Delhi Assembly introduces Court Fee Amendment Act to provide full refunds in amicable settlements

Delhi's new bill proposes a full refund of court fees for all amicable settlements, eliminating the current 50% refund for out-of-court agreements.

New Delhi

Day 2 of the Winter Session in the Delhi Assembly. (HT Photo)

The Delhi government on Tuesday introduced “The Court Fees (Delhi Amendment) Bill, 2026” in the legislative assembly to allow full refund of court fees in cases where disputes are settled amicably, including out-of-court settlements.

Introducing the legislation on the floor of the House, minister Parvesh Verma said that the court fee act of 1870 mandates a court fee of 1.5% under its Section 89.

“In simple words, under the existing law, if the settlement between the two parties occurs by court mechanism, full 100% refund of court fee is provided to the parties, but in cases where the two parties undertake an out-of-court settlement, only 50% of court fee is refunded. Through this Bill, we will provide relief to people and in all settlements, 100% court fee must be refunded,” he said.

Verma told the Assembly that currently, litigants in Delhi get a full refund of court fees only if the court refers the case to alternative dispute resolution mechanisms, such as mediation. The draft Bill has received prior approval from the central government and the recommendation of the lieutenant governor, as required under law, he said.

“For instance, if one has filed a lawsuit seeking compensation of ₹10 lakh, they need to submit a court fee of ₹15,000. Once this Bill is passed, they will get their amount back in entirety, irrespective of mode of settlement,” he said.

Verma, taking a swipe at the Opposition, said that their party name is “Aam Aadmi” but they did not think of the common man. “This amendment removes an unfair distinction between litigants and strengthens the culture of amicable dispute resolution,” he said.

A government official said that the Court Fees Act, 1870, was applicable mainly to civil cases and certain special proceedings. In Delhi, it specifically applies to civil suits filed in civil courts, such as suits for money recovery, declaration, possession, and injunction, among others.

The Delhi Legislative Assembly amended the central act by enacting the Court-Fees (Delhi Amendment) Act, 2010, whereby Section 16A was inserted to extend the benefit of partial refund (50%) of court fees in cases where parties settle disputes amicably outside formal ADR mechanisms.

In 2022, a public interest litigation was filed before the Delhi High Court, challenging Section 16A on the ground that it was discriminatory. “The law department, upon examination, was of the prima facie view that the existing provision requires amendment in order to remove discrimination and to ensure equal treatment to all litigants who resolve their disputes by settlement after reference by the court. PIL was disposed of after noting the intention of the Government to take appropriate legislative action,” the official said.

The proposed amendment seeks to consolidate the refund regime by omitting Section 16A and correspondingly amending Section 16 to provide for a full refund of court fees, irrespective of the mode of settlement.