SANJEEV KUMAR JAIN versus RAGHUBIR SARAN CHARITABLE TRUST & ORS.

Citation: [2011] 12 S.C.R. 744 · Decided: 12-10-2011 · Supreme Court of India · Bench: R.V. RAVEENDRAN · Disposal: Disposed off

Cited by 2 judgment(s) · cites 1 · see the full citation network in Lexace

Judgment (excerpt)

A 
B 
[2011] 11 S.C.R. 744 
SANJEEV KUMAR JAIN 
v. 
RAGHUBIR SARAN CHARITABLE TRUST & ORS. 
(Civil Appeal No. 8610 of 2011) 
OCTOBER 12, 2011 
[R.V. RAVEENDRAN AND A.K. PATNAIK, JJ.] 
CODE OF CIVIL PROCEDURE, 1908: 
c 
s. 35(1), CPC read with Chapters 11, 5 and 23 of Delhi 
High Coult Rules - Costs - Appeal against vacating of an 
interim order - Dismissed by High Coult with costs of Rs. 
45, 28, 0001- - Appeal to Supreme Coult confined only to 
legality and validity of order of High Court as regards costs -
0 
The Court also referred to the larger question of costs in civil 
litigation - The Law Commission of India also intervened -
Notices were also issued to High Coutts to ascerlain the 
Rules and procedures in force in regard to costs - HELD: 
High Court could not have awarded costs exceeding the scale 
E that was prescribed in the Schedule to the Rules - Doing so 
would be contrary to the Rules and, as such, also contrary to 
s. 35, CPC which makes it subject to the conditions and 
/imitations as may be prescribed and the provisions of law for 
the time being in force - Therefore, merely by seeking a 
consent of the patties to award litigation expenses as costs, 
F the High Courj could not have adopted the procedure of 
awarding what it assumed to be the 'actual costs' nor could it 
proceed to award a sum of Rs.45,28,0001- as costs in an 
appeal relating to an interim order in a civil suit - Awarding 
of realistic costs should be in accordance with law - If the law 
G does not permit award of actual costs, coutts cannot award 
actual costs -
The 'actual realistic cost' should have a 
correlation to costs which are realistic and practical - It cannot 
refer to fanciful and whimsical expenditure by patties engaging 
high-charging lawyers, as is the case on hand - It is 
~ 
7AA 
SANJEEV KUMAR JAIN v. RAGHUBIR SARAN 
745 
CHARITABLE TRUST & ORS. 
suggested that the Rules be amended to provide for 'actual A 
realistic costs' - The object is to streamline the award of costs 
and simplify the process of assessment, while making the 
cost 'actual and realistic' - Sa/em Advocates Bar Association 
case. explained. 
ss. 35(1) and (2) - Costs - Discretion of court - HELD: 
The discretion of the court is subject to such conditions and 
/imitations as may be prescribed and to the provisions of law 
B 
for the time being in force - Where the court does not direct 
that costs shall follow the event, it shall state the reasons in 
writing - The mandate of sub- s. (2) should be strictly followed. 
C 
s.35-A - Exemplary costs in respect of false or vexatious 
litigation - HELD: In order to discourage false and vexatious 
claims, the compensatory costs has to be brought to a realistic 
level- A small sum of Rs. 3, 0001- would not make much 
D 
difference - The Court is of the view that the ceiling in regard 
to compensatory costs should be at least Rs. 1,00,000- The 
description of the costs awardable uls. 35 A "as compensatory 
costs" gives an indication that is restitutive rather than punitive 
- The costs awarded for false or vexatious claims should be 
E 
punitive and not merely compensatory - In fact, compensatory 
costs is something that is contemplated in s. 358 and s.35 
itself - Therefore, the Legislature may consider award of 
punitive costs' u/s. 35 A. 
Arbitration and Conciliation Act, 1996: 
F 
s.31(8), Explanation, rlw s.11 - Costs - HELD: The 
Explanation to sub-s. (8) of s. 31 makes it clear that 'costs' 
means reasonable costs - What is awardable is not 'actual' 
expenditure but 'reasonable' costs - Whenever the Chief G 
Justice or his Designate appoints arbitrator/s, it will be open 
to him to stipulate the fees payable to the arbitrator/s .. 
Court Fees: 
Litigation - Court fees - HELO· Except in the case oUew 
H 
746 
SUPREME COURT ~EPORTS 
[2011] 12 S.C.R. 
A categories of suits where courl fee is ad valorem, in majority 
of the suits/petitions and appeals arising therefrom, the court 
fee is a fixed nominal amount -
The fixed fees that are 
payable, prescribed decades ago, have not undergone a 
change and in many cases, the fixed fee is not worth the cost 
B of collection thereof -
There is, therefore, a need for a 
periodical revision of fixed courl fees that is payable in regard 
to suits/petitions/appeals filed in courts/tribunals at different 
levels. 
c 
D 
Legislation: 
Litigation - Costs and court fees - HELD: The Law 
Commission of India, Parliament and the respective High 
Coutts are suggested to make

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