Consider Amending Provision To Allow 100 Percent Court Fees Refund If Suit Is Settled By ADR:Karnataka HC [Read Judgment]

Karnataka High Court has recommended to the State Government to consider amending a section in the State Court Fees Act, providing for 100% refund of court fees in case there is a settlement in a suit by taking recourse to Arbitration, Conciliation and Mediation.

A division bench of Chief Justice Abhay Oka and Justice Mohammad Nawaz while partly allowing a petition filed by advocate K.S. Periyaswamy said "In the case of settlement of suits culminating into an

Award made by the Lok Adalat as provided in Sections 20 and 21 of the National Legal Services Act, 1987, Section 16 of the Central Court Fees Act, 1870, will apply and refund of 100% of the court fees paid on the plaint or counterclaim, as the case may be, shall be made available, notwithstanding sub-section (1) of Section 66 of the Karnataka Court Fees and Suits Valuation Act, 1958."

As per the state act if the suits is settled under the three modes other than Lok Adalat, 75 percent court fees paid is refunded.

The petitioners argued that "Several other States have a provision for grant of 100% refund of the court fees in case of such settlement. He also

invited our attention to the observations made in paragraph 63 of a well known decision rendered by the Apex Court in the case of Salem Advocates Bar Association, Tamil Nadu .v. Union Of India. Also that the Court Fees Act, 1870 (for short, 'the Central Court Fees Act') provides for 100% refund of the court fees paid on a suit which is settled by one of the four modes of settlement of dispute."

The state opposed the plea arguing "The learned Principal Government Advocate submitted that while exercising power under Article 226 of the Constitution of India, a writ Court cannot issue a writ of mandamus directing the Legislature to amend the legislation in a particular manner. He would, therefore, submit that the relief as prayed for cannot be granted in writ jurisdiction."

Bench observed:

In the case of Salem Bar Association (supra), the Apex Court has recommended to the State Governments to amend the local laws and

incorporate the provision which is pari materia with Section 16 of the Central Court Fees Act. We must note here that considering the very object of

incorporating sub-section (1) of Section 89 of the said Code, the State Government will have to favourably consider incorporating a provision in the said Act of 1958, which is pari materia with Section 16 of the Central Court Fees Act.

But the learned Principal Government Advocate is right in submitting that a writ Court cannot issue a mandamus directing the Legislature to amend a particular enactment in a particular manner.

It said in its order :

"We are sure that the State Government will

consider the recommendation made by the Apex Court in the light of the fact that if 100% refund of is provided, it will encourage the litigants to take recourse to one of the modes of alternative disputes redressal provided under sub-section (1) of Section 89 of the said Code." 

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