Case Note & Summary
The petitioner, Pawan Advertising, installed hoardings after obtaining permission from the Grampanchayat, but without the required permission from the Mumbai Metropolitan Regional Development Authority (MMRDA), the Competent Authority. The hoardings exceeded permissible limits under statutory guidelines. The MMRDA rejected the petitioner's application for retention of the hoardings on 11th July 2024. The petitioner challenged this order by filing a writ petition under Article 226 of the Constitution of India before the Bombay High Court. The Division Bench (comprising Hon'ble M.S. Sonak, J and Hon'ble Kamal Khata, J) found that the petitioner had made false statements and suppressed correct facts in the writ petition, and that the hoardings exceeded permissible limits. The Bench unanimously dismissed the writ petition for suppression and misstatement of facts, and agreed that exemplary costs should be imposed. However, the two judges differed on the quantum: Hon'ble M.S. Sonak, J proposed costs of Rs.5,00,000, while Hon'ble Kamal Khata, J proposed Rs.25,00,000. In view of this difference, the matter was referred to a third judge under Chapter I Rule 7 of the Bombay High Court Appellate Side Rules, 1960. The petitioner's Special Leave Petition against the dismissal was dismissed by the Supreme Court on 13th September 2024. The petitioner argued that there were no malafides, it was a first instance, and in a similar case (Yash Raj Multimedia) no costs were imposed. The MMRDA supported the higher costs, citing the petitioner's commercial gains and false statements. The referring judge, A.S. Chandurkar, J, after hearing both sides and considering the principles of discretion and proportionality, held that costs of Rs.15,00,000 would be appropriate. The judge noted that the petitioner had made commercial gains from the hoardings, but also considered that the petitioner had approached the Grampanchayat in good faith and it was a first offence. The court directed that the costs be paid to the MMRDA within four weeks, failing which the MMRDA could recover the same as arrears of land revenue. The reference was answered accordingly.
Headnote
A) Constitutional Law - Writ Jurisdiction - Imposition of Exemplary Costs - Article 226 of the Constitution of India, Chapter XVII Rule 16 of the Bombay High Court Appellate Side Rules, 1960 - The court resolved a difference of opinion between two judges of a Division Bench regarding the quantum of exemplary costs to be imposed on a petitioner who suppressed facts and made false statements in a writ petition challenging MMRDA's rejection of hoarding retention. The court held that costs must be proportionate to the conduct and commercial gains, and imposed Rs.15,00,000 as a balanced deterrent, rejecting both the lower (Rs.5,00,000) and higher (Rs.25,00,000) proposals. (Paras 1-10) B) Civil Procedure - Costs - Discretion of Court - Section 35 of the Code of Civil Procedure, 1908 (CPC) (analogous principle) - The court emphasized that the discretion to impose costs must be exercised judiciously, based on the facts of each case, and not arbitrarily. The court referred to National Insurance Co. Ltd v. Keshav Bahadur to outline the principles governing judicial discretion. (Paras 5-6) C) Law of Torts - Exemplary Damages - Deterrence - The court noted that exemplary costs serve as a deterrent against abuse of process and suppression of facts, and must be sufficient to discourage similar conduct while not being punitive beyond proportionality. The court balanced the need for deterrence with the petitioner's first-time offence and lack of malafides. (Paras 7-10)
Issue of Consideration
What is the appropriate quantum of exemplary costs to be imposed on the petitioner for suppression and misstatement of facts in a writ petition challenging rejection of hoarding retention, where the Division Bench was unanimous on dismissal with exemplary costs but differed on the amount (Rs.5,00,000 vs Rs.25,00,000)?
Final Decision
The reference is answered by imposing exemplary costs of Rs.15,00,000 on the petitioner, to be paid to the MMRDA within four weeks, failing which the MMRDA may recover the same as arrears of land revenue.
Law Points
- Exemplary costs
- discretion of court
- proportionality
- deterrence
- suppression of facts
- misstatement
- commercial gains
- Article 226
- Bombay High Court Appellate Side Rules 1960 Chapter XVII Rule 16
