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The Delhi High Court has stated that unless specified otherwise, whenever costs are imposed on a party to a litigation, it is understood that costs are payable to the party in whose favour the costs are being awarded.
The clarification was stated by a Single Judge Bench of Justice Prathiba M Singh in an Order concerning a challenge to an order imposing further costs on a party for failure to deposit the costs which were imposed on it earlier.
The petitioner before the High Court, Harwant Singh was a defendant before a Delhi Sub-Ordinate Court. After closing the petitioner’s right to file written statement, the lower court had agreed to take the written statement on record, subject to payment of Rs. 5000 as costs.
The relevant part of the lower court’s order read as follows,
“..Considering the reasons assigned by defendant no.1 for delaying filing of written statement, the order dated 06/08/2018, vide which opportunity of defendant no.1 to file written statement was closed, is recalled. The delay in filing of written statement by defendant no.1 is hereby condoned with consent of Ld. Counsel for plaintiff, with cost of Rs.5,000/- upon defendant no.1.
5. Subject to prior payment of cost, written statement filed by defendant no.1 be taken on record. Copy of written statement be supplied to Ld. Counsel for plaintiff against acknowledgment.”
Thereafter, the petitioner prepared a demand draft for Rs. 5,000 and tendered the same before the lower court. However, the plaintiff’s counsel refused to accept it on the ground that it was in the name of the plaintiff and a WhatsApp message was sent asking for the demand draft to be made in favour of the plaintiff’s counsel.
The plaintiff thus argued that the costs had not been paid and accordingly the written statement was taken off the record with further costs of Rs.10,000.
The second order imposing costs on the petitioner read as follows:
“D1 has failed to pay the pending cost since 29/04/2019, because of which the written statement is not taken on record. Because of the dilatory conduct of D-1, the trial of the suit could not commence for several dates. The written statement filed by D-1 is taken off the record with further cost of Rs. 10,000/- upon D-1.
Since there is no defence to the suit, the requirement of framing of issues is obviated.
Put up for PE on 02/12/2019.”
After pursuing the facts of the case, the Court noted that the first order imposing costs on the petitioner did not specify as to in whose favour the costs were to be paid.
The Court thus stated that the preparation of a demand draft of Rs.5,000 in favour of the plaintiff was reasonable conduct on behalf of the petitioner and the same ought to have been accepted by the lower court.
“Considering the costs had in fact been tendered to the ld. counsel for the Plaintiff in the name of the Plaintiff, costs ought to have been accepted and all the subsequent events could have been completely avoided.. Thus, the non-acceptance of the demand draft of Rs.5,000/- is unjustified on and no further costs could have been imposed, and the written statement could not have been taken off the record.”
It further clarified that unless specified otherwise, whenever orders imposing costs on a party to a litigation, it is understood that costs are payable to the party in whose favour the costs are being awarded.
“Whenever orders are passed imposing costs on parties, unless there is any specific person in whose favour the costs are directed to be paid, it is understood that costs are to be in the name of the party in whose favour the costs are being awarded.”
In view of the above, the order imposing costs for the second time was set aside and written statement of the petitioner was taken on record subject to payment of costs of Rs.5,000 to be paid in favour of the plaintiff.
The petitioner was represented by Advocate Praveen Kumar.
Read the Order: