Code of Civil Procedure, 1908 (CPC)
Order XXV CPC: Security for Costs
A defendant who wins his case is entitled to his costs, but the entitlement is worth nothing if the plaintiff is beyond reach or has nothing to pay with. Order XXV of the Code of Civil Procedure, 1908 answers that risk by allowing the court to order the plaintiff to give security for the payment of all costs the defendant may incur, and to dismiss the suit if the security is not furnished. The power is mandatory in one case, where the sole plaintiff resides outside India and has no sufficient immovable property in India, and discretionary in others. These notes cover the whole Order.
1. When Security May Be Ordered: Rule 1
§ Order XXV Rule 1, CPC 1908 (in substance) (1) At any stage of a suit, the Court may, either of its own motion or on the application of any defendant, order the plaintiff, for reasons to be recorded, to give within the time fixed by it security for the payment of all costs incurred and likely to be incurred by any defendant: Provided that such an order shall be made in all cases in which it appears to the Court that a sole plaintiff is residing out of India and that such plaintiff does not possess any sufficient immovable property within India other than the property in suit. (2) Whoever leaves India under such circumstances as to afford reasonable probability that he will not be forthcoming whenever he may be called upon to pay costs shall be deemed to be residing out of India within the meaning of the proviso. (3) Where the sole plaintiff is a woman suing as a sole plaintiff on behalf of the estate in certain representative capacities, or where the plaintiffs are all residing out of India and none possesses sufficient immovable property in India, the same principle applies according to the terms of the rule. |
§ The two limbs of the power The rule has a discretionary limb and a mandatory one: • The general power, sub-rule (1). The court may, at any stage, of its own motion or on a defendant's application, and for reasons to be recorded, order the plaintiff to give security for the costs incurred and likely to be incurred by any defendant. The discretion is exercised where the defendant's costs are genuinely at risk. • The mandatory case, the proviso. Such an order shall be made where it appears that a sole plaintiff is residing out of India and does not possess sufficient immovable property within India other than the property in suit. Both elements are required: residence abroad alone is not enough if he has sufficient property here. • The deemed case, sub-rule (2). A person who leaves India in circumstances affording a reasonable probability that he will not be forthcoming when called upon to pay costs is deemed to be residing out of India, which prevents the proviso from being defeated by a departure after institution. |
§ What the court weighs on the discretionary limb The defendant's real risk. Is there a genuine likelihood that a costs order will be unenforceable, whether because the plaintiff is impecunious, is beyond the jurisdiction, or has put his assets out of reach? The merits, at a glance. The court does not try the suit on an application for security, but a plaintiff with an obviously strong case is not readily shut out for want of means. Access to justice. An order for security can end a genuine claim, so the court is slow to make one merely because the plaintiff is poor. Poverty alone has never been a ground, which is why the Code provides separately for suits by indigent persons under Order XXXIII. Conduct. Whether the plaintiff has been evasive about his assets, or has left the country, bears directly on the discretion, and sub-rule (2) gives that consideration statutory form. |
2. The Plaintiff Residing Outside India
The proviso is the most examined part of the Order, and it should be stated with its two cumulative conditions. There must be a sole plaintiff, so the proviso does not apply in terms where there are several plaintiffs of whom one resides in India with sufficient property, though the general power in sub-rule (1) remains available. And that plaintiff must reside out of India and possess no sufficient immovable property within India other than the property in suit. The exclusion of the suit property is deliberate: the plaintiff cannot offer as security the very thing he is asking the court to give him. Where both conditions are satisfied, the court has no discretion; the word is shall, and an order for security must be made.
3. Effect of Failure to Furnish Security: Rule 2
§ Order XXV Rule 2, CPC 1908 (in substance) (1) In the event of such security not being furnished within the time fixed, the Court shall make an order dismissing the suit unless the plaintiff or plaintiffs are permitted to withdraw therefrom. (2) Where a suit is dismissed under this rule, the plaintiff may apply for an order to set the dismissal aside, and if it is proved to the satisfaction of the Court that he was prevented by any sufficient cause from furnishing the security within the time allowed, the Court shall set aside the dismissal upon such terms as to security, costs or otherwise as it thinks fit, and shall appoint a day for proceeding with the suit. (3) The dismissal shall not be set aside unless notice of the application has been served on the defendant. |
i. Dismissal is the consequence, and it is mandatory in form. The court shall dismiss the suit if the security is not furnished within the time fixed, unless the plaintiff is permitted to withdraw.
ii. Withdrawal is the alternative. A plaintiff who cannot furnish security may seek permission to withdraw, which brings Order XXIII Rule 1 into play, with its consequences for a fresh suit.
iii. The dismissal may be set aside. On proof of sufficient cause for not furnishing the security in time, the court shall set aside the dismissal on such terms as it thinks fit, and fix a day for proceeding with the suit.
iv. Notice to the defendant is compulsory before the dismissal is set aside, since the defendant has acquired the benefit of the dismissal.
v. Time may be extended. The period for furnishing security is fixed by the court, and may be enlarged under Section 148, which allows the court to extend a period it has fixed.
4. Security for Costs and Related Provisions
Provision | What it secures | Distinguishing feature |
|---|---|---|
Order XXV Rules 1 and 2 | The defendant's costs of the suit | Ordered against the plaintiff, mandatory where a sole plaintiff resides abroad without sufficient immovable property in India; failure means dismissal |
Order XXXIII | Nothing; it relieves an indigent person of court fees | The counterpart to Order XXV: poverty is a reason for exemption from fees, not for security against the plaintiff |
Order XLI Rule 10 | The costs of an appeal, or performance of the decree | The appellate court may require the appellant to furnish security, and may stay execution pending it |
Order XXXVIII Rules 1 to 4 | The plaintiff's eventual decree, by arrest before judgment | Directed at a defendant about to abscond or leave the jurisdiction |
Order XXXVIII Rules 5 to 13 | The plaintiff's eventual decree, by attachment before judgment | Directed at a defendant about to dispose of his property to obstruct the decree |
The pairing worth noticing is the first two. Order XXV protects the defendant against a plaintiff who cannot pay costs; Order XXXIII protects a plaintiff who cannot pay court fees. Together they show the Code's position: poverty is not a bar to suing, and it is not by itself a ground for demanding security either, but a defendant is entitled to protection where the risk to his costs is real and traceable to something more than the plaintiff's means, above all to his being beyond reach.
5. Landmark Points
- Order XXV Rule 1(1). At any stage, on application or suo motu and for reasons recorded, the court may order the plaintiff to give security for the costs incurred and likely to be incurred by any defendant.
- Proviso to Rule 1(1). The order shall be made where a sole plaintiff resides out of India and has no sufficient immovable property in India other than the property in suit.
- Rule 1(2). A person who leaves India in circumstances affording a reasonable probability that he will not be forthcoming to pay costs is deemed to reside out of India.
- Rule 2(1). Failure to furnish security within the time fixed leads to dismissal of the suit, unless the plaintiff is permitted to withdraw.
- Rule 2(2) and (3). The dismissal may be set aside on sufficient cause, but only after notice to the defendant.
- Section 148. The time fixed for furnishing security may be enlarged by the court.
6. Frequently Asked Questions
When can a court order security for costs?
At any stage of the suit, of its own motion or on a defendant's application, for reasons to be recorded, where the defendant's costs are genuinely at risk. The order must be made where a sole plaintiff resides out of India and has no sufficient immovable property in India other than the property in suit.
Is security mandatory where the plaintiff lives abroad?
Only where two conditions are both satisfied: he is a sole plaintiff residing out of India, and he does not possess sufficient immovable property within India other than the property in suit. Residence abroad alone is not enough if he has sufficient property here.
Can the suit property be offered as security?
No. The proviso excludes the property in suit from the immovable property that counts, because a plaintiff cannot offer as security the very thing he is asking the court to award him.
What happens if the plaintiff does not furnish the security?
Under Order XXV Rule 2(1) the court shall dismiss the suit, unless the plaintiff is permitted to withdraw from it. The dismissal may be set aside under Rule 2(2) on proof of sufficient cause, and only after notice to the defendant under Rule 2(3).
Is poverty a ground for ordering security for costs?
Not by itself. The Code treats poverty as a reason for relief from court fees under Order XXXIII, not as a reason to shut a plaintiff out. Security is ordered where the risk to the defendant's costs is real, typically because the plaintiff is beyond reach or has put his assets out of reach.
What if the plaintiff leaves India after filing the suit?
Order XXV Rule 1(2) covers it: a person who leaves India in circumstances affording a reasonable probability that he will not be forthcoming whenever called upon to pay costs is deemed to be residing out of India, so the proviso may then be applied.
7. Related Topics in This CPC Series
- Order XXIV: Payment into Court by the Defendant
- Costs under Sections 35, 35A, 35B and Order XX-A
- Withdrawal of a Suit under Order XXIII Rule 1
- Order IX: Appearance and Non-Appearance of Parties