In a significant move aimed at easing the legal process for citizens, the Delhi Assembly on Tuesday took a decisive step towards making out-of-court settlements more financially attractive. The introduction of the Court Fees (Delhi Amendment) Act, 2025 promises a major shift in policy by allowing a full refund of court fees whenever disputes are resolved amicably, irrespective of how the settlement is reached.
Ending the Discriminatory Refund Regime
Currently, the system in the National Capital Territory operates under two different refund rules based on the Court Fees Act, 1870. The existing Section 16 permits a 100% refund of court fees only when a court formally refers parties to alternative dispute resolution (ADR) mechanisms like mediation or arbitration under Section 89 of the Code of Civil Procedure.
However, a conflicting provision, Section 16A, which was added via the Court Fees (Delhi Amendment) Act of 2010, has been a point of contention. This section restricts the refund to just 50% for litigants who settle their disputes amicably outside of these court-referred ADR processes, subject to specific conditions.
A Push for Uniformity and People-Friendly Justice
The newly proposed amendment seeks to eliminate this disparity entirely. The bill aims to omit Section 16A and replace Section 16 with a uniform rule. The new provision will grant parties involved in a suit or appeal a full refund of court fees if they settle their dispute amicably. This applies whether the settlement happens with or without court intervention and regardless of whether formal ADR mechanisms under the CPC are used.
Introducing the bill in the assembly, Minister Parvesh Verma emphasized its goal of making the justice system more accessible. He stated that the previous government had not done enough to simplify processes for the public. "Today, if there is mediation, then people will get their entire money. This is a small development but would make big changes in people's life," Verma remarked, highlighting the bill's potential impact.
Expected Impact and Legal Backdrop
If passed into law, the amendment is anticipated to serve as a strong incentive for early settlements, potentially reducing the backlog of cases and lowering litigation costs for Delhi's residents. This legislative change follows a Public Interest Litigation (PIL) filed in the Delhi High Court in 2022 by advocate Praveen Kumar Aggarwal. The PIL challenged Section 16A as discriminatory, arguing it unfairly penalized litigants who found mutual resolution. The Delhi government had then informed the High Court that it was considering amendments, leading to the dismissal of the PIL.
The move is seen as a progressive step towards reducing the financial burden on citizens entangled in legal disputes and promoting a culture of conciliation over prolonged courtroom battles.
