UNIT 1

Judgment

Under Section 2(9) of the Code, Judgment is defined as the statement given by the Judge
on the grounds of a decree or an order. It refers to what the judge observes regarding all
the issues in matter and the decision on each of the issues. Hence, every judgment
consists of facts, evidence, findings etc. and the conclusion made by the court.

In simple terms, a judgment is the reasoning given by the judge as to why the ‘decree’
was given which explains the legal reasoning that formed the basis for the decree, along
with the citation of the relevant case laws, arguments by the counsels, and the
conclusions reached by the Court. It forms the concluding part of a civil suit and it
determines the rights and liabilities of the parties to the suit.

Rule 3 of Order 20 of the code states that the judgment should be signed and dated by
the judge while declaring it in the open court. It further gives provisions that once
signed by the Judge, the Judgment cannot be amended or altered afterwards, except to
correct the clerical or arithmetical errors caused due to accidental slips or omissions, as
mentioned in section 152 of the Code or further during the review.

Essential elements of Judgment:-

A judgment should possess the essentials of a case, reasoning and basic contention on
which it is delivered or the grounds of the decision.

Judgment of the courts other than that of the Small Causes Court – Rule 4 (2) of Order 20

a) A concise statement of the case

b) The points of determination
c) The decision of the court and
d) The reason for such decision by the court

Judgment of the Small Causes Court

a) The points for determination

b) The decision thereon

Duration in which the judgment has to be pronounced

The word pronouncement means to make an official public announcement. The court
has to pronounce the judgment in an open court after completion of final arguments,
either on the same day or some other day, after giving due notice to parties or their
counsel.
Prior to the Amendment of 1976, no such time limit was specified between hearing of
arguments and delivery of judgment. However, because of persistent demands and as
per the suggestion of joint committee, it was laid that a judgment should be delivered
within 30 days of the conclusion of the proceedings.

In the case of Anil Rai v. State of Bihar in which the judgment was pronounced by the
High Court after 2 years of the final arguments. The Supreme Court had strongly
deprecated the delay and set the provisions of duration in which the judgment had to be
pronounced. Per contra, there is an exception to this rule in certain extraordinary
circumstances, which may extend the judgment to furthermore 60 days.

Judgment to be Signed

As per Rule 3 of Order XX of CPC, the judgment shall be dated and signed by the Judge in
the Open Court at the time of pronouncing it and, when once signed, shall not afterwards
be altered or added, to save as provided by Section 152 of CPC or on review.

Copy of judgment

Copies of judgment shall be made available to the parties immediately after the
pronouncement of the judgment for preferring an appeal on payment of such charges as
may be specified by the High Court. Such a rule is specified in Order XX Rule 6-B of the
Code of Civil Procedure, 1908.

Alteration of a Judgement

If a judgement has been dated and signed by the judge, changes or corrections can only
be made under certain circumstances:

Arithmetical or Clerical Errors:

Changes can be made if there are mistakes in calculations (arithmetical errors) or errors
made by clerks (clerical errors). These are errors in numbers, like adding up figures or
other basic mathematical errors.

Errors Due to Accidental Slips or Omissions:

Amendments are allowed for errors resulting from accidental slips or omissions. These
occur when something crucial is unintentionally overlooked. This provision is outlined
in Section 152. Additionally, the judgement in CPC can be reviewed under Section 114 if
necessary.
In essence, alterations to a judgement are permitted for minor mistakes in numbers or
clerical work and for accidental oversights in essential details. This is in accordance with
Sections 152 and 114 of the CPC.

DECREE

The term “decree” has been defined under section 2(2) of the Code of Civil
Procedure,1908. The decree is a formal expression of adjudication by which the court
determines the rights of parties regarding the matter in controversy or dispute.

In simple terms, a decree is the ruling of the court regarding the claims of the parties of
the suit. For example, in a suit between A and B, A may claim that a particular property P
belongs A. After hearing all the arguments, the court will rule in the favor of either A or B.
The final decision of the court regarding this claim i.e. whether the property belongs to A
or B, is a decree.

ESSENTIAL ELEMENTS

1. There must be an adjudication - The most essential feature of a decree is that there
must be an adjudication, i.e., a formal decision of the Judge on the matter in dispute. If
there is no judicial determination, there is no decree. And such decision must be passed
by the Court. Therefore, an order passed by an officer who is not a court cannot be
termed as a decree.
In Madan Naik v Hansubala Devi AIR 1983, the Supreme Court held that if the matter is
not judicially determined, it is not a decree.

2. There must be a suit - Decree can only be given in relation to a suit. Although CPC
does not define what suit means.
It may be defined as a civil proceeding which is instituted in the Court of Law by the
presentation of a plaint. Thus, if there is no civil suit, there is no decree.
However, there are certain applications which are being treated as suit, such as,
proceedings under, the Indian Succession Act, the Hindu Marriage Act, the Land
Acquisition Act, the Arbitration Act, etc.
in Hansraj vs Dehradun Mussoorie Tramways Co. Ltd. AIR 1933, the Privy Council
defined the term suit as "a civil proceeding instituted by the presentation of a plaint"

3. Rights of the parties - ‘Right’ means substantive rights and not merely procedural
rights. Similarly, the parties to the rights in controversy should be the plaintiffs and
defendants and, if an order is passed upon the application made by a third party who is a
stranger to suit then it is not a decree. It must have determined the rights of the parties
with regard to all or any of the matters in controversy in the suit.

4. Conclusive Determination - The determination of the right must be conclusive.

This means that the court will not entertain any argument to change the decision. l.e. as
far as the court is concerned, the matter in issue stands resolved. For example, an order
striking out defense of a tenant under a relevant Rent Act, or an order refusing an
adjournment is not a decree as they do not determine the right of a party conclusively.
On the other hand, out of several properties in issue in a suit, the court may make a
conclusive determination about the ownership of a particular property. Such a
conclusive determination would be a decree even though it does not dispose off the suit
completely.

4. Formal expression - To be a decree, the court must formally express its decision in
the manner provided by law. A mere comment of the judge cannot be a decree.

Examples of decisions which are Decrees - Dismissal of appeal as time barred, Dismissal
or a suit or appeal for want of evidence or proof, Order holding appeal to be not
maintainable.
Examples of decisions which are not Decrees - Dismissal of appeal for default, order of
remand, order granting interim relief.

Types of Decree

The Code of Civil Procedure recognizes the following three types of decrees.

1. Preliminary Decree
2. Final decree
3. A partly preliminary and partly final decree

Preliminary Decree

A decree is stated as a preliminary decree when the rights of parties regarding all or any
of the matter in dispute are determined in the adjudication but it does not dispose of the
suit completely. The preliminary decree is only a prior stage.
A preliminary decree is passed by the courts mainly when the court has to adjudicate
upon the rights of the parties and then, it has put the matter on hold unless the final
decree of that suit is passed.

As held in the case of Mool Chand v. Director, Consolidation, a preliminary decree is only
a stage to work out the rights of parties until the matter is finally decided by the Court
and adjudicated by a final decree.

Final Decree

The final decree is a decree which disposes of a suit completely and settles all the matter
in dispute between the parties. The final decree does not leave any matter to be decided
further.

Decree is considered as a final decree in the following ways:

1. When no appeal is filed against the decree within a prescribed time period.
2. Matter in the decree has been decided by the highest court.
3. When the decree passed by the court disposes of the suit completely.

Partly preliminary and partly final decree

A decree passed under the Code of Civil Procedure may be partly preliminary and partly
final. This happens some part of the decree is preliminary decree while the rest is a final
decree.

Illustrations
If there is a suit of possession of an immovable property along with the issue of mesne
profit, and the court is obliged.
1. Passes a decree deciding the possession of the property.
2. Directs for an enquiry of mesne profit.

The first part deciding the possession of the property is final while the part regarding
the mesne profit is preliminary.
Deemed decree

An adjudication which does not formally fall under the definition of decree stated
under section 2(2) of the Code of Civil Procedure but due to a legal fiction, they are
deemed to be decrees are considered as deemed decrees.

Rejection of plaint and determination of the issue of restitution of decree are deemed
decree. Also, an adjudication under order 21 Rule 58, Rule 98 and Rule 100 are also
deemed decrees.

Contents of A Decree

The decree shall follow the judgment, agree with it and bear:
 The number of the suit
 The names and description of the parties and their registered addresses
 The particulars of their claims
 The relief granted
 the amount of costs incurred within the suit, and by whom or out of what
property and in what portions are they paid
 The date on which the judgment was pronounced
 The signature of the judge

Drawing up of a Decree

Rule 6A Order XX of Code of Civil Procedure,1908 states that a decree shall be drawn
within 15 days of the judgement. An appeal can be favoured or preferred without filing a
copy of a decree if it is not drawn within 15 days of the judgement.

Decrees in Special Cases

 In suit for recovery of immovable property, the decree shall contain an outline of
such property sufficient to spot it, e.g. boundaries, survey numbers etc.
 A decree for delivery of movable property must state the amount of money to be
paid as an alternate if the delivery of isn’t made.
 During a decree for payment of money, the court may order that the payment of
decretal amount shall be postponed or shall be made by installments with or
without interest.
 During a suit for recovery of possession of immovable property, the court may pass
a decree:
1. For possession of property
2. for past rent or mesne profits or
3. Direct a search to such rent or mesne profits
4. direct an inquiry to such future rents or mesne profits
5. Final decree in respect of rent or mesne profits in accordance with the results
of such inquiry.

Rule 12A states: Decree for specific performance of contract for the sale or lease of
immovable property: Where a decree for the precise performance of contract for the
sale or lease of immovable property orders that the acquisition money or other sum be
paid by the purchaser or lessee, it shall specify the amount within which the payment
shall be made.

Rule 13 states: Decree in administration suit, Where a suit is for an account of any
property and for its due administration under the decree of the Court, the Court shall,
before passing the ultimate decree, pass a preliminary decree ordering such accounts
and inquiries to be taken and made, and giving such other directions because it thinks fit.
Within the administration by the Court of the property of any dead person, if such
property proves to be insufficient for the payment fully of his debts and liabilities, an
equivalent rules shall be observed on the respective rights of secured and unsecured
creditors and on debts and liabilities provable, and on the valuation of annuities and
future and contingent liabilities respectively, as could also be effective for the nonce,
within the local limits of the Court during which the administration suit, is pending
with reference to the estates of persons adjudged or declared insolvent, and every
one persons who in any such case would be entitled to be paid out of such property,
may are available under the preliminary decree, and make such claims against an
equivalent as they’ll respectively be entitled to by virtue of this Code.

Rule 14 states: Decree in pre-emption suit, Where the Court decrees a claim to pre-
emption in respect of a specific sale of property and therefore the purchase-money has
not been paid into Court, the decree shall:
1. Specify each day on or before which the purchase-money shall be so paid, and
2. Direct that on payment into Court of such purchase-money, alongside the prices (if
any) decrees against the plaintiff, on or before the day mentioned in clause (a), the
defendant shall deliver possession of the property to the plaintiff, whose title thereto
shall be deemed to possess accused from the date of such payment, but that, if the
purchase-money and therefore the costs (if any) aren’t so paid, the suit shall be
dismissed with costs. Where the Court has adjudicated upon rival claims to pre-emption,
the decree shall direct and in thus far because the claims decreed are equal in degree,
that the claim of every pre-emptor complying with the provisions of sub-rule (1)
shall become in respect of a proportionate share of the property including any
proportionate share in respect of which the claim of any pre-emptor failing to suits the
said provisions would except for such default, have taken effect; and (b) if and in thus
far because the claims decreed are different in degree, that the claim of the inferior pre-
emption shall not become unless and until the superior preemptor has did not suits the
said provisions.

Rule 15 states: Decree in suit for dissolution of partnership, Where a suit is for the
dissolution of partnership, or the taking of partnership accounts, the Court, before
passing a final decree, may pass a preliminary decree declaring the proportionate shares
of the parties, fixing the day on which the partnership shall stand dissolved or be
deemed to possess been dissolved, and directing such accounts to be taken, and other
acts to be done.

Rule 16 states : Decree in suit for account between principal and agent during a suit for
an account of pecuniary transactions between a principal and an agent, and in the
other suit not herein before provided for, where it’s necessary, so as to determine the
quantity of cash thanks to or from any party, that an account should be taken, the Court
shall, before passing its final decree, pass preliminary decree directing such accounts to
be taken. The court can give special directions regarding mode of taking accounts.

In other cases of immovable property, if the partition or separation cannot conveniently

be made without further inquiry, the court may pass a preliminary decree declaring the
rights of the parties and giving necessary directions and thereafter a final decree shall
be passed.
A decree where the defendant has been allowed a group off or counter claim against the
claim of the plaintiff shall state what amount is thanks to the plaintiff and what amount
is thanks to the defendant.

INTEREST

Interest is like compensation given to the decree-holder for being deprived of money
that is due. The interest can be claimed from the moment such money was due to the
decree-holder until the moment it is paid to him.

In the case of State Bank of India v. Vijay Lakshmi Thakral, the Delhi High Court
expounded the definition of the word "interest", wherein he defined - "interest" as the
payment that is to be given by the creditor when he does not pay the money on the due
date. It can be regarded as the profit that the debtor might have had if he had gotten the
money on the due date; conversely, he suffers the loss due to creditors and is
compensated by charging interest. If it is observed carefully, then the court here
recognizes the concept of the "Time Value of Money", which provides that the money in
our hands today is worth less than the same amount of money in the future. This
happens due to inflation which reduces the buying capacity of money over some time
and due to the power of money to be invested to earn profits. In all cases, if anyone is
unreasonably kept devoid of the money he is entitled to should be compensated with
interest, as with each passing day the purchasing power of money decreases and he
loses the opportunity to invest and earn profits from such money.

Section 34 overview

When a court passes a decree, the court may grant interest on the amount to which the
decree-holder is found to be entitled, and Section 34 provides for relevant provisions
relating to the granting of such interest. The Section clarifies the sum on which the
interest is granted, which is termed the "principal sum adjudged." It includes the
principal sum of money to which the decree-holder is entitled, along with the interest
charged on such a sum for the period preceding the institution of the suit. As a result, in
general, it is the entire amount claimed by the litigant in court to which he becomes
entitled prior to the filing of the suit.

Further, Subsection (1) of Section 34 can be divided into two parts as it provides for
interest being granted on two kinds of periods which are as follows: -

1. From the date of suit to the date of the decree: The interest on the principal sum
adjudged is from the date of suit to the date of the decree. The interest rate should be at
the discretion of the court and there is no upper limit to such kind of interest.

2. From the date of the decree to the date of payment of money to the decree-holder:
Herein, the court can grant interest on the principal sum adjudged at its discretion.
However, an upper limit on such interest rate has been cast by the Section which is six
percent per annum; such kind of interest has been referred to as "further interest"
Proviso to this subsection provides that in case of commercial transactions the further
interest can exceed the rate of six percent per annum and the upper limit in such cases
will be the contractual rate of interest. The proviso further explains, that where there is
no contractual rate of interest provided the upper limit will be the rate at which money
is lent or advanced by the nationalised banks in relation to the commercial transaction.

The term "commercial transaction" will refer to those transactions that are connected
with the industry, trade, or business of the party who has incurred the liability. It is
pertinent to note that the party who has incurred the liability will be the judgement
debtor.

Subsection (2) of Section 34 provides that where the court has passed the decree but the
decree is silent on granting further interest, it should be deemed that the court has
refused such interest. The following provision also bars a subsequent suit for claiming
such an Interest.

Scope of Section 34

In the case of Bhagwant Genuji v. Gangabisan Ramgopal, it was held that Section 34
applies only in cases where the decree is for payment of money, and the fact that the suit
included claims of unliquidated damages or liquidated damages is inconsequential to
the application of this Section. Further, in the case of Dwarkanath v. Debendra, it was
held that no analogy can be drawn between mesne profits and Section 34 as the former
aims to remedy the situation of loss caused by wrongful possession and the latter aims
to remedy the unjust enrichment of the judgement debtor by prolonging the suit.of

It is pertinent to note that Section 34 does not apply in cases where the decree is for
enforcement of a mortgage or charge as the same is governed by Order 34 Rule 11 of the
Code. However, a decree passed under Order 34 Rule 6 that relates to an amount
payable when the proceeds from the sale of mortgage property are found to be
insufficient to cover the debt given in lieu of a mortgage is governed by Section 34 as it is
a personal decree.

What is an award of interest

There can be three types of interests that can be observed under Section 34 which are as
follows: -

 The interest levied prior to the institution of the suit, that is generally stipulated by
an agreement between the parties.

 The additional interest levied by the court for the time taken by the court for
adjudication of the suit, which is the period from the date of institution of the suit to
the date of the decree.

 Further interest is also awarded by the court for the period from the date of the
court's decree to the date of actual payment.

The interest levied before the institution of a suit

This interest is added before the case is even taken to court. It usually comes from an
agreement between the people involved (for example, in a contract). If the agreement
says a certain interest rate, the court usually can’t change it much. If no rate is agreed on,
the plaintiff usually can’t ask for interest, unless it's a common practice in the business
or required by law.

The interest levied for the time taken for adjudication of the suit (Called "Pendente
Lite"):

This interest is for the time the court takes to make a decision, starting from when the
lawsuit is filed until the court gives its judgment.:

 The court has the power to decide the rate of interest during this time. The interest
rate in the contract doesn’t automatically apply here.
 The court has to think about things like inflation and fairness to both sides when
choosing the rate.
 Usually, the court will award interest during this time to make sure the person
suing isn’t harmed by the delay in the court process.
 But if there’s a strong reason, the court can decide not to give interest during this
period.

Interest After the Court’s Decision Until the Money is Paid:

 After the court gives its judgment, the person who lost the case is supposed to pay
the money they owe. Interest is added to encourage them to pay it quickly.

 Usually, the court can’t award more than 6% interest per year during this time.
 If the contract the parties agreed on has a higher rate of interest, then the court can
apply that higher rate.
 If the court doesn’t mention any interest in its judgment, it’s assumed that the court
isn’t awarding any interest after the decision.

The Proviso to Subsection 1 of Section 34 of the Civil Procedure Code (CPC) deals
with the interest charged on a debt from the time a court gives its decision (the decree)
until the debtor actually pays.

Commercial Transactions: If the money owed comes from a commercial

transaction (business-related deal), the court can allow interest at a rate higher than
6% per year. But the interest rate cannot exceed what was agreed upon in the
contract between the parties.

Court’s Discretion: In the case of State Bank of Travancore v. K.

Vinayachandran (1989), the court explained that if the legislature has passed laws or
made rules about interest, the court must take judicial notice of those rules. If the
court doesn’t do this, it’s a mistake, and the case can be reviewed again. The court
also said that interest should usually follow the contractual rate unless there’s a
strong reason to make an exception.

Exceptions to the Rule: In cases like Syndicate Bank v. WB Cements Ltd. (1989),
the court said that unless there are very special circumstances, the borrower cannot
get a lower interest rate just because the bank might take legal action again if they
don’t pay after the court's decision.

No Contractual Rate: If the parties didn’t agree on an interest rate in the contract,
but the transaction is still a business deal, the court can still charge more than 6%
interest. In this case, the interest rate will be based on the "current rate of
interest", which is defined by Section 2(b) of the Interest Act of 1978. The person
claiming this interest must prove what the current rate is by showing what
nationalized banks are charging at that time.

COST

Section 35 of the CPC deals with general costs, which are awarded to litigants to cover the
expenses incurred during litigation. The primary objective of awarding costs under this
section is to ensure that the successful party is compensated for the legal expenses they
have borne.

Principles Governing General Costs Civil Procedure Code

 Discretion of the Court: The award of general costs is at the discretion of the court.
However, this discretion must be exercised judiciously, based on sound legal principles,
rather than capriciously or arbitrarily.
 Costs Follow the Event: Typically, costs should follow the event, meaning that the
successful party is entitled to costs. This principle ensures that the winning party is not
 financially burdened by the litigation. However, the court may deviate from this rule if
there are valid reasons.
 Recording Reasons: If the court decides that costs should not follow the event, it must
record the reasons for such a decision as per sub-section (2) of Section 35. This
provision ensures transparency and accountability in the awarding of costs.

Miscellaneous Costs under Civil Procedure Code: Order 20A

Order 20A of the CPC specifically addresses the power of the court to award costs for certain
expenses incurred during litigation. These expenses include:

 Giving notices
 Typing charges
 Inspection of records
 Producing witnesses
 Obtaining copies

The inclusion of miscellaneous costs under Order 20A aims to cover specific, often
overlooked, expenses that parties incur in the process of litigation. By doing so, the CPC
ensures that parties are adequately compensated for all legitimate expenses.

Compensatory Costs under Section 35A

Section 35A provides for compensatory costs, which serve as an exception to the general
rule of costs under Section 35. This section is designed to address situations where Section
35 does not offer sufficient compensation, particularly in cases involving false or vexatious
claims or defences.

Conditions for Awarding Compensatory Costs

For Section 35A to apply, the following conditions must be met:

 False or Vexatious Claim/Defense: The claim or defence must be false or vexatious,

brought with malicious intent.
 Objection by the Other Party: The other party must have raised an objection that the
claim or defence was false or vexatious, to the knowledge of the party raising it.
 Disallowed, Withdrawn or Abandoned Claim: The claim must have been disallowed,
withdrawn or abandoned, either in whole or in part.

The maximum amount that can be awarded under Section 35A is Rs. 3,000. It is important to
note that this section applies only to suits, not to appeals or revisions. This provision
empowers the court to impose compensatory costs on parties who misuse the legal process
for vexatious purposes.

Costs for Causing Delay: Section 35B

Section 35B addresses costs for causing delays during litigation. This section empowers the
court to impose costs on parties who cause unnecessary delays at any stage of the litigation
process, regardless of the ultimate outcome of the case.

Grounds for Awarding Costs for Delay

Costs for causing delay may be awarded under the following circumstances:

 Failure to Take Required Steps: If a party fails to take a step required by or under the
code on a specified date.
 Obtaining Adjournments: If a party obtains an adjournment for taking such a step or for
producing evidence or on any other ground.

In such cases, the court may order the party responsible for the delay to pay costs to the
other party. This provision ensures that the litigation process is not unduly prolonged and
that parties act diligently and in good faith.

Analysis and Implications of Costs

The provisions related to costs under the CPC are important for several reasons. Firstly, they
act as a deterrent against frivolous and vexatious litigation. By imposing financial
consequences on parties who engage in such practices, the CPC discourages misuse of the
legal system. Secondly, the provisions ensure that the successful party is not unduly
burdened by the costs of litigation. This promotes fairness and equity in the legal process.

The discretion granted to the courts in awarding costs ensures that each case is assessed on
its merits. However, the requirement for courts to record reasons for deviating from the
principle that costs follow the event adds a layer of accountability. This transparency helps
maintain trust in the judicial process.

The inclusion of miscellaneous costs under Order 20A ensures that parties are compensated
for all legitimate expenses, not just the major ones. This comprehensive approach to
awarding costs reflects a nuanced understanding of the various expenses involved in
litigation.

Section 35A’s provision for compensatory costs addresses a significant gap by providing a
remedy in cases where the general rule does not offer sufficient compensation. This section
is particularly important in addressing malicious litigation practices.

Finally, Section 35B’s provision for costs for causing delay underscores the importance of
timely and efficient litigation. By imposing costs on parties who cause unnecessary delays,
the CPC promotes the swift resolution of cases, benefiting both the parties involved and the
judicial system as a whole.