Godrej Consumer Products Limited v. Dabur India Limited .

Factual and Procedural Background

The appellant, who was the defendant in a suit, failed to file the written statement within the period stipulated (or extended) under the Civil Procedure Code. Thereafter the appellant filed an application under Order 8 Rule 1 CPC seeking to bring the written statement on record after a delay of 209 days beyond the initial period of 90 days. The learned single Judge permitted the belated written statement to be taken on record, but conditioned that permission on payment of costs of Rs. 1,00,000 to the respondent. The appellant has challenged only the imposition/quantum of costs by filing the present appeal. The application in the trial court averred that the delay arose because the appellant was searching for scientific literature to establish its case; an additional contention was canvassed by counsel before the single Judge (that interlocutory aspects had gone up to the Supreme Court and attention was diverted), but the bench below did not record that second contention as it did not appear in the application.

Legal Issues Presented

1. Whether the imposition of costs of Rs. 1,00,000 by the learned single Judge as a condition for permitting the belated written statement to be taken on record was justified or exorbitant.
2. Whether conditional costs (payment of costs as a condition precedent to further prosecution/defence) are permissible under Section 35B(1) of the Code of Civil Procedure.
3. What is the effect of the characterisation of Order 8 Rule 1 CPC as directory (and not mandatory) on a party's opportunity to participate in proceedings and on the consequences of delay.

Arguments of the Parties

Appellant's Arguments

• The application for condonation of delay averred that the delay arose from a search for scientific literature to establish the defence; this was presented as the reason for the late filing of the written statement.
• The appellant (via counsel in the impugned order) additionally urged that the appellant's focus was lost because interlocutory aspects of the matter went up to the Supreme Court; the court below did not take this latter contention into account because it was not pleaded in the application.
• Complaint that the impugned order did not give reasons for imposing the costs.
• Submission that a standard or ceiling for costs must be laid down and the amount imposed (Rs. 1,00,000) was too high.
• Reliance on provisions of Sections 35, 35A and 35B of the CPC to contend that, at best, the present case falls within Section 35B and that under sub-section (2) of Section 35B, if costs are not paid they are to be included as costs awarded under the decree — therefore payment could not have been made a pre-condition to bringing the written statement on record.
• Invocation of the proposition that Order 8 Rule 1 CPC is directory and not mandatory, arguing that ordinarily a party should not be denied the opportunity to participate in the process of justice.

The opinion does not contain a detailed account of the respondent's separate arguments in opposition; the respondent's position is not set out at length in the provided text.

Table of Precedents Cited

Court's Reasoning and Analysis

The court proceeded step-by-step as follows:

1. Examination of the pleaded basis for the delay: the court confined itself to the averments in the application which only mentioned a search for scientific literature as the reason for delay. The additional contention advanced by counsel (loss of focus because of interlocutory proceedings reaching the Supreme Court) was not part of the application and therefore could not be treated as a basis for condonation.
2. Assessment of the sufficiency of the pleaded reason: the court found that a "search for scientific matter" was not, in fact, a proper ground to extend the time for filing the written statement. Nonetheless, the court noted that it was not deciding an appeal by the respondent seeking dismissal for delay; rather, the review sought was limited to whether the costs imposed by the single Judge were justified or excessive.
3. Consideration of statutory and precedential law: counsel for the appellant relied on Sections 35, 35A and 35B CPC and argued conditional payment could not be imposed. The court rejected this approach by reference to the language of Section 35B(1), which contemplates that for reasons to be recorded costs "shall be a condition precedent to the further prosecution" — thereby allowing conditional costs.
4. Interpretation of policy considerations: the court emphasized the legislative intent behind time-bound schedules for trial and cautioned against routine extensions which would undermine that intent. It noted the courts' concern about delays and the need to adequately compensate the non-defaulting party for expenses incurred.
5. Application of precedent: relying on Salem Bar Association, the court observed that Sections 35 and 35-B do not prescribe an upper limit on costs, and that courts possess discretion to award such costs. The court also read Zolba v. Keshao as an order in specific facts and not a binding rule to defeat conditional costs where the circumstances justify them; here the appellant had been allowed to participate but on payment of costs.
6. Evaluation of the single Judge's conduct and the quantum of costs: the court considered that the single Judge had been indulgent in allowing the written statement to be taken on record and even granted more time than pleaded, yet imposed a condition of costs to compensate the respondent and to reflect the consequence of delay. The appellate court found that the imposition of costs of Rs. 1,00,000 was within that discretion and not exorbitant in the factual matrix.
7. Consideration of judicial time and public policy: the court stressed the value of judicial time, observing that frivolous or unexplained delays consume scarce judicial resources; litigants should bear the cost of such delays, including counsel fees of the opposing party.

Holding and Implications

APPEAL DISMISSED.

Holding (direct effect): The appellate court dismissed the appeal challenging the condition imposed by the single Judge. The learned single Judge's order permitting the belated written statement to be taken on record subject to payment of costs of Rs. 1,00,000 is treated as an indulgent but permissible exercise of discretion. The court ordered that the appellant pay costs of Rs. 20,000 for the appeal.

Implications:

• The decision affirms that conditional payment of costs as a pre-condition to further prosecution/defence is permissible under Section 35B(1) of the CPC when reasons are recorded.
• The court reaffirmed the principle (as stated in Salem Bar Association) that Sections 35 and 35-B do not prescribe an upper monetary limit on costs; quantum remains a matter of judicial discretion guided by facts and reason.
• The court emphasized the policy interest in preventing routine extensions of time that would undermine time-bound trial schedules and in compensating parties for the expenses and judicial time wasted by unexplained or frivolous delays.
• No novel legal principle or change in precedent was announced; the ruling applies established principles to the facts and upholds the single Judge's exercise of discretion in imposing conditional costs.