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Report No. 55

40. Interest on costs.-

On the last point-interest on costs-there is much to be said on both sides.1 While it is true that no man ought to make a profit out of litigation and that costs are meant only to reimburse the successful litigant, and not to be a source of fresh income, it should not be forgotten that a person is awarded costs to cover expenses which he has rightfully incurred, towards litigation rightfully initiated. Until he is able to recover the amount from the party against whom he has been awarded costs, he loses interest on money which he has rightfully spent and which (if it had not been required for litigation) he would have invested. At the time, we have to take note of the fact that Parliament, having considered these aspects, nevertheless removed the relevant provisions. In this position and in the absence of compelling reasons disclosing the need for modification, we are not inclined to disturb the law on this point.

1. See, for example, Shri Tek Chand's view, para. 22, supra and the dissenting note of Shri K.S. Raghvachari, para. 18, supra.

Rate of Interest for the Period after Decree and Interest on Costs Under Sections 34 and 35 of the Code of Civil Procedure, 1908 Back

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