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

The Madras High Court has ruled that litigants will not be entitled to a refund of court fees if civil disputes are resolved out of court after the trial has commenced. The court disagreed with the 2021 Supreme Court judgment in the M.C. Subramaniam case, which had not considered a 2010 Supreme Court decision from a bench of equal strength in Afcons Infrastructure Limited versus Cherian Varkey Construction Company Private Limited.

Justice P.B. Balaji stated that the latter decision should be followed, and he chose to rely on it instead of the M.C. Subramaniam judgment. Civil Procedure Code Section 69 of the 1955 Act allows for a 50% refund of court fees when a suit is dismissed as settled out of court before any evidence is recorded on the merits of the claim.

However, Section 69A, introduced in 2007, and amended in 2017, provided for a 100% refund if the dispute is settled through alternative dispute resolution (ADR) mechanisms like arbitration, mediation, or Lok Adalat. The court emphasized that litigants would not be eligible for a refund of court fees after the trial begins, citing the persistence of Section 69's original wording and the 2010 Supreme Court ruling.

The verdict dismissed two civil revision petitions filed by different litigants who had sought refunds for court fees paid after their disputes were settled out of court during trial. The court requested the Tamil Nadu Law Commission to review the provision and consider restoring it as it was introduced in 2007 to protect the state exchequer.