1. The conflict between Philomina Joseph vs. State of Kerala, 2009 (1) KLT 591 (DB) and Ramakrishnan K. vs. Venugopalan, 2013 (2) KLT 98 (DB) has led to this reference of the case to the Full Bench.

2. The suit for realisation of money filed by the Bank was decreed against which the principal debtor has filed the Regular First Appeal challenging the extent of the liability as well as the rate of interest. One-third fee was remitted at the time of preferment of the appeal and the balance fee was also paid in time under the Kerala Court Fees and Suits Valuation Act, 1959 (‘the Act’ for short). The dispute was later settled between the parties out of court and no compromise in terms of O.XXIII R.3 of the Code of Civil Procedure, 1908 (‘CPC’ for short) was however recorded. Nevertheless the appeal was dismissed as ‘not pressed’ in view of the submission on behalf of the appellant that the liability to the Bank has been fully discharged. It is thereafter that the appellant filed I.A. No. 918/2016 seeking refund of the total fee paid on the memorandum of Regular First Appeal relying on Section 69 of the Act. The Division Bench noticed that the dictum in Ramakrishnan’s case (supra) militated against the dictum in Philomina Joseph’s case (supra) as regards the entitlement for refund of fee. Two learned single Judges have also taken a contrary view in Peirce Leslie India Ltd. vs. Kunheerium, 1978 KLT 811 and Aravindaksha Prabhu vs. Shamsuddin, 2003 (1) KLT 644.

3. We heard Mr. C.P. Muhammed Nias, Advocate on behalf of the appellant, Mr. C. Ajlth Kumar, Advocate on behalf of the respondents as well as Mr. B. Jayasurya, Senior Government Pleader on the issue.

4. Section 69 of the Act is as follows:-

“69. Refund in cases of compromise or when suit is decided on the admission of parties:- When a suit or appeal is compromised or when a suit is decided solely on the admission of the parties without any investigation, one-half of the Court fee paid on the plaint or memorandum of appeal shall be ordered by the Court to be refunded to the parties by whom the same have been paid respectively:

Provided that no refund shall be ordered where only one-tenth of the amount of fee on plaint as required by Section 4A or one-third of the amount of fee on memorandum of appeal as required by Section 52 has been paid by the parties.”

Section 69 of the Act would apply only under the following two contingencies:-

(i) A suit or appeal should have been compromised without any investigation;

(ii) A suit should have been decided solely on the admission of the parties without any investigation.

The term ‘compromise’ has not been defined in the Act and necessarily we have to take recourse to O.XXIII R.3 of the C.P.C, to understand the import of its meaning in the context in which it is used. The compromise is an adjustment wholly or in part by a lawful agreement in writing whereby the defendant/appellant satisfies the plaintiff/ respondent in respect of the whole or part of the subject matter. The compromise should be proved to the satisfaction of the court whereupon the same would be recorded and a decree passed in accordance therewith. The amplitude of the power given to the court is so wide that the parties can even rope in matters which are not the subject matter of the suit in the compromise to be so recorded and decree passed. The proviso to O. XXIII R.3 of the C.P.C. empowers the court to decide the question as to whether an adjustment or satisfaction has been arrived at by compromise if the same is in dispute.

5. The court cannot take judicial notice of a compromise unless the terms of the agreement are put in writing and the same proved to its satisfaction before the same is recorded and a decree passed. Of course statement by the parties or the counsel duly signed by them can amount to a compromise under O.XXIII R.3 of the C.P.C. (See Pushpa Devi Bhagat vs. Rajinder Singh, AIR 2006 SC 2628. But a unilateral statement by one of them or a settlement arrived at