N.C Ranganna vs The State of Madras

Ramachandra Iyer, J.—This is a civil revision petition filed by the plaintiff in O.S. 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 C.S. 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. 1222-7-0 on the plaint in accordance with the provisions of O. 2.

R. 1 of the High Court Fee Rules, 1933, as amended by R.O.O. 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. Under 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 1935, 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, C.S. No. 263 of 1952, was transferred to the City Court, Madras, on 1st

July, 1955 and was registered there as O.S. 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 S. 69 of the Madras Court fees and Suits Valuation Act (XIV of

1953). 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

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 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 under S. 15 of the Charter Act 1861, Cl. 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 Art. 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-fee in proceedings before it is to be found in Seshadri v. Province of Madras (1954) 1 M.L.J. 206 = 67

L.W. 43. 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 O.2, R. 1 of the Fees Rules read thus:

The fees and commissions set out 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,

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 1933 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 O.1, R. 13, viz., in a case of rejection of plaint or remand on appeal under O.41, R. 23, C.P.C. Evidently, having regard to the fact

that the amendment of O. 2, R. 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 R. 13-A. R. 13-A runs thus:

(1) 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,

(2) 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 authorising 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 suits were settled before the trial commenced. O. 2, R. 13-A which Came into force on 27th June

1950 along with O. 2, R. 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, suit instituted in the

City Civil Court was governed by old Court Fees Act, 1670, subject to Ss. 9 and 13 of the City Civil Courts Act, VII of 1892. Under that Act

refund of court-fees once paid was allowed only in certain cases, viz., those provided for in Ss. 13 to 15. Under 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, 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 Ch. VII. S. 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 City Civil Court Act was repealed by S. 86 of the New Court Fees Act, 1955. The result of these provisions in that except in

cases governed by S. 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 S. 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. S. 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 under S. 8 of Madras Act X of 1955. In S.R. Narayana

Ayyar Vs. Mavalathara Veerankutti and Others, 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, S. 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 S. 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 of

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

under S. 69. I cannot agree S. 69 can apply to only those suits which were instituted after the Act. XIV of 1955 came into force. This is made

clear by S. 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. S. 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 authorising a refund in respect of court-fees paid under any of the repealed enactment or rule. Further, the decision

reported i S.R. Narayana Ayyar Vs. Mavalathara Veerankutti and Others, 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 S. 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 S.

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 O. 2, R. 1 of the Fees Rules for the limited

purpose of calculating the fees S. 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 O. 2,

R. 13-A of the High Court Fees Rules would cease to apply after the suit has been transferred to the civil Court and as S. 13 of the City Civil

Courts Act has been repealed and as S. 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 R. 13-A of the Fees Rules. He would be entitled to even a higher refund if either S. 13 of the

City Civil Courts Act or S. 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 O. 2, R. 13-A of the Fees Rules is a special jurisdiction

granted to the Registrar of the High Court. A reading of O. 2, R. 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 O. 2, R. 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 1/2 or 2/3 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 (1954) 1 M.L.J.

206 = 67 L.W. 43, 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 O. 2, R. 13-A of the High Court Fees

Rules, 1933.

The same conclusion can be reached on a different line of reasoning. On a leading of O. 2, Rr. 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 1/2 or 2/3 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 over-payment 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 1/3 of the court-fee paid on the plaint in accordance with the

provisions of O. 2, R. 13-A of the Fees Rules and the lower Court is directed to grant a certificate to that effect.