modes prescribed under section 89 of the Code of Civil Procedure, 1908. Such a step would be in consonance with the directives issued by the Supreme Court in Salem Advocates Bar Association
