How Successful Litigants In India Are Starting To Recover Their Legal Costs

The Decade-Long Shift Towards Costs on Actuals

The Supreme Court of India, for several years, expressed its concerns regarding India’s ‘Meagre Costs,’ regime¹, under which courts awarded little to no attorney or legal costs to successful litigants.² The Supreme Court particularly advocated for the elimination of this regime in matters that involved commercial interests³, and the adoption of a system where costs followed the result.⁴

The Parliament, in 2015, refined the law on imposition of costs in commercial litigation by elaborating on judicial powers to impose costs.⁵ This, along with another significant pronouncement by the Supreme Court in 2021⁶, spurred a growing trend of commercial courts awarding costs on actuals, although this practice remains uneven and may take time to percolate nationwide.

The Example of the Delhi High Court

The Delhi High Court has increasingly awarded costs on actuals. For example, in January, a Single Judge awarded almost INR 22 lakh (~USD 23,000) to a successful plaintiff in a commercial suit.⁷ Later, in April, a Single Judge upheld an order by the Joint Registrar (Judicial) awarding almost INR 87 lakh (~USD 90,900) to the plaintiff in another commercial suit.⁸

The process typically involves a Single Judge passing a decree for costs, after which the matter is listed before the Taxation Officer for submission of a bill of costs by the successful party. The Taxation Officer then quantifies the costs payable by the unsuccessful party within a fixed period.

The Rationale for Awarding Costs on Actuals

The ‘Meagre Costs,’ regime failed to deter ‘vexatious or luxury litigation,’ and encouraged using litigation as a ‘buying-time tactic.’⁹ An actual costs regime, however, reduces pendency of cases, encourages alternative dispute resolution, and will streamline the civil justice system.¹⁰ The Supreme Court also recognises that awarding actual costs is the only way to compensate successful litigants.¹¹

Factors Governing Costs Awards

The general rule pertaining to costs awards is that the unsuccessful party must bear the successful party’s attorney and legal costs.¹² Other factors influencing such an award are the conduct of the parties¹³, the frivolousness of a suit, claim or counterclaim¹⁴, whether a party has succeeded partly or wholly¹⁵, and whether any reasonable offer to settle was made.¹⁶

Maximising Costs Recovery for Successful Litigants

Successful commercial litigants can recover costs by: (a) making written prayers for costs, (b) maintaining proper and accurate records of attorney invoices and administrative expenses to enable quantification, and (c) ensuring listing before the concerned judicial officer for taxation of costs or, in courts where no such officer is appointed, by filing a separate application for imposition of costs.

At the same time, litigants must be cautious to minimise costs that may not be awarded such as those relating to preparation for hearings and conferences¹⁷, the appearance of more than two lawyers/law firms¹⁸, unnecessarily filed affidavits and documents¹⁹, avoidable impleadments and witnesses²⁰, frivolous claims and counterclaims, and unreasonable refusals of settlement offers.²¹

Footnotes

^{1. Ashok Kumar Mittal v. Ram Kumar Gupta, SLP(C) No. 30991-30992 of 2008, para 7.}

^{2. Ashok Kumar Mittal (supra), para 7.}

^{3. Sanjeev Kumar Jain v. Raghubir Saran Charitable Trust, SLP(C) No. 6285 of 2010, para 17.}

^{4. Vinod Seth v. Devinder Bajaj, SLP(C) No. 6736 of 2009, para 25.}

^{5. Commercial Courts Act, 2015.}

^{6.  Uniflex Limited v. The Government of Tamil Nadu, Civil Appeal Nos. 4862-4863 of 2021.}

^{7. Merck Sharp & Dohme Corp. v. Ranvir Kumar Bindeshwari Singh, C.S. Comm. 1075 of 2018.}

^{8. Anil Chopra v. Registrar General, High Court of Delhi, W.P. (C) 9659 of 2023.}

^{9. Ashok Kumar Mittal (supra), para 7.}

^{10. Vinod Seth v. Devinder Bajaj, SLP(C) No. 6736 of 2009, para 27.}

^{11. Sanjeev Kumar Jain (supra), para 10.}

^{12. Section 35(2) of the Commercial Courts Act, 2015.}

^{13. Section 35(3)(a) of the Commercial Courts Act, 2015.}

^{14. Sections 35(3)(c) and (e) of the Commercial Courts Act, 2015.}

^{15. Section 35(3)(b) of the Commercial Courts Act, 2015.}

^{16. Section 35(3)(d) of the Commercial Courts Act, 2015.}

^{17. Intas Pharmaceuticals v. Sun Pharma Laboratories, RFA (OS)(Comm.) 10 of 2025}

^{18. Chapter XXIII, Rule 6(b) of the Delhi High Court (Original Side) Rules, 2018.}

^{19. Chapter XXIII, Rule 6(c)(iii) and (iv) of the Delhi High Court (Original Side) Rules, 2018.}

^{20. Chapter XXIII, Rule 6(c)(v) and (vi) of the Delhi High Court (Original Side) Rules, 2018.}

^{21. Section 35(3)(c) to (e) of the Commercial Courts Act, 2015.}

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