Court Fee Refund Under Section 65-B Available Even When Settlement Comes During Execution: Rajasthan High Court

The petitioner filed a civil suit in 2023 for recovery of money. The defendants did not appear, the suit proceeded ex parte, and it was decreed on 05.02.2024 (para 2). When the decree was not complied with, he filed an execution petition. During its pendency the parties compromised, a settlement agreement was executed and payment was made; the execution petition was disposed of in the National Lok Adalat on 22.12.2024 (para 2.1). His application under Section 65-B for refund of the court fee was rejected by the Additional District Judge No. 5, Bikaner on 04.03.2025, on the view that no law allows a refund after a decree has been passed (paras 1, 2.2, 3).

Justice Arun Monga held that the trial court seemed to have committed a grave error in interpreting Section 65-B (para 4). The provision leaves no doubt that, as long as the parties settle their dispute in the manner envisaged under Section 89 CPC, the plaintiff is entitled to a refund of the full court fee paid on the plaint (para 5). Section 89 complements Section 65-B: the Court need only ascertain that the settlement is acceptable to both parties and was brought about through an alternative mode, namely arbitration, conciliation, Lok Adalat or mediation (paras 6-7). Here it was a conceded position that the settlement took place during the execution proceedings, outside court, through mutual conciliation or mediation between the parties (second para 6). The Court found its view reaffirmed by the case of parties who settle at the appellate stage while a decree is under challenge: the trial court's approach would deny them any refund, which the Court called fallacious and contrary to the intent and spirit of Section 89 CPC (second para 7).