There is one more aspect which requires serious consideration. What is the meaning of the words `actual realistic costs' assuming that costs could be awarded on such basis? Whether it can be said that ` 45,28,000/-
said to have been incurred (made up of ` 29,73,000/- paid to Mr. S, Senior Advocate, ` 14,41,000/- paid to Mr. G, Senior Advocate, ` 85,500/- paid to Mr. M, Advocate, ` 16,750/- paid to Mr. V, Advocate and ` 11,750/-
incurred as miscellaneous expenses) was the `actual realistic cost' of an appeal against an interim order in a suit for injunction? The actual realistic cost should have a correlation to costs which are realistic and practical. It cannot obviously refer to fanciful and whimsical expenditure by parties who have the luxury of engaging a battery of high-charging lawyers. If the logic adopted by the High Court is to be accepted, then the losing party should pay the costs, not with reference to the subject matter of the suit, but with reference to the fee paying capacity of the other side. Let us take the example of a suit for recovery of ` One lakh. If a rich plaintiff wants to put forth his case most effectively, engages a counsel who charges ` One lakh per hearing and the matter involves 30 hearings, should the defendant be made to pay costs of ` 30 lakhs, in a suit for recovery of ` One lakh merely because it is a commercial dispute? In a matter relating to temporary injunction, merely because the court adjourns the matter several times and one side engages a counsel by paying more than a lakh per hearing, should the other side be made to bear such costs? The costs memo filed by the respondents show that ` 45,28,000/- was paid to four counsel? If a rich litigant engages four counsel instead of one, should the defendant pay the fee of four counsel? If a party engages five senior Advocates and five ordinary counsel because he is capable, should the losing party pay the fees of all these counsel? The appeal came up on several occasions, but the final hearing of the appeal was only on a few days and other days were mere appearances. Should the losing party pay for such appearances? If respondents had engaged two senior counsel who charged ` Two lakhs per appearance, should the other side be made liable to pay ` 1.5 crore as costs?
Even if actual costs have to be awarded, it should be realistic which means what a "normal" advocate in a "normal" case of such nature would charge normally in such a case. Mechanically ordering the losing party to pay costs of ` 45,28,000/- in an appeal against grant of a temporary injunction in a pending suit for permanent injunction was unwarranted and contrary to law.
Reportable
Supreme Court of India
Sanjeev Kumar Jain vs Raghubir Saran Charitable Trust & ... on 12 October, 2011
Bench: R.V. Raveendran, A.K. Patnaik
Citation:JT 2011(12)SC 435