The plaintiff-applicant is assailing order dated 7 August 2015, passed by the revisional court/ Additional District and Sessions Judge/Special Judge (Prevention of Corruption Act), Special Court no.1, Meerut, in S.C.C. Revision No. 110 of 2010 (Raman Gupta and others Vs. Shri Anil Kumar Goel), arising from an order passed by the Small Causes Court at Meerut, in Suit No. 85 of 2007 imposing cost on the applicant upon withdrawal of the suit.
The facts giving rise to the petition, briefly is, that applicant instituted a suit for eviction and arrears of rent; respondent-defendant contested by filing written statement and deposited arrears of rent, interest and cost at 41,950/ rupees to enable the respondent to claim relief against the eviction in view of section 20(4) of Act 13 of 1972. During pendency of the suit, applicant preferred an application under Order 23 Rule 1 CPC withdrawing the entire suit, application was opposed by the respondent/tenant by filing objections, inter-alia, contending that respondent had incurred expenses and after withdrawal of arrears of rent deposited, the suit is being withdrawn, therefore, the application should be rejected.
The trial court allowed the application withdrawing the suit but imposed 15,000/ rupees towards cost of litigation, 35,000/ rupees towards mental agony and 41,950/ rupees towards refund of arrears of rent payable to the respondent. Aggrieved, applicant preferred a revision being Revision No. 110 of 2010, revisional court partly allowed the revision holding that there is no provision in law for grant of cost towards mental agony, arrears of rent withdrawn by the applicant cannot be directed to be refunded as it was deposited unconditionally to avoid eviction on the ground of arrears of rent. It was open to the landlord, in a suit for eviction and arrears of rent, to withdraw the suit upon arrears of rent being satisfied. The revisional court, however, upheld cost of 15,000/rupees towards expenses incurred by the respondent.
The submission of the learned counsel for the applicant is that the suit was instituted for a cause i.e. for arrears of rent, therefore, the suit not being a false and vexatious claim, compensatory cost should not have been granted by the court below, at the best, in view of Section 35A CPC, plaintiffs were entitled to pay 3000/ rupees only.
The sole question to be determined is as to whether upon the plaintiff unconditionally withdrawing the entire suit, the defendant is entitled to cost and if yes, the principle to determine the quantum thereof.
The withdrawal of suit is provided under Order 23 Rule 1 of CPC which reads as follows:
(1) Withdrawal of suit or abandonment of part of claim (1) At any time after, the institution of a suit, the plaintiff may as against all or any of the defendants abandons his suit or abandon a part of his claim:
provided......
2.......
3. Where the Court is satisfied-
(a) that a suit must fail by reason of some formal defect, or
(b) that there are sufficient grounds for allowing the plaintiff to institute a fresh suit for the subject-matter of a suit or part of a claim, it may, on such terms as it thinks fit, grant the plaintiff permission to withdraw from such suit or such part of the claim with liberty to institute a fresh suit in respect of the subject-matter of such suit or such part of the claim.
4. Where the plaintiff-
(a) abandons any suit or part of claim under sub-rule (1), or
(b) withdraw from a suit or part of a claim without the permission referred to in sub-rule (3), he shall be liable for such costs as the Court may award and shall be precluded from instituting any fresh suit in respect of such subject matter or such part of the claim.
There is no distinction between withdrawing a suit and withdrawing from a suit, when there is only one plaintiff and he withdraws the whole suit it can be said that he withdraws the suit; when there are more than one plaintiff and one of them withdraws the suit, it can be said that he withdraws from the suit. It is this right that has been given statutory recognition through Rule 1 (1). The right is not fettered by any conditions, it is an absolute right which a plaintiff can exercise at his sweet will at any time before the judgment is delivered. The right is absolute and capable of being exercised without any permission from the Court. The plaintiff does not need consent of the defendant or permission or confirmation of the Court.
It is to be next noted that no act is required to be done by the court to complete or effectuate a plaintiff's withdrawal of his suit. There is no provision for any act to be done in the suit by the court for making the withdrawal effective or even after the withdrawal it is not even required to pass any order. Withdrawal of a suit is itself its end. The act of withdrawal is complete as soon as the plaintiff or applicant, as the case may be, informs the court that he withdraws the suit (under Order 23 Rule 1) or an application under Order 21 Rule 90) (Vide Atic Industries Ltd Vs. H.H. Dave, District Collector; AIR 1975 SC 960, Smt. Raisa Sultan Begum and others Vs. Abdul Qadir; AIR 1966 All. 318.
A plaintiff withdrawing his suit is liable for such costs as the court may award; so the court is empowered to pass an order only in respect of the costs. The court's order awarding costs against the plaintiff is a consequence of the withdrawal which means that the withdrawal is already complete and effective. It is wholly at the option of the plaintiff and the court has nothing to do with it except as regards providing for costs. If a party desires to withdraw from the suit with such liberty contemplated in sub-rule (2) then he must apply to the court to permit him so to withdraw, if he does not desire to have that liberty then he can withdraw of his own motion and no order of the court is necessary.
Usual or normal overt act is that of informing the court that the suit has been withdrawn; as soon as this information is given, withdrawal of the suit comes into existence and the suit stands withdrawn from that moment. An order awarding costs against the plaintiff will be an act to be done by the Court in consequence of the withdrawal. There cannot be such an order unless the withdrawal is there as a fact. On a suit being withdrawn, the court has to decide what costs should be awarded against the plaintiff which is mandatory.
Section 35 CPC relates to costs, Section 35A relates to compensatory costs in respect of false or vexatious claims, Section 35-B relates to costs for causing delay, Order 20-A of the Code provides for costs being awarded in regard to six items enumerated in Rule 1, Rule 2 of Order 20-A which provides that award of costs under this Rule shall be in accordance with such rules as the High Court may make in this behalf. Scope of Section 35 and 35A was considered in Salem Advocates Bar Association Vs. Union of India; 2005(6) SCC 344, Ashok Kumar Mittal Vs. Ram Kumar Gupta and another; 2009(2) SCC 656 and Vinod Seth Vs. Devender Bajaj and another; 2010 (8) SCC 1.
The principle underlying award of costs was stated in Manindra Chandra Nandi Vs. Aswini Kumar Acharjya; ILR 1921 48 Ca 427, wherein it was observed that whatever the origin of costs might have been, they are now awarded not as a punishment to the defeated party but as a recompense to the successful party for the expenses to which he had been subjected or for whatever appears to the court to be the legal expenses incurred by the party in prosecuting his suit or his defence. The theory on which costs are now awarded to a plaintiff is that default of the defendant made it necessary to sue him, and to a defendant is that the plaintiff sued him without cause, costs are thus in the nature of incidental damages allowed to indemnify a party against the expense of successfully vindicating his rights in court and consequently the party to blame pays costs to the party without fault.
In Salem Advocates Bar Association(supra), the Supreme Court took judicial notice of the fact that many unscrupulous parties take advantage of the fact that either the costs are not awarded or nominal costs are awarded on the successful party. The court took notice of the fact that orders are passed directing the parties to bear their own costs, wherever costs are imposed, ordinarily the same are not realistic and are nominal, therefore, the court was of the opinion that when section 35(2) of the Code provides for cost to follow the event, it is implicit that the costs have to be those which are reasonably incurred by a successful party except in those cases where the Court in its discretion may direct otherwise by recording reasons thereof. The costs therefore, have to be actual reasonable costs including the cost of the time spent by the successful party, the transportation and lodging, if any, or any other incidental costs besides the payment of the court fee, lawyer's fee, typing and other cost in relation to the litigation.
In Ashok Kumar Mittal (supra), Apex Court referred to the present system of levying meagre costs in civil matters and no cost in some matters, as being wholly unsatisfactory and does not act as a deterrent to vexatious or luxury litigation borne out of ego or greed, or resorted to as a "buying-time" tactic and proposed that more realistic approach relating to costs may be the need of the hour. Similar observation was made in Vinod Seth ( supra).
Though section 35 does not impose a ceiling on the costs that could be levied and gives discretion to the Court in the matter, it should be noted that Section 35 starts with the words "subject to such conditions and limitations as may be prescribed, and to the provisions of law for the time being in force". Therefore, if there are any conditions or limitations prescribed in the Code or in any rules, the Court obviously, cannot ignore them in awarding costs.
In Salem Advocates Bar Association case, Supreme Court made observation requiring the High Courts to amend their rule and regulation to provide for 'actual realistic costs' where they are not provided. While observing, the meaning of "actual realistic cost" should have a correlation to the costs which are realistic and practical. It cannot obviously refer to fanciful and whimsical expenditure by parties who have the luxury of engaging a battery of high-charging lawyers. Therefore, the Supreme Court did not approve the logic adopted by the High Court in Vinod Kumar's case. If the view of the High Court was to be accepted then the losing party should pay the costs, not with reference to subject matter of the suit, but with reference to the fee paying capability of the other side. Therefore, even if actual costs have to be awarded, it should be realistic which means what a "normal" advocate in a "normal" case of such nature would charge normally in such a case. Mechanically ordering the losing party to pay an exorbitant costs in an appeal was unwarranted and contrary to law, therefore, unsustainable.
The cost should be assessed according to rule in force. The cost in regard to a litigation includes (i) court fee, (ii) process fee, (iii) advocate fee, (iv) expenses of witnesses and (v) other expenses allowable under the Rules.
As mandated by the Supreme Court in Salem Bar Association's case, this High Court in exercise of power conferred under Article 227 of the Constitution of India and Section 122 of the Code of Civil Procedure, 1908 framed the following rules for imposition of cost by amending the General Rule (Civil) 1957, the rule reads as follows:
"(J) Costs 101-A: Imposition of Costs: The court while imposing cost at any stage of proceedings, and also at the time of final disposal of the case, shall ensure that the cost imposed is actual and reasonable cost, which mitigates the hardship caused to a party, and which includes the cost of time spent by the party, cost of transportation and lodging, if any, and other incidental cost besides court fee, lawyer's fee typing charges etc.".
The rule came into force on 1 October 2014 and shall apply to the court subordinate to the High Court of Judicature at Allahabad.
In the backdrop of the rule and the authoritative pronouncement, the revisional court was justified in setting aside the order of the trial court to the extent it sought to impose cost for mental agony and refund of sum deposited towards arrears of rent. As regard the cost of litigation, it is evident from the record of the case that the suit was instituted in 2007 for eviction and arrears of rent, in which the respondent put in appearance on 14 November 2007 and contested the suit, which was subsequently withdrawn on 23 July 2010. The respondent, upon appearance deposited the arrears of rent, interest and expenses to avoid eviction. The sum so deposited was withdrawn by the applicant/landlord upon arrears of rent being satisfied, no cause of action against the respondent remained thereafter. The respondent could not be evicted in view of Section 20(4) of Act 13 of 1972. In this background, the suit was withdrawn.
Whether, in these circumstances, the respondent was entitled to cost of the litigation. It cannot be said that the respondent tenant was sued by the applicant without a cause or in the alternative, whether the default of the defendant made it necessary for the plaintiff to sue him. Since it has not been disputed by the respondent that he is the tenant, and was in arrears of rent, therefore, the applicant had a cause to institute the suit for eviction and arrears of rent. It, therefore, cannot be said that the defendant was sued without a cause. In my considered opinion, therefore, the revisional court committed an error in upholding the cost of litigation.
For the reasons and law stated, herein above, the petition succeeds, the impugned order is quashed.
The petition is allowed.
No order as to costs.
Date: 16.03.2016 sfa/