Madras High Court
Ranganathan vs In The Court Of District Judge on 11 October, 2007
Author: V.Ramasubramanian
Bench: V.Ramasubramanian
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED : 11/10/2007 CORAM: THE HONOURABLE MR.JUSTICE V.RAMASUBRAMANIAN W.P.(MD)No.8106 of 2007 and M.P.(MD).No.1 of 2007 1.Ranganathan 2.Mariyayee .... Petitioners Vs. In the Court of District Judge, Trichirapalli, Represented by its Sherishthar .... Respondent PRAYER Writ Petition filed under Article 226 of the Constitution of India, praying for the issuance of a Writ of Mandamus directing the respondent to refund the balance Court fee paid by the petitioners in O.S.No.227 of 2004 on the file of District Court, Trichy. !For Petitioner ... Mr.G.R.Swaminathan ^For Respondent ... Mr.Pala.Ramasamy, Spl.G.P. :ORDER
The petitioners filed a civil suit in O.S.No.227 of 2004 on the file of the Sub Court, Tiruchirappalli for specific performance of an agreement of sale and in the alternative for recovery of money. The suit was referred to Lok Adalat, where it ended in a compromise on 03.09.2006. In terms of the compromise, the petitioners received a sum of Rs.11,62,500/-. The Lok Adalat ordered the refund of Court fees in terms of Section 21 of the Legal Services Authorities Act, 1987.
2.Therefore, the petitioners filed necessary application before the Trial Court for refund of the full Court fee. But the Civil Court ordered refund of only half the Court fee. Therefore, the petitioners have come up with the present writ petition, seeking a direction for refund of the balance Court fee.
3.Heard Mr.G.R.Swaminathan, learned counsel for the petitioners and Mr.Pala.Ramasamy, learned Special Government Pleader for the respondent.
4.The question that arises for consideration in this writ petition is as to whether a person whose case is settled before the Lok Adalat, is entitled to refund of half the Court fee paid or the full Court fee paid in the suit or other proceeding?
5.The right to refund of the Court fee, in respect of a dispute settled before the Lok Adalat, emanates from Section 21 of the Legal Services Authorities Act, 1987. Section 21 of the Legal Services Authorities Act, 1987 reads as follows:
"21.Award of Lok Adalat.- (1)Every award of the Lok Adalat shall be deemed to be a decree of a Civil Court or, as the case may be, an order of any other Court and where a compromise or settlement has been arrived at, by a Lok Adalat in a case referred to it under sub-section (1) of section 20, the Court-fee paid in such case shall be refunded in the manner provided under the Court-Fee Act, 1870 (7 of 1870) (2)Every award made by a Lok Adalat shall be final and binding on all the parties to the dispute, and no appeal shall lie to any Court against the award."
6.A plain reading of the above provision shows that a legal fiction is created by treating the award of the Lok Adalat as a decree of the Civil Court. Once a decree is passed on compromise, no Court fee is refundable (under normal circumstances) either under The Court Fees Act, 1870 (Central Act VII of 1870) (before its Amendment by Act 46 of 1999) or under The Tamil Nadu Court-Fees and Suits Valuation Act, 1955. But in order to encourage amicable settlement of disputes through alternative dispute resolution (ADR) mechanism, in the wake of the increase in the volume of adversarial litigation, Section 21 of the Legal Services Authorities Act provides a bait for the litigants in the form of refund of Court-Fees.
7.But while doing so, Section 21 enables the refund of Court Fees "in the manner provided under the Court Fees Act, 1870". But The Court Fees Act, 1870, was repealed under Section 87(1) of the Tamil Nadu Court Fees and Suits Valuation Act, 1955 in its application to the State of Tamil Nadu. Therefore, the words "in the manner provided under the Court Fees Act, 1870" appearing in Section 21 of the Legal Services Authorities Act, 1987 have no meaning in their application to the State of Tamil Nadu, on a plain reading of the provision. Hence, it is to be seen if the provisions of Tamil Nadu Court Fees and Suits Valuation Act, 1955, could be read into Section 21(1) of the Legal Services Authorities Act, 1987, to make it meaningful, in so far as the State of Tamil Nadu is concerned.
8.Section 2(2) of the Legal Services Authorities Act, 1987, appears to have taken note of the above contingency, namely, that the provisions of the Court Fees Act, 1870 have no application to several States, which have their own enactments relating to Court Fees. Section 2(2) reads as follows:-
"(2)Any reference in this Act to any other enactment or any provision thereof shall, in relation to an area in which such enactment or provision is not in force, be construed as a reference to the corresponding law or the relevant provision of the corresponding law, if any, in force in that area."
Therefore, it is clear that the words "The Court Fees Act, 1870" appearing in Section 21(1) of the Legal Services Authorities Act, 1987 have to be understood to mean "The Tamil Nadu Court Fees and Suits Valuation Act, 1955" in so far as the State of Tamil Nadu is concerned. If so understood, the next question that arises for consideration is as to what is the quantum of refund permissible and what are the circumstances under which refund is permissible?
9.Chapter VII of the Tamil Nadu Act contains provisions for "Refunds and Remissions" under Sections 66 to 73. Section 66 deals with Refund in cases of rejection of a plaint or memorandum of appeal in certain cases. Section 67 deals with Refund in cases of remand. Section 68 deals with Refund in cases where an earlier decision is reversed or modified on review. Section 70 to 73 deal with situations about which we are not concerned for the present.
10.However, Section 69 deals with Refund in cases where a suit is settled out of Court. Section 69 of the Tamil Nadu Court Fees and Suits Valuation Act, 1955 reads as follows:
"69.Refund on settlement before hearing.- Whenever any suit is dismissed as settled out of Court before any evidence has been recorded on the merits of the claim, half the amount of all fees paid in respect of the claim or claims in the suit shall be ordered by the Court to be refunded to the parties by whom the same have been respectively paid.
Explanation.- The expression 'merits of the claim' shall have the meaning assigned to it in section 12."
Therefore, Section 69 of the Tamil Nadu Act appears to be the only provision which could probably be invoked in a situation contemplated under Section 21(1) of the Legal Services Authorities Act, 1987. But a reading of Section 69 of the Tamil Nadu Act shows that the refund is limited only to half the amount of all the fees paid in respect of the claim in the suit. Even the eligibility for refund of half the Court fee is subject to two preconditions namely -
(a) that the suit is settled out of Court; and
(b) that such settlement takes place before any evidence has been recorded on the merits of the claim.
Therefore, under normal circumstances, refund of half the Court fee cannot be ordered unless the above two preconditions are satisfied.
11.In view of the preconditions laid down under Section 69 of the Tamil Nadu Act, for the refund of even half the Court fee, a settlement reached before the Lok Adalat would not, per se come within the purview of Section 69 of the Tamil Nadu Act. This is on account of the fact that by virtue of Section 21(1) of the Legal Services Authorities Act, 1987, any settlement reached before the Lok Adalat resulting in an award passed by the Lok Adalat, is declared to be a decree of a Civil Court. Therefore, such a "compromise decree" cannot be equated to the "dismissal of a suit settled out of Court", in terms of Section 69 of the Tamil Nadu Court Fees and Suits Valuation Act. But the issue does not rest there.
12.Section 25 of the Legal Services Authorities Act declares that it shall have overriding effect. Section 25 of the Legal Services Authorities Act, 1987 reads as follows:
"25.Act to have overriding effect.- The provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in any instrument having effect by virtue of any law other than this Act."
13.Therefore, the next question that arises is as to whether Section 69 of the Tamil Nadu Act, can really hold good in the light of Section 21(1) read with Section 25 of the Legal Services Authorities Act. Section 69 of the Tamil Nadu Court Fees Act and Section 21(1) of the Legal Services Authorities Act, 1987 present two conflicting positions, namely, (1) a person, whose case is settled before the Lok Adalat resulting in a compromise decree, is dis-entitled to the refund of Court fee on account of the non fulfilment of the two preconditions laid down under Section 69 of the Tamil Nadu Act; but (2) irrespective of the compromise decree passed by Lok Adalat and irrespective of whether such compromise was reached before any evidence has been recorded or not, such a person would be entitled to refund of Court fees, in the light of Section 21(1) and Section 25 of the Legal Services Authorities Act, de hors the preconditions laid down in Section 69 of the Tamil Nadu Act.
14.In order to resolve this conflict, it is necessary to look into the provisions of the Central Act as well as various State Acts relating to refund of Court fees and also trace the history of the Court Fees Act, 1870 (Central Act).
15.The Central Act, namely The Court Fees Act, 1870, originally provided for refund of Court fees only under Sections 13, 14 and 15. While Section 13 deals with refund of Court fee paid on an appeal or plaint rejected by the lower Court or remanded by an Appellate Court, Section 14 deals with refund of fee on application for review. Section 15 deals with refund arising out of the reversal or modification of an earlier decision on review.
16.Section 16 of The Court Fees Act, 1870, as it originally stood, dealt with the question of additional fee, where the respondent took objection to the unappealed part of the decree. In other words, Section 16, in its origin, did not deal with refund of Court fee at all. But the said Section was repealed by the Code of Civil Procedure, 1908 (5 of 1908). After 90 years of remaining out of the statute books and after 12 years of the enactment of the Legal Services Authorities Act, 1987, Section 16 was inserted by Act 46 of 1999 (C.P.C. Amendment), with a view to pave the way for refund of full Court fees if a dispute is referred to any one of the modes of settlement of disputes, referred to in Section 89 C.P.C. Section 16 of The Court Fees Act, 1870, inserted under Act 46 of 1999 reads as follows:
"16.Refund of Fee.- 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 Code of Civil Procedure, 1908 (5 of 1908), the plaintiff shall be entitled to a certificate from the Court authorising him to receive back from the Collector, the full amount of the fee paid in respect of such plaint."
Therefore, the question of refund of Court fees in respect of a dispute settled through arbitration, conciliation, judicial settlement through Lok Adalat or Mediation under the Central Act, namely The Court Fees Act, 1870, arose for the first time, only after the insertion of Section 16, under the amendment to The Court Fees Act, 1870, under Act 46 of 1999 (C.P.C. Amendment).
17.Despite the fact that Section 16 of The Court Fees Act, 1870 was inserted only under Act 46 of 1999, the entitlement to refund of Court Fees was introduced under Section 21(1) of the Legal Services Authorities Act, 1987 under Act 59 of 1994, with effect from 29.10.1994. In other words, the amendment brought into Section 21(1) of the Legal Services Authorities Act with effect from 29.10.1994 enabling refund of Court fees in the manner provided under The Court Fees Act, 1870, was made at a time when there was no provision for refund of Court Fees under Section 16 of The Court Fees Act, 1870. It was only after about 5 years of the introduction of Section 21(1) of the Legal Services Authorities Act, 1987 that The Court Fees Act, 1870 was amended under Act 46 of 1999, to insert a provision under Section 16 for refund of Court fees.
18.Therefore, the words "the Court fee paid in such case shall be refunded in the manner provided under the Court Fees Act, 1870" appearing in Section 21(1) of the Legal Services Authorities Act, 1987, cannot be construed as making any reference to Section 16 of the Court Fees Act, 1870, since Section 16 was not there in the Court Fees Act, 1870, when Section 21(1) of the Legal Services Authorities Act, 1987 was amended in 1994.
19.Coming to the issue of refund of Court fees under various State enactments, it is seen that the Andra Pradesh Court Fees and Suits Valuation Act, 1956 contains provisions for refund under Sections 63 to 66 which are analogous to Sections 66 to 68 and Section 70 of the Tamil Nadu Act. There is no provision under the Andra Pradesh Act which is analogous to Section 69 of the Tamil Nadu Act.
20.Section 43 of the Bombay Court Fees Act is more beneficial than Section 69 of the Tamil Nadu Act, since it enables refund of half the Court fees, even if the matter is settled by agreement of parties but before any evidence is recorded.
21.Sections 63 to 65 of the Karnataka Court Fees and Suits Valuation Act, 1958 are similar to Sections 66 to 68 of the Tamil Nadu Act and Section 66 of the Karnataka Act is similar to Section 69 of the Tamil Nadu Act. But Section 66 of the Karnataka Act provides for refund of half the Court fee not only when the suit is dismissed as settled out of Court before any evidence is recorded, but also when a suit is compromised ending in a compromise decree before any evidence is recorded and when any appeal is disposed of before the commencement of hearing of such appeal.
22.Sections 66 to 68 of the Kerala Court Fees and Suits Valuation Act, 1959 are similar to Sections 66 to 68 of the Tamil Nadu Act. Section 69 of the Kerala Act which enables refund of half the Court fee, allows such refund (i) when a suit or appeal is compromised; or (ii) when a suit is decided solely on the admission of parties without any investigation.
23.The Rajasthan Court Fees and Suits Valuation Act, 1961 contains provisions for refund under Sections 61 to 63 only in cases of (i) rejection of plaint, etc. (ii)remand and (iii) review. There is no provision for refund upon settlement of a dispute, under the Rajasthan Act. The West Bengal Court Fees Act, 1970 provides for refund of fee only under certain contingencies, stipulated under Sections 18 to 20. But they cover only cases of the remand and review and not cases of settlement.
24.From an overview of the provisions of the various State Enactments, it is clear that some of them provide for refund of half the Court fee when a dispute is settled out of Court or through Court and some of them do not provide for any refund on settlements at all. In any case, there is no State Enactment providing for refund of full Court fee upon the settlement of a dispute.
25.Thus a complex situation arises on account of the conflict between the Central enactment and State enactment relating to Court Fees. The anomalies that have arisen are:
(a)Section 21(1) of the Legal Services Authorities Act, 1987 provides for refund of the Court fee paid in the manner prescribed under the Court Fees Act, 1870. But on the date on which Section 21(1) of the Legal Services Authorities Act was amended to provide for the refund, (namely in the year 1994), the Court Fees Act, 1870 (Central Act) did not contain Section 16 providing for refund of full Court fees when a case is referred under Section 89 C.P.C. to any one of the modes of settlement.
(b)Section 16 of the Court Fees Act, 1870 which provides for refund of full Court fee was inserted only in 1999 (under Act 46 of 1999), 5 years after the introduction of Section 21(1) of the Legal Services Authorities Act.
(c)By itself, Section 16 of the Court Fees Act, 1870 has created an anomaly by providing for refund of full Court fees even if a matter is just referred to any one of the modes of settlement namely, Arbitration, Judicial Settlement, Lok Adalat or Mediation. It means that even before a settlement is reached, the entitlement to refund of Court fees would arise.
(d)None of the State enactments relating to Court fees provide for refund of full Court fees on settlement, though some of the State enactments provide for refund of half the Court fees.
26.As a matter of fact, the above position was taken note of by the Supreme Court in Salem Advocate Bar Association V. Union of India ((2005) 6 SCC
344), wherein the Supreme Court held in para 63 as follows:
"63.Regarding refund of the court fee where the matter is settled by the reference to one of the modes provided in Section 89 of the Act, it is for the State Governments to amend the laws on the lines of amendment made in the Central Court Fees Act by the 1999 amendment to the Code. The State Governments can consider making similar amendments in the State court fee legislations."
27.In view of the above anomalous situation, it is to be seen whether Section 21(1) of the Legal Services Authorities Act will have overriding effect by virtue of Section 25, on the Tamil Nadu Court Fees and Suits Valuation Act, 1955, irrespective of the fact that Section 87 of the Tamil Nadu Act repeals the Court Fees Act, 1870.
28.Under Article 246 of the Constitution, the parliament has the exclusive power to make laws with respect to any of the matters enumerated in List I in the Seventh Schedule and the Legislature of a State has exclusive power to make laws in respect of any of the matters enumerated in List II. Entry Nos.77 and 96 of List I (Union List) are as follows:
"77.Constitution, organisation, jurisdiction and powers of the Supreme Court (including contempt of such Court), and the fees taken therein; persons entitled to practise before the Supreme Court.
96.Fees in respect of any of the matters in this List, but not including fees taken in any court."
Entry No.3 of List II (State List) is as follows:
"3.[***] Officers and servants of the High Court, procedure in rent and revenue courts, fees taken in all courts except the Supreme Court."
29.Therefore, a question arises as to whether there is a conflict or repugnancy. If we merely take the Court Fees Act 1870 and Tamil Nadu Court Fees Act, the case may not fall under Article 254 of the Constitution but if we take the Legal Services Authorities Act, 1987 and the Tamil Nadu Court Fees and Suits Valuation Act, 1955, Article 254 may come to our rescue. The Legal Services Authorities Act, 1987 was enacted with a view to provide free and competent legal services to weaker sections of society and to organise Lok Adalats. By virtue of Section 22(3) of the Legal Services Authorities Act, every Lok Adalat is deemed to be a Civil Court, though for the purpose of Section 195 and Chapter XXVI of the Code of Criminal Procedure. The subject of "Administration of Justice: Constitution and organisation of all Courts, except the Supreme Court and the High Courts" was enumerated as Entry No.11 A in List III (concurrent list) in the 7th Schedule of the Constitution by the 42nd amendment. Therefore, the enactment of the Legal Services Authorities Act, 1987 by the Parliament, was within the legislative competence of the parliament, on account of the fact that the creation of Lok Adalats falls under Entry 11 A in the concurrent list.
30.It is now well settled that if the law enacted by the parliament/legislature of a State is within its legislative competence, the fact that there is an incidental encroachment into an occupied field, would not make it void. A catena of decisions of the Supreme Court makes this very clear.
31.In State of Rajasthan V. G.Chawla and another (AIR 1959 SC 544), the Supreme Court crystalised the law in the following words:
"The legislatures in our country possess plenary powers of legislation. This is so even after the division of legislative powers, subject to this that the supremacy of the legislatures is confined to the topics mentioned as Entries in the Lists conferring respectively powers on them. These entries, though meant to be mutually exclusive, are sometimes not really so. They occasionally overlap, and are to be regarded as enumeration simplex of broad categories. Where in an organic instrument such enumerated powers of legislation exist and there is a conflict between rival lists, it is necessary to examine the impugned legislation in its pith and substance, and only if that pith and substance falls substantially within an Entry or Entries conferring legislative powers, is the legislation valid, a slight transgression upon a rival List, notwithstanding."
32.Again in Southern Pharmaceuticals and Chemicals V. State of Kerala (AIR 1981 Supreme Court 1863), the Supreme Court held in para 15 as follows:
"15...... In such matters of seeming conflict or encroachment of jurisdictions, what is more important is the true nature and character of the legislation. A necessary corollary of the doctrine of pith and substance is that once it is found that in pith and substance the impugned Act is a law on a permitted field any incidental encroachment on a forbidden field does not affect the competence of the legislature to enact the law."
33.In Delhi Cloth and General Mills Co. Limited V. Union of India (AIR 1983 Supreme Court 937), the Supreme Court held in para 33 as follows:
"33......When a law is impugned on the ground that it is ultra vires the powers of the legislature which enacted it, what has to be ascertained is the true character of the legislation. To do that one must have regard to the enactment as a whole, to its objects and to the scope and effect of its provisions (See A.S.Krishna V. State of Madras 1957 SCR 399 at P.410: (AIR 1957 SC 297 at P.303). To resolve the controversy if it becomes necessary to ascertain to which entry in the three lists, the legislation is referable, the Court has evolved the doctrine of pith and substance. If in pith and substance, the legislation falls within one entry or the other but some portion of the subject-matter of the legislation incidentally trenches upon and might enter a field under another list, then it must held to be valid in its entirety, even though it might incidentally trench on matters which are beyond its competence."
34.In Prem Chand Jain V. R.K.Chhabra ((1984) 2 SCC 302), it was held in para 8 as follows:
"8....As long as the legislation is within the permissible field in pith and substance, objection would not be entertained merely on the ground that while enacting legislation, provision has been made for a matter which though germane for the purpose for which competent legislation is made it covers an aspect beyond it. In a series of decisions this Court has opined that if an enactment substantially falls within the powers expressly conferred by the Constitution upon the Legislature enacting it, it cannot be held to be invalid merely because it incidentally encroaches on matters assigned to another Legislature."
35.In view of the aforesaid settled legal position, the slight transgression made by the Legal Services Authorities Act, 1987 into the Tamil Nadu Court Fees and Suits Valuation Act, 1955, appears to be tolerable. Therefore, it is no longer open for a Court to say that unless the two preconditions laid down under Section 69 of the Tamil Nadu Court Fees Act are satisfied, even half the Court fee is not refundable. In other words, even if a matter is settled in Court at any stage and a decree is passed in terms of the award of the Lok Adalat, Court fee would become refundable by virtue of Section 21(1) of the Legal Services Authorities Act, irrespective of the conditions stipulated in the Tamil Nadu Court Fees Act.
36.In Parvathi and another V. Punjab National Bank (2005 (5) CTC 577), a question arose as to whether the appellant in an Original Side Appeal (OSA) on the file of this Court was entitled to refund of the Court fees, when the matter is settled through Lok Adalat at the stage of appeal. The Division Bench of this Court considered the effect of Section 21 of the Legal Services Authorities Act, 1987, vis-a-vis the provisions of Tamil Nadu Court Fees and Suits Valuation Act, 1955 and the Madras High Court Fees Rules, 1956 and held that there is no conflict between the Central Act and the State Act and that the Legal Services Authorities Act has to be construed as an additional provision and not as a conflicting provision.
37.Therefore, Section 21(1) of the Legal Services Authorities Act, 1987 can be made workable only by holding that irrespective of the conditions prescribed under Sections 69 of the Tamil Nadu Court Fees Act, a person would be entitled to refund of Court Fee, if his case is settled in Lok Adalat. But by the very same logic, such an interpretation cannot also make Section 69 of the Tamil Nadu Court Fees Act otiose or a dead letter. As seen from the above discussion, the subject of Court fees chargeable in all Courts other than the Supreme Court falls within the exclusive domain of the State. Therefore, to say that de hors Section 69 of the Tamil Nadu Act, full Court fee is refundable, would make inroads into the occupied field of State legislation to such an extent that it would be intolerable. All the aforesaid decisions of the Supreme Court have held only "incidental encroachments" and "slight transgressions"
permissible, and hence such encroachment cannot go beyond a limit. Therefore, I am of the considered view that Section 21(1) of the Legal Services Authorities Act and Section 69 of the Tamil Nadu Court Fees Act should be given a harmonious construction, so that a person would be entitled only to refund of half the court fee, even if the preconditions laid down under Section 69 of the Tamil Nadu Court Fees Act are not satisfied. Such a harmonious construction alone would save both Section 21(1) of the Legal Services Authorities Act as well as Section 69 of the Tamil Nadu Court Fees Act. Otherwise, anyone of them will become a dead letter. An interpretation, which would make any one of the two legislative provisions redundant, cannot be adopted. On the contrary, an interpretation which would reconcile both of them and make both of them work, has to be preferred.
38.Even the decision of the Division Bench in Parvathi and another V. Punjab National Bank (2005 (5) CTC 577) did not actually deal with the question as to whether the refund to be made should be limited to half the Court fee paid or full Court fee. The Division Bench did not hold that Section 69 of the Tamil Nadu Court Fees Act would get totally eclipsed by Section 21(1) of the Legal Services Authorities Act. While a partial eclipse of Section 69 of the Tamil Nadu Court Fees Act may come within the parameters of "incidental encroachment"
and "slight transgression" permitted by law, a total eclipse may not really be permitted.
39.It is a well known principle of interpretation of statutes that a statute must be read in a manner which would make it workable. This is based on the maxim "ut res magis valeat quam pereat". This maxim was referred to with approval by the Supreme Court in M.P.Gopalakrishnan Nair V. State of Kerala ((2005) 11 SCC 45), wherein it was held in para 55 and 56 as follows:
"55.A statute, it is trite, should not be interpreted in such a manner as would lead to absurdity. (See Nandkishore Ganesh Joshi V. Commr., Municipal Corpn. of Kalyan & Dombivali and Ranjitsing Brahmajeetsing Sharma V. State of Maharashtra.)
56.It is necessary to bear in mind the principle "ut res magis valeat quam pereat" in terms whereof a statute must be read in such a manner which would make it workable. (See Balram Kumawat V. Union of India, Nandkishore Ganesh Joshi, para 19 and Pratap Singh V. State of Jharkhand, SCC para 81, JT para 82.)
40.Therefore, I hold that the petitioner was entitled only to refund of half the Court fees and the writ petition seeking refund of the full Court fees is liable to be dismissed. Accordingly, the writ petition is dismissed. No costs. Consequently, connected miscellaneous petition is also dismissed.
To The District Court, Trichy.