Court fee is refundable where a suit is dismissed solely for Section 12A non-compliance without merits adjudication.

The plaintiff had instituted a commercial suit seeking specific performance of two Space Buyer Agreements dated 18 July 2017 and 16 August 2017 against Defendant No. 1.

The suit was dismissed on 13 August 2025 solely for non-compliance with the mandatory pre-institution mediation requirement under Section 12A of the Commercial Courts Act, 2015; the plaintiff’s substantive claim was not adjudicated on merits.

The dismissal order granted liberty to institute a fresh suit after complying with Section 12A and seek set-off of the court fee already paid.

The plaintiff thereafter initiated pre-institution mediation on 4 September 2025.

The mediation proceedings culminated in a complete settlement between the parties, recorded in a signed Settlement Report dated 30 April 2026.

Since the dispute had been settled at the mediation stage, the plaintiff did not institute a fresh suit and sought refund of the court fee paid in the original proceedings.

Defendant No. 1 did not oppose the application.

Whether court fee paid in a commercial suit dismissed solely for non-compliance with Section 12A of the Commercial Courts Act, 2015, without adjudication on merits, can be refunded or set off.

Whether the plaintiff could claim refund of the court fee where the liberty to institute a fresh suit and seek set-off became unnecessary because the dispute was settled during pre-institution mediation.

Section 12A of the Commercial Courts Act, 2015 mandates pre-institution mediation for commercial disputes, and non-compliance constitutes a curable procedural defect rather than an adjudication on the substantive claim.

The principles underlying Order VII Rules 10, 11(d) and 13 of the Code of Civil Procedure, 1908 recognise that return or rejection of a plaint on a threshold procedural or jurisdictional ground does not amount to a decision on merits and may permit presentation of a fresh plaint.

In Dr. (Col.) Subhash Chandra Talwar v. T. Choithram & Sons, 2019 SCC OnLine SC 2469, the Supreme Court held that court fee should be refunded where the plaint is returned for presentation before the competent court and the suit has not been decided on merits.

The court relied on IPJ Industrial Corporation v. M/s Esskay Machinery Pvt. Ltd., 2026 SCC OnLine Cal 7297, for the principle that rejection for non-compliance with Section 12A ordinarily should not result in automatic forfeiture of court fee.

Amit Jain v. Mahavir International Pvt. Ltd., 2023 SCC OnLine Del 2657, and Ri Networks Private Limited v. World Phone Internet Services Private Limited, 2026:DHC:629-DB, for the liberal and equitable approach that court fee is not a penalty for approaching the court where the dispute remains unadjudicated.

Nutan Batra v. M/s Buniyaad Associates, 2018 SCC OnLine Del 12916.

The original suit was terminated exclusively because the plaintiff had not first complied with Section 12A; the court had neither examined nor determined the merits of the specific-performance claim.

The procedural defect was expressly treated as curable, as shown by the liberty granted to institute a fresh suit after mediation and seek set-off of the earlier court fee.

The plaintiff subsequently complied with the statutory mediation requirement, but the mediation resulted in a complete settlement, making institution of a fresh suit unnecessary.

Applying the principles that court fee should not operate as a punitive financial consequence where no adjudication has occurred, the court held that retaining the substantial fee would be inequitable, particularly when the plaintiff had pursued the corrective procedure contemplated by the earlier order and the dispute had been resolved through mediation.

The court held that, in the circumstances, the plaintiff was entitled to refund of the court fee paid in the dismissed suit, notwithstanding that no fresh suit was instituted because the dispute had been settled in pre-institution mediation.

The court directed refund of ₹9,90,586/- paid as court fee in CS(COMM) 66/2024.