⚖️ CIVIL PROCEDURE CODE: Imposition of Actual Reasonable Costs
Topics:
- Power to order discovery
- Summons to witness
- Penalty for default
- Judgment and decree
- Interest
- COSTS: Costs shall follow the event
- Compensatory costs for vexatious claims or defenses
- Costs for causing delay
- Compensatory costs not to exceed Rs. 3000
Supreme Court Judgment 📜
Salem Advocates Bar Assn. v. Union of India [2005 SC]
Decision: Section 35 postulates that the cost shall follow the event and if not, reasons thereof shall be stated. Costs must include actual reasonable costs including time, transportation, lodging, court fees, lawyer’s fees, typing, and other incidental litigation expenses.
Power to Order Discovery 📂
Section 30
- Subject to prescribed conditions and limitations:
- Court may, of its own motion or on application of any party:
- Make necessary or reasonable orders regarding admission of documents and facts, discovery, inspection, production, impounding, and return of documents or other material objects producible as evidence
- Issue summonses to persons whose attendance is required to give evidence or produce documents/objects
- Order any fact to be proved by affidavit
Summons to Witness 📑
Section 31
- Provisions in sections 27 apply to summonses to give evidence or produce documents/material objects
Penalty for Default ⚖️
Section 32
- Court may compel attendance of any person issued a summons under Section 30
- May issue a warrant, attach/sell property, impose fine not exceeding ₹5000, or commit to civil prison
Judgment and Decree 🏛️
Section 33
- After the case has been heard, Court shall pronounce judgment and decree shall follow
Interest 💰
Section 34(1)
- Court may order interest on principal sum adjudged at reasonable rate from date of suit to decree, plus further interest not exceeding 6% p.a.
- Higher interest rate for commercial transactions may exceed 6% but not exceed contractual or prevailing bank rates
- Explanation II: Transaction is commercial if connected with industry, trade, or business of party incurring liability
Deemed Refusal of Further Interest
- Section 34(2): Silence on further interest from date of decree to payment means refusal; separate suit shall not lie
COSTS 💸
Section 35(1)
- Costs of all suits are at the discretion of Court
- Court determines by whom, out of what property, and to what extent costs are paid
Costs Shall Follow the Event
- Section 35(2): If Court directs costs not to follow the event, reasons must be stated in writing
Compensatory Costs for Vexatious Claims or Defences
- Section 35A: If claim/defence is false or vexatious and disallowed/withdrawn, Court may order payment of costs as compensation
- Maximum amount: ₹3000 or limits of pecuniary jurisdiction, whichever is less
Costs for Causing Delay ⏳
- Section 35B(1): Party failing to take required steps or causing adjournment may pay costs to reimburse other party
- Section 35B(2): Costs paid are not included in decree; if unpaid, separate executable order is drawn
Explanatory Notes from DLA: Section 35 mandates costs follow the event, awardable costs are at Court discretion. Costs should reflect actual reasonable expenditure by successful party, including time, travel, lodging, court fees, lawyer fees, typing, and incidental litigation costs.
📚 Continue Your CPC Preparation
Don’t stop here! Strengthen your knowledge of the Civil Procedure Code with our other fully solved tests:
📘 Free Study Material for Judiciary Aspirants!
Download our FREE study material prepared by Delhi Law Academy’s expert faculty.
❓ Frequently Asked Questions: CPC – Actual Reasonable Costs
It means that the party who wins the case is entitled to have the costs of the suit paid by the losing party. If the Court decides otherwise, reasons must be stated in writing. Costs include actual reasonable expenses such as lawyer fees, travel, lodging, court fees, and time spent.
Under Section 35A, if a party raises a claim or defense that is false or vexatious and it is disallowed or withdrawn, the Court may order the offending party to pay costs as compensation to the other party. The maximum amount cannot exceed ₹3000 or the limits of the Court’s pecuniary jurisdiction.
Yes, Section 35B allows the Court to require a party causing delay (e.g., failing to take a step or obtaining an adjournment) to pay costs to reimburse the other party for expenses incurred on that date. Payment of such costs may be a condition precedent to continuing the suit or defense.
Actual reasonable costs include the successful party’s time spent, transportation, lodging, court fees, lawyer’s fees, typing charges, and other incidental costs related to the litigation, as clarified in Salem Advocates Bar Assn. v. Union of India [2005 SC].
Yes, Section 35(1) provides that costs are in the discretion of the Court. The Court decides by whom, out of what property, and to what extent such costs are payable. Section 35(2) ensures that reasons are recorded if costs are not awarded to follow the event.
Yes, Section 35A(2) limits compensatory costs to ₹3000 or the pecuniary jurisdiction of the Court, whichever is less. This prevents excessive penalties while ensuring accountability for vexatious litigation.
Contact us
📍 Delhi Law Academy – Jaipur Branch
6C, Tower 2, Coaching Hub, Pratap Nagar, Jaipur – 302033
📞 Phone:
+91 9911916552
+91 8447285606
✉️ Email:
contactus@delhilawacademy.com