Code of Civil Procedure, 1908: s.89 – Tamil Nadu Court Fees and Suit Valuation Act, 1955 – s.69-A – Parties entering into a private out of court settlement for resolving the controversy between them outside the modes contemplated under s.89 and seeking permission to withdraw suit and also refund of court fees – Refund of court fees – Permissibility of – Held: The purpose of s.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 – Object of s.89 is to facilitate private settlements, and enable lightening of the overcrowded docket of the Indian judiciary – s.69-A of the Act, 1955 and s.89 CPC should be interpreted liberally in a manner that would serve their object and purpose – Construing them narrowly would lead to situation wherein parties who settle the dispute through mediation centre or other centres of alternative judicial settlement under s.89 would be entitled to claim refund of their court fees whilst parties who settle the disputes privately by themselves will be left without any means to seek the refund – Differential treatment between two similarly situated persons would constitute a violation of Art.14 of the Constitution – Thus, s.89 of CPC shall cover, and the benefit of s.69-A of the 1955 Act shall also extend to, all methods of out-ofcourt dispute settlement between parties that the Court subsequently 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 Court.
Interpretation of statutes: Purposive interpretation – It is wellsettled that the Courts may, in order to avoid any difficulty or injustice resulting from inadvertent ambiguity in the language of a statute, mould the interpretation of the same so as to achieve the true purpose of the enactment – This may include expanding the scope of the relevant provisions to cover situations which are not strictly encapsulated in the language used therein.
Dismissing the Special Leave Petitions, the Court HELD: 1. The provisions of Section 89 of CPC must be understood in the backdrop of the longstanding proliferation of litigation in the civil courts, which has placed undue burden on the judicial system, forcing speedy justice to become a casualty. As the Law Commission has observed in its 238th Report on Amendment of Section 89 of the Code of Civil Procedure 1908 and Allied Provisions, Section 89 has now made it incumbent on civil courts to strive towards diverting civil disputes towards alternative dispute resolution processes, and encourage their settlement outside of court (Para 2.3). These observations make the object and purpose of Section 89 crystal clear – to facilitate private settlements, and enable lightening of the overcrowded docket of the Indian judiciary. This purpose, being sacrosanct and imperative for the effecting of timely justice in Indian courts, also informs Section 69-A of the 1955 Act, which further encourages settlements by providing for refund of court fee. This overarching and beneficent object and purpose of the two provisions must, therefore, inform this Court’s interpretation thereof. [Para 12][560-B-E]
2. It is well-settled that the Courts may, in order to avoid any difficulty or injustice resulting from inadvertent ambiguity in the language of a statute, mould the interpretation of the same so as to achieve the true purpose of the enactment. This may include expanding the scope of the relevant provisions to cover situations which are not strictly encapsulated in the language used therein. The narrow interpretation of Section 89 of CPC and Section 69-A of the 1955 Act sought to be imposed by the Petitioner would lead to an outcome wherein parties who are referred to a Mediation Centre or other centres by the Court will be entitled to a full refund of their court fee; whilst parties who similarly save the Court’s time and resources by privately settling their dispute themselves will be deprived of the same benefit, simply because they did not require the Court’s interference to seek a settlement. Such an interpretation, in our opinion, clearly leads to an absurd and unjust outcome, where two classes of parties who are equally facilitating the object and purpose of the aforesaid provisions are treated differentially, with one class being deprived of the benefit of Section 69-A of the 1955 Act. A literal or technical interpretation, in this background, would only lead to injustice and render the purpose of the provisions nugatory – and thus, needs to be departed from, in favour of a purposive interpretation of the provisions. [Paras 13, 15][561-B-C; F-H; 562-A-B]
3. 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, 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. 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. [Para 19][564-C-G]
4.1 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, the present case is not of such nature. [Para 19][564-G-H; 565-A]
4.2 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, 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. 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 No. 1’s claim. [Para 20][565-A-C]
4.3 Thus, the High Court was correct in holding that Section
89 of the CPC and Section 69-A of the 1955 Act be interpreted liberally. In view of this broad purposive construction, the High Court’s conclusion, is affirmed. 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 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 Court. In such a case as well, the appellant, i.e., Respondent No. 1 would be entitled to refund of court fee. [Para 21][565-C-E]
Directorate of Enforcement v. Deepak Mahajan, 1994
3 SCC 440 : [1994] 1 SCR 445; Shailesh Dhairyawan v. Mohan Balkrishna Lulla, (2016) 3 SCC 619 : [2015]
12 SCR 70; Anurag Mittal v.Shaily Mishra Mittal, (2018) 9 SCC 691: [2018] 10 SCR 123 – relied on. Kamalamma & Ors. v.Honnali Taluk Agricultural
Produce Co-operative Marketing Society Ltd., (2010)
1 AIR Kar. R 279; Pradeep Sonawat v.Satish Prakash, 2015 (1) RCR Civil 955; Pritam Singh v.Ashok Kumar, 2019 (1) Law Herald (P&H) 721; Raj Kumar v.Gainda Devi through LRs & Ors., 2019 SCC OnLine P&H 658; J.K. Forgings v. Essar Construction India Ltd. & Ors., (2009) 113 DRJ 612; Inderjeet Kaur Raina v. Harvinder Kaur Anand, 2018 SCC OnLine Del 6557 – referred to.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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