‘Fee to be refunded once Lok Adalat settles dispute’

ONCE a commercial dispute was referred to a Lok Adalat and the matter settled, the court fee paid by the parties should be refunded to them, a division bench of the Madras High Court has held.

Published: 12th October 2019 06:11 AM  |   Last Updated: 12th October 2019 06:11 AM   |  A+A-

By Express News Service

CHENNAI: ONCE a commercial dispute was referred to a Lok Adalat and the matter settled, the court fee paid by the parties should be refunded to them, a division bench of the Madras High Court has held.
The bench of Justices S Manikumar (since promoted as Chief Justice and posted to Kerala High Court) and R Suresh Kumar made the ruling while passing final orders on a writ petition from E K Jayachandran and E J Latha Maheshwari, on October 4.

The petitioners had borrowed a loan from SBI Stress Assets Recovery Branch in Egmore. As they had defaulted in repayment, the bank moved the Debt Recovery Tribunal- II on Anna Salai and the plea was allowed on December 13, 2013. Aggrieved, the duo preferred an appeal before the Debt Recovery Appellate Tribunal in 2014.

As a condition precedent, they were required to deposit `20,505, being 50% of the amount due, before the Appellate Tribunal under Section 21 of the Recovery of Debt due to Banks and Financial Institutions Act. As they could not make the payment, they moved the High Court, which, on March 25, 2014, referred the matter for settlement to the Lok Adalat/Bank Adalat. Meanwhile, the petitioners deposited the said amount with the DRAT. The matter was settled amicably by the Adalat and the petitioners sought for the refund of the deposited amount. However, the DRAT refused the plea. Hence, the present petition before the High Court.

Disposing of the same, the bench observed that Section 89(2)(b) of the CPC makes it clear that once the Court referred the matter to a Lok Adalat under sub-section (1) of Section 20 of Lok Adalat Act, all other provisions of that Act shall apply in respect of the disputes so referred to it. When that being so, the provision under Section 21(1), enabling the party to get refund of Court fee, shall definitely be made available to the parties to invoke, the bench said.

If a case at the appeal stage is referred for settlement by the court of law under Section 20 of the LA Act and was settled in Lok Adalat, the non-availability of explicit provision in that section cannot take away the party’s right for refund, since that right is an in-built one under the section and it would have a overriding effect on the DRT Act, the judges said.

They set aside the tribunal order refusing to refund the amount and remitted the matter back to it for passing appropriate orders by way of direction/certification to refund the court fee paid by the petitioners within two months.

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