THE HIGH COURT OF JUDICATURE AT MADRAS REP. BY ITS REGISTRAR GENERALversusM.C. SUBRAMANIAM AND ORS.

552                       [2021]
               SUPREME COURT     1 S.C.R. 552
                              REPORTS                      [2021] 1 S.C.R.


A       THE HIGH COURT OF JUDICATURE AT MADRAS REP. BY
                    ITS REGISTRAR GENERAL
                                        v.
                      M.C. SUBRAMANIAM AND ORS.
B            (Special Leave Petition (Civil) Nos. 3063-3064 of 2021)
                               FEBRUARY 17, 2021
                  [MOHAN M. SHANTANAGOUDAR AND
                             VINEET SARAN, JJ.]
             Code of Civil Procedure, 1908: s.89 – Tamil Nadu Court Fees
C     and Suit Valuation Act, 1955 – s.69-A – Parties entering into a
      private out of court settlement for resolving the controversy between
      them outside the modes contemplated under s.89 and seeking
      permission to withdraw suit and also refund of court fees – Refund
      of court fees – Permissibility of – Held: The purpose of s.69-A is to
D     reward parties who have chosen to withdraw their litigations in
      favour of more conciliatory dispute settlement mechanisms, thus
      saving the time and resources of the Court, by enabling them to
      claim refund of the court fees deposited by them – Such refund of
      court fee, though it may not be connected to the substance of the
      dispute between the parties, is certainly an ancillary economic
E     incentive for pushing them towards exploring alternative methods
      of dispute settlement – Object of s.89 is to facilitate private
      settlements, and enable lightening of the overcrowded docket of
      the Indian judiciary – s.69-A of the Act, 1955 and s.89 CPC should
      be interpreted liberally in a manner that would serve their object
F     and purpose – Construing them narrowly would lead to situation
      wherein parties who settle the dispute through mediation centre or
      other centres of alternative judicial settlement under s.89 would be
      entitled to claim refund of their court fees whilst parties who settle
      the disputes privately by themselves will be left without any means
      to seek the refund – Differential treatment between two similarly
G     situated persons would constitute a violation of Art.14 of the
      Constitution – Thus, s.89 of CPC shall cover, and the benefit of
      s.69-A of the 1955 Act shall also extend to, all methods of out-of-
      court dispute settlement between parties that the Court subsequently
      finds to have been legally arrived at – This would, thus, cover the
H
                                       552
   THE HIGH COURT OF JUDICATURE AT MADRAS REP. v.                           553
                M.C. SUBRAMANIAM

present controversy, wherein a private settlement was arrived at,           A
and a memo to withdraw the appeal was filed before the High Court.
       Interpretation of statutes: Purposive interpretation – It is well-
settled that the Courts may, in order to avoid any difficulty or
injustice resulting from inadvertent ambiguity in the language of a
statute, mould the interpretation of the same so as to achieve the          B
true purpose of the enactment – This may include expanding the
scope of the relevant provisions to cover situations which are not
strictly encapsulated in the language used therein.
      Dismissing the Special Leave Petitions, the Court
       HELD: 1. The provisions of Section 89 of CPC must be                 C
understood in the backdrop of the longstanding proliferation of
litigation in the civil courts, which has placed undue burden on
the judicial system, forcing speedy justice to become a casualty.
As the Law Commission has observed in its 238th Report on
Amendment of Section 89 of the Code of Civil Procedure 1908 and             D
Allied Provisions, Section 89 has now made it incumbent on civil
courts to strive towards diverting civil disputes towards
alternative dispute resolution processes, and encourage their
settlement outside of court (Para 2.3). These observations make
the object and purpose of Section 89 crystal clear – to facilitate
private settlements, and enable lightening of the overcrowded               E
docket of the Indian judiciary. This purpose, being sacrosanct
and imperative for the effecting of timely justice in Indian courts,
also informs Section 69-A of the 1955 Act, which further
encourages settlements by providing for refund of court fee. This
overarching and beneficent object and purpose of the two                    F
provisions must, therefore, inform this Court’s interpretation
thereof. [Para 12][560-B-E]
       2. It is well-settled that the Courts may, in order to avoid
any difficulty or injustice resulting from inadvertent ambiguity in
the language of a statute, mould the interpretation of the same             G
so as to achieve the true purpose of the enactment. This may
include expanding the scope of the relevant provisions to cover
situations which are not strictly encapsulated in the language used


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554            SUPREME COURT REPORTS                      [2021] 1 S.C.R.


A     therein. The narrow interpretation of Section 89 of CPC and
      Section 69-A of the 1955 Act sought to be imposed by the
      Petitioner would lead to an outcome wherein parties who are
      referred to a Mediation Centre or other centres by the Court
      will be entitled to a full refund of their court fee; whilst parties
      who similarly save the Court’s time and resources by privately
B
      settling their dispute themselves will be deprived of the same
      benefit, simply because they did not require the Court’s
      interference to seek a settlement. Such an interpretation, in our
      opinion, clearly leads to an absurd and unjust outcome, where
      two classes of parties who are equally facilitating the object and
C     purpose of the aforesaid provisions are treated differentially, with
      one class being deprived of the benefit of Section 69-A of the
      1955 Act. A literal or technical interpretation, in this background,
      would only lead to injustice and render the purpose of the
      provisions nugatory – and thus, needs to be departed from, in
      favour of a purposive interpretation of the provisions. [Paras 13,
D
      15][561-B-C; F-H; 562-A-B]
             3. The purpose of Section 69-A is to reward parties who
      have chosen to withdraw their litigations in favour of more
      conciliatory dispute settlement mechanisms, thus saving the time
      and resources of the Court, by enabling them to claim refund of
E     the court fees deposited by them. Such refund of court fee, though
      it may not be connected to the substance of the dispute between
      the parties, is certainly an ancillary economic incentive for pushing
      them towards exploring alternative methods of dispute
      settlement. As the Karnataka High Court has rightly observed
F     in Kamalamma, parties who have agreed to settle their disputes
      without requiring judicial intervention under Section 89, CPC
      are even more deserving of this benefit. This is because by
      choosing to resolve their claims themselves, they have saved
      the State of the logistical hassle of arranging for a third-party
      institution to settle the dispute. Though arbitration and mediation
G     are certainly salutary dispute resolution mechanisms, we also find
      that the importance of private amicable negotiation between the
      parties cannot be understated. There is no justifiable reason why
      Section 69-A should only incentivize the methods of out-of-court
      settlement stated in Section 89, CPC and afford step-brotherly
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  THE HIGH COURT OF JUDICATURE AT MADRAS REP. v.                        555
               M.C. SUBRAMANIAM

treatment to other methods availed of by the parties. [Para             A
19][564-C-G]
       4.1 Admittedly, there may be situations wherein the parties
have after the course of a long-drawn trial, or multiple frivolous
litigations, approached the Court seeking refund of court fees in
the guise of having settled their disputes. In such cases, the Court    B
may, having regard to the previous conduct of the parties and the
principles of equity, refuse to grant relief under the relevant rules
pertaining to court fees. However, the present case is not of such
nature. [Para 19][564-G-H; 565-A]
      4.2 Thus, even though a strict construction of the terms of       C
Section 89, CPC and 69-A of the 1955 Act may not encompass
such private negotiations and settlements between the parties,
the participants in such settlements will be entitled to the same
benefits as those who have been referred to explore alternate
dispute settlement methods under Section 89, CPC. Though the
Registry/State Government will be losing a one-time court fee in        D
the short term, they will be saved the expense and opportunity
cost of managing an endless cycle of litigation in the long term. It
is therefore in their own interest to allow Respondent No. 1’s
claim. [Para 20][565-A-C]
       4.3 Thus, the High Court was correct in holding that Section     E
89 of the CPC and Section 69-A of the 1955 Act be interpreted
liberally. In view of this broad purposive construction, the High
Court’s conclusion, is affirmed. Section 89 of CPC shall cover,
and the benefit of Section 69-A of the 1955 Act shall also extend
to, all methods of out-of-court dispute settlement between parties      F
that the Court subsequently finds to have been legally arrived at.
This would, thus, cover the present controversy, wherein a private
settlement was arrived at, and a memo to withdraw the appeal
was filed before the High Court. In such a case as well, the
appellant, i.e., Respondent No. 1 would be entitled to refund of
court fee. [Para 21][565-C-E]                                           G
      Directorate of Enforcement v. Deepak Mahajan, 1994
      3 SCC 440 : [1994] 1 SCR 445; Shailesh Dhairyawan
      v. Mohan Balkrishna Lulla, (2016) 3 SCC 619 : [2015]

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556            SUPREME COURT REPORTS                          [2021] 1 S.C.R.


A           12 SCR 70; Anurag Mittal v.Shaily Mishra Mittal,
            (2018) 9 SCC 691: [2018] 10 SCR 123 – relied on.
            Kamalamma & Ors. v.Honnali Taluk Agricultural
            Produce Co-operative Marketing Society Ltd., (2010)
            1 AIR Kar. R 279; Pradeep Sonawat v.Satish Prakash,
B           2015 (1) RCR Civil 955; Pritam Singh v.Ashok Kumar,
            2019 (1) Law Herald (P&H) 721; Raj Kumar v.Gainda
            Devi through LRs & Ors., 2019 SCC OnLine P&H 658;
            J.K. Forgings v. Essar Construction India Ltd. & Ors.,
            (2009) 113 DRJ 612; Inderjeet Kaur Raina v. Harvinder
            Kaur Anand, 2018 SCC OnLine Del 6557 – referred
C           to.
                              Case Law Reference
      [1994] 1 SCR 445                 relied on                   Para 13
      [2015] 12 SCR 70                 relied on                   Para 14
D
      [2018] 10 SCR 123                relied on                   Para 14
             CIVIL APPELLATE JURISDICTION : Special Leave Petition
      (Civil) Nos. 3063-3064 of 2021.
            From the Judgment and Order dated 08.01.2020 of High Court of
E     Judicature at Madras in C.M.P. Nos. 26742 and 26743 of 2019.
             Anish R. Shah, Adv. for the Petitioner.
            The Judgment of the Court was delivered by
            MOHAN M. SHANTANAGOUDAR, J.
F           1. These special leave petitions arise out of common order and
      judgement of the High Court of Madras (hereinafter, ‘High Court’) dated
      8.01.2020. By the impugned judgement, the High Court allowed Civil
      Miscellaneous Petitions Nos. 26742 & 26743 of 2019 filed by the
      Respondent No.1 herein praying for refund of the court fees deposited
G     by him in Appeal Suits Nos. 876/2012 and 566/2013 filed by him before
      the High Court.
             2. The facts leading to these petitions are as follows: Respondent
      No.1 purchased two vehicles from Respondent No. 2 vide two separate
      hire purchase agreements (hereinafter, ‘Agreement-I’ and ‘Agreement-
      II’; collectively, ‘the Agreements’) dated 10.06.1996, under which
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  THE HIGH COURT OF JUDICATURE AT MADRAS REP. v.                             557
M.C. SUBRAMANIAM [MOHAN M. SHANTANAGOUDAR, J. ]

Respondent No.1 was the principal debtor/hirer, and Respondents Nos.         A
3 and 4 were the sureties to the Agreements. As per the terms of the
Agreements, Respondent No.1 was to pay a sum of Rs.10,08,000/- in
stipulated instalments to Respondent No. 2 for each of the two vehicles.
       3. It suffices to note for our purposes that Respondent No. 2
brought Original Suits Nos. 66/2003 and 76/2003 against Respondents          B
Nos. 1, 3 and 4 before the Additional District Munsif Court, Coimbatore
(hereinafter, ‘Munsif Court’) and the Additional District and Sessions
Court, Coimbatore (hereinafter, ‘District Court’) respectively. In the two
suits, Respondent No.2 alleged non-payment of Rs.6,64,000/- and
Rs.5,97,200/- towards the instalments stipulated in Agreement-I and
Agreement-II respectively, and sought recovery of the balance amounts        C
along with interest thereon. Both the Original Suits Nos.66/2003 and 76/
2003 were partly decreed by the Munsif Court and District Court, by
judgments dated 13.02.2004 and 31.01.2005 respectively.
       4. Aggrieved, Respondent No.1 preferred Appeal Suits Nos. 876/
2012 and 566/2013 before the High Court, against the judgments in O.S.       D
No. 66/2003 and O.S. No.76/2013, respectively. While the appeals were
still pending consideration before the High Court, the parties entered
into a private out-of-court settlement, thus resolving the controversy
between them. In view of this, Respondent No. 1 filed a memo before
the High Court, seeking permission to withdraw Appeal Suits Nos. 876/        E
2012 and 566/2013. Such permission, along with a direction to refund
the court fee deposited by Respondent No.1, was granted by orders
dated 16.09.2019 and 18.09.2019 in A.S. Nos.566/2013 and A.S. Nos.
876/2012 respectively.
       5. Despite the above stated orders of the High Court, the Registry    F
orally refused Respondent No.1’s request for refund of court fees, on
the ground that such refund is not authorised by the relevant rules. Left
without recourse, on 25.12.2019, Respondent No.1 filed Civil
Miscellaneous Petitions Nos. 26742/2019 and 26743/2019 under Section
151, Code of Civil Procedure, 1908 (hereinafter, ‘CPC’), praying for
refund of the court fees paid by him in A.S. Nos. 876/2012 and 566/2013      G
respectively, in terms of the orders dated 18.09.2019 and 16.09.2019
therein.
      6. By the impugned common judgment and order dated 8.01.2020,
the High Court has allowed the aforementioned Civil Miscellaneous
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558            SUPREME COURT REPORTS                            [2021] 1 S.C.R.


A     Petitions, and directed the Registry to refund the full court fee to
      Respondent No. 1 herein.
            7. In addressing the question of whether the refund of court fee
      was permissible under the relevant rules, the High Court considered
      Section 69-A of the Tamil Nadu Court Fees and Suit Valuation Act, 1955
B     (hereinafter, ‘1955 Act’), which reads as follows:
            “69-A. Refund on settlement of disputes under section 89
            of Code of Civil Procedure.—Where the Court refers the
            parties to the suit to any of the modes of settlement of dispute
            referred to in section 89 of the Code of Civil Procedure, 1908
C           (Central Act V of 1908), the fee paid shall be refunded upon such
            reference. Such refund need not await for settlement of the
            dispute.” (emphasis supplied)
            Considering, appeal suits to be continuation of original suits, and
      therefore falling within the ambit of ‘suits’ as provided in Section 69-A,
D     the Court went on to take notice of Section 89, CPC which reads as
      follows:
            “89. Settlement of disputes outside the Court.—(1) Where
            it appears to the Court that there existelements of a settlement
            which may be acceptable to the parties, the Court shall formulate
E           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;
F           (b) conciliation;
            (c) judicial settlement including settlement through Lok Adalat: or
            (d) mediation.
            (2) Were a dispute has been referred—
G           (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
H           in accordance with the provisionsof sub-section (1) of section 20
  THE HIGH COURT OF JUDICATURE AT MADRAS REP. v.                               559
M.C. SUBRAMANIAM [MOHAN M. SHANTANAGOUDAR, J. ]

      of the Legal Services Authority Act, 1987 (39 of 1987) and all           A
      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            B
      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.”       C
       8. After giving due consideration to the above provisions, the High
Court held that, given their beneficial intent, they must be interpreted
liberally, in a manner that would serve their object and purpose. Construing
them narrowly would lead to a situation wherein parties who settle their
dispute through a Mediation Centre or other centres of alternative judicial    D
settlement under Section 89, CPC would be entitled to claim refund of
their court fee, whilst parties who settle the disputes privately by
themselves will be left without any means to seek a refund. Accordingly,
the High Court opined that such differential treatment between two
similarly situated persons, would constitute a violation of Article 14 of
the Constitution. Therefore, in the High Court’s view, a constitutional        E
interpretation of Section 89 of the CPC, and resultantly Section 69-A of
the 1955 Act, would require that these provisions cover all methods of
out-of-court dispute settlement between parties that the Court
subsequently finds to have been legally arrived at.
     9. Dissatisfied, the Petitioner herein has challenged the impugned        F
judgment of the High Court.
        10. The gravamen of the Petitioner’s contentions is that Section
69-A of the 1955 Act only contemplates refund of court fees in those
cases where the Court itself refers the parties to any of the alternative
dispute settlement mechanisms listed in Section 89 of the CPC. That            G
hence it does not apply to circumstances such as in the present case,
where the parties, without any reference by the Court, privately agreed
to settle their dispute outside the modes contemplated under Section 89
of the CPC.
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560             SUPREME COURT REPORTS                             [2021] 1 S.C.R.


A           This Court’s Analysis
            11. Having heard the petitioner and thoroughly considered the
      arguments advanced, we find ourselves unimpressed by the Petitioner’s
      contentions, for reasons outlined below.
             12. The provisions of Section 89 of CPC must be understood in
B     the backdrop of the longstanding proliferation of litigation in the civil
      courts, which has placed undue burden on the judicial system, forcing
      speedy justice to become a casualty. As the Law Commission has
      observed in its 238th Report on Amendment of Section 89 of the Code
      of Civil Procedure 1908 and Allied Provisions, Section 89 has now
C     made it incumbent on civil courts to strive towards diverting civil disputes
      towards alternative dispute resolution processes, and encourage their
      settlement outside of court (Para 2.3). These observations make the
      object and purpose of Section 89 crystal clear – to facilitate private
      settlements, and enable lightening of the overcrowded docket of the
      Indian judiciary. This purpose, being sacrosanct and imperative for the
D     effecting of timely justice in Indian courts, also informs Section 69-A of
      the 1955 Act, which further encourages settlements by providing for
      refund of court fee. This overarching and beneficent object and purpose
      of the two provisions must, therefore, inform this Court’s interpretation
      thereof.
E            13. Before expounding further on our interpretation of the aforesaid
      provisions, regard must be had to the following postulation of this Court’s
      interpretive role in Directorate of Enforcement v. Deepak Mahajan,
      1994 3 SCC 440 –
            “24…Though the function of the Courts is only to expound the
F           law and not to legislate, nonetheless the legislature cannot be asked
            to sit to resolve the difficulties in the implementation of its intention
            and the spirit of the law. In such circumstances, it is the duty of
            the court to mould or creatively interpret the legislation by liberally
            interpreting the statute.
G           25. In Maxwell on Interpretation of Statutes, Tenth Edn. at page
            229, the following passage is found:
            “Where the language of a statute, in its ordinary meaning and
            grammatical construction, leads to a manifest contradiction of the
            apparent purpose of the enactment, or to some inconvenience or
H           absurdity, hardship or injustice, presumably not intended, a
  THE HIGH COURT OF JUDICATURE AT MADRAS REP. v.                                    561
M.C. SUBRAMANIAM [MOHAN M. SHANTANAGOUDAR, J. ]

       construction may be put upon it which modifies the meaning of                A
       the words, and even the structure of the sentence. … Where the
       main object and intention of a statute are clear, it must not be
       reduced to a nullity by the draftsman’s unskilfulness or ignorance
       of the law, except in a case of necessity, or the absolute intractability
       of the language used.” (emphasis supplied)
                                                                                    B
       Therefore, it is well-settled that the Courts may, in order to avoid
any difficulty or injustice resulting from inadvertent ambiguity in the
language of a statute, mould the interpretation of the same so as to
achieve the true purpose of the enactment. This may include expanding
the scope of the relevant provisions to cover situations which are not
strictly encapsulated in the language used therein.                                 C

      14. This principle of statutory interpretation has been affirmed
more recently in the decision in Shailesh Dhairyawan v. Mohan
Balkrishna Lulla, (2016) 3 SCC 619 –
       “33.…Though the literal rule of interpretation, till some time ago,          D
       was treated as the “golden rule”, it is now the doctrine of purposive
       interpretation which is predominant, particularly in those cases
       where literal interpretation may not serve the purpose or may
       lead to absurdity. If it brings about an end which is at variance
       with the purpose of statute, that cannot be countenanced.”
       (emphasis supplied)                                                          E

       This was followed in the subsequent decision of this Court in
       Anurag Mittal v. Shaily Mishra Mittal, (2018) 9 SCC 691.
        15. In light of these established principles of statutory interpretation,
we shall now proceed to advert to the specific provisions that are the              F
subject of the present controversy. The narrow interpretation of Section
89 of CPC and Section 69-A of the 1955 Act sought to be imposed by
the Petitioner would lead to an outcome wherein parties who are referred
to a Mediation Centre or other centres by the Court will be entitled to a
full refund of their court fee; whilst parties who similarly save the Court’s
time and resources by privately settling their dispute themselves will be           G
deprived of the same benefit, simply because they did not require the
Court’s interference to seek a settlement. Such an interpretation, in our
opinion, clearly leads to an absurd and unjust outcome, where two classes
of parties who are equally facilitating the object and purpose of the
aforesaid provisions are treated differentially, with one class being
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562             SUPREME COURT REPORTS                           [2021] 1 S.C.R.


A     deprived of the benefit of Section 69-A of the 1955 Act. A literal or
      technical interpretation, in this background, would only lead to injustice
      and render the purpose of the provisions nugatory – and thus, needs to
      be departed from, in favour of a purposive interpretation of the provisions.
             16. It is pertinent to note that the view taken by the High Court in
B     the impugned judgement has been affirmed by the High Courts in other
      states as well. Reference may be had to the decision of the Karnataka
      High Court in Kamalamma & ors. v. Honnali Taluk Agricultural
      Produce Co-operative Marketing Society Ltd., (2010) 1 AIR Kar. R
      279, wherein it was held as follows:
C           “6. Whether the parties to a suit or appeal or any other proceeding
            get their dispute settled amicably through Arbitration, or meditation
            or conciliation in the Lok Adalath, by invoking provisions of Section
            89, C.P. C. or they get the same settled between themselves without
            the intervention of any Arbitrator/Mediator/Conciliators in
            Lokadalath etc., and without invoking the provision of Section 89,
D           C.P.C., the fact remains that they get their dispute settled without
            the intervention of the Court. If they get their dispute settled by
            invoking Section 89, C.P.C., in that event the State may have to
            incur some expenditure but, if they get their dispute settled between
            themselves without the intervention of the Court or anyone else,
E           such as arbitrator/mediator etc., the State would not be incurring
            any expenditure. This being so, I am of the considered opinion
            that whether the parties to a litigation get their dispute settled by
            invoking Section 89, C.P.C. or they get the same settled between
            themselves without invoking Section 89, C.P.C., the party paying
            Court-Fees in respect thereof should be entitled to the refund of
F           full Court-Fees as provided under Section 16 of the Court-Fees
            Act, 1870.”
                                                            (emphasis supplied)
            Section 16 of the Court-Fees Act, 1870 is in parimateria with
G     Section 69-A of the 1955 Act, and hence the above stated principles are
      equally applicable to the present case.
            17. The holding in Kamalamma (supra) has been followed by
      the Punjab & Haryana High Court in Pradeep Sonawat v. Satish
      Prakash, 2015 (1) RCR Civil 955 and Pritam Singh v. Ashok Kumar,
      2019 (1) Law Herald (P&H) 721, which in turn were further affirmed in
H
  THE HIGH COURT OF JUDICATURE AT MADRAS REP. v.                               563
M.C. SUBRAMANIAM [MOHAN M. SHANTANAGOUDAR, J. ]

Raj Kumar v. Gainda Devi through LRs & ors., 2019 SCC OnLine                   A
P&H 658.
     18. The Delhi High Court has also taken a similar view in J.K.
Forgings v. Essar Construction India Ltd. & Ors., (2009) 113 DRJ
612:
      “11. The laudable object sought to be achieved by inserting and          B
      amending these sections seems to be speedy disposal. The policy
      behind the statute is to reduce the No. of cases by settlement.
      Section 89 of C.P.C. and Section 16 Court Fee Act are welcome
      step in that direction, as the No. of cases has increased, it is the
      duty of court to encourage settlement. In present scenario of huge       C
      pendency of cases in the courts a purposive and progressive
      interpretation is the requirement of present hour. The intention of
      the Legislature is primarily to be gathered from the object and the
      words used in the material provisions. The statute must be
      interpreted in their plain grammatical meaning.
                                                                               D
      12. It is very clear that the Legislative intent of Section 16 of
      Court Fees Act was made broad enough to take cognizance of all
      situations in which parties arrive at a settlement irrespective of
      the stage of the proceedings. It is also obvious that the purpose of
      making this provision was in order to provide some sort of incentive
      to the party who has approached the court to resolve the dispute         E
      amicably and obtain a full refund of the court fees. Having regard
      to this position, the present application will have to be allowed.
      14. This is not a case where parties to the suit after long drawn
      trial have come to the court for settlement. Had it been the case
      of long drawn trial non-refund of court fees could have been             F
      justified but in such like cases courts endeavor should be to
      encourage the parties and court fees attached with the plaint should
      be refunded as an incentive to them.
                                   xxx
                                                                               G
      17. Settlement of dispute only through any of the mode prescribed
      under section 89 of C.P.C is not sine qua non of section 89 C.P.C.
      rather it prescribes few methods through which settlement can
      be reached, sine qua non for applicability of section 89 is settlement
      between the parties outside the court without the intervention of
      the courts.                                                              H
564             SUPREME COURT REPORTS                             [2021] 1 S.C.R.


A            18. It is also not the requirement of the section that court must
             always refer the parties to Dispute Resolution Forum. If parties
             have arrived at out of court settlement it should be welcomed
             subject to principles of equity.
             19. Court Fees Act is a taxing statute and has to be construed
B            strictly and benefit of any ambiguity if any has to go in favour of
             the party and not to the state.” (emphasis supplied)
            The view taken in both Kamalamma (supra) and J.K. Forgings
      (supra) has been subsequently relied upon by the Delhi High Court in
      Inderjeet Kaur Raina v. Harvinder Kaur Anand, 2018 SCC OnLine
C     Del 6557.
             19. We find ourselves in agreement with the approach taken by
      the High Courts in the decisions stated supra. The purpose of Section
      69-A is to reward parties who have chosen to withdraw their litigations
      in favour of more conciliatory dispute settlement mechanisms, thus saving
D     the time and resources of the Court, by enabling them to claim refund of
      the court fees deposited by them. Such refund of court fee, though it
      may not be connected to the substance of the dispute between the parties,
      is certainly an ancillary economic incentive for pushing them towards
      exploring alternative methods of dispute settlement. As the Karnataka
      High Court has rightly observed in Kamalamma (supra), parties who
E     have agreed to settle their disputes without requiring judicial intervention
      under Section 89, CPC are even more deserving of this benefit. This is
      because by choosing to resolve their claims themselves, they have saved
      the State of the logistical hassle of arranging for a third-party institution
      to settle the dispute. Though arbitration and mediation are certainly
F     salutary dispute resolution mechanisms, we also find that the importance
      of private amicable negotiation between the parties cannot be understated.
      In our view, there is no justifiable reason why Section 69-A should only
      incentivize the methods of out-of-court settlement stated in Section 89,
      CPC and afford step-brotherly treatment to other methods availed of by
      the parties.
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             Admittedly, there may be situations wherein the parties have after
      the course of a long-drawn trial, or multiple frivolous litigations, approached
      the Court seeking refund of court fees in the guise of having settled their
      disputes. In such cases, the Court may, having regard to the previous
      conduct of the parties and the principles of equity, refuse to grant relief
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  THE HIGH COURT OF JUDICATURE AT MADRAS REP. v.                                565
M.C. SUBRAMANIAM [MOHAN M. SHANTANAGOUDAR, J. ]

under the relevant rules pertaining to court fees. However, we do not           A
find the present case as being of such nature.
       20. Thus, even though a strict construction of the terms of Section
89, CPC and 69-A of the 1955 Act may not encompass such private
negotiations and settlements between the parties, we emphasize that the
participants in such settlements will be entitled to the same benefits as       B
those who have been referred to explore alternate dispute settlement
methods under Section 89, CPC. Indeed, we find it puzzling that the
Petitioner should be so vehemently opposed to granting such benefit.
Though the Registry/State Government will be losing a one-time court
fee in the short term, they will be saved the expense and opportunity
cost of managing an endless cycle of litigation in the long term. It is         C
therefore in their own interest to allow the Respondent No. 1’s claim.
       21. Thus, in our view, the High Court was correct in holding that
Section 89 of the CPC and Section 69-A of the 1955 Act be interpreted
liberally. In view of this broad purposive construction, we affirm the
High Court’s conclusion, and hold that Section 89 of CPC shall cover,           D
and the benefit of Section 69-A of the 1955 Act shall also extend to, all
methods of out-of-court dispute settlement between parties that the Court
subsequently finds to have been legally arrived at. This would, thus,
cover the present controversy, wherein a private settlement was arrived
at, and a memo to withdraw the appeal was filed before the High Court.          E
In such a case as well, the appellant, i.e., Respondent No. 1 herein
would be entitled to refund of court fee.
       Conclusions and Directions
     22. These petitions are accordingly dismissed, and the impugned
judgment of the High Court dated 8.01.2020 is upheld.                           F
      23. The petitioners are directed to refund the court fee deposited
by Respondent No. 1 for Appeal Suits Nos. 876 of 2012 and 566 of
2013, within a period of six weeks.

Devika Gujral                                            Petitions dismissed.   G




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