Case Note & Summary
The petitioners, Sri Narayana Murthy H M and Smt. Chandrakala R., filed a writ petition under Articles 226 and 227 of the Constitution of India before the High Court of Karnataka at Bengaluru. They sought a writ of certiorari to quash the order dated 08.08.2022 passed by the Debt Recovery Tribunal II, Bengaluru, which dismissed their I.A. No. 2280/2022 in S.A. No. 277/2022. The I.A. was filed seeking a refund of court fees of INR 79,225/- deposited in the Securitisation Application, which had been disposed of as infructuous. The petitioners had availed a loan of INR 2,50,00,000/- from Union Bank of India (respondent No. 2) in 2016, with petitioner No. 2 as guarantor. Subsequently, additional loans were sanctioned in 2019. The bank declared the account as a Non-Performing Asset (NPA) and issued a demand notice under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act). The petitioners filed S.A. No. 277/2022 before the DRT challenging the bank's actions. However, during the pendency of the S.A., the bank and the petitioners arrived at a settlement, and the S.A. was disposed of as infructuous. The petitioners then filed I.A. No. 2280/2022 seeking a refund of the court fees, which was dismissed by the DRT on the ground that there was no provision for refund under the Recovery of Debts and Bankruptcy Act, 1993 (RDB Act). The High Court considered the issue of whether Section 16 of the Court Fees Act, 1870, which provides for refund of court fees when a case becomes infructuous, applies to proceedings before the DRT. The court noted that the Court Fees Act is a general law and applies to all courts and tribunals unless specifically excluded. The DRT had not considered Section 16 of the Court Fees Act. The High Court held that the DRT's order was erroneous and set it aside, remanding the matter back to the DRT for fresh consideration of the refund application in light of Section 16 of the Court Fees Act, 1870. The court directed the DRT to pass a fresh order within four weeks from the date of receipt of the order. The writ petition was allowed in part.
Headnote
A) Court Fees - Refund of Court Fees - Section 16 of the Court Fees Act, 1870 - Applicability to DRT Proceedings - The petitioners sought refund of court fees of INR 79,225/- deposited in S.A. No. 277/2022 before the DRT, which was dismissed as infructuous. The DRT rejected the refund application. The High Court held that Section 16 of the Court Fees Act, 1870, which provides for refund of court fees on an application becoming infructuous, applies to proceedings before the DRT. The court directed the DRT to reconsider the refund application in light of Section 16 and the principle that court fees are meant for the services of the court, and if the proceeding becomes infructuous without adjudication, refund may be granted. (Paras 1-6) B) Debt Recovery Tribunal - Refund of Court Fees - Section 16 Court Fees Act, 1870 - The DRT had dismissed the refund application on the ground that there was no provision for refund under the Recovery of Debts and Bankruptcy Act, 1993. The High Court clarified that the Court Fees Act, 1870 is a general law applicable to all courts and tribunals unless specifically excluded, and Section 16 provides for refund when a case becomes infructuous. The matter was remanded for fresh consideration. (Paras 4-6)
Issue of Consideration
Whether the petitioners are entitled to a refund of court fees deposited in a Securitisation Application before the Debt Recovery Tribunal when the main petition was disposed of as infructuous.
Final Decision
The High Court allowed the writ petition in part, set aside the DRT order dated 08.08.2022, and remanded the matter back to the DRT for fresh consideration of I.A. No. 2280/2022 in light of Section 16 of the Court Fees Act, 1870. The DRT was directed to pass a fresh order within four weeks from the date of receipt of the order.
Law Points
- Refund of court fees
- Section 16 Court Fees Act
- 1870
- DRT proceedings
- Infructuous petition
- Certiorari
