TaxTMI 
TaxTMI 
2021 (2) TMI 1412
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.... 'Agreement­I' and 'Agreement­II'; collectively, 'the Agreements') dated 10.06.1996, under which Respondent No. 1 was the principal debtor/hirer, and Respondents Nos. 3 and 4 were the sureties to the Agreements. As per the terms of the Agreements, Respondent No. 1 was to pay a sum of Rs. 10,08,000/­ in stipulated instalments to Respondent No. 2 for each of the two vehicles. 3. It suffices to note for our purposes that Respondent No. 2 brought Original Suits Nos. 66/2003 and 76/2003 against Respondents Nos. 1, 3 and 4 before the Additional District Munsif Court, Coimbatore (hereinafter, 'Munsif Court') and the Additional District and Sessions Court, Coimbatore (hereinafter, 'District Court') respectively. In the two suits, Respondent No. 2 alleged non­payment of Rs. 6,64,000/­ and Rs. 5,97,200/­ towards the instalments stipulated in Agreement­I and Agreement­II respectively, and sought recovery of the balance amounts along with interest thereon. Both the Original Suits Nos. 66/2003 and 76/2003 were partly decreed by the Munsif Court and District Court, by judgments dated 13.02.2004 and 31.....
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....e ambit of 'suits' as provided in Section 69­A, the Court went on to take notice of Section 89, CPC which reads as follows: "89. Settlement of disputes outside the Court.-(1) Where it appears to the Court that there existelements of a settlement which may be acceptable to the parties, the Court shall formulate the terms of settlement and give them to the parties for their observations and after receiving the observations of the parties, the Court may reformulate the terms of a possible settlement and refer the same for :- (a) arbitration; (b) conciliation; (c) judicial settlement including settlement through Lok Adalat: or (d) mediation. (2) Were a dispute has been referred- (a) for arbitration or conciliation, the provisions of the Arbitration and Conciliation Act, 1996 (26 of 1996) shall apply as if the proceedings for arbitration or conciliation were referred for settlement under the provisions of that Act; (b) to Lok Adalat, the Court shall refer the same to the Lok Adalat in accordance with the provisions of subsection (1) of section 20 of the Legal Services Authority Act, 1987 (39 of 1987) and ....
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....nimpressed by the Petitioner's contentions, for reasons outlined below. 12. The provisions of Section 89 of CPC must be understood in the backdrop of the longstanding proliferation of litigation in the civil courts, which has placed undue burden on the judicial system, forcing speedy justice to become a casualty. As the Law Commission has observed in its 238th Report on Amendment of Section 89 of the Code of Civil Procedure 1908 and Allied Provisions, Section 89 has now made it incumbent on civil courts to strive towards diverting civil disputes towards alternative dispute resolution processes, and encourage their settlement outside of court (Para 2.3). These observations make the object and purpose of Section 89 crystal clear - to facilitate private settlements, and enable lightening of the overcrowded docket of the Indian judiciary. This purpose, being sacrosanct and imperative for the effecting of timely justice in Indian courts, also informs Section 69­A of the 1955 Act, which further encourages settlements by providing for refund of court fee. This overarching and beneficent object and purpose of the two provisions must, therefore, inform this Court's interpretat....
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....lied) This was followed in the subsequent decision of this Court in Anurag Mittal v. Shaily Mishra Mittal, (2018) 9 SCC 691. 15. In light of these established principles of statutory interpretation, we shall now proceed to advert to the specific provisions that are the subject of the present controversy. The narrow interpretation of Section 89 of CPC and Section 69­A of the 1955 Act sought to be imposed by the Petitioner would lead to an outcome wherein parties who are referred to a Mediation Centre or other centres by the Court will be entitled to a full refund of their court fee; whilst parties who similarly save the Court's time and resources by privately settling their dispute themselves will be deprived of the same benefit, simply because they did not require the Court's interference to seek a settlement. Such an interpretation, in our opinion, clearly leads to an absurd and unjust outcome, where two classes of parties who are equally facilitating the object and purpose of the aforesaid provisions are treated differentially, with one class being deprived of the benefit of Section 69­A of the 1955 Act. A literal or technical interpretation, in this backgrou....
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.....K. Forgings v. Essar Construction India Ltd. & Ors., (2009) 113 DRJ 612: "11. The laudable object sought to be achieved by inserting and amending these sections seems to be speedy disposal. The policy behind the statute is to reduce the No. of cases by settlement. Section 89 of C.P.C. and Section 16 Court Fee Act are welcome step in that direction, as the No. of cases has increased, it is the duty of court to encourage settlement. In present scenario of huge pendency of cases in the courts a purposive and progressive interpretation is the requirement of present hour. The intention of the Legislature is primarily to be gathered from the object and the words used in the material provisions. The statute must be interpreted in their plain grammatical meaning. 12. It is very clear that the Legislative intent of Section 16 of Court Fees Act was made broad enough to take cognizance of all situations in which parties arrive at a settlement irrespective of the stage of the proceedings. It is also obvious that the purpose of making this provision was in order to provide some sort of incentive to the party who has approached the court to resolve the dispute amicab....
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....r claims themselves, they have saved the State of the logistical hassle of arranging for a third­party institution to settle the dispute. Though arbitration and mediation are certainly salutary dispute resolution mechanisms, we also find that the importance of private amicable negotiation between the parties cannot be understated. In our view, there is no justifiable reason why Section 69­A should only incentivize the methods of out­of­court settlement stated in Section 89, CPC and afford stepbrotherly treatment to other methods availed of by the parties. Admittedly, there may be situations wherein the parties have after the course of a long­drawn trial, or multiple frivolous litigations, approached the Court seeking refund of court fees in the guise of having settled their disputes. In such cases, the Court may, having regard to the previous conduct of the parties and the principles of equity, refuse to grant relief under the relevant rules pertaining to court fees. However, we do not find the present case as being of such nature. 20. Thus, even though a strict construction of the terms of Section 89, CPC and 69­A of the 1955 Act may not encomp....