Case Note & Summary
The first petitioner, Nagpur District Central Cooperative Bank Ltd., a cooperative society registered under the Maharashtra Cooperative Societies Act, 1960, engaged in banking business, had filed recovery applications before the Debts Recovery Tribunal, Nagpur, under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, depositing court fees of Rs. 1,27,000. The Supreme Court subsequently ruled that cooperative banks do not fall within the definition of 'banking company' under Section 5(c) of the Banking Regulations Act, 1949, rendering the provisions of the 1993 Act inapplicable. Consequently, the DRT returned the original application on 13 March 2008 for presentation before the competent forum. The petitioner bank then applied for refund of the court fees via M.A. No. 39 of 2008, but the Presiding Officer of the DRT, by order dated 10 June 2008, refused to refund the amount. The petitioners challenged this order by filing the present writ petition under Articles 226 and 227 of the Constitution of India. The sole issue before the High Court was whether the petitioners were entitled to a refund of the court fees upon return of the proceeding for want of jurisdiction. The court noted that neither the Debts Recovery Tribunal (Procedure) Rules, 1993, nor the Debts Recovery Tribunals (Refund of Court Fees) Rules, 2013, contained a specific provision for refund in such circumstances. The latter provided for refund only upon settlement of matters. The court then turned to general principles and precedents. Relying on decisions such as Rhoda Jal Mehta v. Homi Framroze Mehta (1989 Mh.L.J. 124), Dr. (Col.) Subhash Chandra Talwar v. T. Choithram and sons (decided 25.10.2019), Chandra Prem Shah v. K. Raheja Universal Pvt. Ltd. (2015(5) Mh.L.J. 714), and Anglo-French Drug Co. (Eastern) Ltd. v. The State of Bombay (AIR 1951 Bom. 130), the court held that when a plaint or original application is returned for want of jurisdiction under Order VII Rule 10 of the Code of Civil Procedure, 1908, the court has inherent power under Section 151 of the CPC to order refund of the court fees. The rationale is that since no adjudication on merits has taken place and the party is required to pay court fees again before the competent forum, it would be unjust to deny refund. The court also referred to Allahabad Bank v. Radha Krishna Maity (AIR 1999 SC 3426) to emphasize that the Tribunal has wide powers. Finding no express provision barring refund, and noting that the respondents did not point to any such restriction, the High Court held that the impugned order was unsustainable. It set aside the DRT’s order dated 10 June 2008 and directed refund of the entire court fees of Rs. 1,27,000 to the petitioners, without interest. The writ petition was allowed, and rule was made absolute with no order as to costs.
Headnote
A) Court Fees and Costs - Refund of Court Fees on Return of Plaint/Application - Inherent Power to Refund - Code of Civil Procedure, 1908, Section 151 - The cooperative bank's original application before Debts Recovery Tribunal was returned for want of jurisdiction after the Supreme Court held cooperative banks are not banking companies under the Banking Regulation Act, 1949. The Tribunal refused to refund court fees of Rs. 1,27,000. The High Court held that where a proceeding is returned for want of jurisdiction and no merits are adjudicated, the court has inherent power under Section 151 CPC to order refund of court fees to prevent double payment. The Tribunal's order was set aside and full refund directed (Paras 4-11).
Issue of Consideration
Whether the petitioners are entitled to refund of court fees deposited before Debts Recovery Tribunal after the original application was returned for want of jurisdiction.
Final Decision
Allowed petition; set aside DRT order dated 10.06.2008 and directed refund of entire court fees of Rs. 1,27,000 to petitioners without interest.
Law Points
- Legal points not extracted
- cooperative bank not a banking company under Banking Regulation Act 1949
- DRT lacks jurisdiction over cooperative bank recovery
- inherent power of court to refund court fees under Section 151 CPC on return of proceeding
- no need for specific statutory provision for refund
- return of plaint entitles full court fee refund
- liberal interpretation of fiscal statutes
