The Delhi High Court has held that parties are entitled to a full refund of court fees when a suit, counter-claim or appeal is disposed of upon an amicable settlement.

A Division Bench comprising Justice Anil Khetarpal and Justice Bharat Parashar observed that such a refund is a substantive statutory entitlement under the amended Section 16 of the Court Fees Act, 1870.

“…. full refund of court fee, paid in respect of a suit, counter-claim or appeal being disposed of as settled or compromised, is a substantive statutory entitlement. Consequently, no separate application or petition ought to be required for such refund once the matter has been disposed of as settled or compromised and the Court has issued a certificate to that effect,” the Court said.

The Bench made the observations while dealing with an application seeking refund of court fee in an appeal filed by a company- M/s Hitech Enterprises against another entity- M/s Modern Construction Company.

The Court noted that the Delhi Government had, by a notification dated March 06, amended Section 16 of the Court Fees Act, repealing and substituting the erstwhile Section 16A.

Under the amended provision, where parties to a suit or appeal settle their dispute amicably at any stage, whether with or without the intervention of the Court and whether or not through any of the modes of settlement contemplated under Section 89 of the Code of Civil Procedure, the plaintiff or counter-claimant becomes entitled to a certificate authorising refund of the full court fee paid.

The Bench held that, on a plain reading of the amended provision, the entitlement to refund arises once the matter is disposed of as settled or compromised.

The Court further clarified that no separate application or petition is required for seeking such refund once the matter has been disposed of as settled or compromised and the Court has issued the requisite certificate.

Accordingly, the Court directed that whenever a matter is settled, with or without recourse to the modes under Section 89 CPC, the Court, while disposing of the matter in terms of the settlement, should direct refund of the court fee and issue a certificate authorising the concerned parties to receive the full amount paid in respect of the claim or counter-claim.

“The Court shall also issue a certificate authorizing the parties to receive back full amount of court fees in respect of claim/counter-claim, thereby obviating the necessity of any obligations by parties to seek such refund,” the Court said.

The Court also directed the Delhi Government to take necessary steps to ensure time-bound refund of court fees in such matters upon presentation of the certificate issued by the Court.

“Ld. Standing Counsel (Civil), GNCTD is requested to ensure that the concerned authorities take necessary administrative steps in all such kind of cases, thereby avoiding unnecessary litigations in the Courts,” the Bench said.

It further directed that a copy of the order be sent to the Registrar General of the High Court for circulation among all Principal District and Sessions Judges.

Title: M/S HITECH ENTERPRISES v. M/S MODERN CONSTRUCTION COMPANY DELHI

Click here to read order