CPCCostsSupreme Court of India

Ashok Kumar Mittal v Ram Kumar Gupta

(2009) 2 Supreme Court Cases 65620092 min read
The case in brief30-second read
Facts
The dispute arose from an agreement to sell dated 15 July 2003. The trial court dismissed the suit on 19 May 2008 and the High Court dismissed the appeal on 29 September 2008.
Issue
What is the source and limit of a civil court's power to award costs?
Held
Costs in civil cases are governed by S.35 (general costs) and S.35A (compensatory costs for false or vexatious claims or defences, then capped at Rs 3,000) of the CPC. A court cannot use its inherent power to levy costs contrary to these provisions. Exemplary or heavy costs are more commonly seen in writ and public interest litigation.
Principle
Costs in civil litigation are governed by Sections 35 and 35A CPC (compensatory costs then capped at Rs 3,000); a court cannot use inherent power to levy costs contrary to the Code. Heavy costs payable to Legal Services bodies or non-party charities should be avoided.
Cite this

Facts

  • The dispute arose from an agreement to sell dated 15 July 2003. The trial court dismissed the suit on 19 May 2008 and the High Court dismissed the appeal on 29 September 2008.
  • Finding false statements by both sides, the High Court levied costs of Rs 1 lakh on each party, payable to the Delhi High Court Legal Services Committee.

Issues

  1. What is the source and limit of a civil court's power to award costs?
  2. To whom should costs be paid?

Held

  • Costs in civil cases are governed by S.35 (general costs) and S.35A (compensatory costs for false or vexatious claims or defences, then capped at Rs 3,000) of the CPC. A court cannot use its inherent power to levy costs contrary to these provisions. Exemplary or heavy costs are more commonly seen in writ and public interest litigation.
  • The existing system of meagre costs is unsatisfactory and does not deter vexatious litigation; the Law Commission should consider the matter.
  • Although the High Court's order on costs "may not strictly be correct", the Court declined to interfere under Art.136 as it had caused no injustice.
  • Costs should not be made payable to the High Court Legal Services Committee or to non-party charities in selected cases; the sum received was to be made over to the State government.

Ratio decidendi

The power to award costs in civil proceedings must be exercised within Sections 35 and 35A CPC and the rules; inherent power cannot be used to override them.

Exam use

How to use it in an answer

  • Cite for the statutory basis of costs (Ss.35, 35A) and the limits on the court's power, and for the call to reform the costs regime.
  • Do not cite it for "a no-costs order without reasons is set aside": that rule comes from the text of S.35(2) (see also Sanjeev Kumar Jain, 2011, and Vinod Seth, 2010).
  • Key line: "In Ashok Kumar Mittal (2009), the Supreme Court held that costs in civil cases are governed by Ss.35 and 35A CPC and cannot be levied through inherent power contrary to them."

Cite this

Citation

Ashok Kumar Mittal v. Ram Kumar Gupta (2009) 2 Supreme Court Cases 656

Reported: Indian Kanoon doc 1228923 (order of 9 January 2009); (2009) 2 SCC 656 per secondary reports (not shown on Indian Kanoon). This is an educational summary, not the judgment itself. Cite the reported version in professional or academic work.