M.C. Ranganna vs The State of Madras

Ramachandra Ayyar J.

This is a Civil Revision Petition filed by the Plaintiff in Original Suit No. 1145 of 1955, on the file of the City Civil Court, Madras. The question

involved in the petition is whether the Petitioner would be entitled to a refund of a portion of the Court-fee paid on the plaint in the circumstances of

this case.

The Plaintiff filed Civil Suit No. 263 of 1952, on the Original Side of this Court for recovery of a sum of Rs. 22,456-0-9 as against the

Defendants therein as damages and he paid a Court-fee of Rs. 1,222-7-0 on the plaint in accordance with the provisions of Order II, Rule 1 of the

High Court Fees Rules, 1933, as amended by R.O.C. No. 2219 of 1949.

The Defendants contested the claim in their written statement. Issues were framed and when the suit was pending on the Original Side of this

Court, the jurisdiction of the City Civil Court was increased from Rs. 10,000 to Rs. 50,000 by Madras Act X of 1955. u/s 8 of that Act as

amended by Act XXIX of 1955 all suits pending in the High Court on the date of the commencement of Act X of 1955 which would be within the

cognizance of the Madras City Civil Court under the provisions of the said Act (i.e., suits of the value of Rs. 50,000 and below) stood transferred

to the City Civil Court. In consequence of that provision, Civil Suit No. 263 of 1952, was transferred to the City Civil Court, Madras on 1st July

1955, and was registered there as, Original Suit No. 1145 of 1955.

The suit however, did not proceed to trial as the parties settled the dispute outside the Court. On 21st October 1955, the suit was dismissed as

settled. The Petitioner who was the Plaintiff in the suit, thereupon applied to the Court for a refund of one-half of the Court-fee paid on the plaint

presumably relying on Section 69 of the Madras Court-fees and Suits Valuation Act (XIV of 1955). The learned Principal City Civil Judge

declined to grant the application on the ground that there was no statutory authority to refund the Court-fee in the circumstances of this case. The

Petitioner seeks to revise the order.

Before proceeding with the case it is necessary to set out briefly the law in regard to the levy and refund of Court-fee in the High Court on the

Original Side and in the City Civil Court, Madras, in so far as it is relevant for the present case. The Madras Court-fees and Suits Valuation Act

XIV of 1955 which will hereafter be referred to as the New Court Fees Act of 1955 came into force on 19th May 1955 and it applied to all the

Courts in the Madras State, including the Original Side of the High Court. Prior to the new Court Fees Act of 1955, the levy and refund of Court-

fee on plaints and proceedings on the Original Side of the High Court and appeals therefrom were regulated by the Fees Rules framed by the High

Court. The High Court had the authority derived u/s 15 of the Charter Act, 1861, Clause 37 of the Letters Patent and the provisions of the

Government of India Acts of 1915 and 1935 which continued to be in force by virtue of Article 375 of the Constitution to prescribe, regulate and

levy Court-fees in proceedings before it. An illuminating (if I may say so with respect) discussion on the origin of or the legal basis of the power of

the High Court to levy or prescribe Court-fees in proceedings before it, is to be found in Seshadri v. Province of Madras ILR (1954) Mad. 643.

By virtue of that power, rules were framed by this Court for the levy of Court-fees. The High Court Fees Rules, 1933, as amended was in force

on the date of the institution of the suit.

Prior to the new Court Fees Act of 1955, the levy, etc., of Court-fees in Courts other than the Original Side of the High Court was regulated by

the Central Act, the Court Fees Act VII of 1870, which for the sake of brevity will be referred to hereafter as the old Court Fees Act of 1870.

The scale of fees prescribed by the High Court was different from the one prescribed by the old Court Fees Act of 1870. Broadly speaking, prior

to 27th June 1950, the amount of Court-fee levied by the High Court on plaints and other proceedings entertained on the Ordinary Original

Jurisdiction was very; much less than what a litigant would have to pay for a similar suit in Courts to which the old Court Fees Act, 1870, applied.

This anomaly was remedied by an amendment of the Fees Rules by the High Court in 1949 by R.O.C. No. 2219 of 1949. By virtue of that

amendment Order II, Rule 1 of the Fees Rules read thus:

The fees and commissions set put in Appendix II hereto shall be charged by the Registrar , Sheriff, the. Reserve Bank of India and the Imperial

Bank of India, as the case may be, upon the several documents, matters and transactions therein specified as chargeable. The commission

chargeable to Government shall be charged by the Reserve Bank of India and credited to Government.

To other documents including Memoranda of Appeals the Registrar shall apply so far as may be the law for the time being in force relating to

Court-fees, as regards the scale of such fees, the manner of levy of such fees, the refund of such fees and in every other respect, in the manner and

to the extent that it is applicable to similar documents filed in Original proceedings in a District Court and in appeals from decrees and orders of a

District Court.

It must be noticed at this stage that by fixing the scale of Court-fee on the Original Side on the same basis as under the old Court Fees Act of

1870, did not render the old Court Fees Act, 1870, as such applicable to the suits on the Original Side of the High Court. The authority for the

levy was only the Fees Rules of 1937 though the rules by reason of the amendment adopted the same scale of fees as those levied by the old

Court Fees Act, 1870. Before the amendment of the Fees Rules in 1949, there was a provision for refund of Court-fee only in two cases as

provided in Order I, Rule 13, viz., in a case of rejection of plaint or remand on appeal under Order XLI, Rule 23, Civil Procedure Code.

Evidently, having regard to the fact that the amendment of Order II, Rule 1 of the Fees Rules obliged the litigant to pay a higher Court-fee than

before, a new provision for refund was made by introducing Rule 13-A. Rule 13-A runs thus:

Where a suit instituted on or after the 27th day of June 1950 is settled out of Court before the settlement of issues or before any order dispensing

with issues, a certificate shall be issued to the Plaintiff authorising him to receive from the Collector one-half of the amount of the institution fees

paid by him on the plaint.

Where such suit is settled out of Court after the settlement of issues or any order dispensing with issues, but before trial, a certificate shall be issued

to the Plaintiff authorising him to receive from the Collector one-third of the amount of such institution fees.

(3) Where a suit is settled out of Court before the commencement of the trial, the Court shall grant to the Plaintiff a certificate authorizing him to

receive back from the Collector one-half of the amount of institution fees paid by him on the plaint.

Neither in the old Court Fees Act of 1870, nor in the Fees Rules of the Original Side of the High Court prior to 1949, was there any rule for

refund of a part of Court-fee in cases where the suit were settled before the trial commenced. Order II, Rule 13-A which came into force on 27th

June 1950 along with Order II, Rule 1 which adopted the scale of fee provided by the old Court Fees Act, 1870, for the first time entitled the

litigant to obtain a partial refund in cases where suits were settled before trial. There seems to be little doubt that such a refund was intended as a

part of the scheme of the amended rules which had the effect of increasing the Court-fees payable in suits, etc., on the Original Side. The result is

that in suits instituted after 27th June 1950, when the amendments came into force, a litigant on the Original Side of this Court would be entitled to

get a refund of a portion of the Court-fees in the event of the suit being settled, the quantum of refund being provided for in the rules.

It is necessary now to consider briefly the law which regulated the Court-fee in the City Civil Court, Madras. Prior to 1955, suits instituted in the

City Civil Court was governed by old Court Fees Act, 1870, subject to sections 9 and 13 of the City Civil Courts Act VII of 1892. Under that

Act, refund of Court-fee once paid was allowed only in certain cases, viz., those provided for in sections 13 to 15. u/s 13 of the City Civil Courts

Act, however, suits in the City Civil Court if they were settled before issues were settled or evidence recorded, the Plaintiff would be entitled to

obtain refund of half the Court-fee paid. The old Court Fees Act of 1870, was repealed on the passing of the Madras Court-fees and Suits

Valuation Act XIV of 1955. The latter Act contained provisions for refund of Court-fee in chapter VII. Section 69 specifically provided for refund

of half the Court-fee in case a suit was settled before evidence is recorded on the merits of the claim. This Act as stated already came into force on

19th May 1955. Section 13 of the Madras City Civil Court Act was repealed by Section 86 of the new Court Fees Act, 1955. The result of these

provisions is that except in cases governed by Section 69 of the new Act, there is no statutory provision for refund of Court-fee in a case like the

present if the suit is settled out of Court.

The present suit was transferred to the City Civil Court by virtue of Section 8 of Madras Act X of 1955, to which reference has been made

already. In a case of the transfer of a suit from the Original Side of the High Court to the City Civil Court, Section 16 of the City Civil Courts Act

provides that on transfer the Plaintiff should pay the Court-fee payable for such suits as in suits filed in the City Civil Court, (see: The Official

Assignee Vs. M.C. Ranganathan, But this rule was held not to apply to the case of a statutory transfer as u/s 8 of Madras Act X of 1955. In

Narayana v. Veerankutti ILR (1958) Mad 711, a case similar to the present one, it was held that as the suit was transferred by virtue of a Statute

and not as a result of the exercise of discretion by the High Court, Section 16 of the City Civil Courts Act would not apply and there could be no

levy of a higher Court-fee as a result of such a transfer. It was also held that after transfer the plaint could not be deemed to be received by the

City Civil Court within the meaning of Section 8 of the new Court Fees Act, 1955, so as to make its provisions applicable. The suit should,

therefore, be held to have been properly valued and proper Court-fee paid even though the plaint was stamped only in accordance with the High

Court Fees Rules, 1933.

The question then arises whether there is a power in the City Civil Court to refund a portion of the Court-fee paid on the plaint in the High

Court when the case has been transferred to the City Civil Court by Act X of 1955.

The learned Advocate for the Petitioner argued that as the transfer of the suit to the City Civil Court was effected only on 1st July 1955, the

provisions of the Madras Court Fees Act and the Suits Valuation Act of 1955, would apply and that the Plaintiff would be entitled to obtain refund

u/s 69. I cannot agree. Section 69 can apply to only those suits which were instituted after the Act XIV of 1955, came into force. This is made

clear by Section 87(2) of the Act which specifically states that all suits and proceedings instituted before the Act shall be governed by the Court

Fees Act VII of 1870. Section 69 and other provisions for refund are enacted for refund in cases where levy is made under the new Court Fees

Act of 1955 and they cannot be read as authorizing a refund in respect of Court-fee paid under any of the repealed enactment or rule. Further, the

decision reported in Narayana v. Yeerankutti ILR (1958) Mad. 711 has held that the new Court Fees Act would not apply-to a suit transferred by

force of a statute.

Mr. V. Ramaswami , who appeared for the Additional Government Pleader took up the other extreme contention that on transfer, when the

suit came to the file of the City Civil Court by virtue of Section 87(2) of the new Court Fees Act of 1955, the provisions of, the old Court Fees

Act (Central Act VII of 1870) would apply with the result there would be no power to refund in a case like the present. He would argue that the

words of Section 87(2) are general and would apply to all suits instituted before the new Court Fees Act, 1955, in whichever forum it might have

been instituted. I cannot agree with this contention either. The suit in the instant case was instituted in the High Court in accordance with the Fees

Rules of the High Court. The provisions of the Court Fees Act, 1870, never applied to the suit except by force of Order II, Rule 1 of the Fees

Rules for the limited purpose of calculating the fee. Section 87(2) should be read as rendering the provisions of the old Court Fees Act applicable

only to cases of suits instituted before 19th May 1955 to which the old Court Fees Act VII of 1870 applied.

Mr. V. Ramaswami , in an able argument, next contended that there is no provision of law for refund in the present case. He argued that Order

II, Rule 13-A of the High Court Fees Rules would cease to apply after the suit has been transferred to the civil Court and as Section 13 of the

Madras City Civil Court Act has been repealed and as Section 69 of the new Court Fees Act could not apply, there is no power to grant refund.

This contention looks prima facie plausible but if accepted would lead to an anomaly. If the suit had remained in the High Court it is conceded that

the Petitioner would be entitled to a refund of one-third Court-fee under Rule 13-A of the Fees Rules . He would be entitled to even a higher

refund if either Section 13 of the City Civil Court or Section 69 of the new Court Fees Act applied. But, as the suit had been statutorily

transferred, it is argued that the right to obtain refund is taken away. For the reasons to be stated hereafter, there is no basis for this anomaly. It

was further contended that refund could be granted only by the Registrar of the High Court who would have no power to do so after the suit had

been transferred to the City Civil Court. This contention is based on the assumption that the right to refund in cases contemplated under Order II,

Rule 13-A of the Fees Rules is a special jurisdiction granted to the Registrar of the High Court. A reading of Order II, Rule 13-A, shows that there

is no discretion left in the Court or the Registrar to grant or refuse the refund under that rule: the rule is mandatory. In the case of a suit being settled

the Plaintiff would be entitled to the refund as of right. In my opinion, this rule should be read as an integral part of Order II, Rule 1 of the Fees

Rules so that the effect of the two rules would be that on institution the full Court-fee would be charged which would be subject to the refund of a

portion in case of settlement: so that in the case of a suit which is ultimately settled the proper Court-fee would be only half or two-thirds of the full

Court-fee according as the suit is settled before or after the settlement of the issues. This rule should apply even after the statutory transfer of the

suit as the rule was made by virtue of the powers of the High Court and is in substance a rule fixing the scale of fees. The principle of the decision

reported in Seshadri v. Province of Madras L.L.B. (1954) Mad 643, would appear to support the view that the right of the Plaintiff could not be

interfered with except by an express statutory provision. There being none, I would hold that the Plaintiff would be entitled to refund in accordance

with Order II, Rule 13-A of the High Court Fees Rules, 1933.

The same conclusion can be reached on a different line of reasoning. On a reading of Order II, Rules 1 and 13-A of the High Court Fees

Rules, the proper Court-fee intended to be levied for a suit that would be ultimately settled was half or two-thirds as the case may be. Any

payment of the full fee at the beginning would by virtue of subsequent event become an excess payment not warranted by the rules. It has been

held that where there has been a payment or overpayment not required or warranted by the relevant statute or rule and also not covered by any

specific provision as to refund whether in the Court Fees Act or elsewhere, the Court has an inherent power to direct a refund. In such cases no

statute or rule is disregarded but the inherent power of the Court is invoked so as to entitle the Government to retain only that fee which would be

legitimately due to them on a strict construction of a fiscal enactment or rule. If originally the Court-fee collected is excessive, there is an undoubted

power in Court to direct a refund of the excess. I can find no difference in principle between that case and a case where the original collection

becomes excessive by reason of a subsequent event (like the Settlement of the suit) which was contemplated and provided for by the rules

themselves.

I am, therefore, of opinion that the Petitioner would be entitled to obtain a certificate for refund of one-third of the Court-fee paid on the plaint

in accordance with the provisions of Order II, Rule 13-A of the Fees Rules and the lower Court is directed to grant a certificate to that effect.