The Delhi High Court has clarified that parties who amicably settle a suit, counter-claim or appeal are entitled to a full refund of the court fee, following the amendment to Section 16 of the Court Fees Act, 1870 by the Government of NCT of Delhi.
The order was passed by a Division Bench comprising Justice Anil Khetarpal and Justice Bharat Parashar on September 21, 2026, in proceedings arising from M/s Hitech Enterprises v. M/s Modern Construction Company Delhi.
Background
The Court was considering an application concerning refund of court fee. During the proceedings, it was brought to the Bench's notice that the Delhi Government had amended Section 16 of the Court Fees Act through a notification dated March 6, 2026. The amendment repealed the earlier Section 16-A and substituted it with a new provision dealing with refund of court fees.
The amended provision covers settlements reached at any stage of a suit or appeal, whether through court intervention or independently, and whether or not the parties use any settlement mechanism under Section 89 of the Code of Civil Procedure, 1908.
The Bench held that the amended provision makes the refund a substantive statutory entitlement. Therefore, once a matter is disposed of on the basis of settlement or compromise, a separate application should not be necessary for seeking refund.
The Court observed:
“In view of the amended provision, full refund of court fee, paid in respect of a suit, counter-claim or appeal being disposed of as settled or compromised, is a substantive statutory entitlement.”
The Court further directed that, while disposing of a settled matter, the court should direct refund of the court fee and issue a certificate authorising the concerned party to recover the full amount paid.
The Delhi High Court directed the Government of NCT of Delhi to take administrative steps to ensure that such refunds are processed in a time-bound manner upon presentation of the court-issued certificate.
It also requested the Standing Counsel (Civil) to ensure implementation by the concerned authorities and directed circulation of the order among the Principal District and Sessions Judges.
Case Details:
Case Title: M/s Hitech Enterprises v. M/s Modern Construction Company Delhi
Case Number: RFA(COMM) 305/2025
Judge: Justice Anil Khetarpal and Justice Bharat Parashar
Decision Date: September 21, 2026
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