Is Plaintiff Entitled To Complete Refund Of Court Fees Where Dispute Settled Privately Without ADR Mechanism? Delhi High Court To Decide

The Delhi High Court is set to decide as to whether a plaintiff in a civil suit would be entitled to complete refund of court fees or only to half of it, where the dispute is settled with the defendant privately, without intervention of any ADR mechanism.

Justice C Hari Shankar referred the question to a division bench, observing that the issue may have to be decided in the light of Sections 16 and Section 16A of the Court Fees Act, as well as different judgments of the Supreme Court and division benches on the issue.

“As there are two Division Benches and the judgment of the Supreme Court to be considered, I am of the view that this issue would have to be resolved at least by a Division Bench of this Court,” the court said.

Justice Shankar said that though the Supreme Court in High Court of Judicature at Madras v. M.C. Subramaniam ruled on the private settlement between the parties, it was yet to be considered whether the said decision can apply in Delhi, in the face of a separate statutory dispensation for private settlement contained in Section 16A of the Court Fees Act, applicable exclusively to the national capital.

The court also noted the opposite views taken by two division benches on the subject, in Nutan Batra case and Ajay Mahajan case.

The Nutan Batra case held that a plaintiff is entitled to refund of full court fees only where the settlement is via ADR (under Section 16), and is entitled only to refund of half the court fees if the settlement is private between the parties (under Section 16A).

On the other hand, Ajay Mahajan case held that where there is private settlement without ADR intervention, the plaintiff was entitled to refund of the entire court fees paid under Section 16.

“Accordingly, I respectfully refer, to the Division Bench, for decision, the question of whether, if plaintiff and the defendant settle the dispute between themselves privately, without intervention of any ADR mechanism, the plaintiff would be entitled to complete refund of court fees or would be entitled only to refund of half the court fees paid,” the court said.

The bench was dealing with a suit filed by V Guard Industries Limited against Mahavir Home Appliances where the dispute between them was amicably resolved and settled.

The court decreed the suit in terms of the settlement at which the parties had arrived and said that the parties shall remain bound by the terms of settlement.

Justice Shankar said that so far as Delhi is concerned, there are two separate statutory dispensations on refund of court fees in view of settlement between parties. 

The court said that while Section 16 of the Court Fees Act provides for refund of complete court fees where the dispute is settled via ADR or judicial settlement, Section 16A of the enactment provides for refund of half the court fees where the dispute is settled by private agreement between the parties without the intervention of ADR.

Title: V GUARD INDUSTRIES LTD v. MS MAHAVIR HOME APPLIANCES AND ANR. & ANR.

Citation: 2023 LiveLaw (Del) 1316

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