Back
High Court of Judicature at Bombay
K.R. SHRIRAM, J.
Alpha Oil International
Versus
M.T. Chem Lily
Notice of Motion No. 381 of 2014 In Admiralty Suit No. 14 of 2008
Decided On : 08-04-2014
In fact Section 35 also provides that the fact that the Court has no jurisdiction to try the suit shall be no bar to the exercise of such powers. Then Section 35-A provides for award of compensatory cost in respect of false or vexatious claim or defences. Section 35-B provides for the award of cost for causing delay where the party fails to take steps which he was required by or under the Code to take or obtains an adjournment for taking such steps or for producing evidence or on any other ground and then Section 95 which provides for grant of compensation for obtaining arrest, attachment or injunction on insufficient grounds. Though under Section 95 there is a cap of Rs. 50,000 and under Section 35-A the cost awardable is upto Rs. 3000/-, under Section 35 and Section 35-B there is no upper limit of amount of cost awardable and the amount of cost to be awarded is at the discretion of the Court.
Civil Procedure Code, 1908 - Order XXV, Rule 1 Amount of security for costs. - When defendant required three witnesses to depose in matter and agreed that Rs. 2 lacs per witness is a reasonable amount then plaintiff must provide security in sum of Rs. 6 lacs for three witnesses. In view of the Apex Court Judgments in the matters of Sanjeev Kumar Jain, 2012 All SCR 985 and Vinod Seth, 2010 All SCR 2356 Court is inclined to follow the provisions of Rule 606 of Bombay High Court (O.S.) Rules. Since the rules provides only for Rs. 25,000/- towards Advocates’ fees, the plaintiffs have to provide security only in the sum of Rs. 25,000/-.
It is not the business of any party to decide how many witnesses the other side should produce. They may have their own strategy. There is no necessity for any party to explain why each of the witness is required unless the witness being called after the party closes its case or as a rebuttal witness. Therefore, Court is inclined to direct the plaintiff to provide security in the sum of Rs. 6 lakhs for the 3 witnesses since Mr. Shankar also agreed that Rs. 2 lakhs per witness is reasonable. Certainly if the defendant does not lead evidence of 3 witnesses and leads evidence of only 1 or 2 witness, it will be open for the plaintiff to apply for release of proportionate security. Of course, that will be decided when an application is taken out and on the circumstances then prevailing.
It is a reasonable amount taking into account that expenses to be incurred towards fees of the Commissioner, hiring of venue and secretarial assistance.
Civil Procedure Code, 1908 - Order XXV, Rule 1 Filing of application for security for cost. An application for security of cost, can be filed at any stage.
Civil Procedure Code, 1908 - Order XXV, Rule 1(1) Proviso Security for cost. When plaintiff is not an Indian company, furnishing security for cost is mandatory.
Civil Procedure Code, 1908 - Order XXV, Rule 2 Failure to furnish security for costs. - Failure of plaintiff to furnish security for costs within time fixed renders suit liable to be dismissed. The effect of failure to furnish security is provided in Order XXV, Rule 2 of CPC. The effect automatically follows. Should the plaintiff fail to furnish the security within the time fixed above, the suit shall stand dismissed.
1. This Notice of Motion is taken out on behalf of the defendant praying for (a) an order and direction to the plaintiff to deposit sum of Rs.24 lakhs as security for costs incurred and likely to be incurred by the defendant or such other amount as this Hon'ble Court deems fit and proper and (b) dismiss the suit in the event the plaintiff fails to furnish security should the Court decide to allow the prayer for security for costs.
2. Mr.Pratap Senior Counsel for the defendant submitted that this Notice of Motion should be heard and disposed before the matter proceeds further.
3. Pursuant to an order dated 19.3.2008 the applicant as the owner of the defendant-vessel furnished security in the sum of USD 460,000 + interest at 6% p.a. as security for release of the defendant vessel. This was despite the fact that the original order of arrest required the defendant to furnish security in the sum of USD 12,24,976.12 which was shown to be incorrect at the time of applying for release of the vessel. The defendant had furnished security without prejudice to their rights and contentions in the matter. The defendant is disputing their liability in respect of bunkers alleged to have been supplied to the defendant vessel.
4. The plaintiff then filed an affidavit of one Kim in lieu of examination in chief in which the witness has stated that the plaintiff had received a sum of US$ 2,60,000/- from the erstwhile demise charterers SH Marine, who is not a party to the suit and out of this the plaintiff appropriated a sum of US$ 1,88,408.20 to the credit of its claim in the suit but has not disclosed when this amount was received. The defendant has alleged in the affidavit in support that as a result of this the defendant has been renewing the bank guarantee for US$ 4,60,000/- from time to time and the guarantee is in force till March, 2015 and had the plaintiff disclosed this receipt of money the defendant would have provided bank guarantee for a lesser sum and that would mean saving in bank guarantee charges. The plaintiff subsequently took out a Chamber Summons to amend the plaint to bring down its claim by a sum of US$ 1,88,408.20 which according to the plaintiff they have received. This Chamber summons has been allowed. The revised claim in the suit now stood at US$ 2,71,197.75.
5. It is the defendant's case that the applicant, viz. owner of the defendant vessel is based in Norway and the plaintiff is also a foreign company incorporated under the laws of Korea. The plaintiff has no place of business in India and has no asset or immovable property in India and therefore, it is only just, fair and proper that the plaintiff be directed to provide security for cost. Mr.Pratap counsel for the defendant submitted that under order XXV of the Code of Civil Procedure 1908 (CPC) which deals with the situation when the security for cost may be required from plaintiff, it is mandatory for the court to direct the plaintiff, where the plaintiff is based outside India and has no asset or immovable property within India, to furnish security for cost.
6. The plaintiff has filed an affidavit of one Ravindra Kumbhar dated 27.3.2014 in reply opposing the Notice of Motion. In reply to the specific averment in paragraph-4 to the affidavit in support stating that the plaintiff do not have any place of business in India or assets in the form of immovable property or otherwise within India, the plaintiff has not denied the same. In fact, during the course of argument, the Counsel for the plaintiff confirmed that the plaintiff do not possess any asset or immovable property within India.
7. Order XXV of the Code of Civil Procedure reads as under:-
“1. When security for costs may be required from plaintiff –
(1) At any stage of a suit, the Court may, either of its own motion or on the application of any defendant, order the plaintiff, for reasons to be recorded, to give within the time fixed by it security for the payment of all costs incurred and likel
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
