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TMI Blog1976 (4) TMI 233X X X X Extracts X X X X X X X X Extracts X X X X ..... e claim in appeal by finding out some percentage of success of the appeal as compared to the whole claim made? (2) Whether adovocate's fees are to be taxed as per the table of fees on the amount of claim allowed or disallowed or whether they are to be taxed on percentage basis as stated above?" 2. These two questions arise, as pointed out in its order of reference by the Division Bench, out of a common practice prevalent in this State in the appellate Courts and, in some cases, even in the trial Courts, to pass an order of costs in proportion to the success of the claim, that is to say, to award costs to the plaintiff or appellant in proportion to the success of his claim and to award to the defendant or respondent proportional costs on the claim disallowed. Such an order raises the question as to in what manner and proportion costs are to be taxed in relation to court-fees and advocate's fees and it is to set at rest the doubt or debate, if any, on such question that this reference has been made to the Full Bench. 3. It appears that the practice which prevailed in the former High Court of Bombay and which was adopted in this Court up to 1967 was that when an order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esaid mode of taxing costs in relation to those two items and it was urged that having regard to the slab system both in respect of court-fees and advocate's fees, the proper method of taxing costs was to work out the total costs taxable on those items on the basis of the amount claimed in the appeal and then to apportion them amongst the parties in proportion to their success in the appeal. The matter was ultimately placed for decision before the Division Bench and by its judgment and order delivered on May 5, 1967, the Division Bench partly accepted the said contention. It held, so far as taxing of costs on the item of court-fees was concerned, that the prevalent practice of treating that part of the claim which was ultimately allowed as the claim originally made and awarding to the appellant the amount which he would have paid by way of court-fees on such part of the claim as taxed costs was eminently just and fair and that It was not required to be revised. However, in respect of costs on the Item of advocate's fees, the Division Bench held that having regard to the slab system of advocate's fees, the proper and just method was to determine the advocate's fees o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... state the amount of costs incurred in the appeal, and by whom, or out of what property, and in what proportions such costs and the costs in the suit are to be paid. Chapter XIV of the Bombay High Court Appellate Side Rules, 1960 prescribes the rules for computing the advocate's fees in various kinds of proceedings. So far as the question under consideration is concerned, however, it does not throw much light except that it shows that generally in a large number of cages advocate's fees are taxed on a slab system. The provisions of the Code referred to earlier show that the decree and bill of costs have to be drawn up in accordance with the order passed by the Court 7. Before coming to grips with the problem, reference may be made to the object underlying the provisions relating to awarding of costs to a litigant. Under the common law in England, party and party costs were treated not as a complete indemnity but in the character of an indemnity. In Gundry v. Sainsbury (1910) 1 K B 645 Cozens-Hardy M. R. quoted with approval the following observations by Bramwell B. in Harold v. Smith (1860) 5 H&N 381 at 385: "Costs as between party and party are given by the law as a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity and that consequently the successful party should not be allowed to make any profit out of the order for costs made in his favour. The learned Judge observed that there was no doubt as to the soundness of the principle upon which the said rule was based and no doubt also that the said rule should be applied to the Supreme Court, there being no specific provision on that point in the rules of the Court. Accordingly, if the agreement between the Agent and the respondent had been merely this, namely, that the respondent would pay the Agent in addition to his out-pocket expenses a sum of ₹ 300/- as his remuneration, the order of the Taxing Officer would have been a perfectly good order. However, the agreement in that case provided in the latter part that in case the respondent succeeded in the litigation, the Agent would be entitled to recover frown him whatever sum might be allowed to him on proper taxation. L.J. pointed out in Gundry v. Sainsbury Under the circumstances, in view of the latter part of the agreement, even on the application of the English doctrine, upon the happening of the contingency of the success of the respondent, the Agent of the respondent became entit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad as -a matter of punishment to Pena indemnified by the defendant to the exiles the appellant and it is essentially tent of party and party costs. It is this made as a recompense to the appellant principle which lies at the root of the for whatever appears to the Court to be order awarding proportionate costs in the legal, expenses incurred by him in cases where the plaintiff or the apple prosecuting his appeal, there is no realant succeeds partly in his claim. Asson why he should not be awarded court pointed out by the Judicial Committee infers on the amount which he has success Mudhobun Doss v. Gokul Doss (1863-1866)fully recovered in the appeal. It cannot 10 Moo Ind App 563 (at P. 575), the costs be overlooked that court-fees are pay of an action in this country. Particularly able on a slab system and that when the stamp duties payable on the proceed the value of the subject-matter is maintaining, depend a good deal on the value over flower level the court-fees are payable at the thing claimed. It is accordingly the a comparatively higher rate than that at practice of the Courts in this country which they would be payable if the value when a plaintiff has recovered less than of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... restricted his one-tenth of the amount of ₹ 785/-,claim to the amount allowed, he would that is to say, ₹ 78.50. It would thus have been entitled to recover from the appear that if the latter method is respondent the amount of court-fees pay adopted, the appellant would suffer a loss able on such claim on the principle off ₹ 28-25 and such loss is occasioned to indemnity. There is no reason why the him merely because he claimed an result should be any the different mere amount in excess of what was found duely because he claimed a larger amount to him. Such mode of taxing costs on the which the Court found he was not entitled item of court-fees is thus inconsistent to. Since an order of costs-even an order with the basic principle underlying the award of costs inasmuch as it is in the nature of a penalty imposed upon a party because of his failure to establish the validity of his claim to higher amount and it is also in the nature of a bonus to the other party, for, had restricted his claim to the amount ultimately found due to him, the other party would have been required to reimburse him to the full extent of the court-fees paid by him on such restricted claim. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... apportion such fees amongst the parties in proportion to the success of each party in the case. Such a course would indemnify parties as nearly and fairly as possible for the legitimate expenditure incurred by them in prosecuting and defending the appeal. In our opinion. Therefore, the prevalent practice adopted by this Court since 1967 in the matter of taxing of costs on the item of advocate's fees is just and proper and no cogent ground is made out to depart from the same. 13. It is true, as pointed out in the order of reference, that the current practice adopts two different standards with regard to taxation of two different items in the bill of costs. However, having regard to the basic difference in the nature and character of these two items, and in view of the fact, that whereas court-fees are payable by only one of the parties, the advocate's fees are payable by both the parties, and bearing in mind the fundamental principle behind the rule of awarding costs we are of the opinion that the adoption of different standards is not only not incongruous but is just and proper. 14. We might incidentally mention that there are certain other items in the bill of costs such ..... X X X X Extracts X X X X X X X X Extracts X X X X
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