Case BriefsSupreme Court

Supreme Court: The bench of MM Shantanagoudar* and Vineet Saran, JJ has held that Section 89 of CPC and Section 69-A of Tamil Nadu Court Fees and Suit Valuation Act, 1955 contemplate the refund of court fees in all methods of out-of-court dispute settlement between parties that the Court subsequently finds to have been legally arrived at and not just to those cases where the Court itself refers the parties to any of the alternative dispute settlement mechanisms listed in Section 89 of the CPC.

Issue before the Court

Madras High Court had, on8.01.2020, held that, given their beneficial intent, Section 89 of CPC and Section 69-A of Tamil Nadu Court Fees and Suit Valuation Act, 1955 must be interpreted liberally, in a manner that would serve their object and purpose.

“Construing them narrowly would lead to a situation wherein parties who settle their dispute through a Mediation Centre or other centres of alternative judicial settlement under Section 89, CPC would be entitled to claim refund of their court fee, whilst parties who settle the disputes privately by themselves will be left without any means to seek a refund.”

The High Court was of the opinion that as such differential treatment between two similarly situated persons, would constitute a violation of Article 14 of the Constitution, a constitutional interpretation of Section 89 of the CPC, and resultantly Section 69-A of the 1955 Act, would require that these provisions cover all methods of out-of-court dispute settlement between parties that the Court subsequently finds to have been legally arrived at.

Challenging the said decision, the Madras High Court’s Registry had approached the Supreme Court with the contention 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 of the CPC. 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 of the CPC.

Analysis

Understanding the object of the provisions in question

The object and purpose of Section 89 crystal clear is 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.”

The purpose of Section 69-A of the 1955 Act 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.

Why a narrow interpretation would lead to absurd and unjust outcome

The narrow interpretation of Section 89 of CPC and Section 69¬A of the 1955 Act sought to be imposed by the Petitioner would lead to an outcome wherein 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 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 would lead 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.”

Further, 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 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 incentivize 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.” 

Noticing that there may be situations wherein the parties have after the 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, the Court said that 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.

How the Registry and State Government would benefit in long run 

Finding it puzzling that the High Court’s Registry should be so vehemently opposed to granting such benefit, the Court said that

“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.”

[High Court of Judicature at Madras  Rep. by its Registrar General v. MC Subramaniam, 2021 SCC OnLine SC 109, decided on 17.02.2021]


*Judgment by: Justice MM Shantanagoudar 

Hot Off The PressNews

SCBA writes to Secretary General, Supreme Court, requesting inclusion of RuPay card and UPI for payment of court fees.

For the payment of Court Fees, the Supreme Court website is accepting payments from only four credit Cards i.e. Visa, Mastercard, Mistro and American express. It does not provide the facility of payment through Rupay Cards and UPI. 

Rupay was a payment scheme launched by the Government of India to fulfill vision of India’s own, domestic, open and multilateral payment system and UPI is an initiative by Government of India with multiple benefits. Both schemes are being highly promoted by the Government of India, therefore most of the Banks are issuing RuPay Cards where a large population as also many members of the Bar use the Rupay Cards and UPI system for payments.

Therefore, SCBA requested that payments for this purpose should also be accepted through RuPay Card and UPI. 


Supreme Court Bar Association

Case BriefsHigh Courts

Punjab and Haryana High Court:  Lisa Gill, J. allowed the application for the refund of the fees on the ground that the matter was resolved between the parties.

An appeal was filed by the appellant-plaintiff against the order passed by the Additional Civil Judge (Senior Division), Faridabad where the suit for specific performance filed by the appellant was dismissed.

Rakesh Kumar Sharma, counsel for the applicant/appellant submitted that the appellant does not wish to pursue the appeal which was filed for the specific performance as the dispute between the parties had been resolved amicably.The applicant/appellant further prayed for the refund of the court fee.  Reliance was placed upon the decision of Division Bench of the Karnataka High Court in the case of A. Sreeramaiah v. South Indian Bank Ltd., 2006 SCC Online Kar 563 in which it was held that the matter being resolved by the parties amicably, amongst themselves without the intervention of the court, the court fees should be refunded.

In the above-mentioned case, the court held that the object behind Section 89 of the Civil Procedure Code, 1908 is to encourage the parties to arrive at the settlement. It is not important that the parties are referred to the four methods but if parties themselves at the earliest stage before the court come to the settlement, it will be considered that the object of Section 89 is achieved. The court further held that “No party should be discriminated in the matter of refund of Court Fees mainly on the ground that they have settled the dispute at the earliest stage before the court without recourse to any of the methods mentioned under Section 89 of the Civil Procedure Code, 1908.” Thus, the court directed the refund of the court fees appended with the appeal to the appellant. [Raj Kumar v. Gainda Devi, 2019 SCC OnLine P&H 658decided on 29-5-2019]

Case BriefsHigh Courts

Orissa High Court: A Bench comprising of Dr A.K. Rath, J. clarified the point on exemption of paying court fees in respect of a woman through the present order.

The plaintiff-opposite party 1 had instituted the suit for declaration of title, partition and permanent injunction. Value of the suit was at Rs 1, 11, 84,300 on which ad valorem court fees is of Rs 3, 61,931 payable. It has been contended that the plaintiff being a woman will be exempted from the payment of court fees.

Further, it has been stated that the plaintiff in the present case was a citizen of USA due to which she was not liable to be exempted from payment of court fees. Trial Court had rejected the said submissions which lead to the instant petition.

The Bench stated that in accordance to the SRO No. 575 of 1994 issued by the Government of Orissa under Section 35 of the Court Fees Act, 1987, categories of persons are exempted from payment of court fees, which clearly states that women are exempted from the payment of court fees. The Court also stated that the notification sweeps the woman of any status or nationality.

Therefore, in view of the notification stated above, plaintiff being a woman is exempted from the payment of court fees and the impugned order does not suffer from any illegality or infirmity warranting the interference of the Court under Article 227 of Constitution of India. [Sanjay Kumar Das v. Munmum Patnaik, 2018 SCC OnLine Ori 445, decided on 21-12-2018]

 

Case BriefsHigh Courts

Orissa High Court: A Single Judge Bench of Dr A.K. Rath, J., dismissed the petition which challenged the order of the trial court whereby the Court allowed the application of the defendant filed under Order 7 Rule 11(c) CPC and directed the plaintiff to pay ad-valorem court fees.

The facts of the case are as that the plaintiff-petitioner had instituted the suit for declaration of title and declaration that the sale deed executed by him in favor of the defendant as null and void. The litigation started between the parties and the defendant filed an application under Order 7 Rule 11(c) CPC stating that the plaintiff had instituted the suit for declaration that the registered sale deed as void. They contended that the plaintiff was the executant of the sale deed, he sought its cancellation and therefore He should pay ad-valorem court fees. Plaintiff filed an objection to the said application and their counsel, Mr Samir Kumar Mishra and Mr S. Rout contended that the sale deed was a nominal one and no consideration was passed and thus the plaintiff could put his own valuation and pay the court fees.

The Court, relying on the Umakanta Das v. Pradip Kumar Ray, 1986 SCC OnLine Ori 11, dismissed the petition and upheld the order of the trial court, directing the petitioners to pay the ad valorem court fees. [Kumar Soumyakanta Bisoi v. Banita Panda, 2018 SCC OnLine Ori 435, decided on 18-12-2018]