12/23/24, 11:39 PM Cost and Interest under Code of Civil Procedure,1908 By Juned Akhter

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Cost and Interest under Code of Civil Procedure,1908 By Juned Akhter

     13 Jan 2019

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January 14,2019:
The author, Juned Akhter, is a 2nd year student of Dr. Ram Manohar Lohia National Law University Lucknow. He is
currently interning with LatestLaws.com
INTRODUCTION
In present days, the Indian Courts are burdened with huge number of cases. The basic problem in moving towards
litigation is the time taken to adjudge the dispute as well as the costs incurred in the whole legal proceeding.This
solution to this problem is mentioned in the Code of Civil Procedure, 1908 only if the suit is of civil nature. Certain
provisions like Section 34, 35,35A and 35B provides remedy to the winning party in terms of monetary compensation
incurred in maintaining litigation expenses.
According to the Black’s Law Dictionary, costs is a pecuniary allowance provided to the winning party for maintaining
the suit and incurring expenses. In England, this term is also used to refer to the expenses incurring in paying fees to
the attorneys, lawyers or for drafting contracts, notices and other legal drafting by the winning party.

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12/23/24, 11:39 PM Cost and Interest under Code of Civil Procedure,1908 By Juned Akhter

Interest as defined in Section 34 of Code of Civil Procedure reads as: Where and in so far as a decree is for the
payment of money, the court may, in the decree, order interest at such a rate as the court deems reasonable to be
paid on the principal sum adjudged, from the date of the suit to the date of the decree, in addition to any interest
adjudged on such principal sum for any period prior to the institution of the suit,[ with further interest at such rate not
exceeding six percent, per annum as the Court deems reasonable on such principal sum], from the date of the
decree to the date of payment, or to such earlier date as the Court thinks fit[1].
Section 35- “Costs”- Section 35 of the Code of Civil Procedure provides for the costs. The provision grants right to
the discretion of the court that it may grant order for paying the cost to the winning party for the expenses incurred
in maintaining the suit or to pay for the amount that the winning party has incurred while drafting legal notices and
contracts.
This amount is subjected to be paid by the losing party. This remedy shall not to be treated as any reward to the
winning party on one side and as a punishment to the losing party on the other side[2].
All the necessary direction with regard to that shall be given by the court. In cases where the Court refuses to grant
the cost, it shall give in writing for doing so. Costs are at the discretion of the court. It must be exercised reasonably if
the court deems fit to do so and not by caprice or chance. This discretion of the court must be exercised considering
the facts and circumstances of the case.
Section 35A- Compensation in respect of false or vexatious claims
If any suit or other proceedings including an execution proceeding but any party objects to the claim of defence on
the ground that the claim or defence or any part of it, as against the objector, false or vexatious to the knowledge of
the party by whom it has been put forward, and if thereafter, as against the objector, such claim or defence is
disallowed, abandoned or withdrawn in whole or in part, the Court may after recording its reasons for holding such
claims defence to be false or vexatious make an order for the payment to the object or by the party by whom such
claim or defence has been put forward, of cost by way of compensation.
The condition precedent for applying this section is that the suit filed must be false or vexatious and the objection
should be raised by the other party that the suit filed was wrong and was within the knowledge of party filing the
suit[3]. Such claim must be withdrawn or rejected by the court. The maximum amount that can be awarded under
this provision is 30,000. But this monetary punishment does not exempt the guilty party from any criminal liability[4].
That party may be held liable for false claim or defence as per the provision of law. Under this section, an appeal
may be filed against the compensatory cost but no appeal lies against the order refusing to award compensatory
cost because of the misconduct of other party as well. This also includes those who have been wrongfully made
party to the suit, are entitled to get the costs as well as where the plaintiff withdraws from a suit or abandons a part
of claim without the permission of the court, he shall be entitled to pay the cost as to be decided by the court.
Section 35- Costs for Causing Delay- This Section was inserted via amendment act of 1976. This Section provides
for the fines that are imposed upon the defendant for causing delay. As is evident from the present condition of
judicial system, one of the reason for a large number of pending cases is that the lawyers use different tactics to
delay the judicial process.
This section shows a strict behaviour against these type of acts. It empowers the court of law to impose
compensatory costs on the either party who are responsible for causing delay and consuming court’s time at any
stage of litigation. Besides, this cost will have no effect upon the outcome of litigation. The payment has been a
condition precedent for the further proceeding of the court.
In certain cases where the party is unable to pay the cost due to unavoidable circumstances like public holiday or
bank strikes, then in such cases, the court can extend the time[5]. But despite this provision, it was observed that
these provisions are not sufficient enough to discomfort the delaying habit of lawyers. Imposing more harsh law is
the need of the hour[6].
Miscellaneous costs- 20A- Order 20A makes specific provision with regard to the power of court in respect of
expenses incurred in typing, notice drafting etc.
Conclusion:-
After going through the provision of CPC, I came to the conclusion that Section 35,35A,35B were inserted with an
intent to award the cost to the winning party keeping in mind the amount of time and money spent throughout the
litigation process. As there is no ceiling limit to the amount of costs, but the court should award reasonable costs
assuring that the beneficiary party is not at fault itself by any way of misconduct.
Bibliography:-
1) Takwani,C.K. Civil Procedure(Eastern Book Company) 6th Edition.
2) Singh, Avtar Code of Civil Procedure(Central Law Publication) 2008.
3) Ray, Sukumar The Code of Civil Procedure(Universal Law Publishing Co.) 2008.
[1] S.34 of the Code of Civil Procedure.

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