No Court Fee Refund Once Evidence Is Recorded, Rules Madras High Court in Susheela Kawar v. M Pettu Lakshmi
Case: Susheela Kawar v. M Pettu Lakshmi
Date of Judgment: 30 October 2026
Court: Madras High Court
Coram: Justice P. B. Balaji
Court Observation
“In such view of the matter, I am emboldened to follow and rely upon the ratio laid down in Afcons case instead of following the ratio laid down in M.C. Subramaniam’s case.”
Summary
The Madras High Court has held that litigants who settle their civil disputes out of court after evidence has been recorded during trial are not entitled to a refund of court fees under the Tamil Nadu Court Fees and Suits Valuation Act, 1955. The Court dismissed two civil revision petitions challenging trial court orders that had refused a full refund of court fees despite private settlements between the parties.
The Court reasoned that Section 69 of the Act permits a refund when a suit is settled out of court before evidence is recorded on the merits of the claim, and that the legislature deliberately retained that restriction even when a 2017 amendment raised the refundable amount to 100 per cent. It therefore followed the Supreme Court’s 2010 ruling in Afcons Infrastructure Ltd. v. Cherian Varkey Construction Co. (P) Ltd., which contemplated reference to alternative dispute resolution only before commencement of trial, rather than the 2021 ruling in the M.C. Subramaniam case.
Key Holdings
- A party is not entitled to any refund of court fees once evidence has been recorded, where the dispute is settled out of court after commencement of trial.
- The benefit of a full refund of court fees following an out-of-court settlement cannot be extended indiscriminately to cases where the trial has already progressed to the stage of recording evidence.
- Section 69 of the Tamil Nadu Court Fees and Suits Valuation Act, 1955, as amended, retains the condition that a refund is available only where the suit is settled before any evidence has been recorded on the merits of the claim.
Directions Issued
- A copy of the judgment was directed to be forwarded to the Tamil Nadu State Law Commission for consideration of this grey area in the law.
Background
Two civil revision petitions came before the Court, one against a Tiruvallur district court order refunding only 50 per cent of the court fees after deducting 5 per cent towards administrative charges, and the other against a Chengalpattu court order refusing a full refund of Rs 2.54 lakh in court fees. The petitioners relied on the Supreme Court’s 2021 judgment in High Court of Judicature at Madras v. M.C. Subramaniam, which had upheld a full refund even for private settlements outside the alternative dispute resolution mechanisms in Section 89 of the Code of Civil Procedure, 1908.
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Disclaimer: This is a summary prepared for informational purposes only and does not constitute legal advice. Readers should refer to the official judgment for the authoritative text.
