Parties settling their dispute before the Court or before any of the forums mentioned under Section 89 of the CPC are entitled to a refund of full court fees as per Section 16 of the Court Fees Act 1870.

SUBHASH B. ADI, J.

( 1 ) THE appellant is the first defendant and the respondent No. 1 is the plaintiff. The plaintiff had filed a suit for recovery of Rs. 8,11,582/ -. The suit was decreed by judgment and decree dated 12 /10/2004. When this matter came up for consideration before this Court, this Court after noticing the rival contentions, found that there was an element of possibility of settlement and suggested the terms of settlement to the parties. In the light of the suggestions made by this Court, the parties settled the matter out of full Court and reported the same.

( 2 ) IN the light of settlement of the matter, learned Counsel appearing for the appellant submitted that the appellant is entitled for the refund of full court fees. He referred to Section 16 of the Court Fees Act, 1870 (Central Act) and submitted that any settlement arrived at, in terms of Section 89 of the Code of Civil Procedure 1908, party is entitled for refund of full court fees under Section 16 of the Court Fees Act 1870.

( 3 ) IT is in this regard, we heard the learned Government Advocate and the Counsel appearing for the appellant and other Counsel appearing in the similar cases.

( 4 ) SECTION 89 was inserted by the (Amendment) Act 1999 inter alia providing for settlement of dispute outside the Court. This provision was inserted based on acceptance of Justice Malimath Committee report, wherein the said Committee had emphasized for providing a legal sanction to such machinery for resolution of disputes and resort thereto in order to reduce and control the inflow of commercial transaction in regular civil courts. Justice Malimath Committee was also of the view that, the resolution of dispute be made obligatory on the part of the court, to resolve for settlement of the disputes and the Committee agreeing with the Law Commission recommended to provide for settlement of disputes outside the court at any stage of the proceedings by means of judicial settlement, arbitration, conciliation, mediation or through Lok Adalat and it is only after the party fails to get the dispute settled through any one of the alternative dispute resolution method, the suit shall proceed further in the court in which it was filed. The object, for making it obligatory on the part of the Court to refer the matter to the alternate dispute resolution methods, is to provide early disposal of the disputes, avoiding long waiting for Justice for years and further avoiding judicial wrangles and multiplicity of appeals/revisions and also to reduce the burden on the judiciary of huge areas of cases pending at different levels of courts. The result of this recommendation, Section 89 was inserted in the Code of Civil Procedure.

( 5 ) INCONSONANCE with the provisions of Section 89 of CPC, the Parliament brought an amendment to the provisions of Court Fees Act 1870 by inserting Section 16, which reads as under:"refund of Court Fee. Where the Court refers the parties to the suit to any of the mode of settlement of dispute referred to in Section 89 of the Code of Civil Procedure, 1908, the plaintiff shall be entitled to a certificate from the Court authorizing him to receive back from the collector, the full amount of the fee paid in respect of such plaint. The object behind insertion of Section 16 to the Central Court Fees Act was to encourage the litigant to adopt the alternate dispute resolution method for early disposal of the dispute. "

( 6 ) IT is in this context, in matter referred to any of the methods specified under Section 89 of the CPC and if the dispute is resolved, the party is entitled for refund of full court fees as contemplated under Section 16 of the Court Fees Act. It is in this regard the appellant's Counsel had submitted that this dispute having been settled at the intervention of the Court by way of Judicial settlement, party is entitled for refund of full court fees. He also submitted that in case of settlement arrived at Lok Adalat, Section 21 also provides for

Click Here to Read the rest of this document