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Report No. 189

(1) Imposition of exemplary costs

No doubt, frivolous or vexatious litigation is a serious problem and it is required to be dealt with effectively. The Supreme Court in Dr BuddhiKota Subbarao v. K. Parasaran, AIR 1996 SC 2687, has criticized the practice of frivolous petitions. The Supreme Court observed:

"No litigant has a right to unlimited drought on the Court time and public money in order to get his affairs settled in the manner as he wishes. Easy access to justice should not be misused as a licence to file misconceived frivolous petition."

As observed in Chapter VI, enhancing the Court fee for purpose of limiting vexatious litigation is not an appropriate step as suggested by the Department of Justice and Standing Committee of Secretaries. On the contrary, enhancement in the Court fees would adversely affect the rights of genuine litigants to get justice. There are many other ways which up to some extent can curb the flood of vexatious litigations. One way is awarding exemplary costs. The Court can pass an order of exemplary costs in cases of vexatious or frivolous litigation. Supreme Court and other Courts in fact have passed an order of exemplary cost in many cases. In Rajappa Hanamantha Ranoj v. Mahadev Channabasppa, (2002) 6 SCC 120, the Supreme Court has held:

"It is distressing to note that many unscrupulous litigants in order to circumvent orders of Courts adopt dubious ways and take recourse to ingenious methods including filing of fraudulent litigation to defeat the orders of Courts. Such tendency deserves to be taken serious note of and curbed by passing appropriate orders and issuing necessary directions including exemplary costs."

The Supreme Court in this case passed an order of exemplary costs of rupees twenty five thousand against appellant for filing of vexatious case.

In another instance in Charanlal Sahu v. Dr. A.P.J. Abdul Kalam, (2003) 1 SCC 609, the Supreme Court imposed exemplary costs of rupees twenty 108 five thousand on the petitioner for filing a frivolous petition challenging the election of the President of India, Dr. A.P.J. Abdul Kalam. The Court observed that the petitioner who is an advocate had earlier filed four election petitions challenging the election of the returned candidates in the President's elections held in the years 1974, 1977, 1982 and 1997. All these election petitions were dismissed on the ground that the petitioner had no locus standi. The Court in Charanlal Sahu v. Giani Zail Singh, 1984 (1) SCC 390, observed:

"In order to discourage the filing of such petitioners, we would have been justified in passing a heavy order of costs against the two petitioners."

In that case the Court did not pass any order as to costs it would create a needless misconception that Supreme Court, which is the exclusive forum for deciding election petitions relating to election of the President and the Vice President, is loathe to entertain such petitions. Instead, the Court expressed its disapproval of the high-handed and indifferent manner in which the petitions were drafted and filed. But when the same petitioner again filed another election petition in 1998, the Supreme Court imposed costs of rupees ten thousand on him Charanlal Sahu v. K.R. Narayanan, (1998) 1 SCC 56).

There are other instances where the Supreme Court had passed order of exemplary costs. Sivamoorthy v. University of Madras, (2001) 10 SCC 483; State of Punjab v. Bhajan Singh, (2001) 3 SCC 565.

Section 26 of the Consumer Protection Act, 1986 provides that whenever the Dist. Forum, State Commission or the National Commission finds that any complaint instituted before it is frivolous or vexatious, it shall dismiss the complaint with a reasoned order along with an order directing the complainant to pay to the opposite party, costs not exceeding rupees ten thousand as may be specified in the order.

Section 35A of the Code of Civil Procedure, 1908 also provides for compensatory costs in respect of false or vexatious claims or defences. Any party to suit or other proceeding may object to the claim or defence on the ground that such claim or defence or any part of it is, as against the objector, false or vexatious to the knowledge of the party by whom it has been put forward. And if thereafter, such claim or defence is disallowed, abandoned or withdrawn in whole or in part, the Court may hold that such claim or defence to be false or vexatious and make an order for payment of costs to the objector by whom such claim or defence was put forward.

In T.S. Arivandanan v. T.V. Satyapal, AIR 1977 SC 2421, Krishna Iyer J. condemned the petitioner for the gross abuse of the process of Court to which he resorted unrepentantly. It was held that if the trial Court was satisfied that litigation was inspired by vexatious motives and altogether groundless, it should take deterrent action under sec. 35A to the CPC. The National Commission to Review the Working of the Constitution has also stated (para 7.11) that an award of exemplary cost should be made in appropriate cases of abuse of process of law.

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