Provisions relating to Cost in C.P.C.

In civil proceedings, cost shall follow the event. Section 35 of the Code of Civil Procedure contains the provision as to costs. The cost of an incident to all suits are in the discretion of the Court. The court shall have full power to determine by order out of what property and what extent such costs are to be paid. All necessary direction for these purposes will be given by the court. Where the Court directs the costs are not to follow the events the court shall give it in writing.

Section 35-A deals with compensatory costs in respect of false and vexatious claims and defence. If in any suit or proceedings, any party objects to the claim or defence on the ground that the claim or defence on any part of it , as against the objector , is false or vexatious and if thereafter as against the objector, such claim or defence is disallowed, abandoned or withdrawn in whole or in part , the Court if it thinks fit may , after recording its reasons for so holding make an order for payment to the objector by the party by whom such claim or defence was put forward , of costs by way of compensation. No court can make any such order for payment of an amount exceeding three thousand rupees or exceeding the limits of the pecuniary jurisdiction , whichever amount is less. The amount of any compensation awarded under this section in respect of false claim or defence has to be taken into account in any subsequent suit for damages or compensation of such claim or defence.

Section 35-B was amended in the Code of Civil Procedure by amendment act of 1976. It provides for costs for causing delay. Where separate defenses have been raised by the defendant or group of defendants payment of such costs shall be a condition precedent to the further prosecution of the defense by such defendants as have been ordered by Court to pay such costs.

Kinds of Costs

The code provides for the following kinds of costs:

1) General costs-Section 35

2) Miscellaneous costs-Order 20 A

3)Compensatory costs for false and vexatious claim or defences-Section 35-A

4) Costs for causing delay-Section 35-B

(1) General Costs: Section 35 deals with general costs. The object of awarding costs to a litigant is to secure to him the expenses incurred by him in the litigation. It neither  enables the successful party to make any profit out of it nor punishes the opposite party.

(2) Miscellaneous costs: Order 20-A makes specific provision with regard to the power of the court to award costs in respect of certain expenses incurred in giving notices, typing charges, inspection of records, obtaining copies and producing witnesses.

(3) Compensatory Costs: Section 35 A provides for compensatory costs. This section is an exception to the general rule on which Section 35 is based, viz. that the “costs are only an indemnity, and never more than indemnity.” This section is intended to deal with those cases in which  Section 35 does not afford sufficient compensation in the opinion of the court. Under this provision, if the court is satisfied that the litigation was inspired by vexatious motive and was altogether groundless, it can take deterrent action. This section applies only to suits and not to appeals or to revisions. The maximum amount that can be awarded by the court is Rs. 3000/-. But a person against whom an order has been passed is not exempt from any criminal liability. In a subsequent suit for damages or compensation for false, frivolous or vexatious claim or defence, the court will take into account the amount of compensation awarded to the plaintiff under this section.

An order awarding compensatory costs is appellable. But no appeal lies against an order refusing to award compensatory costs. Since such an order can be termed as “case decided”, a revision lies.

(4) Costs for causing delay: Section 35-B is added by the Amendment Act of 1976. It is inserted to put a check upon the delaying tactics of litigating parties. It empowers the court to impose compensatory costs on parties who are responsible for causing delay at any stage of the litigation. Such costs would be irrespective of the ultimate outcome of the litigation. The payment of costs has been a condition precedent for further prosecution of the suit, if the party concerned is a plaintiff and the defence, if the is a defendant.

In Anand Prakash v. Bharat Bhusan, AIR 1981 P&H 269, The court held that  the provisions of Section 35-B are mandatory in nature and, therefore, the court should not allow prosecution of suit or defence, as the case may be, in the event of a party failing to pay costs as directed by the court. If , however, a party is unable to pay costs due to circumstances beyond his control, such as strike of advocates or staff, declaration of the last day for payment of costs as a holiday, etc. the court can extend the time.

In Ashok Kumar v. Ram Kumar (2009) 2 SCC 656 pt p. 659the Supreme Court observed that the present system of levying meager costs in civil matter is wholly unsatisfactory and does not act as a deterrent to vexatious or luxury litigation. More realistic approach relating to costs is the need of the hour.

*Dr. Deepak Miglani, Email id:- [email protected]

Leave a Comment