Court fee must be refunded in case of compromise-High Court

The Punjab and Haryana High Court has ruled that court fee must be refunded in all cases that end up in a compromise. The ruling by the HC is likely to save litigants a significant amount of money.

The ruling by the court is applicable in all cases. The suit is to be determined by the court based on the compromise, and not necessarily through the process of mediation or in a lok adalat.

The ruling by Justice Dr. Bharat Parsoon is significant because legal matters often end up costing litigants several lakhs. The court fee in such cases is usually determined on the basis of a certain percentage of the suit amount.

The issue was brought to the notice of the High Court after one Pradeep Sonowat complained that he was not refunded the court fee because his case had not been resolved in the lok adalat. Sonowat filed a petition against Satish Prakash, challenging the dismissal of an application seeking refund of court fee affixed on the plaint after the litigation had been resolved through a mutual compromise.

Justice Parsoon ruled: “It is felt that whether the compromise is with the persuasion of the court or amongst the parties by themselves in terms of Section 89 of the CPC or otherwise, invocation of provision of Section 16 of the Act should be made in all cases so that settlements by way of alternative dispute resolution mechanism are encouraged….”

“Merely because the matter has not been settled in lok adalat, invocation to Section 16 of the Act should not have been refused…. The petitioner-plaintiff is entitled to a certificate from the court below authorising him to receive back the full amount of the court fee paid in respect of the plaint, from the Collector”

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