Andhra Pradesh High Court - Amravati
Gaddam Jithendra Kumar vs Kovvuri Srinivasa Reddy on 9 May, 2025
1
(RNT,J & DR.YLR,J
I.A.NO.1 OF 2025 IN/AND A.S. NO.472 OF 2024)
THE HONOURABLE SRI JUSTICE RAVI NATH TILHARI
AND
THE HONOURABLE DR JUSTICE Y. LAKSHMANA RAO
I.A.No.1 of 2025
In/and
FIRST APPEAL NO: 472/2024
ORDER :(per Hon'ble Sri Justice Ravi Nath Tilhari) Heard Sri Rosedar S.R.A., learned counsel for the petitioner /appellant.
I . Facts :-
2. Respondents 1 to 4/plaintiffs filed O.S. No. 78 of 2019 on the file of the III Additional District Judge, Nellore, against the 5th respondent (Defendant No.1) and the petitioner/appellant (Defendant No.2), seeking a preliminary decree directing payment of the suit amount of Rs.78,00,000/-
along with interest at 24% per annum from the date of the suit, and thereafter a final decree in terms of the preliminary decree. They also sought a personal decree in the event the sale proceeds of the schedule property were insufficient to satisfy the decretal amount.
3. After contesting the suit, a preliminary decree was passed on 08.04.2024, directing the 5th respondent to pay the suit amount with 2 (RNT,J & DR.YLR,J I.A.NO.1 OF 2025 IN/AND A.S. NO.472 OF 2024) interest at 12% per annum from the date of the suit till the date of decree, and thereafter at 6% per annum until the date of realization, on the principal amount of Rs.30,00,000/-, granting three months time for redemption.
4. Challenging the preliminary decree dated 08.01.2024, the present A.S.No.472 of 2024 has been filed by the petitioner/appellant.
5. On 04.11.2024, this Court granted interim stay in I.A. No. 1 of 2024, subject to the condition that the petitioner/appellant deposits the suit costs within a period of six (06) weeks, which was duly complied with, and a memo to that effect was also filed.
6. During the pendency of the appeal, the appellant/defendant No.2 and the respondents/plaintiffs resolved their dispute out of Court. On 21.10.2024, the petitioner paid an amount of Rs.56,00,000/- to the respondents/plaintiffs towards full and final settlement, and a Full Satisfaction Memo to that effect had been filed before the learned III Additional District Judge, Nellore, in I.A. No. 623 of 2024 in O.S. No. 78 of 2019, which was allowed, and the execution proceedings were terminated. II . I.A.No.1 of 2025 for refund of Court Fee :-
7. The petitioner/appellant filed I.A. No. 1 of 2025 in the present appeal, supported by an affidavit containing the aforesaid averments, with 3 (RNT,J & DR.YLR,J I.A.NO.1 OF 2025 IN/AND A.S. NO.472 OF 2024) a prayer for refund of the Court Fee amount of Rs.80,526/- paid in this appeal.
III . Submission of learned counsel for the appellant :-
8. Learned counsel for the appellant submitted that the dispute between the parties has been resolved out of Court and that the decree has been satisfied. The same has also been recorded by the learned Execution Court. In view of the full and final settlement, nothing survives for adjudication in the appeal, and the same may be dismissed as withdrawn.
9. Learned counsel for the appellant further prayed for a refund of the Court Fee. He placed reliance in the following judgments:
1. Polyprint Private Limited and Others V. Canara Bank and Another1
2. Dayaram V. Smt.Laxmi Agrawal2
3. High Court of Judicature at Madras, represented by its Registrar General V. M.C.Subramaniam and Others3
10. Learned counsel for the respondents/plaintiffs did not appear.1
1997 (4) ALD 281 (D.B) 2 2022 SCC On-line MP 6004 3 (2021) 3 SCC 560 4 (RNT,J & DR.YLR,J I.A.NO.1 OF 2025 IN/AND A.S. NO.472 OF 2024) IV . Submission of learned counsel for the appellant :-
11. The following points arise for our consideration and determination :
A. "Whether in view of the out of Court settlement, without reference to any of modes of Alternative Dispute Resolution under Section 89 CPC, and in view thereof, the appeal being withdrawn, the Court fee paid in this appeal deserves to be refunded ?
B. If the answer to Point A is, yes, to what amount of Court Fee ?"
V . Consideraton / Analysis :-
Point 'A':-
12. We have considered the aforesaid submissions advanced by the learned counsel for the appellant, and perused the material on record.
13. The Appeal Suit is dismissed as withdrawn, as the decree has been satisfied, as stated in the affidavit, and such satisfaction has been recorded by the Execution Court.
14. Insofar as the refund of Court Fee paid in the appeal is concerned, it is relevant to refer to the provisions of Sections 63 to 66-A of 5 (RNT,J & DR.YLR,J I.A.NO.1 OF 2025 IN/AND A.S. NO.472 OF 2024) the Andhra Pradesh/Telangana Court Fees and Suit Valuation Act, 1956 (hereinafter referred to as the 'Act'), which provide as follows:
"63. Refund in cases of rejection of plaint, etc., for delay. :-
(1) Where a plaint or memorandum of appeal is rejected on the ground of delay in its representation or where the fee paid on a plaint or memorandum of appeal is insufficient and the deficit fee is not paid within the time allowed by the Court, or the delay in payment of the deficit fee is not condoned, and the plaint or memorandum of appeal is consequently rejected, the Court may, in its discretion, direct the refund to the plaintiff or the appellant, of the fee, either in whole or in part, paid on the plaint or memorandum of appeal which was rejected.
(2) Where a memorandum of appeal is rejected on the ground that it was not presented within the time allowed by the law of limitation, one-half of the fee shall be refunded.
64. Refund in cases of remand.
(1) Where a plaint or memorandum of appeal rejected by the lower Court is ordered to be received, or where a suit is remanded in appeal for a fresh decision by the lower Court, the Court making the order or remanding the appeal may direct the refund to the appellant of the full amount of fee paid on the memorandum of appeal; and, it the remand is on second appeal, also on the memorandum of appeal in the first appellate Court and if the remand is in Letters Patent Appeal, also on the memorandum of second appeal and memorandum of appeal in the first appellate Court.
(2) Where an appeal is remanded in Second Appeal or Letters Patent Appeal for a fresh decision by the lower appellate Court, the High Court remanding the appeal may direct the refund to the appellant of the full amount of fee paid on the memorandum of Second Appeal if the remand is in Second Appeal, and of the full amount of fee paid on the Memorandum of Second Appeal and the 6 (RNT,J & DR.YLR,J I.A.NO.1 OF 2025 IN/AND A.S. NO.472 OF 2024) Memorandum of Letters Patent Appeal if the remand is in Letters Patent Appeal:
Provided that no refund shall be ordered if the remand was due to the fault of the party who would otherwise be entitled to a refund :
Provided further that, if the order of remand does not cover the whole of the subject- matter of the suit, the refund shall not extend to more than so much fee as would have been originally payable on that part of the subject-matter in respect whereof the suit has been remanded.
65. Refund in cases of review.
Where an application for a review of judgment is admitted on the ground of some mistake or error apparent on the face of the record and on rehearing, the Court reverses or modifies its former decision on that ground, it shall direct refund to the applicant of so much of the fee paid on the application as exceeds the fee payable on any other application to such Court under Article 11 (g) and (u) of Schedule II.
66. Refund of fee paid by mistake or inadvertence.
- The fee paid by mistake or inadvertence shall be ordered to be refunded.
66A. Refund of fee.
Where the Court refers the parties to the suit to any one of the mode of settlement of dispute referred to in section 89 of the Code of Civil Procedure, 1908 (Central Act No.5 of 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."
15. As per Section 63 (1) of the Act, where a plaint or memorandum of appeal is rejected on the ground of delay in its representation or where the fee paid on a plaint or memorandum of appeal 7 (RNT,J & DR.YLR,J I.A.NO.1 OF 2025 IN/AND A.S. NO.472 OF 2024) is insufficient and the deficit fee is not paid within the time allowed by the Court, or the delay in payment of the deficit fee is not condoned, and the plaint or memorandum of appeal is consequently rejected, the Court may, in its discretion, direct the refund to the plaintiff or the appellant, of the fee, either in whole or in part, paid on the plaint or memorandum of appeal which was rejected. As per Section 63 (2) of the Act, where a memorandum of appeal is rejected on the ground that it was not presented within the time allowed by the law of limitation, one-half of the fee shall be refunded.
16. Section 64 of the Act provides for refund in cases of remand. Section 65 of the Act provides for refund in cases of review. Section 66 of the Act provides for refund of fee paid by mistake or inadvertence.
17. Section 66-A of the Act provides for refund of fee, where the Court refers the parties to the suit to any one of the mode of settlement of dispute referred to in section 89 of the Code of Civil Procedure, 1908 (Central Act No.5 of 1908). In such a case, 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.
18. The present case is admittedly not one involving rejection of the memorandum of appeal on the ground of delay in its representation, or on account of insufficient or deficit court fee not being paid within the time 8 (RNT,J & DR.YLR,J I.A.NO.1 OF 2025 IN/AND A.S. NO.472 OF 2024) allowed, as contemplated under Section 63 of the Act. Furthermore, Section 64 of the Act, pertains to refund of court fee in cases of remand, and Section 65, relates to refund in cases of review, are also not attracted in the present case, it not being a case of remand or review. Similarly, it is not the case of the petitioner that the court fee was paid due to any mistake or inadvertence so as to attract Section 66 of the Act.
19. The refund of court fee under Section 66-A of the Act is permissible in cases where the Court refers the parties to any one of the modes of settlement of dispute referred to in Section 89 of the Code of Civil Procedure, 1908. In such cases, the plaintiff is 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 present case is also not one where the parties were referred to any of the modes of settlement of dispute under Section 89 CPC.
20. Learned counsel for the petitioner/appellant has not been able to point out any provision under the Act, apart from the aforementioned provisions, that permits refund of court fee in cases where the parties have entered into a compromise outside the Court and, as a result, the decree has been fully satisfied, either in part or in full, through such settlement. He, however, placed reliance in the cases (supra) to 9 (RNT,J & DR.YLR,J I.A.NO.1 OF 2025 IN/AND A.S. NO.472 OF 2024) contend that the Court Fee can be directed to be refunded also in a case of the present situation/circumstances.
21. In Polyprint Private Limited (supra), a Co-ordinate Bench of this Court, where a preliminary decree in a mortgage suit, was satisfied with the decree and a compromise was entered into between the parties, and the appeal was dismissed as withdrawn, on the request of the appellants, this Court permitted refund of the Court fee paid in the appeal, though the request for refund of the Court fee fell outside the provisions of Sections 63 to 66 of the Act, observing that there was power inherent in this law Court as a Court of Record, which was not only a Court of law but also a Court of Justice and Equity to see and weigh in each case as to whether the Court fee was liable to be refunded or not. Paragraph No.3 of Polyprint Private Limited (supra), reads as under :
"3..Having heard the arguments of the learned Counsel for the appellants, we also apply the principle incidental to the facts of the case as the request for refund of Court Fee falls outside the provisions of Sections 63 to 66 of the A.P. Court Fees and Suits Valuation Act. There is the power inherent in this law Court as a Court of Record, which is not only a Court of law but also a Court of Justice and Equity to see and weigh in each case as to whether the Court fee is liable to be refunded or not. Such inherent power has to be exercised having regard to the facts and circumstances of the case and only in the cases where there is equity in 10 (RNT,J & DR.YLR,J I.A.NO.1 OF 2025 IN/AND A.S. NO.472 OF 2024) favour of the appellant withdrawing the appeal. In the instant case, having regard to the facts and circumstances, we find the equity in favour of the appellants and as such the Court fee paid in this appeal shall be refunded to the appellants by the Registry. We may also make it clear that the refund of this Court fees will not be deprived of the fees payable to the learned Counsel appearing for the plaintiff- Bank. The plaintiff- bank has to pay his fees in accordance with their understanding and in accordance with the provisions of the A.P. Advocates' Fees Rules, 1990."
22. In Dayaram (supra), the Madhya Pradesh High Court opined that even if the matter was settled between the parties outside the Court without invoking the provisions of Section 89 CPC, the appellant while withdrawing his first appeal, was entitled to the refund of full Court fees as provided under Section 16 of the Court Fees Act,1870. (hereinafter referred as 'Court Fee Act').
23. Section 16 of the Court Fees Act, 1870, reads as under :
"16. Refund of fee [Section 16 repealed by Act 5 of 1908 and again inserted by Act 46 of 1999, Section 34.] Where the Court refers the parties to the suit to any one of the mode of settlement of dispute referred to in section 89 of the Code of Civil Procedure, 1908 (5 of 1908), the plaintiff shall be entitled to a certificate from the Court authorizing him to receive back from 11 (RNT,J & DR.YLR,J I.A.NO.1 OF 2025 IN/AND A.S. NO.472 OF 2024) the Collector, the full amount of the fee paid in respect of such plaint."
24. The Section 66-A of the Andhra Pradesh/Telangana Court Fees and Suit Valuation Act,1956, is the same as was Section 16 of the Court Fee Act,1870.
25. In Dayaram's case (supra), reliance was placed in the judgments of the Karnataka High Court in A.Sreeramaiah V. South Indian Bank Limited 4 and in Kamalamma V. Honnali Taluk Agricultural Produce Co-operative Marketing Society Limited 5. Both the judgments of the Karnataka High Court, were referring to the provisions of Section 89 of CPC and Section 16 of the Court Fee Act, wherein, it was observed that even if the parties come forward to settle their dispute before the Court itself, they should not be denied refund of Full Court Fees on the ground that they had not settled the dispute by any of the four methods provided under Section 89 of CPC. The object behind section 89 CPC was to encourage the parties to arrive at settlement and if that object was sought to be achieved by means of referring the matter to any of the four methods mentioned in section 89 CPC, then even the 4 ILR 2006 Kar 4032 5 AIR 2010 Kar 279 12 (RNT,J & DR.YLR,J I.A.NO.1 OF 2025 IN/AND A.S. NO.472 OF 2024) settlement arrived at the earliest stage before the Court would also be one of the method provided under Section 89, Sub-section (1).
26. In Dayaram's case (supra), the Madhya Pradesh High Court also, referred to the judgment of Punjab and Haryana High Court in Pradeep Sonawat V. Satish Prakash @ Satish Chandra 6 , wherein, it was observed that whether the compromise is with the persuasion of the Court or amongst the parties by themselves in terms of Section 89 CPC or otherwise, invocation of provision of Section 16 of the Court Fee Act should be made in all cases so that settlements by way of Alternative Dispute Resolution mechanism were encouraged.
27. In High Court of Judicature at Madras (supra), the Hon'ble Apex Court observed agreement with the approach taken by the High Courts in Kamalamma (supra), and the cases, which followed Kamalamma (supra) including Pradeep Sonawat (supra). It was observed that the purpose of Section 69-A of Tamilnadu Court Fees Act,1955 was to reward parties who had chosen to withdraw their litigations in favour of more conciliatory dispute settlement mechanisms, thus saving the time and resources of the Court, by enabling them to claim refund of the court fees deposited by them. Such refund of court fee, though it might not be connected to the substance of the dispute between the parties, was certainly an ancillary economic incentive for pushing them 6 2015 (2) Civil Court Cases 52 13 (RNT,J & DR.YLR,J I.A.NO.1 OF 2025 IN/AND A.S. NO.472 OF 2024) towards exploring alternative methods of dispute settlement. It was observed that the Karnataka High Court rightly observed in Kamalamma (supra), that the parties who had agreed to settle their disputes without requiring judicial intervention under Section 89 CPC were even more deserving of this benefit. Because, by choosing to resolve their claims themselves, they had saved the State of the logistical hassle of arranging for a third-party institution to settle the dispute. Though arbitration and mediation are certainly salutary dispute resolution mechanisms, the importance of private amicable negotiation between the parties could not be understated. The Hon'ble Apex Court held that there was no justifiable reason why Section 69-A of the Tamilnadu Court Fees Act,1955 should only incentivise the methods of out-of-court settlement stated in Section 89 CPC and afford step-brotherly treatment to other methods availed of by the parties.
28. It is apt to reproduce paragraph Nos.11 to 26 of High Court of Judicature at Madras (supra) as under :
"11. The gravamen of the petitioner's contentions is that Section 69-A of the 1955 Act only contemplates refund of court fees in those cases where the Court itself refers the parties to any of the alternative dispute settlement mechanisms listed in Section 89 CPC. That hence it does not apply to circumstances such as in the present case, where the parties, without any reference by the Court, privately agreed to settle their dispute outside the modes contemplated under Section 89 СРС.
This Court's analysis 14 (RNT,J & DR.YLR,J I.A.NO.1 OF 2025 IN/AND A.S. NO.472 OF 2024)
12. Having heard the petitioner and thoroughly considered the arguments advanced, we find ourselves unimpressed by the petitioner's contentions, for reasons outlined below.
13. The provisions of Section 89 CPC must be understood in the backdrop of the longstanding proliferation of litigation in the civil courts, which has placed undue burden on the judicial system, forcing speedy justice to become a casualty. As the Law Commission has observed in its 238th Report on Amendment of Section 89 of the Code of Civil Procedure, 1908 and Allied Provisions, Section 89 has now made it incumbent on civil courts to strive towards diverting civil disputes towards alternative dispute resolution processes, and encourage their settlement outside of court (Para 2.3). These observations make the object and purpose of Section 89 crystal clear to facilitate private settlements, and enable lightening of the overcrowded docket of the Indian judiciary. This purpose, being sacrosanct and imperative for the effecting of timely justice in Indian courts, also informs Section 69-A of the 1955 Act, which further encourages settlements by providing for refund of court fee. This overarching and beneficent object and purpose of the two provisions must, therefore, inform this Court's interpretation thereof.
14. Before expounding further on our interpretation of the aforesaid provisions, regard must be had to the following postulation of this Court's interpretive role in Directorate of Enforcement v. Deepak Mahajan ((1994) 3 SCC 440): (SCC pp. 453-54, paras 24-25) "24. ...Though the function of the courts is only to expound the law and not to legislate, nonetheless the legislature cannot be asked to sit to resolve the difficulties in the implementation of its intention and the spirit of the law. In such circumstances, it is the duty of the court to mould or creatively interpret the legislation by liberally interpreting the statute.15
(RNT,J & DR.YLR,J I.A.NO.1 OF 2025 IN/AND A.S. NO.472 OF 2024)
25. In Maxwell on Interpretation of Statutes, Tenth Edn. at p. 229, the following passage is found:
'Where the language of a statute, in its ordinary meaning and grammatical construction, leads to a manifest contradiction of the apparent purpose of the enactment, or to some inconvenience or absurdity, hardship or injustice, presumably not intended, a construction may be put upon it which modifies the meaning of the words, and even the structure of the sentence. Where the main object and intention of a statute are clear, it must not be reduced to a nullity by the draftsman's unskilfulness or ignorance of the law, except in a case of necessity, or the absolute intractability of the language used.' (emphasis supplied)
15. Therefore, it is well settled that the courts may, in order to avoid any difficulty or injustice resulting from inadvertent ambiguity in the language of a statute, mould the interpretation of the same so as to achieve the true purpose of the enactment. This may include expanding the scope of the relevant provisions to cover situations which are not strictly encapsulated in the language used therein
16. This principle of statutory interpretation has been affirmed more recently in the decision in Shailesh Dhairyawan v. Mohan Balkrishna Lullas (2016 3 SCC 619): (SCC p. 642, para 33) "33. .. Though the literal rule of interpretation, till some time ago, was treated as the "golden rule", it is now the doctrine of purposive interpretation which is predominant, particularly in those cases where literal interpretation 16 (RNT,J & DR.YLR,J I.A.NO.1 OF 2025 IN/AND A.S. NO.472 OF 2024) may not serve the purpose or may lead to absurdity. If it brings about an end which is at variance with the purpose of statute, that cannot be countenanced."
(emphasis supplied) This was followed in the subsequent decision of this Court in Anurag Mittal v. Shaily Mishra Mittal (2018 9 SCC 691).
17. In light of these established principles of statutory interpretation, we shall now proceed to advert to the specific provisions that are the subject of the present controversy. The narrow interpretation of Section 89 CPC and Section 69-A of the 1955 Act sought to be imposed by the petitioner would lead to an outcome wherein the parties who are referred to a mediation centre or other centres by the Court will be entitled to a full refund of their court fee; whilst the parties who similarly save the Court's time and resources by privately settling their dispute themselves will be deprived of the same benefit, simply because they did not require the Court's interference to seek a settlement. Such an interpretation, in our opinion, clearly leads to an absurd and unjust outcome, where two classes of parties who are equally facilitating the object and purpose of the aforesaid provisions are treated differentially, with one class being deprived of the benefit of Section 69-A of the 1955 Act. A literal or technical interpretation, in this background, would only lead to injustice and render the purpose of the provisions nugatory and thus, needs to be departed from, in favour of a purposive interpretation of the provisions.
18. It is pertinent to note that the view taken by the High Court in the impugned judgment¹ has been affirmed by the High Courts in other States as well. Reference may be had to the decision of the Karnataka High Court in Kamalamma v. Honnali Taluk Agricultural 17 (RNT,J & DR.YLR,J I.A.NO.1 OF 2025 IN/AND A.S. NO.472 OF 2024) Produce Coop. Mktg. Society Ltd.(2009 SCC OnLine kar 744). wherein it was held as follows: (SCC OnLine Kar para 6) "6. Whether the parties to a suit or appeal or any other proceeding get their dispute settled amicably through arbitration, or meditation or conciliation in the Lok Adalat, by invoking provisions of Section 89 CPC or they get the same settled between themselves without the intervention of any Arbitrator/Mediator/ Conciliators in Lok Adalat, etc., and without invoking the provision of Section 89 CPC, the fact remains that they get their dispute settled without the intervention of the Court. If they get their dispute settled by invoking Section 89 CPC, in that event the State may have to incur some expenditure but, if they get their dispute settled between themselves without the intervention of the Court or anyone else, such as arbitrator/mediator, etc., the State would not be incurring any expenditure. This being so, I am of the considered opinion that whether the parties to a litigation get their dispute settled by invoking Section 89 CPC or they get the same settled between themselves without invoking Section 89 CPC, the party paying court fees in respect thereof should be entitled to the refund of full court fees as provided under Section 16 of the Court Fees Act, 1870."
(emphasis supplied)
19. Section 16 of the Court Fees Act, 1870 is in pari materia with Section 69-A of the 1955 Act, and hence the abovestated principles are equally applicable to the present case.
18
(RNT,J & DR.YLR,J I.A.NO.1 OF 2025 IN/AND A.S. NO.472 OF 2024)
20. The holding in Kamalamma (2009 SCC OnLine Kar 744) has been followed by the Punjab and Haryana High Court in Pradeep Sonawat v. Satish Prakash (2015 SCCOnLine P&H 2235) and Pritam Singh v. Ashok Kumar ((2019) 1 Law Herald 721 (P&H)), which in turn were further affirmed in Raj Kumar v. Gainda DeVito (2009 SCC OnLine P&H 658).
21. The Delhi High Court has also taken a similar view in J.K. Forgings v. Essar Construction (India) Ltd. (2009 SCC OnLine Del 3134): (SCC OnLine Del paras 11-12, 14 & 17-19) "11. The laudable object sought to be achieved by inserting and amending these sections seems to be speedy disposal. The policy behind the statute is to reduce the number of cases by settlement. Section 89 CPC and Section 16 of the Court Fees Act are welcome step in that direction, as the number of cases has increased, it is the duty of court to encourage settlement. In present scenario of huge pendency of cases in the courts a purposive and progressive interpretation is the requirement of present hour. The intention of the Legislature is primarily to be gathered from the object and the words used in the material provisions. The statute must be interpreted in their plain grammatical meaning.
12. It is very clear that the legislative intent of Section 16 of the Court Fees Act was made broad enough to take cognizance of all situations in which parties arrive at a settlement irrespective of the stage of the proceedings. It is also obvious that the purpose of making this provision was in order to provide some sort of incentive to the party who has approached the court to resolve the dispute amicably and obtain a full refund of the court fees. Having regard to this position, the present application will have to be allowed.
14. This is not a case where parties to the suit after long drawn trial have come to the court for settlement. Had it been the case of long drawn trial non-refund of court fees could have been justified but in such like cases courts' endeavour should be to encourage the parties and court fees attached with the plaint should be refunded as an incentive to them.
19
(RNT,J & DR.YLR,J I.A.NO.1 OF 2025 IN/AND A.S. NO.472 OF 2024)
17. Settlement of dispute only through any of the mode prescribed under Section 89 CPC is not sine qua non of Section 89 CPC rather it prescribes few methods through which settlement can be reached, sine qua non for applicability of Section 89 is settlement between the parties outside the court without the intervention of the courts.
18. It is also not the requirement of the section that court must always refer the parties to Dispute Resolution Forum. If parties have arrived at out-of-court settlement it should be welcomed subject to principles of equity.
19. The Court Fees Act is a taxing statute and has to be construed strictly and benefit of any ambiguity if any has to go in favour of the party and not to the State."
22. The view taken in both Kamalamma (2009 SCC OnLine Kar 744) and J.K. Forgings(2009 SCC OnLine Del 3134) has been subsequently relied upon by the Delhi High Court in Inderjeet Kaur Raina v. Harvinder Kaur Anand (2018 SCC OnLine Del 6557).
23. We find ourselves in agreement with the approach taken by the High Courts in the decisions stated supra. The purpose of Section 69-A is to reward parties who have chosen to withdraw their litigations in favour of more conciliatory dispute settlement mechanisms, thus saving the time and resources of the Court, by enabling them to claim refund of the court fees deposited by them. Such refund of court fee, though it may not be connected to the substance of the dispute between the parties, is certainly an ancillary economic incentive for pushing them towards exploring alternative methods of dispute settlement. As the Karnataka High Court has rightly observed in Kamalamma (2009 SCC OnLine Kar 744), the parties who have agreed to settle their disputes without requiring judicial intervention under Section 89 CPC are even more deserving of this benefit. This is because by choosing to resolve their claims themselves, they have saved the State of the logistical hassle of arranging for a third-party institution to settle the dispute. Though 20 (RNT,J & DR.YLR,J I.A.NO.1 OF 2025 IN/AND A.S. NO.472 OF 2024) arbitration and mediation are certainly salutary dispute resolution mechanisms, we also find that the importance of private amicable negotiation between the parties cannot be understated. In our view, there is no justifiable reason why Section 69-A should only incentivise the methods of out-of-court settlement stated in Section 89 CPC and afford step-brotherly treatment to other methods availed of by the parties.
24. Admittedly, there may be situations wherein the parties have after a course of a long-drawn trial, or multiple frivolous litigations, approached the Court seeking refund of court fees in the guise of having settled their disputes. In such cases, the Court may, having regard to the previous conduct of the parties and the principles of equity, refuse to grant relief under the relevant rules pertaining to court fees. However, we do not find the present case as being of such nature.
25. Thus, even though a strict construction of the terms of Section 89 CPC and Section 69-A of the 1955 Act may not encompass such private negotiations and settlements between the parties, we emphasize that the participants in such settlements will be entitled to the same benefits as those who have been referred to explore alternate dispute settlement methods under Section 89 CPC. Indeed, we find it puzzling that the petitioner should be so vehemently opposed to granting such benefit. Though the Registry/State Government will be losing a one-time court fee in the short term, they will be saved the expense and opportunity cost of managing an endless cycle of litigation in the long term. It is therefore in their own interest to allow Respondent 1's claim.
26. Thus, in our view, the High Court was correct in holding that Section 89 CPC and Section 69-A of the 1955 Act be interpreted liberally. In view of this broad purposive construction, we affirm the High Court's conclusion, and hold that Section 89 CPC shall cover, and the benefit of Section 69-A of the 1955 Act shall also extend to all 21 (RNT,J & DR.YLR,J I.A.NO.1 OF 2025 IN/AND A.S. NO.472 OF 2024) methods of out-of-court dispute settlement between parties that the Court subsequently finds to have been legally arrived at. This would, thus, cover the present controversy, wherein a private settlement was arrived at, and a memo to withdraw the appeal was filed before the High Court. In such a case as well, the appellant i.e. Respondent 1 herein would be entitled to refund of court fee."
29. In High Court of Judicature at Madras (supra), thus, it has been laid down that the participants in private settlements and negotiations will be entitled to the same benefits of refund of Court Fee, as those who have been referred to explore alternative dispute settlement methods under Section 89 CPC.
30. The Hon'ble Apex Court, however, further observed that there may be situations, wherein the parties have after a course of a long-drawn trial, or multiple frivolous litigations, approached the Court seeking refund of court fees in the guise of having settled their disputes. In such cases, the Court may, having regard to the previous conduct of the parties and the principles of equity, refuse to grant relief under the relevant rules pertaining to court fees.
7
31. We may also refer to Jage Ram V. Ved Kaur . In the said case, the second appeal was decided in terms of the settlement by the High Court and not on merits. The appellant prayed for refund of Court 7 Special Leave to Appeal (c) No.723 of 2023 22 (RNT,J & DR.YLR,J I.A.NO.1 OF 2025 IN/AND A.S. NO.472 OF 2024) Fee paid by him in the trial Court as well as in the first Appellate Court and the second Appellate Court. The High Court rejected the prayer, by holding that no case for refund was made out. The Hon'ble Apex Court held that the refund of Court Fee was permissible only if the matter was referred to Arbitration, Conciliation, Judicial settlement, including through Lok Adalat or mediation for settlement and the case was decided in terms of such a settlement and not otherwise.
32. The judgment in Jage Ram (supra) is reproduced as under :-
"1. Heard learned counsel for the parties.
2. The second appeal was decided by the High Court in terms of the settlement, a signed copy of which was produced before it.
3. Since the appeal was decided in terms of the settlement and not on merits, the petitioner prayed to refund the court fees paid by him in the trial Court as well as in the First Appellate Court and Second Appellate Court.
4. In the second appeal, the petitioner had paid Rs.29,053/- (Rupees Twenty-Nine Thousand Fifty- Three only).
5. The High Court by the impugned order has rejected the prayer so made by the petitioner by holding that no ground for refund has been made out.
6. The refund of court fees is permissible only if the matter is referred to Arbitration, Conciliation, judicial settlement, including through Lok Adalat or mediation 23 (RNT,J & DR.YLR,J I.A.NO.1 OF 2025 IN/AND A.S. NO.472 OF 2024) for settlement and the case is decided in terms of such a settlement and not otherwise.
7. In the case at hand, the settlement in terms of which the second appeal was decided by the High Court is not on reference to any of the above authorities/for a rather it was an amicable settlement out of the court.
8. Accordingly, we are of the opinion that the petitioner is not entitled to refund of the court fees and the High Court has not committed any error or illegality in refusing such a prayer."
33. Jage Ram (supra) does not refer to High Court of Judicature at Madras (supra).
34. in Jage Ram (supra), there was a settlement out of court during the pendency of second appeal. It was not on a reference to any of the authorities under Section 89 CPC. It was an amicable settlement arrived at independently, but the second appeal was decided in terms of that an out-of-court settlement without reference to Section 89 CPC.
35. In High Court of Judicature at Madras (supra), there was an out of Court settlement independent of Section 89 CPC and in view thereof, the appeal was permitted to be withdrawn. The appeal was not decided in terms of the out of Court settlement. 24
(RNT,J & DR.YLR,J I.A.NO.1 OF 2025 IN/AND A.S. NO.472 OF 2024)
36. The present is not a case where the appeal is decided, based on an out of Court settlement. Instead, in view of the settlement, the appellant sought to withdraw the appeal, and permission for such withdrawal has been granted. Upon consideration of the aforesaid judgments, we are of the view that the judgment in the case of High Court of Judicature at Madras, V. M.C.Subramaniam and Others is fully applicable and attracted to the facts of the present case. Accordingly, by following the aforesaid judgment, we hold that the appellant is entitled for refund of Court Fee.
POINT 'B':-
37. The question now is as to what amount of Court Fee deserves to be refunded ?
38. We may refer, Sanjeev Kumar Harakchand Kankariya V. Union of India and Others8, on the point of refund of Court Fee, in which, the appellant had entered into agreement of sale. The agreement of sale could not be performed and as such, he preferred a Special Civil Suit before the Civil Court, praying for a direction of specific performance of the contract. The dispute was referred to mediation under Section 89 CPC and, was amicably resolved. The terms of the settlement were presented to the Court and the Civil Suit was disposed of in terms of 8 2024 SCC On-line SC 3811 25 (RNT,J & DR.YLR,J I.A.NO.1 OF 2025 IN/AND A.S. NO.472 OF 2024) the said compromise. A request for refund of Court fees was allowed only to the extent of 50%. Challenging which, and claiming full refund, it was contended that under Section 21 of the Legal Services Authority Act, 1987, Section 20(1) r/w 16 of the Court Fee Act, 1870, 100% of the Court Fee should have been refunded.
39. The question for consideration was as per paragraph No.5 of the judgment in Sanjeev Kumar (supra), which reads as under :
"5. The question presented for this Court's adjudication was, considering the submissions as afore-stated is whether in view of the inconsistency between the CFA, 1870 and the MCFA, 1959, if any, would the appellant be entitled to a complete refund of court fees per the former, since is a Central legislation? Allied thereto, would be the question of whether the Maharashtra State Legislature could have enacted the provision and brought out a notification giving refunds in ways contrary to and distinct from the manner and method provided in the Central Legislation?"
40. The Maharashtra Court Fee Act, 1959, provided for refund of Court Fee in certain circumstances under Section 43(1) and Section 43(2) provided for the notification, which notification dated 08.05.2013 was issued. There was no such provision like Section 16 of the Court Fees Act, in the Maharashtra Court Fee Act, 1959. Later on, in 2018, Section 16A had been introduced in Maharashtra Court Fee Act, 1959, identical to 26 (RNT,J & DR.YLR,J I.A.NO.1 OF 2025 IN/AND A.S. NO.472 OF 2024) Section 16 of the Court Fees Act,1870. The Hon'ble Apex Court concluded and held vide paragraph Nos. 21 to 24, which read as under :
"CONCLUSION
21. The inescapable conclusion per the above discussion, holding that Entry 11A List III cannot govern the refund of court fees when matter is settled by methods of alternate dispute resolution, in the face of Entry 3 List II simply by the use of the words "administration of justice" in the former and, that reference to CFA, 1870 in respect of refund of court fees when the matter is settled by way of an Award of Lok Adalat does not mean that the same shall be extended to the settlement of dispute by mediation for the simple reason that Lok Adalat and mediation are two distinct methods and cannot be equated, we hold that this appeal lacks merit and is liable to be dismissed. Ordered accordingly.
22. As extracted supra, the High Court in the impugned judgment had made a suggestion to the State legislature that the differences in the court fees in Lok Adalat, vis-à-vis, the forms of ADR should be done away with the view to promote the adaptation of such methods of dispute resolution among the public. It has been brought to our attention that the State legislature has indeed carried out such an amendment to the MCFA, 1959 and Section 16A has been introduced therein by way of Maharashtra Act No. of 2018, the relevant extract of which reads under:
MAHARASHTRA ACT No. X OF 2018.
(First published, after having received the assent of the Governor in the "Maharashtra Government Gazette", on the 16th January 2018.) An Act further to amend the Maharashtra Court-fees Act.27
(RNT,J & DR.YLR,J I.A.NO.1 OF 2025 IN/AND A.S. NO.472 OF 2024) WHEREAS it is expedient further to amend the Maharashtra Court- fees Act, for the purposes hereinafter appearing; it is hereby enacted in the Sixty-eighth Year of the Republic of India as follows:-
1.... 2. After section 16 of the Maharashtra Court-fees Act (hereinafter referred to as "principal Act"), the following section shall be inserted, namely:-
"16A. Where the court refers the parties to the suit to any one of the modes of settlement of dispute referred to in section 89 of the Civil Procedure Code, 1908 and suit is disposed of by the court by adaptation of any of the modes prescribed under the said section, 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.".
23. The effect of the above being that for the time when the amendment to the MCFA, 1959 granting partial or complete refund, as the case may be, in accordance with Section 43 as amended, the persons whose matters were settled by way of ADR would not be entitled to 100% refund. Any matter settled under the processes mentioned in Section 89 CPC after the coming into force of the above- extracted amendment, such parties shall receive refund of court fees in its entirety.
24. The total amount of court fees paid by the appellant, in respect of the refund of which the matter has travelled up to this Court was approximately Rs. 5 lakhs. Should we, in the facts and circumstances of this case grant, in exercise of extraordinary jurisdiction under Article 142 of the Constitution of India, refund of the said amount is a question we have asked ourselves. Considering the fact that the original dispute was settled amicably and that the amount of court fees involved is 28 (RNT,J & DR.YLR,J I.A.NO.1 OF 2025 IN/AND A.S. NO.472 OF 2024) not excessive, in the peculiar facts of this case, for it not to be a binding precedent, we are of the view that the same can be refunded to him. Ordered accordingly. Pending applications, if any, shall stand disposed of."
41. In Sanjeev Kumar Harakchand Kankariya (supra), the Hon'ble Apex Court held that as per the Maharashtra Court Fee Act, 1959 (unamended), the persons whose matters were settled by way of Alternative Dispute Resolution would not be entitled 100% refund. Any matter settled under the processes mentioned in Section 89 CPC after coming into force of amendment i.e., Section 16 A in the Maharashtra Court Fee Act, 1959, such parties shall receive refund of Court Fees in its entirety. The Hon'ble Apex Court through granted refund of entire Court fee, but observing that was done in the peculiar facts of that case, for not being a binding precedent, and in the exercise of jurisdiction under Article 142 of the Constitution of India.
42. The out-of-court settlement, in our view, was not arrived at the earliest stage, nor was it affected by taking recourse to Section 89 of the CPC. Therefore, Section 66-A of the Act, which provides for a refund of the full amount of Court Fee upon certification by the Court, is not applicable in the present case with respect to the refund of Full Court fee as sought.
29
(RNT,J & DR.YLR,J I.A.NO.1 OF 2025 IN/AND A.S. NO.472 OF 2024)
43. The appellant filed the present appeal, which was listed and heard on multiple occasions. On 04.11.2024, an interim order was granted, subject to the condition of depositing the suit costs. Furthermore, under Section 63 of the Act, in cases where the memorandum of appeal is rejected on the ground of delay and the delay is not condoned, the refund is permissible only to the extent of 50% under sub-section (2).
44. Although Section 63 is not attracted, considering the legislative intent behind the aforesaid provisions, we are of the opinion that directing a refund of 100% of the Court Fee would not be appropriate in the present circumstances. Accordingly, the appellant is not entitled to a 100% refund of the Court Fee. We allow a refund of 50% of the Court Fee deposited.
VI . Conclusion :-
45. Our conclusions on the points framed are as under :-
(i) On Point 'A', we hold that the appellant is entitled for refund of Court Fee.
(ii) On Point 'B', we hold that 50% of the Court Fee paid in this appeal shall be refunded.30
(RNT,J & DR.YLR,J I.A.NO.1 OF 2025 IN/AND A.S. NO.472 OF 2024) VII . Result :-
46. IN THE RESULT,
i) The Appeal Suit is dismissed as withdrawn ;
ii) I.A.No.1 of 2025 is partly allowed for the refund of 50% of Court Fee paid in this appeal ;
iii) The Court Fee shall be paid to the appellant in his Bank Account, the particulars of which shall be furnished to the Registrar (Judicial) of this Court ;
iv) The Registrar (Judicial), High Court of Andhra Pradesh, shall take necessary steps.
No order as to costs.
As a sequel thereto, miscellaneous petitions, if any pending, shall also stand closed.
_________________________ RAVI NATH TILHARI,J ________________________ DR. Y. LAKSHMANA RAO,J Date :09.05.2025.
Note: L.R. copy be marked B/o.
RPD.
31
(RNT,J & DR.YLR,J I.A.NO.1 OF 2025 IN/AND A.S. NO.472 OF 2024) 296 THE HONOURABLE SRI JUSTICE RAVI NATH TILHARI AND THE HONOURABLE DR JUSTICE Y. LAKSHMANA RAO I.A.No.1 of 2025 In/and FIRST APPEAL NO: 472/2024 Date : 09 .05.2025.
Note: L.R. copy be marked B/o.
RPD.
32
(RNT,J & DR.YLR,J I.A.NO.1 OF 2025 IN/AND A.S. NO.472 OF 2024) * THE HONOURABLE SRI JUSTICE RAVI NATH TILHARI * THE HONOURABLE DR JUSTICE Y. LAKSHMANA RAO + I.A.No.1 of 2025 In/and FIRST APPEAL NO: 472/2024 % 09.05.2025 # Gaddam Jithendra Kumar ......Appellant/Defendant No.2 And:
$ Kovvuri Srinivasa Reddy and Others ....Respondents.
!Counsel for the Appellant : Sri Rosedar S.R.A., ^Counsel for the respondents : --- <Gist: >Head Note: ? Cases referred: 1. 1997 (4) ALD 281 (D.B) 2. 2022 SCC On-line MP 6004 3. (2021) 3 SCC 560 4. ILR 2006 Kar 4032 5. AIR 2010 Kar 279 6. 2015 (2) Civil Court Cases 52
7. Special Leave to Appeal (c) No.723 of 2023
8. 2024 SCC On-Line SC 3811 33 (RNT,J & DR.YLR,J I.A.NO.1 OF 2025 IN/AND A.S. NO.472 OF 2024) HIGH COURT OF ANDHRA PRADESH AT AMARAVATI **** I.A.No.1 of 2025 In/and FIRST APPEAL NO: 472/2024 DATE OF JUDGMENT PRONOUNCED: 09.05.2025 SUBMITTED FOR APPROVAL:
THE HON'BLE SRI JUSTICE RAVI NATH TILHARI & THE HONOURABLE DR JUSTICE Y. LAKSHMANA RAO
1. Whether Reporters of Local newspapers Yes/No may be allowed to see the Judgments?
2. Whether the copies of judgment may be Yes/No marked to Law Reporters/Journals
3. Whether Your Lordships wish to see the fair Yes/No copy of the Judgment?
____________________ RAVI NATH TILHARI,J ________________________ DR. Y. LAKSHMANA RAO,J