For using out-of-court dispute settlement methods, parties are entitled to a refund of the court fees: High Court of Delhi

IN THE HIGH COURT OF DELHI AT NEW DELHI Date of decision: 22.02.2022 CS(COMM) 639 2021 SUN PHARMACEUTICAL INDUSTRIES LTD Plaintiff Through Mr. Sachin Gupta Ms. Jasleen Kaur and Ms. Swati Meena Advs. OLCARE LABORATORIES PVT LTD ..... Defendant Through Mr. Amar Dave Mr. Prakash Gogia Ms. Jaikriti S. Jadeja and Ms. Prapti Allagh Advs. HON BLE MR. JUSTICE SURESH KUMAR KAIT JUDGMENTI.A. 2939 2022The present application has been jointly filed by plaintiff and defendant praying for issuance of decree in terms of prayer clause 28(b) of the present suit and for refund of entire Court fees. In the present suit filed by the plaintiff seeking permanent injunction restraining infringement of copyright trade mark passing off unfair competition delivery up damages and or rending of accounts of profits etc. CS(COMM) 639 2021 against the defendant parties have arrived at an amicable settlement out of court in terms enumerated in Paragraph 2 of the present application. Learned counsel for the plaintiff submits that in terms of settlement the present suit be decreed against defendant. Upon hearing learned counsel for the parties and upon perusal of the application and in specific contents of Para 2 thereof this Court finds that the settlement reached between the parties is valid and lawful. Accordingly the present application filed by the plaintiff and Needless to say parties shall be bound by the terms of settlement defendant is allowed. reached between them. CS(COMM) 639 2021 The application stands disposed of accordingly. In view of order passed in IA No. 2939 2022the present suit is decreed qua defendant in terms of Paragraph No.2 thereof which shall form part of decree sheet. Decree sheet be accordingly drawn. Learned counsel also submits that since the subject matter of the suit stands amicably resolved therefore the entire court fees be refunded. CS(COMM) 639 2021 Reliance is placed upon decision of Hon ble Supreme Court in The HC of Judicature at Madras Rep. by its Registrar General v. MC. Subramaniam Ors. 3 SCC 560. 10. The relevant observations of the Hon’ble Supreme Court in The HC of Judicature at Madras Rep. by its Registrar General are as under: “23. 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 the 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 incentivise the methods of out of court settlement stated in CS(COMM) 639 2021 Section 89 CPC and afford step brotherly treatment to other methods availed of by the parties. 24. 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 25. Thus even though a strict construction of the terms of Section 89 CPC and Section 69 A of the 1955 Act may not encompass such private negotiations and settlements between the parties we emphasise 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 Respondent 1 s 26. Thus in our view the High Court was correct in holding that Section 89 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 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 CS(COMM) 639 2021 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 1 herein would be entitled to refund of court fee.” 11. Concurring with afore noted decision of Hon’ble Supreme Court in The HC of Judicature at Madras Rep. by its Registrar General the plaintiff is entitled to refund of entire court fees. Registry is directed to issue necessary certificate authorization in favour of the plaintiff to seek refund before the appropriate authorities. 12. With aforesaid directions the present suit stand decreed accordingly. Pending application if any is disposed of as infructuous. 13. The dates already fixed i.e. 02.03.2022 and 21.03.2022 stand FEBRUARY 22 2022 rk SURESH KUMAR KAIT J CS(COMM) 639 2021 

Summary: 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.”