Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2026 Supreme(Online)(Del) 881

IN THE HIGH COURT OF DELHI AT NEW DELHI
Subramonium Prasad, J
Diwan Saheb Fashion Pvt Ltd – Appellant
Versus
Vijay Bhushan – Respondent
CS(OS) 328/2022

Advocates:
For the Appellants/Petitioners: Jai Sahai Endlaw, Sagarika Kaul
For the Respondents: Sanjeev Mahajan

A civil suit may be withdrawn under Order XXIII Rule 1(4) of the CPC upon mutual settlement, and the plaintiff is entitled to seek a refund of court fees in accordance with the amended provisions of the Court Fees Act.

Headnote:The case concerns an application for the withdrawal of a civil suit following a mutual settlement between the parties. The plaintiff sought withdrawal under O. XXIII R. 1(4) of the CPC after receiving full and final payment via demand drafts. The Court accepted the settlement and the statement of the authorized representative of the plaintiff. The main issue was the prayer for the withdrawal of the suit upon settlement and the subsequent claim for a refund of court fees. Regarding the refund, the Court noted the legislative amendment allowing for 100% refund of court fees in cases resolved through settlement and directed the plaintiff to file a separate, formal application to support this request. The Court allowed the withdrawal of the suit, closed all attendant proceedings, and cancelled the scheduled date of hearing.

Table of Content
1. parties may settle disputes out of court resulting in suit withdrawal. (Para 1 , 2 , 3 , 4)
2. courts may facilitate fee refunds post-settlement upon proper application. (Para 5 , 6 , 7)
3. formal disposal of a suit following a mutual settlement. (Para 8 , 9 , 10 , 11)

1. Though the present application has been styled as filed under Order XXIII Rule 3 of CPC, however, vide the present the application, the Plaintiff is seeking withdrawal of the Suit under Order XXIII Rule 1(4) of CPC on the ground of settlement arrived at between the parties.

2. It is stated by the learned Counsel appearing for the parties that the parties have mutually resolved their disputes.

3. Learned Counsel for the Defendants states that they have handed over 07 Demand Drafts to the Plaintiff for a total sum of Rs.3,50,00,000/- in terms of the settlement arrived at between the parties as full and final settlement. The details of the Demand Drafts, as proved by the Defendants, read as under:

S. No.	DD No.	Date	Drawn on	Amount (Rs.)
1.	023552	24.12.2025	HDFC Bank	43,75,000/-
2.	679124	07.01.2026	Punjab National Bank	43,75,000/-
3.	000729	07.01.2026	Axis Bank	87,50,000/-
4.	000059	07.01.2026	Bank of India	36,45,833/-
5.	000060	07.01.2026	Bank of India	29,16,667/-
6.	360144	07.01.2026	Union Bank	21,87,500/-
7.	100854	07.01.2026	Axis Bank	87,50,000/-
Total				3,50,00,000/-

4. Mr. Surinder Diwan, Authorized Representative of the Plaintiff, is present in Court and he states that a settlement has been arrived at between the parties. His statement has also been taken on record.

5. In view of the above, the learned Counsel for the Plaintiff states that the Suit may be permitted to be withdrawn.

6. Learned Counsel for the Plaintiff has also prayed for refund of Court Fees under Section 16-A of Court Fees Act, 1870 as applicable to Delhi. He states that the law as originally stood was that only 50% of the Court Fees was permitted to be refunded when the Suit was withdrawn on the basis of compromise/settlement. He states that the said provision was a subject matter of challenge in a writ petition being W.P.(C) 10235/2022 and after the said challenge, the State Legislature has brought an amendment permitting 100% refund of Court Fees.

7. The Plaintiff is directed to move a separate application seeking 100% refund of Court Fees along with a copy of the necessary amendment.

8. The Suit is disposed of as withdrawn, along with pending application(s), if any.

9. All other proceedings arising out of the present matter stand closed.

10. The application is disposed of.

11. The next date of hearing i.e., 04.02.2026, stands cancelled.

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2026 Supreme(Online)(Del) 881

IN THE HIGH COURT OF DELHI AT NEW DELHISubramonium Prasad, JDiwan Saheb Fashion Pvt Ltd – AppellantVersusVijay Bhushan – RespondentCS(OS) 328/2022

A civil suit may be withdrawn under Order XXIII Rule 1(4) of the CPC upon mutual settlement, and the plaintiff is entitled to seek a refund of court fees in accordance with the amended provisions of the Court Fees Act.

IN THE HIGH COURT OF DELHI AT NEW DELHI
Subramonium Prasad, J
Diwan Saheb Fashion Pvt Ltd – Appellant
Versus
Vijay Bhushan – Respondent
CS(OS) 328/2022