Duty of court -to Encourage Settlement between Parties: High Court of New Delhi

IN THE HIGH COURT OF DELHI AT NEW DELHI RFA(OS) 78 2019 C.M. Appl. Nos. 38986 38987 2019 VIJAY KUMAR & ORS Through: Mr. Prag Chawla Advocate MERA BABA INFRASTRUCTURE PVT LTD Through: Mr. Rajeev Aggarwal Advocate Date of Decision: 17th March 2021 HON BLE MR. JUSTICE MANMOHAN HON BLE MS. JUSTICE ASHA MENON JUDGMENT MANMOHAN JNo.78 2019 The Supreme Court of India in ‘The High Court of Judicature at Madras represented by Its Registrar General Vs. M.C. Subramaniam Ors.’ SLP(C) No. 3063 3064 2021 decided on 17th February 2021 has held as under “18. The Delhi High Court has also taken a similar view in J.K Forgings v. Essar Construction India Ltd. & Ors. 113 DRJ “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 settlement. In present scenario of huge pendency of cases in the courts a purposive and progressive interpretation is the requirement of present hour. 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 is the duty of court the stage of 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 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 the proceedings. It 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 nonrefund of court fees could have been justified but in such like cases courts endeavor should be to encourage the parties and court fees RFANo.78 2019 attached with the plaint should be refunded as an incentive 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 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.”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 Kamalammaparties 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 RFANo.78 2019 themselves they have saved the State of 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 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 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 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 21. Thus in our view the High Court was correct in Holding that Section 89 of the CP and Section 69 A of the 1955 Act be 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 RFANo.78 2019 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 In such a case as well the appellant i.e. Respondent No.1 herein would be entitled to refund of court fee.” Keeping in view the aforesaid mandate of law the Registry is directed to issue to an authorized representative of the appellants a certificate authorizing him her to receive back from the Collector half the amount of the Court fee paid by them in the present appeal Accordingly the present appeal stands disposed of in view of the settlement arrived at between the parties MANMOHAN J ASHA MENON J MARCH 17 2021 RFANo.78 2019 Page 

Summary: It was the duty of court to encourage settlement. More over court fees was a taxing statute and had to be construed strictly and benefit of any ambiguity if any had to go in favor of the party and not to the state. This remarkable judgement was passed by New Delhi High Court in the case of Vijay Kumar and Ors v. Mera Baba Infrastructure Private ltd [RFA(OS) 78/2019, C.M. Appl. Nos. 38986-38987/2019] by Hon’ble Justice Mr. Manmohan and Ms. Asha Menon. The appeal had been filed challenging the decree dated 22nd May, 2019 whereby the Learned Single Judge was pleased to decree the suit for recovery filed by the Respondent for a sum of Rs. 2,15,74,500/- along with interest at the rate of 7% per annum from the date of institution of the suit till its realization. The parties stated that the matter had been amicably resolved by way of an out of Court settlement. The appellants prayed for refund of 50% of the Court fee.  The Court referred the case of the High Court of Judicature at Madras represented by Its Registrar General Vs. M.C. Subramaniam &amp; Ors. The Delhi High Court had also taken a similar view in J.K. Forgings v. Essar Construction India Ltd. &amp; Ors, (2009) and Inderjeet Kaur Raina v. Harvinder Kaur Anand, 2018 SCC that, “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. Court Fees Act is a taxing statute and has to be construed strictly and benefit of any ambiguity if any has to go in favor of the party and not to the state.” The court opinioned that, “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.”