Section 35: Costs

Code of Civil Procedure Section 34. Interest.

COSTS

35. Costs.—(1) Subject to such conditions and limitations as may be prescribed, and to the provisions of any law for the time being in force, the costs of and incident to all suits shall be in the discretion of the Court, and the Court shall have full power to determine by whom or out of what property and to what extent such costs are to be paid, and to give all necessary directions for the purposes aforesaid. The fact that the Court has no jurisdiction to try the suit shall be no bar to the exercise of such powers.

(2) Where the Court directs that any costs shall not follow the event, the Court shall state its reasons in writing.

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Note 1: Sub-section (3) omitted by Act 66 of 1956, s. 3.

Part in Red is original provisions from CPC reproduced here for reference.

Code of Civil Procedure Section 35A. Compensatory costs in respect of false or vexatious claims or defences.

Simplified Explanation:

Section 35 provides Actual realistic costs - meaning.

Provision of costs have been incorporated in section 35, 35-A, 35-B and section 95 of CPC for the purpose of acting as a deterrence against frivolous vexatious claims made. But the working of the provision shows that many unscrupulous parties take advantage of the fact that either the costs are not awarded or nominal costs are awarded on the unsuccessful party.

Judgments:

(a) In Salem Advocates Bar Association V. Union of India, 2005 (6) SCC 344, the Supreme court held that the costs have to be actual and reasonable, including the cost of the time spent by the successful party, the transportation and lodging, if any, or any other incidental cost besides the payment of the court fee, lawyer's fee, typing and other cost in relation to the litigation. It is for the High Courts to examine these aspects and wherever necessary make requisite rules.

(b) In Sanjeev Kumar Jain V. Raghubir Saran Charitable Trust & Ors., (2012)lSCC455, the Apex Court went into the Interpretation of the words "actual realistic costs". It held that even if actual costs have to be awarded, it should be realistic which means what a "normal" advocate in a "normal" case of such nature would charge normally in such a case, Assuming that costs could be awarded on such basis. The actual realistic cost should have a correlation to costs which are realistic and practical. It cannot obviously refer to fanciful and whimsical expenditure by parties who have the luxury of engaging a battery of high-charging lawyers.

Reference: http://www.nja.nic.in/16%20CPC.pdf

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