Similarly, the court should provide adequate indemnity to the successful litigant for the expenditure incurred by him towards the litigation. It was also held in the decision in Vinod Seth v. Devender Bajaj and Anr., (Referred to above) that provisions relating to the compensatory cost (Section 35 A of the Code) in respect of false or vexatious claims or defence has become virtually infructuous or ineffective, on account of inflation. Under the said section, awarding of compensatory cost, in case of false and vexatious litigation was subject to a ceiling of Rs.3,000/-. However, it was made clear that the same requires a realistic revision keeping in view, the observations in Salem Advocates Bar Association (Supra). It is also relevant to consider that lack of appropriate provisions relating to costs has resulted in a steady increase in malicious, vexatious, false, frivolous and speculative suits, apart from increase in docket explosion, making the object of Section 89 of the Code ineffective. As held by the Hon'ble Apex Court, any attempt to reduce the pendency or encourage Alternative Dispute Resolution (ADR) processes or to streamline the civil justice system will fail, in the absence of not using the appropriate provisions relating to costs, as the same should discourage maintaining false and vexatious litigations.
