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Title: V GUARD INDUSTRIES LTD Versus MS MAHAVIR HOME APPLIANCES

+ CS(COMM) 98/2023, I.A. 3531/2023, I.A. 14582/2023, I.A. 16345/2023 and I.A. 25081/2023

Decided on: 14.12.2023

CORAM: HON’BLE MR. JUSTICE C.HARI SHANKAR

Facts:

The parties in this case have amicably resolved their dispute and have filed an application jointly under Order XXIII Rule 3 of the Code of Civil Procedure, 1908 (CPC), requesting the court to record the terms of settlement.

Laws Involved:

• Section 16 & 16A, 161 of Court Fees Act
• Section 69A and 89 of CPC

Issue:

Whether the plaintiff is entitled to a refund of the court fees paid, based on the provisions of the Court Fees Act and the Code of Civil Procedure.

Courts Judgement and Analysis:

The court finds that the dispute between the parties has been settled and therefore, there is no controversy remaining for consideration on merits. The parties shall be bound by the terms of settlement.

Section 161 of the Court Fees Act entitles the plaintiff to a refund of the entire court fee deposited when the dispute is settled under Section 16. Section 16 provides for a refund of the complete court fees in cases settled through alternative dispute resolution (ADR) or judicial settlement.

However, Section 16A of the Court Fees Act only allows for a refund of 50% of the court fees paid if the suit is at a pre-evidence stage.

The court notes that the case may fall under either Section 16 or Section 16A, depending on the facts and whether the dispute was settled through mediation.

Section 89 of the CPC provides for a refund of the entire court fee paid when the dispute is settled under this section. The purpose of Section 89 is to facilitate private settlements and reduce the burden on the judicial system.

Section 69A of the 1955 Act also encourages settlements by providing for a refund of court fees. The court emphasizes that a narrow interpretation of Section 89 and Section 69A would lead to unjust outcomes, where parties referred to mediation centers by the court receive a full refund, while parties who privately settle their disputes are deprived of the same benefit.

The court concludes that a purposive interpretation of the provisions is necessary to avoid injustice and uphold the purpose of the provisions.

Conclusion:

The court refers the question of the extent of court fees to be refunded to the Division Bench for adjudication. The case is renotified for further proceedings on 31 January 2024, pending the decision of the Division Bench.

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Written by- Aditi

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