The Delhi High Court has held that parties who amicably settle a suit, counterclaim or appeal are entitled to a full refund of the court fee paid, and there is no requirement to file a separate application seeking such refund.

A Division Bench comprising Justice Anil Kshetarpal and Justice Bharat Parashar observed that, following the amendment to Section 16 of the Court Fees Act by the Delhi government, refund of court fee upon settlement of a dispute constitutes a “substantive statutory entitlement.”

Courts Must Direct Refund While Disposing of Settled Cases

The High Court held that whenever a matter is settled, whether through a mechanism contemplated under Section 89 of the Code of Civil Procedure (CPC) or otherwise, the Court disposing of the matter should itself direct refund of the court fee.

The Court further directed that a certificate authorising the parties to receive the full amount of court fee paid in respect of the claim or counterclaim should be issued along with the order disposing of the case.

The direction is intended to eliminate the need for parties to undertake separate proceedings or file applications merely to obtain a refund after the dispute has already been settled.

Delhi Government Asked to Ensure Time-Bound Refund

The High Court also directed the Government of NCT of Delhi to take necessary administrative measures to ensure that court-fee refunds are processed in a time-bound manner once the certificate issued by the Court is presented.

The Court observed that such administrative steps would help prevent unnecessary litigation concerning refund of court fees.

The order has also been directed to be circulated among all Principal District and Sessions Judges in Delhi.

Case Before the High Court

The directions were issued while dealing with an application seeking refund of court fee in an appeal filed by Hitech Enterprises against Modern Construction Company Delhi.

The High Court made it clear that once the dispute has been settled, the refund follows as a statutory entitlement and the parties should not be required to initiate separate proceedings for securing the same.

Case: Hitech Enterprises v. Modern Construction Company Delhi
Court: Delhi High Court
Bench: Justice Anil Kshetarpal and Justice Bharat Parashar
Issue: Refund of court fee following settlement of dispute
Relevant Provision: Section 16, Court Fees Act; Section 89, CPC