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      Question

      Under Section 19(3B), if an application is settled

      before or during proceedings, what happens to the fees paid by the applicant?
      A The applicant may be granted a refund of the fees paid at such rates as may be prescribed Correct Answer Incorrect Answer
      B The fees are forfeited in full to the Consolidated Fund of India Correct Answer Incorrect Answer
      C The fees are transferred to the defendant as compensation Correct Answer Incorrect Answer
      D Half the fees are refunded automatically and half forfeited Correct Answer Incorrect Answer
      E No refund is permissible under any circumstances Correct Answer Incorrect Answer

      Solution

      Section 19(3B) (originally numbered 3A and renumbered by the 2016 Amendment) provides that if any application filed before the Tribunal for recovery of debt is settled prior to the commencement of the hearing OR at any stage of the proceedings before the final order is passed, the applicant may be granted a refund of the fees paid at such rates as may be prescribed. This provision encourages out-of-court settlement and negotiated resolution by offering a financial incentive (fee refund) to the applicant bank that opts to settle rather than continue litigation. The rates of refund are prescribed under the rules made under Section 36.

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