Section 89 of The Code of Civil Procedure, 1908

The provisions of Section 89 of The Code of Civil Procedure, 1908 must be understood in the backdrop of longstanding proliferation of litigation in Civil Courts, which has placed undue burden on the judicial system, forcing speedy justice to become a casualty. The purpose, being sacrosanct and imperative for effecting timely justice in Indian Courts, also informs Section 69­A of The Tamil Nadu Court Fees and Suit Valuation Act, 1955 which further encourages settlements by providing for refund of Court Fee. The purpose of Section 69­A is to reward parties who have chosen to withdraw their litigations in favor of more conciliatory dispute settlement mechanisms, thus saving the time and resources of the Court, by enabling them to claim refund of the Court Fees deposited by them. Such refund of Court Fee, though may not be connected to the substance of the dispute between the parties, is certainly an ancillary economic incentive for pushing them towards exploring alternative methods of dispute settlement. In our view, there is no justifiable reason why Section 69­A should only incentivize the methods of Out-­of-Court settlement stated in Section 89, CPC and afford step­-brotherly treatment to other methods availed of by the parties. The importance of private amicable negotiation between the parties cannot be understated.

It is well­-settled, 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 provisions to cover situations which are not strictly encapsulated in the language used therein.

Section 89, CPC shall cover, and the benefit of Section 69­A of 1955 Act shall also extend to, all methods of Out-­of-Court settlement between parties the Court subsequently finds to have been legally arrived at. This would, thus, cover the present controversy, wherein a private settlement was arrived at.

Hon’ble Justice Mohan M. Shantanagoudar, High Court of Judicature at Madras v. M.C. Subramaniam, [SLP (Civil) Nos. 3063-3064 of 2021].