The Kerala High Court on August 12, 2011 in Jeena Vs. Satheesh Babu, ILR 2011 (3) Ker. 945 issued judicial guidelines in the matter of awarding costs by the Motor Accident Claims Tribunals in the absence of specific stipulations in the Statute or the Rules.

A bench comprising of Justice R. Basant and Justice M.C. Hari Rani observed that “there is no general and accepted procedures followed by the tribunals in the State. Some direct payment of costs. Some direct payment of proportionate costs. Some direct payment of specified amount of costs.”

For the purpose of uniformity in the matter of award of costs, and to standardise the procedure for award of costs by the tribunals in the Kerala State, the Court directed the Registry to bring to the notice of all Motor Accident Claims Tribunals of the State the directions in paragraph 21 of the judgment.

Judicial Guidelines in the matter of awarding costs

Costs can be directed to be paid by the Tribunal whether the claim be under Section 163(A) or 166 of the M.V.Act. The taxable costs has to be ascertained by following the stipulations of Rule 195 of the Kerala Civil Rules of Practice. The procedure that has to be followed is as prescribed under Rule 196, though those provisions are not made specifically applicable to tribunals. The tribunal ought to have awarded proportionate costs.

i) The M.A.C.T has jurisdictional competence to award costs in claims under Sections 163A and 166 of the Motor Vehicles Act.

ii) The Jurisdiction to direct costs is purely discretionary; but tribunals must apply their mind on the question in all cases. There must be a direction in every case either to award costs or not to award costs after such application of mind. The award must reflect that such application of mind has taken place. Ordinarily, unless there are reasons, there must be a direction to pay proportionate costs to the successful claimant. This observation is without prejudice to the wide discretion which the tribunals have in the matter.

iii) Taxable costs must be ascertained by reference to the principles under Rule 195 of the Civil Rules of Practice. The procedure prescribed under Rule 196 of the Civil Rules of Practice must be followed by the tribunals though the Civil Rules of Practice is not specifically applicable to proceedings before a Motor Accident Claims Tribunal.

iv) Advocate fee as stipulated under the Advocate Fees Rules must be included in the costs certified by the tribunal. In ascertaining Advocate fees payable, Rule 6(2) and 9 of the relevant rules shall be followed by the tribunal.

v) Costs shall be certified and appended to the free copy of the award (and certified copies) issued to the parties under Section 168.(2) of the M.V.Act.

What principles should apply in the matter of awarding costs ?

There is no specific provision either in the Motor Vehicles Act or in the Central or State Rules justifying or authorising tribunals to issue a direction for payment of costs. Section 171 of the Motor Vehicles Act which authorises the tribunal to issue directions for payment of interest. Section 172 of the M.V.Act which authorises Motor Accident Claim Tribunals to award compensatory cost in certain cases. There is no specific provision in the Act or in the Rules authorising the tribunals to award costs to any of the parties.

Whether tribunal has Jurisdiction to award cost even in the absence of a specific statutory provision.

Under Section 168 of the M.V.Act, the primary mandate to the tribunal is to determine the amount of compensation which appears to be just. In directing compensation which is just, the tribunals must be held to have the inherent, ancillary and incidental power to direct payment of costs. Costs incurred by a claimant bona fide in the prosecution of a legitimate claim must certainly be held to be payable to the claimant who prosecutes the claim. A direction to pay costs even in the absence of express statutory provision is taken in clearly within the sweep of the mandate of Section 168 of the M.V.Act which directs the tribunal to determine and direct payment of just compensation to the claimants.

What procedure is to be followed by the tribunals in the matter of awarding costs?

It is now well settled that the direction to pay costs is incidental and ancillary to the powers of the court/tribunal. In United India Insurance Co.Ltd. v. Padmini Amma, 1986 KLT 581 Hon’ble Justice Paripoornan had occasion to consider whether the M.A.C.T has the jurisdiction to award costs. It was held that the power to award costs is incidental and ancillary to the power to direct payment of compensation. Such costs can be awarded, though the power to award costs is fully discretionary, it was held.

Later, another Division Bench of Kerala High Court had occasion to consider the same question again in New India Assurance Co.Ltd. v. Koyammu, 1991 (1) KLT 320. In paragraph 8 of the said Judgment, it was clearly held that the general rule is that a successful party is entitled to get costs incurred by him unless he is guilty of misconduct or negligence or there is any other reason for disallowing costs to him. That general rule is applicable to proceedings before the M.A.C.T in the matter of award of costs, it was held.

It is hence very clear that the M.A.C.T has the jurisdictional competence to award, costs. Such jurisdiction to award costs is only discretionary and it is for the tribunal to exercise such powers in an appropriate case. The tribunal does not lack jurisdictional competence to issue such directions for payment of costs.

Advocate Jacob Abraham appeared for the Petitioner and Senior Advocate Mathews Jacob, Advocates Resmi Damodaran, A.R. George and Jacob Murickan for the respondents.