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Delhi High Court Approves Suit Withdrawal, Orders Refund of Court Fee Following Settlement.

Delhi High Court

In a recent decision, the Delhi High Court has allowed the plaintiff firm to withdraw its suit, CS (COMM) 1448/2016, following a successful out-of-court settlement. The decision was rendered by Hon’ble Justice Prateek Jalan, who also ordered the refund of the court fee to the plaintiff in accordance with precedents set by the Supreme Court and Delhi High Court.

The parties to the suit reached a settlement on November 28, 2022, which was duly signed by the partners of the plaintiff firm and the directors of the defendant company. The settlement was placed on record during the court proceedings.

Mr. Nikhilesh Krishnan, counsel for the plaintiff, confirmed that the defendant had paid the entire amount due under the settlement agreement. Subsequently, the plaintiff sought permission to withdraw the suit, which was granted by the court.

Citing the judgments in High Court of Judicature at Madras vs. M.C. Subramaniam and Others and J.K. Forgings vs. Essar Construction (India) Ltd., Mr. Krishnan requested a refund of the court fee. In these precedents, the courts have emphasized the importance of incentivizing out-of-court settlements to save judicial resources.

The Supreme Court, in the High Court of Judicature at Madras case, highlighted the purpose of refunding court fees to encourage parties to resolve disputes amicably outside the courtroom. It noted that such settlements, even if not facilitated by Section 89 of the Code of Civil Procedure (CPC), should still be rewarded to save the state's resources.

In a similar vein, the Delhi High Court in J.K. Forgings stated that the settlement of disputes outside the court without judicial intervention should be welcomed and supported through the refund of court fees. The court reiterated that the Court Fees Act, being a taxing statute, should be construed strictly, and any ambiguity should benefit the party rather than the state.

The Hon’ble Delhi High Court, aligning with these authoritative decisions, directed the Registry to refund the court fee to the plaintiff. The court emphasized that such refunds promote the use of alternative dispute resolution mechanisms and relieve the judicial system of prolonged litigation burdens.

This decision underscores the judiciary's support for out-of-court settlements and reinforces the economic incentives designed to encourage litigants to resolve disputes amicably.


Case title: M/s Ramesh Paper Mart vs. M/s Matrix Global Private Limited

CS(COMM) 1448/2016

Counsels for the Petitioner: Mr. Nikhilesh Krishnan, Ms. Ritika Priya 

Counsels for the Respondent: None

Date of Order: 20.01.2023

Read the order here:-

Judgment Ramesh Paper mart on Court Fees refund
.pdf
Download PDF • 1.28MB

 

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