The Bombay High Court by a judgment dated April 2, 2019, has clarified that a litigant who settles a suit before Lok Adalat held under the Legal Services Authorities Act, 1987, is entitled to 100% refund of court fees paid.
A Bench comprising of Justices A.S. Oka and M.S. Sankelcha held that “Section 16 of the Central Court Fees Act stands incorporated in sub-Section (1) of the Section 21 of the said Act of 1987 and, therefore, when a civil suit is referred to a Lok Adalat which ends with an Award of the Lok Adalat, the plaintiff is entitled to 100% refund of Court fees paid in the said suit. Thus, a defendant who files a counter claim in the suit is entitled to 100% refund of the Court fees paid on a counter claim which is settled before a Lok Adalat.”
In this case, a suit was placed before the Lok Adalat which was earlier filed in the Court of Civil Judge, Senior Division at Malshiras, District Solapur. The suit was disposed of in terms of the compromise by the Lok Adalat and an award was made.
Thereafter, an application was made by the petitioner before the Trial Judge for refund of the entire amount of court fees of Rs. 3 lakhs paid on the suit. The Trial Judge passed an order allowing the full refund, relying on Section 89 of the Civil Procedure Code, 1908, and Section 21 of the Legal Services Authorities Act, 1987.
However, a District Judge subsequently directed the petitioner to deposit Rs. 2.25 lakh with the court as the petitioner was only entitled to refund of 25% of the court fee paid under the Maharastra Court Fees Act, 1959. Aggrieved by the said communication, the petitioner moved the Bombay High Court, which framed the legal question as follows:
“Whether a litigant who settles a suit before Lok Adalat held under the Legal Services Authorities Act, 1987 (for short “the said Act of 1987) is entitled to 100% refund of Court Fees paid?”
The state contended that such litigants are only entitled a refund to the extent of 25%, in view of a May 2013 notification issued under Section 43 the Maharashtra Court Fees Act, 1959. The Government Pleader argued that as far as payment and refund of court fees in the Civil Courts in Maharashtra is concerned, the Maharashtra Court Fees Act is a complete code by itself.
The Bombay High Court, however, rejected the contention and accepted the submission made by the petitioner that Section 21 of the Legal Services Authorities Act read with Section 16 of the Central Court Fees Act was applicable.
Section 21 of the Legal Services Authorities Act lays down that where a case has been settled by a Lok Adalat, the court fee paid should be refunded “in the manner provided under the Court Fees Act, 1870.”
Section 16 of the Central Court Fees Act, which deals with refund of court fees states:
“Where the Court refers the parties to the suit to any one of the mode of settlement of dispute[including by means of a Lok Adalat] 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.”
Taking into consideration these provisions, the court observed that on the point in issue the Central Court Fees Act and not the Maharashtra Court Fees Act would apply.
Accordingly, the court stated that “On plain reading of Section 21, the provisions of the Central Court Fees Act relating to refund of Court fees[Section 16] stand incorporated in Section 21……The effect of such incorporation is that the provisions of Section 16 of the Central Court Fees Act stand incorporated in sub Section (1) of Section 21 and Section 16 has now become a part of sub Section (1) of Section 21. As pointed out earlier, Section 16 is applicable when a suit referred by the Court to one of the three modes of settlement under Section 89 of the CPC, which includes Lok Adalat, is settled. Thus, it is crystal clear that once there is a settlement of a suit before the Lok Adalat, by virtue of incorporation of the provisions of Section 16 of the Central Court Fees Act into sub Section (1) of Section 21, the plaintiff in a suit settled before the Lok Adalat by an Award of a Lok Adalat, will be entitled to 100% refund of Court fees.”
