1. The instant writ petition, filed under Article 227 of the Constitution of India, challenges the order dated 27.07.2015 passed by the Third Additional District Judge, Gwalior, in Civil Suit No.106-A/2014, only to the extent, that the prayer made by the petitioners seeking a refund of court fees has been declined.

2. Leaned counsel appearing for the petitioners submits that a suit for specific performance of a contract in respect of certain land was filed by the petitioners before the learned trial Court which was registered as Civil Suit No.106-A/2014. During the pendency of the civil suit, an out-of-court settlement was arrived at between the petitioners and the respondent. Accordingly, an application under Order 23 Rule 3 C.P.C. was filed by the parties before the learned trial Court, seeking disposal of the suit on the basis of the compromise entered into between them. He submits that learned trial Court, vide impugned order dated 27.07.2015, allowed the said application preferred by the parties and has passed the compromise decree (Annexure P/1) but the prayer made by the petitioners seeking a refund of court fees was rejected by the learned trial Court on the ground that since the suit was not being disposed in a Lok Adalat or under Section 89 C.P.C., the petitioners are not entitled for refund of court fees.

3. Learned counsel appearing for the petitioners submits that the issue is now well settled in a catena of cases by this Court as well as the Apex Court that even when out of court settlement is arrived at between the parties and the matter is disposed of by the Court on the basis of out of court settlement, then the plaintiff is entitled for refund of court fees but learned trial Court has erred in rejecting the said prayer made by the petitioners.

4. Since the issue of refund of court fees is involved, learned counsel appearing for the State present in court is also heard. Leaned counsel for the State submits that the order passed by the learned trial Court is just and proper and does not call for any interference.

5. Heard the learned counsel for the petitioners as well as the counsel for the State.

6. The Coordinate Bench of this Court, in the case Hariram Jat Vs. Rakesh Arya and Others , Miscellaneous Petition No.313/2025, vide order dated 29.01.2025 has held as under:

          "This Court in Dayram vs. Smt. Laxmi Agrawal I.L.R. 2023 M.P.263 in which it has been categorically held that even if the matter is settled by the parties outside the Court without invoking the provisions of Section 89 of the CPC, the plaintiff while withdrawing the appeal is entitled to refund of full Court fees as provided under Section 16 of the Court Fees Act. Though the said decision is in respect of withdrawal of an appeal but the principle as laid down therein would be squarely applicable even in case where a plaint before the trial Court is withdrawn on the basis of a compromise having been arrived at between the parties out of Court. The relevant part of the said judgment is as under:

          "3. Now the question arises as to whether this Court, in the aforesaid circumstances, can pass order for refund of court fees as provided under Section 16 of the Court Fees Act, 1870. Section 16 of the Court Fees Act, 1870 states as under:--

          "16. Refund of fee - Where the court refers the parties to the suit to any one of the mode of settlement of dispute referred to in Section 89 of the Civil Procedure Code, 1908 the plaintiff shall be entitled to a certificate from the court authorising him to receive back from the collector, the full amount of the fee paid in respect of such plaint."

          4. In the case of A. Sreeramaiah v. South Indian Bank Ltd.ILR 2006 KAR 4032, Division Bench of the Karnataka High Court, held as follows:

          "6. Considering the object behind the Amendment Act 1999 inserting section 89 of CPC and also the insertion of Section 16. it is clear that the object of providing of refund of Full Court Fees, is to encourage the settlement of the disputes in terms of section 89 of CPC. In this case, the parties agreed for settlement in terms suggested by the Court and accordingly, they have settled their dispute outside the Court. The judicial settlement is also one of the alternative method of settlement of the disputes. As such, in our considered view, in any settlement arrived in terms of section 89 of CPC including the judicial settlements at the intervention and on terms suggested by the Court, the appellant is entitled for refund of Full Court Fees, as otherwise, it would be meaningless if the provisions of section 16 are not applied for settlement of dispute by the parties under section 89. Section 89 does provide for settlement of dispute at any stage of the proceeding, whether it is by way of method referred to therein or by judicial settlement as contemplated under section 89 sub-section (1). As such, we are of the opinion that if the parties come forward to settle their dispute before the Court itself, they should not be denied of refund of Full Court Fees on the ground that they have not settled the dispute before any of the four methods provided under section 89 of CPC. The object behind section 89 is to encourage the parties to arrive at settlement and if that object is sought to be achieved by means of referring the matter to any of the four methods mentioned in section 89, then even the settlement arrived at the earliest stage before the Court would also be one of the method provided under section 89 subsection (1). Hence, we feel it as just and appropriate to order for full refund of Court Fees in the case of parties settling their dispute before the Court as well as before any of the Forum mentioned under Section 89 of the CPC. No party should be discriminated in the matter of refund of Court Fees mainly on the ground that they have settled the dispute at the earliest stage before the Court without recourse to any of the methods mentioned under section 89 of the CPC. Hence, appellant is entitled for refund of Full Court Fees."

          5. Aforesaid view has been upheld by the Karnataka High Court, in Kamalamma v. Honnali Taluk Agricultural Produce Co-operative Marketing Society Ltd.(2010) 4 KCCR 3211 = AIR 2010 AIR Kant R 279 where, again referring to provisions of Section 89 of CPC and Section 16 of the Act, it was observed as under:

          "7. Whether the parties to a suit or appeal or any other proceeding get their dispute settled amicably through Arbitration or meditation or conciliation or in the Lok Adalat, by invoking provisions of Section 89. C.P.C, or they get the same settled between themselves without the intervention of any Arbitrator/Mediator/Conciliators or in Lok Adalat etc., and without invoking the provisions of S. 89, Civil Procedure Code, the fact remains that they get their dispute settled without the intervention of the court. If they get their dispute settled by invoking S. 89, C.P.C, in that event the State may have to incur some expenditure but, if they get their dispute settled between themselves without the intervention of the Court or anyone else, such as arbitrator/mediator etc., the State would not be incurring any expenditure. This being so, I am of the considered opinion that whether the parties to a litigation get their dispute settled by invoking Section 89, C.P.C or they get the same settled between themselves without invoking S. 89, Civil Procedure Code, the party paying Court Fees in respect thereof should be entitled to the refund of full Court Fees as provided under Section 16 of the Court Fees Act, 1870. Therefore, the contention of the learned Government Pleader that the principles laid down by the Division Bench of this Court in the said case cannot be made applicable to the facts of the present case does not deserve acceptance."

          6. In the case of PRADEEP SONAWAT v. SATISH PRAKASH @ SATISH CHANDRA(2015) 2 Civil Court Cases 52 the Punjab and Haryana High Court held as under:--

          "16. Going a step further, it is felt that whether the compromise is with the persuasion of the Court or amongst the parties by themselves in terms of Section 89CPC or otherwise, invocation of provision of Section 16 of the Act should be made in all cases so that settlements by way of alternative dispute resolution mechanism are encouraged. 17. Keeping in view the totality of the facts, merely because the matter has not been settled in Lok Adalat, as has been observed by the lower Court while dismissing the application of the plaintiff-petitioner, invocation to Section 16 of the Act should not have been refused."

          7. In view of the aforesaid, I am of the considered opinion that even if the matter is settled by the parties outside the Court without invoking the provisions of section 89CPC, the appellant while withdrawing his first appeal, is entitled to the refund of full Court fees as provided under section 16 of the Court Fees Act, 1870."

7. The Hon'ble Apex Court, in the case of The High Court of Judicature at Madras, represented by its Registrar General Vs. M.C.Subramaniam and Ors., Special Leave Petition (Civil) Nos.3063-3064 of 2021 (Diary No.3869-2021), vide judgment dated 17.02.2021, has held as under:

          "21. Thus, in our view, the High Court was correct in holding that Section 89 of the CPC and Section 69-A of the 1955 Act be interpreted liberally.

          In view of this broad purposive construction, we affirm the High Court's conclusion, and hold that Section 89 of CPC shall cover, and the benefit of Section 69-A of the 1955 Act shall also extend to, all methods of out-of- court dispute settlement between parties that the Court subsequently finds to have been legally arrived at. This would, thus, cover the present controversy, wherein a private settlement was arrived at, and a memo to withdraw the appeal was filed before the High Court. In such a case as well, the appellant, i.e., Respondent NO.1 herein would be entitled to refund of court fee."

8. In view of the issue having already been settled by the Coordinate Bench of this Court as well as the Apex Court, the instant writ petition stands allowed. The order dated 27.07.2015 passed by the learned trial Court in Case No.106A/2014, to the extent it rejects the prayer made by the petitioners seeking a refund of court fees, is hereby set aside.

9. The Registry is directed to issue a certificate regarding the refund of court fees amounting to Rs.1,22,000/-, authorising the petitioners to receive back the full amount of the court fee paid in respect of civil suit, from the Collector, Gwalior.

10. With the aforesaid observations, this writ petition stands disposed of.

11. Pending application (s), if any, shall stand closed.