Summary
The Supreme Court held that refund of court fees on settlement of a suit through mediation under Section 89 CPC is governed by Entry 3 of List II (fees taken in courts), not Entry 11A of List III, so Maharashtra's Court Fees Act and the notification under its Section 43(2) allowing only partial refund were not repugnant to the Court Fees Act, 1870. The full refund for Lok Adalat settlements under Section 21 of the Legal Services Authorities Act does not extend to mediation. The appeal failed, though the Court ordered refund to the appellant under Article 142 without creating a precedent.
Issues
- Whether refund of court fees on settlement of a suit through an ADR mode under Section 89 CPC falls under 'administration of justice' in Entry 11A of List III, so that Section 16 of the Court Fees Act, 1870 prevails over the Maharashtra Court Fees Act, 1959.
- Whether the notification dated 08.05.2013 under Section 43(2) of the Maharashtra Court Fees Act, 1959, providing only partial refund, was invalid for inconsistency with the Central law.
- Whether the full refund provided under Section 21 of the Legal Services Authorities Act, 1987 for Lok Adalat settlements must be extended to settlements through mediation.
Provisions considered
- Seventh Schedule, List II Entry 3 and List III Entry 11A, Constitution of IndiaEntry 3 of List II expressly gives the State power over fees taken in all courts except the Supreme Court; refund of court fees on an ADR settlement does not move into Entry 11A of List III merely because ADR concerns administration of justice, so no question of repugnancy with Central law arose. (¶¶ 6, 9, 10, 11, 12, 13, 21)
- Article 254, Constitution of IndiaThe doctrine of repugnancy, under which a Central law prevails over an inconsistent State law on a Concurrent List subject, was explained but held inapplicable since court fees fall in the State List. (¶¶ 11, 12)
- Section 16, Court Fees Act, 1870Provides for a certificate for refund of the full fee where the court refers the parties to a Section 89 CPC mode; the appellant's claim to full refund under it was rejected since refund in Maharashtra is governed by the State Act made under Entry 3 of List II. (¶¶ 3.1, 6, 21)
- Section 43 (and Section 16A inserted by Maharashtra Act No. X of 2018), Maharashtra Court Fees Act, 1959Section 43(1) gives half refund where a suit is settled before evidence and Section 43(2) lets the State order refunds by notification; the impugned notification under Section 43(2) was upheld. Section 16A, inserted in 2018, now gives full refund where a suit is disposed of through a Section 89 mode. (¶¶ 6, 22, 23)
- Section 21, Legal Services Authorities Act, 1987Its direction that court fee be refunded under the Court Fees Act, 1870 when a Lok Adalat settles a referred case applies to Lok Adalat awards only and cannot be extended to mediation under Section 89 CPC, the two processes being distinct. (¶¶ 6, 15, 16, 17, 19, 20, 21)
- Section 89, Code of Civil Procedure, 1908Its object is resolution of disputes by ADR to reduce pendency; refund of court fees is only an incidental benefit, so a partial-refund scheme under the State Act does not negate Section 89. (¶¶ 14, 14.1, 14.2, 14.3)
- Article 142, Constitution of IndiaInvoked, in the peculiar facts and expressly without precedential value, to order refund of the court fee in issue to the appellant since the dispute had been settled amicably and the sum was not excessive. (¶ 24)
Held
- Entry 3 of List II specifically empowers the State Legislature to legislate on fees taken in all courts except the Supreme Court; refund of court fees on settlement through ADR does not fall within Entry 11A of List III merely because ADR forms part of the administration of justice. (¶¶ 12, 13, 21)
- Since court fees fall in the State List, no question of repugnancy between the Court Fees Act, 1870 and the Maharashtra Court Fees Act, 1959 arose, and the State notification under Section 43(2) providing partial refund could not be struck down for inconsistency with Central law. (¶¶ 11, 12, 21)
- Section 89 CPC aims at resolving disputes through ADR and reducing pendency; refund of court fees, partial or complete, is only an incidental benefit, so a refund scheme giving less than full refund does not negate Section 89. (¶¶ 14.2, 14.3)
- A Lok Adalat, which only records a settlement as an executable award, and mediation under Section 89 CPC are distinct processes governed by different legislation; the full refund prescribed by Section 21 of the Legal Services Authorities Act for Lok Adalat settlements cannot be extended to mediated settlements. (¶¶ 16, 17, 18, 19, 20)
- After Section 16A was inserted into the Maharashtra Court Fees Act by Maharashtra Act No. X of 2018, parties whose suits are settled through a Section 89 mode are entitled to full refund of court fees; before that amendment, refund was governed by Section 43 and parties were not entitled to 100% refund. (¶¶ 22, 23)
- In the peculiar facts, and expressly without precedential value, the Court ordered refund of the court fee in issue (about Rs. 5 lakh) to the appellant under Article 142, the dispute having been amicably settled. (¶ 24)
Result
Appeal dismissed and the High Court's rejection of the challenge to the notification dated 08.05.2013 upheld; however, under Article 142 and without precedential value, the court fee in issue was directed to be refunded to the appellant.