Muhammad Zafar vs Muhammad Sadiq

Form No: HCJD/C-121

ORDER SHEET

LAHORE HIGH COURT

BAHAWALPUR BENCH, BAHAWALPUR

JUDICIAL DEPARTMENT

Regular First Appeal No. 34/2014

Muhammad Zafar Vs.

Muhammad Sadiq S.No. of order/ Date of order/ Order with the signature of the Judge and that of parties or counsel, proceeding Proceeding where necessary

C. M. No.830/2016

12.10.2023 Mr Haroon-ur-Rasheed, Advocate, for the Petitioner. Ms Mehnaz Nadeem Abbasi, Assistant Advocate General

Tariq Saleem Sheikh, J. – The Respondent, Muhammad Sadiq, filed a suit under Order XXXVII of the Code of Civil Procedure 1908 (“CPC”) against the Petitioner/Appellant in the District Court at Bahawalnagar to recover Rs. 310,000/-. The Additional District Judge decreed it with costs in the Respondent’s favour vide judgment and decree dated 28.2.2014. The Petitioner filed RFA No.34/2014 in this Court, which was admitted to regular hearing on 22.5.2014. However, on 29.2.2016, he withdrew the appeal, stating that he had settled his liability out of the court. Now, through this application (C.M. No.830/2016) under section 13 of the Court Fees Act 1870, read with section 151 CPC, he prays for the refund of the court fee of Rs.15,000/- he paid for the appeal.

2.I have heard the Petitioner’s counsel, Mr Haroon-ur- Rasheed, Advocate, and the Assistant Advocate General and have examined the record. Mr Rasheed submits that RFA No. 34/2014 was admitted on 22.5.2014 and withdrawn on 29.2.2016. Despite the fact that the withdrawal occurred one year, nine months and 24 days after the admission, the appeal had not progressed beyond the

in RFA No.34/2014

notice stage. Since the Petitioner did not use a significant amount of court time, he is entitled to a refund of the court fee. Mr Rasheed has relied upon the Supreme Court’s ruling in Sh Riaz-ud-Din v. Aqil-ur-Rehman Siddiqui and others (PLD 1993 SC 76) to support his contention. On the other hand, the Assistant Advocate General contends that RFA No.34/2014 was taken up three times before its withdrawal. Firstly, on 22.5.2014, when it was admitted, and subsequently on two occasions when the Petitioner submitted miscellaneous applications (C.M. Nos. 1085/2015 and 1157/2015). Therefore, the Petitioner’s argument that he did not consume considerable time of this Court is untenable. She argues that the application has no merit and should be dismissed.

3.Sections 13, 14, and 15 of the Court Fees Act 1870 (the “Act”) deal with the refund of the court fee. For our present purposes, section 13 is relevant, which I reproduce below for ready reference:

13.Refund of fee paid on memorandum of appeal.– If an appeal or plaint, which has been rejected by the lower court on any of the grounds mentioned in the Code of Civil Procedure (Act V of 1908) is ordered to be received or if a suit is remanded in appeal, on any of the grounds mentioned in Rule 23, Order XLI of the First Schedule to the said court for a second decision by the lower court, the Appellate Court shall grant to the appellant a certificate, authorizing him to receive back from the Collector the full amount of fee paid on the memorandum of appeal.

Provided that if, in the case of a remand in appeal, the order of remand shall not cover the whole of the subject matter of the suit, the certificate so granted shall not authorize the appellant to receive back more than so much fee as would have been originally payable on the part or parts of such subject matter in respect whereof the suit has been remanded.

4.Sh. Riaz-ud-Din’s case, which Mr Rasheed has cited, is crucial for refunding the court fee. However, before discussing it, I may refer to three other rulings. In Tradewell (Pakistan) v. Standard Bank Limited (PLD 1975 Karachi 178), a Division Bench of the Sindh High Court ruled that where legislation mandates court fees, the court cannot order a refund unless the law explicitly allows it. The court has no inherent power to grant

in RFA No.34/2014

refunds. The Division Bench emphasised that courts have historically exercised their inherent jurisdiction only when the court fee was not legally required to be paid. This typically occurs when a litigant pays it by mistake or is compelled to do so due to a court’s error. The purpose of invoking such jurisdiction is to prevent the government from profiting from such mistakes. The Division Bench pointed out that payment of the prescribed court fee is a fundamental requirement for seeking the court’s assistance in our country. Without this payment, litigants are not entitled to have their cases heard. The obligation to pay the court fee is not contingent on the outcome of the proceedings, and it applies irrespective of whether or not the case is heard on its merits. Allowing refunds in situations other than those specified would essentially enable a litigant to circumvent the law and avoid his responsibility to pay court fees. The court must uphold the law and ensure its strict compliance.

5.In Bhola v. Sardar Muhammad (PLD 1976 Lahore 1268), Muhammad Afzal Zullah J. of this Court made several important observations. He noted that (i) the consensus among legal authorities is that sections 13, 14, and 15 of the Court Fees Act do not provide an exhaustive list of grounds for the refund of court fees, (ii) the court possesses inherent powers to issue refunds for court fees in cases not explicitly covered by the aforesaid sections, and (iii) the decision to grant a refund certificate in its inherent jurisdiction is at the discretion of the court. The following could be some of the relevant factors which the court might consider when exercising this discretion: the length of proceedings compared to the matter’s progress and hearing; the fault, if any, committed by any party; and the benefit, if any, derived by the party concerned through the filing of the proceedings. The learned Judge posited that because the law recognizes the principle of refunding court fees, it is reasonable to presume that in situations not covered by the strict letter of the law, the court is not bound to issue a refund but retains the power to exercise its inherent

in RFA No.34/2014

jurisdiction at its discretion. His Lordship also drew support from clause (d) of Article 37 of the Constitution in arriving at his conclusions. This particular clause encapsulates one of the Principles of Policy mandating the State to “ensure inexpensive and expeditious justice”.

6.In Nabi Bux Khan Bhurgari v. National Bank of Pakistan (PLD 1988 Karachi 24), the Sindh High Court ruled that section 13 of the Act can be supplemented by additional grounds using inherent powers, provided that such exercise of power is solely in the interest of justice.

7.The Supreme Court resolved the above conflict of views in Sh. Riaz-ud-Din’s case, supra. It held:

“Under Article 2-A of the Constitution of 1973 (as amended in 1985), the State is obligated to further the ends of social justice which, inter alia, obligate it to ‘ensure inexpensive and expeditious justice’ [see Article 37(d) of the Constitution]. To require a party to pay court fee in a proceeding where the parties have compromised their dispute outside the court and decided to withdraw the proceedings pending before the court, thereby not burdening it (the court) to expend its valuable time in examining the case, in hearing arguments in connection therewith, deliberating over the judgment thereon and then in formally taking time to write it manifestly defeats the above mandate of the Constitution as it penalizes the party for approaching the court, instead of assisting it to obtain inexpensive and speedy justice. It was incumbent upon the High Court to adopt the interpretation which furthered the objectives of the Constitution rather than negated them.”

8.The rule enunciated by the Supreme Court is binding on all courts in Pakistan under Article 189 of the Constitution. It has, therefore, been consistently followed. See, for instance, Jam Ghulam Mustafa v. Muhammad Latif (1995 CLC 1931) and Liaquat Hussain v. Saudi Air Line (2011 CLC 314). Nevertheless, in Fateh Khan v. Province of Punjab (1995 CLC 111), a Division Bench of this Court held that the applicant’s conduct is a relevant consideration while deciding his request for a refund of the court fee. It added that refunds should be directed to prevent injustice. In Haji Shah Nawaz v. Chaudhry Corporation (2002 YLR 1628), another Division Bench of this Court ruled that section 13 of the Act is not exhaustive and that the refund of the

in RFA No.34/2014

court fee can be ordered on similar and analogous grounds. For this purpose, the court may also invoke its inherent power under section 151 CPC. Nevertheless, the crucial determinant for exercising judicial discretion in favour of an applicant lies in his overall conduct during the proceedings. If an applicant’s conduct lacks bona fides, he will not be entitled to this discretionary relief.

9.Coming back to RFA No.34/2014, it is observed that this Court admitted the appeal on 22.5.2014. The Petitioner withdrew it on 29.2.2016 due to a settlement with the Respondent. The case was still at the notice stage at the time of withdrawal because the Respondent had not yet been served. In these circumstances, it is a fit case for the refund of the court fee.

10.The next question is whether the Petitioner should receive a full or partial refund. The Bhola’s case established that the pivotal factors in determining the court fee refund amount include the stage at which the proceedings culminated and the advantage gained by the party seeking the refund. In Bhola, the learned Judge refunded only half of the court fee. Two factors influenced his decision: firstly, although the appeal was admitted in routine, being a first appeal, the High Court did consider a miscellaneous application for a stay order submitted alongside the main appeal. Secondly, it was evident that the filing of the appeal provided the parties with an opportunity to resolve the matter through an extrajudicial settlement that might not have otherwise been available.

11.In the present case, the Petitioner made two miscellaneous applications which were dismissed in limine on 20.3.2015 and 26.3.2015, respectively, before withdrawing the appeal on 29.2.2016. Considering the decision in Bhola, in my opinion, the Petitioner is not entitled to a complete refund of the court fee he paid for the appeal. Nevertheless, I cannot ignore that he filed this application for a refund (i.e. C.M. No. 830/2016) on 01.03.2016, which remained undecided for several years without any fault on his part. Therefore, it would be just to refund him

in RFA No.34/2014

Rs.14,500/- against his claim of Rs. 15,000/-. A refund certificate shall be issued accordingly.

12.Disposed of.

(Tariq Saleem Sheikh) Judge Naeem

Announced in open court on ____________________.

Judge Approved for reporting

Judge