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Section 89 CPC and Section 69-A of the 1955 Act be interpreted liberally to include all methods of out-of-court dispute settlement between parties that the Court subsequently finds to have been legally arrived at. 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. It is an economic incentive for pushing them towards exploring alternative methods of dispute settlement and the same was upheld by High Court of Delhi through the learned bench led by Justice Suresh Kumar Kait in the case of SUN PHARMACEUTICAL INDUSTRIES LTD. vs. OLCARE LABORATORIES PVT LTD. [CS(COMM) 639/2021] on 22.02.2022.

The facts of the case are that the plaintiff seeks a permanent injunction restraining infringement of copyright, trade mark, passing off, unfair competition, and delivery up, damages and/or rending of accounts of profits, etc. against the defendant. For the said dispute, the parties have arrived at an amicable settlement out of court. The present application has been jointly filed by plaintiff and defendant praying for issuance of decree of the present suit and for refund of entire Court fees.

The plaintiff’s counsel submitted that in terms of settlement, the present suit be decreed against defendant and parties have agreed to be bound by the terms of settlement that has been reached between them. Further, it was submitted that since the subject matter of the suit stands amicably resolved, therefore, the entire court fees should be refunded.

In the view of facts and circumstances, the Court held that the settlement reached between the parties is valid and lawful, therefore, the plaintiff is entitled to refund of entire court fees. Registry was directed to issue necessary authorization in favour of the plaintiff to seek refund before the appropriate authorities and accordingly the present suit stood decreed.

The Court observed that “Section 89 CPC and Section 69-A of the 1955 Act be interpreted liberally to include all methods of out-of-court dispute settlement between parties that the Court subsequently finds to have been legally arrived at. 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. It is an economic incentive for pushing them towards exploring alternative methods of dispute settlement.”

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Judgment reviewed by – Shristi Suman