Tuesday, February 13, 2024

𝗝𝘂𝗱𝗶𝗰𝗶𝗮𝗹𝗗𝗿𝗲𝗮𝗺™

𝙰𝙵𝙵𝙾𝚁𝙳𝙰𝙱𝙻𝙴 & 𝙰𝙲𝙲𝙴𝚂𝚂𝙸𝙱𝙻𝙴

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SECURITY FOR COSTS

Write a detailed note on security for costs.

Indian Justice System follows the principles of natural justice and the main aim of this system is that no one should be left without justice. It aims to administer justice to each and every person. Our system provides some basic rights to each and every person and if any person tries to violate the rights of another person, then the aggrieved person has right to file a suit against wrongdoer and if the aggrieved person proves the fact that the defendant has violated his rights then in such a case the court will pronounce the judgement in favor of plaintiff and against the defendant. But in these proceedings, it does not mean that the court will pronounce the judgment in favor of plaintiff and against defendant without hearing the defendant. The court will pass the judgment only after hearing both the parties.
During trial, while hearing parties, if the court feels that the plaintiff will fail to prove his burden of proof and judgment will be passed in favor of defendant then in such a case if court thinks it reasonable then the court can ask the plaintiff to give security for the payment of cost that will be incurred by the defendant for contesting the suit. Such orders are passed by court only to protect the interest of innocent defendant.
Order 25 of Code of Civil Procedure, 1908, deals with the provisions of security for cost that has been incurred by defendant for contesting the suit. According to Order 25 Rule 1 of Code of Civil Procedure, 1908, the defendant has right to file an application before the court at any stage of the suit to pass an order against the plaintiff to give the security for the cost that has been incurred by him for contesting the suit. If the court thinks it reasonable then court has power to ask the plaintiff to give the security for the cost that has been incurred by the defendant.
According to this rule if the plaintiff resides out of India or if there are more than one plaintiff and all the plaintiffs reside out of India and they have no property in India except the property against which the suit has been filed then in such a case it is mandatory for the court to pass such orders. According to this rule if the plaintiff leaves India and it is considered by the court that plaintiff has left India with an intention not to come back whenever he will be called by the court to pay the cost to the defendant then in such a case the court will deem that the plaintiff is residing out of India and in this situation, it will be mandatory for the court to ask the plaintiff to give the security for the cost that has been incurred by the defendant.
According to Order 25 Rule 1 of Code of Civil Procedure, 1908, the court can pass such orders either on the application filed by the defendant or on its own motion.
In the leading case of Vinod Seth v. Devinder Bajaj (SC 2010), the Hon’ble court stated that the main object of this rule is to provide for the protection of the defendants in certain cases where, in the event of success, they may have difficulty in realizing their costs from the plaintiff.
Moreover, in the leading case of Arumugam Chettiar v. K.R.S. Sevugan Chettiar (Mad. 1950), the Hon’ble court held that it is a discretionary power which can be exercised only in exceptional circumstances, where it is shown that the exercise of power is necessary for the reasonable protection of the interests of the defendant.
Order 41 Rule 10 of the Code of Civil Procedure, 1908, the appellate court may also ask the appellant to give the security for the cost of appeal or for the cost of suit or both or if the appellant resides out of India and he does not have any immovable property in India except the property against which the appeal has been filed then in such a case, it is mandatory for the court the pass such orders. According to this rule, if the appellant does not give the security, then in such a case the court can dismiss the appeal filed by the appellant.
According to Order 25 Rule 2 of Code of Civil Procedure, 1908, if the plaintiff fails to give the security within the fixed time, then in such a case the court has power to dismiss the suit unless the plaintiff is permitted to withdraw the suit. According to this rule, if the suit has been dismissed by the court, then the plaintiff can file an application for setting aside the dismissal order and the court will set aside the dismissal order only if the court thinks that there was sufficient ground because of which the plaintiff failed to furnish the security. If the court thinks that there was no sufficient ground then in such a case the court will not set aside the dismissal order.
According to this rule, the court cannot set aside the dismissal order without giving any notice to the defendant. The court will provide a notice to the defendant and on a prescribed date, after hearing both the parties the court will determine whether to set aside the dismissal order or not.
In the leading case of Bai Porebai v. Devji Meghji (Bom 1898), the Hon’ble court held the provisions of this Order i.e., Order 25 applies even to a minor plaintiff.

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