The Apex Court has clearly held that dismissal of the suit for non-prosecution is not a decree as specified by Section 2(2) of the C.P.C. There is no difficulty in holding that an order dismissing a suit for non-payment of costs is essentially an order dismissing the suit for non-prosecution. Therefore, in my humble opinion, the order dismissing the suit for non-payment of costs is not a decree. {Para 22}
23. Coming to the third question, I am of the considered opinion that in view of the law laid down by the Apex Court and the discussion in relation to questions 1 and 2 above that in case a suit is dismissed or defence is struck off in terms of Section 35B, only on account of non-payment of costs, the aggrieved party can apply to the Court under Section 151, C.P.C. for recalling the orders, if it can show sufficient cause for non-payment of the costs imposed. Every Court has the power to recall or review its orders. In the absence of any express provision in this behalf, the power can also be derived from Section 151, C.P.C. The Madhya Pradesh High Court rightly held that Order 9 Rule 9, C.P.C. would not be applicable in such a case. This, however, does not mean that the party is left without remedy. The Court has the inherent power to recall its earlier order.
IN THE HIGH COURT OF HIMACHAL PRADESH
Decided On: 27.06.2008
Piaro Devi Vs. Anant Ram and Ors.
Hon'ble Judges/Coram:
Deepak Gupta, J.
Citation: MANU/HP/0122/2008,AIR 2008 HP 107
1. An interesting question relating to the interpretation of Section 35B of the Code of Civil Procedure (CPC) arises in this petition.
2. Brief facts of the case are that the respondent (hereinafter referred to as 'the plaintiff) instituted a suit for recovery of Rs. 1,00,000/- on account of damages for malicious prosecution against the petitioner (hereinafter referred to as 'the defendants').
3. The defendants contested the suit. Issues were framed on 15.9.2001 and the matter was listed for evidence of the plaintiff on 7.12.2001. His evidence was not present on the said date and on his request, the matter was adjourned to 22.2.2002. On this date also, the plaintiff did not produce the evidence. At the request of the plaintiff, the trial Court adjourned the suit of the plaintiff to 3.5.2002 subject to payment of costs of Rs. 100/-. On 3.5.2002 neither the plaintiff nor his Counsel were present. The trial Court passed the following order:
Present: None for the plaintiff.
Mr. J.C. Kaushal, Advocate for the defendants.
Called several times. None has appeared on behalf of the plaintiff. He and his learned Counsel are absent despite knowledge. Even no PW is present despite of the grant of last opportunity. Previous costs of Rs. 100/- not paid. It is 2.30 p.m. Thus, this suit is dismissed in default U/O 9 Rule 8 of C.P.C. as well as for non payment of the costs under Section 35B of C.P.C. Parties to bear their own costs. File after due completion be consigned to the Records.
Sd/-
S.J. Barsar
4. Thereafter the plaintiff on 1.3.2003 filed an application under Order 9 Rules 4 and 9 read with Section 151, CPC for recalling the earlier order. It was alleged that the plaintiff had been visiting the office of his Counsel to enquire about his case but his Counsel never informed him that the suit had been dismissed in default or for non-prosecution. Since his old Counsel was not giving the details of the progress of the case, he engaged another Counsel. Only then the plaintiff came to know that the suit had been dismissed on 3.5.2002. This application was contested. The learned trial Court held that the portion of the order whereby the plaint had been dismissed for non-payment of costs under Section 35B, CPC amounted to a decree and relying upon the judgment of the Karnataka High Court in Syed Mujibur Rahman v. Abdul Azeez AIR 2001 Kar 104, held that the application under Order 9 Rule 9, C.P.C. was not maintainable. The plaintiff challenged this order in appeal before the learned District Judge. The learned District Judge came to the conclusion that there were sufficient grounds to condone the delay in filing the application and the absence of the plaintiff from the Court on the said date had been explained and, therefore, it could not be said that the plaintiff had refused to pay/tender the costs. He, therefore, held that the learned Civil Judge could not have dismissed the suit for non-payment of costs under Section 35B of the Code of Civil Procedure. He consequently set aside the order of the learned trial Court and allowed the application filed by the plaintiff for restoration of this suit.
5. Aggrieved by the said order, the defendants have filed the present petition, under Article 227 of the Constitution of India.
6.1 have heard Mr. Ankush Dass Sood, Advocate, learned Counsel for the petitioner and Mr. K.S. Banyal, Advocate, learned Counsel for respondent No. 1. Following questions arises for decision in the case:
1. Whether the provision of Section 35B are directory or mandatory?
2. Whether an order dismissing a case for non-payment of costs ordered to be paid under Section 35B amounts to a decree?
3. In case the order is not a decree, what is the remedy available to the aggrieved party?
4. Whether the order passed in the present case should be treated as an order dismissing the suit for default or a decree?
7. To appreciate the rival contentions of the parties, it would be apposite to refer to Section 35B of the Code of Civil Procedure, which reads as follows:
[35-B. Costs for causing delay.- (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 Seb-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.]
8. The question that arises is whether the word 'shall' used in the Section makes it obligatory on the Court in case of non payment of costs to stop the further prosecution of the case by the plaintiff or to strike off the defence of the defendant. A Full Bench of the Punjab and Haryana High Court considered this matter in Anand Parkash v. Bharat Bhushan Rai and Anr. MANU/PH/0126/1981. Earlier a number of Judges of this Court had taken the view that this provision was directory but the Full Bench by a majority judgment held as follows:
As a result of the aforesaid discussion, I hold that in the event of the party failing to pay the costs on the date next following the date of the order imposing costs, it is mandatory on the Court to disallow the prosecution of the suit or the defence as the case may be, and that no other extraneous consideration would weigh with the Court in exercising its jurisdiction against the delinquent party. However, in cases, where costs are not paid as a result of the circumstances beyond the control of the defaulting party, then the Court will be well within its jurisdiction to exercise its power under Section 148 of the Code in favour of the defaulting party if a strong case is made out for the exercise of such jurisdiction.
This matter has been considered by a number of High Courts who have taken a different view. In Sri Kasi Biswanath Dev v. Paramananda Routrai and Ors. MANU/OR/0024/1982 : AIR1982Ori80 , the learned Judge held as follows:
Section 35B is admittedly a procedural provision. Undoubtedly, it was introduced into the statute with a view to controlling the conduct of parties in litigations. The language of Section 35B indicates that it is directory. If the provision is taken to be mandatory it will take away the Court's right to exercise its discretion in the interest of justice. The cause of justice is paramount and a procedural law cannot be raised to the pedestal of being such a mandatory provision as would take away the Court's right in a given case to exercise its discretion in the interest of justice.
9. The Rajasthan High Court in Union of India v. Ram Niwas AIR 1984 Raj 2, held as follows:
Section 35B nowhere provides that the Court would not be competent to adjourn the case without payment of costs. What is forbidden is further prosecution of the suit or further prosecution of the defence. If, ultimately costs are paid, which have been imposed on earlier dates, then only, further prosecution of the suit or further prosecution of the defence by the defendant could be possible.
10. The Gauhati High Court in Surendra Mohan Sangma and Ors. v. Khetrinath Sangma and Anr. MANU/GH/0013/1988, also considered this matter and held as follows:
The intention behind awarding of costs being to avoid delay in disposal of suits, this purpose has not much to do with the condition that the costs must be paid on the date next following the date of imposition of the costs. The awarding of costs has no doubt relevance with the object of expediting the trial so that unnecessary adjournments are not sought for. But then the condition that it must be paid on the date next following the imposition of costs has not much to do with the underlying idea of avoiding delay. It would not, therefore, be acting against the intention of the Legislature to regard the actual payment of the costs as being directory in nature instead of being mandatory. The failure to deposit costs as awarded on the next following date should not in all cases prohibit further prosecution of the suit or the defence, as the case may be. This does not of course mean that the party against whom costs are awarded should be given a long rope to keep the proceedings deferred until it is pleased to deposit the costs. The enlargement of time in this connection by exercising power under Section 148 of the C.P.C. has to be granted only in cases where the Court is satisfied that the default is not wilful or the conduct of the party is not contumacious. To put it differently, the party ordered to pay costs cannot be allowed to defeat the purpose of Section 35B by acting negligently or contumaciously.
11. The Patna High Court in Raj Kishore Gupta v. Shanti Devi and Anr. MANU/BH/0006/1989 : AIR1989Pat21 , has also taken a different view from that of the Punjab & Haryana High Court and held as under:
In Section 35B, there are two parts, one provides for dismissing the suit or striking out the defence, as the case may be and the other for realization of the cost by execution. If the first part of the Section is mandatory then not only the suit is dismissed when the defaulter is the plaintiff or the defence is struck off if the defaulter is the defendant, but also he cannot escape in paying the cost. The party, therefore, suffers twice. This could not have been the intention of the Legislature.
12. After considering all the aforesaid Authorities, with due respect to the Punjab & Haryana High Court, I am not inclined to accept the view taken by that Court. The Rules of Procedures are meant to be the handmaiden of justice to further the cause of justice. The party in a given case may have a very valid ground to explain why it could not pay the costs on the next date. The Court must always have a discretion to examine whether the reasons put forth by the party are valid or not. Section 148, CPC empowers a Court to extend time in any matter. This power would be set at naught if it is held that the provisions of Section 35B, CPC are mandatory and that the Court would have no option but to stop the further prosecution of the suit by the plaintiff or strike off the defence of the defendants in case of non-payment of costs. I am in agreement with the reasoning given by the Orissa, Patna, Gauhati and Rajasthan High Courts and consequently I hold that the provisions of Section 35B, CPC are not mandatory but are only directory. The Court may in the absence of the concerned party, or in the absence of any plausible explanation for non payment of costs pass an order stopping the further prosecution of the case by the defaulting party. However, the Court, in some circumstances, may not pass such an order.
13. Coming to the second question, the main judgment relied upon by the petitioner is Budhulal Kasturchand v. Chhotelal and Ors. MANU/MP/0001/1977 : AIR1977MP1 . The Full Bench of the Madhya Pradesh High Court in this case was answering two questions. Both the questions are relevant for the present case.
14. The question dealt by the Full Bench are as follows:
(1) Whether it was necessary before the time could be extended under Sections 148 and 149, Code of Civil Procedure, that an application should be filed before the period allowed by the Court had run out and whether the Court is clothed with ample powers under Section 151, C.P.C., to give redress in such cases?
(2) Whether the words 'dismissed in default' also refer to default committed in respect of adjournment costs?
15. Question No. 1 was answered by holding that the Court has the power to extend the time, which view I have also taken.
16. With regard to the second question, the Full Bench of the Madhya Pradesh High Court came to the conclusion that the word 'default' as used in Section 2(2) of the C.P.C. wherein the word 'decree' has been defined is not the same as 'default' as used in Order 9 Rule 9 and Order 17 Rule 2, C.P.C.
17. The Madhya Pradesh High Court held that a dismissal on account of default or non-appearance cannot be treated at par with a dismissal on account of non-payment of costs. It held that dismissal for non-appearance may fall under Order 9 Rule 8 or under Order 17 Rule 2 but dismissal for non-payment of costs would fall within the meaning of Order 17 Rule 3, CPC and the Order passed under Order 17 Rule 3, CPC would be an appealable order. The Full Bench held as under:
(2) An order dismissing a suit for default in payment of costs is appealable as a decree. The word 'default' in Section 2(2) of the Code of Civil Procedure refers only to non-appearance of parties as specifically referred to in Order 9 and in Order 17 Rule 2, C.P.C. it does not include any other default. Obviously enough, the word 'default' in Order 17 Rule 3, C.P.C. is, having regard to its context, wide enough to apply to every default referred to in the earlier part of the Rule. It is permissible under the rules of interpretation of statutes that the same word occurring in an enactment in different Sections can be construed to have different imports according to the context.
18. The Court came to the conclusion that the order dismissing the suit for non-payment of costs would not be a dismissal for default. With respect to the learned Judges of the Madhya Pradesh High Court, I am unable to make myself agree with this view. Even non-payment of costs is a default. Section 2(2), C.P.C. defines decree as follows:
2. Definitions- In this Act, unless there is anything repugnant in the subject or context-
(2) decree means the formal expression of an adjudication which, so far as regards the Court expressing it, conclusively determines the rights of the parties with regard to all or any of the matters in controversy in the suit and may be either preliminary or final. It shall be deemed to include the rejection of a plaint and the determination of any question within [***] Section 144, but shall not include-
(a) any adjudication from which an appeal lies as an appeal from an order, or
(b) any order of dismissal for default.
19. A bare perusal of this Section clearly indicates that the Legislature intended that the decree would be the formal expression of an adjudication which conclusively determines the right of the parties. This, in my humble opinion, would mean that some observations are being made on the merits of the disputes raised before the Court. The Legislature in its wisdom specifically excluded from the ambit of the term 'decree' any order dismissing the case in default. The Madhya Pradesh High Court while coming to the aforesaid conclusion was influenced by the fact that in case an order dismissing the suit for non-payment of costs is not considered to be a decree, the party would be left with no remedy. I am not in an agreement with this view. Any Court which has the power to dismiss a case in default would also have the power to recall its order dismissing the suit for default. Even if it is held that the Court has no such power, then also the aggrieved party can always approach the High Court in exercise of its revisional jurisdiction under Section 115, C.P.C. or can approach the High Court in exercise of its supervisory jurisdiction under Article 226 of the Constitution of India. Under Section 35B, the Court has the power to stop the further prosecution of the case by the defaulting party. There may be cases where some evidence has already been recorded. In such a case the better course may be to decide the case on the material on record. If it decides the case on merits, the order would amount to a decree. However, if the suit is dismissed only on account of non-payment of costs, it would not amount to a decree.
20. As far as the judgment of the Karnataka High Court in Sayed Mujibur Rahman v. Abdul Azeez (supra) is concerned, no reasons have been given in the said judgment and the same has been passed solely on the basis of the judgment rendered by the Madhya Pradesh High Court.
21. While taking the aforesaid view, I am fortified by the judgment of the Apex Court in Firdous Omer (Dead) by LRs. and Ors. v. Bankim Chandra Daw (Dead) by LRs. and Ors. MANU/SC/3384/2006 : AIR2006SC2759 , wherein certain observations of the Apex Court which are relevant, read thus:
11. Keeping out for the moment the Rules of the original side of the Calcutta High Court or the practice followed in that Court, it appears to us that it was a case where the suit was dismissed for default or for non-prosecution. Such a dismissal, no doubt, was on the basis that the suit was placed before a Judge trying the cause under Rule 35 of Chapter X of the Original Side Rules. But the dismissal still remains a dismissal for default of the plaintiff.
12. After all, a dismissal of the suit for non-prosecution or for non-appearance of the plaintiff is not a decree as specified by Section 2(2) of the Code itself. Hence it is not appealable as a decree.
(Emphasis supplied)
22. The Apex Court has clearly held that dismissal of the suit for non-prosecution is not a decree as specified by Section 2(2) of the C.P.C. There is no difficulty in holding that an order dismissing a suit for non-payment of costs is essentially an order dismissing the suit for non-prosecution. Therefore, in my humble opinion, the order dismissing the suit for non-payment of costs is not a decree.
23. Coming to the third question, I am of the considered opinion that in view of the law laid down by the Apex Court and the discussion in relation to questions 1 and 2 above that in case a suit is dismissed or defence is struck off in terms of Section 35B, only on account of non-payment of costs, the aggrieved party can apply to the Court under Section 151, C.P.C. for recalling the orders, if it can show sufficient cause for non-payment of the costs imposed. Every Court has the power to recall or review its orders. In the absence of any express provision in this behalf, the power can also be derived from Section 151, C.P.C. The Madhya Pradesh High Court rightly held that Order 9 Rule 9, C.P.C. would not be applicable in such a case. This, however, does not mean that the party is left without remedy. The Court has the inherent power to recall its earlier order.
24. The Apex Court in Firdous Omer's case (supra) also held as under:
13. We also feel that the view of the Calcutta High Court, no doubt, backed by the procedure followed in that Court and the practice of that Court that once the order of dismissal is drawn up, completed and filed, the Court loses its power to restore the suit in an appropriate case, seems to deprive the Court of a power which every Court has, of restoring a suit so as to enable the parties to contest the same on merits. It is even possible to argue, that the power to dismiss a suit for default, carries with it the power to restore that suit.
25. It is thus clear that, if any Court exercises the power to dismiss a suit on account of default on the part of a party whether it be for non-appearance or for noncompliance, the Court will also have the corresponding power to restore the suit in case the party can show sufficient cause and explain the reasons for the noncompliance. This answers the third question.
26. In the present case, even the trial Court had allowed the application under Section 5 of the Limitation Act and had condoned the delay in filing the application under Order 9 Rule 9, C.P.C. The reasons given in this application were identical to the reasons given in the application under Order 9 Rule 9, C.P.C. When the reasons were the same, i.e. non-information by the Counsel of the dates of hearing then the plaintiff cannot be at fault.
27. The facts of the present case in fact support what I have held above. The order of the learned trial Court quoted above was in two parts. Neither the Counsel nor the party were present and hence the suit was dismissed for non-appearance.
28. Thereafter, the suit was also dismissed for non-payment of costs.
29. Would this mean that the party should file two separate proceedings to challenge the same order? An application under Order 9 Rule 9, C.P.C. to set aside the earlier part of the order dismissing the suit for non-appearance and an appeal or revision in respect of the latter part of the order. This in my opinion would lead to a very anomalous situation and the party may have to approach two different Courts, which would lead to conflicting orders. This will also lead to multiplicity of litigation, which cannot be the intention of the Legislature.
30. Therefore, in my opinion the learned trial Judge had the power to recall his earlier orders.
31. In view of the above discussion, I find no merit in the petition and I uphold the order of the learned District Judge, though for entirely different reasons.
32. Keeping in view the facts of the case, there shall be no order as to costs.
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