Description

Section 35 of the Code of Civil Procedure (CPC), 1908, deals with the award of costs in civil litigation. The section gives the court the discretion to determine the costs of a lawsuit, which can include the expenses incurred by a party for legal representation, filing fees, expert fees, and other related costs. It allows the court to decide who will bear these costs and to what extent. The aim is to provide a fair and just outcome in a case, considering the circumstances of the parties involved.

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Key Features of Section 35 - Costs

1. Discretionary Power of the Court:

   • Section 35 grants the court discretion to award costs. The court is authorized to decide who should pay the costs of the proceedings. The losing party is typically required to pay the costs of the winning party, but the court has the authority to deviate from this general rule if it deems fit.
   • The court may order the party who loses the suit to pay the costs incurred by the winning party for the litigation.

2. Types of Costs:

   • The costs awarded may include:
     • Court Fees: Fees paid to the court for filing the suit.
     • Attorney Fees: The costs of hiring a lawyer, including the legal fees incurred for representation.
     • Miscellaneous Expenses: Costs of documents, postage, travel, and other related expenses.
     • Expert Fees: If expert witnesses were called, their fees can also be included.

3. Who Bears the Costs:

   • Normally, the losing party is ordered to pay the costs of the proceedings.
   • However, the court may choose to:
     • Order each party to bear its own costs if it believes that the case was of a complicated nature or if the parties acted in good faith.
     • Apportion the costs between the parties if the court believes that both parties contributed to the outcome of the case.

4. Factors Influencing Award of Costs:

   • The court may consider various factors while determining costs, such as:
     • Whether a party was acting in bad faith.
     • The conduct of the parties during the litigation, including whether any party unnecessarily prolonged the proceedings.
     • Whether any party unreasonably refused settlement or failed to respond to reasonable settlement offers.
     • Whether the party made frivolous claims or raised unnecessary issues that caused unnecessary expenses.

5. Fixed and Taxed Costs:

   • The court can either:
     • Fix costs at a specific amount, determining what the winning party should be paid by the losing party.
     • Tax costs, where the court requires a detailed assessment of the actual expenses incurred by the winning party. This often involves the preparation of a bill of costs that is scrutinized to ensure that only necessary and reasonable costs are included.

6. Interim Orders and Costs:

   • If interim orders were passed during the suit (such as an injunction or stay), the court may decide who bears the costs associated with the interim proceedings as well.
   • Costs can be awarded at different stages of the suit, depending on how the case progresses.

7. Punitive Costs:

   • In exceptional cases, the court may impose punitive costs on a party. For example, if a party has caused unnecessary delays, wasted the court’s time, or acted in bad faith, the court may order that the party pay costs that are higher than usual. This is meant to deter parties from engaging in frivolous or vexatious litigation.

8. Costs in Case of Settlement:

   • If the parties reach a settlement or compromise before the final judgment, the court may order the party that made the settlement offer to bear the costs. In some cases, the parties may agree to settle the issue of costs between themselves.
   • If a party rejects a settlement offer and loses the case, the court may order them to pay the other party’s costs for rejecting the reasonable offer.

9. Appeals and Costs:

   • In the case of an appeal, the court of appeal may decide whether to award costs in favor of the winning party. The losing party in an appeal may be ordered to pay the costs of the appeal in addition to the costs of the original suit.
   • Section 35(2) provides that the court may specify when and how the costs should be paid, and whether the winning party should be paid in full or partially.

10. Review and Adjustment of Costs:

• The review of costs can be requested in cases where a party believes the awarded costs are excessive or not in line with what is reasonably expected. This is typically done through a taxation process.
• The court may reassess the costs by requiring an itemized bill of costs to be submitted for review and determine whether all claimed costs are justified.

Punishment

1. Failure to Pay Costs:

   • If a party refuses or fails to pay the costs as ordered by the court, the court can take measures to enforce payment. These may include:
     • Attachment of property of the party who refuses to pay the costs.
     • Warrants of arrest against the non-paying party to enforce payment.
   • Contempt of Court: If the failure to pay costs is due to wilful disobedience, the court may initiate contempt of court proceedings, which may result in fines, imprisonment, or both.

2. Costs for Frivolous Litigation:

   • If the court finds that a party has filed a frivolous lawsuit or engaged in vexatious litigation, it may impose punitive costs on the party to discourage such behavior.
   • In some cases, the court may also impose penalties in the form of an increased costs award to deter abuse of the legal process.

3. Execution of Costs:

   • If the awarded costs are not paid voluntarily, the winning party may file for the execution of the decree, which may include attachment of the losing party's property or garnishment of wages to satisfy the debt.

4. Failure to Comply with Settlement Offers:

   • If a party fails to comply with a reasonable settlement offer and loses the case, they may be ordered to bear the entire cost of the litigation as a penalty for rejecting a reasonable offer and prolonging the case unnecessarily.