Code
1[35A. Compensatory costs in respect of false or vexatious claims or defences.– (1) If in any suit
or other proceedings2[including an execution proceeding but3[excluding an appeal or a revision] any
party objects to the claim or defence on the ground that the claim or defence or any part of it is, as against
the objector, false or vexatious to the knowledge of the party by whom it has been put forward, and if
thereafter, as against the objector, such claim or defence is disallowed, abandoned or withdrawn in whole
or in part, the Court,4[if it so thinks fit], may, after recording its reasons for holding such claim or
defence to be false or vexatious, make an order for the payment to the object or by the party by whom
such claim or defence has been put forward, of cost by way of compensation.*[(2) No Court shall make any such order for the payment of an amount exceeding5[three thousand
rupees] or exceeding the limits of its pecuniary jurisdiction, whichever amount is less:Provided that where the pecuniary limits of the jurisdiction of any Court excercising the jurisdiction of a
Court of Small Causes under the Provincial Small Cause Courts Act, 1887 (9 of 1887),6[or under a
corresponding law in force in7[any part of India to which the said Act does not extend]] and not being a Court
constituted8[under such Act or law], are less than two hundred and fifty rupees, the High Court may empower
such Court to award as costs under this section any amount not exceeding two hundred and fifty rupees and not
exceeding those limits by more than one hundred rupees :Provided, further, that the High Court may limit the amount which any Court or class of Courts is
empowered to award as costs under this section.](3) No person against whom an order has been made under this section shall, by reason thereof, be
exempted from any criminal liability in respect of any claim or defence made by him.(4) The amount of any compensation awarded under this section in respect of a false or vexatious
claim or defence shall be taken into account in any subsequent suit for damages or compensation in
respect of such claim or defence.]STATE AMENDMENTSJammu and Kashmir and Ladakh (UTs).–In Section 35A, omit sub-section (2).[Videthe Jammu and Kashmir Reorganization (Adaptation of Central Laws) Order, 2020, notification
No. S.O. 1123(E) dated (18-3-2020) andvideUnion Territory of Ladakh Reorganisation (Adaptation of
Central Laws) Order, 2020, Notification No. S.O. 3774(E), dated (23-10-2020).]
