“I have found in my experience that there is one panacea which heals every sore in litigation and that is costs.” – Justice Bowen in Copper vs. Smith (1884).
Civil litigation in India is a long-drawn-out and arduous process. Of the several factors contributing to the age-defying process of civil litigation nationwide, vexatious and frivolous litigations, borne out of greed and dilatory tactics of seeking constant adjournments, are the leading drawbacks. To deter litigants from indulging in such improper conduct, a mechanism has been put in place under the Code of Civil Procedure, 1908 (the Code) for awarding costs. The provisions on costs under the Code aim at ensuring that realistic and reasonable costs are awarded to a successful party thereby curbing false and frivolous litigation, and discouraging unnecessary adjournments.1 Despite express provisions under the Code, the levying of costs has been a rather underrated and overlooked aspect. The habitual overuse of phrases such as “no costs awarded” or “parties to bear their own costs” has undermined the purpose and objective of the imposition of costs in civil litigation.
Existing framework
The provisions for awarding costs in civil litigation in India are enshrined in the Code under Sections 35, 35A, and 35B, and Orders XX-A, and XXV. Sections 35, 35A, and 35B of the Code stipulate provisions relating to the award of “general costs”, “compensatory costs” for false/vexatious claims, and “costs for delay”, respectively. Order XX-A of the Code envisages costs in relation to certain specific expenditures, such as costs incurred for issuing notices, and the printing of pleadings. Discretion is conferred on the courts to award “security for costs” under Order XXV of the Code where a party instituting a suit must deposit security to ensure payment of expenses incurred by the other party in the suit.
Please click here to read the full article by Pratik Pawar, Shanaya Cyrus Irani, and Ananya Verma published in Mondaq.
Pratik’s core area of practice is litigation and alternative dispute resolution in a diverse range of corporate & commercial disputes, matters pertaining to public trusts, and matters arising out of engineering and construction contracts, and matters pertaining to media & entertainment law.
Shanaya is part of the Disputes practice of the firm. She focuses on dispute resolution and handles Indian & international arbitration. She has acted for several international as well as Indian clients in many arbitrations, as well as diverse litigation proceedings.