Karnataka High Court
A.J. Shetty vs M/S. Bharat Plywood And Timber Products ... on 3 December, 1999
Equivalent citations: ILR2000KAR494, 2000(2)KARLJ194
Author: R. Gururajan
Bench: R. Gururajan
ORDER
1. This civil revision petition is filed aggrieved by the order dated 18-6-1999 passed in LA. 7 in O.S. No. 80 of 1997 rejecting the request for refund of half Court fee paid on the plaint.
2. Facts.--Plaintiff petitioner filed a suit in O.S. No. 80 of 1997 for specific performance of a contract of agreement of sale dated 19-8-1993 and to register the sale deed in favour of the plaintiff and has paid a Court fee in terms of the Karnataka Court Fees and Suits Valuation Act, 1958 (hereinafter referred to as 'the Act'). The first defendant is a company and the second defendant is the Managing Director. Defendants 3 to 8 are the Directors of first defendant-company. Defendants 1 and 2 are the real contesting defendants. Defendants (respondents 3 and 5 to 8) remained ex parte before the Trial Court.
3. During the pendency of the suit and before evidence is recorded, a memo came to be filed by the plaintiff-petitioner in the following terms:--
"The above suit is settled out of Court between the parties and therefore, it is prayed that the suit may be dismissed without cost.
Half the Court fee paid on the plaint may be ordered to be refunded to the plaintiff'.
(emphasis supplied) In terms of the said memo and in view of the settlement between the parties, refund of half the Court fee paid on the plaint was sought for by the plaintiff in the said memo. The learned Judge, after hearing, was pleased to reject the said request in a detailed order. The learned Judge was of the view that since defendants 3 and 5 to 8 were placed ex parte, no refund could be allowed under Section 66 of the Act. The finding is that unless the ex parte order is set aside by the Court, no Court fee can be refunded. Though plaintiff-petitioner placed reliance on the judgment of this Court in P.B. Rai v Reza Jalali and Another , the learned Judge, on the ground that the said judgment is not applicable, has rejected the prayer for refund and hence this petition.
4. This Court issued emergent notice and by an order dated 15-10-1999 directed the learned High Court Government Pleader to take notice and to assist the Court in the matter. The matter was heard at length. Sri K. Giridhar and Sri K.T. Suman, learned Counsel appeared for the petitioner and respondents did not appear and Sri H.S. Surendra, in terms of the order of this Court assisted the Court.
5. The learned Counsel for the petitioner argued at length that the correct interpretations of Section 66 of the Act would result in refund as claimed by him. He essentially relied on the judgment of this Court in P.B. Rai's case, supra. Per contra, Sri Surendra, learned High Court Government Pleader argued that the learned Judge is right in rejecting the request on account of defendants 3 and 5 to 8 remaining exparte.
6. I have considered the rival pleas, perused the order and pass the following order:--
The Karnataka Court Fees and Suits Valuation Act is an Act consolidating the laws relating to Court fees and valuation of suits in the State of Karnataka. Jn this case, we are concerned only with Section 66 of the said Act. Section 66 of the Act reads as under:--
"Refund on settlement before hearing.--Whenever by agreement of parties:--
(a) any suit is dismissed as settled out of Court before any evidence has been recorded on the merits of claim; or
(b) any suit is compromised ending in a compromise decree before any evidence has been recorded on the merits of the claim; or
(c) any appeal is disposed of before the commencement of hearing of such appeal;
half the amount of all fees paid in respect of the claim or claims in the suit or appeal 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 11".
Admittedly in the case on hand, the memo filed by the petitioner categorically states that the suit is settled out of Court between the parties. It is also an admitted fact that no evidence has been recorded on the merits of claim before such memo is filed by the plaintiff-petitioner. In the circumstances, a plain reading of Section 66 would entitle the petitioner to claim half the amount of Court fee paid on the plaint on account of settlement of the suit between the parties before evidence. In this connection, it is pertinent to refer to a judgment of this Court in P.B. Rai's case, supra. This Court has considered the object of Section 66 of the Act. This Court in paras 4 and 5 has ruled as under:--
"The benefit of refund of half the amount of fee paid on the claim in a suit, made available to a suitor under the above provision, as is seen therefrom, is obviously intended to achieve dual beneficial purposes, viz., (i) of encouraging parties to a suit, to settle by agreement, the claim in such suit out of Court itself that too, in the very initial stages of such suit, so that they may be saved of their time and expenses of a prolonged litigation, and (ii) of giving relief to the Court concerned which is invariably overburdened.
From the peremptory language employed in the above provision, it becomes clear that the Court dismissing a suit as settled out of Court before any evidence therein was recorded on the merits of the claim, should consequentially order refund to the parties, half of the amount of all fees paid by them respecting the claim or claims in the suit. In other words, when a Court, as envisaged in the provision, does dismiss a suit as settled out of Court, acting on the submission of the suitor respecting a settlement reached between the parties by agreement out of Court, question of that very Court denying to the suitor refund of half of the amount of all fees paid by him allowable under that provision, can never arise, much less on the ground that the agreement relating to settlement out of Court had not been established. It must be remembered that a suitor, who seeks to get his suit dismissed as settled out of Court, would be doing so at the risk of abandoning his suit claim on which he has paid fees payable under the Act and incurred other expenses. Hence, the Court to which a settlement out of Court is reported, need not take upon itself the responsibility of satisfying itself as to the truth of settlement of suit reached out of Court by agreement of parties, in that, it is neither its duty imposed under the above provision nor could it be a factor which goes to the benefit of the opposite party. From this it follows that a Court which, before recording evidence on merits of the claim in the suit, dismisses such suit as settled out of Court, shall not refuse to order refund to the suitor half of the fee paid on the claim of the suit".
This judgment squarely applies to the facts of the case. The learned Judge unfortunately, though has noticed the same, has failed to follow the principle laid down and thereby has committed a material error in applying the correct law requiring my interference.
7. The argument of the learned High Court Government Pleader with regard to some respondents-defendants remaining at parts resulting in the deprival of half the Court fee cannot be accepted. As held by this Court in Rai's case, supra, the very object of "parties to a suit to settle by agreement resulting in saving of the time and expenses of prolonged litigation and giving relief to the parties", is frustrated if such argument is accepted. All that the section requires is a settlement of the suit out of Court before any evidence between the parties. The memo filed categorically states that the suit is settled out of Court between the parties. The learned Judge has also accepted the memo. Having accepted the memo of settlement out of Court between the parties, he cannot reject the request for refund on the sole ground that a few respondents remained ex parte. If the plaintiff-petitioner has to seek orders of setting aside the ex parte orders, it would result in unnecessary expenses and time in the matter. It is not the object of Section 66 of the Act as held by this Court. In the circumstances, the lone reason of a few defendants having been set ex parte, cannot be a reason for denial of refund of half the Court fee. Neither Section 66 nor the object of Section 66 require such interpretation. Particularly on the facts of this case, it is seen that the matter is one of specific performance and the contesting respondents have entered appearance and the matter is settled out of Court before any evidence is recorded. In the circumstances, all the ingredients of Section 66 have been complied with. Therefore, there is no reason as to why the request for refund of half the Court fee is to be rejected In the circumstances, I have no hesitation in holding that the learned Judge has committed a serious error in dismissing the LA.
8. In the circumstances, I allow this C.R.P., set aside the order of the learned Judge dated 18-6-1999 and order refund of half the Court fee paid by the petitioner in the suit. No costs.