Exemplary costs in writ petitions must be reasonable, based on actual gains and misconduct, and not arbitrary figures.

JUDGMENT :

P.C. :

1. This opinion seeks to resolve the difference that has arisen between the Hon’ble Judges constituting the Division Bench that heard Writ Petition No.10220 of 2024 on the quantum of costs to be imposed on the petitioner. In the said writ petition, an order dated 11th July 2024 passed by the Mumbai Metropolitan Regional Development Authority- MMRDA rejecting the application made by the petitioner for retention of hoardings installed by it was under challenge. By its order dated 24th July 2024, the Division Bench proceeded to dismiss the writ petition after recording a finding that the hoardings installed by the petitioner exceeded the permissible limits as laid down in the statutory guidelines. There was a consensus between the learned Judges that the writ petition was liable to be dismissed with exemplary costs. However, there was a disagreement between them as regards the quantum of costs. Hon’ble M. S. Sonak, J was of the view that imposition of costs of Rs.5,00,000/- would be appropriate. However, Hon’ble Kamal Khata, J was of the view that the costs to be imposed could not be insignificant or trivial. Costs ought to be imposed so as to act as a genuine deterrent. He was of the view that costs of Rs.25,00,000/- ought to be imposed.

In view of the difference of opinion as regards the quantum of costs to be imposed, the writ petition has been placed before this Court in accordance with the provisions of Chapter-I Rule 7 of the Bombay High Court Appellate Side Rules, 1960 to resolve this difference.

2. Ms. Minal Chandnani, the learned counsel appearing for the petitioner at the outset submitted that the order dated 24th July 2024 passed in the writ petition was the subject matter of challenge before the Supreme Court in SLP (C) No.20943/2024. The said Special Leave Petition however came to be dismissed on 13th September, 2024. It is thus only the difference of opinion with regard to the quantum of costs that is required to be adjudicated in the present reference. It was submitted that the facts of the present case did not indicate that the imposition of exemplary costs was warranted. The petitioner had approached the Grampanchayat for seeking permission for erecting the hoardings and after receiving its permission had errected the said hoardings. It was however found by the Division Bench that the permission of the MMRDA, which was the Competent Authority, had not been obtained and instead permission from the Grampanchayat had been sought. There were no malafides in the action of the petitioner and hence imposition of exemplary costs of Rs.25,00,000/- was not at all warranted. The observations made in paragraphs 19 and 23 of the order dated 24th July 2024 were unwarranted in the facts of the present case inasmuch as no fraud was played by the petitioner by obtaining permission from the Grampanchayat. It was the first instance when the petitioner had approached this Court and therefore, it could not be said that the petitioner was a habitual law-breaker so as to invite an order for payment of exemplary costs. Drawing attention to the order passed by the said Division Bench in Writ Petition No.8657 of 2024 (Yash Raj Multimedia Pvt. Ltd. & Anr. Vs. State of Maharashtra & Ors.) decided on 21st August 2024, it was submitted that even in the said case, the petitioner had approached the Grampanchayat for grant of permission to put up an hoarding. The Division Bench dismissed the writ petition but did not impose any costs whatsoever. It was therefore submitted that imposition of exemplary costs of Rs.25,00,000/- on the petitioner was unwarranted.

To substantiate her contentions in this regard, the learned counsel relied on the decisions in Ashok Kumar Mittal Vs. Ram Kumar Gupta and Another, (2009) 2 SCC 656, Vinod Seth Vs. Devinder Bajaj and Another, (2010) 8 SCC 1, Sanjeev Kumar Jain Vs. Raghubir Saran Charitable Trust and Others, (2012) 1 SCC 455 and Maria Margarida Sequeira Fernandes and Others Vs. Erasmo Jack De Sequ