Report No. 240

Annexure-I

Costs in Civil litigatio.- Some illustrative cases of Supreme Court

Even though the Code of Civil Procedure contemplates award of costs as a rule, and if costs are not awarded, reasons should be recorded, no consistent principles could be seen from the judgments of the Supreme Court as to when cost could be denied to a party. Even in cases where the court felt that exemplary costs are called for, the quantification of costs seems to be ad hoc and does not furnish any guidance. There are situations where the Court felt that the conduct of the parties to the suit in fact called for award of exemplary costs but actually did not impose any exemplary cost; even cost ordinary allowable was not awarded.

For instance, see Amarendra Komalam v. Usha Sinha & Anr. , (2005) 11 SCC 251, "For the forgoing reasons, the appeal succeeds. Though it is eminently a fit case for awarding exemplary cost, we refrain from doing so. No costs."

Similarly in Gayatri Devi v. Mousumi Cooperative Housing Society Ltd. & Ors. (2004) 5 SCC 90, even though the Court was of the view that it was a fit case for award of exemplary costs, eventually it did not even allow the cost which ordinarily the petitioner would have been entitled to, holding as under:-"The appeal stands allowed. Though this case is eminently a fit case to award exemplary cost, we, by taking a lenient view of the matter say no cost".

Again, in Sumer v. State of U. P. (2005) 7 SCC 220 , the Supreme Court held "Ordinarily a curative petition of this nature deserves dismissal by imposing exemplary cost on the petitioner, but in the present case, we refrain from imposing cost, considering that the petition arises out of a criminal appeal".

In Dattaraj Nathuji Thaware v. State of Maharashtra & Ors. (2005) 1 SCC 590, even though the Court felt exemplary cost should be imposed, eventually refrained from imposing any cost, in so far as proceedings before the Supreme Court is concerned, observing as under:

"We would have imposed exemplary cost in this regard but taking note of the fact that the High Court had already imposed cost of Rs. 25,000/-, we do not propose to impose any further cost."

Similarly in Rajender Singh v. Lt. Governor Andaman & Nicobar Island & Ors. (2005) 13 SCC 289, the Court noticed that the petitioner had been unnecessarily harassed by the authorities, but however noticing that the High Court had imposed a cost of Rs. 25,000/-did not even allow the costs before it and disposed of the matter with an order, "No costs".

In Ravinder Kaur v. Ashok Kumar & Anr. (2003) 8 SCC 289 relating to disputes between land lord and tenant where the Court felt that the dispute raised by the tenant in regard to the identity of suit schedule property was only a bogey to delay the eviction, imposed an exemplary cost of Rs. 25,000/-.

In State of Kerala v. Thressia & Anr. 1995 supplement (2) SCC 449, a matter arising out of a dispute between the landlord and tenant the Court felt that exemplary cost should be imposed on the State Government and imposed a cost of Rs. 10,000/-with a direction that it shall be collected from the officer concerned and the counsel who recommended filing of the Special Leave Petition.

In Ram Awatar Agarwal & Ors. v. Corporation of Calcutta & Ors. (1999) 6 SCC 532 the Court, noticing that various proceedings, title suit etc. were filed by a party with a view to frustrate an order for demolition made by the Corporation, took the view that the proceedings by the appellant is an abuse of the process of the Court and in these circumstances quantified the cost as Rs. 1 lakh.

In Kabari Pvt. Ltd. v. Shivnath Shroff and Ors., (1996) 1 SCC 690, in relation to a suit which commenced in the year 1981 and was eventually decided finally by the Supreme Court in the year 1996 after giving through the hierarchy of courts, the Court while awarding costs quantified the cost at Rs. 10,000/-in each appeal. It is not clear whether if costs as per provisions of CPC were to be claimed by the party succeeding, the said party would have been entitled to the amount of costs so quantified.

In Bhupinder Pal Singh v. Director General of Civil Aviation & Ors. (2003) 3 SCC 633, in a service dispute decided by a Single Judge and Division Bench of the High Court, the Supreme Court while allowing the appeal, quantified the cost at Rs. 10,000/-.

In Union of India & Ors. v. Shaik Ali 1989 supplement (2) SCC 717 involving a dispute relating to premature retirement, while setting aside the same, the Court quantified the cost as Rs. 3000/-even though the matter involved adjudication initially by the Central Administrative Tribunal and thereafter by the Supreme Court.

In Srinivasa Cooperative House Building Society Ltd. v. Madam Gurumurthy Sastry & Ors. (1994) 4 SCC 675 involving a dispute concerning land acquisition, while holding that the Section 6 declaration was a colourable exercise of power, quantified the cost at Rs. 10,000/even though the matter involved adjudication by the Single Judge, the Division Bench of the High Court and thereafter by the Supreme Court.

In Life Insurance Corporation of India v. Shanta, (2004) 13 SCC 748, in a dispute relating to insurance, while dismissing the appeal filed by LIC, the Court directed cost to the respondent and quantified the litigation cost at Rs. 25,000/-.

In Oriental Insurance Company Ltd. v. Ozma Shipping Company & Anr., (2009) 9 SCC 159, in a dispute relating to Marine Insurance of the value of Rs. 21.50 lakhs which culminated in proceedings in National Commission under the Consumer Protection Act and thereafter before the Supreme Court, while dismissing the appeal of the Insurance Company, the Court quantified the cost at Rs. 25,000/-.

In P.H. Dayanand v. S. Venugopal Naidu & Ors. (2009) 2 SCC 323 , arising out of a suit relating to title, while dismissing the appeal taking note of the fact that the appellant had been prolonging the hearing of the suit, the Court observed that "he must pay and bear the cost of 1st respondent. Counsel's fee assessed at Rs. 75,000/-"

In Mohinder Singh v. State of Punjab & Ors., (2007) 10 SCC 724, in a matter involving redemption of mortgage the Court dismissed the appeal with costs and provided, "counsels fee is assessed at Rs. 25,000/-".

In Udyami Evam Khadi Gramodyog Welfare Sanstha v. State of U.P & Ors. (2008) 1 SCC 560, taking a view that the appellant has resorted to legal proceedings over and over again, which amounted to abuse of the process of law while dismissing the appeal with cost, quantified counsel's fee at Rs. 50,000/-.

In Mumbai International Airport Pvt. Ltd. v. Golden Chariot Airport and Anr., (2010) 10 SCC 422, relating to proceedings under the Public Premises (Eviction of Unauthorised Occupants) Act, 1971, which proceedings were pursued initially before the Estate Officer and thereafter before the City Civil Court, Mumbai etc. the Court noticed that the contesting respondent had taken inconsistent stands and prolonged several proceedings for more than a decade and imposed "cost assessed at Rs. 5,00,000/-(Five Lakhs)" and directed that it shall be paid to the Supreme Court Mediation Centre.

It may be recalled that the Hon'ble Supreme Court in Ashok Kumar Mittal v. Ram Kumar Gupta & Anr. (2009) 2 SCC 656, had expressed its displeasure about giving directions to deposit amounts with State Legal Services Authority, NGOs etc.

In Ali Jawad Ameerhanan Rizvi v. Indo-French Biotech Enterprises Ltd. & Ors. (2000) 9 SCC 373, in a proceeding challenging an order of the High Court whereby the High Court imposed a cost of Rs. 1 lakh while dismissing the writ petition, the Court noticed that on the findings arrived at by the High Court, there cannot be any doubt that the Court was justified in awarding the cost, but, however, reduced the same from Rs. 1 lakh to Rs. 50,000/-while maintaining the order of the High Court that the same shall be paid to the National Association for the Blind, who was not a party to the proceedings, a practice adversely commented upon in (2009) 2 SCC 656 (supra).

In Haryana Urban Development Authority v. K.C. Kad (2005) 9 SCC 469, in a dispute under the Consumer Protection Act relating to allotment of plots, the Court while awarding the cost before the Supreme Court quantified the same at a meager amount of Rs. 500/-and directed that the same shall be paid to the Legal Aid Society of the Supreme Court. This was a matter involving adjudication at various Consumer Fora.

In Associated Construction v. Pawan Hans Helicopters Ltd. (2008) 16 SCC 128, involving arbitration proceedings where the Court felt that Pawan Hans had taken advantage of a beleaguered contractor and therefore the contractor is entitled to cost, however, quantified the same only at Rs. 10,000/-.

In India Cements Ltd. v. Collector of Central Excise 1989 (2) SCR 715 , a matter under the Central Excise Act involving adjudication at the level of Appellate Collector, Appellate Tribunal and thereafter the Supreme Court, where cost was directed to be paid, it was quantified at Rs. 10,000/-.

In Delhi Electricity Supply Undertaking v. Basanti Devi and Anr (1999) 8 SCC 229, noticing that there was a lapse on the part of Delhi Electricity Supply Undertaking in remitting the LIC premium on account of which the respondent had suffered, the Court while allowing the appeal with cost, quantified the same at Rs. 25,000/-whereas the amount which was to be paid by LIC to the respondent was specified as Rs. 50,000/with interest.

In Burn Standard Company Ltd. v. McDeromott International Inc. & Anr. (1991) 2 SCC 669, dealing with Technical Collaboration Agreement and arbitration agreement, the Supreme Court taking the view that the conduct of the appellant was such as to tarnish the image and credibility of our entrepreneurs abroad, while dismissing the appeal with cost, quantified the cost at Rs. 5,000/-.

In Smt. Lata Kamat v. Vilas (1989) 2 SCC 613 involving a matrimonial dispute, the Court quantified the cost as Rs. 2500/-.

In M.S. Patil (Dr.) v. Gulbarga University (2010) 10 SCC 63, covering appointment of the petitioner as a Reader in the University, the Court dismissed the appeal with cost and quantified the same at Rs. 50,000/-. A perusal of the judgment would show that the Court felt strongly about the manner in which interim orders were obtained and the petitioner continued in the post for about 17 years even though he was not entitled to the post.

In Union of India v. R. Padmanabhan (2003) 7 SCC 270 involving dispute under the Rent Control Act, when appeal was dismissed, cost was quantified at Rs. 15,000/-.

In Bonder & Anr. v. Hem Singh & Ors. (2009) 12 SCC 310, on finding that the defendant did not have any case, either in law or equity, the Court allowed the appeal and quantified the cost to be paid by the defendant at Rs. 50,000/-.

In Oswal Fats & Oils Ltd. v. Additional Commissioner, (Administration),Bareilly (2010) 4 SCC 728 the Court taking the view that the appellant had not approached the Quasi Judicial and Judicial Forums, the High Court and the Supreme Court with clean hands and succeeded in securing interim orders, directed payment of cost quantifying the same at Rs. 2 lakhs.

In Sita Ram Bhandar Society, New Delhi v. Lt. Governor, Government of NCT, Delhi (2009) 10 SCC 501, dealing with Land Acquisition Proceedings, the Court taking a view that the pleas raised were frivolous in nature and meant to frustrate and delay an acquisition which is in public interest, dismissed the appeals with costs which was determined at Rs. 2 lakhs.

In N.V. Srinivasa Murthy v. Mariyamma (2005) 5 SCC 548, the Court not only directed "cost incurred throughout by the respondents to be paid by the appellants" and in addition directed that a further cost in the sum of Rs, 10,000/-to be paid by the appellant to the respondent "for prosecuting and prolonging litigation upto this Court in a hopelessly barred suit".

In Indian Council for Enviro-Legal Action & Ors. v. Union of India & Ors (1996)3 SCC 212, in a litigation involving a matter of public interest and spread over a period of six years, the court awarded a sum of Rs. 50,000/-. However, in Mohammad Mahibulla & Anr. v. Seth Chaman Lal & Ors. (1991) 4 SCC 529 where the litigation was dragged on and prolonged for ten years, the cost imposed was only Rs. 1000/-.

"We are inclined to agree with counsel for the respondents that this is a case of negligence on the part of the appellants and, therefore, the respondents who have been dragged in these proceedings for about 10 years should be compensated. We direct that the restoration of the appeal in the appellate court on payment of appropriate court-fee shall be subject to the further condition of payment by way of cost of Rs. 1000" (para 7)

In Union of India v. R.Padmanabhan (2003) 7 SCC 270, the Court while finding that the Government has been unreasonable directed as under:

"The respondent has been driven to unnecessary litigation by completely denying anything initially for all his efforts and had to face proceedings in this Court also. The Appellant will pay Rs. 15,000 for the costs of the respondent, while bearing their own costs."

In State of Punjab & Ors. v. Bhajan Singh & Anr. (2001) 3 SCC 565, on giving a finding that the conduct of the official concerned was responsible for the situation complained of, the Court directed the officer involved to personally pay the cost pr Rs. 25,000/-.

In Comptroller & Auditor General of India v. K.S.Jagannathan (1986) 2 SCR 17 the Court directed:

"For the purpose of this appeal the Respondents have been compelled to come to New Delhi to appear before this Court time and again and also had to spend money on their board and lodging. The Appellants will therefore will pay to each of the Respondents a sum of Rs.1500/-by way of cost of this appeal." This was a case involving weaker sections of society and interpretation of certain constitutional provisions.

The above judgments which are merely a representative sample dealing with different situations and different subject matters ranging from family disputes, eviction proceedings, service disputes to commercial disputes, tax disputes, land acquisitions, etc., would show that there are no discernible norms in regard to award of costs or quantification of costs and it so even in regard to exemplary costs.

There are also instances where cost is directed to be paid to a person other than a party to the proceeding whereas in some judgments, the Court has deprecated and cautioned against such practice. Judgments of the Court seen with reference to cost being imposed or cost not being imposed, do not give any indication of any underlying principle and no guidelines or norms can be s deduced therefrom. Representative sample of judgments of apex Courts only reinforce the belief that at present award of costs and quantum are a matter entirely in the discretion of the Court and that such discretion is being exercised without any discernible principles.