240th Report on Costs in Civil Litigation - Law Commission of India

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8.3 Section 35-A can be invoked in any suit or proceeding (includingexecution proceeding). However, by an exclusionary clause, it is madeinapplicable to an appeal or revision.8.4 In the case of Shiv Kumar Sharma vs. Santosh Kumari 2007 (8) SCC600 involving disputes relating to an agreement to sell, the Supreme Courtinvoked Section 35-A and directed payment of Rs. 50,000/- by way of cost. TheCourt declared - In exercise of our discretionary jurisdiction under Article 142of the Constitution of India and having regard to the conduct of the defendant,we direct that the cost shall be payable by the appellant in favour of therespondent in terms of Section 35-A of the Code, besides the costs alreadydirected to be paid by the learned trial Judge as also by the High Court. Wedirect the appellant to pay a sum of Rs. 50,000/- by way of cost to therespondent.”8.5 The reference to Section 35A is not clear as S.35-A does not, going by itsplain language, empower the Court to award more than Rs.3,000/-. There aresome instances in which the High Courts directed ‘exemplary costs’ of more thanthe ceiling set out in Section 35 A even in civil proceedings.8.6 In the case of T. Arivanandam vs. T. V. Sathyapal 1977 (4) SCC 467relating to eviction proceedings, the Supreme Court adverted to Section 35-A andobserved as under “The trial court in this case will remind itself of Section 35-ACPC and take deterrent action if it is satisfied that the litigation was inspired byvexatious motives and altogether groundless” (Para 6). In this case there were anumber of proceedings at the instance of the tenant in an effort to remain inpossession of the tenanted shop, even though there was an earlier order of the40
Court directing his eviction. Whatever may be position in 1977, at the presentjuncture, S.35-A with its ceiling limit of three thousand rupees can no longer beconsidered a deterrent against frivolous litigation.8.7 The Hon’ble Supreme Court in Ashok Kumar Mittal Vs. Ram KumarGupta 2009 (2) SCC 656 dealing with a case where the High Court imposed anexemplary cost of Rs. 1 lakh on the petitioner and Rs. 1 lakh on the respondent,on a finding by the High Court that both the sides were guilty of having lied onoath, observed that the limit prescribed under Section 35-A should be kept inview by the Courts. In the said case, the Supreme Court also adverselycommented upon the practice of directing costs to be paid to Legal ServicesCommittee etc. or to some non party Charitable Organisation. The Court alsomade an observation that the principles and practices relating to levy of cost inadministrative law matters cannot be imported mechanically into civil litigationsgoverned by the Code of Civil Procedure.8.8 Inspite of the above, in Direct Tax Practioner Association vs. R.K. Jain2010 (8) SCC 281, the Court taking a view that the petition before it wasfrivolous in nature imposed a cost of Rs. 2 lakhs and while directing that out ofthe same, Rs. 1 lakh shall be paid to the respondent, and Rs. 1 lakh shall bedeposited with the Supreme Court Legal Services Committee.8.9 Earlier also in Mahendra Babu Rao Mahadik & Ors. vs. SubashKrishna Kanitkar & Ors. 2005 (4) SCC 99 the Supreme Court dismissed theappeal quantifying the costs at Rs. 50,000/- and directed that the same shall bedeposited with the National Legal Services Authority.There are other suchsimilar instances.41
Page 1 and 2: GOVERNMENT OF INDIALAWCOMMISSIONOFI
Page 3 and 4: INDEXSl.No.ParticularsPage numbers1
Page 5 and 6: speculative suits, apart from rende
Page 7 and 8: “… the sum of money which the c
Page 10 and 11: 2.11 A bill of costs is a certified
Page 12 and 13: of the parties has behaved unreason
Page 14 and 15: two competing views, to cite, (i) t
Page 16 and 17: inflation and vexatious litigation,
Page 18 and 19: is a commercial dispute? In a matte
Page 20 and 21: “The process of taxation of costs
Page 22 and 23: 54. While imposing costs we have to
Page 24 and 25: (d) The sub-section (2) lays down:
Page 26 and 27: The ‘model rule’ relating to fi
Page 28 and 29: Moreover, the revision of rules inc
Page 30 and 31: notification dated 7.12.2006. The r
Page 32 and 33: are quite low judged by the present
Page 34 and 35: advocate. It appears that the High
Page 36 and 37: for enhanced court-fee; especially,
Page 38 and 39: However, if any practical difficult
Page 42 and 43: The above two cases, however, arise
Page 44 and 45: the Legislature may consider award
Page 46 and 47: (3) The expression ‘exemplary’
Page 48 and 49: Section 94(c), if the Court is sati
Page 50 and 51: expenses incurred for attending the
Page 52 and 53: significant. The quantum of costs u
Page 54 and 55: (2)…………..12.2 The effect of
Page 56 and 57: The format of bill of costsneeds to
Page 58 and 59: Annexure-ICosts in Civil litigation
Page 60 and 61: from the officer concerned and the
Page 62 and 63: 5,00,000/- (Five Lakhs)” and dire
Page 64 and 65: In Oswal Fats & Oils Ltd. vs. Addit
Page 66 and 67: quantum are a matter entirely in th
Page 68 and 69: 6, In all such suits, referred to a
Page 70 and 71: 22. In all interlocutory applicatio
Page 72 and 73: 39. The fee shall be fixed at half

240th Report on Costs in Civil Litigation - Law Commission of India

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