Noorudheen v. Muhammed Najmal

# **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR. JUSTICE ANIL K.NARENDRAN** **&** **THE HONOURABLE MRS. JUSTICE M.R.ANITHA** **TUESDAY, THE 6[TH] DAY OF JULY 2021 / 15TH ASHADHA, 1943** **RFA NO. 295 OF 2019** **AGAINST THE JUDGMENT AND DECREE IN O.S.NO.111/2017 OF THE SUBORDINATE JUDGES COURT, KOZHIKODE.** **APPELLANT/DEFENDANT:** **NOORUDHEEN.V.,** **AGED 55 YEARS, S/O.AHAMMED KOYA, FOUSIYA MANZIL, GOVT. ARTS COLLEGE, PANNIYANKARA AMSOM AND DESOM, KOZHIKODE TALUK, KOZHIKODE-673018.** **BY ADVS. R.K.MURALEEDHARAN SMT.ATHIRA A.MENON** ## **RESPONDENT/PLAINTIFF:** **MUHAMMED NAJMAL, S/O.KUNHAMMED KUTTY, KADEKKACHALIL HOUSE, KUTTIADI AMSOM, KUTTIADI POST, KOZHIKODE DISTRICT-673508.** **BY ADVS. SMT.MEENA.A. SRI.VINOD RAVINDRANATH SMT.M.R.MINI SRI.ASHWIN SATHYANATH SRI.K.C.KIRAN SRI.M.DEVESH** **THIS REGULAR FIRST APPEAL HAVING COME UP FOR ADMISSION ON 06.07.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** R.F.A.No.295 of 2019 -2- **==> picture [85 x 11] intentionally omitted <==** ## **JUDGMENT** ## **Anil K.Narendran, J.** The appellant is the defendant in O.S.No.111 of 2017 on the file of the Subordinate Judge’s Court, Kozhikode. The respondent-plaintiff filed the said suit for recovery of an amount of Rs.74,20,200/- from the defendant, together with interest at the rate of 12%. By the judgment dated 16.03.2019, the trial court decreed the suit and the defendant was held liable to pay an amount of Rs.83,10,400/- with 12% interest from the date of suit to the date of decree and thereafter, 6% interest till realisation. As per the decree, the plaintiff is entitled to realise the said amount from the assets of the defendants, both movable and immovable. The defendant was held liable to pay cost to the plaintiff. Challenging the judgment and decree of the trial court, the appellant-defendant is before this Court in this appeal. 2. On 05.07.2019, when this appeal came up for admission, this Court admitted the matter on file and issued notice to the respondent-plaintiff. This Court granted an interim order in I.A.No.1 of 2019, staying the execution of the decree, ## R.F.A.No.295 of 2019 -3- for a period of three months, on the condition that the appellant shall furnish sufficient security for the decree amount and cost, within one month from the date of order. 3. On 04.10.2019, when this appeal came up for consideration, the learned counsel for the appellant submitted that the condition stipulated in the order dated 05.07.2019 had been complied with. Recording the said submission, this Court extended the interim order for a further period of six months. 4. On 18.06.2021, the appellant has filed I.A.No.1 of 2021, an application under Order XXIII, Rule 3 of the Code of Civil Procedure, 1908, to record the settlement arrived at between the parties, as evidenced by Annexure A joint statement dated 29.04.2021. 5. Condition Nos.3 and 4 of Annexure A joint statement dated 29.04.2021 read thus; “3. As per the settlement arrived at, the entire dispute between the parties is compromised for a sum of Rs.45,00,000/- in full and final settlement. In view of the settlement arrived at between the parties, the defendant today paid a sum of Rs.20,00,000/- as per cheque No. 892480 dated 29.04.2021 drawn on State Bank of India, Naduvattom Beypore Branch in favour of the plaintiff. The R.F.A.No.295 of 2019 -4- plaintiff acknowledged the said cheque from the defendant and he can encash the same today itself. 4. Out of the balance amount of Rs.25,00,000/-, the defendant will pay a sum of Rs.5,00,000/- within 21 days from today. The balance sum of Rs.20,00,000/- will be paid on or before 30.06.2021 without any default from the side of the defendant.” 6. On 28.06.2021, when this appeal came up for consideration, the matter was adjourned to this date for further consideration. 7. Heard the learned counsel for the appellantdefendant and also the learned counsel for the respondentplaintiff. 8. The learned counsel for the respondent-plaintiff would submit that the appellant-defendant had complied with condition No.4 in Annexure A joint statement dated 29.04.2021 by paying the balance sum of Rs.20,00,000/- to the respondent-plaintiff, on 30.06.2021. The said submission is recorded. 9. The learned counsel for the appellant would point out condition No.6 in Annexure A joint statement dated 29.04.2021, which deals with refund of court fee, which reads R.F.A.No.295 of 2019 -5- thus; “6. the appellant/defendant can take steps to refund the court fee paid by the appellant before the Hon’ble High Court.” 10. Section 69A of the Kerala Court Fees and Suit Valuation Act, 1959, which deals with refund of court fee in case where the dispute is settled under Section 89 of the Code of Civil Procedure, reads thus; “69A. Refund of court fee in case where the dispute is settled under Section 89 of the Code of Civil Procedure.Where a suit, appeal or other proceeding before any court is settled by recourse to Section 89 of the Code of Civil Procedure, 1908 (Central Act 5 of 1908), the whole court fee paid on the plaint/Memorandum of Appeal or other Proceedings, except in interlocutory matters, shall be ordered by the court to be refunded to the parties concerned by whom the court fee was paid.” 11. In **High Court of Madras v. M.C. Subramaniam** **[(2021) 3 SCC 560]** the Apex Court held that, the purpose of Section 69A of the Tamil Nadu Court Fees and Suit Valuation Act, 1955 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 the court fees ## R.F.A.No.295 of 2019 -6- 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 rightly observed by the Karnataka High Court in **Kamalamma v. Honnali Taluk Agricultural Produce Cooperative Marketing Society Ltd. [2009 SCC OnLine Kar** **744 : (2010) 1 AIR Kant. R 279]** , the parties, who have agreed to settle their disputes without requiring judicial intervention under Section 89 of the Code of Civil Procedure, 1908, 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 thirdparty institution to settle the dispute. Though arbitration and mediation are certainly salutary dispute resolution mechanisms, the importance of private amicable negotiation between the parties cannot be understated. Therefore, there is no justifiable reason why Section 69A of the 1955 Act should only incentivise the methods of out-of-court settlement stated in Section 89 of the Code and afford step-brotherly treatment ## R.F.A.No.295 of 2019 -7- to other methods availed of by the parties. There may be situations, wherein the parties have after the course of a longdrawn 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 under the relevant rules pertaining to court fees. Even though a strict construction of the terms of Section 89 of the Code and Section 69A of the 1955 Act may not encompass such private negotiations and settlements between the parties, the Apex Court emphasised that, 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 of the Code. The Apex Court held that the High Court of Madras was correct in holding that Section 89 of the Code and Section 69A of the 1955 Act be interpreted liberally. In view of the above broad purposive construction, the Apex Court affirmed the conclusion of the High Court of Madras and held that Section 89 of the Code shall cover, and the benefit of Section 69A of the 1955 R.F.A.No.295 of 2019 -8- - - Act shall also extend to all methods of out of court dispute settlement between parties that the c ourt subsequently finds to have been legally arrived at. In the case before the Apex Court, a private settlement was arrived at, and a memo to withdraw the appeal was filed before the High Court of Madras. The Apex court held that, in such a case as well, the appellant would be entitled to refund of court fee. 12. Section 69A of the Tamil Nadu Court Fees and Suit Valuation Act, 1955, which deals with refund on settlement of disputes under Section 89 of Code of Civil Procedure, reads thus; “69A. 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 (Central Act V of 1908), the fee paid shall be refunded upon such reference. Such refund need not await for settlement of the dispute. 13. The provisions under Section 69A of the Kerala Court Fees and Suit Valuation Act, 1959 regarding refund of court fee in case where the dispute is settled under Section 89 of the Code of Civil Procedure, which is extracted hereinbefore R.F.A.No.295 of 2019 -9- at paragraph 10, are in _pari materia_ with the provisions under Section 69A of the Tamil Nadu Court Fees and Suit Valuation Act, 1955, dealt with by the Apex Court in **M.C. Subramaniam [(2021) 3 SCC 560]** . However, as per Section 69A of the Kerala Act, no such refund of court fee shall be ordered in interlocutory matters. 13. Since the provisions under Section 69A of the Kerala Court Fees and Suit Valuation Act, 1959 are in _pari materia_ with the provisions _under_ Section 69A of the Tamil Nadu Court Fees and Suit Valuation Act, 1955, dealt with by the Apex Court in **M.C. Subramaniam [(2021) 3 SCC 560]** , the law laid down by the Apex Court in that decision shall apply with equal force regarding refund of court fee under the Kerala Act and therefore, Section 89 of the Code of Civil Procedure shall cover, and the benefit of Section 69A of the Kerala Court Fees and Suit Valuation Act shall also extend to all methods of out-ofcourt dispute settlement between parties, i.e., private negotiations and settlements between the parties, that the court subsequently finds to have been legally arrived at. However, under Section 69A of the Kerala Act, no such refund R.F.A.No.295 of 2019 -10- of court fee shall be ordered in interlocutory matters. In that view of the matter, the appellant-defendant is entitled for refund of the court fee paid before this Court in this appeal, since the dispute has already been settled between the parties out-of-court, by way of private settlement. In the above circumstances, this appeal is disposed of in terms of Annexure A joint statement dated 29.04.2021, which shall form part of this judgment. The appellant-defendant shall be entitled for refund of the whole court fee paid on the memorandum of Regular First Appeal. **Sd/ANIL K. NARENDRAN JUDGE** **Sd/M.R. ANITHA JUDGE** bpr R.F.A.No.295 of 2019 -11- ## **APPENDIX** ## **APPELLANT'S EXHIBITS:** **ANNEXURE A: TRUE COPY OF JOINT STATEMENT DATED 29.04.2021 EXECUTED BETWEEN THE PARTIES.**