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An analysis of effect of cost under CPC
Submitted by-
Rajat Chopra
Semester-X Roll no.-113
Section-A
Submitted to-
Mr. Vishal Dixit
Faculty, CPC
HIDAYATULLAH NATIONAL LAW UNIVERSITY
ATAL NAGAR, NEW RAIPUR, CHHATTISGARH
ACKNOWLEDGEMENT
At the very outset I would like to pay thanks to the almighty God. It gives me immense pleasure
to acknowledge and pay thanks to the persons who helped me throughout the course of my
work. I am really thankful to our respected subject teacher,Mr. Vishal Dixit Faculty,HNLU, under
whos abled guidance the present project has been done. She helped me in a passive way and
guided me in different matters regarding the topic. She had been very kind and patient while
suggesting me the outline of this project.
I thank her for her overall support, constructive suggestions while which have always been
soothing and had desired effects, hence it is my obligation to express my gratitude for her
constant support and encouragement.
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Rajat Chopra
Semester-IX
CONTENTS
Acknowledgement........................................................02
Introduction.................................... ....... .......................04
Meaning of cost under the code....................................05
Kinds of cost....................................................................06
Imposition of code............................................................06
Discretion of court...........................................................09
Cost against Government.................................................11
Appeal against Cost.................................. .. . .................13
History of section......................... ....................................14
Compensatory cost..............................................................15
Powers of court......................................................................17
Conclusion................................... . ..................................23
References.............................................................................25
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Introduction
Cost is expenses incurred in the action. They are in the nature of incidental damages allowed
to the successful party to indemnify him against the expenses of asserting his rights in Court,
when the necessity for so doing caused by the other's breach of legal duty Otherwise defined,
costs the sums prescribed by law as charges for the services enumerated in the fee bill. They
have reference only to the parties and the amounts paid them, and only those expenditures
which are by statute taxable and to be included in the judgement fall within the term 'costs'
The general rule is that the successful party is entitled to costs unless he is guilty of
misconduct, negligence or omission or unless there is some other good cause for not allowing
costs. The same rule is expressed by the expression “Costs follow the event”, i.e., costs
follow the result of the suit. The drastic step of imposing costs must be taken and used
very cautiously, sparingly and only in cases where the Court is certain that there is an
absolutely false case of defence. To the Supreme Court it is clear that merely because a court
does not accept a case or defence is no ground for granting high interest or costs. It must also
be mentioned that the special courts Act provides that the Civil Procedure Code does not
apply. Provision of costs have been incorporated in section 35, 35-A, 35-B and section 95 of
CPC for the purpose of acting as a deterrence against frivolous vexatious claims made. But
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the working of the provision shows that many unscrupulous parties take advantage of the fact
that either the costs are not awarded or nominal costs are awarded on the unsuccessful party.
In Salem Advocates Bar Association V. Union of India the Supreme court held that the
costs have to be actual and reasonable, including the cost of the time spent by the successful
party, the transportation and lodging, if any, or any other incidental cost besides the payment
of the court fee, lawyer's fee, typing and other cost in relation to the litigation. It is for the
High Courts to examine these aspects and wherever necessary make requisite rules.
Meaning of cost under the code
According to Black’s Law Dictionary “costs is a pecuniary allowance made to the successful
party for his expenses in prosecuting or defending a suit or a distinct proceeding with a suit”.
Cost are an allowance to the party for expenses incurring in prosecuting or defending a
suit, an incident to the judgment. In England the term is also used to designate the charges
which an attorney or solicitor is entitled to make and recover from his client, as his
remuneration for professional services, such a legal advice, attendances, drafting,
conducting legal proceedings etc. Costs are at the discretion of the court. The said discretion
must be exercised on sound legal principles and not by caprice, chance or humour. No
hard and fast rules can be laid down and the discretion must be exercised considering the facts
and circumstances of each case. Normally, costs to follow the event and the successful party
are entitled to costs unless there are good grounds for depriving him of that right. To put it
differently the loser pays costs to the winner. However it does not always depend on who wins
and losses in the end. Even a successful party may be deprived of costs if he is guilty of
misconduct or there are other reasons to do so. Section 35 (2) expressly provides that when the
court orders that cost should not follow the event, it must record reasons for doing so.
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Kinds of cost
The code provides for following types of cost:
1. General costs under Section 35 of the code;
2. Miscellaneous costs-Order XX-A of the code;
3. Compensatory costs for false and vexatious claim or
defences under Section 35-A and
4. Costs for causing delay under section 35 of the code.
Imposition of costs
The costs may be justifiably made payable to the High Court Legal Services Committee
or other Legal Services Authorities, where before the other side is served or represented,
the Court wants to penalise a petitioner for lapses, omissions or delays, as for example,
where the petitioner fails to pay the process fee for service of respondents, or fails to
cure defects or comply with office objections, or where there is delay in refiling of petitions.
Once the other side is represented the costs levied by reason of any attempt by a party to delay
the proceedings should normally be for the benefit of the other party who has suffered
due to such conduct. Only where both the parties are at fault, costs may be ordered to be paid
to legal services authority. But this should be sparingly used. Normally it is in the discretion of
the Court. When the Court, in the light of the facts before it, satisfied that the defendant wanted
to delay the proceedings and ordered him to pay costs of attain amount, it would not be
appropriate to interfere with that part of the order.
In the case of Banwarilal B. Purohit v. Vilas Muttemwar & ors
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Where election petition was filed on the ground of tampering of electronic voting
machine (EMS) but there was no substantive evidence in support of such allegation, the
election petition dismissed with costs. Unless and until loopholes in the security are at least
suggestively proved, distinguishable from barely alleged, burden to disprove whatever,
facts sought to be proved by the petitioner, did not shift on the respondents. Moreover, any
such burden did never primarily rest on the returned candidate. As regards charge of non-
compliance with provisions of rules or orders made under representation of the People Act or
hand book for Returning Officers, perusal of evidence and analysis reveals that testimony
of petitioner has status of hearsay. Petitioner has named his son as an Election agent
and attributes some knowledge to him, however he has not been examined nor has a single
polling agent been examined to prove alleged lapses in following the provisions of hand
book in conducing mock polls etc. The responsibility to prove the factual aspect about
lack of security and failure to comply certain stages, did rest on the petitioner, which was
very limited. The evidence that is within the power and control of the Election Petitioner
has to be executed to come before the Court, present is not a case where the petitioner has
pleaded any of the violations contemplated by clause.
(a) to (c) of Section 100 (1) of the Representation of the
People Act. His case also does not fall in sub-Clause (i), (ii)
and (iii) of Clause (d) of Section 100(1).
Provision of cost under section 35 of the code
Costs as penalty
Whatever the origin of course might have been, they are not awarded, as a punishment for
defeated party but as a re-compensate to the successful party for the expenses to which
he had been subjected. Far removed from the days when the plaintiff who failed, was punished
in amercement pro falco calamore (pecuniary punishment for a false claim) and the defendant
comma where the judgment was against him in misericordia cum expense litis (expenses
incurred for unreasonable defense) for hey a just details on to the plaintiff’s rights. Costs
cannot be imposed beyond the Costs of suit. it is not according to law to give to a party by way
of damages, the cost as between attorney and client of the litigation in which the damages are
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recovered.' where a review application was misconceived but both the parties were at fault,
exemplary costs were not awarded but normal cost were awarded.
In the case of Harsh Wood Products v. state the assessor of Delhi Municipal Corporation
determined the rental value and the rateable value of the property situated in Delhi and also
determined the tax payable thereon. Thereafter the owner filed a suit in the court in the
State of Uttar Pradesh for declaration that the assessment ordered passed by the
assessor of Delhi Municipal Corporation was illegal, invalid and void ab initio and for
prohibitory injunction against the attachment of the owners property. The decree for
prohibitory injunction restraining Municipal Corporation from attachment of owner’s
property was passed ex parte. The fact that the appeal against the assessment order was
pending, was deliberately suppressed. Such practices of gross abuse of the processes of the
court ought to be down with a stern hand so that similarly-minded others may desist from
indulging in similar acts. Exemplary cost, in a sum of Rs 50,000 was awarded against the
legal representative of the deceased owner.
Discretion of the court
Cost to be awarded under this section are entirely in the discretion of the court. But like
all other descriptions, discretion to avoid costs also should be exercised judicially, properly
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and on sound legal principles. No hard and fast rule can be laid down and exercise of
discretion will depend upon the facts and circumstances of each case including the
length of trying, questions in board in the preceding, conduct of the parties, before, during
and after the suit, etc.
The court has also power to determine by whom, out of
what property and to what extent costs are to be paid.
Cost shall follow the event
Normally, costs should follow the event and the successful party is entitled to costs unless there
are good grounds for depriving him of that right. However, it does not always depend on
who wins and who losers in the end. A conduct or such other reasons, cost may be awarded
to an unsuccessful litigant where he fails to get relief on some technical ground. Where
the success is divided, the court may will leave the parties to be there on costs. The court
also not award costs to the successful party if he had remained absent or is not called
upon to argue. The maxim ‘the cost shall follow the event’ means that the party who
succeeds in the action is entitled to get cost of the action. However, where the action in form
separate issues, the Term event should be read this distributive of any particular issues
should go to the party is success on that issue comma with arising are the different cause of
action or under the same cause of action.
By whom costs are to be paid?
As a general rule, an order for costs can be made against a party to the proceeding. Where there
is more than one Party before the court, it has to decide who shall beer the costs. But in
exceptional cases stranger also can be made liable for the costs. Great care and caution,
however, must be exercise before is human power to avoid cost cancer stranger.
Likewise, where a party to a litigation disease caused from a stranger to the litigation, he must
at an appropriate stage of the proceedings, raise the point before the court, so that the
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court, if it thinks proper to do so, implead The stranger as a party to the litigation and upon
him an opportunity of hearing before passing an order. Cost can be awarded against
incontinence things respondent if they are responsible for setting the law motion.
To what extent costs are to be
awarded?
The court has power to determine the extents of costs in a suit or proceeding. Where is it
contains various reliefs, cost can be awarded to the plaintiff in proportional to success that
is on the amount recovered and not on the amount claimed. In case of partial decree, costs
may be awarded to the both the party that is to the plaintiff as well as to the defendant in
proportion unless they are reasons for not adopting such a course.
Costs against Government
The government, in an unsuccessful litigation, is liable to pay costs like any other
unsuccessful party. Irreversible damage had occurred to the eyes of a patient, operated upon
in an eye camp. Social organisation espoused the cause of unfortunate victims and prosecuted
it with diligence. State government was saddled with costs of the organisation, in the
circumstances. The distribution of surplus land by the revenue authority were done with
unjust and undue haste. The action performed on the part of was found to be mala-fide against
the petitioner hence a cost of Rs 5000 was against the revenue authority. While the state
cannot be treated differently from any other litigant in the matter of condonation of delay,
the court is 'bound' to take into consideration the following factors:
a) Red-tapism in government;
b) Delays in correspondence;
c) Habitual indifference of government officials or governments pleaders as distinct
from the usual diligence of ordinary litigant or lawyers for private parties;
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d) Collusion or negligence by government officers or government pleaders or fraud;
e) Damage to public interest or to public funds or interests of the state;
f) Institutional or bureaucratic procedure as well as delays arising thereon; and
g) Need to render substantial justice on merits.
In the circumstances, an application for condonation of delay under section 5 of the
Limitation Act, 1963 was allowed subject to cost of Rs 5,000 to be paid to the Legal Aid
Board by the government initially and later fix the reasonability of delay on the
concerned officers or employees and recover the same from them. The petitioner has lost the
best period of his life due to the callous and unjust attitude of the Calcutta University, hence,
he should be adequately compensated. The case was pending for a period of seven years
and on a number of occasion the case had to be adjourned, therefore, a cost of Rs 10,000
]
was imposed against the university . The building of the petitioner company was
unauthorisedly demolished by Regional Development Authority, hence, a cost of Rs50,000
was awarded by the court against the Regional Development Authority. The telephone
connection of the petitioner, a doctor, was arbitrarily disconnected on account of non-
payment of bill. In the facts and circumstance of the case, a cost of Rs 20,000 was awarded in
favour of the petitioner .
Cost upon advocate
The section does not confer any disciplinary jurisdiction and a legal practitioner cannot be
ordered personally to pay the costs of an application which is an abuse of the process of the
court but a solicitor who purports to act for a non-existent party is personally liable to
pay costs. Where an advocates filed a petition not maintainable and it appeared that the parties
concerned not the Supreme Court ordered him to pay the costs personally. The court has a
discretion to award cost against a legal practitioner who has been found guilty of professional
misconduct.
Costs were not allowed
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Where the successful parties were ordered to get back to the employment, the costs were not
allowed in their favour. Where the controversy arose because of relevant provisions were not
free from ambiguity, the parties may be directed to bear their own costs throughout. Where
an appeal in the Supreme Court is allowed but the appellant had not appeared before the
High Court to assist the Court. There will be no order as to costs to the appeal in Supreme
Court. No order was passed as to costs on dismissal of application in view of personal
appearance of the applicant.
Appeal against costs
The question of appeal ability of an order as to costs can be
discussed under three heads:
1. Where the direction is in a decree.
2. Where the direction is in an appealable order;
3. Where the direction is in a non-appealable order.
Direction in degree
Every degree is appealable, but a decree may contain
1. A decision on the rights of the parties and;
2. A direction as to costs.
In respect of cases Falling in the first category and an appeal will be competent under section
96 of the code. Regarding the second category, however, the position is different. It is settled
law that the award of costs is entirely within the discretion of the court and, hence, ordinarily
no appeal lies unless or as to payment of course in warm a matter of principle. Generally,
an appeal against an order of costs lies on the following grounds:
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1. Where there has been no real exercise of discretion by the court in making an order as
to costs e.g a successful party is deprived of cost without a valid reason or an
unsuccessful party has been awarded costs or
2. Where there is abuse of discretion by the court in passing an order as to costs e.g
awarding costs in violation of statutory provision (o. 34 rule 7 and 10) or granting cost to the
plaintiff even though a major portion of his claim is dismissed, etc. In such cases, the order as
to costs involves a matter of principle
3. Where the order as because is based on a misapprehension of fact or law.
Direction in appealable order
Certain orders are applicable. Where the direction is in an order which is appealable, an
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appeal may lie from that part of the order which relates to cost .
Discretion in non- appealable order
All others except those referred to above are non- appealable. The order itself being
non- appealable, a direction as to costs contained therein is also not appealable. Thus, no
appeal lies against a direction as to costs made in an order granting adjournment. Similarly,
an order as to costs passed in an application for transfer under section 34 is not applicable.
Provision of cost under section 35-
A
History of the section.
This section was added into the Code by Act 9 of 1922, and by section 7 of the Code of Civil
Procedure (Amendment) Act, 1951, in the first proviso to sub- section (2) the words and letter
or under a corresponding law in force in a Part B State' were inserted after the figures '1887'
and the words 'under such Acts or law were substituted for the words under that Act'.
The section did not come into operation until the local government, with the previous
sanction of the Governor-General in Council, by notification in the local Official Gazette,
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directed that the Act shall come into force in the province on such date as may be specified
in the notification. But, now, by section 19 of the Code of Civil Procedure (Amendment)
Act, 1951, this section, together with other amendments made by the said Act IX of 1922,
has been extended to the whole of India except a few states specified in section 1, sub-section
(3) of the Code. By the Civil Procedure Code Amendment Act, 1956, in sub-clause
(1) the words 'including an execution proceeding but excluding' were substituted for the
words not being and the words 'if it so thinks fit' were substituted for the words 'if the
objection has been taken at the earliest opportunity and if it is satisfied of the justice thereof'.
In sub-clause (2) the words 'in any part of India to which the said Act does not extend' were
substituted for 'a Part B State' by the Adaptation of Laws 2 of 1956. The Amendment Act,
1976, has further amended sub-section 1 to exclude from its operation revision
proceedings. By substituting for the words 'one thousand rupees' the words 'three thousand
rupees' the legislature has as a deterrent to false or vexatious claims and defences, authorised
the courts to award a higher amount by way of compensation
Compensatory costs in respect of
false or vexatious
claims or defences
If in any suit or other proceeding, including an execution proceeding but excluding an appeal
or a revision, any party objects to the claim or defence on the ground that the claim or defence
or any part of it is, as against the objector, false or vexatious to the knowledge of the party by
whom it has been put forward, 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 so thinks fit, may,
after recording its reasons for holding such claim or defence to be false or vexatious,
make an order for the payment to the objector by the party by whom such claim or defence
has been put forward, of costs by way of compensation. The compensatory or exemplary
costs under Section 35A C.P.C. can be awarded only by a Trial Court and not by a court sitting
in an appeal or revision. The appellate court has no jurisdiction to grant or impose
compensatory costs even if the claim or defence raised by the parties is false, vexatious
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or frivolous. The award of compensatory costs is in the exclusive realm of the Trial Court.
In the case of
Manak Lal and others v. Mahendra Singh and another
The impugned order of the Additional District Judge, by which he directed the appellants
to pay a sum Rs. 2000/- as compensatory costs. to the respondent (defendants) cannot be
maintained. The imposition of compensatory costs on the appellants by the Additional
District Judge in appeals is wholly erroneous and illegal.
In Gian Chand Goel v. Inderjit Agarwal it was contended that compensatory costs
could be awarded by the appellate authority as Section 35A was not applicable to the
proceedings under Rent Act. It was found that as a matter of fact the compensatory costs were
awarded by the learned judge because of the conduct of the judgement-debtor. This conduct
of the judgement-debtor is quite apparent even now when he filed a separate suit for declaration
challenging the said orders of the Rent Controller as well as the Appellate Authority. As a
matter of fact it was inherent in the jurisdiction of the appellate authority toward
compensatory costs if it found that the conduct of a party was not above board., In this case
admittedly the objector is an advocate and it has rightly been observed by the appellate
authority that his conduct was not becoming that of an advocate. In these circumstances the
executing court rightly came to the conclusion that it could not go behind the order and was
bound to execute the same as such. Where suit for recovery of money filed against Secretary
of Society for shortage of stock, there was nothing in the minutes or any other valid
evidence to show that secretary had any hand in the shortage rather it was found that he was
not at all present during relevant days.
Powers of the court
Cost is awarded in a civil or quasi criminal action to compensate the winning party for
the expenses incurred in that action. For a case of vexatious nature, there is a provision
in the Code of Civil Procedure for award of costs by way of compensation. The cost so
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allowed is to be taken into account in any suit for damages in respect of such vexatious
claim. But in awarding cost no account is taken of any injury to property right. Person
suffering injury to property right cannot be left without any remedy. A person, who is
deprived of exercising the acts of ownership over his property by a direct act of another
Person or through a motion in a law court at his instance, is certainly entitled to such
damages as are necessary and proximate result thereof. When such act of that other person
was intentional it is of no avail to him to urge that he acted bona fide for which he had
reasonable ground. It is not necessary for the person injured to prove any malice or
want of reasonable or probable cause. Any person should not be allowed to suffer
for an intentional act of other. All these are bases upon sound principles of equity
and justice." In this case reference to a Privy Council decision in Mohd. Amin v.
Jogendra Kumar Banerjee, is also made. In that case, the Privy Council was dealing with
an action for malicious prosecution and not for an action arising out of a civil suit for
damages for filing a false and vexatious civil suit. It is, clear that the observations made by
the Privy Council as to non-maintainability of an action for falsely and maliciously
prosecuting an ordinary civil action were actually not of the Judges deciding Mohd.Amin's
case but were from a decision of Bowen L.J. Quariz Hill Consolidated Gold Mining
Co. v. Eyre. Discussing the arguments in favour and against the question of
maintainability of the action assuming that a civil suit did not lie for recovering damages
for false and vexatious civil proceedings the Privy Council observed that the reason why
the action does not lie for falsely and maliciously prosecuting an ordinary civil action is
that such a does not necessarily and naturally involve damage to party sued.
Provision of cost under section
35B of the code
Costs for causing delay
As per section 35 of the code,
If, on any date fixed for the hearing of a suit or for taking
any step therein, a party to the suit—
a. Fails to take the step which he was required by or under this Code to take on that date, or
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b. Obtains an adjournment for taking such step or for producing evidence or on any
other ground, the court may, for reasons to be recorded, make an order requiring such party
to pay to the other party such costs, as would, in the opinion of the court, be reasonably
sufficient to reimburse the other party in respect of the expenses incurred by him in
attending the court on that date, and payment of such costs, on the date next following the
date of such order, shall be a condition precedent to the further prosecution of,
a. The suit by the plaintiff, where the plaintiff was ordered to pay such costs,
b. The defence by the defendant, where the defendant was ordered to pay such costs.
Explanation: Where separate defences have been raised by the defendants or groups of
defendants, payment of such costs shall be a condition precedent to the further prosecution
of the defence by such defendants or groups of defendants as have been ordered by the court
to pay such costs.
(2) The costs, ordered to be paid under sub-section (1), shall not, if paid, be included in the
costs awarded in the decree passed in the suit; but, if such costs are not paid, a separate order
shall be drawn up indicating the amount of such costs and the names and addresses of the
persons by whom such costs are payable and the order so drawn up shall be executable
against such persons.
History of the Section
Section 35B was inserted for the first time by Amendment Act of 1976, giving discretion to
the court to impose compensatory costs on the parties responsible for delaying the
proceedings of the case to come to a correct finding it would be useful to note as to why Section
35-B found place in the code. As is apparent from the heading of the section, it was thought
proper that some costs should be awarded for causing delay. This matter received the attention
of the Law Commission and it recommended that a new section, namely, Section 35-B be
added to the Code. Before giving its recommendations, the Commission solicited views by
issuing a questionnaire. After having gone through the replies, the recommendation of
the commission was as below-
"We have taken into consideration the opinions expressed we have come to the conclusion
that while it may not be wise to have a rigid provision, it would be useful to give a discretion
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to the court to take into account such delay. This should at least have the utility of focussing
attention on this aspect". The commission therefore recommended insertion of Section 35-
B while introducing the Code of Civil Procedure (Amendment) Bill, the recommendation
was somewhat modified as the relevant clause inserted in the Bill read as below:
"35B. While making an order for costs in a suit or proceeding, the court may, for
reasons to be recorded, required the party to the suit or proceeding, to pay such costs,
commensurate with the delay so caused, as it thinks if, and the costs so required to be paid shall
not be included in the costs awarded in the decree or order which is ultimately made in the suit
or proceedings"
Statement in the notes on clause about this insertion was as below
"Sometimes, a party, though successful in the litigation, is responsible for causing undue
delay in respect of particular stages of the litigation. It is but fair that such delay should be
taken into account while awarding costs. More often than not, solvent parties resort to dilatory
tactics to cripple the opposite party. Instances are also not rare where a party with a bad case
tries to delay the matter. In some other cases, the litigation is aimed at delaying the relief
to which the opposite party is entitled. New Section 35B is, therefore, being inserted to
give to the court a discretion to impose compensatory costs on parties who are responsible
for delaying any stage of litigation and such.
Miscellaneous cost under order
XX-A of the code
Order XX-A provides for payment of costs in special circumstances. These special
circumstances as mentioned under Rule 1 are as follows-
a) Expenditure on notices required to be issued under the law by the parties.
b) Expenditure on notices not required to be issued under the law by the parties.
c) Expenditure incurred on typing, writing, printing, etc. of pleadings.
d) Charges paid by parties for inspection of documents.
e) Expenditures on witnesses even though not summoned through the court.
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f) In case of appeals, expenses incurred by parties for obtaining any copies of the
pleadings, judgment, decrees, etc.
Rule 2 provides that costs under this provision shall be paid in accordance with rules made by
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the High Court. In Salem Advocate Bar Association case , the Supreme Court adverted
to certain items of costs including those set out in order XXA. The following passage deserves
notice:
“The costs have to be actual reasonable costs including the cost of the time spent by the
successful party, the transportation and lodging, if any, or any other incidental cost besides
the payment of the court fee, lawyer’s fee, typing and other cost in relation to the litigation.
It is for the High Courts to examine these aspects and wherever necessary make requisite
rules, regulations or practice direction so as to provide appropriate guidelines for the
subordinate courts to follow.” Obviously, the expression “actual reasonable or realistic
costs”, an expression used in Sanjeev Kumar Jain’s case, is meant to convey the idea that the
costs should be based on actuals in regard to certain items and secondly, the scale of costs
awardable should be realistic, not fanciful or meagre. The word ‘actual’ ought to be read as a
separate word and not descriptive of ‘realistic or reasonable costs’. Otherwise, it would not
make proper sense. It may be mentioned that the same expression has been repeated in
Sanjeev Kumar Jain’s case. However, the Court explained that the “actual realistic costs
should bear a correlation to costs which are realistic and practical.” Further, it was clarified:
“even if actual costs have to be awarded, it should be realistic which means what a normal
advocate in a case of such nature would charge normally in such a case”. The observation
is“the object is to streamline the award of costs and simplify the process of assessment, while
making the costs ‘actual and realistic’ ” gives an indication that the two words ‘actual’
and ‘realistic’ are to be read separately. For instance, it has been pointed out that as far as the
advocates’ fee is concerned, the emphasis should be on ‘realistic’ rather than ‘actual’.
“While ascertainment of actuals is necessary in regard to expenditure incurred (as for
example, travel expenses of witnesses, cost of obtaining certified copies, etc.), in so far
Cost of adjournment
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As per order XVII rule 1 in every such case the Court shall fix a day for the further hearing of
the suit, and shall make such orders as to costs occasioned by the adjournment or such higher
costs as the Court deems fit. This is a general provision governing adjournments and it is
complementary to section 35-B. The costs contemplated under this provision need not
necessarily be confined to the expenses incurred by the party for attending the court.
Security of cost
As per Order XXV of the code at any stage of a suit, the Court may, either of its own motion
or on the application of any defendant, order the plaintiff, for reasons to be recorded, to
give within the time fixed by it security for the payment of all costs incurred and likely to be
incurred by any defendant.
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Conclusion
One party to pay another party in respect of the expenses of litigation incurred. Except where
specifically provided by the statute or by rule of Court, the costs of proceedings are in the
Court’s discretion. In Johnstone v. The Law Society of Prince Edward Island, the
Canadian Court of Appeal speaking through McQuoid, J described costs in the following
words: “… The sum of money which the court orders one party to pay another party in an
action as compensation for the expense of litigation incurred. The definition continues to
the effect that costs are awarded as compensation (i.e. reimbursement); there is, unlike
damages, no restitutio in integrum, that is to say, no concept in costs, as there exists in
damages, that the injured person should be placed, in so far as money can do so, in the same
position as he occupied before the injury was suffered”. Following are the goals for imposing
cost on civil litigation. The first goal is indemnification: successful litigants ought to be at least
partially indemnified against their legal costs. The second goal is deterrence: potential litigants
should be encouraged to think carefully before engaging the civil justice system to achieve
their goals and should also be encouraged to refrain from taking unnecessary steps within
that system.
The third goal goal is to make costs rules easy to understand and simple to apply. The
fourth goal is to encourage early settlement of disputes, and
The fifth goal is to facilitate access to justice.
The sixth and final goal the Commission considered important is flexibility: the rules
must allow judges to ensure that justice is done in particular cases”.
Costs under S.35 are paid for general expenses incurred by the litigants and depend upon
the discretion of the court.
S. 35-A further provides for compensatory costs in cases where the claims of the other party
are false or vexatious.
1.The following conditions must be satisfied under this section, namely-The claim or defence
must have been false or vexatious.
2.Objections must be made by the other party that the party making the claim or defence
had knowledge of the fact that such claim or defence was false or vexatious.
3.Such claim or defence must have been disallowed or abandoned or withdrawn in whole or
in part.
21
S.35-B deals with costs for delay. It states that where a party did not take a step which it should
have under the code or obtained an adjournment as regards the same, he will have to pay such
costs to the other party so as to reimburse him for attending court on the designated date. Unless
such costs are paid, the plaintiff shall not allowed to proceed with his suit, if he should have
paid the costs and the defendant shall not be allowed to proceed with the defence if he was
liable to pay such costs. If however, a party is unable to pay costs due to circumstances beyond
his control, the court may extend such time. Order XX-A provides for payment of costs
in special circumstances. There are some special circumstances as mentioned under Rule
1, where Rule 2 provides that costs under this provision shall be paid in accordance with
rules made by the High Court.
References
• Basu’s commentary, code of civil procedure, 1091,
th
• (whytes & co. 14 Edn.,2015)
• 2005 (6) SCC 344
• Jugraj Singh v. Jaswant Singh (1970) 2 SCC 386
• colash Iyer v. Balasubramanyam (1980) 1 SCC 634
• id at 3.
• 'Satyapal Singh v. Union of India and another; AIR
22
• 2010 SC 1138
• Laxman Prasad v. Prodigy Electronics Ltd; AIR 2008
• SC 685
• AIR 2006 (NOC) 917 (Born.).
th
• Mulla, the civil procedure code, 534,(Lexis Nexis, 18
• Edn, updated, reprint., 2015)
• AIR 1989 M.P. 112.
• Raja ram v. Radhakrishnayya, AIR 1961 SC 1795
• C.K Thakker, the civil procedure code, 647, (Eastern
st
• Book Company., 1 Edn., with supplement, 2014)
• Ram coomar v. Chander kanto (1876) 4 IA 23
• Ramchandra v. State of Maharashtra, (1993) 4 SCC 216
• Rasaraj Debnath v. Calcutta University, AIR 1998
• Shib kumar sheo, AIR 1922 All 90
• AIR 1985 P&H 109,
• AIR 1947 PC 108 code of civil procedure, 1124,
th
• (whytes & co. 14 Edn.,2015)
• Halsbury’s Laws of England, 4th Edn., Vol 12, P 414
• 2 PEIR B-28 (1988 )
• https://www.legalbites.in/law-notes-cpc-costs/
