Munish Kalra vs Kiran Madan & Ors.
2019 Latest Caselaw 1917 Del

$~30
*      IN THE HIGH COURT OF DELHI AT NEW DELHI
                                     Date of decision: 8th April, 2019
+                          CS (OS) 2940/2014
       MUNISH KALRA                                      ..... Plaintiff
                    Through: Ms. Aastha Dhawan and Ms. Shaini
                                Bhardwaj,                  Advocates.
                                (M:7895664246)
                    versus

       KIRAN MADAN & ORS.                                 ..... Defendants
                   Through:            Mr. Neeraj Yadav and Mr. Davesh
                                       Bhatia, Advocates. (M:9811502199)
       CORAM:
       JUSTICE PRATHIBA M. SINGH
Prathiba M. Singh, J. (Oral)

I.A. 5011/2019 (refund of court fee)

1. The present application has been moved by the Plaintiff seeking refund of the complete court fee i.e. total amount of Rs.2,30,284/-, deposited in this Court.

2. The present suit was between family members and the Plaintiff had sought permanent injunction, mandatory injunction, rendition of accounts, and declaratory reliefs against his mother and sister. The suit was listed from time to time before this Court. Issues were framed in the matter and some part of the evidence was recorded. However, at that stage, an amendment application was moved by the Plaintiff. The said amendment was allowed. Subsequently, the parties had appeared before the Court from time to time. Various proposals were exchanged for settlement of disputes.

3. On 15th March, 2019, settlement was recorded between the parties and the suit was decreed in terms of the settlement. At that stage, no refund of

court fee was sought. The present application has been moved by the Plaintiff seeking refund of court fees.

4. Ld. Counsel for the Plaintiff has relied upon the judgment of a Division Bench of this Court in Nutan Batra v. M/s. Buniyaad Associates, 2018 (255) DLT 696 to argue that even when there is a settlement, which is recorded during the pendency of the proceedings in Court, full court fee is liable to be refunded as the same constitutes a `judicial settlement'. She has taken the Court through the judgment and also the provisions of Sections 89 CPC and Sections 16 and 16A of the Court Fee Act, 1870.

5. Ld. Counsel for the Defendants, on the other hand, submits that this would be covered under Section 16A of the Court Fees Act and at best only half of the full court fee is liable to be refunded. He also submits that also since part of the evidence was recorded, even under Section 16A, refund ought not to be granted.

6. In Nutan Batra (supra), the Ld.Division Bench observes as under:

"8. Section 89 has been interpreted inter alia in the judgment of the Supreme Court in Afcons Infrastructure Limited v Cherian Varkey Construction Company Private Limited & Ors., (2010) 8 SCC 24. The following observations in the said judgment are relevant for a proper interpretation of the provision: "9. If Section 89 is to be read and required to be implemented in its literal sense, it will be a trial Judge's nightmare. It puts the cart before the horse and lays down an impractical, if not impossible procedure in sub-section (1). It has mixed up the definitions in sub-section (2). In spite of these defects the object behind Section 89 is laudable and sound. Resort to alternative dispute resolution (for short "ADR") processes is necessary to give speedy and effective relief to the

litigants and to reduce the pendency in and burden upon the courts. As ADR processes were not being resorted to with the desired frequency, Parliament thought it fit to introduce Section 89 and Rules 1-A to 1-C in Order X in the Code, to ensure that ADR process was resorted to before the commencement of trial in suits.

10. In view of its laudable object, the validity of Section 89, with all its imperfections , was upheld in Salem Advocate Bar Assn. (1) v Union of India (2003) 1 SCC 49 [for short Salem Bar (1)] but referred to a committee, as it was hoped that Section 89 could be implemented for ironing the creases. In Salem Advocate Bar Assn (II) V Union of India, (2005) 6 SCC 344 [for short Salem Bar (II)], this Court applied the principle of purposive construction in an attempt to make it workable. xxxxxxxxxxxx

25. In view of the foregoing, it has to be concluded that the proper interpretation of Section 89 of the Code requires two changes from a plain and literal reading of the Section. Firstly, is not necessary for the court before referring the parties to an ADR process to formulate the terms of a possible settlement. It is sufficient if the court merely describes the nature of the dispute (in a sentence or two) and makes the reference. Secondly, the definitions of "judicial settlement" and "mediation" in clauses (c) and (d) of Section 89 (2) shall have to be interchanged to correct the draftsman's error. Clauses (c) and (d) of Section 89 (2) of the Code will read as under when the two terms are interchanged:

(c) for "mediation", the court shall refer the same to a suitable institution or person and such institution or person shall be deemed to be a Lok Adalat and all the provisions of the Legal Services Authorities Act, 1987 (39 of 1987) shall apply as

if the disputes were referred to a Lok Adalat under the provisions of that Act;

(d) for "judicial settlement", the Court shall effect a compromise between the parties and shall follow such procedure as may be prescribed The above changes made by interpretative process shall remain in force till the legislature corrects the mistakes so that Section 89 is not rendered meaningless and infructuous"

9. Section 16 of the Act was also inserted by the same amendment, apparently with the object of providing some incentive to resort to methods of Alternative Dispute Resolution (hereinafter referred to as "ADR") The notes on clauses accompanying the bill [which was ultimately enacted as the 1999 Amendment to the CPC] treated it as "consequential" to the insertion of Section 89 in the CPC.

"Clause 35 - (Amendment to the Court fees Act, 1870) The proposed amendment is consequential to the new Section 89 in the Code of Civil Procedure, 1908, proposed to be inserted vide clause 7 of the Bill so as to enable the party to claim refund of court fee in case the matter in dispute is settled outside the court."

A perusal of Nutan Batra (supra), especially the discussion in paragraphs 8 & 9, clearly shows that when the matter is settled in court and decreed, the same would constitute judicial settlement. Difference between Sections 16 and 16A is that in Section 16, reference to mediation under Section 89 has been contemplated and full court fee is liable to be refunded, however, in Section 16A, if the matter is settled out of Court or compromised ending with compromise decree before evidence is recorded, 50% of the court fee would be liable to be refunded.

7. In Afcons Infrastructure Limited v. Cherian Varkey Construction Company Private Limited & Ors., (2010) 8 SCC 24, the Supreme Court has

held that a judicial settlement under Section 89(2)(d) would be where "the Court effects compromise between the parties". In the present case, proposals which were exchanged between the parties were considered in detail during the course of submissions in the Court and finally, after the efforts of the counsels along with the parties, the settlement terms were arrived at. This was a compromise effected in Court as per the prescribed procedure in Order XXIII Rule 3 CPC, and would thus constitute a judicial settlement as defined by Afcons Infrastructure (supra).

8. Under these circumstances, in view of the decision of the Supreme Court in Afcons Infrastructure (supra) as also Nutan Batra (supra), the suit having been settled, the Plaintiff is entitled to refund of the entire court fee.

9. I.A. is disposed of in the above terms. Registry is directed to issue the necessary refund authorisation in favour of the Plaintiff.

PRATHIBA M. SINGH JUDGE APRIL 08, 2019/dk