High Court of Delhi was dealing with the petition filed under Order XXIII Rule 3 CPC, where the plaintiff and the defendants, namely, VHM (Varsha Health Medicine), Krypton Pharmaceuticals and MBS Formulation impleaded as defendant nos.1, 2 and 3 seek decree of the suit in terms of the settlement arrived at between the parties.
Brief Facts:
Plaintiff and defendants have entered into a settlement. The settlement agreement is duly signed by the constituted attorney of the plaintiff as also the authorized signatory of the defendants Mr Manoj Kumar Sah. The constituted attorney of the plaintiff has also filed the plaint on behalf of the plaintiff and his affidavits and necessary authorization are already on record. Authorization letters in favour of Mr Manoj Kumar Sah on behalf of the defendants have been placed on record along with the vakalatnama of the learned counsel for the defendant. Consequently, the suit is decreed in terms of the settlement arrived at between the parties as also the prayer clauses (a) and (b) of the plaint.
Petitioner’s Contention:
Learned counsel for the petitioner submitted that since the settlement in the suit was arrived at the initial stage itself, as summons in the suit were issued on 27th October, 2021 and on the next date before this Court, the parties stated that they have settled the matter and sought some time to place on record the terms of settlement, full court fee be returned to the plaintiff.
HC’s Observations and Held:
After hearing both the sides Court relied upon the case of High Court of Judicature at Madras Vs. M. C. Subramaniam & Ors. where the SC held that though in strict terms when settlement is arrived at between the parties by not adopting a mode prescribed under Section 89 CPC, the party may not be entitled to full court fee, however, Section 89 CPC has to be given a liberal interpretation and thus in cases where settlement is arrived at out of court, the full court fee be refunded.
It was held that “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. 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.”
HC directed the registry to issue a certificate releasing full court fee to the authorized attorney of the plaintiff.
Bench: Hon'ble Ms. Justice Mukta Gupta
Case Title: Sun Pharma Laboratories Ltd v. VHM (Varsha Health Medicine) & Ors.
Case Details: CS(COMM) 535/2021
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