The Supreme Court has cautioned High Courts against passing orders to frighten or terrorise litigants as if to prevent the filing of frivolous, vexatious or false cases.
A suit or proceeding initiated in accordance with the law cannot be considered an abuse of the process of the court, only on the ground that it is likely to cause hardship or is likely to be rejected ultimately, said a Bench consisting of Justices R.V. Raveendran and R.M. Lodha.
The Bench set aside an order of the Delhi High Court directing plaintiff-appellant Vinodh Seth to file an undertaking that he would pay Rs. 25 lakh to defendants-respondents in the event of failure in a suit for specific performance.
“Outside law”
Writing the judgment, Justice Raveendran said: “We appreciate the anxiety shown by the High Court to discourage land-grabbers, speculators, false claimants and adventurers in real estate from pressuring hapless and innocent property owners to part with their property against their will, by filing suits which are vexatious, false or frivolous. But we cannot approve [of] the method adopted by the High Court which is wholly outside law.”
The Bench pointed out that lack of appropriate provisions on costs had resulted in a steady increase in malicious, vexatious, false, frivolous and speculative suits, apart from rendering Section 89 of the Civil Procedure Code (CPC) ineffective. “Any attempt to reduce pendency or encourage alternative dispute resolution processes or streamline the civil justice system will fail in the absence of appropriate provisions relating to costs.”
There was an urgent need for the Legislature and the Law Commission revisiting the provisions relating to costs and compensatory costs in Sections 35 and 35 A of the CPC.
“In a suit governed by the [Civil Procedure] Code, no court can, merely because it considers it just and equitable, issue directions which are contrary to or not authorised by law. The High Court can certainly innovate to discipline those whom it considers to be adventurers in litigation, but it has to do so within the four corners of law.”
“If litigants are to be subjected to such directions in terrorem , the litigant public will be dissuaded from approaching courts, even in regard to bona fide claims. Such orders may lead to gradual loss of faith in the judiciary and force litigants to think of extra-judicial remedies by seeking the help of underworld elements or police to settle/enforce their claims, leading to a breakdown of the rule of law.”
No order or direction of the High Court even if it was intended to deter vexatious and frivolous litigation should lead to obstruction of access to courts. Passing such orders would encourage, in fact even force, the losing party to file an appeal or further appeal against the final decision in the suit, the Bench said.
“This is because no plaintiff would like to undertake to pay a large sum as damages nor would a defendant like to miss a chance to receive a large sum as damages. Such orders would also tempt and instigate both parties to make attempts to succeed in the suit by hook or by crook, by adopting means fair or foul.”
The Bench asked the appellant to give an undertaking to pay Rs. 3 lakh in the event of failure in the suit, and allowed the appeal.
