Whether court can impose costs on loosing party as per fees paid by winning party to his Advocate?

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

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Basic principles to be followed by court while imposing costs on parties

The English civil procedure rules provide that a court in deciding what order, if any, to make in exercising its discretion about costs should have regard to the following circumstances: (a) the conduct of all the parties;

(b) whether a party has succeeded on part of his case, even if he has not been wholly successful; and (c) any payment made into court or admissible offer to settle made by a party which is drawn to the courts attention. `Conduct of the parties' that should be taken note by the court includes : (a) conduct before, as well as during, the proceedings and in particular the extent to which the parties followed the relevant pre-action protocol; (b) whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue; (c) the manner in which a party has pursued or defended his case or a particular allegation or issue; and (d) whether a claimant who has succeeded in his claim, in whole or in part, exaggerated his claim. Similar provisions, with appropriate modifications may enable proper and more realistic costs being awarded. As Section 35 of the Code does not impose any ceiling the desired object can be achieved by the following : (i) courts levying costs, following the result, in all cases (non-levy of costs should be supported by reasons); and (ii) appropriate amendment to Civil Rules of Practice relating to taxation of costs, to make it more realistic in commercial litigation.

Supreme Court of India

Vinod Seth vs Devinder Bajaj & Anr on 5 July, 2010

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Whether court should direct parties to deposit costs in legal services authority?

We would however like to refer to two aspects of the order of the High Court relating to costs. The first is, whether a court, having reached a conclusion that a party deserves to be prosecuted for perjury, should let him off with what it considers to be a stiff penalty by way of costs, on the ground that courts are overburdened with work. We propose to leave open for the present, this question involving moral and ethical issues.

10. The second aspect relates to the recipient of the costs. In para 38 of the impugned judgment, the High Court specifically stated that it had decided to saddle the parties with heavy costs to be paid to the state which spends money on judicial infrastructure. Having said so, in para 39, the High Court directed that the costs should be paid to the Delhi High Court Legal Services Committee. The High Court Legal Services Committee, a statutory authority under the Legal Services Authorities Act, 1987, is not the `state' that spends money on providing judicial infrastructure, referred in the earlier para. Once the Court held that costs had to be paid to the state, it should have directed payment of the costs to the state and not the High Court Legal Services Committee. No litigant should be made to feel that heavy costs are being levied in some cases by Judges to create a corpus or expense fund for the High Court Legal Services Committee or the State Legal Services Authority. While levy of an uniform token sum, as costs payable to the Legal Service Authority/Committee by way of a deterrent fine, in regard to non-compliance with procedural requirements, delays in re-presentation of papers etc. may not be objectionable, levy of huge amounts as costs in selected cases, made payable to the Legal Service Authorities, may invite adverse comments and evoke hostility to legal services in general. We have also come across cases of costs being levied and made payable to some non-party charitable organizations. Levy of such costs should be avoided.

11. The Delhi High Court Legal Services Committee when it receives the sum of Rs. Two Lakhs as costs from the parties, shall make over the same to the state government as directed in para 38 of the impugned judgment. Let a copy of this order be sent to the Delhi Legal Services Committee, for compliance.

Reportable

Supreme Court of India

Ashok Kumar Mittal vs Ram Kumar Gupta & Anr on 9 January, 2009

Bench: R.V. Raveendran, J.M. Panchal

Citation: 2009(2) SCC 656

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Whether court can extend time for deposit of costs for filing of written statement?

There is no dispute that the trial Court has admittedly, granted an applications of the defendants to take written statement on record. That order remained final. Therefore, by the impugned order, it is very clear that the defendants would not be in a position to file the written statement, even though, it was ordered to be and permitted to be taken on record. After reading the order, it is very clear that the defendants-petitioners would suffer injustice only because, they failed to deposit the cost within stipulated time. It is true that no sufficient reason have been made out in the application for not depositing the amount within stipulated time. However, considering the nature of dispute between the parties and considering the fact that the Court has already granted permission to the defendants to file the written statement. I am of the view that for want of not depositing cost within stipulated period the party should not be deprived of their rights to contest the proceeding by filing a written statement.

5. Taking all this into account, I am inclined to consider the case of the petitioner. Impugned order therefore, is quashed and set aside. Application for extension of time under Section 148 of Civil Procedure Code, as filed by the defendants is allowed.

IN THE HIGH COURT OF BOMBAY

W.P. No. 1866 of 2005

Decided On: 12.12.2005

Smita Arvinda Apte and Anr.

Vs.

 Ajay Pandurang Potdar

Coram:

Anoop V. Mohta, J.

Citation: 2006 (2) MHLJ 509

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Whether defendant can be denied opportunity to file written statement if he fails to pay costs within time?

There is no dispute that the trial Court has admittedly, granted an applications of the defendants to take written statement on record. That order remained final. Therefore, by the impugned order, it is very clear that the defendants would not be in a position to file the written statement, even though, it was ordered to be and permitted to be taken on record. After reading the order, it is very clear that the defendants-petitioners would suffer injustice only because, they failed to deposit the cost within stipulated time. It is true that no sufficient reason have been made out in the application for not depositing the amount within stipulated time. However, considering the nature of dispute between the parties and considering the fact that the Court has already granted permission to the defendants to file the written statement. I am of the view that for want of not depositing cost within stipulated period the party should not be deprived of their rights to contest the proceeding by filing a written statement.

Bombay High Court

Smita Arvinda Apte And Anr. vs Ajay Pandurang Potdar on 12 December, 2005

Equivalent citations: 2006 (3) BomCR 687, 2006 (2) MhLj 509

Bench: A V Mohta

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When court should not set aside abatement of proceeding on payment of costs?

I believe this powerfully articulated passage to be squarely applicable to this case. I cannot in law turn a blind eye to the law relating to abatement. What is it that is expected of the Applicants?

At a minimum, I believe the law requires the Applicants to explain the delay. It is not just any explanation that will do. The explanation must be one that is cogent, persuasive and tenable. As we have seen, the statements in the Affidavit in Support of the Chamber Summons provide no sort of explanation at all, apart from stating in the most general terms that the Applicants were 'unaware' of the proceedings in this Court. That they were aware of the proceedings between the same parties in other courts is accepted. The so-called explanation seems to me to be most unlikely in the normal course of conduct; it postulates that the Petitioner kept the Applicants abreast of the litigations in other courts but for some reason completely shut them out of all knowledge of the present proceedings. Why and how that might have been is left to our speculation. On so diaphanous a thread am I asked to allow this application. In short, what the Applicants say is that it matters not a whit what the law says; it matters perhaps even less that their affidavit contains no explanation as required by law; I must, for the mere asking, allow their application. I cannot.

13. Would an order putting the Applicants to terms suffice? After all, in several cases, our courts, including the Supreme Court, have condoned delayed and set aside abatement by putting parties to terms. I do not believe there is any rigid formula in such cases. It also cannot be that in every single case, irrespective of conduct or the want of any explanation, a party can simply agree to pay costs and thus evade the consequences of his own negligence or indolence, or both. Costs are imposed to compensate the other side for the trouble and expense they have suffered. I do not believe that anything in our judicial system contemplates, even remotely, a well- heeled party being able to literally buy his or her way out of a situation like this. This is, after all, a revocation petition. The Respondent has obtained legal representation in the Testamentary Petition, one that was evidently contested and was tried as a suit. There is, to my mind, no amount that can 'suitably compensate' the Respondent if everything is now sought to be set at nought again.

Bombay High Court

Achyutbhai Hiralal Shah vs Princess Ujawala Raje And Hema ... on 12 June, 2015

Bench: G.S. Patel

Citation: 2016(6) ALLMR403 bom

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Whether delay can be condoned after imposing costs if sufficient cause for delay condonation is not given?

It is a settled position of law that in absence of any proper
explanation for  delay, the same cannot be  condoned merely for  the
asking.  The explanation has to be reasonable or plausible to enable the
Court to exercise judicial discretion – Balwant Singh (supra).  Similarly,
the Court has to record a satisfaction that the explanation for the delay
was reasonable or satisfactory – P.K. Ramachandran (supra).   Though a
liberal approach is required to be adopted, such approach cannot be so
exercised when there is total absence of explanation for the delay being
caused – Maniben Shah (supra).
As regards the direction to pay costs, it is already noted that
the costs can be ordered subject to there being any reasonable ground to
condone the delay.  By imposition of costs the requirement of furnishing
sufficient cause cannot be dispensed with.  Costs cannot be a substitute
for absence of reasons to condone the delay.  The rights that had accrued
in  favour  of  petitioner  in  view of  the  decree   in  his  favour  are  also
required to be taken into consideration.   Therefore, in absence of any
reason whatsoever being furnished by the respondents in the application
for condonation of delay dated 15.02.2012, the delay in filing restoration
application   could   not   have   been   condoned.  
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH, NAGPUR.
WRIT PETITION NO.6835 OF 2014
Rajendra Namdeorao Akre,

V 
 Rajkumar Bhalerao Balbudhe,

­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­
CORAM:  A.S. CHANDURKAR, J.
DATE:         30th JUNE, 2015.
Citation: 2016(1) MHLJ 184

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What order is to be passed by court if plaintiff is willing to withdraw his suit?

 Next it is to be noted that no act is required to be done by the Court to complete or effectuate a plaintiff's withdrawal of his suit There is no provision for any act to be done in the suit by the Court for making the withdrawal effective or even after the withdrawal it is not even required to pass any order. Withdrawal of a suit is itself its end. A plaintiff withdrawing his suit is liable for such costs as the Court may award; so the Court is empowered to pass an order only in respect of the costs. The liability for costs arises out of the plaintiff's withdrawing his suit; the suit has been withdrawn and consequently he becomes liable. The Court's order awarding costs against him is a consequence of the withdrawal, which means that the withdrawal is already complete and effective The order is not an element of the withdrawal and is not required to complete or effectuate it. In Lakshmanan Chetty v. Muthaya Chetty, (1921) 40 Mad LJ 126. Sadasiva Aiyar, J. pointed out at p. 137 that as regards unconditional withdrawal.

"It is. . . . . wholly at the option of the plaintiff and the Court has nothing to do with it except as regards providing for costs ...

and it is only where he wants some permission that he has to make an application under Clause 2.

In ILR 32 Bom 345 (supra) Sir Lawrence Jenkins, C. J, said at p. 347 that "if a party desires to withdraw from the suit with such liberty, then he must apply to the Court to permit him so to withdraw. If he does not desire to have that liberty, then he can withdraw of his own motion and no order of the Court is necessary".

Allahabad High Court

Smt. Raisa Sultana Begam And Ors. vs Abdul Qadir And Ors. on 20 September, 1965

Equivalent citations: AIR 1966 All 318

Bench: M Desai, S Manchanda

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Whether court can extend time for deposit of costs beyond thirty days as per S 148 of CPC?

 In terms of Section 148 C.P.C. court has the discretion
to extend the time. The words “not exceeding thirty days in total”
have been inserted by the C.P.C. (Amendment) Act, 1999.
Observing that if the act could not be performed within thirty days
for the reasons beyond the control of the parties, the time beyond
maximum thirty days can be extended under Section 151 C.P.C.,
in Salem Advocates Bar Association, T.N. vs. Union of India
(2005) 6 SCC 344, this Court in para (41) held as under:
“41. The amendment made in Section 148 affects the power of the
court to enlarge time that may have been fixed or granted by the
court for the doing of any act prescribed or allowed by the Code. The
amendment provides that the period shall not exceed 30 days in
total. Before amendment, there was no such restriction of time.
Whether the court has no inherent power to extend the time beyond
30 days is the question. We have no doubt that the upper limit fixed
in Section 148 cannot take away the inherent power of the court to
pass orders as may be necessary for the ends of justice or to prevent
abuse of process of the court. The rigid operation of the section
would lead to absurdity. Section 151 has, therefore, to be allowed to
operate fully. Extension beyond maximum of 30 days, thus, can be
permitted if the act could not be performed within 30 days for
reasons beyond the control of the party. We are not dealing with a
case where time for doing an act has been prescribed under the
provisions of the Limitation Act which cannot be extended either
under Section 148 or Section 151. We are dealing with a case where
the time is fixed or granted by the court for performance of an act
prescribed or allowed by the court.”
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 1856 OF 2016

NASHIK MUNICIPAL CORPORATION  Vs  M/S. R.M. BHANDARI & ANR.

Citation;AIR 2016 SC 1090,(2016) 6 SCC245,2016(6) MHLJ 813

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