Tuesday, 31 May 2016

ALLAHABAD HC:Court should refund court fees if case is settled in lokadalat

In Vasudevan Vs. State of Kerala, AIR 2004 Kerala 43, Mudavangadan Abbas Vs. Kurrippurathodi Mayinkutty and others, 2012 (3) KLJ 560, Madhya Pradesh High Court in Vipin Trivedi Vs. Mohanlal Sharma, LAWS (MPH)-2011-5-3 and Vallabh Das Gupta Vs. Geeta Bai, 2004 (3) MPLJ 37 (DB) held that once the suit is decided by Lok Adalat on settlement, then the plaintiff would be entitled for refund of Court Fee paid in suit. By the impugned order Court below has illegally carved out a distinction between the case where the parties voluntary moved an application for reference of dispute to Lok Adalat and where, on possibility of settlement, could referred the matter to Lok Adalat.
Allahabad High Court
Smt. Sukhpali Devi vs Civil Judge (S.D.) And 2 Others on 25 May, 2016
Bench: Ram Surat (Maurya)


1. Heard Sri Ayub Khan, for the petitioner and Standing Counsel, for State of U.P.
2. This petition has been filed against the order of Civil Judge (S.D.) dated 14.03.2016, dismissing the application of the petitioner for refund of Court Fee paid in the suit and mandamus directing Civil Judge (S.D.) to pass order for refund of the Court Fee to the petitioner, paid in the suit.
3. The petitioner filed a suit (registered as O.S. No. 160 of 2014) for recovery of Rs. 19,99,920/- from respondents-2 and 3. According to the valuation, advolerum Court Fee of Rs. 1,50,600/- has been supplied on plaint. The defendants, on appearance before the Court, admitted their liability. The suit was referred to Lok Adalat, held on 12.09.2015. Where the parties filed a written compromise. Signatures of the parties on written compromise were identified by their counsel. Lok Adalat verified the compromise in presence of the parties and by its order dated 12.09.2015 decreed the suit in terms of compromise.
4. The petitioner filed an application dated 05.11.2015 (registered as Misc. Case No. 138 of 2015) for refund of Court Fee of Rs. 1,50,600/- supplied in the suit, under Section 21 of Legal Services Authorities Act, 1987 read with Section 16 of Court Fee Act, 1870. The application was heard by Civil Judge (Senior Division), who by impugned order dated 14.03.2016 held that a perusal of compromise dated 12.09.2015 shows that parties compromised their dispute outside the Lok Adalat. Lok Adalat merely verified their compromise. As such suit was not decided by Lok Adalat. The applicant has not stated that compromise was filed due to persuasion of Lok Adalat nor suit was referred to Lok Adalat on request of the parties, informing about probability of compromise. The parties filed an application 27-C, stating therein that matter has been compromised between the parties and they wanted to refer the suit to Lok Adalat. In the facts of the case, the suit was not actually decided by Lok Adalat as such the plaintiff is not entitled for refund of the Court fee. On these findings the application was dismissed. Hence this petition has been filed.
5. I have considered the arguments of the counsel for the parties and examined the record.Article 39-A of the Constitution directs that the State shall secure that the operation of the legal system promotes justice, on a basis of equal opportunity, and shall, in particular, provide free legal aid, by suitable legislation or schemes or in any other way, to ensure that opportunities for securing justice are not denied to any citizen by reason of economic or other disabilities. With as view to achieve the aforesaid objects, Parliament enacted The Legal Services Authorities Act, 1987 to constitute legal services authorities to provide free and competent legal services to the weaker sections of the society to ensure that opportunities for securing justice are not denied to any citizen by reason of economic or other disabilities, and to organise Lok Adalats to secure that the operation of the legal system promotes justice on a basis of equal opportunity. Provisions of law, which are relevant for deciding controversy are quoted below:-
Section 19. Organisation of Lok Adalats:- (1) ...........
(5) A Lok Adalat shall have jurisdiction to determine and to arrive at a compromise or settlement between the parties to a dispute in respect --
(i) any case pending before; or
(ii) any matter which is falling within the jurisdiction of, and is not brought before, any court for which the Lok Adalat is organised:
20. Cognizance of cases by Lok Adalats.--(1) Where in any case referred to in clause (i) of sub-section (5) of Section 19,
(i)(a) the parties thereof agree; or
(b) one of the parties thereof makes an application to the court, for referring the case to the Lok Adalat for settlement and if such court if prima facie satisfied that there are chances of such settlement; or
(ii) the court is satisfied that the matter is an appropriate one to be taken cognizance of by the Lok Adalat, the court shall refer the case to the Lok Adalat:
Provided that no case shall be referred to the Lok Adalat under sub-clause (b) of clause (i) or clause (ii) by such court except after giving a reasonable opportunity of being heard to the parties.
(2) Notwithstanding anything contained in any other law for the time being in force, the Authority or Committee organising the Lok Adalat under sub-section (1) of Section 19 may, on receipt of an application from any one of the parties to any matter referred to in clause (ii) of sub-section (5) ofSection 19 that such matter needs to be determined by a Lok Adalat, refer such matter to the Lok Adalat, for determination:
Provided that no matter shall be referred to the Lok Adalat except after giving a reasonable opportunity of being heard to the other party.
(3) Where any case is referred to a Lok Adalat under sub-section (1) or where a reference has been made to it under sub-section (2) the Lok Adalat shall proceed to dispose of the case or matter and arrive at a compromise or settlement between the parties.
(4) Every Lok Adalat shall, while determining any reference before it under this Act, act with utmost expedition to arrive at a compromise or settlement between the parties and shall be guided by the principles of justice, equity, fair play and other legal principles.
(5) Where no award is made by the Lok Adalat on the ground that no compromise or settlement could be arrived at between the parties, the record of the case shall be returned by it to the court, from which the reference has been received under sub-section (1) for disposal in accordance with law.
(6) Where no award is made by the Lok Adalat on the ground that no compromise or settlement could be arrived at between the parties, in a matter referred to in sub-section (2), that Lok Adalat shall advise the parties to seek remedy in a court.
(7) Where the record of the case is returned under sub-section (5) to the court, such court shall proceed to deal with such case from the stage which was reached before such reference under sub-section (1).
Section 21-Award of Lok Adalat.-- (1) Every award of the Lok Adalat shall be deemed to be a decree of a civil court or, as the case may be, an order of any other court and where a compromise or settlement has been arrived at, by a Lok Adalat in a case referred to it under sub-section (1) of Section 20, the court-fee paid in such case shall be refunded in the manner provided under the Court Fees Act, 1870 (7 of 1870).
7. Experiencing with success of functioning of Lok Adalat, Parliament thought it proper that the suits pending before the regular court in which there appears chance of compromise, be also referred to Lok Adalat for its disposal. For that purpose Section 89 CPC was amended by Act No. 46 of 1999. Section 89 C.P.C. was amended as follows:-
89. Settlement of disputes outside the Court.--(1) Where it appears to the court that there exist elements of a settlement which may be acceptable to the parties, the Court shall formulate the terms of settlement and give them to the parties for their observations and after receiving the observations of the parties, the court may reformulate the terms of a possible settlement and refer the same for--
(a) arbitration;
(b) conciliation;
(c) judicial settlement including settlement through Lok Adalat; or
(d) mediation.
(2) Where a dispute has been referred--
(a) for arbitration or conciliation, the provisions of the Arbitration and Conciliation Act, 1996 (26 of 1996) shall apply as if the proceedings for arbitration or conciliation were referred for settlement under the provisions of that Act;
(b) to Lok Adalat, the Court shall refer the same to the Lok Adalat in accordance with the provisions of sub-section (1) of Section 20 of the Legal Services Authority Act, 1987 (39 of 1987) and all other provisions of that Act shall apply in respect of the dispute so referred to the Lok Adalat;
(c) for judicial settlement, the Court shall refer the same to a suitable institution or person and such institution or person shall be deemed to be a Lok Adalat and all the provisions of the Legal Services Authority Act, 1987 (39 of 1987) shall apply as if the dispute were referred to a Lok Adalat under the provisions of that Act;
(d) for mediation, the Court shall effect a compromise between the parties and shall follow such procedure as may be prescribed.]
8. By Act No. 46 of 1999 Section 16 of Court Fee Act, 1870 was amended as follows:-
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 authorising him to receive back from the collector, the full amount of the fee paid in respect of such plaint.
9. In view of direction of Supreme Court in Salem Advocate Bar Assn. v. Union of India, AIR 2003 SCC 189, High Court of Judicature at Allahabad framed Uttar Pradesh Civil Procedure Alternative Dispute Resolution Rules, 2009 vide Noti. No. 404/VII-Nyaya-7-2009-5/2008, dated August 13, 2009. Relevant Rules are quoted below:-
In exercise of the rule making power conferred under Part X of the Code of Civil Procedure, 1908 and clause (d) of sub-section (2) of Section 89 of the said Code, and all other powers enabling it in this behalf, the High Court of Judicature at Allahabad makes the following rules:
1. Short title and commencement.--(1) These rules may be called the Uttar Pradesh Civil Procedure Alternative Dispute Resolution Rules, 2009.
3. Procedure for directing parties to opt for alternative modes of settlement.--(a) The Court shall, after recording admissions and denials at the first hearing of the suit under Rule 1 of Order 10, and where it appears to the Court that there exist elements of a settlement which may be acceptable to the parties, formulate the terms of settlement and give them to the parties for their observations under sub-section (1) of Section 89, as the parties shall submit to the Court their responses within thirty days of the first hearing.
(b) At the next hearing, which shall be not later than thirty days of the receipt of responses, the Court may reformulate the term of a possible settlement and shall direct the parties to opt for one of the modes of settlement of disputes outside the Court as specified in clauses (a) to (d) of sub-section (1) of Section 89 read with Rule 1-A of Order 10, in the manner stated hereunder:
Provided that the Court, in the exercise of such power, shall not refer any dispute to an arbitration or to judicial settlement by a person or institution without the written consent of all the parties to the suit.
Explanation.--For the purpose of this rule the words "terms of settlement" and the words "terms of possible settlement" mean a summary of the dispute or summary of the remaining dispute, respectively.
10. Supreme Court in Salem Advocate Bar Association. v. Union of India, AIR 2003 SCC 189, held that it is quite obvious that the reason why Section 89 has been inserted is to try and see that all the cases which are filed in court need not necessarily be decided by the court itself. Keeping in mind the law's delays and the limited number of Judges which are available, it has now become imperative that resort should be had to alternative dispute resolution mechanism with a view to bring to an end litigation between the parties at an early date. The alternative dispute resolution (ADR) mechanism as contemplated by Section 89 is arbitration or conciliation or judicial settlement including settlement through Lok Adalat or mediation. Sub-section (2) ofSection 89 refers to different Acts in relation to arbitration, conciliation or settlement through Lok Adalat, but with regard to mediation Section 89(2)(d) provides that the parties shall follow the procedure as may be prescribed. Section 89(2)(d), therefore, contemplates appropriate rules being framed with regard to mediation.
11. Section 89 C.P.C. directs that where it appears to the court that there exist elements of a settlement which may be acceptable to the parties, the Court shall formulate the terms of settlement and give them to the parties for their observations and after receiving the observations of the parties, the court may reformulate the terms of a possible settlement and refer the same for (c) judicial settlement including settlement through Lok Adalat. Procedure for referring the dispute to Lok Adalat has been given under Rule 3 of Uttar Pradesh Civil Procedure Alternative Dispute Resolution Rules, 2009, which provides that the Court shall, after recording admissions and denials at the first hearing of the suit under Rule 1 of Order 10, and where it appears to the Court that there exist elements of a settlement which may be acceptable to the parties, formulate the terms of settlement and give them to the parties for their observations under sub-section (1) ofSection 89, as the parties shall submit to the Court their responses within thirty days of the first hearing.
12. Under Section 19 (5) of Legal Services Authorities Act, 1987, Lok Adalat has jurisdiction over the cases referred to it or directly came to it. Once the matter came before Lok Adlat, then it has jurisdiction to pass award in terms of settlement between the parties. Section 89 C.P.C. castes a duty upon the Court trying the suit that at first hearing while recording statements of the parties under Order 10 Rule 1 C.P.C. to examine as to whether there exist elements of a settlement, acceptable to the parties. Then the Court will formulate the terms of settlement and give them to the parties for their observations under sub-section (1) of Section 89, as the parties shall submit to the Court their responses within thirty days of the first hearing. If the parties agree for settlement of their dispute, matter would be referred to Lok Adalat, for resolving the dispute through settlement. The provisions of Section 21 of Legal Services Authorities Act, 1987 andSection 16 of Court Fee Act, 1870 are applicable in both the cases.
13. In Vasudevan Vs. State of Kerala, AIR 2004 Kerala 43, Mudavangadan Abbas Vs. Kurrippurathodi Mayinkutty and others, 2012 (3) KLJ 560, Madhya Pradesh High Court in Vipin Trivedi Vs. Mohanlal Sharma, LAWS (MPH)-2011-5-3 and Vallabh Das Gupta Vs. Geeta Bai, 2004 (3) MPLJ 37 (DB) held that once the suit is decided by Lok Adalat on settlement, then the plaintiff would be entitled for refund of Court Fee paid in suit. By the impugned order Court below has illegally carved out a distinction between the case where the parties voluntary moved an application for reference of dispute to Lok Adalat and where, on possibility of settlement, could referred the matter to Lok Adalat.
14. In view of the aforesaid discussions, the petition succeeds and is allowed. The order of Civil Judge (S.D.) dated 14.03.2016, is set aside. The application of the petitioner for refund of Court Fee paid in the suit is allowed. Civil Judge (S.D.) Moradabad shall issue a certificate to the petitioner for refund of entire Court Fee paid in O.S. No. 160 of 2014 forthwith.
Order Date 25.05.2016/Rahul/-
   
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