- The main object behind ordering costs is to secure to a litigant, the expenses incurred by him during litigation.
- Thus neither does it enable the successful party to earn profits nor does it punish the opposite party.
- The principles with respect to costs have been provided under Ss. 35, 35-A, 35-B and Order XX-A of the code.
- The code provides for the following types of costs-
(a) General costs- S. 35
(b) Specific costs- Order XX-A
(c) Compensatory costs- S.35-A
(d) Costs for delay- S.35-B
- Costs under S.35 are paid for general expenses incurred by the litigants and depend upon the discretion of the court.
- They must generally follow an event and thus it is essentially the loser who pays. However, the court may also direct that costs shall not be paid following an event and must state reasons for the same in writing.
- For example if the plaintiff has instituted the suit for vexatious purposes, the court shall deny payment of costs to him even if he wins the case.
- 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.
(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 the High Court.
- S. 35-A further provides for compensatory costs in cases where the claims of the other party are false or vexatious.
- The following conditions must be satisfied under this section, namely-
(a) The claim or defence must have been false or vexatious.
(b) 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.
(c) Such claim or defence must have been disallowed or abandoned or withdrawn in whole or in part.
- No court shall order payment of costs exceeding Rs.3000 or exceeding its pecuniary jurisdiction.
- Further, this section also provides that where costs are to be awarded by Small Causes Court or any court whose jurisdiction doesn’t exceed Rs.250, the High Court may empower such court to award such costs as do not exceed Rs.250 under this provision or not exceeding such limits by Rs.100.
- The High Court also has the power to limit the power of courts to award costs under this provision.
- Further, award of such costs under this provision shall not exempt any person from criminal liability.
- Also, the amount of compensation awarded in such cases must be taken into consideration in a subsequent suit for damages or compensation in respect of such claim or defence.
- 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.
- S. 35-B(2) provides that where costs are not paid, a separate order shall be drawn up indicating the names and addresses of persons to whom costs have to be paid and the amount to be paid.
Submitted By –
(Editor @ Legal Bites)