The Supreme Court of India has ruled that court fee refunds are not permissible when cases are settled privately outside the formal judicial settlement mechanisms such as Arbitration, Conciliation, Lok Adalat, or Mediation. The ruling came in the case of Jage Ram v. Ved Kaur & Ors., where the petitioner sought a refund of court fees following a private out-of-court settlement.
Background of the Case
The case arose from a second appeal (RSA No. 98 of 2018) before the Punjab & Haryana High Court. The appellant, Jage Ram, had initially filed a civil suit, which progressed through the trial court, the first appellate court, and finally to the second appellate court. However, instead of a decision on merits, the case was settled amicably between the parties outside the court, and the High Court disposed of the matter in terms of the settlement agreement presented before it.
Following this, Jage Ram filed a plea for the refund of court fees amounting to Rs. 29,053, which he had paid at various judicial stages. The High Court dismissed his application on September 15, 2022, stating that the legal grounds for such a refund had not been met.
Supreme Court Proceedings and Ruling
Dissatisfied with the High Court’s decision, Jage Ram approached the Supreme Court by filing a Special Leave Petition (SLP (C) No. 723/2023). The matter was heard by a bench comprising Justice Pankaj Mithal and Justice Ahsanuddin Amanullah.
The petitioner was represented by advocates Rajinder Singh Kataria, S.P. Laler, Twinkle Kataria, and Rameshwar Prasad Goyal. The respondents were represented by Advocate General Deepak Thukral, along with Samar Vijay Singh, Sabarni Som, Aman Dev Sharma, and Fateh Singh.
Key Legal Issue:
Refund of Court Fees in Case of Private Settlements
The Supreme Court examined whether a litigant is entitled to a refund of court fees when the case is settled out of court without any reference to Arbitration, Conciliation, Lok Adalat, or Mediation.
Court’s Observations and Ruling
The Court, while dismissing the petition, reiterated that refunds of court fees are allowed only when the matter is resolved through formal judicial settlement mechanisms. Since the settlement in the present case was purely private and not mediated by any recognized alternative dispute resolution forum, the petitioner was not entitled to a refund.
“The refund of court fees is permissible only if the matter is referred to Arbitration, Conciliation, judicial settlement, including through Lok Adalat or mediation. In the present case, the settlement was out of court and not on reference to any such authority or forum.” – Supreme Court Bench.
The Court upheld the High Court’s view that no legal ground for refund had been established and stated that there was no illegality or error in the High Court’s rejection of the refund request.
The Supreme Court, therefore, dismissed the Special Leave Petition, stating that it lacked merit.
