THE HIGH COURT OF JUDICATURE AT MADRAS REP. BT ITS REGISTRAR GENERAL VS. M.C. SUBRAMANIAM

CITATION	LL 2021 SC 97
DATE OF JUDGEMENT	17th February, 2021
COURT	Supreme Court of India
APPELLENT	High Court of Judicature at Madras Rep. by its Registrar General
RESPONDENT	M.C Subramaniam
BENCH	Mohan M. Shantanagoudar,Vineet Saran

INTRODUCTION 

When people settle a dispute privately, without going to court, they want to know if they can get a refund on the court fees they paid.The court is deciding if they can get that refund, based on a specific rule (Section 89 of the Code of Civil Procedure) that talks about settling disputes.Two people agreed to buy and sell two vehicles. Later, they disagreed about the payment. One of them  took the other to court to get the remaining money owed, plus interest. The court ruled that the other person had to pay some of the money, but not all of it. This decision was made by two lower courts (Munsif Court and District Court).

FACTS OF THE CASE

1. Two people had a deal to buy and sell two vehicles, but they disagreed about the payment. One of them (Respondent No. 2) went to court to get the remaining money owed, plus interest. The lower courts (Munsif Court and District Court) ruled that the other person had to pay some of the money.
2. The other person didn’t agree with the decision and appealed to a higher court (High Court). But before the High Court made a decision, the two people settled their dispute privately and agreed to drop the appeal. They essentially resolved their issue outside of court and asked the court to dismiss the appeal.
3. The person who appealed to the High Court changed their mind and wanted to withdraw their appeal because they had settled the dispute with the other party privately. The High Court allowed them to withdraw the appeal and also asked for a refund of the court fees they had paid. However, the court’s administrative office (registry) refused to give the refund, saying it wasn’t allowed.
4. The person who wanted a refund of their court fees filed a new petition (request) with the High Court. The High Court looked at a specific law (Section 69-A of the Tamil Nadu Court Fee and Suit Valuation Act) to decide whether to grant the refund. This law says that court fees can be refunded if the court encourages the parties to settle their dispute through certain methods (like mediation or arbitration) instead of going to trial. The High Court is now considering whether this law applies in this case.
5. The court was looking at a  CPC that only mentions a few ways to settle disputes without going to trial (arbitration, reconciliation, judicial settlement, and Lok Adalat). But, the court realised that this law doesn’t cover private settlements between parties, which would mean they couldn’t get a refund of their court fees. So, the court decided to interpret the law in a way that includes all types of out-of-court settlements, not just the ones mentioned in the law. This way, parties who settle their disputes privately can also get a refund of their court fees.
6. The petitioner didn’t agree with the court’s decision to allow a refund of court fees for private settlements. They appealed to a higher court, saying that the law only allows refunds if the court itself suggests settlement talks, which wasn’t the case here. So, according to the petitioner, the refund shouldn’t be granted because the parties settled privately without the court’s involvement.

ISSUES OF THE CASE

The High Court said that a rule (Section 69-A) should apply equally to all situations where people settle disputes outside of court, even if they don’t use specific methods listed in another rule (Section 89). This is because unequal treatment would be unfair (Article 14).But the Madras High Court’s Registry argued that the rule (Section 69-A) only applies when the court itself suggests alternative dispute resolution methods, not when people settle disputes privately without court involvement.

1. The major issue which the Supreme Court was dealing with that in  the present case was whether the High Court’s decision in granting the refund of the Court fee was right or not?

CONTENTION OF THE APPELLANT

1. The petitioner is arguing that a specific law (Section 69A of the 1955 Act) only allows for a refund of court fees in cases where the court itself suggests alternative ways to resolve the dispute (like mediation or arbitration). However, if the parties involved in the dispute choose to settle their issue privately, without the court’s suggestion or involvement, then this law does not apply, and they cannot get a refund of their court fees.
2. The goal of Section 89 of the Civil Procedure Code (CPC) is to reduce the huge number of cases in civil courts, which has caused delays in justice. The Law Commission wants courts to encourage people to resolve disputes outside of court through alternative methods like mediation or arbitration. This helps reduce the workload of courts and enables faster justice.
3. Section 69A of the 1955 Act supports this goal by offering a refund of court fees if parties settle their disputes privately. The purpose of these provisions is to promote private settlements and reduce the burden on the judiciary, ensuring timely justice.

 CONTENTION OF THE RESPONDENT

1. Limited scope contention: The respondent argues that Section 69-A is limited in scope and only applies to court-referred alternative dispute resolution methods listed in Section 89, excluding privately initiated settlements outside of these methods.

2. Legislative intent contention: The respondent contends that the legislature intended to restrict the refund of court fees to specific circumstances, and expanding it to privately initiated settlements would go against their intent.

3. Clear language contention: The respondent argues that the language of Section 69-A is clear and unambiguous, and its application should be restricted to court-referred settlements, as opposed to privately negotiated ones.

JUDGEMENT

  1.The goal of Section 89 of the Code of Civil Procedure is to encourage people to settle disputes outside of court, reducing the judiciary’s workload. If a law is unclear, the court can interpret it in a way that achieves its purpose. Giving a narrow interpretation of the law would lead to unfair outcomes, where:

    2.Those who settle disputes without court involvement would be treated unfairly. Those who use court-referred alternative dispute resolution methods would receive a full refund.To avoid this injustice, the court decided that Section 89 should cover all out-of-court settlements, and parties should receive the benefit of Section 69-A (refund of court fees) regardless of whether they used court-referred methods or not.

3.  People who settle disputes through court-referred programs (like mediation) get a full refund of their court fees. People who settle disputes on their own, without court involvement, don’t get the same refund.This is unfair because both groups of people are achieving the same goal: saving the court’s time and resources. The court thinks that both groups should be treated equally and receive the same benefit (refund of court fees).The court also notes that people who settle disputes on their own are actually doing more to help the system, as they’re not requiring the court to arrange for a third-party mediator. So, they deserve the benefit even more.

ANALYSIS

1. The petitioner argued that a refund of court fees (under Section 69-A) only applies when the court itself suggests alternative dispute resolution methods (like mediation or arbitration). However, in this case, the parties settled their dispute privately, without court involvement.The court disagreed, stating that the purpose of the refund is to encourage parties to resolve disputes outside of court, saving time and resources. Parties who settle disputes privately, without court intervention, deserve the refund even more, as they’ve saved the state the hassle of arranging alternative dispute resolution.

2. The court ruled that even though the law may not explicitly include private settlements, it should be interpreted liberally to cover all out-of-court settlements, including private negotiations. This means that parties who settle disputes privately can also claim a refund of their court fees.
3. The court’s goal is to encourage settlements outside of court and reduce the judiciary’s workload. When a law is unclear, the court can interpret it in a way that achieves its purpose. A narrow interpretation of the law would lead to unfair outcomes, where those who settle disputes privately are treated differently from those who use court-referred methods. This would deprive justice to those who settle disputes without court involvement and go against the purpose of the law. Instead, the court rules that all out-of-court settlements, whether private or through court-referred methods, should be treated equally and receive the benefit of a full refund of court fees.

                              CONCLUSION

The court’s goal is to encourage people to settle disputes outside of court. If the law only rewards those who settle disputes through court-referred methods, it would be unfair to those who settle disputes privately. This would mean that those who use court-referred methods get a refund of court fees, but those who settle disputes on their own don’t.

The court wants to treat both types of settlements equally, as they both achieve the goal of resolving disputes outside of court. By interpreting the law broadly, the court ensures that everyone who settles a dispute outside of court can get a refund of court fees, regardless of whether it was through a court-referred method or a private agreement.

REFERENCE

1. https://updates.manupatra.com/roundup/contentsummary.aspx?iid=30842
2. https://www.livelaw.in/pdf_upload/high-court-of-judicature-at-madras-vs-mc-subramaniam-ll-2021-sc-97-389372.pdf
3. https://indiankanoon.org/docfragment/71728768/?big=3&formInput=section%2089%20,%20code%20of%20civil%20procedure

Written by Mugdha Chaturvedi an intern under legal vidhiya

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