When a Plaintiff files a suit / plaint, he is mandated to file the suit / plaint with the requisite court fee, as has been provided in the law. At the time of filing the plaint, the pecuniary value of the plaint / suit is ascertained on the basis of which the court fee is calculated and also the pecuniary jurisdiction of the Court is ascertained. If the requisite Court fee is not paid, then such plaint can be rejected in terms of Order 7 Rule 11 of the Civil Procedure Code, 1908. Only indigent persons (as mentioned in Order 33 of the Civil Procedure Code) are exempt from paying the Court fees.
As stated above, the Court fee is usually paid on the basis of the pecuniary value of the suit (on an ad valorem basis). The rate at which court fee is to be paid was decided many years ago and has not been updated since and the same is not commensurate to today’s times and has not at all accounted for the inflation in all these years. At times, the court fee in several cases is in a few hundreds or thousands. For example, as per the prevalent rate of court fee in Delhi, if a suit is valued less than Rs. 4,00,000/- then the amount payable as Court fee would be a meagre sum of Rs. 6,560.00/- (1.64%) as against the humungous expenditure being incurred by the Courts in adjudicating the case (Click here to see the Schedule of Court fee, as applicable in Delhi).
However, in cases of a suit where the value of the subject matter of the suit is considerably quite high, the court fee also becomes a huge amount. For example, in a case of pecuniary value of Rs. 2,00,00,000/- (Rupees two crores), the court fee payable would be approximately Rs. 2,00,000/-.
If a case is settled between the parties after it being referred for settlement by the Court under Section 89 of the CPC, in that case the court fee can be refunded in terms of Section 16 of the Court fees Act, 1870. As per Section 16 of the Court Fees Act,
“16. Refund of fee.—Where the court refers the parties to the suit to any one of the mode of settlement of dispute referred to in Section 89 of the Code of Civil Procedure, 1908 the plaintiff shall be entitled to a certificate from the court authorizing him to receive back from the Collector, the full amount of the fee paid in respect of such plaint.”
Therefore, in such cases, on presenting an application before the Court, the Court can provide a certificate to the Plaintiff authorizing him to receive a refund of the court fee paid along with the plaint. However, if the settlement is an out of court settlement, that in that case, the court fee will not be refunded.
But, the State of Delhi has amended and inserted a new section 16A whereby it has been provided that (click here to read the section 16A),
“16 A Refund of fees on settlement before hearing – Whenever by agreement of parties-
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- Any suit is dismissed as settled out of Court before any evidence has been recoded on the merits of the claim; or
- Any suit is compromised ending in a compromise decree before any evidence has been recorded on the merits of the claim; or
- Any appeal is disposed of before the commencement of such appeal;
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Half the amount of all fees paid in respect of the claim or claims in the suit or appeal shall be ordered by the Court to be refunded to the parties by whom the same have been respectively paid.
Explanation – The expression “merits of the claim” refers to matters which arise for determination in the suit not being matters relating to the frame of the suit, misjoinder of parties and cause of action, the jurisdiction of the Court to entertain or try the suit or the fee payable, but includes matters arising on pleas of res judicata, limitation and the like”
Thus, if a suit is settled out of court before the evidence has been recorded or a settlement has led to a compromise decree, then in that situation, the court can refund 50% of the amount of the Court fee.
However, in case you still wish to get a refund of the complete amount of the court fee, in that scenario, you can plead before the Court to refer the matter for settlement in terms of Section 89 of the CPC and thereafter settle the matter before the mediator and in such a scenario, the court fee will be completely refunded.
