Karnataka High Court
The Registrar vs Sri.Narayana Murthy H.M on 6 March, 2026
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WA No. 1867 of 2024
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 6TH DAY OF MARCH, 2026
PRESENT
THE HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE
AND
THE HON'BLE MR. JUSTICE C.M. POONACHA
WRIT APPEAL NO. 1867 OF 2024 (GM-DRT)
BETWEEN:
1. THE REGISTRAR
DEBT RECOVERY TRIBUNAL BANGALORE
BSNL BUILDING
TELEPHONE HOUSE
RAJBHAVAN ROAD
BANGALORE - 560 009
...APPELLANT
(BY SMT. NAYANA TARA B.G., ADVOCATE)
AND:
Digitally
signed by
VEERENDRA 1.
KUMAR K M SRI NARAYANA MURTHY H.M.
Location: S/O. MADAPPA H.T.
High Court
of Karnataka AGED ABOUT 60 YEARS
RESIDING AT NO.117
SAPTHAGIRI, N BLOCK
KUVEMPU NAGARA
MYSORE - 570 023
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WA No. 1867 of 2024
2. SMT. CHANDRAKALA R.
W/O. NARAYANA MURTHY H. M.
AGED ABOUT 51 YEARS
RESIDING AT NO.117
SAPTHAGIRI, N BLOCK
KUVEMPU NAGARA
MYSORE - 570 023
3. UNION BANK OF INDIA
MYSORE-KAMAKSHI HOSPITAL BRANCH
KAMAKSHI HOSPITAL
SARAWATHIPURAM
MYSORE - 570 009
...RESPONDENTS
(BY SRI SAMEER SHARMA, ADVOCATE FOR C/R-1 & 2,
SMT. DIVYA PURANDAR, ADVCOATE FOR R-3)
THIS WRIT APPEAL FILED UNDER SECTION 4 OF THE
KARNATAKA HIGH COURT ACT PRAYING TO ALLOW THE
PRESENT APPEAL BY SETTING ASIDE THE ORDER DATED
19.11.2024 PASSED BY THE LEARNED SINGLE JUDGE IN W.P.
No.11177/2023 & ETC.
THIS WRIT APPEAL HAVING BEEN HEARD AND
RESERVED FOR JUDGMENT, COMING ON FOR
PRONOUNCEMENT THIS DAY, JUDGMENT WAS PRONOUNCED
AS UNDER:
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WA No. 1867 of 2024
CORAM: HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE
and
HON'BLE MR. JUSTICE C.M. POONACHA
CAV JUDGMENT
(PER: HON’BLE MR. VIBHU BAKHRU, CHIEF JUSTICE)
TABLE OF CONTENTS
I. PREFATORY FACTS …………………………………………………………………..4
II. SUBMISSIONS…………………………………………………………………………..7
III. REASONS AND CONCLUSIONS ………………………………………………10
(A) MAINTAINABILITY:…………………………………………………………………. 10
(B) THE ENTITLEMENT TO REFUND OF FEE: ………………………………… 13
(C) TRIBUNAL HAS NO INHERENT POWER TO REFUND THE FEE:….. 19
(D) DRT REFUND RULES ARE NOT APPLICABLE TO FEES UNDER THE
SARFAESI ACT:……………………………………………………………………… 42
(E) NO ELEMENT OF DIRECT QUID PRO QUO:………………………………. 44
(F) THE GENERAL CLAUSES ACT: ……………………………………………….. 45
1. The Registrar, Debts Recovery Tribunal, Bengaluru [the DRT]
has filed the present appeal impugning an order dated 19.11.2024
passed by the learned Single Judge of this Court in
W.P.No.11177/2023 (GM-DRT) [impugned order] allowing the said
petition.
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WA No. 1867 of 2024
2. Respondent Nos.1 and 2 [the writ petitioners] had preferred
the said petition impugning an order dated 08.08.2022 passed by the
learned DRT rejecting their application – I.A.No.2280/2022 in
S.A.No.277/2022 – for refund of court fee of `79,225/- (Rupees
Seventy Nine Thousand Two Hundred and Twenty Five only). In the
alternative, the writ petitioners had prayed to quash the said order
and place the matter before the learned DRT for reconsideration of
their request for refund of the court fee.
I. PREFATORY FACTS
3. Respondent No.1 [writ petitioner No.1] had availed a loan of
`2,50,00,000/- (Rupees Two Crore and Fifty Lacs only), which was
secured by mortgage of several properties. Respondent No.2 [writ
petitioner No.2], who is the spouse of writ petitioner No.1, had stood
as a surety for the repayment obligations. The writ petitioners state
that thereafter the repayments were scheduled and respondent No.3
[The Bank] sanctioned further loans of `30,00,000/- and `6,50,000/-.
4. The writ petitioners claim that they were not in default of
servicing the loans for more than a period of ninety days and yet the
Bank had classified the loan account as a Non-Performing Asset
[NPA]. The Bank had issued a notice dated 17.02.2022 under
Section 13(4) of the Securitisation and Reconstruction of Financial
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WA No. 1867 of 2024
Assets and Enforcement of Security Interest Act, 2002 [SARFAESI],
to take possession of the secured assets. The Bank thereafter issued
an e-auction notice on 11.05.2022 to enforce its secured interest. The
writ petitioners claim that the said notice was served on writ petitioner
No. 1 on 17.05.2022. Upon receiving the notice, he made a
representation dated 27.05.2022 offering to pay an amount of
`50,00,000/- in two instalments subject to the Bank refraining from
proceeding with the auction. The writ petitioners claim that since the
Bank did not respond to the said offer, they filed an application, being
S.A.No.277/2022, under Section 17 of the SARFAESI Act before the
DRT, seeking quashing of the notices issued and proceedings
initiated by the Bank. While the proceedings were pending, the writ
petitioners preferred I.A.No.2280/2022 seeking disposal of the
proceedings as having become infructuous upon the regularisation of
the loans. They claim that in the aforesaid circumstances, the
application preferred by the writ petitioners under Section 17 of the
SARFAESI Act was rendered infructuous.
5. The writ petitioners settled the amounts due to the Bank and
repaid the loans. The Bank also issued an intimation dated
08.07.2022 stating that the loans were regularised.
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WA No. 1867 of 2024
6. In the aforesaid facts, the writ petitioners filed an application
under Section 22(2)(h) of the Recovery of Debts and Bankruptcy Act,
1993 [RDB Act], seeking refund of the court fee. The learned DRT
rejected the said application on the ground that there was no
provision under the SARFAESI Act for the refund of court fees and
observed that in the absence of any enabling provision for the refund
of court fee, the application for refund of court fee could not be
entertained.
7. As noted above, the learned Single Judge allowed the writ
petition by the impugned order wherein the court set aside the order
dated 08.08.2022 and remanded the matter to the DRT to take
necessary steps for refund of the court fee in accordance with law.
8. The learned Single Judge referred to Rule 4 of Debts Recovery
Tribunals (Refund of Court Fee) Rules, 2013 [DRT (ROCF) Rules]
for directing the refund of the court fee. The learned Single Judge
reasoned that when the recovery proceedings initiated by the Bank
are disposed of as infructuous in light of the settlement arrived at
between the parties, it is an inherent right of the applicant for a refund
of the court fee, so deposited at the time of filing the application.
Further, the Court held that the mere unavailability of an express
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WA No. 1867 of 2024
provision for the return/refund of the court fee could not deprive a
litigant of an inherently equitable right to the refund of the court fee.
II. SUBMISSIONS
9. The learned counsel appearing for the appellant argued that, in
the absence of a statutory provision for the refund of the court fee,
the learned DRT could not refund it. The learned counsel also
challenged the reasoning that the applicant had an inherent right to a
refund of the court fee, as the application had become infructuous
due to a subsequent settlement between the parties.
10. The learned counsel appearing for respondent Nos.1 and 2
countered the aforesaid submissions. First, he submitted that the
present appeal is not maintainable; according to him, the impugned
order was passed in exercise of the jurisdiction conferred by Article
227 of the Constitution of India. He referred to the decision of a
Larger Bench of this Court in Tammanna and Others v. Miss.
Renuka and Others1, in support of his contention that the present
appeal is not maintainable. He argued that the learned DRT’s
decision to reject the application for refund of court fee was a
decision on the merits of the writ petitioners’ application. The
impugned order had also considered the merits of the said decision,
1
ILR 2009 KAR 1207
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WA No. 1867 of 2024
therefore, it was required to construe as an order under Article 227 of
the Constitution of India. He also referred to various decisions of this
Court, including the decision in the case of Gurushanth Pattedar v.
Mahaboob Shahi Kulbarga Mills and another2, as well as the
decision in the case of Sri Vishnu Ganapathi Naik v. The
Management of NWKRTC3 in support of this contention.
Additionally, he referred to several other decisions in which this Court
had held that appeals against the orders passed by the learned
Single Judge were not appealable.
11. The learned counsel had also referred to certain other
decisions where such a plea had been rejected. He sought to
distinguish those decisions on the ground that the merits of the
disputes were considered in those cases. He contended that where
decisions of the tribunals or courts that have trappings of finality on
merits are challenged by way of writ petitions, and the same are
examined, the orders passed by this Court would necessarily require
to be considered as passed under Article 227 of the Constitution of
India and not under Article 226 of the Constitution of India.
2
ILR 2005 KAR 2503
3
ILR 2006 KAR 1863
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WA No. 1867 of 2024
12. He submitted that, in terms of the General Clauses Act, 1897,
the power to receive court fee would equally contemplate the power
to refund the same. He referred to the decision of this Court in
Syndicate Bank, Gandhinagar, Bangalore v. Cantreads Private
Limited, Mangalore and others4, in support of the said contention.
He also contended that the court fee was a quid pro quo; therefore, in
the absence of any service, it is liable to be refunded.
13. He also supported the decision of the learned Single Judge
that court fee could be refunded notwithstanding that there was no
provision in the statute for granting such a refund. He referred to the
decisions in the case of Sri R. Prakash v. Sri D.M.Ravikumar and
another5; E.K.Jayachandran and another v. Registrar, Debt
Recovery Appellate Tribunal and another6; Nagpur District
Central Co-operative Bank Ltd. and another v. Union of India and
others (W.P.No.4369/2009); and M/s.Progressive Aquatech
Enterprises v. The Debts Recovery Tribunal-II and others
(W.P.No.30437/2021) decided on 23.12.2021.
4
(2007) 7 Kant LJ 636
5
ILR 2010 KAR 2198
6
(2019) 7 Mad LJ 641
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WA No. 1867 of 2024
III. REASONS AND CONCLUSIONS
(A) MAINTAINABILITY
14. The question to be considered at the threshold is whether the
present appeal filed under Section 4 of the Karnataka High Court Act,
1961 is maintainable. According to the learned counsel for the
respondent Nos.1 and 2, the appeal is not maintainable because the
learned DRT had rejected respondent Nos.1 and 2’s application for
refund, and that decision was challenged on its merits.
15. At this stage, it is relevant to refer to Section 4 of the Karnataka
High Court Act 1961 [High Court Act]. The said section is
reproduced below:
“4. Appeals from decisions of a single Judge of the
High Court.- An appeal from a judgment, decree, order
or sentence passed by a single Judge in the exercise of
the original jurisdiction of the High Court under this Act
or under any law for the time being in force, shall lie to
and be heard by a Bench consisting of two other
Judges of the High Court.”
16. It is clear from the plain language of Section 4 of the High
Court Act that an appeal would lie from a judgment or order passed
by the learned Single Judge in exercise of the original jurisdiction of
the High Court. The respondents argue that the impugned order was
not passed in exercise of the original jurisdiction of this Court.
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WA No. 1867 of 2024
17. We find no merit in the aforesaid contention. Respondent
Nos.1 and 2 had filed the writ petition under Article 226 of the
Constitution of India. A plain reading of the writ petition also does not
indicate otherwise. Respondent Nos.1 and 2 had sought a writ in the
nature of certiorari, or any order or direction, to set aside the order
dated 08.08.2022 passed by the learned DRT. It also expressly
sought directions for the refund of the court fee. The order passed is
clearly in exercise of the powers under Article 226 of the Constitution
of India.
18. In Umaji Keshao Meshram v. Radhikabai7, the Supreme
Court had observed
“101. Under Article 226 an order, direction or writ is
to issue to a person, authority or the State. In a
proceeding under that article the person, authority
or State against whom the direction, order or writ is
sought is a necessary party. Under Article 227,
however, what comes up before the High Court is the
order or judgment of a subordinate court or tribunal for
the purpose of ascertaining whether in giving such
judgment or order that subordinate court or tribunal has
acted within its authority and according to law. Prior to
the commencement of the Constitution, the
Chartered High Courts as also the Judicial
Committee had held that the power to issue
prerogative writs possessed by the Chartered High
Courts was an exercise of original jurisdiction (see
Mahomedalli Allabux v. Ismailji Abdulali [AIR 1926
Bom 332 : (1926) 28 Bom LR 471], Raghunath Keshav
Khadilkar v. Poona Municipality, Ryots of
Garabandho v. Zemindar of Parlakimedi [AIR 1942 PC
7
1986 SCC OnLine SC 378
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WA No. 1867 of 2024
164 : (1942-43) 70 IA 129] and Moulvi Hamid Hasan
Nomani v. Banwarilal Roy [AIR 1947 PC 90 : (1946-47)
74 IA 120, 130-31]). In the last mentioned case which
dealt with the nature of a writ of quo warranto, the
Judicial Committee held:
“In Their Lordships’ opinion any original civil jurisdiction
possessed by the High Court and not in express terms
conferred by the Letters Patent or later enactments falls
within the description of ordinary original civil
jurisdiction.”
By Article 226 the power of issuing prerogative
writs possessed by the Chartered High Courts prior
to the commencement of the Constitution has been
made wider and more extensive and conferred upon
every High Court. The nature of the exercise of the
power under Article 226, however, remains the
same as in the case of the power of issuing
prerogative writs possessed by the Chartered High
Courts.” A series of decisions of this Court has firmly
established that a proceeding under Article 226 is an
original proceeding and when it concerns civil rights, it
is an original civil proceeding (see, for instance, State of
U.P. v. Vijay Anand Maharaj [AIR 1963 SC 946 : (1963)
1 SCR 1, 16] , CIT v. IshwarlalBhagwandas [AIR 1965
SC 1818 : (1966) 1 SCR 190, 197-8] , Ramesh v. Seth
Gendalal Motilal Patni [AIR 1966 SC 1445 : (1966) 3
SCR 198, 203] , Arbind Kumar Singh v. Nand Kishore
Prasad [AIR 1968 SC 1227 : (1968) 3 SCR 322, 324]
and Ahmedabad Mfg. & Calico Ptg. Co. Ltd. v. Ram
TahelRamnand [(1972) 1 SCC 898 : AIR 1972 SC 1598
: (1973) 1 SCR 185] ).
102. Consequently, where a petition filed under
Article 226 of the Constitution is, according to the
Rules of a particular High Court, heard by a Single
Judge, an intra-court appeal will lie from that
judgment if such a right of appeal is provided in the
Charter of that High Court, whether such Charter be
Letters Patent or a statute. Clause 15 of the Letters
Patent of the Bombay High Court gives in such a
case a right of intra-court appeal and, therefore, the
decision of a Single Judge of that High Court given
in a petition under Article 226 would be appealable
to a Division Bench of that High Court.”
(emphasis added)
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WA No. 1867 of 2024
19. In the present case, respondent Nos.1 and 2 had made the
learned DRT a party to the writ petition and had sought directions for
the learned DRT to refund the fee paid. As noted above, the
respondent Nos.1 and 2 had, apart from clearly stating in the writ
petition that it was filed under Article 226 of the Constitution of India,
also sought a writ in the nature of a certiorari, a prerogative writ. The
order passed by the learned Single Judge is also clearly in exercise
of the original jurisdiction of this Court.
(B) THE ENTITLEMENT TO REFUND OF FEE
20. The principal question to be addressed is whether the
respondent Nos.1 and 2 were entitled to a refund of the fee paid by
them along with the application filed under Section 17 of the
SARFAESI Act. At this stage, it is relevant to refer to Section 17 of
the SARFAESI Act. The same is set out below:
“17. Application against measures to recover secured
debts.– (1) Any person (including borrower), aggrieved
by any of the measures referred to in sub-section (4) of
section 13 taken by the secured creditor or his
authorised officer under this Chapter, may make an
application along with such fee, as may be prescribed,
to the Debts Recovery Tribunal having jurisdiction in the
matter within forty-five days from the date on which
such measure had been taken:
Provided that different fees may be prescribed for
making the application by the borrower and the person
other than the borrower.
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WA No. 1867 of 2024
Explanation.–For the removal of doubts, it is hereby
declared that the communication of the reasons to the
borrower by the secured creditor for not having
accepted his representation or objection or the likely
action of the secured creditor at the stage of
communication of reasons to the borrower shall not
entitle the person (including borrower) to make an
application to the Debts Recovery Tribunal under this
sub-section.
(1A) An application under sub-section (1) shall be filed
before the Debts Recovery Tribunal within the local
limits of whose jurisdiction–
(a) the cause of action, wholly or in part, arises;
(b) where the secured asset is located; or
(c) the branch or any other office of a bank or financial
institution is maintaining an account in which debt
claimed is outstanding for the time being.](2) The Debts Recovery Tribunal shall consider whether
any of the measures referred to in sub-section (4) of
section 13 taken by the secured creditor for
enforcement of security are in accordance with the
provisions of this Act and the rules made thereunder.
(3) If, the Debts Recovery Tribunal, after examining the
facts and circumstances of the case and evidence
produced by the parties, comes to the conclusion that
any of the measures referred to in sub-section (4) of
section 13, taken by the secured creditor are not in
accordance with the provisions of this Act and the rules
made thereunder, and require restoration of the
management or restoration of possession, of the
secured assets to the borrower or other aggrieved
person, it may, by order,–
(a) declare the recourse to any one or more measures
referred to in sub-section (4) of section 13 taken by the
secured creditor as invalid; and
(b) restore the possession of secured assets or
management of secured assets to the borrower or such
other aggrieved person, who has made an application
under sub-section (1), as the case may be; and
(c) pass such other direction as it may consider
appropriate and necessary in relation to any of the
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WA No. 1867 of 2024
recourse taken by the secured creditor under sub-
section (4) of section 13.
(4) If, the Debts Recovery Tribunal declares the
recourse taken by a secured creditor under sub-
section (4) of section 13, is in accordance with the
provisions of this Act and the rules made thereunder,
then, notwithstanding anything contained in any other
law for the time being in force, the secured creditor shall
be entitled to take recourse to one or more of the
measures specified under sub-section (4) of section 13
to recover his secured debt.
(4A) Where–
(i) any person, in an application under sub-section (1),
claims any tenancy or leasehold rights upon the
secured asset, the Debt Recovery Tribunal, after
examining the facts of the case and evidence produced
by the parties in relation to such claims shall, for the
purposes of enforcement of security interest, have the
jurisdiction to examine whether lease or tenancy,–
(a) has expired or stood determined; or
(b) is contrary to section 65A of the Transfer of Property
Act, 1882 (4 of 1882); or
(c) is contrary to terms of mortgage; or
(d) is created after the issuance of notice of default and
demand by the Bank under subsection (2) of section 13
of the Act; and
(ii) the Debt Recovery Tribunal is satisfied that tenancy
right or leasehold rights claimed in secured asset falls
under the sub-clause (a) or sub-clause (b) or sub-
clause (c) or sub-clause (d) of clause (i), then
notwithstanding anything to the contrary contained in
any other law for the time being in force, the Debt
Recovery Tribunal may pass such order as it deems fit
in accordance with the provisions of this Act.
(5) Any application made under sub-section (1) shall be
dealt with by the Debts Recovery Tribunal as
expeditiously as possible and disposed of within sixty
days from the date of such application:
Provided that the Debts Recovery Tribunal may, from
time to time, extend the said period for reasons to be
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WA No. 1867 of 2024
recorded in writing, so, however, that the total period of
pendency of the application with the Debts Recovery
Tribunal, shall not exceed four months from the date of
making of such application made under sub-section (1).
(6) If the application is not disposed of by the Debts
Recovery Tribunal within the period of four months as
specified in sub-section (5), any part to the application
may make an application, in such form as may be
prescribed, to the Appellate Tribunal for directing the
Debts Recovery Tribunal for expeditious disposal of the
application pending before the Debts Recovery Tribunal
and the Appellate Tribunal may, on such application,
make an order for expeditious disposal of the pending
application by the Debts Recovery Tribunal.
(7) Save as otherwise provided in this Act, the Debts
Recovery Tribunal shall, as far as may be, dispose of
the application in accordance with the provisions of the
Recovery of Debts Due to Banks and Financial
Institutions Act, 1993 (51 of 1993) and the rules made
thereunder.”
21. As is apparent from the above, Section 17(1) of the SARFAESI
Act mandates that every application is required to be accompanied
with such fee as may be prescribed. The proviso to Section 17(1)
SARFAESI Act also stipulates that different fees may be prescribed
for applications made by the borrower or a person other than a
borrower.
22. Rule 13 of the Security Interest (Enforcement) Rules, 2002,
framed in exercise of the powers conferred under Section 38 of the
SARFAESI Act, prescribes the fee payable on applications under
Sections 17 and 18 of the Act. The said Rule is reproduced below:
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WA No. 1867 of 2024
“13. Fees for applications and appeals under section 17
and 18 of the Act.- (1) Every application under sub
section (1) of section 17 or an appeal to the Appellate
Tribunal under sub-section (1) of section 18 shall be
accompanied by a fee provided in the sub-rule (2) and
such fee may be remitted through a crossed demand
draft drawn on a bank or Indian Postal Order in favour
of the Registrar of the Tribunal or the Court as the case
may be, payable at the place where the Tribunal or the
Court is situated.
(2) The amount of fee payable shall be as follows:
Sl.
Nature of Application Amount of Fee payable
No.
Application to a Debt
Recovery Tribunal under sub-
section (1) of section
1.
17 against any of the
measures referred to in sub-
section (4) of section 13
(a) Where the applicant is a
borrower and the amount of Rs. 500 for every Rs.1 lakh or
debt due is less than Rs.10 part thereof
lakhs
(b) Where the applicant is a Rs. 5,000 + Rs. 250 for every
borrower and the amount of Rs. 1 lakh or part thereof in
debt due is Rs. 10 lakhs and excess of Rs. 10 lakhs subject
above to a maximum of Rs. 1,00,000
(c) Where the applicant is an
aggrieved party other than
Rs. 125 for every Rupees One
the borrower and where the
lakh or part thereof
amount of debt due is less
than Rs.10 lakhs
(d) Where the applicant is an Rs. 1,250 + Rs. 125 for every
aggrieved party other than Rs. 1 lakh or part thereof in
the borrower and where the excess of Rs. 10 lakhs subject
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WA No. 1867 of 2024
amount of debt due is Rs.10 to a maximum of Rs. 50,000
lakhs and above
(e) Any other application by
Rs. 200
any person
Appeal to the Appellate
Same fees as provided at
Authority against any order
2. clauses (a) to (e) of serial
passed by the Debt Recovery
number 1 of this rule]
Tribunal under section 17
13A. Application by lessee or tenant.- (1) Every
application under sub-section (1) of section 17 filed by
lessee or tenant of the secured assets shall be
accompanied by a fee specified in sub-clause (c) and
sub-clause (d) of sub-rule (2) of rule 13, as the case
may be.
(2) The application to be made by the lessee or the
tenant under sub-section (1) of section 17, shall be in
the form specified in Appendix X annexed to these
rules.”
23. Concededly, there is no provision for a refund of the fee.
Notwithstanding the same, respondent Nos.1 and 2 claim that they
are entitled to a refund of the fees on essentially three grounds. First,
they submit that the Court has the inherent power to grant a refund of
the court fee. The exercise of this power is warranted in the facts of
the present case, as there was no occasion for the respondent Nos.1
and 2 to pursue their application under Section 17. The fee was
therefore liable to be refunded.
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WA No. 1867 of 2024
24. Second, respondent Nos.1 and 2’s claim that the fee levied
under Section 17 of the SARFAESI Act is not a tax but a fee. It is
paid in consideration of the adjudication of the application. And, as
respondent Nos.1 and 2 application was not considered, the fee is
liable to be refunded.
25. Third, respondent Nos.1 and 2 submit that a recourse is
available to the provisions of the Rules made for the refund of fees
under the RDB Act. They submit that, under Rule 4 of the Debts
Recovery Tribunals (Refund of Court Fee) Rules, 2013, the Debt
Recovery Tribunal has the power to refund the fee, and recourse to
the said Rule would be available in the present case as well.
(C) TRIBUNAL HAS NO INHERENT POWER TO REFUND THE
FEE
26. The first question to be addressed is whether the Tribunal has
the inherent power to refund the fee paid under Section 17 of the
SARFAESI Act. Plainly, this question must be answered in the
negative. The fee is a statutory prescription. In the absence of any
statute authorising the refund of the fee, the Court would have no
inherent power to order its refund.
27. The inherent powers of a court refers to the courts intrinsic
authority — independent of any statute — to regulate its own
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WA No. 1867 of 2024
procedure and prevent abuse of its process. Inherent powers are not
conferred by statute; they are preserved by it. Section 151 of the
Code of Civil Procedure, 1908 [CPC] and Section 482 of the Code of
Criminal Procedure, 1973 [CrPC]– now Section 528 of the Bharatiya
Nagarik Suraksha Sanhita, 2023 [BNSS] — are saving clauses that
recognise this inherent power.
28. It is relevant to refer to Section 151of the CPC which reads as
under:
“151. Saving of inherent powers of Court.–Nothing
in this Code shall be deemed to limit or otherwise affect
the inherent power of the Court to make such orders as
may be necessary for the ends of justice or to prevent
abuse of the process of the Court..”
29. An important feature of Section 151 is its process-driven
character. The inherent powers it preserves relate exclusively to
regulating the court’s procedure, preventing abuse of its process, and
securing the ends of justice. They do not — and cannot — create
new substantive rights, override express statutory provisions, or
expand a court’s subject-matter jurisdiction.
30. In Padam Sen v. State of U.P.8, the Supreme Court had
observed as under:
8
AIR 1961 SC 218
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WA No. 1867 of 2024
“9. …The inherent powers saved by Section 151 of
the Code are with respect to the procedure to be
followed by the Court in deciding the cause before
it. These powers are not powers over the
substantive rights which any litigant possesses.”
31. The aforesaid principle was reiterated by the Supreme Court in
Ram Prakash Agarwal v. Gopi Krishan9 wherein, the Court held
that as under:
” 13. Section 151 CPC is not a substantive
provision that confers the right to get any relief of
any kind. It is a mere procedural provision which
enables a party to have the proceedings of
a pending suit conducted in a manner that is
consistent with justice and equity. The court can do
justice between the parties before it. Similarly,
inherent powers cannot be used to re-open settled
matters. The inherent powers of the Court must, to
that extent, be regarded as abrogated by the
legislature. A provision barring the exercise of
inherent power need not be express, it may even
be implied. Inherent power cannot be used to
restrain the execution of a decree at the instance of
one who was not a party to suit. Such power is
absolutely essential for securing the ends of
justice, and to overcome the failure of justice. The
Court under Section 151 CPC may adopt any
procedure to do justice, unless the same is
expressly prohibited.”
32. In K.K. Velusamy v. N. Palanisamy10, the Supreme Court,
after referring to various decisions summarised the law on the
inherent powers as recognised under Section 151 of the CPC as
under:
9
(2013) 11 SCC 296
10
(2011) 11 SCC 275
– 22 –
WA No. 1867 of 2024
“12. …(a) Section 151 is not a substantive provision
which creates or confers any power or jurisdiction
on courts. It merely recognises the discretionary
power inherent in every court as a necessary
corollary for rendering justice in accordance with
law, to do what is “right” and undo what is “wrong”,
that is, to do all things necessary to secure the
ends of justice and prevent abuse of its process.
(b) As the provisions of the Code are not
exhaustive, Section 151 recognises and confirms
that if the Code does not expressly or impliedly
cover any particular procedural aspect, the inherent
power can be used to deal with such situation or
aspect, if the ends of justice warrant it. The breadth
of such power is coextensive with the need to
exercise such power on the facts and
circumstances.
(c) A court has no power to do that which is
prohibited by law or the Code, by purported
exercise of its inherent powers. If the Code
contains provisions dealing with a particular topic
or aspect, and such provisions either expressly or
by necessary implication exhaust the scope of the
power of the court or the jurisdiction that may be
exercised in relation to that matter, the inherent
power cannot be invoked in order to cut across the
powers conferred by the Code or in a manner
inconsistent with such provisions. In other words
the court cannot make use of the special provisions
of Section 151 of the Code, where the remedy or
procedure is provided in the Code.
(d) The inherent powers of the court being
complementary to the powers specifically
conferred, a court is free to exercise them for the
purposes mentioned in Section 151 of the Code
when the matter is not covered by any specific
provision in the Code and the exercise of those
powers would not in any way be in conflict with
what has been expressly provided in the Code or
be against the intention of the legislature.
(e) While exercising the inherent power, the court
will be doubly cautious, as there is no legislative
guidance to deal with the procedural situation and
– 23 –
WA No. 1867 of 2024
the exercise of power depends upon the discretion
and wisdom of the court, and in the facts and
circumstances of the case. The absence of an
express provision in the Code and the recognition
and saving of the inherent power of a court, should
not however be treated as a carte blanche to grant
any relief.
(f) The power under Section 151 will have to be
used with circumspection and care, only where it is
absolutely necessary, when there is no provision in
the Code governing the matter, when the bona
fides of the applicant cannot be doubted, when
such exercise is to meet the ends of justice and to
prevent abuse of process of court.”
33. It is well settled that courts cannot use inherent powers to: (a)
override express or implied statutory provisions11; (b) create new
substantive rights12; (c) grant substantive relief not contemplated
under any law13; (d) serve as a substitute for appeal, revision, or
review where such remedies are available14; (e) re-open or unsettle
concluded adjudications15; or (f) revive expired or time-barred
statutory remedies16.
34. Fee paid in accordance with the provisions of the statute
ceases to be under the control of the court and belongs to the State.
There is no inherent power to direct the State to make any payments
11
Arjun Singh v. Mohindra Kumar, 1963 SCC OnLine SC 43 at ¶20
12
Padam Sen, supra 8 at ¶9
13
Vinod Seth v. Devinder Bajaj, (2010) 8 SCC 1 at ¶28
14
My Palace Mutually Aided Coop. Society v B Mahesh, (2022) 19 SCC 806 at ¶28
15
id. at ¶27
16
P.A. Ahammed Ibrahim v. Food Corporation of India (1999) 7 SCC 39 at ¶8
– 24 –
WA No. 1867 of 2024
which have been collected in accordance with law. There may be
cases where the fee has been erroneously assessed or cases where
the collection is not in accordance with the statutory provisions. In
such cases, the necessary sequitur of finding that the collection of the
fee is erroneous would be to direct a refund of the court fee.
However, this principle cannot be applied where the fee is collected
in accordance with statutory provisions and there is no error in its
collection.
35. The full Bench of the Patna High Court in Dwarka Singh and
another v. Nagdeo Singh and others17, inter alia, considered the
question whether court fee could be refunded, even though statutory
provisions did not provide for such a refund. In this context, the court
observed as under:
“15.Thus, if the three sections are out of the
question, there is no power left in the Court to grant
a certificate of refund where court fee has been
paid in accordance with the provisions of the Court
fees Acton the document filed in Court.
16.Learned counsel has, however, contended, in
any case, the petitioners are entitled to the order of
refund under Sec. 151, Code of Civil Procedure.
He has pressed into his argument the analogy of
the exercise of the power under Sec. 151, Code of
Civil Procedure, for refund of court fee when a
higher amount of Court-fee has been realised than
required in law to be paid. In my opinion, however,
the analogy is wholly groundless. When the party17
1960 SCC OnLine Pat 175
– 25 –
WA No. 1867 of 2024
by mistake has paid an excess amount oil court fee
than is payable by him, and the court is satisfied
about it, it is obvious that the excess amount was
never paid under any provision of the Court Fees
Act in any of the schedules and, as such, it was
never the money of the Government.
** ** ** **
18. It is clear, therefore, on an examination of the
inherent jurisdiction under the Code of Civil
Procedure, that there can be no legal justification
for the Court passing an order for refund of the
amount of court fee paid on a review application
when it allowed on aground other than that of a
mistake in law or fact. Learned counsel has,
however, drawn our attention to the following
decisions which have no bearing on the point.”
36. In High Court of Judicature at Madras represented by its
Registrar General v. M.C. Subramanian and others18, the
Supreme Court considered the question whether the refund of Court
fee could be directed even in cases where the parties have settled a
dispute out of court, but not through the Mediation Centre or other
centers of judicial settlement. The matter arose from the Madras High
Court’s decision. The court had interpreted the provisions of Section
89 of the CPC and 69A of the Tamil Nadu Court Fee and Suit
Valuation Act, 1955 liberally. The Court directed the refund of court
fees even though the parties had settled their disputes by a mode
other than that specifically contemplated under Section 89 of the
18
(2021) 3 SCC 560
– 26 –
WA No. 1867 of 2024
CPC. In an appeal from the said decision, the Supreme Court
accepted that the provisions for refund of court fee are to be
interpreted keeping view of the object. We consider it relevant to
refer to the following extract from the said decision:
“14. Before expounding further on our interpretation
of the aforesaid provisions, regard must be had to
the following postulation of this Court’s interpretive
role in Directorate of Enforcement v. Deepak
Mahajan: (SCC pp. 453-54, paras 24-25)“24. Though the function of the courts is only to
expound the law and not to legislate, nonetheless
the legislature cannot be asked to sit to resolve the
difficulties in the Implementation of its intention and
the spirit of the law. In such circumstances, it is the
duty of the court to mould or creatively Interpret the
legislation by liberally interpreting the statute.
25. In Maxwell on Interpretation of Statutes, Tenth
Edn. at p. 229, the following passage is found:
‘Where the language of a statute, in its ordinary
meaning and grammatical construction, leads to a
manifest contradiction of the apparent purpose of
the enactment, or to some Inconvenience or
absurdity, hardship or injustice, presumably not
intended, a construction may be put upon it which
modifies the meaning of the words, and even the
structure of the sentence…. Where the main object
and intention of a statute are clear, it must not be
reduced to a nullity by the draftsman’s
unskilfulness or ignorance of the law, except in a
case of necessity, or the absolute intractability of
the language used.’ (emphasis supplied)
15. Therefore, it is well settled that the courts may,
in order to avoid any difficulty or injustice resulting
from inadvertent ambiguity in the language of a
statute, mould the interpretation of the same so as
to achieve the true purpose of the enactment. This
may include expanding the scope of the relevant
– 27 –
WA No. 1867 of 2024
provisions to cover situations which are not strictly
encapsulated in the language used therein.
16. This principle of statutory interpretation has
been affirmed more recently in the decision in
Shailesh Dhairyawan v. Mohan Balkrishna Lulla:
(SCC p. 642, para 33)
“33…. Though the literal rule of interpretation, till
some time ago, was treated as the “golden rule”, it
is now the doctrine of purposive interpretation
which is predominant, particularly in those cases
where literal interpretation may not serve the
purpose or may lead to absurdity. If it brings about
an end which is at variance with the purpose of
statute, that cannot be countenanced.”
This was followed in the subsequent decision of
this Court in Anurag Mittal v. Shaily Mishra Mittaf.
17. 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 CPC and Section 69-A
of the 1955 Act sought to be imposed by the
petitioner would lead to an outcome wherein the
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 the 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 69-A of the
1955 Act. A literal or technical interpretation, in this
background, would only lead to injustice and render
the purpose of the provisions nugatory and thus,
needs to be departed from, in favour of a purposive
interpretation of the provisions.
** ** ** **
- 28 -
WA No. 1867 of 2024
25. Thus, even though a strict construction of the
terms of Section 89 CPC and Section 69-A of the
1955 Act may not encompass such private
negotiations and settlements between the parties,
we emphasise that the participants in such
settlements will be entitled to the same benefits as
those who have been referred to explore alternate
dispute settlement methods under Section 89 CPC.
Indeed, we find it puzzling that the petitioner should
be so vehemently opposed to granting such
benefit. Though the Registry/State Government will
be losing a one-time court fee in the short term,
they will be saved the expense and opportunity
cost of managing an endless cycle of litigation in
the long term. It is therefore in their own interest to
allow Respondent 1’s claim.
26. Thus, in our view, the High Court was correct in
holding that Section 89 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 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 1 herein would be
entitled to refund of court fee.”
37. The elaborate discussion on the expansive interpretation of the
provisions governing the grant of a refund of Court fee also implicitly
underscores that the Supreme Court did not consider that the court’s
inherent power encompassed the refund of court fees.
38. In a recent decision in the case of Jage Ram v. Ved Kaur and
others in SLP (C) No.723/2023 by an order dated 28.01.2025, the
– 29 –
WA No. 1867 of 2024
Supreme Court upheld the decision of the High Court to reject the
request for a refund of court fee, where the parties arrived at a
settlement, which was otherwise than by arbitration, conciliation,
judicial settlement or mediation. The said order is set out below:
“1. Heard learned counsel for the parties.
2. The second appeal was decided by the High
Court in terms of the settlement, a signed copy of
which was produced before it.
3. Since the appeal was decided in terms of the
settlement and not on merits, the petitioner prayed
to refund the court fees paid by him in the trial
Court as well as in the First Appellate Court and
Second Appellate Court.
4. In the second appeal, the petitioner had
paidRs.29,053/- (Rupees Twenty-Nine Thousand
Fifty-Three only).
5. The High Court by the impugned order has
rejected the prayer so made by the petitioner by
holding that no ground for refund has been made
out.
6. The refund of court fees is permissible only if the
matter is referred to Arbitration, Conciliation,
judicial settlement, including through Lok Adalat or
mediation for settlement and the case is decided in
terms of such a settlement and not otherwise.
7. In the case at hand, the settlement in terms of
which the second appeal was decided by the High
Court is not on reference to any of the above
authorities/for a rather it was an amicable
settlement out of the court.
8. Accordingly, we are of the opinion that the
petitioner is not entitled to refund of the court fees
and the High Court has not committed any error or
illegality in refusing such a prayer.
– 30 –
WA No. 1867 of 2024
9. Accordingly, the Special Leave Petition lacks
merits and is dismissed. Pending application(s), if
any, shall stand disposed of.
39. We may also refer to the decision of the full Bench of the
Punjab and Haryana High Court in Jawahar Singh and Others v.
Union of India and others19. In the said case, the Court considered
the reference, inter alia, on the question whether the petitioner was
entitled to a refund of the court fee paid on his plaint. In that case, the
petitioner had instituted a civil suit in the court of the Subordinate
Judge at Amritsar. However, the plaint was returned as the court
found it lacked jurisdiction to entertain the suit. Therefore, the Court
returned the plaint for presentation before a court of competent
jurisdiction. The said order was affirmed by the learned Single Judge
and thereafter by a Division Bench of the Punjab and Haryana High
Court. The petitioner thereafter filed an application for a refund of the
court fee.
40. There was a conflict of opinions between the division benches
of the Punjab and Haryana High Courts. In one case, (Discount
Bank of India v. A.N. Mishra20), the division bench held that refund
of court fee is only limited to three cases, namely, (i), when the refund
is authorised by the Court-Fees Act itself, (ii), when excess court-fee
19
1957 SCC OnLinePunj 113
20
AIR1955 Punjab 165
– 31 –
WA No. 1867 of 2024
is being paid as a result of a mistake and (iii) when the excess
payment is being made as a result of an erroneous demand by the
Court itself. However, another Division Bench of the Punjab and
Hariyana High Court, in (S.Sohan Singh v. The Oriental Bank of
Commerce21), accepted the view that the court had inherent power
to refund court fees even if the fees had been collected in
accordance with provisions of law. In the aforesaid context, the
following question was referred for the decision of the Full Bench of
the Punjab and Haryana High Court,
“Is the power of a Court to remit or refund court-
fees confined only to fees illegally or erroneously
assessed or collected or does it extend also to fees
which have been paid or collected in accordance
with the provisions of the Court-fees Act?”22
41. The Full bench considered the scope of inherent jurisdiction of
the court and observed as under:
“But what about the inherent jurisdiction of the
Court? The power and authority of a Court to hear
and determine justiciable controversies and to
deliver binding judgments thereon is derived from
the Constitution and the laws; but quite apart from
the power expressed by the constitutional and
statutory provisions every Court has inherent
power to do all things that are reasonably
necessary for the administration of justice, for the
maintenance of dignity and for the legitimate
discharge of its functions. It does not spring from
legislation but from the very nature and constitution21
1956 P.L.R. 355
22
Jawahar Singh, supra 19, at p.109
– 32 –
WA No. 1867 of 2024
of the tribunals themselves and is essential for the
ordinary and efficient exercise of the jurisdiction
conferred by the law of the land. This power is
essentially a protective power and is as necessary
for the preservation of the existence of the Courts
as is the natural right of self-defence to the
preservation of human life (Hulman v. State).
Now, that exactly is the meaning of the expression
‘inherent powers of the Court’ which have been
preserved and safeguarded by the provisions of
section 151 of the Code of Civil Procedure? The
expression ‘inherent powers of the Court’ is not
susceptible of a clear and precise definition and, so
far as I am aware, no Court has endeavoured to
give an all embracing statement of the essential
nature of this extraordinary jurisdiction. The
boundaries of inherent powers can best be
determined by a process of inclusion and
exclusion. Among the inherent powers of a Court of
general jurisdiction most frequently expounded and
exercised are–
(a) the power to preserve order, decency and
silence in the Courtroom;
(b) the power to protect itself from contempt, the
power to punish unseemingly behaviour and the
power to punish those who assume to treat it with
contempt;
(c) the powers to maintain dignity and
independence;
(d) the power to correct their records so as to make
them speak the truth; to pass upon the
constitutionality of statutes, to prevent the abuse of
their authority and to enforce obedience to their
mandates;
(e) the power of enforcing and effectuating its own
judgments and mandates;
(f) the power of holding its officers to a proper
accountability for any default or misfeasance in the
execution of its process; and
(g) the power of vacating judgments entered by
mistake and of relieving against judgments
procured by fraud; etc.
In addition to these powers, a Court of general
jurisdiction has inherent power to correct that which
has been wrongfully done by virtue of its process,
– 33 –
WA No. 1867 of 2024
for it is one of the highest duties of all Courts to
take care that the act of the Court does no injury to
any of the suitors(Roger v. Comptoir d’ Escompts
de Paris), It has power to undo wha it had no
authority to do originally, to restore the amounts
which a person had been wrongfully compelled to
pay under the orders of the Court, and to restore,
as far as possible, the parties to their original
position. Again a Court has power to act rightly and
fairly towards all parties, to prevent abuse,
oppression and injustice, and to order are fund of
the money which ought in good conscience to be
repaid to the person from whom it has been
illegally or erroneously exacted. If therefore, a
litigant pays a court-fee which has been unjustly
assessed or is excessive in amount or has been
wrongly collected, the Courts will give him relief ex
debitojustitiae, for the State has impliedly agreed to
pay back the money received by a Court but which
the law had not authorised the Court to exact.
Beyond this the inherent powers will not take us.
It will be seen from the above, that quite apart from
authority and purely on the basis of legal principles,
a Court of law has power to order a refund of court-
fees (1) where the Court-fees Act applies (2),
where there is an excess payment by mistake and
(3) where on account of mistake of the Court a
party has been compelled to pay court-fee either
wholly or in part. This proposition is so well
established that I consider it entirely unnecessary
to again enter upon the field of argument and
authority to maintain the power of this Court to pay
back the court-fee where excess fee has been paid
through oversight, mistake or inadvertence. I need
cite only a few authorities which have been relied
upon by the Courts which have entertained the
view that a Court has inherent power to authorise
refund of court-fee not only in the three types of
cases mentioned above but also in cases where
the law expressly declares that fees shall be
charged, levied and collected.”
– 34 –
WA No. 1867 of 2024
42. The Full Bench undertook an extensive survey of the
affirmative authorities — Sadiq Ali Khan v. Ali Abbas23, Mst.
Gendo v. Radha Mohan24, Galstaun v. Jankinath Rai25, Jan
Mohammad v. Amolak Ram26 , Hari Ram and Sons v. H.O. Hay27,
Anglo French Drug Co. (Eastern) Ltd. v. State of Bombay28 ,
Central Bank of India Ltd. v. Thakur Das-Tulsi Ram29, and the
Division Bench of the Punjab and Haryana High Court in Sohan
Singh (supra) — as well as the decisions where the courts had
interpreted the power restrictively including in Om Prakash Gupta v.
State of U.P.30, Jamah Prasad v. Askaran Prasad31, Umar Din v.
Umar Hayat32 , V.K.P. Chockkalingam Aurbalam v. Maung Tin33,
In re Rachakonda Nagurathnam34, Secretary of State v. A.
Veerayya Vandayar35, Karfule Ltd. v. Arical Daniel Varghese36,
Ranchhod Lal Maneklal v. Kanekhl37, Prabhunath v. Mt.
23
ILR 7 Luck 588
24
AIR 1932 Lah 219
25
AIR 1934 Cal 615
26
AIR 1936 Lah 301
27
AIR 1939 Lah 257
28
AIR 1951 Bom 130
29
AIR 1933 Lah 135
30
(1955) 1 SCC 727
31
AIR 1928 Pat 29
32
AIR 1927 Lah 886
33
AIR 1938 Rang 208
34
AIR 1950 Mad 629
35
AIR 1940 Mad 451
36
AIR 1953 Bom 73
37
AIR 1953 Bom 436
– 35 –
WA No. 1867 of 2024
Khadijatul Kubra38, Shri Om Parkash Gupta v. The United
Provinces39, Tara Chand-Ghansham Das v. State of West
Bengal40, and the Division Bench of the Punjab and Haryana High
Court in Discount Bank (supra) — all declining refund where fees
were lawfully paid.
43. The Court referred to the decisions where the refund of the
court fee was granted even though respondent Nos.1 and 2 were not
covered under statutory provisions and observed as follows:
“But these decisions appear to have ignored certain
fundamental legal principles. They have not taken
account of the fact that all Governments in all countries,
civilized or otherwise, have found it necessary to enact
measures for the imposition, assessment and collection
of taxes and to provide safeguards of their own against
mistake, injustice and oppression in the administration
of its revenue laws. The Legislature has power to
prescribe the manner and the circumstances in which
taxes should be refunded regardless of the legality or
illegality of the assessment or collection or recovery
thereof. If a statutory enactment provides a remedy for
protection against administrative aggression in the form
of the illegal or erroneus exaction of a tax, that remedy
must be regarded as exclusive and the Courts have no
power to intervene. If however, the statutory enactment
is silent and the system of corrective justice is not
complete the inherent power of a Court to grant
equitable relief will step in to fill the gap, for the inherent
power of the Court is limited to the power of the Court to
regulate and deal with such matters in the absence of
legislation. The Court has no power to refund taxes as a
matter of gratuity when they have been collected in38
AIR 1953 All 184
39
AIR 1951 All 205
40
AIR 1955 Cal 258
– 36 –
WA No. 1867 of 2024
accordance with the provisions of law, S. Sohan Singh
v. The Oriental Bank of Commerce.
Secondly it has failed to take into consideration the
fact that it is the duty of the Court to ascertain the
intention of the Legislature and to carry such intention
into effect to the fullest degree even though such
legislation appears to the Courts to be unfair, inequitable
or unjust. If the statute is ambiguous in its terms and
fairly succeptible of two or more constructions, the Court
will avoid a construction which would render the statute
productive of injustice, unfairness, inconvenience,
hardship or oppression and will adopt a construction in
favour of an equitable operation of law and which will
best subserve the ends of justice. If, on the other hand,
the language of the statute is plain and unambiguous
and conveys a clear and definite meaning, the Courts
have no power to give the statute a meaning to which its
language is not susceptible merely to avoid that which
the Court believes are objectionable, mischievous or
injurious consequences. A Court has no power, inherent
or otherwise, to nullify, destroy or defeat the intention of
the legislature by adopting a wrong construction or to
take shelter behind the comforting thought that Courts of
law have been established and ordained for the purpose
of promoting substantial justice between the parties and
that a technicality should not be permitted to override
justice. The Courts have no power to modify the
provisions of law even if those provisions are not as
convenient and reasonable as the Courts themselves
could have devised. If there is a general hardship
affecting a general class of cases, the hardship can be
avoided by a change of the law itself and not by judicial
action in the guise of interpretation. If there is a
particular hardship from the particular circumstances of
the case, it would be extremely dangerous to relieve it
by departing from the provisions of the statute. In any
case a Court has no power to circumvent the provisions
of a statute, for whatever is prohibited by law to be done
directly cannot legally be effected by an indirect and
circuitous contrivance.
Thirdly, the Courts have failed to recognise the basic
fact that although a Court possesses all the inherent or
implied powers necessary to discharge the onerous
duties imposed upon it by the Legislature, and although
it is the duty of every Court to maintain its inherent
– 37 –
WA No. 1867 of 2024
jurisdiction vigorously, a Court is not wholly independent
of the Legislature and cannot disregard the mandate
issued by it in the form of a statute. All inherent and
implied powers must yield to the power of statutory
enactments (Brydonjack v. State Bar (1), for no Court of
Law possesses inherent power to dispense with the
provisions of a statute (Maqbul Ahmad v.Onkar Partap
(2). Jurisdiction is not, a matter of sympathy or favour
(63Lawyers Edition 313, 315) and it is not open to a
Court by the exercise of inherent power to exonerate a
litigant from an obligation imposed upon him by law
Alexander Branet v. Indrakishna Kaul (3), Karfule Ltd. v.
Arical Daniel Varghese (4).
The legal principles set out in the preceding
paragraphs have been adopted and applied in a very
large number of cases and Judges have taken the view
that the power of a Court to grant refunds must be
confined within the limits of statutory provisions.
Refunds may also be granted when court-fee has been
paid in excess by inadvertence or by a mistake of the
Court. Thus it has no power to order a refund of court
fees when the suit or appeal has been dismissed on the
ground that a deficit in the court-fee ordered to be paid
has not been paid Jamah Prasad v. Askaran Prasad (5),
or when remand order is passed on any ground other
than a ground mentioned under order 41, rule 23 Umar
Din and others v. Umar Hayat (6), V.K.P.
Chockkalingam Aurbalam v.Maung Tin and others (7),
memorandum of appeal not numbered as appeal owing
to reluctance to pay court-fee is filed and is withdrawn
by the party before numbering. In re Rachakonda
Nagurathnam (8), or when an appeal which was
preferred to the High Court was withdrawn as having
been settled out of Court. In re. v. Arical Daniel
Varghese (1), or when an appeal presented by a bank to
one High Court could not be proceeded with as another
High Court ordered the bank to be wound up Discount
Bank of India v. A.N. Mishra(2), or when the petitioner
sought a certain relief in the plaint or in the
memorandum of appeal but later had it deleted, Om
Prakash Gupta v.State of Uttar Pradesh (3), Shri Om
Parkash Gupta v. The United Provinces (4), when an
appeal which was competent when filed had tobe
dismissed in view of the provisions of a new Act which
came into force while the appeal was pending in Court
Prabhunath v. Mt.Khadijatul Kubra and others (5), or
– 38 –
WA No. 1867 of 2024
when the plaintiff was entitled to file the suit in the
District Munsiff’s Court at the time the suit was filed but
where this power was taken away during the pendency
of the litigation, Secretary of State v. A. Veerayya
Vandayar (6). The Courts have resolutely refused to
depart from the provisions of the Statute even incases of
manifest hardship and oppression for it is well-known
that hard cases make bad law.
For these reasons I am of the opinion that the power
of a Court to remit or refund court-fees is confined only
to fees which have been illegally or erroneously
assessed or collected, and does not extend to fees
which have been paid or collected in accordance with
the provisions of the Court-fees Act.”
44. We respectfully concur with the view of the Full Bench that the
power of a court to remit or refund court fees is confined only to fees
which have been illegally or erroneously assessed or collected, and
does not extend to fees paid or collected in accordance with the
provisions of the enactment. As felicitously articulated by the learned
CJ Bhandari, “no Court of Law possesses inherent power to dispense
with the provisions of a statute”. We may also note that in his
concurring opinion, Tek Chand J. emphasized that inherent powers
“cannot be stretched to cover a wider field”, and that “in the disguise
of exercising their inherent powers courts cannot proceed to arrogate
the functions of Legislature” — holding that “vague and nebulous
considerations of hardship or injustice are snares into which Courts
should not permit themselves to be drawn”. The Full Bench found
that the authorities granting refund had ignored the fundamental
– 39 –
WA No. 1867 of 2024
character of court fees as a statutory impost, had failed to recognize
that all inherent and implied powers must yield to statutory
enactments, and had erroneously assumed that courts possess
“some mysterious or hidden power to modify the provisions of a
statute of some strictness or vigour when it considers that some
possible inconvenience may grow from a strict observance of it”.
45. A six-judge bench of the Supreme Court in the case of Om
Prakash Gupta v. State of U.P.41, made a significant observation on
the aspect of “Inherent Powers of the Court” vis-à-vis Court Fees, by
stating that,
“10. …In the High Court he did not ask for this relief on
the basis of any statutory provision. He invoked the
inherent powers of the High Court. The Court Fees Act
contains certain provisions for refund of court fee paid
by a party but admittedly the present case is not
covered by any of those provisions. It seems, therefore,
that the High Court in the circumstances of the present
case rightly refused to order a refund of the excess
court fee paid by the appellant. It also does not appear
that the Civil Judge acted illegally in refusing to order a
refund.”
46. We may also note that in a recent decision delivered by the
Supreme Court in Rajeev Nohwar v. Chief Controlling Revenue
41
(1955) 1 SCC 727
– 40 –
WA No. 1867 of 2024
Authority Maharashtra State and Others42, the Supreme Court in
the context of refund of stamp duty, had observed as under:
“32. We are conscious of the fact that as a general rule
of law, the right to refund is a statutory creation. A
refund can be sought in terms envisaged by statute. As
discussed above, the case of the appellant is not
specifically barred by any substantive provision. It is an
established principle that this Court while exercising its
power under Article 142 of the Constitution must not
ignore and override statutory provisions but must rather
take note of the express statutory provisions and
exercise its discretion with caution. Therefore, if a
statute prescribes a limitation period, this Court must be
slow to interfere with the delay under Article 142.
However, in the case of an eventuality such as the
instant case where the facts of the case are not covered
by the statute, this Court under Article 142 will have the
power to do complete justice by condoning the delay.
We are of the view that since the delay in filing the
application for refund in the instant case was due to the
prolonged proceedings before NCDRC, the application
cannot be rejected on the ground of delay. A litigant has
no control over judicial delays. A rejection of the
application for refund would violate equity, justice and
fairness where the applicant is made to suffer the brunt
of judicial delay. Therefore, this is a fit case for the
exercise of the power under Article 142 of the
Constitution.”
47. As is apparent from the above, the Supreme Court
acknowledged that there was no inherent right to a refund of the fee,
as it was a matter of statutory prescription. However, the Supreme
Court granted the refund in exercise of its powers under Article 142 of
the Constitution of India.
42
2021(13) SCC 754
– 41 –
WA No. 1867 of 2024
48. It is also relevant to refer to the decision of the Supreme Court
in Union of India v. VKC Footsteps (India) (P) Ltd.,43 Although the
said decision was rendered in the context of Section 54 of the Central
Goods and Services Tax Act, 2017 – which provides for refund of
goods and services tax – the following observations are instructive:
“99. We must be cognizant of the fact that no
constitutional right is being asserted to claim a refund,
as there cannot be. Refund is a matter of a statutory
prescription. Parliament was within its legislative
authority in determining whether refunds should be
allowed of unutilised ITC tracing its origin both to input
goods and input services or, as it has legislated, input
goods alone. By its clear stipulation that a refund would
be admissible only where the unutilised ITC has
accumulated on account of the rate of tax on inputs
being higher than the rate of tax on output supplies,
Parliament has confined the refund in the manner which
we have described above. While recognising an
entitlement to refund, it is open to the legislature to
define the circumstances in which a refund can be
claimed. The proviso to Section 54(3) is not a condition
of eligibility (as the assessees’ the counsel submitted)
but a restriction which must govern the grant of refund
under Section 54(3). We, therefore, accept the
submission which has been urged by Mr N.
Venkataraman, learned ASG”.
49. The observations are equally relevant to fees collected under
the statute. It would make little difference whether the refund sought
is of a tax or a fee. Both are statutory exactions. The amounts
collected under the provisions of a statute cannot be refunded in the
absence of a statutory provision for contemplating such a refund.
43
(2022) 2 SCC 603
– 42 –
WA No. 1867 of 2024
There is no inherent right for a party to seek a refund of an amount
paid under the statute. Clearly, the court too has no such inherent
power.
50. The fact that the SARFAESI Act or the Rules made therein do
not specifically provide for refund of fees paid in respect of an
application under Section 17 of the SARFAESI Act or an appeal
under Section 18 of the Act, is indicative of the legislative intent not to
permit refund of such fees. The refund of a statutory levy is a matter
of statutory prescription; the courts do not have any inherent power to
supplant the statutory scheme for providing such a refund.
(D) DRT REFUND RULES ARE NOT APPLICABLE TO FEES
UNDER THE SARFAESI ACT
51. We are also unable to accept that recourse to Rule 4 of the
Debts Recovery Tribunals (Refund of Court Fee) Rules, 2013, is
available for refund of fee paid under Section 17 or 18 of the
SARFAESI Act. The said rules have been made in exercise of
powers conferred under clause (cc) of subsection (2) of Section 36
r/w subsection (3A) of Section 19 of the RDB Act. Section 36 of the
RDB Act empowers the Central Government to make rules by
notification to carry out the provisions of the RDB Act. Sub-section
(3A) of Section 19 of the Act was re-numbered as sub-section (3B)
– 43 –
WA No. 1867 of 2024
with effect from 04.11.2016, by virtue of Act No.44 of 2016. The said
Sub-section reads as under:
“19. Application to the Tribunal.–(1) Where a
bank or a financial institution has to recover any debt
from any person, it may make an application to the
Tribunal within the local limits of whose jurisdiction–
** ** ** **
(3B) If any application filed before the Tribunal
for recovery of any debt is settled prior to the
commencement of the hearing before that Tribunal or at
any stage of the proceedings before the final order is
passed, the applicant may be granted refund to the fees
paid by him at such rates as may be prescribed.”
52. Section 19(3B) of the RDB Act expressly provides that if an
application for recovery of debts, filed before the DRT under Section
19 of the RDB Act, is settled prior to the commencement of the
hearing before the DRT or at any stage of the proceedings before the
final order is passed, the applicant may be granted refund of the fee
paid or at such rates as may be prescribed.
53. It is clear from the above that the provisions of Rule 4 of the
Debts Recovery Tribunals (Refund of Court Fee) Rules, 2013 are
applicable only in respect of court fees or fees paid in respect of
applications filed under the RDB Act. The said rules have no
application for fee collected under the SARFAESI Act or any other
statute. Furthermore, Section 35 of the SARFAESI Act accords a
overriding effect to its provisions over other enactments.
– 44 –
WA No. 1867 of 2024
(E) NO ELEMENT OF DIRECT QUID PRO QUO
54. The learned counsel for respondent Nos.1 and 2 had also
contended that the fee, by its very nature, is for services and since no
services were rendered, the fee is liable to be refunded. The said
contention is misconceived as it assumes that there must be a direct
correlation between payment of fee and receipt of services. The said
assumption is unfounded. There is a distinction between a tax and a
fee inasmuch as it must be in connection with services or in the
nature of a regulatory fee. However, it is not necessary that the
service be rendered directly to the person remitting the fee. There is
no element of a direct quid pro quo between the payor and the
services received. The fee charged may be for the services in
general. Thus, the assumption that the person paying the fee must
receive services commensurate with the fee is erroneous.
55. In State of Tamil Nadu and another v. TVL South India
Sugar Mills Association and others44, the Supreme Court had
observed that the element of quid pro quo, in the strict sense, is not
always sine qua non for a fee, and all that is necessary is that there
should be a reasonable relationship between the levy of fee and
services.
44
2015 13 SCC 748
– 45 –
WA No. 1867 of 2024
56. The fee paid along with the application under Section 17 of the
SARFAESI Act is payable for filing the application in the DRT.
However, it would be erroneous to assume that there is a direct quid
pro quo between the court fee paid and the service received by the
payer.
(F) THE GENERAL CLAUSES ACT
57. We also find no merit in the contention that the power to
receive a fee which is paid in conformity with statutory provisions
would necessarily include the power to refund under the General
Clauses Act, 1897. The learned counsel for respondent Nos.1 and 2
was unable to point out any statutory provisions in the said Act in
support of his contention.
58. The appeal is accordingly allowed. The impugned order is set
aside.
Sd/-
(VIBHU BAKHRU)
CHIEF JUSTICE
Sd/-
(C.M. POONACHA)
JUDGE
KPS/SD/KVM