The benefit of Section 69-A of the Court fees Act, 1955 extends to all methods of out-of-court dispute settlement between parties: High Court of Delhi
The parties who have agreed to settle their disputes without requiring judicial intervention under Section 89 CPC deserves the benefit of court fees refund. There is no justifiable reason why Section 69-A of Court fees Act should only incentivise 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. Thus, even though a strict construction of the terms of Section 89 CPC and Section 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 and the same upheld by High Court of Delhi through the learned bench led by Justice Suresh Kumar Kait in the case of V GUARD INDUSTRIES LTD vs. RAMESH KUMAR &amp; ANR. [CS(COMM) 556/2021] on 11.02.2022 The facts of the case are that the plaintiff filed a suit against the defendants seeking permanent injunction restraining infringement of trademark “V-GUARD”, copyright and designs, passing-off, unfair competition, rendition of accounts of profits, delivery up, etc. The plaintiff and defendants have amicably resolved their disputes out of court. Plaintiff prays that in terms of settlement, the present suit be decreed against defendants. The present application has been jointly filed by plaintiff and defendants praying for issuance of decree in terms of prayer of the present suit and for refund of entire Court fees. The plaintiff’s counsel submitted that in terms of settlement, the present suit should be decreed against defendants. Counsel further submitted that since the subject matter of the suit stands amicably resolved, therefore, in terms of Section 16 of the Court Fees Act, the entire court fees should be refunded to the plaintiff. According to facts and circumstances of the case, the Court held that the plaintiff shall be entitled to refund of entire court fees as the benefit of Section 69-A of the 1955 Act extends to all methods of out-of-court dispute settlement between parties that the Court subsequently finds to have been legally arrived at. The Registry was directed to issue necessary authorization in favour of the plaintiff to seek refund before the appropriate authorities. The Court observed that “the parties who have agreed to settle their disputes without requiring judicial intervention under Section 89 CPC are deserving of the benefit of court fees refund. There is no justifiable reason why Section 69-A of Court fees Act should only incentivise 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. Thus, even though a strict construction of the terms of Section 89 CPC and Section 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.”
 IN THE HIGH COURT OF DELHI AT NEW DELHI Date of decision: 11.02.2022 CS(COMM) 556 2021 V GUARD INDUSTRIES LTD Plaintiff Through Mr. Sachin Gupta Ms. Jasleen Kaur Mr. Pratyush Rao Ms. Namrata Tripathi Mr. Snehal Singh and Ms. Swati Meena Advs. RAMESH KUMAR & ANR. in person through vc Defendants HON BLE MR. JUSTICE SURESH KUMAR KAIT JUDGMENTThe hearing has been conducted through video conferencing. I.A. 2348 2022The present application has been jointly filed by plaintiff and defendants praying for issuance of decree in terms of prayer clause 25& b) of the present suit and for refund of entire Court fees. The captioned suit has been filed by the plaintiff against the defendants seeking permanent injunction restraining infringement of trademark "V GUARD" copyright and designs passing off unfair CS(COMM) 556 2021 competition rendition of accounts of profits damages delivery up etc. This court is informed that the plaintiff and defendants have amicably resolved their disputes out of court in terms as stated in Paragraph 5 of the present application. Learned counsel for the plaintiff submits that in terms of settlement the present suit be decreed against defendants. Upon hearing learned counsel for the plaintiff and defendants in persons through video conferencing and upon perusal of the application as well as in specific contents of Para 5 thereof this Court finds that the settlement reached between the parties is valid and lawful. Accordingly the present joint application filed by the plaintiff and defendants is allowed. reached between them. Needless to say parties shall be bound by the terms of settlement The application stands disposed of accordingly. CS(COMM) 556 2021 & I.A. 14357 2021 In view of order passed in IA No. 2348 2022the present suit is decreed qua defendants in terms of Paragraph No.5 of said application i.e. I.A. 2348 2022 which shall form part CS(COMM) 556 2021 of decree sheet. Decree sheet be accordingly drawn. 10. Learned counsel also submits that since the subject matter of the suit stands amicably resolved therefore in terms of Section 16 of the Court Fees Act the entire court fees be refunded to the plaintiff. 11. Learned counsel for plaintiff has relied upon judgment passed by Hon’ble Supreme Court in the case of The High Court of Judicature at Madras rep. by its Registrar General vs. M.C. Subramanium & Ors. 2021) 3 SCC 560. The relevant paras of the said judgment are reproduced as under: “....23. We find ourselves in agreement with the approach taken by the High Courts in the decisions stated supra. 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 the 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 CS(COMM) 556 2021 between the parties cannot be understated. In our view there is no justifiable reason why Section 69 A should only incentivise 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. 24. 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 we do not find the present case as being of such nature. 25. Thus even though a strict construction of the terms of Section 89 CPC and Section 69 A of the 1955 Act may not encompass such private negotiations and settlements between the parties we emphasise that 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. Indeed we find it puzzling that the petitioner should be so vehemently opposed to granting such benefit. 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 1 s claim. 26. Thus in our view the High Court was correct in holding that Section 89 CPC and Section 69 A of the 1955 Act be interpreted liberally. In view of this broad purposive construction we affirm the High Court s conclusion and hold that Section 89 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 CS(COMM) 556 2021 well the appellant i.e. Respondent 1 herein would be entitled to refund of court fee.” 12. Concurring with afore noted decision of Hon’ble Supreme Court in The HC of Judicature at Madras Rep. by its Registrar General the plaintiff is entitled to refund of entire court fees. Registry is directed to issue necessary certificate authorization in favour of the plaintiff to seek refund before the appropriate authorities. 13. With aforesaid directions the present suit stands decreed accordingly. 14. Accordingly the present suit and pending application stand disposed FEBRUARY 11 2022 rk SURESH KUMAR KAIT J CS(COMM) 556 2021 