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Report No. 240

5. The High Court Rule.- an overview:

(a) In Salem Advocates Bar Association case (supra), the Court, while broadly indicating the items of costs, mentioned "the cost of the time spent by the successful party" as an item of costs. Presumably, taking clue from this observation, the Calcutta High Court amended rule 2 of Order XXA through a notification dated 7.12.2006. The rule practically reproduces the broad indicators set out in Salem Bar Case. According to the substituted rule, the costs awarded shall be "actual reasonable costs", "in getting a just relief or opposing a frivolous claim including the value of time spent by him."

This is in addition to court fee, lawyer's fee and reasonable expenses incurred towards transportation and lodging of such party and his witnesses. Incidentally, it may be mentioned here that the use of the expression 'frivolous' is not quite clear. Is it only in cases of frivolous defence that the value of time spent should be quantified and not otherwise? The next sub-rule

(b) casts an obligation on the Court to quantify these amounts while disposing of the suit "not only in favour of the successful party but also to specify the amount of costs the unsuccessful party had incurred". The reason mentioned is that if the decree is reversed by the appellate court and costs are awarded in favour of the appellant, it will be convenient for the appellate court to make assessment of costs.

The reason given, though plausible, casts avoidable burden on the Court/Taxation officer. In the year 2008, the Sikkim High Court framed the rule substantially similar to the new rule 2 framed by the Calcutta High Court. However, there is no provision similar to sub-rule (b) of rule 2 framed by the Calcutta High Court.

(b) We may also refer to the amendment made by the Karnataka State to Order XXA with effect from 29th December, 2006, based on High Court's proposal. Sub-rule (g) was added according to which "the cost awarded under sub-rule (a) to (f) shall have to be actual or reasonable cost incurred by the successful party including the loss of income during effective days of hearing, conveyance charges and lodging charges, if any".

(c) The fact remains that it is not too easy to ascertain the cost of the time spent on litigation or the loss of income in monetary terms. The process of quantifying such costs will be complex. As observed by the Supreme Court in Sanjeev Kumar Jain's case (supra) at paragraph 12, having regard to the Indian conditions, it is not possible or practicable to spend the amount of time that is required for determination of actual costs as is being done in the western countries by specialized taxation officers. It was observed:

"If the courts have to set apart the time required for the elaborate procedure of assessment of costs, it may even lead to increase in the pendency of cases." The need to simplify the procedure for assessing the cost has been emphasized. In fact, even if a provision is made to assess such costs, the claims will be made only in a few cases, that too on a rough and ready estimate. The investigation into genuineness of claim is fraught with difficulties and the matter will in all probability be placed before the court for determination.

However, a party who wastes his time and money to come to the Court will not be left without any relief. If adjournment is sought on tenuous and unjustified grounds, the Court while granting adjournment, has the discretion and perhaps a duty to grant adequate costs, taking into account, inter alia, the valuable time spent by a party to attend the Court. So also, if the court comes to the conclusion that a party resorted to frivolous or vexatious litigation and unduly prolonged the litigation, the court has the discretion to award heavier costs (subject to the ceiling under section 35A).

It is doubtful whether by means of the rules, the time spent for attending the Court or income lost could be quantified with reasonable certainty. In any case, as said earlier, it would be a long drawn process and a complex exercise which our overburdened courts cannot undertake. The purpose will be better served if during the progress of trial itself, the award of costs of substantial amount is resorted to if the party or his/her advocate seeks adjournments frequently or on feeble grounds. In doing so, the cost of travel and loss of daily earning if any can be taken into account.

Costs in Civil Litigation Back

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