Litigants will not be entitled to refund of court fees if disputes get settled out of court after commencement of trial, rules Madras High Court

Learn the stated distinction and keep the two meanings separate. CHENNAI Litigants will not be entitled to return of court fees if their civil disputes lead to an out of the court settlement after the commencement of trial in civil suits, the Madras High Court has held after refusing to follow the judgment passed by the Supreme Court in the 2021 M.C. Subramaniam’s case. Therefore, the continued existence of Section 69 along with the words “before any evidence has been recorded on the merits of the claim” and the Supreme Court’s 2010 ruling that courts could refer civil disputes for ADR only before commencement of trial would make it clear that litigants would not be entitled to refund of court fees after the trial commences, the judge held.

The judge said, such premature refund would go against the interests of the public exchequer if the dispute does not get settled through ADR.

Use the stated distinction to avoid mixing up different meanings. Section 69 of the 1955 Act, as it stood originally, provided for refund of 50% of court fees “whenever any suit is dismissed as settled out of court before any evidence has been recorded on the merits of the claim.” In 2007, Section 69A was introduced to the Act providing for refund of 100% of the court fees if the dispute gets settled after the court concerned refers the matter for arbitration, mediation, conciliation, Lok Adalat or such other alternative dispute resolution (ADR) mechanisms mentioned in Section 89 of the Code of Civil Procedure (CPC). However, even then, the legislature consciously did not tinker with the words “whenever any suit is dismissed as settled out of court before any evidence has been recorded on the merits of the claim.” Further, Justice Balaji highlighted that the Supreme Court in Afcons Infrastructure case had held that the civil courts could refer disputes to the ADR mechanisms mentioned in Section 89 of CPC only before commencement of trial because otherwise, the litigants could use it as a ruse to protract the trial.

• CHENNAI Litigants will not be entitled to return of court fees if their civil disputes lead to an out of the court settlement after the commencement of trial in civil suits, the Madras High Court has held after refusing to follow the judgment passed by the Supreme Court in the 2021 M.C. Subramaniam’s case. • Therefore, the continued existence of Section 69 along with the words “before any evidence has been recorded on the merits of the claim” and the Supreme Court’s 2010 ruling that courts could refer civil disputes for ADR only before commencement of trial would make it clear that litigants would not be entitled to refund of court fees after the trial commences, the judge held. • Justice Balaji held that both the petitioners would not be entitled to refund of any amount of court fees since the out of court settlement had been reached only after commencement of trial.