No Refund Of Court Fee When Case Is Settled By Mediation; Refund Only When Settlement Was At Lok Adalat : Supreme Court.

The Supreme Court of India, in a significant ruling, has clarified that court fees are not refundable when a case is settled through mediation. Refund of court fees is only permissible when the settlement occurs at a Lok Adalat, under Section 16 of the Legal Services Authorities Act, 1987.

Key Highlights of the Judgment:

1. Distinction between Mediation and Lok Adalat:
   • Settlements through mediation do not fall under the ambit of Section 16 of the Legal Services Authorities Act, which provides for the refund of court fees in cases settled at Lok Adalats.
   • Lok Adalats operate under a statutory framework and are distinct from mediation processes, which are governed by the Civil Procedure-Mediation Rules.
2. No Blanket Rule for Refund in Mediation:
   The court noted that mediation, while encouraged as an alternative dispute resolution mechanism, does not automatically entitle parties to claim a refund of court fees unless explicitly provided by law.
3. Judicial Interpretation:
   The judgment emphasized that statutory provisions related to refund of court fees must be strictly construed. Since there is no legal provision equating mediation settlements with Lok Adalat awards, the same benefits cannot be extended.

Implications:

• Encourages clarity in legal provisions for court fee refunds.
• Highlights the importance of Lok Adalats as a cost-effective and efficient mechanism for dispute resolution.
• May lead to a push for legislative changes to promote mediation by allowing refunds in such cases as well.

 

Relevant Paras:

23. The effect of the above being that for the time when the amendment to the MCFA, 1959 granting partial or complete refund, as the case may be, in accordance with Section 43 as amended, the persons
whose matters were settled by way of ADR would not be entitled to 100% refund. Any matter settled under the processes mentioned in Section 89 CPC after the coming into force of the above-extracted amendment, such parties shall receive refund of court fees in its entirety.
24. The total amount of court fees paid by the appellant, in respect of the refund of which the matter has travelled up to this Court was approximately Rs. 5 lakhs. Should we, in the facts and circumstances
of this case grant, in exercise of extraordinary jurisdiction under Article 142 of the Constitution of India, refund of the said amount is a question
we have asked ourselves. Considering the fact that the original dispute was settled amicably and that the amount of court fees involved is not excessive, in the peculiar facts of this case, for it not to be a binding
precedent, we are of the view that the same can be refunded to him.

To read the judgment click here :

SANJEEVKUMAR HARAKCHAND KANKARIYA VERSUS UNION OF INDIA & ORS THE LAW LITERATES

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