In Brief
The High Court of Madras held that court fees must be refunded to a party who privately settled an appeal dispute with the opposing party, even though no formal alternative dispute resolution mechanism under Section 89 of the CPC was involved. The Supreme Court upheld this decision, holding that Sections 89 (CPC) and 69-A (Tamil Nadu Court Fees Act, 1955) should be interpreted purposively, not literally. A narrow interpretation would absurdly benefit only parties using Court-referred ADR while denying refunds to those who privately negotiate settlements—despite both achieving the legislative goal of reducing litigation. The Court affirmed that all legally arrived-at out-of-court settlements qualify for fee refunds as economic incentives to settlement, not just formally-mediated ones.
The lawyer headnote and full judgment text are available to registered users.