Compensation payment has to be reasonable: Bombay HC

Mumbai: Stating that payment of compensation for default cannot be treated as a punishment, a division bench of the Bombay high court has stayed the Rs 4.5 lakh cost levied on a trust for not filing its affidavit in time and seeking adjournment last week. The court said that as per previous judgements the cost has to be reasonable and thus reduced the amount to Rs 50,000. 

While hearing the appeal, the bench of Naresh justice Patil was informed by the appellant trusts’ advocate that though they had assured justice Patil of their willingness to file the affidavit, it was rejected and the cost was levied on them. The trust claimed that as the trustee was 79 years old, a reasonable view should be taken with regards to the amount payable as costs. 

After hearing the submissions, the ben ch said, “Of course the condition imposed should not be in the nature of a penalty or punishment to the party asking for adjournment, and hence the costs awarded should in no case exceed a sum commensurate with the expense.”