In a recent ruling, the Supreme Court of India clarified that litigants who resolve their disputes privately, without the aid of any formal Alternative Dispute Resolution (ADR) mechanisms, are not entitled to a refund of court fees. This decision came in a case where the petitioner sought a refund of the court fees paid in a case that was amicably settled outside of the courtroom.
The bench, comprising Justice Pankaj Mithal and Justice Ahsanuddin Amanullah, held that court fees would only be refunded when disputes are settled through ADR mechanisms such as arbitration, conciliation, judicial settlement, or mediation. The Court categorically stated that a refund is “permissible only if the matter is referred to Arbitration, Conciliation, judicial settlement, including through Lok Adalat or mediation for settlement and the case is decided in terms of such a settlement and not otherwise.”
The matter stemmed from a Special Leave Petition (SLP) filed by Jage Ram, the petitioner, challenging the Punjab & Haryana High Court’s refusal to grant a refund of the court fees he had paid across different stages of litigation. The case had been settled amicably between the parties, but without any involvement of ADR procedures.
The Supreme Court upheld the High Court’s decision, reinforcing that since the appeal was resolved on the basis of an out-of-court settlement and not through any of the prescribed ADR forums, the petitioner was not entitled to a refund. “In the case at hand, the settlement in terms of which the second appeal was decided by the High Court is not on reference to any of the above authorities/fora rather it was an amicable settlement out of the court,” the Court observed.
The Court further emphasized that the High Court had not committed any error or illegality in rejecting the refund request, ruling that “the petitioner is not entitled to refund of the court fees and the High Court has not committed any error or illegality in refusing such a prayer.”
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