Full Court Fee Refund on Settlement: Delhi High Court

If you settle a civil suit or appeal in Delhi, you are entitled to get back the full court fee you paid, and you should not have to file a separate application for it. A Division Bench of the Delhi High Court (Justice Anil Kshetarpal and Justice Bharat Parashar) said so in M/s Hitech Enterprises v. M/s Modern Construction Company Delhi, RFA (COMM) 305/2025, reported as 2026 LiveLaw (Del) 905. The ruling rests on a new section 16 of the Court Fees Act, 1870, as amended for Delhi in March 2026. It matters to anyone who has a suit or appeal pending in a Delhi court and is thinking about settling it.

At a glance

Case: M/s Hitech Enterprises v. M/s Modern Construction Company Delhi, RFA (COMM) 305/2025.
Court and bench: Delhi High Court, Division Bench of Justice Anil Kshetarpal and Justice Bharat Parashar.
Decided: September 2026.
Held: full refund of court fee on a settled or compromised suit, counter-claim or appeal is a statutory entitlement under the amended section 16; no separate application is needed.
Directions (as reported): courts should issue the refund certificate along with the order disposing of the settled matter, and the Delhi Government should put a time-bound refund procedure in place.

What was the dispute about?

Two parties were litigating a commercial appeal before the High Court. They settled it. An application was then made for refund of the court fee paid. The question was how much could be refunded and whether a separate application was even needed.

Behind that sits a change in the law. Until March 2026, the refund on settlement was governed by section 16A of the Court Fees Act, which allowed only a part refund. In one Delhi High Court suit decreed in September 2025, for example, the court directed a refund of 50% under section 16A. The question of how that section worked was also pending before another Division Bench in V-Guard Industries Ltd. v. Mahavir Home Appliances & Anr., CS(COMM) 98/2023.

What changed in March 2026

By a notification dated 6 March 2026, the Government of NCT of Delhi enacted the Court Fees (Delhi Amendment) Act, 2026. It substituted a new section 16 and omitted section 16A. A Delhi High Court order of 27 April 2026 (Raghav Lifestyle Products Unit II v. Suzan Michael, CS(COMM) 802/2023) reproduces the new section. It reads:

“Where the parties to a suit or appeal, at any stage of such suit or appeal, settle their dispute amicably, with or without the intervention of the Court and with or without invoking any of the modes of settlement of dispute, referred to in section 89 of the Code of Civil Procedure, 1908 … and the said suit including Counter-claim, if any, or appeal is disposed of as settled/compromised by the court, the plaintiff/Counterclaimant shall be entitled to a certificate from the Court authorizing him to receive back from the collector/competent officer, the full amount of fee, paid in respect of such plaint/counter claim.”

Three things stand out in plain English. The refund is now the full fee, not half. It is available whether you settled with the court’s help or on your own. And it applies at any stage, in a suit or an appeal.

What the Division Bench held

As reported by LiveLaw and Bar & Bench, the Bench held that a full refund of court fee, when a suit, counter-claim or appeal ends as settled or compromised, is a substantive statutory entitlement, not a favour the court may grant or refuse. It also held that no separate application or petition ought to be required once the matter has been disposed of as settled or compromised and the court has issued the certificate. The reports add that the Bench asked the courts to issue the refund certificate at the same time as the settlement order, and asked the Delhi Government to make the refund procedure time-bound. A copy was to go to the Principal District and Sessions Judges.

The reasoning fits the earlier single-judge order. In April 2026, Justice Tushar Rao Gedela applied the new section 16 to a suit where the refund question was still open, noting that the amendment is beneficial and that it appears meant “to incentivise and promote settlement and amicable resolution of disputes”.

Is this new law?

The new law is the amendment itself; the Division Bench ruling tells courts how to apply it. Under the old section the refund was partial. Under the new one, as the Division Bench reads it, the refund follows from the settlement order itself. The amendment is a Delhi amendment, so it applies to Delhi; other states have their own court-fee laws.

What this means for you

If you are a plaintiff, counter-claimant or appellant in a Delhi civil case:

Keep proof of the court fee you paid: the receipts or stamp details filed with the plaint, counter-claim or appeal.
When you settle, make sure the order records that the suit or appeal is disposed of as settled or compromised. The section is triggered by that wording.
Ask the court to issue the refund certificate with the disposal order, as the Division Bench directed, so you do not need a separate application later.
Then present the certificate to the collector or competent officer to receive the money. Check the refund procedure in your court, because the Bench asked the Government to fix a time-bound process.
If an earlier order gave you only half, or left the refund pending, ask your advocate whether the new section 16 now helps you. The April 2026 order shows a court applying it to a pending refund question.

If you are a defendant: the section gives the refund to the plaintiff or counter-claimant who paid the fee, so settlement terms often deal with it. Say so in writing, instead of leaving it to be assumed.

Settlement is never a reason to concede a claim you believe is good. But when you were already inclined to settle, the full refund is a real saving that did not exist a few months ago.

How I approach these cases

When a client tells me a civil matter may settle, I look at the pleadings and the fee paid at the start, draft the settlement terms so that they say the matter is disposed of as settled or compromised, and ask for the refund certificate in the same order. I read the order after it is passed, and check that it says what was agreed. More on civil suits and appeals is on my civil lawyer in Delhi page.

Frequently asked questions

How much court fee can I get back on settlement in Delhi?

Under the amended section 16, the full amount of the fee paid on the plaint or counter-claim, as reported in the Division Bench ruling. Before the amendment, section 16A allowed only a part refund (50% in the 2025 decree noted above).

Do I need to file a separate refund application?

According to reports of the Division Bench ruling, no separate application should be required once the matter is disposed of as settled or compromised and the court has issued the certificate.

Does it apply to appeals as well as suits?

Yes. Section 16 refers to a “suit or appeal”, and the Hitech Enterprises case itself arose from an appeal.

Do I have to go through mediation to qualify?

No. The section applies whether or not the parties use any of the modes in section 89 of the Code of Civil Procedure, and with or without the court’s involvement.