Singh Vs. D.S. Sharma & ANR.  INSC 1731 (13 November 2009)
SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 7554-7555
OF 2009 [Arising out of SLP [C] Nos.2203-2204 of 2008] Manohar Singh ...
Appellant D. S. Sharma & Anr. ... Respondents
Leave granted. Heard learned counsel.
The appellant filed a suit for damages against his erstwhile
employer - National Thermal Power Corporation Ltd. (`NTPC' for short, second
respondent herein) and its then General Manager in the District Court, Delhi.
After conclusion of Plaintiff's evidence, the defendants' evidence was
commenced. On 6.1.2004 the suit was listed for further evidence of defendants.
One S. Joseph, (DW 2), whose affidavit had been filed by way of an
examination-in-chief, was present in court for being cross-examined by the
plaintiff. The plaintiff requested for an 2 adjournment on the ground that his
counsel was busy elsewhere. The case was therefore adjourned to the next day
(7.1.2004). Again, plaintiff sought time on the ground that his counsel was
otherwise busy. When the court asked the plaintiff to cross-examine the said
witness, as he had earlier cross-examined DW-1 without the assistance of a
counsel, plaintiff refused to do so. The witness had come all the way from
Durgapur for giving evidence. The court therefore adjourned the matter to
9.2.2004, subject to payment of costs of Rs.5000 by the plaintiff. On 9.2.2004
also, S. Joseph (DW-2) was present, but the plaintiff sought an adjournment on
the ground that he wanted to move an application for transfer of the suit.
request for adjournment was opposed on the ground that the witness had come
from Durgapur by air. The suit was however adjourned to 9.3.2004. On 9.3.2004,
plaintiff submitted that he had already moved an application for transfer
(alleging that he had lost faith in the Presiding Officer). The suit was
adjourned to 7.4.2004. The suit was thereafter adjourned to 20.7.2004,
31.8.2004, 5.10.2004, 10.11.2004, 17.1.2005, 23.2.2005, and 7.4.2005 on the
ground that the transfer application filed by the plaintiff was pending before
the District Judge.
On 24.3.2005, the transfer petition filed by the plaintiff was
allowed and his suit was withdrawn from the file of Shri O.P. Gupta, Addl.
District Judge and assigned to the file of another Additional District Judge,
with a direction to the parties to appear on 1.4.2005. On that day, the new
trial Judge directed the plaintiff to deposit Rs.5,000 towards the travel
expenses of DW-2 before he could cross-examine DW2. The matter was adjourned to
27.4.2005. On 27.4.2005, the plaintiff filed an application for waiver of
costs. That application was dismissed and the case was posted to 27.7.2005 for
further evidence. On 27.7.2005, the plaintiff failed to deposit the costs. The
court recorded that costs were not paid in spite of repeated opportunities.
Relying upon Section 35B of the Code of Civil Procedure (for short `the CPC'),
the trial court dismissed the suit for failure to pay the costs in spite of
several opportunities. The said dismissal order dated 27.7.2005 was challenged
by way of a revision before the Delhi High Court. The High Court dismissed the
appeal by order dated 21.5.2007. It upheld the decision of the trial court
holding that the provisions of section 35B were mandatory and if the costs
levied were not paid "the only course open to the court is to disallow the
prosecution of the suit" and, that meant the dismissal of the suit.
Appellant's petition for review was dismissed on 7.9.2007. The 4 orders dated
21.5.2007 and 7.9.2007 are challenged in these appeals by special leave.
The appellants contended that having regard to the provisions of
section 35B of CPC, if costs levied on plaintiff are not paid, the court can
only stop further prosecution of the suit by the plaintiff. It is submitted
that section 35B does not confer power to dismiss the suit for non- payment of
costs. Learned counsel for the second respondent, on the other hand, supported
the judgment of the trial court, as affirmed by the High Court.
Section 35B of CPC deals with costs for causing delay. Relevant
portion of the said section extracted below :
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-- 5 (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.
35B provides that if costs are levied on the plaintiff for causing delay,
payment of such costs on the next hearing date, shall be a condition precedent
to the further prosecution of the suit by the plaintiff.
if costs are levied on the defendant for causing delay, payment of such costs
on the next date of hearing, shall be a condition precedent to the further
prosecution of the defence of the suit by the defendant. This takes us to the
meaning of the words "further prosecution of the suit" and
"further prosecution of the defence". If the Legislature intended
that the suit should be dismissed in the event of non-payment of costs by
plaintiff, or that the defence should be struck off and suit should be decreed
in the event of non-payment of costs by the defendant, the Legislature would
have said so. On the other hand, Legislature stated in the rule that payment of
costs on the next date shall be a condition precedent to the further
prosecution of the suit by plaintiff (where the plaintiff was ordered to pay
such costs), and a condition precedent to the further prosecution of the
defence by the defendant (where the defendant was 6 ordered to pay such costs).
This would mean that if the costs levied were not paid by the party on whom it
is levied, such defaulting party is prohibited from any further participation
in the suit. In other words, he ceases to have any further right to participate
in the suit and he will not be permitted to let in any further evidence or
address arguments. The other party will of course be permitted to place his
evidence and address arguments, and the court will then decide the matter in
accordance with law. We therefore reject the contention of the respondents that
section 35B contemplates or requires dismissal of the suit as an automatic
consequence of non-payment of costs by plaintiff.
We may also refer to an incidental issue. When section 35B states
that payment of such costs on the date next following the date of the order
shall be a condition precedent for further prosecution, it clearly indicates
that when the costs are levied, it should be paid on the next date of hearing
and if it is not paid, the consequences mentioned therein shall follow. But the
said provision will not come in the way of the court, in its discretion
extending the time for such payment, in exercise of its general power to extend
time under section 148 of CPC. Having regard to the scheme and object of
section 35B, it is needless to say that such extension 7 can be only in
exceptional circumstances and by subjecting the defaulting party to further
terms. No party can routinely be given extension of time for payment of costs,
having regard to the fact that such costs under section 35B were itself levied
for causing delay.
We may also refer to the provisions of Rule 1 of Order XVII of CPC
which deals with grant of time and adjournments. The said provision is
extracted below :
Court may grant time and adjourn hearing.--(1) The Court may, if sufficient
cause is shown, at any stage of the suit, grant time to the parties or to any
of them, and may from time to time adjourn the hearing of the suit for reasons
to be recorded in writing:
that no such adjournment shall be granted more than three times to a party
during hearing of the suits.
of adjournment.--In every such case the Court shall fix a day for the further
hearing of the suit, and shall make such orders as to costs occasioned by the
adjournment of such higher costs as the Corut deems fit:
that, -- (a) when the hearing of the suit has commenced, it shall be continued
from day to-day until all the witnesses in attendance have been examined,
unless the Court finds that, for the exceptional reasons to be recorded by it,
the adjournment of the hearing beyond the following day is necessary, (b) no
adjournment shall be granted at the request of a party, except where the
circumstances are beyond the control of that party, (c) the fact that the
pleader of a party is engaged in another Court, shall not be a ground for
adjournment, 8 (d) where the illness of a pleader or his inability to conduct
the case for any reason, other than his being engaged in another Court, is put
forward as a ground for a adjournment, the Court shall not grant the
adjournment unless it is satisfied that the party applying for adjournment
could not have engaged another pleader in time, (e) where a witness is present
in Court but a party or his pleader is not present or the party or his pleader,
though present in Court, is not ready to examine or cross-examine the witness,
the Court may, if it thinks fit, record the statement of the witness and pass
such orders as it thinks fit dispensing with the examination-in-chief or
cross-examination of the witness, as the case may be, by the party or his
pleader not present or not ready as aforesaid.
supplied) It is evident from Rule 1(2) proviso (e) of Order 17 that where a
witness is present in court but the other side is not ready to cross-examine
the witness, the court can dispense with his cross-examination. But where a
genuine and bona fide request is made for adjourment, instead of resorting to
forfeiture of the right to cross-examine, the court may grant time by levying
A conspectus of the above provisions clearly demonstrates that
under the scheme of CPC, a suit cannot be dismissed for non-payment of costs.
Non-payment of costs results in forfeiture of the right to further prosecute
the suit or defence as the case may be. Award of costs, is an alternative
available to the court, instead of dispensing with the cross- 9 examination and
closing the evidence of the witness. If the costs levied for seeking an
adjournment to cross-examine a witness are not paid, the appropriate course is
to close the cross-examination of the witness and prohibit the further
prosecution of the suit or the defence, as the case may be by the defaulting
In this case, the plaintiff has harassed the defendants and its
witness by seeking repeated adjournments. In view of it, plaintiff's right to cross-examine
DW2 stands forfeited. However, as costs were levied, but were not paid, the
court should have closed the evidence of DW2, permitted the defendants to
produce any further evidence (without any right to plaintiff to cross-examine
such witnesses) and then ought to have proceeded to dispose of the suit on
merits by considering the material available and hearing the arguments of
defendant. The court could not have dismissed the suit.
In view of the above, we allow these appeals, set aside the judgments
of the High Court and the trial court, restore the suit to its file, subject to
the following :
The right of the plaintiff to cross-examine DW2 stands forfeited and he is
barred from prosecuting the suit further.
trial court shall however permit the defendants to let in any further evidence,
hear arguments and then dispose of the suit.
However, if plaintiff-appellant tenders the costs with an appropriate
application under section 148 CPC, the trial court may consider his request in
accordance with law. Even if the court extends the time for deposit, permits
the plaintiff to pay the costs and prosecute the suit further that will not
entitle the plaintiff to cross-examine DW2.
....................................J. (R V Raveendran)