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INTERIM ORDERS
QUESTION BANK
1. Explain fully interim orders and their importance in Civil Procedure Code.
2. Explain the provisions regarding âtemporary injunctionâ.
3. Explain the provisions regarding âattachment before judgment.
4. State and explain provisions regarding the temporary and perpetual injunction.
SHORT NOTES
1) Court Commission.
2) Interim order.
3) Adjournments.
4) Receiver.
5) Attachment before judgment.
6) Injunction.
7) Interest and costs.
SYNOPSIS
2. Interim Orders Under the CPC
Evidentiary Value of the Commissioner's Report:
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1. Full Satisfaction:
2. Part Satisfaction:
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a. Statutory Limit:
b. Effect:
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The terms "interim" or "interlocutory" signify a provisional, temporary, or non-final arrangement. In Indian civil jurisprudence, an Interim Order refers to any order passed by a Court during the active pendency of a suit or proceeding, effective between its formal commencement and final disposition.
It is a settled principle of law that interim orders do not finally determine the ultimate substantive rights and liabilities of the parties regarding the subject matter of the litigation. The core purpose of these orders is to act as auxiliary mechanisms. They are passed to protect the subject matter of the suit from destruction or alienation, assist the parties in properly prosecuting their claims, and prevent the blatant abuse of the process of the Court pending final adjudication.
2. Interim Orders Under the CPC
A civil court can issue following interim orders under CPC-
The dictionary meaning of the word âCommissionâ is âan authority (to any person) to act on behalf of another (i.e., court)â or âan authorization to perform certain duties or tasks, or to take on certain powersâ. In legal parlance, a âCommissionâ is a process through which witnesses who are sick or infirm, and are unable to attend the Court, are examined by issuing a Commission by the Court. Generally, a âCommissionerâ may be an advocate or an expert in a particular field, like an auditor, valuer, engineer, etc. It is the duty of the Commissioner to interrogate the witness and collect the evidence, requisite material, and information from the witness in order to assist the Court in deciding the case.
While other interim ordersâsuch as temporary injunctions (O. XXXIX) or attachments before judgment (O. XXXVIII)âprimarily seek to preserve the status quo of the property, an Order of Commission acts as an administrative and exploratory interim aid to prevent the loss of evidence and assist the court in obtaining clarity on factual realities.
Sections 75 to 78 and Order XXVI of the Code deal with the various provisions relating to the issuance of a Commission. The power to issue a commission is discretionary and cannot be claimed as a right. The Court can exercise the power to issue a commission on its own motion (suo motu) or on the application of either party to the suit.
Section 75 provides that the Court may issue a commission for the following purposes:
It is a general rule that the evidence of a witness is to be taken before the Court. However, in certain exceptional circumstances, it can be recorded through the issuance of a commission.
The Court may issue a commission for the examination of any witness in the following circumstances:
The Commissioner, as per the order, shall execute the commission, return it with the evidence taken under it, and submit it to the Court that ordered the commission (R. 7). The recorded deposition cannot be read in evidence directly unless the other party consents or the Court dispenses with such consent (R. 8).
Contemporary Legal Update: Under Rule 4A (inserted for the expeditious disposal of suits), courts increasingly direct the recording of evidence by a Commissioner through modern technological means, such as video conferencing and secure audio-video electronic links. Following the landmark precedent in State of Maharashtra v. Dr. Praful B. Desai [AIR 2003 SC 2053], virtual commissions are widely utilized to examine witnesses who cannot physically attend court due to distance or health constraints.
In any suit where the Court thinks it necessary to conduct a local investigation, it may issue a commission to such person as it thinks fit, directing him to collect material information to elucidate any matter in controversy, or to ascertain the market value of any property, or the amount of any mesne profits, damages, or annual net profits.
However, if the State Government has made rules as to the persons to whom such commission shall be issued, the Court shall be bound by such rules.
The purpose of a local investigation is to make spot investigationsâfor example, to investigate what is written on a wall or on a stone lying on a fort, the situation of houses, the position of an existing road, measurements of an encroachment, the stage of construction, etc.
Legal Limitation Note: It is a settled position of law that a local commission cannot be used by a party to delegate its task of gathering evidence. The purpose of a local investigation is purely to elucidate existing matters in dispute, and a court will not appoint a commissioner to help a party collect evidence that they could produce themselves, nor can it be used to shift the burden of proof.
Where any question arising in a suit involves any scientific investigation which cannot, in the opinion of the Court, be conveniently conducted before the Court, the Court may issue a commission to such person as it thinks fit, directing him to inquire into such question and report thereon to the Court. For example, a Certified Valuation Expert may be appointed to determine the value of premises, or an engineer may be appointed to determine the quality of construction, etc.
However, if the State Government has made rules as to the persons to whom such commission shall be issued, the Court shall be bound by such rules.
The dictionary meaning of the term âMinisterial actâ is âan act having the nature or characteristics of the administrative functions of the government or executiveâ, or âan administrative act carried out in a prescribed manner not allowing personal discretionâ. In other words, a âministerial actâ is an act that is not judicial work but administrative work, like accounting or calculation, which requires no discretion. Where any question arising in a suit involves the performance of any ministerial act which cannot, in the opinion of the Court, be conveniently performed before the Court, it mayâfor reasons to be recorded, and if it is of the opinion that it is necessary or expedient in the interests of justice so to doâissue a commission to such person as it thinks fit, directing him to perform that ministerial act and submit his report to the Court.
However, if the State Government has made rules regarding the persons to whom such commission shall be issued, the Court shall be bound by such rules.
In any suit where it is necessary to sell any movable property which cannot be preserved for long and is in the custody of the Court pending determination of the suit, the Court may, for reasons to be recorded in writing if it thinks fit in the interests of justice, issue a Commission to such person as it thinks fit, directing him to carry out the sale and submit his report to the Court. The sale should be held, as far as possible, in accordance with the procedure prescribed for the sale of movable property in the execution of a decree.
In a suit in which the examination or adjustment of accounts is required, the Court may issue a commission directing the Commissioner, as it thinks fit, to make the requisite examination or adjustment. The report of the Commissioner is to be considered as evidence in the suit.
Where a decree for the partition of immovable property has been passed, the Court, in order to effect the partition or separation in terms of the decree, may issue a Commission for such partition.
After such investigation as may be essential, the Commissioner divides the property in question among the various shareholders and awards them their respective portions. After the completion of the partition work, the Commissioner will prepare a report, allotting each shareholder's share and demarcating the same by boundaries, and submit it to the Court. After hearing objections, if any, the Court shall order the final allotment of the portion of the property to each shareholder.
Evidentiary Value of the Commissioner's Report:
Under Order XXVI Rule 10(2), the report of the Commissioner and the evidence taken during the commission constitute substantive evidence in the suit and automatically form part of the judicial record. However, the court is not blindly bound by the report; it is subject to objections raised by the parties, and the court may order further inquiry if it is dissatisfied with the report's findings.
The Commissioner may:
(a) Summon and procure the attendance of the parties, and examine the parties and witnesses;
(b) Call for and examine documents;
(c) At any reasonable time, enter upon or into any land or building mentioned in the order; and
(d) Proceed ex-parte if the parties do not appear before him despite the order of the Court.
The Court may order the party at whose instance the Commission is issued to pay the reasonable expenses of the Commission, to be deposited in the Court within a fixed time as the Court thinks proper.
Modern judicial practice draws a clear line here: "expenses" refer to travel, print, and administrative overheads, whereas the "Commissionerâs professional fee" is determined distinctly by the court based on the commissioner's specialized standing (such as an advocate, chartered accountant, or structural engineer) and must be securely deposited before the work begins.
If a High Court is satisfied that a foreign Court wishes to obtain the evidence of a witness in a proceeding of a civil nature, and that the witness is residing within the limits of the High Courtâs appellate jurisdiction, it may issue a commission for the examination of such witness (R. 19). Rules 20 to 22 prescribe the procedure to conduct such a commission.
Similarly, Section 77 provides that an Indian Court can issue a Letter of Request to a foreign Court to examine a witness residing within its local limits.
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Generally, a creditor who has obtained a decree against a debtor can attempt to get the debtor arrested or ask for the attachment of the property of the debtor in the event of non-execution of the decree. In exceptional circumstances, the law also permits these remedies even before the judgment is pronounced. The underlying purpose of these provisions is to ensure that the plaintiff does not suffer due to the defendant absconding, and to secure the realization of the decretal amount in the event a decree is passed in the plaintiff's favor.
The power to arrest a defendant before judgment is an extraordinary and drastic remedy. Courts exercise this power with extreme care and caution, ensuring it is not used as a tool of coercion or a lever for settlement before trial. As established by the Supreme Court in Raman Tech. & Process Engg. Co. v. Solanki Traders, (2008) 2 SCC 302, these interim protections are ahead-of-time remedies that should not be invoked lightly, ensuring they do not turn into instruments of oppression before a debt is judicially determined.
Where at any stage of a suit (other than a suit of the nature referred to in Section 16), the Court is satisfied, by affidavit or otherwise, that the defendant, with intent to delay the plaintiff, to avoid any process of the Court, or to obstruct or delay the execution of any decree that may be passed against him:
a. Has absconded or left the local limits of the jurisdiction of the Court, or
b. Is about to abscond or leave the local limits of the jurisdiction of the Court, or
c. Has disposed of or removed his property or any part thereof from the local limits of the jurisdiction of the Court, or
d. Is about to leave India under circumstances affording a reasonable probability that the plaintiff will or may be obstructed or delayed in the execution of any decree that may be passed against the defendant in the suit,
âthe Court may issue a warrant to arrest the defendant and bring him before the Court to show cause why he should not furnish security for his appearance.
However, the defendant shall not be arrested if he pays to the officer entrusted with the execution of the warrant the sum specified therein as sufficient to satisfy the plaintiffâs claim. Furthermore, Section 56 of the Code provides a strict statutory exemption, stating that the Court cannot order the arrest or detention of a woman in execution of a decree for money. By extension, this protection applies strictly to interim arrests under Order XXXVIII.
Where the defendant fails to show such cause, the Court shall order him either to deposit in Court money or other property sufficient to answer the claim against him, or to furnish security for his appearance at any time when called upon while the suit is pending and until the satisfaction of any decree that may be passed against him in the suit.
Every surety for a defendant's appearance shall bind himself, in default of such appearance, to pay any sum that the defendant may be ordered to pay in the suit (R. 2).
Where the defendant fails to furnish security or to provide fresh security after the original surety has been discharged from his obligation by the Court, the Court may commit him to civil prison until the decision of the suit, or, where a decree is passed against him, until the decree has been executed (R. 4). The period of detention in civil prison is strictly governed by the monetary limits and durations prescribed under Section 58 of the Code. The detention cannot exceed three months where the suit claim exceeds five thousand rupees, and cannot exceed six weeks where the claim is between two thousand and five thousand rupees.
Where an arrest has been effected on insufficient grounds, or if the suit of the plaintiff fails and it appears to the Court that there were no reasonable or probable grounds for instituting the same, the defendant may apply to the Court. The Court may, upon such application, award against the plaintiff by its order such amount (not exceeding fifty thousand rupees) as it deems a reasonable compensation to the defendant for the expense or injury caused to him.
Under Section 95(2), once an order determining an application for compensation has been passed by the Court, it acts as a complete bar to any separate, subsequent suit for damages by the defendant for such arrest.
Here is the fully integrated, grammatically corrected, and legally exhaustive draft of your remaining text. The original flow, headings, and numbering system have been strictly maintained while correcting typographical/spacing errors and embedding contemporary statutory limits and landmark judicial updates.
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âAttachment before judgmentâ, like âarrest before judgmentâ, is an important remedy available to the plaintiff. The provision of attachment before judgment is made with the object of realizing the decree that may be passed against the defendant. It prevents the defendant from defeating the fruits of a decree that the plaintiff may eventually obtain.
Extensive Principles & Judicial Caution: The Supreme Court of India in Raman Tech. & Process Engg. Co. v. Solanki Traders, (2008) 2 SCC 302 settled that the power to attach before judgment is a drastic and extraordinary power. It must not be exercised mechanically. The court must be satisfied that a prima facie case exists, and that the defendant is genuinely attempting to remove or dispose of the property with the specific intent to obstruct or delay execution. It cannot be used merely to pressure the defendant into a settlement.
Where, at any stage of a suit, the Court is satisfied, by affidavit or otherwise, that the defendant, with intent to obstruct or delay the execution of any decree that may be passed against him:
(a) is about to dispose of the whole or any part of his property, or
(b) is about to remove the whole or any part of his property from the local limits of the jurisdiction of the Court,
âthe Court may direct the defendant, within a time to be fixed by it, either to (i) furnish security of such sum as may be specified in the order or (ii) to appear and show cause why he should not furnish security.
The plaintiff must specify the property required to be attached and its estimated value (R. 6). The Court may order a conditional attachment of the whole or any portion of the property. Under Rule 5(4), if an order of attachment before judgment is made without complying with the provisions of Rule 5(1), such attachment shall be void.
However, a Court of Small Causes has no power to order the attachment of immovable property before judgment (R. 13).
The attachment shall be made in the manner and as provided for the attachment of property in the execution of a decree (as prescribed under Order XXI). This includes the execution of prohibitory orders for immovable property and physical seizure or safe custody for movable property.
Where any claim is preferred to the property attached before judgment, it has to be adjudicated upon in the manner and as provided for the adjudication of claims to property attached in execution of a decree for payment of money (under Order XXI, Rule 58).
An attachment before judgment does not affect the rights of a third party existing prior to the attachment (R. 10), nor does it bar any person holding a decree against the defendant from applying for the sale of the attached property under execution.
Where an order is made for attachment before judgment, the Court must order the attachment to be withdrawn when the defendant furnishes the required security, together with security for the costs of the attachment, or when the suit is dismissed.
Where property is under attachment on the Courtâs order and a decree is subsequently passed in favor of the plaintiff, he is not required to apply for a re-attachment of the property upon filing an execution application.
Rule 11A lays down that the provisions of Order XXI applicable to an attachment in âexecution of a decreeâ continue to apply to an attachment before judgment that continues after the decree. Furthermore, an attachment before judgment does not revive automatically if a suit dismissed in default is subsequently restored.
Where an attachment has been effected on insufficient grounds, or if the suit of the plaintiff fails and it appears to the Court that there were no reasonable or probable grounds for instituting the same, the defendant may apply to the Court. The Court may award against the plaintiff by its order such amount, not exceeding fifty thousand rupees, as it deems a reasonable compensation to the defendant for the expense or injury caused. Under Section 95(2), such an order acts as a complete bar to any separate subsequent suit for damages.
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âHalsburyâ defines an injunction as a judicial process whereby a party is ordered
(i) to refrain from doing, or
(ii) to do, a particular act or thing.
It is thus an order of the Court whereby it restrains the commission or continuance of some wrongful act or omission.
In the former case (restraining commission), the injunction is called a prohibitory or restrictive injunction; in the latter (compelling performance), it is mandatory. Prohibitory injunctions are significantly more common than mandatory ones.
Specific relief afforded by means of an injunction is called preventive relief. It is based on the maxim âprevention is better than cureâ. An injunction is a form of specific relief that the Court grants when pecuniary compensation would be inadequate or altogether futile. The object of granting an injunction is to restrain the commission of an act to prevent future or threatened injuries. This preventive relief is granted at the discretion of the Court and may be temporary or perpetual (S. 36 of the Specific Relief Act, 1963).
There are following two primary kinds of injunctions: Mandatory
A temporary injunction is also called an interim injunction. It is an injunction that remains in force until a specified time or until further orders of the Court (S. 37(1) of the Specific Relief Act). Such injunctions can be granted at any stage of the suit and are regulated by Order XXXIX of the Code of Civil Procedure, 1908. The main object of a temporary injunction is to maintain the status quo (i.e., to preserve the property in its current state during litigation).
A perpetual injunction is also called a permanent injunction. It is permanent in nature and is governed by Sections 38 to 44 of the Specific Relief Act, 1963. A perpetual injunction can only be granted by way of a final decree passed by the Court after a full trial on the merits of the case. Its object is to permanently settle the rights of the parties and prevent a recurrent breach of an obligation.
Temporary Injunction: It is passed by way of an interlocutory order at any stage during the pendency of a suit, before the final judgment is delivered.
Perpetual Injunction: It can be granted only by way of a formal decree made at the final hearing of the suit and upon a thorough consideration of the merits of the case.
Temporary Injunction: It is transient in nature and continues only until a specified period of time (e.g., ten days, until the next hearing date) or until further explicit orders of the Court.
Perpetual Injunction: It is permanent in nature, finally settling the mutual rights of the parties and directing a party for all time to do or to permanently abstain from doing a particular act.
Temporary Injunction: The immediate objective is to preserve the property in dispute in status quo so as to prevent its destruction or alienation during litigation; it does not conclude or establish a final legal right.
Perpetual Injunction: The objective is to finally protect, declare, and give lasting effect to the plaintiff's established legal rights, often restoring or securing the property or rights to their rightful state.
Temporary Injunction: It is regulated strictly by the procedural provisions contained under Order XXXIX (Rules 1 to 5) of the Code of Civil Procedure, 1908.
Perpetual Injunction: It is governed and regulated by the substantive law provisions under Sections 38 to 42 of the Specific Relief Act, 1963.
A temporary injunction may be granted by a Court in the following cases:
1. Where any property in dispute in a suit is in danger of being wasted, damaged, or alienated by any party to the suit, or wrongfully sold in execution of a decree.
2. Where the defendant threatens or intends to remove or dispose of his property with a view to defrauding his creditors.
3. Where the defendant threatens to dispossess the plaintiff or otherwise cause injury to the plaintiff in relation to any property in dispute in the suit.
4. Where the defendant is about to commit a breach of contract or injury of any other kind (R. 2).
5. Where the Court is of the opinion that the interests of justice so require, invoking its inherent powers under Sections 94(c) and 151 of the Code. Any party to the suit, whether the plaintiff or the defendant, may pray for a temporary injunction if there is a danger of alienation or waste to the property. Any order for an injunction may be discharged, varied, or set aside by the Court on an application made by any party dissatisfied with such order (R. 4).
The power to grant an injunction is discretionary. However, such discretion must be exercised with caution on sound judicial principles, as a reckless grant can adversely prejudice the opposite party. The Supreme Court of India (reiterated in cases like Dalpat Kumar v. Prahlad Singh) has firmly established that three golden principles must coexist before an injunction is granted:
The plaintiff must show that he has a prima facie case. The case must raise a triable issue showing that the plaintiff has a legal right that requires protection. The burden is entirely on the plaintiff. The Court is not expected to conduct a mini-trial or closely examine the absolute merits of the case at this stage; it relies on the plaint, written statements, affidavits, and documents produced by the parties.
Example: If a plaintiff files a suit for partition and separate possession of ancestral property against his brother and seeks an injunction against alienation, the Court will evaluate the relationship, the revenue records (e.g., 7/12 extracts), the non-existence of a prior recorded partition, and any active attempt to sell the property before deciding.
The plaintiff must prove that he will suffer an irreparable injury if the temporary injunction is refused. An injury is considered "irreparable" if it cannot be adequately measured or compensated by pecuniary damages. For example, in a partition suit, a Karta may be restrained from selling the joint family home because the loss of ancestral property cannot be compensated by money. Similarly, in an encroachment suit, a defendant may be ordered to halt construction to prevent the permanent alteration of the disputed site.
The balance of convenience must favor the plaintiff. The Court must weigh the relative hardships and satisfy itself that the injury or inconvenience the plaintiff will suffer if the injunction is refused is significantly higher than the inconvenience the defendant will suffer if the injunction is granted.
Other Factors: Along with these three elements, the Court will consider equitable principles such as delay, laches, acquiescence, and whether the plaintiff has come to the Court with clean hands without suppressing material facts.
An injunction directed to a corporation is binding not only on the corporation itself but also on all members and officers whose personal actions it seeks to restrain (R. 5).
Rule 3 mandates that the Court shall give notice of the application to the opposite party before granting an injunction. However, where an ex-parte ad-interim injunction is proposed without giving notice, the Court must record its reasons showing that the very object of the injunction would be defeated by delay.
When an ex-parte order is granted, the Court shall direct the applicant to deliver or send by registered post to the opposite party a copy of the application, the plaint, affidavits, and documents relied upon on the same day or the day immediately following. The applicant must file an affidavit of compliance on the same day or the next day.
The Court shall make an endeavor to finally dispose of the application within thirty days from the date on which the ex-parte injunction was granted; if it is unable to do so, it must record its reasons for such inability (R. 3A).
In case of disobedience or breach of any temporary injunction order, the Court granting the injunction or the court to which the suit is transferred may order:
1. The attachment of the property of the guilty person, and
2. Detention of such person in a civil prison for a term not exceeding three months, unless the Court directs his release in the meantime.
No attachment under this rule shall remain in force for more than one year, at the end of which, if the disobedience continues, the property attached may be sold to award compensation to the injured party.
Where a temporary injunction is obtained on insufficient grounds, or if the plaintiff's suit fails and it appears to the Court that there were no reasonable or probable grounds for instituting it, the defendant may apply for compensation. The Court may award an amount not exceeding fifty thousand rupees as a reasonable compensation for the injury or expense caused, which acts as a bar to any subsequent suit for damages under Section 95(2).
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Interlocutory orders are those interim orders passed by a Court during the pendency of a suit that do not determine the substantive rights of the parties or terminate the suit. Instead, they relate to the protection, management, or sale of the subject matter of the suit. The key interlocutory orders mentioned in Rules 6 to 10 include:
Rule 6 provides that the Court may, on the application of any party to a suit, order the saleâby a person named in the order and on such terms as it thinks fitâof any movable property being the subject-matter of the suit or attached before judgment, which is subject to speedy and natural decay, or where for any other just and sufficient cause it is desirable to have it sold at once.
Upon the application of any party, the Court can order the detention, preservation, or inspection of any property forming the subject matter of the suit or as to which any question may arise. For that purpose, the Court may authorize any person to enter upon or into any land or building in the possession of any other party, and authorize samples to be taken, observations to be made, or experiments to be tried to obtain full information.
Orders under Rules 6 and 7 can be made at any time after the institution of the suit. Before making such an order, the Court shall give notice to the opposite party. However, it can dispense with notice if it appears that the object of the order would be defeated by delay (R. 8).
Where the suit land is liable for the payment of revenue to the Government or is a tenure liable to sale, and the party in possession neglects to pay the revenue or rent, any other party to the suit claiming an interest in the land may, upon paying the revenue or rent due, be put in immediate possession of the land. The Court may award in the final decree the amount so paid, with interest thereon, against the defaulting party.
Where the subject matter of a suit is money or some other thing capable of delivery, and a party admits that he holds such money or thing as a trustee for another party, or that it belongs or is due to that party, the Court may order it to be deposited in Court or delivered to that party, with or without security, pending the final disposal of the case.
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A âReceiverâ is an impartial person and an officer of the Court appointed to collect the rents, profits, or manage property pending the final outcome of a suit. The Receiver is considered the hands of the Court; the property in his possession is in custodia legis (custody of the law) for the benefit of the ultimate successful party.
Where it appears to the Court to be just and convenient, the Court may, by order, appoint a receiver of any property, whether before or after the decree. The Court can remove any person from the possession or custody of the property and commit the same to the possession, custody, or management of the receiver. However, Rule 1(2) clarifies that the Court cannot remove from the possession or custody of property any person whom any party to the suit has no present right to remove.
The appointment of a receiver is a highly discretionary remedy. It is considered one of the harshest remedies in civil law because it displaces a person from possession before a final decree. Therefore, this discretion is exercised cautiously based on sound judicial principles (historically referred to as the "Five Principles of a Receiver"). The main object is to protect and preserve the subject matter of litigation from being wasted, dissipated, or destroyed pending judicial determination.
Where the property is land paying revenue to the Government, or land of which the revenue has been assigned or redeemed, and the Court considers that the interests of those concerned will be promoted by the management of a public officer, the Court may, with the consent of the Collector, appoint him to be the receiver of such property.
As an officer of the Court, a receiver functions strictly under the courtâs directions. The Court may confer upon him all or any of the following powers:
a. To bring and defend suits.
b. To realize, manage, protect, preserve, and improve the property.
c. To collect, apply, and dispose of rents and profits.
d. To execute documents as if he were the owner.
e. Such other powers as the Court thinks fit.
The receiver cannot sue or be sued, or alienate the property, without the express permission of the appointing court.
Every receiver shall:
(i) furnish such security as the Court thinks fit to account for what he shall receive,
(ii) submit his accounts at such periods and in such form as the Court directs,
(iii) pay the amount due from him as directed by the Court, and
(iv) be responsible for any loss occasioned to the property by his willful default or gross negligence.
If a receiver fails to submit accounts, pay progress balances, or causes loss through willful default or gross negligence, the Court may direct his personal property to be attached and sold to make good any amount found due from him (R. 4).
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Rule 1 provides that the Court may, either on its own motion or on an application by the defendant, at any stage of the suit, order the plaintiff to give security for the payment of the costs of the defendant. The Court shall make such an order in the following circumstances:
a. Where the sole plaintiff resides outside India, or where there are multiple plaintiffs and all of them reside outside India, and
b. Where such plaintiff or none of the plaintiffs possess sufficient immovable property within India other than the suit property.
This provision protects the defendant against vexatious or speculative claims filed by non-residents, ensuring they can recover their costs if the suit fails.
If the required security is not furnished within the time fixed by the Court, the Court shall dismiss the suit, unless the plaintiff is exempted or applies for an extension. The plaintiff can apply to set aside the dismissal if he shows sufficient cause for the default within the limitation period.
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The defendant in any suit to recover a debt or damages may, at any stage of the suit, deposit in Court such sum of money as he considers full satisfaction of the plaintiff's claim (R. 1).
Notice of the deposit shall be given by the defendant to the plaintiff, and on the plaintiff's application, the amount deposited may be paid out to him (R. 2). No interest shall be allowed to the plaintiff on the sum deposited from the date of receipt of notice of such deposit, whether the sum is accepted in full or part satisfaction (R. 3).
1. Full Satisfaction: If the plaintiff accepts the sum as full satisfaction of his claim, the Court shall record his statement to that effect and pronounce judgment accordingly, usually awarding the plaintiff his costs up to the date of deposit.
2. Part Satisfaction: Where the plaintiff accepts the amount as part satisfaction only, he may accept it under protest and prosecute his suit for the balance. However, if the Court ultimately decides that the initial deposit made by the defendant was sufficient to fully satisfy the claim, the plaintiff must pay all costs of the suit incurred after the date of the deposit (R. 4).
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Section 34 of the Code governs the power of the Court to award interest in a decree for the payment of money. The Court is empowered to award interest on the principal sum adjudged at a reasonable rate. This section applies strictly to money suits and does not apply to foreclosure or sale decrees in mortgage suits, which are separately regulated by Order XXXIV, Rule 11.
Interest prior to the suit is a matter of substantive law and does not fall within the discretion of Section 34. Pre-suit interest is awarded only when there is an express agreement between the parties, a clear mercantile usage, a statutory provision (like the Interest Act, 1978), or by way of damages for wrongful detention of money.
Under Section 34, the Court can award interest from the date of the filing of the suit to the date of the final decree. Awarding this interest is completely at the discretion of the Court. While the standard discretionary rate is usually up to 6% per annum, where the liability arises out of a commercial transaction, the rate of interest may exceed 6% but cannot exceed the contractual rate or the rate at which money is lent by nationalized banks in relation to commercial transactions.
The Court can award interest from the date of the decree to the date of actual payment or realization of the money. The rate is within the court's discretion but is legally capped at 6% per annum for ordinary transactions, and up to the banking lending rate for commercial transactions.
Where a money decree is completely silent regarding the grant of interest from the date of the decree to the date of payment, it shall be deemed that the Court has refused such interest. A separate suit for such interest will not lie.
This rule lays down the special framework for awarding interest in a mortgage suit, directing the court to calculate interest at the rate agreed upon in the mortgage deed up to the date fixed for payment in the preliminary decree, after which the discretionary rates apply.
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Section 35 empowers the Court to determine and award costs of and incidental to all suits and civil proceedings. The award of costs is at the absolute discretion of the Court, which has full power to determine by whom, out of what property, and to what extent such costs are to be paid. The primary object of awarding costs is to indemnify the successful litigant for the expenses reasonably incurred during the litigation, not to create a profit or to vindictively punish the losing party. Under Section 35(2), if the Court directs that costs shall not follow the event, it must state its reasons in writing.
The Code recognizes four distinct kinds of costs:
General costs relate to the basic expenses of the suit, such as court fees, process fees, and advocate fees. They follow the general principle that the losing party pays the winning party's costs unless the court directs otherwise for specific reasons.
Order XX-A empowers the Court to award specific costs in respect of items that do not fall under ordinary expenditures. These include expenses incurred for giving statutory notices prior to the suit, typing/printing charges, inspection of Court records, expenses incurred in procuring witnesses, and expenses for obtaining certified copies of judgments or decrees. These are assessed according to the rules framed by the respective High Courts.
If a party objects that the claim or defense of the opposite party is false or vexatious to their knowledge, and if such claim or defense is subsequently disallowed or abandoned, the Court may award compensatory costs.
a. Statutory Limit: The maximum amount that can be awarded by a court as compensatory costs under this section is three thousand rupees or the limit of its pecuniary jurisdiction, whichever is less.
b. Effect: The award of compensatory costs is penal in nature but does not exempt the party from criminal liability for perjury. Under Section 35A(4), the amount of compensation awarded under this section shall be taken into account in any subsequent civil suit for damages for malicious prosecution or false claims. An order awarding compensatory costs is appealable under Section 104.
Section 35-B mandates the imposition of costs on a party that adopts delaying tactics. If a party fails to take a required step or apply for an adjournment on a date fixed for the hearing of the suit or for leading evidence, the Court shall, for reasons to be recorded, order that party to pay costs sufficient to reimburse the other party for attending.
The payment of such costs is a condition precedent to further prosecution of the suit or defense. If the plaintiff fails to pay delay costs, their suit cannot proceed; if the defendant fails to pay, their defense can be struck off or held up until payment is made.
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