Court fees should be refunded to litigants whose cases can't be heard: Madras High Court

The Madras High Court recently observed that litigants are “consumers of justice” and they are entitled to a refund of court fees paid if their case cannot be heard because of maintainability [Murugavel Vs Pichai]

A Bench of Justices GR Swaminathan and KK Ramakrishnan said that a litigant who mistakenly approaches a court lacking jurisdiction does not receive the service for which the court fee was paid.

“Jurist Upendra Baxi would call litigants as consumers of justice. Litigants come to the courts for adjudication of their lis. If the matter could not be taken up for adjudication at all because it was not maintainable in the first instance, the litigant did not receive any service. There has been a failure of consideration and a case for refund stands made out,” the Court said.

The Bench made the observation while dealing with an appeal filed by one J Murugavel against an arbitral award passed in October 2024.

Murugavel directly challenged the arbitral award before the High Court under Section 37 of the Arbitration and Conciliation Act, 1996. However, the Court noted that Section 37 only provides for appeals against specified orders and does not permit a direct appeal against a final arbitral award.

Such an award can only be challenged through a petition under Section 34 of the Act, the Court explained.

“Unfortunately, this appeal came to be filed and what is worse, it was numbered also,” the Bench remarked while closing the appeal as not maintainable.

Murugavel’s counsel then requested that the court fee paid for filing the appeal be refunded.

The Court examined Section 70 of the Tamil Nadu Court-Fees and Suits Valuation Act, 1955, which states that a fee paid by mistake or inadvertence “shall” be refunded.

It concluded that the filing of the appeal arose from a failure to properly understand the scope of Section 37 and therefore, amounted to inadvertence. The Court clarified that inadvertence could include ignorance of the law.

The Bench also said that a court fee could not be retained when the court was legally incapable of granting the relief sought. Since an appeal against the final arbitral award did not lie under Section 37, acceptance of the court fee for such an appeal was without the authority of law, it added.

“If refund is not ordered, there would be unjust enrichment for the State,” the judgment stated.

The Court further observed that the Court-Fees Act was a fiscal statute and any ambiguity in its provisions must be interpreted in favour of the citizen rather than the State.

Hence, the Bench directed the High Court registry to refund Murugavel’s court fee immediately.

Murugavel was granted liberty to pursue the legally available remedy against the arbitral award.

Advocate S Arjun represented Murugavel.

[Read Judgment]