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Published : February 07, 2011 | Author : himanikishorkini
Category : Civil Laws | Total Views : 3507 | Unrated

  
himanikishorkini
himani.kini.
 

Award of Cost

It is almost certain that irrespective of court verdict the parties, complainant and defendant are actually set out to loose their health and property. There is a rule for compensating winner for his expenses during the legal process. The Court will usually order the loser to pay the winner's expenses[1]thus there is a judicial discretion.

The award of Cost has been dealt under Section 35 of Civil Procedure Code.
35 Cost[2] (l) Subject to such conditions and limitations as may be prescribed, and to the provisions of any law for the time being in force, the costs of and incident to all suits shall be in the discretion of the court, and the court shall have full power to determine by whom or out of what property and to what extent such costs are to be paid, and to give all necessary directions for the purposes aforesaid. The fact that the court has no jurisdiction to try the suit shall be no bar to the exercise of such powers.

(2) Where the court directs that any costs shall not follow the event. the court shall state its reasons in writing.
As a general rule, to award cost is at the discretion of the court. Normally, is civil proceeding, “costs shall follow the event”[3].

Kinds of cost:
The Code provides for the following kinds of costs:
(1) General Cost-Section 35
(2) Miscellaneous cost-Order 20-A
(3) Compensatory cost for false and vexatious claims or defences-Section 35A.
(4) Cost for causing delay-Section 35-B.

General Cost: Section 35
(a) Object:- The object of awarding costs is to indemnify a party against the expenses incurred in successfully maintain his rights.[4]It neither enables the successful party to make any profit out of it nor punishes the opposite party[5].This section provides that the costs of suits and application are in the discretion of the court. That discretion is very wide, but it has to be exercised judicially and on fixed principles. The general rule is that the successful party is entitled to cost 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 “Cost follow the event”, i.e cost follow the result of the suit[6].

(b) Rules Regulating Award of Cost[7]:-
(1)The general rule is that costs shall follow the event unless the court, for good reason, otherwise orders.

Normally costs should follow the event and it is not the rule that cost should be left to be borne by the parties.

(2) Where a party successfully enforces a legal right and in no way misconducts himself, he is entitled to costs as of right.

(3)Everything which is done by a party to increase the litigation and cost, i.e. raising unnecessary issues, is a good cause for depriving him to his costs.

(4)A person wrongfully made a party should get his costs.

(5)If the plaintiff successes only with regard to part of his claim and fails on important issues, he may be ordered to pay the whole cost of the suit to the defendant.

(6) If the defence is common to all the defendants, separate cost are not to be awarded.

(7)Orders for cost on any application should be made when the application is disposed of.

(8) In cases of unreasonable, vexatious and improper interrogatories, the cost occasioned by the said interrogatories and the answer thereto shall be paid in any event by the party in fault.

(9) Where the plaintiff withdrawn from a suit or abandons part of a claim without the permission of the court, he shall be liable for such costs as the court may award.

(10)When a court refuses costs, no separate suit for it is paintable.

Where costs are awarded in a decree an appeal lies for cost when:-
(1) a question of principle is involved;
(2) the order proceeds upon a misapprehension of fact or law
(3) there ha been no exercise of the discretion in making the order as to costs, or
(4) When the order is erroneous in law and improper.

In case of disconnection of telephone on account of non-payment of bill evidence showed that the subscriber was making payment of bills regularly and nothing was due against him. On failure of the authorities to inform the subscriber about disconnection on account of non-payment of bill, the authorities were found to have acted arbitrarily in disconnecting the telephone. In view of the facts and circumstances of the case, special cost of Rs.20000 was awarded to the subscriber, a medical practitioner[8].

The election petition, alleging corrupt practices against candidate contesting election and person campaigning for him, was not proved. Costs were awarded only to the candidate and persons who appeared personally as witness to rebut allegations made against them[9].

(c) Scope of Section[10]:
Section35 deals with cost. It provides that:
(1) The cost of and incident to all suits shall be in the discretion of the court.

(2) The court shall have full power to determine by whom or out of what property and to what extent cost are to be paid ;

(3) Where costs are not to follow the event the court shall state its reasons in writing.

(d) “Cost shall follow the event”- The general rule relating to cost is that costs should follow the event, i.e. a successful party must get the costs and the loosing party should pay to the other side[11]

Miscellaneous Cost. Provision relating to certain items-Without prejudice to the generality of the provisions of this Code relating to costs, the Court may award costs in respect of -

(a) expenditure incurred for the giving of any notice required to be given by law before the institution of the suit;

(b) expenditure incurred on any notice which, though not required to be given by law, has been given by any party to the suit to any other party before the institution of the suit;

(c) expenditure incurred on the typing, writing or printing of pleadings filed by any party;

(d) charges paid by a party for inspection of the records of the Court for the purposes of the suit;

(e) expenditure incurred by a party for producing witnesses, even though not summoned through Court, and

(f) in the case of appeals, charges incurred by a party for obtaining any copies of judgments and decrees which are required to be filed along with the memorandum of appeal[12].

Thus, 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[13].

The award of cost under this rule shall be in accordance with such rules as the High Court may make in that behalf[14].

Compensatory Cost: Section 35-A[15]
Compensatory costs in respect of false or vexatious claims or defences.

(1) If any suit or other proceedings [including an execution proceedings but [excluding an appeal or a revision]] any party objects to the claim of 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 the object or by the party by whom such claim or defence has been put forward, of cost by way of compensation.


(2) No Court shall make any such order for the payment of an amount exceeding [three thousand rupees] or exceeding the limits of it pecuniary jurisdiction, whichever amount is less:

Provided that where the pecuniary limits of the jurisdiction of any Court exercising the jurisdiction of a Court of Small Causes under the Provincial Small Cause Courts Act, 1887 (9 of 1887) [or under a corresponding law in force in[any part of India to which the said Act does not extend]] and not being a Court constituted [under such Act or law], are less than two hundred and fifty rupees, the High Court may empower such Court to award as costs under this section any amount not exceeding two hundred and fifty rupees and not exceeding those limits by more than one hundred rupees:

Provided, further, that the High Court may limit the amount or class of Courts is empowered to award as costs under this Section.

(3)No person against whom an order has been made under this section shall, by reason thereof, be exempted from any criminal liability in respect of any claim or defence made by him.

(4) The amount of any compensation awarded under this section in respect of a false or vexatious claim or defence shall be taken into account in any subsequent suit for damages or compensation in respect of such claim or defence.]

(a) Object[16]- Section 35A provides for compensatory costs. This section is an exception to the general rule on which section 35 is based, viz. that the “cost 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 applied only to suits and not to appeals or to revisions.

(b) Condition:[17]- The following condition must exist before this section can be applied.

(1) The claim or defense must be false or vexatious;

(2) Objections must have been taken by the other party that the claim or defense was false or vexatious to the knowledge of the party raising it, and

(3) Such claim must have been disallowed or withdrawn or abandoned in whole or in part.

(c) Maximum amount[18]:-
The maximum amount that can be awarded by the court is 3000. But a person against whom an order has been passes 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 of compensation awarded to the plaintiff under third section.

(d) Scope:- The section provides for the payment of costs by way of compensation in cases of false or vexatious claims and defenses. Therefore, before awarding costs under this section, the court should satisfy itself that the claim was false or vexatious to the knowledge of the party who puts it forward and that the interest of justice requires award of such costs and further, that a claim has been made by the party at the easiest opportunity. The court has no power to award compensatory costs without giving reasons and unless the point is raised. Where costs are awarded in respect of proceedings under s 145, Cr PC, (wrongful possession of property) suit based Q on injury to property is maintainable. Costs under this section are not intended as punishment for an unsuccessful party. If the claim is untenable but not false, the section does not apply. Where a claim involves complicated questions calling for elaborate consideration, it cannot be said to be frivolous. The section does not apply to witnesses. The trial court should keep s 35A in mind and take deterrent action if litigation is inspired by vexatious motives and is altogether groundless[19].

The suit in U.P. was filed against the assessment order passed by Delhi Municipal Corporation. It was falsely alleged in plaint that officers of Delhi Corporation went in U.P. to attach movables of the plaintiff and her grand children and facts of pendency of appeal against the assessment order was concealed. The U.P. Court granted prohibitory injunction only to properties on U.P. but it has granted a declaration that the very assessment order was void and illegal. Thus assessment order cannot be enforced even within the limit of Delhi Municipal Corporation. Such practices are gross abuse of the process of Court[20].

35B. Costs for causing delay[21].

(1) 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

(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.][22]
(a) Object of Provision- to avoid delay-Section 35 has been inserted by the Amendment Act 1976, so as to avoid delay in the disposal of suit. Payment of compensatory costs for causing delay is a condition precedent to the further prosecution of the suit or the defence by the plaintiff or defendant concerned. The new provision give discretion to the court to impose compensatory cost on parties responsible for causing delay in impose compensatory cost on parties responsible for causing delay in the disposal of the litigation and such costs would be irrespective of the ultimate result of the litigation[23].

(b) Nature[24]:- the provision is mandatory in nature and therefore, the court should not allow prosecution so 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 cost due to circumstances beyond his control, such as strike of advocates or staff, declaration of the last day for the payment of cost as a holiday etc. the court can extend the time.

In Ashoka Kumar v. Ram Kumar[25], the Supreme Court observed that the present system of levying meagre cost in civil matter is wholly unsatisfactory and does not act as a deterrent vexatious or luxury litigation. More realistic approach relating to cost is the need of the hour.

Conclusion
After doing the research and taking into consideration the Judicial decisions of the various courts it can be concluded that to award interest is basically the discretionary power of the court according to facts and circumstances of the cases.

Though section 35 provides that the award of cost is within the discretion of the court, it lays down certain guidelines for the exercise of such discretion. The general rule is that the successful party in entitled to cost unless he is guilty of misconduct, negligence or omission or unless there is some other good cause for not allowing cost.

And for the payment of cost my hypothesis proved to be correct. After researching I came to know that the cost is compulsory when it is in respect of false or vexatious claims ore defence and when it is has cause to delay.

Thus to summarize it can be said that to grant the cost is upon the discretion of the court which needs to be exercised with caution. And the discretion is wide

Bibliography:

Books referred:
1 Takwani, C.K. Civil Procedure. (Lucknow: Eastern Book Company) 2009.
2  Tripathi, T. P. The Code of Civil Procedure. (Allahabad Law Agency) Ed 2nd.
3 Mulla, Code of Civil Procedure (Abridged).(Nagpur: LexisNexis Butterworths) Ed 14th.
4 Tandon, Rajesh. The Code of Civil Procedure (Hariyana: AllahabadLaw Agency)2007
--------------------------------------------------------------------------------
[1] Available at, http://www.thefinancialexpress-bd.com/more.php?news_id=101781, visited on 8 October.
[2] Available at, www.vakilno1.com, visited on August 12, 2010
[3] C.K. Takwani, Civil Procedure. (Lucknow: Eastern Book Company) 2009.
[4] Rajesh Tondon, The Code of Civil Procedure(Hariyana:Allahabad Law Agency) 2007,p.251
[5] C.K. Takwani, Civil Procedure. (Lucknow: Eastern Book Company) 2009 ,p.397.
[6] Rajesh Tondon, The Code of Civil Procedure(Hariyana:Allahabad Law Agency) 2007,p.251-252.
[7] Ibid.
[8] Jugar Singh v. Jawant Singh,1971(1) SCJ 141.
[9] Ramachandra G. Kapse v. Haribansh Ramakbal singh, AIR 1996 SC 817.
[10] Rajesh Tondon, The Code of Civil Procedure(Hariyana:Allahabad Law Agency),p.251.
[11] C.K. Takwani, Civil Procedure. (Lucknow: Eastern Book Company) 2009 ,p.398.
[12] Available at http://www.vakilno1.com/bareacts/civilprocedure/sORDERXXA.htm,visited october12.
[13] C.K. Takwani, Civil Procedure. (Lucknow: Eastern Book Company) 2009 ,p.398.
[14] Rajesh Tondon, The Code of Civil Procedure(Hariyana:Allahabad Law Agency),p.259.
[15] Mulla, Code of Civil Procedure (Abridged).(Nagpur: LexisNexis Butterworths) Ed 14th
[16] C.K. Takwani, Civil Procedure. (Lucknow: Eastern Book Company) 2009 ,p.398
[17] Ibid.
[18] Supra note no.15
[19] Mulla, Code of Civil Procedure (Abridged).(Nagpur: LexisNexis Butterworths) Ed 14th.
[20] Mucipal Corporation of Delhi v. kamla Devi, AIR 1996 SC 1733.
[21] Mulla, Code of Civil Procedure (Abridged).(Nagpur: LexisNexis Butterworths) Ed 14th
[22] Mulla, Code of Civil Procedure (Abridged).(Nagpur: LexisNexis Butterworths) Ed 14th
[23] Rajesh Tondon, The Code of Civil Procedure(Hariyana:Allahabad Law Agency),p.258.
[24] C.K. Takwani, Civil Procedure. (Lucknow: Eastern Book Company) 2009 ,p.398
[25] (2009)2SC 656 at p. 656.

Authors contact info - articles The  author can be reached at: himanikini@legalserviceindia.com




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