R. BASANT. J:
1. Can the Motor Accident Claims Tribunals award costs? What principles should apply in the matter of awarding costs? What procedure is to be followed by the tribunals in the matter of awarding costs? 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. We perceive urgent necessity for issue of judicial guidelines in the matter in the absence of specific stipulations in the Statute or the Rules.
2. This appeal is preferred by the claimant who staked claim for compensation for the loss suffered by her as a result of the death of her husband who succumbed to injuries suffered by him in a motor accident that occurred on 10/08/2008. Respondents 1 to 3 are the owner, driver and insurer of the vehicle. Respondents 4 and 5 are the father and mother of her deceased husband. They were arrayed as respondents obviously as the appellant and her parents-in-law could not agree to file a joint application for compensation.
3. By the impugned award, the tribunal came to the conclusion that the appellant along with respondents 4 and 5 are entitled to a total amount of Rs.4,37,000/- as compensation along with interest at the rate of 7% per annum. Rs.2,500/- has been directed to be paid as costs. The direction for payment of compensation is not challenged either by the appellant or by respondents 4 and 5 or by the Insurance Company.
4. The tribunal, evidently in discharge of its obligation to ensure that just compensation is paid to those entitled to compensation, proceeded to issue the impugned direction that the compensation amount must be divided by the petitioner, her mother-in-law and father-in-law in the ratio of 2 : 1 : 1 . The challenge in this appeal by the appellant/wife is against the said direction. We must hasten to observe that the tribunal had alertly directed that Rs.15,000/- awarded under the head of loss of consortium shall belong exclusively to the appellant and the remaining amount of compensation alone will have to be divided in the ratio 2 : 1 : 1 .
5. The learned counsel for the appellant points out that the tribunal had awarded the amount of Rs.4,37,000/- as per the details given below:
|1.||Transport to hospital||1,500/-|
|2.||Damage to clothing||500/-|
|4.||Pain and sufferings to the victim.||10,000/-|
|5.||loss of love and affection||10,000/-|
|6.||Loss of estate||5,000/-|
|7.||Loss of consortium||15,000/-|
|8.||Loss of dependency(Rs.3,500/- x 12 x 14 x 2/3)||3,92,000/-|
|Total||4, 37, 000/-|
7. The learned counsel for the appellant then contends that the entire amount of cost is liable to be paid to the appellant who had incurred all the expenditure for prosecuting the claim. Fair and just amount, taking note of the actual expenses incurred, must be awarded as costs, contends counsel. Award of paltry unrealistic sums of money, which have no proportion to the actual costs incurred is unjust, argues the learned counsel Shri. Jacob Abraham. He prays that this court may consider the question in detail, enter specific findings and issue specific directions so that tribunals in the State shall follow uniform procedure hereafter.
8. The first question is whether a Motor Accident Claims Tribunal can direct payment of cost. The counsel were requested to research and offer assistance. It is pointed out that there is no specific provision either in the Motor Vehicles Act or in the Central or State Rules justifying or authorizing tribunals to issue a direction for payment of costs. Our attention has been drawn to Section 171 of the Motor Vehicles Act which authorizes the tribunal to issue directions for payment of interest. Our attention has further been drawn to Section 172 of the M.V. Act which authorizes Motor Accident Claim Tribunals to award compensatory cost in certain cases. The fact remains that there is no specific provision in the Act or in the Rules authorizing the tribunals to award costs to any of the parties.
9. That takes us to the question whether tribunal has jurisdiction to award cost even in the absence of a specific statutory provision. We do first of all note that 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”. We have absolutely no hesitation to agree that 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. We are satisfied that 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.
10. 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. We extract below the relevant portions in paragraph 2 of the said judgment.
“It should be remembered that the award of costs is fully discretionary. It means, allowances, a succeeding party is entitled to get from the losing party to reimburse himself for expenses incurred in defending the proceedings. The power to award costs is incidental and ancillary to the proceedings.’’
11. Later, another Division bench of this 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 of 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. The learned judges in paragraph 8 of the said judgment had stated thus:
‘’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. We find no reason why the general rule cannot be extended to claim petitions filed under the Motor Vehicles Act. We are therefore of the view that a successful party in a claim petition before the Tribunal has to be paid the costs incurred in the petition.”
12. It is hence very clear that the M.A.C.T has the jurisdictional competence to award costs. We may hasten to observe that such jurisdiction to award costs is only discretionary and it is for the tribunal to exercise such powers in an appropriate case. All that we intend to note is that the tribunal does not lack jurisdictional competence to issue such directions for payment of costs.
13. That takes us to the next question as to what can constitute costs in a case. The decision New India Assurance Co. Ltd. (supra) did consider that questions in detail. By the discussions in paragraph 9 and 10 of the judgment it is very evident that the tribunal can award costs including court fee, expenses incurred for stamps, expenses incurred for procuring witness etc. and also Advocates fee. The Bench in New India Assurance Co. Ltd. (Supra) was dealing with a case under 1939 Act before amendment of the M.V.Act. The Kerala Motor Vehicles Rules 1989 had come into force by then (i.e. 2001) and we note that the Bench had not specifically adverted to the amended Rule 381(2). Suffice it to say now that New India Assurance Co. Ltd. (Supra) is authority for the proposition that all costs incurred for the due prosecution of a claim can be directed to be paid as costs by the M.A.C.T also in exercise of the inherent/incidental/ancillary power vested in it.
14. It will be apposite in this context to refer to Rules 195 and 196 of the Kerala Civil Rules of Practice. Chapter IV – B of the Kerala Civil Rules of Practice specifically deals with costs. Tabulation of costs is referred to in Rules 195 to 198. What costs are taxable are given in detail in Rule 195. Procedure to be followed for claiming cost and for the court to issue directions regarding cost are contained in rule 196. It is now well settled that the M.A.C.T. not being a Civil court, the provisions of the Civil Rules of Practice cannot directly apply to the M.A.C.T. But we have hesitation to agree that in exercising the power of the Motor Accident Claims Tribunal to direct payment of costs, the tribunals ought to and shall do well to follow the principles underlying and procedure prescribed under Rules 195 and 196 of the Kerala Civil Rules of Practice notwithstanding the fact that the Rules in terms may not be applicable to the tribunals. Rules 195 and 196 contain stipulations which can readily be accepted and followed by the tribunals for proper exercise of their jurisdiction to award costs. We deem it appropriate to direct that notwithstanding that Rules 195 and 196 are not specifically applicable to tribunals, all tribunals would do well to and must follow the mandate of rules 195 and 196.
15. Under Section 168(2) of the M.V.Act, the tribunal has an obligation to furnish free copies of the awards to the parties. Rule 168(2) stipulates that such copy must be furnished expeditiously, in any case within a period of 15 days from the date of the award. 15 days time is prescribed under Section 168(2) and we are satisfied that the procedure contemplated under Rule 196 can certainly be followed satisfactorily before the free copy is issued under Section 168(2) of the M.V.Act. Our direction to the tribunals to follow the principles under Rules 195 and 196, we are satisfied, shall not in any way offend the mandate of the Legislature under Section 168(2) of the M.V.Act.
16. In the instant case, the tribunal has awarded costs. Costs is not duly certified. The direction is only that cost of Rs.2,500/- must be paid. There is no specific observation to help us to ascertain whether this is cost for Advocate fee incurred or it includes the cost incurred for payment of court fee.
17. We find the tribunals in the State are resorting to this procedure of directing payment of specified amounts without really adverting to the actual quantum of costs incurred for the prosecution of a claim. A just direction issued under Section 168 must specifically take note of the costs actually incurred and must direct payment of such costs which have been incurred in the bona fide prosecution of every claim. Only then can it be said that complete justice has been done to the parties.
18. That takes us to the next question as to what is the Advocates fee payable. We note that adhoc directions without applying the mind of the tribunals as to what exactly is the fee payable are issued by tribunals in the State. It is in this context that Rule 381 of the Kerala Motor Vehicle Rules becomes relevant. In New India Assurance Co.Ltd. (Supra) the Bench had directed that appropriate rules ought to be framed; but we note that by then the Kerala Motor Vehicles Rules with Rule 381 had already been promulgated. We extract Rule 381 below:
‘’Appearance of legal practitioner:- (1) Any party may appear in person or through a legal practitioner before the Claims Tribunal.
(2) The scale of fees contemplated in the rules regarding fees payable to the advocates in respect of original suits shall apply in the case of applications for compensations.’’
19. We entertained a doubt as to whether this amounts to a stipulation regarding the fees payable and claimable by Advocates from the claimants. The rule refers to appearance of legal practitioners and not to cost payable. It is hence that we entertained this doubt in our mind. Counsel argue that freedom of an Advocate to fix any appropriate fees with his client on contract is not, in any way, fettered by the stipulations in Rule 381. We are unable to agree that that freedom of contract can, under no circumstances, be fettered by intervention of the legislature or Rule making authority. It is common knowledge that there is scandalous improprieties in the matter of collection of fees in motor accident claims and hence if the legislature or the rule making authority were to intervene to issue regulatory directions, we do not think that would in any way offend the law. Nor can it be contended that freedom of contract cannot be fettered by such a stipulation in the Act or the Rules. Remuneration disproportionate to work is conceptually sin, exploitation or atleast impropriety. It is ethically anathema to a professional to charge fees/remuneration disproportionate to the service rendered. More so for the members of the noble profession of law, at any tier or level. When there is rampant abuse, the sublime section of the profession must themselves demand legislative intervention to remove and avoid possibility of such abuse. In the Interest of the noble profession, stipulation of maximum fees leviable ordinarily in a motor accident claim does appear to us to be an idea that is wholesome and acceptable. But on a careful consideration of Rule 381 (2), we are unable conclude that rule 381 (2) was intended for that purpose. It only stipulates that the Rules a relating to payment of Advocate fee in respect of original suits shall apply in case of applications for compensation. Rule 381 (2) speaks of the applicability of the said rules. The said rules relate only to amounts recoverable as Advocates fee when court directs costs to be paid.
20. We have therefore got to hold that Rule 381 (2), in its present form, does not in any way prescribe the fee that is leviable by Advocates from clients. All that it stipulates is that the relevant rule regarding fees payable to Advocates shall apply in the case of applications for compensation as if they are original suits. Rules framed by the high Court regarding fees payable to Advocates in exercise of the powers under Article 225 and 227 of the Constitution of India stipulate the costs that are recoverable as Advocates fee in various instances. The purpose of Rule 381(2) is only to make it clear that Advocate fee claimable as costs in respect of motor accident claims must be as in the case of suits which come under Rules 6 and 9 of the relevant Rules. Advalorem Advocates fee can be claimed as costs in original suits as per the stipulation in Rule 6(2) and Rule 9. When the court directs that proportionate costs are payable, it is the Advocates fee payable on the amount awarded as per Rules 6(2) and (9) which can be claimed from the opposite party.
21. To sum up, we are satisfied that 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 the Rule 195 of the Kerala Civil Rules of Practice. The procedure that has to be followed is as prescribed under Rule 196, though, as stated earlier, those provisions are not made specifically applicable to tribunals. We hence come to the conclusion that the tribunal ought to have awarded proportionate costs. We are informed that another Division Bench if this Court has been taken an identical view in the unreported judgment dated 23/06/2011 in K.J. Abraham and others. V. C.L. Joseph and Others [M.A.C.A.No. 2525 of 2010]. We are satisfied that the following directions can be issued in the matter.
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. We repeat that 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 Rule 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 stipulate 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 follow by the tribunal.
v) costs shall 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.
22. In this case, costs have not been awarded as directed above. Going by the relevant rules an amount of Rs,3,742.50/- (Rs.372.50 + Rs.3,370/-)shall be payable as court fee. An amount of Rs.8,693/- (Rs.6,520/- + Rs.2,173/-)shall be payable as Advocate fee. Other items of costs admissible under Rule 195 CRP are also there. The amount of Rs.2,500/- awarded as costs by the tribunal is grossly inadequate. No special reasons are shown to deviate from the normal rule that the successful party is entitled to costs incurred for the bona fide prosecution of the claim. We therefore deem it necessary to interfere with the cost awarded. We direct the respondents to pay the proportionate costs to the claimant. We give the parties an opportunity to file statement of costs before the tribunal within a period of three months from today whereupon the tribunal shall duly certify and include costs in the award passed.
23. In the result,
a) This appeal is allowed in part.
b) We direct that the amount of compensation (less the compensation fixed for loss of consortium) shall be apportioned between the appellant and respondents 4 and 5 in the ratio 75 : 12.5 : 12.5(6 : 1 : 1).
c) We direct that the proportionate costs before the tribunal shall be paid to the claimant/appellant. We leave open the option of the claimant to file a statement of costs under Rule 196 before the tribunal within a period of three months from today whereupon the tribunal shall certify the costs legally payable.
(d) All other directions of the tribunal are upheld.
24. For the purpose of uniformity in the matter of award of costs, and to standardize the procedure for award of costs by the tribunals in the State, we direct the Registry to bring to the notice of all Motor Accident Claims Tribunals of the State the directions in paragraph 21 of this judgment.