In a significant move providing major financial relief to litigants, the Delhi Legislative Assembly has passed a crucial amendment to a century-old law. The change ensures that petitioners will now receive a full refund of their court fees even when they settle disputes privately outside the court system.
Ending a Discriminatory Refund Policy
The amendment, passed on Tuesday during the ongoing Winter Session, targets the Court Fees Act of 1870. Previously, the refund regime was seen as creating an unfair distinction. Petitioners received a 100% refund only if their dispute was resolved through a court-referred Alternative Dispute Resolution (ADR) mechanism. However, if parties arrived at a mutual, private settlement without court referral, they were entitled to only a 50% refund of the fees paid.
The proposal for this change was tabled in the House by PWD Minister Parvesh Sahib Singh Verma. He emphasized that this is a major relief for the people, who will now be encouraged to settle disputes amicably without fear of losing a portion of their court fees.
The Legal Challenge That Paved the Way
This legislative action follows a Public Interest Litigation (PIL) filed in 2022 before the Delhi High Court. The PIL, titled Praveen Kumar Aggarwal versus Government of NCT of Delhi, challenged Section 16A of the Civil Procedure Code (CPC). The petitioner argued that the 50% refund limit for private settlements was discriminatory.
It created an unreasonable distinction between litigants who settled via court-referred methods and those who used other lawful, amicable means. The Law Department, upon review, agreed with this prima facie view. The government then informed the High Court of its intention to take appropriate legislative action, leading to the disposal of the PIL.
What the Amendment Changes
The core of the amendment involves omitting Section 16A of the CPC and amending Section 16 to create a uniform refund policy. The draft Bill stated its purpose was to "remove the existing distinction and ensure uniform refund of court fees." It seeks to consolidate the refund regime by providing for a full refund irrespective of the mode of settlement adopted by the disputing parties.
Officials confirmed that the draft Bill received the necessary approvals from the Centre and the recommendation of the Lieutenant Governor before being presented and passed in the Assembly.
Understanding Court Fees and Their Impact
Court fees are mandatory payments made by a petitioner or plaintiff to institute litigation. They are charges for using the court's machinery, staff, and resources. The amount varies significantly based on the type and monetary value of the dispute.
As per the Court Fees Act in Delhi:
- Petitions filed under Article 226 of the Constitution in the Delhi High Court attract a fee of Rs 100.
- Petitions for the execution of a court judgment or decree can require a fee of Rs 1,000.
- Election petitions and suits related to Intellectual Property Rights (IPR) at the High Court level have a substantial court fee of Rs 5,000.
Failure to pay the correct court fee can result in a petition not being listed or heard. Therefore, the refund policy has a direct and tangible financial impact on individuals seeking justice.
This landmark amendment, passed on January 7, 2026, marks a progressive step towards reducing the financial burden on litigants and promoting out-of-court settlements, potentially easing the caseload on Delhi's judiciary. It aligns the legal framework with the principle of equal treatment for all citizens, regardless of their chosen path to dispute resolution.
