THE HIGH COURT OF JUDICATURE AT MADRAS REP. BY ITS REGISTRAR GENERAL versus M.C. SUBRAMANIAM AND ORS.
[2021] 1 S.C.R. 552, Supreme Court of India, 2021
Outcome: Dismissed (Dismissed)
Segment: Ratio
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THE HIGH COURT OF JUDICATURE AT MADRAS REP. BY
ITS REGISTRAR GENERAL
v.
M.C. SUBRAMANIAM AND ORS.
(Special Leave Petition (Civil) Nos. 3063-3064 of 2021)
FEBRUARY 17, 2021
[MOHAN M. SHANTANAGOUDAR AND
VINEET SARAN, JJ.]
Code of Civil Procedure, 1908: s.89 – Tamil Nadu Court Fees
and Suit Valuation Act, 1955 – s.69-A – Parties entering into a
private out of court settlement for resolving the controversy between
them outside the modes contemplated under s.89 and seeking
permission to withdraw suit and also refund of court fees – Refund
of court fees – Permissibility of – Held: The purpose of s.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 – Such refund of
court fee, though it may not be connected to the substance of the
dispute between the parties, is certainly an ancillary economic
incentive for pushing them towards exploring alternative methods
of dispute settlement – Object of s.89 is to facilitate private
settlements, and enable lightening of the overcrowded docket of
the Indian judiciary – s.69-A of the Act, 1955 and s.89 CPC should
be interpreted liberally in a manner that would serve their object
and purpose – Construing them narrowly would lead to situation
wherein parties who settle
the dispute through mediation centre or
other centres of alternative judicial settlement under s.89 would be
entitled to claim refund of their court fees whilst parties who settle
the disputes privately by themselves will be left without any means
to seek the refund – Differential treatment between two similarly
situated persons would constitute a violation of Art.14 of the
Constitution – Thus, s.89 of CPC shall cover, and the benefit of
s.69-A of the 1955 Act shall also extend to, all methods of out-of-
court dispute settlement between parties that the Court subsequently
finds to have been legally arrived at – This would, thus, cover the
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present controversy, wherein a private settlement was arrived at,
and a memo to withdraw the appeal was filed before the High Court.
Interpretation of statutes: Purposive interpretation – It is well-
settled that the Courts may, in order to avoid any difficulty or
injustice resulting from inadvertent ambiguity in the language of a
statute, mould the interpretation of the same so as to achieve the
true purpose of the enactment – This may include expanding the
scope of the relevant provisions to cover situations which are not
strictly encapsulated in the language used therein.
Dismissing the Special Leave Petitions, the Court
HELD: 1. The provisions of Section 89 of CPC must be
understood in the backdrop of the longstanding proliferation of
litigation in the civil courts, which has placed undue burden on
the judicial system, forcing speedy justice to become a casualty.
As the Law Commission has observed in its 238th Report on
Amendment of Section 89 of the Code of Civil Procedure 1908 and
Allied Provisions, Section 89 has now made it incumbent on civil
courts to strive towards diverting civil disputes towards
alternative dispute resolution processes, and encourage their
settlement outside of court (Para 2.3). These observations make
the object and purpose of Section 89 crystal clear – to facilitate
private settlements, and enable lightening of the overcrowded
docket of the Indian judiciary. This purpose, being sacrosanct
and imperative for the effecting of
timely justice in Indian courts,
also informs Section 69-A of the 1955 Act, which further
encourages settlements by providing for refund of court fee. This
overarching and beneficent object and purpose of the two
provisions must, therefore, inform this Court’s interpretation
thereof. [Para 12][560-B-E]
2. It is well-settled that the Courts may, in order to avoid
any difficulty or injustice resulting from inadvertent ambiguity in
the language of a statute, mould the interpretation of the same
so as to achieve the true purpose of the enactment. This may
include expanding the scope of the relevant provisions to cover
situations which are not strictly encapsulated in the language used
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therein. The narrow interpretation of Section 89 of CPC and
Section 69-A of the 1955 Act sought to be imposed by the
Petitioner would lead to an outcome wherein parties who are
referred to a Mediation Centre or other centres by the Court
will be entitled to a full refund of their court fee; whilst parties
who similarly save the Court’s time and resources by privately
settling their dispute themselves will be deprived of the same
benefit, simply because they did not require the Court’s
interference to seek a settlement. Such an interpretation, in our
opinion, clearly leads to an absurd and unjust outcome, where
two classes of parties who are equally facilitating the object and
purpose of the aforesaid provisions are treated differentially, with
one class being deprived of the benefit of Section 69-A of the
1955 Act. A literal or technical interpretation, in this background,
would only lead to injustice and render the purpose of the
provisions nugatory – and thus, needs to be departed from, in
favour of a purposive interpretation of the provisions. [Paras 13,
15][561-B-C; F-H; 562-A-B]
3. 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. Such refund of court fee, though
it may not be connected to
the substance of the dispute between
the parties, is certainly an ancillary economic incentive for pushing
them towards exploring alternative methods of dispute
settlement. As the Karnataka High Court has rightly observed
in Kamalamma, parties who have agreed to settle their disputes
without requiring judicial intervention under Section 89, CPC
are even more deserving of this benefit. This is because by
choosing to resolve their claims themselves, they have saved
the State of the logistical hassle of arranging for a third-party
institution to settle the dispute. Though arbitration and mediation
are certainly salutary dispute resolution mechanisms, we also find
that the importance of private amicable negotiation between the
parties cannot be understated. There is no justifiable reason why
Section 69-A should only incentivize the methods of out-of-court
settlement stated in Section 89, CPC and afford step-brotherly
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treatment to other methods availed of by the parties. [Para
19][564-C-G]
4.1 Admittedly, there may be situations wherein the parties
have after the course of a long-drawn trial, or multiple frivolous
litigations, approached the Court seeking refund of court fees in
the guise of having settled their disputes. In such cases, the Court
may, having regard to the previous conduct of the parties and the
principles of equity, refuse to grant relief under the relevant rules
pertaining to court fees. However, the present case is not of such
nature. [Para 19][564-G-H; 565-A]
4.2 Thus, even though a strict construction of the terms of
Section 89, CPC and 69-A of the 1955 Act may not encompass
such private negotiations and settlements between the parties,
the participants in such settlements will be entitled to the same
benefits as those who have been referred to explore alternate
dispute settlement methods under Section 89, CPC. Though the
Registry/State Government will be losing a one-time court fee in
the short term, they will be saved the expense and opportunity
cost of managing an endless cycle of litigation in the long term. It
is therefore in their own interest to allow Respondent No. 1’s
claim. [Para 20][565-A-C]
4.3 Thus, the High Court was correct in holding that Section
89 of the CPC and Section 69-A of the 1955 Act be interpreted
liberally. In view of this broad purposive construction, the High
Court’s conclusion, is affirmed. Section 89 of CPC shall
cover,
and the benefit of Section 69-A of the 1955 Act shall also extend
to, all methods of out-of-court dispute settlement between parties
that the Court subsequently finds to have been legally arrived at.
This would, thus, cover the present controversy, wherein a private
settlement was arrived at, and a memo to withdraw the appeal
was filed before the High Court. In such a case as well, the
appellant, i.e., Respondent No. 1 would be entitled to refund of
court fee. [Para 21][565-C-E]
Directorate of Enforcement v. Deepak Mahajan, 1994
3 SCC 440 : [1994] 1 SCR 445; Shailesh Dhairyawan
v. Mohan Balkrishna Lulla, (2016) 3 SCC 619 : [2015]
THE HIGH COURT OF JUDICATURE AT MADRAS REP. v.
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12 SCR 70; Anurag Mittal v.Shaily Mishra Mittal,
(2018) 9 SCC 691: [2018] 10 SCR 123 – relied on.
Kamalamma & Ors. v.Honnali Taluk Agricultural
Produce Co-operative Marketing Society Ltd., (2010)
1 AIR Kar. R 279; Pradeep Sonawat v.Satish Prakash,
2015 (1) RCR Civil 955; Pritam Singh v.Ashok Kumar,
2019 (1) Law Herald (P&H) 721; Raj Kumar v.Gainda
Devi through LRs & Ors., 2019 SCC OnLine P&H 658;
J.K. Forgings v. Essar Construction India Ltd. & Ors.,
(2009) 113 DRJ 612; Inderjeet Kaur Raina v. Harvinder
Kaur Anand, 2018 SCC OnLine Del 6557 – referred
to.
Case Law Reference
[1994] 1 SCR 445
relied on
Para 13
[2015] 12 SCR 70
relied on
Para 14
[2018] 10 SCR 123
relied on
Para 14
CIVIL APPELLATE JURISDICTION : Special Leave Petition
(Civil) Nos. 3063-3064 of 2021.
From the Judgment and Order dated 08.01.2020 of High Court of
Judicature at Madras in C.M.P. Nos. 26742 and 26743 of 2019.
 Anish R. Shah, Adv. for the Petitioner.
The Judgment of the Court was delivered by
MOHAN M. SHANTANAGOUDAR, J.
1. These special leave petitions arise out of common order and
judgement of the High Court of Madras (hereinafter, ‘High Court’) dated
8.01.2020. By the impugned judgement, the High Court allowed Civil
Miscellaneous Petitions Nos. 26742 & 26743 of 2019 filed by the
Respondent No.1 herein praying for refund of the court fees deposited
by him in Appeal Suits Nos. 876/2012 and 566/2013 filed by him before
the High Court.
2. The facts
leading to these petitions are as follows: Respondent
No.1 purchased two vehicles from Respondent No. 2 vide two separate
hire purchase agreements (hereinafter, ‘Agreement-I’ and ‘Agreement-
II’; collectively, ‘the Agreements’) dated 10.06.1996, under which
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Respondent No.1 was the principal debtor/hirer, and Respondents Nos.
3 and 4 were the sureties to the Agreements. As per the terms of the
Agreements, Respondent No.1 was to pay a sum of Rs.10,08,000/- in
stipulated instalments to Respondent No. 2 for each of the two vehicles.
3. It suffices to note for our purposes that Respondent No. 2
brought Original Suits Nos. 66/2003 and 76/2003 against Respondents
Nos. 1, 3 and 4 before the Additional District Munsif Court, Coimbatore
(hereinafter, ‘Munsif Court’) and the Additional District and Sessions
Court, Coimbatore (hereinafter, ‘District Court’) respectively. In the two
suits, Respondent No.2 alleged non-payment of Rs.6,64,000/- and
Rs.5,97,200/- towards the instalments stipulated in Agreement-I and
Agreement-II respectively, and sought recovery of the balance amounts
along with interest thereon. Both the Original Suits Nos.66/2003 and 76/
2003 were partly decreed by the Munsif Court and District Court, by
judgments dated 13.02.2004 and 31.01.2005 respectively.
4. Aggrieved, Respondent No.1 preferred Appeal Suits Nos. 876/
2012 and 566/2013 before the High Court, against the judgments in O.S.
No. 66/2003 and O.S. No.76/2013, respectively. While the appeals were
still pending consideration before the High Court, the parties entered
into a private out-of-court settlement, thus resolving the controversy
between them. In view of this, Respondent No. 1 filed a memo before
the High Court, seeking permission to
withdraw Appeal Suits Nos. 876/
2012 and 566/2013. Such permission, along with a direction to refund
the court fee deposited by Respondent No.1, was granted by orders
dated 16.09.2019 and 18.09.2019 in A.S. Nos.566/2013 and A.S. Nos.
876/2012 respectively.
5. Despite the above stated orders of the High Court, the Registry
orally refused Respondent No.1’s request for refund of court fees, on
the ground that such refund is not authorised by the relevant rules. Left
without recourse, on 25.12.2019, Respondent No.1 filed Civil
Miscellaneous Petitions Nos. 26742/2019 and 26743/2019 under Section
151, Code of Civil Procedure, 1908 (hereinafter, ‘CPC’), praying for
refund of the court fees paid by him in A.S. Nos. 876/2012 and 566/2013
respectively, in terms of the orders dated 18.09.2019 and 16.09.2019
therein.
6. By the impugned common judgment and order dated 8.01.2020,
the High Court has allowed the aforementioned Civil Miscellaneous
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Petitions, and directed the Registry to refund the full court fee to
Respondent No. 1 herein.
7. In addressing the question of whether the refund of court fee
was permissible under the relevant rules, the High Court considered
Section 69-A of the Tamil Nadu Court Fees and Suit Valuation Act, 1955
(hereinafter, ‘1955 Act’), which reads as follows:
“69-A. Refund on settlement of disputes under section 89
of Code of Civil Procedure.—Where the Court refers the
parties to the suit to any of the modes of settlement of dispute
referred to in section 89 of the Code of Civil Procedure, 1908
(Central Act V of 1908), the fee paid shall be refunded upon such
reference. Such refund need not await for settlement of the
dispute.” (emphasis supplied)
Considering, appeal suits to be continuation of original suits, and
therefore falling within the ambit of ‘suits’ as provided in Section 69-A,
the Court went on to take notice of Section 89, CPC which reads as
follows:
“89. Settlement of disputes outside the Court.—(1) Where
it appears to the Court that there existelements of a settlement
which may be acceptable to the parties, the Court shall formulate
the terms of settlement and give them to the parties for their
observations and after receiving the observations of the parties,
the Court may reformulate the terms of a possible settlement and
refer the same for :—
(a) arbitration;
(b) conciliation;
(c) judicial settlement including
settlement through Lok Adalat: or
(d) mediation.
(2) Were a dispute has been referred—
(a) for arbitration or conciliation, the provisions of the Arbitration
and Conciliation Act,1996 (26 of 1996) shall apply as if the
proceedings for arbitration or conciliation were referred for
settlement under the provisions of that Act;
(b) to Lok Adalat, the Court shall refer the same to the Lok Adalat
in accordance with the provisionsof sub-section (1) of section 20
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of the Legal Services Authority Act, 1987 (39 of 1987) and all
other provisions of that Act shall apply in respect of the dispute so
referred to the Lok Adalat;
(c) for judicial settlement, the Court shall refer the same to a
suitable institution or person and such institution or person shall be
deemed to be a Lok Adalat and all the provisions of the Legal
Services Authority Act, 1987 (39 of 1987) shall apply as if the
dispute were referred to a Lok Adalat under the provisions of that
Act;
(d) for mediation, the Court shall effect a compromise between
the parties and shall follow such procedure as may be prescribed.”
8. After giving due consideration to the above provisions, the High
Court held that, given their beneficial intent, they must be interpreted
liberally, in a manner that would serve their object and purpose. Construing
them narrowly would lead to a situation wherein parties who settle their
dispute through a Mediation Centre or other centres of alternative judicial
settlement under Section 89, CPC would be entitled to claim refund of
their court fee, whilst parties who settle the disputes privately by
themselves will be left without any means to seek a refund. Accordingly,
the High Court opined that such differential treatment between two
similarly situated persons, would constitute a violation of Article 14 of
the Constitution. Therefore, in the High Court’s view, a constitutional
interpretation of Section 89 of the CPC, and resultantly
Section 69-A of
the 1955 Act, would require that these provisions cover all methods of
out-of-court dispute settlement between parties that the Court
subsequently finds to have been legally arrived at.
9. Dissatisfied, the Petitioner herein has challenged the impugned
judgment of the High Court.
10. The gravamen of the Petitioner’s contentions is that Section
69-A of the 1955 Act only contemplates refund of court fees in those
cases where the Court itself refers the parties to any of the alternative
dispute settlement mechanisms listed in Section 89 of the CPC. That
hence it does not apply to circumstances such as in the present case,
where the parties, without any reference by the Court, privately agreed
to settle their dispute outside the modes contemplated under Section 89
of the CPC.
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This Court’s Analysis
11. Having heard the petitioner and thoroughly considered the
arguments advanced, we find ourselves unimpressed by the Petitioner’s
contentions, for reasons outlined below.
12. The provisions of Section 89 of CPC must be understood in
the backdrop of the longstanding proliferation of litigation in the civil
courts, which has placed undue burden on the judicial system, forcing
speedy justice to become a casualty. As the Law Commission has
observed in its 238th Report on Amendment of Section 89 of the Code
of Civil Procedure 1908 and Allied Provisions, Section 89 has now
made it incumbent on civil courts to strive towards diverting civil disputes
towards alternative dispute resolution processes, and encourage their
settlement outside of court (Para 2.3). These observations make the
object and purpose of Section 89 crystal clear – to facilitate private
settlements, and enable lightening of the overcrowded docket of the
Indian judiciary. This purpose, being sacrosanct and imperative for the
effecting of timely justice in Indian courts, also informs Section 69-A of
the 1955 Act, which further encourages settlements by providing for
refund of court fee. This overarching and beneficent object and purpose
of the two provisions must, therefore, inform this Court’s interpretation
thereof.
13. Before expounding further on our interpretation of the aforesaid
provisions, regard must be had to the following
postulation of this Court’s
interpretive role in Directorate of Enforcement v. Deepak Mahajan,
1994 3 SCC 440 –
“24…Though the function of the Courts is only to expound the
law and not to legislate, nonetheless the legislature cannot be asked
to sit to resolve the difficulties in the implementation of its intention
and the spirit of the law. In such circumstances, it is the duty of
the court to mould or creatively interpret the legislation by liberally
interpreting the statute.
25. In Maxwell on Interpretation of Statutes, Tenth Edn. at page
229, the following passage is found:
“Where the language of a statute, in its ordinary meaning and
grammatical construction, leads to a manifest contradiction of the
apparent purpose of the enactment, or to some inconvenience or
absurdity, hardship or injustice, presumably not intended, a
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construction may be put upon it which modifies the meaning of
the words, and even the structure of the sentence. … Where the
main object and intention of a statute are clear, it must not be
reduced to a nullity by the draftsman’s unskilfulness or ignorance
of the law, except in a case of necessity, or the absolute intractability
of the language used.” (emphasis supplied)
Therefore, it is well-settled that the Courts may, in order to avoid
any difficulty or injustice resulting from inadvertent ambiguity in the
language of a statute, mould the interpretation of the same so as to
achieve the true purpose of the enactment. This may include expanding
the scope of the relevant provisions to cover situations which are not
strictly encapsulated in the language used therein.
14. This principle of statutory interpretation has been affirmed
more recently in the decision in Shailesh Dhairyawan v. Mohan
Balkrishna Lulla, (2016) 3 SCC 619 –
“33.…Though the literal rule of interpretation, till some time ago,
was treated as the “golden rule”, it is now the doctrine of purposive
interpretation which is predominant, particularly in those cases
where literal interpretation may not serve the purpose or may
lead to absurdity. If it brings about an end which is at variance
with the purpose of statute, that cannot be countenanced.”
(emphasis supplied)
This was followed in the subsequent decision of this Court in
Anurag Mittal v. Shaily Mishra Mittal, (2018) 9 SCC 691.
15. In
light of these established principles of statutory interpretation,
we shall now proceed to advert to the specific provisions that are the
subject of the present controversy. The narrow interpretation of Section
89 of CPC and Section 69-A of the 1955 Act sought to be imposed by
the Petitioner would lead to an outcome wherein parties who are referred
to a Mediation Centre or other centres by the Court will be entitled to a
full refund of their court fee; whilst parties who similarly save the Court’s
time and resources by privately settling their dispute themselves will be
deprived of the same benefit, simply because they did not require the
Court’s interference to seek a settlement. Such an interpretation, in our
opinion, clearly leads to an absurd and unjust outcome, where two classes
of parties who are equally facilitating the object and purpose of the
aforesaid provisions are treated differentially, with one class being
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deprived of the benefit of Section 69-A of the 1955 Act. A literal or
technical interpretation, in this background, would only lead to injustice
and render the purpose of the provisions nugatory – and thus, needs to
be departed from, in favour of a purposive interpretation of the provisions.
16. It is pertinent to note that the view taken by the High Court in
the impugned judgement has been affirmed by the High Courts in other
states as well. Reference may be had to the decision of the Karnataka
High Court in Kamalamma & ors. v. Honnali Taluk Agricultural
Produce Co-operative Marketing Society Ltd., (2010) 1 AIR Kar. R
279, wherein it was held as follows:
“6. Whether the parties to a suit or appeal or any other proceeding
get their dispute settled amicably through Arbitration, or meditation
or conciliation in the Lok Adalath, by invoking provisions of Section
89, C.P. C. or they get the same settled between themselves without
the intervention of any Arbitrator/Mediator/Conciliators in
Lokadalath etc., and without invoking the provision of Section 89,
C.P.C., the fact remains that they get their dispute settled without
the intervention of the Court. If they get their dispute settled by
invoking Section 89, C.P.C., in that event the State may have to
incur some expenditure but, if they get their dispute settled between
themselves without the intervention of the Court or anyone else,
such as arbitrator/mediator etc., the
State would not be incurring
any expenditure. This being so, I am of the considered opinion
that whether the parties to a litigation get their dispute settled by
invoking Section 89, C.P.C. or they get the same settled between
themselves without invoking Section 89, C.P.C., the party paying
Court-Fees in respect thereof should be entitled to the refund of
full Court-Fees as provided under Section 16 of the Court-Fees
Act, 1870.”
(emphasis supplied)
Section 16 of the Court-Fees Act, 1870 is in parimateria with
Section 69-A of the 1955 Act, and hence the above stated principles are
equally applicable to the present case.
17. The holding in Kamalamma (supra) has been followed by
the Punjab & Haryana High Court in Pradeep Sonawat v. Satish
Prakash, 2015 (1) RCR Civil 955 and Pritam Singh v. Ashok Kumar,
2019 (1) Law Herald (P&H) 721, which in turn were further affirmed in
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Raj Kumar v. Gainda Devi through LRs & ors., 2019 SCC OnLine
P&H 658.
18. The Delhi High Court has also taken a similar view in J.K.
Forgings v. Essar Construction India Ltd. & Ors., (2009) 113 DRJ
612:
“11. The laudable object sought to be achieved by inserting and
amending these sections seems to be speedy disposal. The policy
behind the statute is to reduce the No. of cases by settlement.
Section 89 of C.P.C. and Section 16 Court Fee Act are welcome
step in that direction, as the No. of cases has increased, it is the
duty of court to encourage settlement. In present scenario of huge
pendency of cases in the courts a purposive and progressive
interpretation is the requirement of present hour. The intention of
the Legislature is primarily to be gathered from the object and the
words used in the material provisions. The statute must be
interpreted in their plain grammatical meaning.
12. It is very clear that the Legislative intent of Section 16 of
Court Fees Act was made broad enough to take cognizance of all
situations in which parties arrive at a settlement irrespective of
the stage of the proceedings. It is also obvious that the purpose of
making this provision was in order to provide some sort of incentive
to the party who has approached the court to resolve the dispute
amicably and obtain a full refund of the court fees. Having regard
to this position, the present application will have to be allowed.
14. This is not a case where parties to the suit
after long drawn
trial have come to the court for settlement. Had it been the case
of long drawn trial non-refund of court fees could have been
justified but in such like cases courts endeavor should be to
encourage the parties and court fees attached with the plaint should
be refunded as an incentive to them.
xxx
17. Settlement of dispute only through any of the mode prescribed
under section 89 of C.P.C is not sine qua non of section 89 C.P.C.
rather it prescribes few methods through which settlement can
be reached, sine qua non for applicability of section 89 is settlement
between the parties outside the court without the intervention of
the courts.
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18. It is also not the requirement of the section that court must
always refer the parties to Dispute Resolution Forum. If parties
have arrived at out of court settlement it should be welcomed
subject to principles of equity.
19. Court Fees Act is a taxing statute and has to be construed
strictly and benefit of any ambiguity if any has to go in favour of
the party and not to the state.” (emphasis supplied)
The view taken in both Kamalamma (supra) and J.K. Forgings
(supra) has been subsequently relied upon by the Delhi High Court in
Inderjeet Kaur Raina v. Harvinder Kaur Anand, 2018 SCC OnLine
Del 6557.
19. We find ourselves in agreement with the approach taken by
the High Courts in the decisions stated supra. 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. Such refund of court fee, though it
may not be connected to the substance of the dispute between the parties,
is certainly an ancillary economic incentive for pushing them towards
exploring alternative methods of dispute settlement. As the Karnataka
High Court has rightly observed in Kamalamma (supra), parties who
have agreed to settle their disputes without requiring judicial intervention
under Section 89, CPC are even more deserving of this
benefit. This is
because by choosing to resolve their claims themselves, they have saved
the State of the logistical hassle of arranging for a third-party institution
to settle the dispute. Though arbitration and mediation are certainly
salutary dispute resolution mechanisms, we also find that the importance
of private amicable negotiation between the parties cannot be understated.
In our view, there is no justifiable reason why Section 69-A should only
incentivize the methods of out-of-court settlement stated in Section 89,
CPC and afford step-brotherly treatment to other methods availed of by
the parties.
Admittedly, there may be situations wherein the parties have after
the course of a long-drawn trial, or multiple frivolous litigations, approached
the Court seeking refund of court fees in the guise of having settled their
disputes. In such cases, the Court may, having regard to the previous
conduct of the parties and the principles of equity, refuse to grant relief
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under the relevant rules pertaining to court fees. However, we do not
find the present case as being of such nature.
20. Thus, even though a strict construction of the terms of Section
89, CPC and 69-A of the 1955 Act may not encompass such private
negotiations and settlements between the parties, we emphasize that the
participants in such settlements will be entitled to the same benefits as
those who have been referred to explore alternate dispute settlement
methods under Section 89, CPC. Indeed, we find it puzzling that the
Petitioner should be so vehemently opposed to granting such benefit.
Though the Registry/State Government will be losing a one-time court
fee in the short term, they will be saved the expense and opportunity
cost of managing an endless cycle of litigation in the long term. It is
therefore in their own interest to allow the Respondent No. 1’s claim.
21. Thus, in our view, the High Court was correct in holding that
Section 89 of the CPC and Section 69-A of the 1955 Act be interpreted
liberally. In view of this broad purposive construction, we affirm the
High Court’s conclusion, and hold that Section 89 of CPC shall cover,
and the benefit of Section 69-A of the 1955 Act shall also extend to, all
methods of out-of-court dispute settlement between parties that the Court
subsequently finds to have been legally arrived at. This would, thus,
cover the present controversy, wherein a private settlement was arrived
at, and a memo to withdraw
the appeal was filed before the High Court.
In such a case as well, the appellant, i.e., Respondent No. 1 herein
would be entitled to refund of court fee.
Conclusions and Directions
22. These petitions are accordingly dismissed, and the impugned
judgment of the High Court dated 8.01.2020 is upheld.
23. The petitioners are directed to refund the court fee deposited
by Respondent No. 1 for Appeal Suits Nos. 876 of 2012 and 566 of
2013, within a period of six weeks.
Devika Gujral
Petitions dismissed.
THE HIGH COURT OF JUDICATURE AT MADRAS REP. v.
M.C. SUBRAMANIAM [MOHAN M. SHANTANAGOUDAR, J. ]