CPCCompensatory costsSupreme Court of India

Sanjeev Kumar Jain v Raghubir Saran Charitable Trust

(2012) 1 Supreme Court Cases 45520112 min read
The case in brief30-second read
Facts
The suit was a tenant's suit for injunction concerning a staircase at E-67, Connaught Place, New Delhi. In the appeal against the interim order, the High Court asked the parties to agree to bear actual litigation expenses and then awarded Rs 45,28,000 on the basis of an affidavit of fees paid to four counsel.
Issue
Could the High Court award "actual costs" of Rs 45,28,000 in an appeal against an interim order, beyond the scale in the Delhi High Court Rules?
Held
S.35 CPC begins "subject to such conditions and limitations as may be prescribed, and to the provisions of law for the time being in force". Costs exceeding the scale in the Delhi High Court Rules were contrary to the Rules and so to S.35. A request for the parties' consent could not change this.
Principle
Costs under S.35 CPC are subject to the conditions and limitations prescribed by the rules; a court cannot award so-called actual costs beyond the scale in the rules, even if the parties agree in principle to litigation expenses. Actual realistic costs must be provided for by amending the rules. Where costs do not follow the event, S.35(2) requires reasons.

Facts

  • The suit was a tenant's suit for injunction concerning a staircase at E-67, Connaught Place, New Delhi.
  • In the appeal against the interim order, the High Court asked the parties to agree to bear actual litigation expenses and then awarded Rs 45,28,000 on the basis of an affidavit of fees paid to four counsel.

Issue

  1. Could the High Court award "actual costs" of Rs 45,28,000 in an appeal against an interim order, beyond the scale in the Delhi High Court Rules?

Held

  • S.35 CPC begins "subject to such conditions and limitations as may be prescribed, and to the provisions of law for the time being in force". Costs exceeding the scale in the Delhi High Court Rules were contrary to the Rules and so to S.35. A request for the parties' consent could not change this.
  • Salem Advocates Bar Association did not authorise courts to ignore the rules; it called for the rules to be amended to provide for actual realistic costs.
  • "Actual realistic costs" means what a normal advocate would charge in a normal case of that kind, not whatever a party chose to pay several senior counsel.
  • The mandate of S.35(2), that reasons must be stated where costs do not follow the event, is seldom followed and should be.
  • Result: the award of Rs 45,28,000 was set aside; the appellant was to pay costs of the High Court appeal as per the Rules plus Rs 3,000 as exemplary costs. The Court sent suggestions on reform of costs to the Law Commission, Parliament and the High Courts.

Ratio decidendi

A civil court's power to award costs under S.35 is subject to the prescribed rules; it cannot award actual or consensual costs beyond them. Realistic costs require amendment of the rules, not departure from them.

Exam use

How to use it in an answer

  • Cite for the limits on costs under S.35 and the meaning of "actual realistic costs".
  • Cite with the text of S.35(2) for the duty to give reasons when costs do not follow the event.
  • Do not cite it for S.35A compensatory costs or the "knowingly false" requirement: that test comes from the text of S.35A, not from this case.
  • Key line: "In Sanjeev Kumar Jain (2011), the Supreme Court set aside an award of Rs 45.28 lakh as costs because costs under S.35 must be within the prescribed rules."

Cite this

Citation

Sanjeev Kumar Jain v. Raghubir Saran Charitable Trust (2012) 1 Supreme Court Cases 455

Reported: Indian Kanoon doc 169578605 (judgment of 12 October 2011, Civil Appeal 8610 of 2011); (2012) 1 SCC 455 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.