Report No. 240

10. Section 35-B: ("Costs For Causing Delay")

10.1 In its 54th Report (1973), the Law Commission of India recommended the insertion of Section 35-B as follows:

"35-B. The Court may, while passing an order for costs, make the party responsible for delay with reference to any step in the litigation, pay the costs proportionate to that delay, whatever may be the ultimate event of the suit".

10.2 By the Civil Procedure Code (Amendment) Act of 1976, Section 35-B was introduced which is substantially the same as suggested by the Commission. However, the ambit of S. 35 has been widened to include costs for obtaining adjournment for any reason.

10.3 Section 35-B of CPC empowers the Court to make an order requiring a party who is causing delay in the proceedings to pay to the other party cost which "in the opinion of the Court be reasonably sufficient to reimburse the other party in respect of expenses incurred by him in attending the Court on that date fixed."

Section 35-B which is narrower that Section 35-A covers two situations: one is where the party to the suit fails to take the step which was required to be taken under the Code on the date fixed, for e.g. not filing an application for bringing LRs on record, not filing written statement, not doing the needful to cause the service of summons or notice etc., not filing the documents ordered to be filed, not answering the interrogatories and so on. Seeking an adjournment for taking such steps is a part of the first contingency. The second one is obtaining an adjournment for producing evidence or "on any other ground".

In either event, costs can be ordered by the Court. Section 35-B requires reasons to be recorded for making such an order and further the cost should be such as would cover the expenses incurred for attending the Court. Sub-section (1) of Section 35-B also contains an important provision which says that the payment of such cost on the date next following the date of such order shall be a "condition precedent" to the further prosecution of the suit or the defence as the case may be.

This provision laying down an embargo on the further prosecution of the suit etc. has been construed by the Supreme Court in Manohar Singh v. B.S. Sharma (2010 1 SCC 53). In that case, the Supreme Court was dealing with an order in a suit dismissing the suit for failure to pay the cost of Rs.5000/-by invoking Section 35-B of the Code. The High Court had taken the view that the provisions of Section 35-B 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",.

However, the Supreme Court interpreted the words "further prosecution of the suit" and "further prosecution of the defence" to only mean that if the cost levied was not paid, such defaulting party is prohibited from any further participation in the suit and it cannot be construed as one requiring dismissal of the suit as an automatic consequence of non payment of cost by the plaintiff. Taking the said view, the Court restored the suit and directed however that the plaintiff's right to cross examine the defence witness concerned shall stand forfeited.

The Court, at the same time, added a rider that "if the appellant-plaintiff 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 DW-2" (vide para 13 (iii). This judgment clarifies that the embargo laid down in Section 35-B is not absolute and it is subject to Section 148 which provides for enlargement of time up to 30 days in total.

The rigour of embargo laid down in Section 35-B has thus been softened. We are not here concerned with the larger question whether in the interests of speedy disposal of suit, Section 148 should be allowed to be invoked. Suffice it to state at this juncture, that the Court even while exercising its discretionary power under Section 148 is not powerless to impose costs or such other conditions as may act as a check against further defaults. Logically, the cost to be imposed while passing an order under Section 148 should be heavy cost.