Suits in General Costs MCQ Quiz - Objective Question with Answer for Suits in General Costs - Download Free PDF

The correct answer is 'Section 35A'

Key Points

• Compensatory Costs for False or Vexatious Claims under Section 35A of the Code of Civil Procedure (CPC), 1908:
  • Section 35A of the Code of Civil Procedure, 1908 deals with the awarding of compensatory costs in cases where a party makes a false or vexatious claim or defense.
  • This provision aims to discourage parties from filing frivolous lawsuits or making baseless defenses that waste the court's time.
  • The maximum amount that can be awarded under Section 35A is Rs. 3,000/- or an amount prescribed by law, ensuring that malicious litigants are penalized.
  • Such compensatory costs are awarded in addition to regular costs under Section 35 CPC.

Additional Information

• Section 36 CPC:
  • Section 36 of CPC does not deal with compensatory costs.
  • Instead, it relates to the execution of decrees and orders and lays down general provisions regarding how court orders should be enforced.
• Section 34 CPC:
  • Section 34 deals with interest on judgments and decrees, not compensatory costs.
  • It provides that a court may order interest on a decree amount at a rate it deems reasonable.
• None of the Above:
  • Since Section 35A specifically deals with compensatory costs, the option "None of the Above" is incorrect.

the correct answer is option 3.Key PointsSection 35B was inserted by by Act 104 of 1976, s. 15 (w.e.f. 1-2-1977).

• Section 35B deals with costs for causing delay.
• If, on any date fixed for the hearing of a suit or for taking any step therein, a party to the suit—
  • Fails to take the step which he was required by or under this Code to take on that date, or
  • Obtains an adjournment for taking such step or for producing evidence or on any other ground,
• The Court may, for reasons to be recorded, make an order requiring such party to pay to the other party such costs as would, in the opinion of the Court, be reasonably sufficient to reimburse the other party in respect of the expenses incurred by him in attending the Court on that date, and payment of such costs, on the date next following the date of such order, shall be a condition precedent to the further prosecution of:
  • The suit by the plaintiff, where the plaintiff was ordered to pay such costs,
  • The defence by the defendant, where the defendent was ordered to pay such costs.
• Where separate defences have been raised by the defendant or groups of defendants, payment of such costs shall be a condition precedent to the further prosecution of the defence by such defendants or groups of defendants as have been ordered by the Court to pay such costs.

The correct answer is option 4

 Key PointsSection 35B of CPC says Costs for causing delay.-- (1) If, on any date fixed for the hearing of a suit or for taking any step therein, a party to the suit
(a) fails to take the step which he was required by or under this Code to take on that date, or
(b) obtains an adjournment for taking such step or for producing evidence or on any other ground, the Court may, for reasons to be recorded, make an order requiring such party to pay to the other party such costs as would, in the opinion of the Court, be reasonably sufficient to reimburse the other party in respect of the expenses incurred by him in attending the Court on that date, and payment of such costs, on the date next following the date of such order, shall be a condition precedent to the further prosecution of
(a) the suit by the plaintiff, where the plaintiff was ordered to pay such costs,
(b) the defence by the defendant, where the defendant was ordered to pay such costs.
Explanation.-- Where separate defences have been raised by the defendant or groups of defendants, payment of such costs shall be a condition precedent to the further prosecution of the defence by such defendants or groups of defendants as have been ordered by the Court to pay such costs.
(2) The costs, ordered to be paid under sub-section (1), shall not, if paid, be included in the costs awarded in the decree passed in the suit; but, if such costs are not paid, a separate order shall be drawn up indicating the amount of such costs and the names and addresses of the persons by whom such costs are payable and the order so drawn up shall be executable against such persons.

• Section 35B deals with cost for causing delay and the cost imposed shall not be included in the cost awarded in the decree passed in the suit and Shall, if not paid be executable against the person on whom the cost have been imposed as per section clause 2 of section 35B.

the correct answer is option 3.Key PointsSection 35B was inserted by by Act 104 of 1976, s. 15 (w.e.f. 1-2-1977).

• Section 35B deals with costs for causing delay.
• If, on any date fixed for the hearing of a suit or for taking any step therein, a party to the suit—
  • Fails to take the step which he was required by or under this Code to take on that date, or
  • Obtains an adjournment for taking such step or for producing evidence or on any other ground,
• The Court may, for reasons to be recorded, make an order requiring such party to pay to the other party such costs as would, in the opinion of the Court, be reasonably sufficient to reimburse the other party in respect of the expenses incurred by him in attending the Court on that date, and payment of such costs, on the date next following the date of such order, shall be a condition precedent to the further prosecution of:
  • The suit by the plaintiff, where the plaintiff was ordered to pay such costs,
  • The defence by the defendant, where the defendent was ordered to pay such costs.
• Where separate defences have been raised by the defendant or groups of defendants, payment of such costs shall be a condition precedent to the further prosecution of the defence by such defendants or groups of defendants as have been ordered by the Court to pay such costs.

The correct answer is Rs. 3,000/-

Key Points

• Under Section 35A of the Civil Procedure Code, 1908, the court has the power to award compensatory costs in case of false or vexatious claims or defences.
• This is applicable where no specific provision for cost is available, and the court finds that the party has raised a false or frivolous claim/defence to delay or misuse legal proceedings.
• The maximum compensatory cost that a court can impose under Section 35A is:
  • Rs. 3,000/-,
  • or the actual expenses (whichever is less), unless a higher amount is notified by the High Court.

Additional Information

• Rs. 10,000/- – Not the limit prescribed under Section 35A.
• Rs. 5,000/- – Exceeds the statutory cap in Section 35A unless amended by specific state rules.
• Rs. 25,000/- – Far exceeds the general statutory limit.

The correct answer is Section 35 A

Key Points

• Section 35A of the Code of Civil Procedure, 1908 provides for compensatory costs in respect of false or vexatious claims or defences.
• This provision was introduced to discourage frivolous and dishonest litigation.
• It applies when:
  • A claim or defence is false or vexatious to the knowledge of the party putting it forward.
  • The court records a finding to that effect.
• The maximum amount that can be awarded as compensatory costs is limited (as per the Act, not to exceed ₹3,000 or the court’s pecuniary jurisdiction, whichever is less — though state amendments may vary this limit).

Additional Information

• Section 35 – Deals with general costs of the suit, awarded at the court's discretion.
• Section 35B – Deals with costs for causing delay, not compensatory costs for false or vexatious claims.
• Section 34 – Relates to interest on decrees, not costs or compensation.

The correct answer is 'Section 35A'

Key Points

• Compensatory Costs for False or Vexatious Claims under Section 35A of the Code of Civil Procedure (CPC), 1908:
  • Section 35A of the Code of Civil Procedure, 1908 deals with the awarding of compensatory costs in cases where a party makes a false or vexatious claim or defense.
  • This provision aims to discourage parties from filing frivolous lawsuits or making baseless defenses that waste the court's time.
  • The maximum amount that can be awarded under Section 35A is Rs. 3,000/- or an amount prescribed by law, ensuring that malicious litigants are penalized.
  • Such compensatory costs are awarded in addition to regular costs under Section 35 CPC.

Additional Information

• Section 36 CPC:
  • Section 36 of CPC does not deal with compensatory costs.
  • Instead, it relates to the execution of decrees and orders and lays down general provisions regarding how court orders should be enforced.
• Section 34 CPC:
  • Section 34 deals with interest on judgments and decrees, not compensatory costs.
  • It provides that a court may order interest on a decree amount at a rate it deems reasonable.
• None of the Above:
  • Since Section 35A specifically deals with compensatory costs, the option "None of the Above" is incorrect.

The correct answer is option 4

 Key PointsSection 35B of CPC says Costs for causing delay.-- (1) If, on any date fixed for the hearing of a suit or for taking any step therein, a party to the suit
(a) fails to take the step which he was required by or under this Code to take on that date, or
(b) obtains an adjournment for taking such step or for producing evidence or on any other ground, the Court may, for reasons to be recorded, make an order requiring such party to pay to the other party such costs as would, in the opinion of the Court, be reasonably sufficient to reimburse the other party in respect of the expenses incurred by him in attending the Court on that date, and payment of such costs, on the date next following the date of such order, shall be a condition precedent to the further prosecution of
(a) the suit by the plaintiff, where the plaintiff was ordered to pay such costs,
(b) the defence by the defendant, where the defendant was ordered to pay such costs.
Explanation.-- Where separate defences have been raised by the defendant or groups of defendants, payment of such costs shall be a condition precedent to the further prosecution of the defence by such defendants or groups of defendants as have been ordered by the Court to pay such costs.
(2) The costs, ordered to be paid under sub-section (1), shall not, if paid, be included in the costs awarded in the decree passed in the suit; but, if such costs are not paid, a separate order shall be drawn up indicating the amount of such costs and the names and addresses of the persons by whom such costs are payable and the order so drawn up shall be executable against such persons.

• Section 35B deals with cost for causing delay and the cost imposed shall not be included in the cost awarded in the decree passed in the suit and Shall, if not paid be executable against the person on whom the cost have been imposed as per section clause 2 of section 35B.

The correct answer is Option 3.

Key Points Section 34 of the CPC makes provision for payment of interests in a money decree.

• In respect of 'interest prior to the institution of the suit", the court will normally allow the rate of interest as was stipulated between the parties or as according to mercantile usage (if any) or a statutory right of interest (e.g. under the Negotiable Instrument Act).
• In respect of pendent lite interest i.e. 'interest from the date of the suit till the date of the decree'. the court has discretion. 
  • Courts normally award interest at the rate agreed to between the parties, unless it is inequitable to do so. 
  • The court may disallow such interest altogether. Or, it may allow it even if there is a contrary contract between the parties.
• In respect of futurel further interest i.e. 'interest from the date of the decree till realization or date of payment', the court has a discretion and it may award at such rate as it deems reasonable, not exceeding 6 percent per annum, except in case of commercial transactions in which the rate may exceed 6%. 
  • However, such rate cannot exceed the contractual rate of interest or the rate at which money is lent by nationalized banks in relation to commercial transactions.

it is open to the court to allow compound interest from the date of the institution of the suit. 

case law: 

A division bench of the Supreme Court clarified in the recent case of Small Industries Development Bank of India v. M/s Sibco Investments Pvt. Ltd. (2022) that interest pendente lite is a discretionary matter of court that the court decides based on equitable considerations. The Supreme Court in the following case denied interest pendente lite as the claim was not pressed by the respondent in the trial court and there was also no mention of such a claim in the appeal memo, which in toto manifested the lack of seriousness of the respondent regarding such a claim. 

Additional Information Does Section 34 CPC apply in the cases of negotiable instruments?

• It is pertinent to note that cases related to negotiable instruments are dealt with in accordance with the Negotiable Instrument Act, 1881, where Section 79 of the Act provides for the levying of interest in matters related to negotiable instruments.
• In the case of United Bank of India v. P Krishnaiah (1989), it was held that Section 34 of the Code of Civil Procedure, 1908, would prevail even over the Negotiable Instrument Act, 1881.
  • The rationale is that the Code came into force after the Act, and the Code was cognizant of the existence of provisions like Section 79, but the legislature consciously omitted to insert any exceptions in Section 34, which shows legislative intent to make Section 34 prevail over Section 79.