Mudavangadan Abbas Vs. Kurrippurathodi Mayinkutty [Kerala High Court; 29-06-2012]

Civil Procedure Code, 1908 – Section 89 & Order 23 Rule 3 – Court Fees Act, 1870 – Section 16 – Legal Services Authorities Act, 1987 –  Sections 20 & 21 – Settlement of disputes outside the Court – Refund of Court fee – If the matter is settled between the parties, otherwise than on a reference under S.89 of the CPC, the plaintiff cannot take advantage of S.16 of the Court Fees Act – To say that there was mediation, it must be shown that the Court referred the dispute for settlement outside the Court as per mediation – A private arrangement between the parties without the intervention of the Court would not amount to a settlement as provided under Section 89 – If Section 89 CPC does not apply, refund of court fee as provided under Section 16 of the Court Fees Act, 1870 does not arise. In cases covered by private settlement and a compromise under Rule 3 of Order 23 of the CPC, the Kerala Court Fees and Suits Valuation Act would apply.

# 2012 (3) KLT 540 : 2012 (3) KLJ 560 : 2012 (3) KHC 391

IN THE HIGH COURT OF KERALA AT ERNAKULAM

K.T. Sankaran, J.

Mudavangadan Abbas Vs. Kurrippurathodi Mayinkutty

O.P.(C) No. 1834 of 2011

Decided On : 29-Jun-2012

Advocates : For Petitioner: Mohammed Iqbal; For Respondents: T.K. Sajeev (GP)

JUDGMENT

K.T.Sankaran, J.

1. The question involved in this Original Petition is whether the plaintiff who paid the full court fee is entitled to get refund of the entire amount of court fee on settlement of the disputes between the parties and on filing a compromise petition under Rule 3 of Order XXIII of the Code of Civil Procedure and whether the plaintiff can invoke the benefit of Section 16 of the Court Fees Act, 1870.

2. The petitioner and others filed a suit against the respondents for specific performance of an agreement for sale. The suit was valued at ₹27,46,600/- and a court fee of ₹2,38,128/-was paid. The parties to the suit settled the disputes and they filed a compromise petition under

# Rule 3 of Order XXIII of the Code of Civil Procedure.

In the compromise petition, it was stated that the plaintiffs do not want the relief for specific performance of the contract and that the defendants had repaid the advance sale consideration paid by the plaintiffs to them. It is also stated that the parties agreed to bear the court costs equally. A prayer was made for refund of the court fee paid by the plaintiffs.

3. The court below passed a judgment dated 13.1.2011, by which, the compromise was recorded and the suit was dismissed with costs. The court below directed refund of half of the court fee to the plaintiffs. In this Original Petition, the fourth plaintiff prays for a declaration that the plaintiffs are entitled to get refund of the entire court fee paid by them. There is also a prayer for issuing a direction to the Sub Court, Tirur to pass an order for refund of the entire court fee.

4. The learned counsel for the petitioner relied on the decisions in

# Vasudevan v. State of Kerala, 2003 (3) KLT 993

and

# Aboobacker v. District Collector, 2006 (3) KLT 670

The learned counsel contended that clause (d) of sub-section (1) of

# Section 89 of the Code of Civil Procedure

applies and the suit should be deemed to have been disposed of as per the settlement contemplated under Section 89 of the Code of Civil Procedure. If so, the counsel contends that the plaintiffs are entitled to get refund of the entire court fee, as provided under

# Section 16 of the Court Fees Act, 1870.

5. Section 89 of the Code of Civil Procedure provides for settlement of disputes outside the Court. Section 89 reads as follows:

# 89. Settlement of disputes outside the Court:-

(1) Where it appears to the Court that there exist elements 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 Adalath; or

(d)    mediation.

(2) Where 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 provisions of sub-section (1) of section 20 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.”

6. Section 89 of the Code of Civil Procedure contemplates a reference to the appropriate authority as provided under sub­-section (2), if it appears to the Court that there exist elements of a settlement. Rule 1A of Order X of the Code of Civil Procedure provides that the Court shall direct the parties to the suit to opt either mode of settlement outside the Court as specified in sub­section (1) of Section 89. Section 20 of the Legal Services Authorities Act provides for cognizance of cases by Lok Adalats. Section 21 of the Legal Services Authorities Act provides that every award of the Lok Adalat shall be deemed to be a decree of a civil court and where a compromise or settlement has been arrived at, by a Lok Adalat in a case referred to it under sub­section (1) of Section 20, the court fee paid in such case shall be refunded in the manner provided under the Court Fees Act, 1870 (Act 7 of 1870).

7. Section 16 of the Court Fees Act, 1870, as amended, reads as follows:

# 16. Refund of fee

Where the Court refers the parties to the suit to anyone of the mode of settlement of dispute referred to in Section 89 of the Code of Civil Procedure, 1908 (5 of 1908), the plaintiff shall be entitled to a certificate from the Court authorising him to receive back from the Collector, the full amount of the fee paid in respect of such plaint.”

8. On a careful consideration of Section 89 of the Code of Civil Procedure, Sections 20 and 21 of the Legal Services Authorities Act and Section 16 of the Court Fees Act, 1870, it is clear that for refund of court fee as provided under Section 16 of the Court Fees Act, 1870, the matter should have been referred to anyone of the modes of settlement under Section 89 of the Code of Civil Procedure. If the matter is settled between the parties, otherwise than on a reference under Section 89 of the Code of Civil Procedure, the plaintiff cannot take advantage of Section 16 of the Court Fees Act, 1870. To say that there was mediation as provided under Section 89 of the Code of Civil Procedure, it must be shown that the Court referred the dispute for settlement outside the Court as per mediation, as provided in Section 89 of the Code of Civil Procedure. In other words, a private arrangement between the parties without the intervention of the Court would not amount to a settlement as provided under Section 89 of the Code of Civil Procedure. If Section 89 CPC does not apply, refund of court fee as provided under Section 16 of the Court Fees Act, 1870 does not arise. In cases covered by private settlement and a compromise under Rule 3 of Order XXIII of the Code of Civil Procedure, the Kerala Court Fees and Suits Valuation Act would apply. Section 69 of the said Act reads as follows:

# 69. Refund in cases of compromise or when suit is decided on the admission of parties

When a suit or appeal is compromised or when a suit is decided solely on the admission of the parties without any investigation, one-half of the Court fee paid on the plaint or memorandum of appeal shall be ordered by the Court to be refunded to the parties by whom the same have been paid respectively:

Provided that no refund shall be ordered where only one-tenth of the amount of fee on plaint as required by Section 4A or one-third of the amount of fee on memorandum of appeal as required by Section 52 has been paid by the parties.”

9. The decisions relied on by the learned counsel for the petitioner do not apply to the facts of the present case. In Vasudevan v. State of Kerala, 2003 (3) KLT 993 and Aboobacker v. District Collector, 2006 (3) KLT 670, there were reference of the dispute for settlement under Section 89 of the Code of Civil Procedure. In Vasudevan v. State of Kerala, 2003 (3) KLT 993, it was held that on settlement of the case on a reference under Section 89 of the Code of Civil Procedure to the Lok Adalat, the plaintiff would be entitled to get refund of the entire court fee as provided under Section 16 of the Court Fees Act, 1870. In Aboobacker v. District Collector, 2006 (3) KLT 670, the question which arose for consideration was, after the civil court having ordered refund of the court fee, whether the District Collector could refuse refund on the ground that the cancelled court fee stamp papers were not produced. It was held that the District Collector could not do so. In

# John Arthur Henshaw v. Sulochana, 2010 (1) KLT 10

a learned single Judge held that on a settlement of the case on reference to the Lok Adalat, the plaintiffs are not entitled to get refund of one-tenth of the court fee paid by them under Section 4A of the Kerala Court Fees and Suits Valuation Act. The questions which arise for consideration in the present case did not arise for consideration in the aforesaid decisions.

10. For the aforesaid reasons, I am of the view that the court below was right in holding that the plaintiffs are entitled to get refund of only one-half of the court fee paid. No interference is called for.

The Original Petition is, accordingly, dismissed.

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