For Private Settlements After Trial Evidence Begins, Madras HC Says No Court-Fee Refund Is Due, Yet Leaves One Partial Refund Undisturbed

Both revisions concerned claims for refund of court fees following out-of-court settlements reached after trial had commenced.

In C.R.P. No. 4064 of 2026, the suit for specific performance was settled after issues had been framed and the plaintiff’s proof affidavit filed.

The trial court ordered a refund of 50% of the court fee, less 5% as administrative charges; the State did not challenge that refund.

In C.R.P. No. 4106 of 2026, the compromise was recorded after evidence had been led on both sides and through a court witness.

The trial court rejected the claim for refund of court fees.

The petitioners relied on High Court of Judicature at Madras v. M.C. Subramaniam, contending that a private settlement entitled them to a full refund under Section 69-A of the Tamil Nadu Court Fees and Suits Valuation Act, 1955 (“Court Fees Act”).

Section 69 of the Court Fees Act, as amended by Act 6 of 2017, provides for a refund of the full court fee when a suit or counterclaim is dismissed as settled out of court, but retains the condition that settlement must occur before evidence has been recorded on the merits.

Section 69-A provides for court-fee relief in connection with disputes referred under Section 89 CPC; M.C. Subramaniam held that its benefit may extend to private settlements, not only settlements reached through the specified Section 89 modes.

Applying Afcons Infrastructure Ltd. v. Cherian Varkey Construction Pvt. Ltd., the Court stated that Section 89 settlement efforts ordinarily occur before trial; although referral may still be considered after issues are framed, courts will be reluctant to refer a matter once evidence has commenced.

The Court treated Section 69 as continuing to govern settlements reached after evidence has been recorded and held that Section 69-A cannot be applied so broadly as to render Section 69 ineffective.

The Court distinguished M.C. Subramaniam on the ground that it addressed the reach of Section 69-A in the context of private settlements, but did not consider the stage at which settlement occurred or the restriction in Section 69.

It considered Afcons relevant to the timing of Section 89 settlement processes and reasoned that, once evidence had commenced, the retained limitation in Section 69 applied notwithstanding a private compromise.

In C.R.P. No. 4064 of 2026, the plaintiff’s proof affidavit had been filed; the Court concluded that no refund was due under Section 69, but left the trial court’s partial refund undisturbed because the State had not challenged it.

In C.R.P. No. 4106 of 2026, witnesses had been examined and exhibits marked on both sides, as well as through a court witness, so the trial court correctly rejected the refund claim.

It did not interfere with the partial refund already granted in C.R.P. No. 4064 of 2026, as the State had not appealed that order.

The Court also directed that a copy of the order be sent to the Tamil Nadu State Law Commission to consider the statutory framework governing refunds following unsuccessful Section 89 referrals.