Plaintiff Not Entitled For Refund Of Court Fees If Parties Are Referred For Arbitration: Delhi High Court

The Delhi High Court has observed that a plaintiff cannot be entitled for refund of court fees in the event of an application under sec. 8 of the Arbitration and Conciliation Act being allowed and the parties being referred for arbitration.Justice Amit Bansal reiterated that a litigant is not entitled to refund of court fees in case of rejection of plaint under Order VII Rule 11 of the CPC where the plaint does not disclose a cause of action. "On the same analogy, the plaintiff cannot be entitled for refund of court fees in the event of an application under Section 8 of the Arbitration and Conciliation Act being allowed and the parties being referred for arbitration. The rationale being that the plaintiff has invoked a wrong remedy of filing the suit when it should have invoked the arbitration proceedings," the Court observed. The Court was dealing with a case in which an application filed on behalf of the defendant under sec. 8 of the Arbitration and Conciliation Act, 1996 was allowed on 31st March, 2022 and a sole arbitrator was appointed.The only issue to be adjudicated in the suit was whether the plaintiff was entitled to refund of court fees in terms of sec. 16 of the Court Fees Act, 1870 read with sec. 89 of the Code of Civil Procedure, 1908 (CPC). The Counsel appearing for the plaintiff submitted that in terms of sec. 89, the plaintiff was entitled to refund of court fees in view of the fact that the matter has been referred to arbitration. In this regard, reliance was placed on a Supreme Court judgment in RV Solutions Pvt. Ltd. v. Ajay Kumar Dixit. On the other hand, the counsel appearing for the defendant opposed the said request.The Court was of the view that in the present matter, the case was not referred in terms of sec. 89 of the CPC for settlement and thus, the plaintiff was not entitled to refund of court fees in terms of sec. 16 of the Court Fees Act, 1870.Section 89 provides that if it appears to the Court that settlement may be arrived between the parties, the court may refer the matter for arbitration or conciliation or mediation or to the Lok Adalat. The Court observed that key word here is "settlement" and thus, the provisions for refund of court fees are only applicable when the matter is referred for arbitration in the context of "settlement". "In the present case, an application under Section 8 of the Arbitration and Conciliation Act filed on behalf of the defendant has been allowed and the matter has been referred for adjudication to a sole arbitrator. The matter was not referred in terms of Section 89 of the CPC for settlement. Therefore, the plaintiff is not entitled to refund of court fees in terms of Section 16 of the Court Fees Act, 1870," it observed.The Court added,"The reliance placed by the counsel for the plaintiff on the judgment placed in RV Solutions (supra) is misplaced. There is only a direction given in the said case that court fees may be refunded as the matter has been referred to arbitration. The same would not constitute a dicta to hold that any of the cases where Section 8(1) of the application is allowed and the matter is referred for arbitration, the plaintiff would be entitled to refund of court fees," the Court observed. Case Title: A-ONE REALTORS PVT.LTD. v. ENERGY EFFICIENCY SERVICES LTD.Citation: 2022 LiveLaw (Del) 578Click Here To Read Order

Plaintiff Not Entitled For Refund Of Court Fees If Parties Are Referred For Arbitration: Delhi High Court

Nupur Thapliyal

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