Deposit by Defendant, Security for Costs, and Commission under CPC (Code of Civil Procedure)

The Code of Civil Procedure, 1908 (CPC) provides a detailed framework for fair adjudication of civil disputes in India. Among its various provisions, Order 24 (Deposit by Defendant), Order 25 (Security for Costs), and Order 26 (Commissions) hold significant importance. These orders ensure that litigation is conducted efficiently, unnecessary costs are avoided, and courts can access evidence even outside their premises.

This article explains these provisions in detail with illustrations, case laws, and practical examples.

🔹 Order 24 CPC – Deposit by Defendant in Satisfaction of Claim

Order 24 CPC deals with situations where the defendant deposits money in court to satisfy the plaintiff’s claim, either fully or partially.

1. Deposit by Defendant
• In suits for debt or damages, the defendant may deposit in court any sum he considers as full satisfaction of the plaintiff’s claim.
• This can be done at any stage of the suit.

2. Notice of Deposit
• Once the deposit is made, the court must notify the plaintiff.
• Unless directed otherwise, the plaintiff can withdraw the deposited amount upon application.

3. Interest Not Payable After Notice
• From the date of notice, the plaintiff is not entitled to interest on the sum deposited—whether it represents full or part satisfaction.

4. Plaintiff’s Response to the Deposit

The plaintiff has two options:

(i) Acceptance as Part Satisfaction
• Plaintiff may accept the deposit as partial satisfaction and continue the suit for the balance.
• If the court later finds the deposit was sufficient, the plaintiff may have to bear litigation costs incurred after the deposit.

(ii) Acceptance as Full Satisfaction
• Plaintiff may accept the deposit as full settlement, and the court shall pronounce judgment accordingly.
• Costs will depend on which party was responsible for unnecessary litigation.

Illustrations under Order 24 CPC

(a) A owes B ₹100. Without making a demand, B files a suit. A deposits ₹100 in court. Since the litigation was unnecessary, B cannot claim costs.
(b) A disputes the debt but later deposits ₹100. B accepts. Here, B may claim costs as A’s conduct led to litigation.
(c) B sues A for ₹150 when only ₹100 is due. A deposits ₹100. B accepts it as full satisfaction. The court may direct B to bear A’s costs as the excess claim was unjustified.

🔹 Order 25 CPC – Security for Costs

Order 25 CPC empowers courts to ensure that defendants are not burdened with unrecoverable costs if the plaintiff is unlikely to pay.

1. When Can Court Ask for Security?

At any stage, the court may direct the plaintiff to deposit security for costs, either:
• On its own motion (suo motu), or
• On application by the defendant.

This is to cover:
• Costs already incurred, and
• Costs likely to be incurred in the future.

2. Mandatory Security – Plaintiff Residing Outside India

The court must order security when:
• There is only one plaintiff,
• He resides outside India, and
• Owns no immovable property in India (except the disputed property).

If there are multiple plaintiffs, this applies only if all satisfy the above conditions.

Example: Aman, an Indian citizen, files a case but soon leaves for Dubai indefinitely. The court may order him to deposit security since there’s a chance he may not return to pay costs.

3. Failure to Furnish Security
• If the plaintiff fails to deposit within time, the suit is dismissed.
• The plaintiff may seek restoration of the suit by showing sufficient cause (illness, emergency, etc.).
• Restoration is allowed only after notice to the defendant.

🔹 Order 26 & Section 75 CPC – Commissions

A commission is an instruction issued by the court to a commissioner to perform tasks outside the court, aiding in proper adjudication.

1. Who Can Be Appointed as Commissioner?
• Usually, advocates from a High Court-approved panel.
• Must be independent, impartial, and skilled for the task.
• Acts as the “eyes and ears” of the court but does not decide rights.

2. Purposes for Issuing Commission (Sec. 75 & Order 26 CPC)

The court may issue a commission for:
1. Examining Witnesses – when a witness is ill, old, residing outside jurisdiction, or unable to attend (Order 26 Rules 1–8).
2. Local Investigation – to inspect property, verify possession, assess value, mesne profits, or damages (Rules 9–10).
3. Adjusting Accounts – in business or partnership disputes (Rules 11–12).
4. Partition of Property – after a preliminary decree, to divide property as per shares (Rules 13–14).
5. Scientific or Expert Investigation – handwriting, fingerprints, DNA, technical analysis (Rule 10-A).
6. Sale of Movable Property – when property in custody cannot be preserved (Rule 10-C).
7. Ministerial Acts – calculations, measurements, valuations (Rule 10-B).

3. Powers of the Commissioner (Rules 16–18)
• Summon and examine witnesses.
• Call for and examine documents.
• Enter land/building mentioned in order.
• Proceed ex parte if a party fails to appear.

4. Evidentiary Value of Commissioner’s Report
• The report serves as prima facie evidence (Tushar Kanti v. Savitri Devi, 1996 SC).
• It cannot be rejected without valid reasons but may be challenged with contrary evidence.

5. Limitations
• Commissioner cannot perform judicial functions (e.g., deciding ownership or property value).
• Cannot seize documents.
• Only investigates and reports facts.

6. Commissions for Foreign Tribunals (Rules 19–22)

High Courts can issue commissions for recording testimony in India on the request of a foreign tribunal.

🔹 Key Case Law
• Bandhua Mukti Morcha v. Union of India (1984) 3 SCC – Court emphasized the importance of commissions for social justice cases.
• Tushar Kanti v. Savitri Devi (1996 SC) – Commissioner’s report is valid evidence unless proved otherwise.

 Conclusion

Orders 24, 25, and 26 of CPC collectively ensure:
• Order 24 – Defendants can settle claims early, avoiding unnecessary litigation.
• Order 25 – Defendants are protected from frivolous plaintiffs who may evade costs.
• Order 26 – Courts can access evidence, conduct investigations, and resolve disputes effectively.

These provisions promote fairness, efficiency, and cost-effectiveness in civil litigation.

🔹 FAQs

Q1. Can a defendant deposit money in court after trial begins?
👉 Yes, under Order 24 CPC, the deposit can be made at any stage of the suit.

Q2. What happens if a plaintiff refuses to accept a deposit as full satisfaction?
👉 The court will proceed with the case, but if it later finds the deposit sufficient, the plaintiff may bear costs.

Q3. Is security for costs always mandatory if the plaintiff lives outside India?
👉 Yes, if the plaintiff has no immovable property in India (other than the disputed property).

Q4. Can a Commissioner decide the rights of the parties?
👉 No, a Commissioner only investigates and submits a report. The final decision lies with the court.

Q5. Is a Commissioner’s report binding on the court?
👉 It is an important piece of evidence but not binding. The court can accept or reject it based on facts.

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