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Costs in discretion of Courts must be granted fairly and reasonably and not arbitrarily – a case of imposing costs of Rs. 50 lakh, then reduced to Rs.5 lakh by the same Court – this will promote litigation. |
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Costs in discretion of Courts must be granted fairly and reasonably and not arbitrarily – a case of imposing costs of Rs. 50 lakh, then reduced to Rs.5 lakh by the same Court – this will promote litigation. |
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Judgments under study: SR COLD STORAGE VERSUS UNION OF INDIA AND 3 OTHERS - 2022 (12) TMI 1095 - ALLAHABAD HIGH COURT Dated: - 19-12-2022 SR COLD STORAGE VERSUS UNION OF INDIA AND 3 OTHERS - 2022 (8) TMI 806 - ALLAHABAD HIGH COURT Dated: - 11-8-2022 The above two judgments deal with the same Writ Tax cases and decided by the same bench of the same High Court. In order dt. 11.08.2022 higher amount of costs Rs.50 lakh was imposed then it was reduced in order dt. 19.22.2022 to Rs. Five lakh only that is by 90 per cent. In this article author is not going into various aspects concerning such cases. The scope of this article is that approach adopted by honorable Court. Apparently it seems that in first order higher amount was awarded – though this had a purpose of reducing initiation of un-necessary litigation by not applying relevant procedure and by not complying with principal of natural justice. However, reduction of amount to 10% of originally imposed costs is likely to give wrong signals to erring officers and government departments and also in other cases. This approach only inculcate feeling and attitude amongst litigants that such orders are very casual and one need to be worried about. The penalty or costs can be reduced by the same judges in a review , rectification or other suitable proceeding and also by appellate courts. The first order imposing costs of Rs. 50 lakh is dated 11.08.2022 and second one is dated 19.12.2022. It is within a very short period of 4 months and 8 days. A summary and an analysis of operative parts of orders
As per the first order the cost of Rs. 50 lakh was to be deposited by 01.09.2022. It appears that the same was not so deposited instead prayer was made before the Court for reconsideration. In the second order dated 19.12.2022 direction was given to deposit Rs.5 lakh within one month that is by 19.01.2023. Let us hope that costs shall be so deposited in honor of Honorable High Court. As the costs are to be deposited in the Prime Minister National Relief Fund , there should not be a case of refund. However, more likely is that respondents / revenue / UOI will file an appeal against order dated 19.12.2022 before the honorable Supreme Court. The author will not be surprised if honorable Supreme Court vacate entire costs on the sole ground that the High Court has passed arbitrary orders. There was no basis for imposing costs of Rs. 50 lakh and then reducing it to Rs.5 lakh only. One more question is whether by awarding costs to be deposited in any fund like PMNRF, there is a reprieve of opposite party who suffered due to respondents having acted arbitrarily, illegally without jurisdiction, and thus faced lot of harassment and also had to bear costs of litigation and has to pass through troubled times in all respect. Some compensatory costs must be allowed to be paid to the parties who suffered due to illegal actions of authorities.
By: DEV KUMAR KOTHARI - January 9, 2023
Discussions to this article
Yes, Sir. I agree with you. If the Court awards cost then it should be given to the affected party not to the PM's relief fund. There is no provision to do so in any law for the time being in force.
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