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This article is written by Sneha Mahawar from Ramaiah Institute of Legal Studies. The article discusses the concept of Judgement and Decree along with Interest and Costs.

What is Judgement and Decree?

The word ‘judgement’ is derived after combining two words namely, judge and statement. It can also be termed as an act of judging. It is the conclusion or the result of judging. On the other hand, the term decree can be termed as the judicial decision in a litigated cause rendered by a Court of equity. It is the determination of a cause in a Court of admiralty or Court of probate. The Court, after the case has been heard, shall pronounce judgement, and on such judgement a decree shall follow. Section 33 of the Code of Civil Procedure describes the term ‘Judgement and Decree’ together.

Difference between Judgement and Decree

Judgement 

Decree

  • A judgement is based upon facts. 
  • A decree is based upon judgement.
  • Judgment is made prior to decree.
  • Decree always follows a judgement.
  • A judgement contains facts of the case, the issues involved, the evidence brought by the parties, finding on issues(based on evidence and arguments). 
  • A decree contains the outcome of the suit and conclusively determines the rights of the parties with regard to the issues in dispute in the suit.
  • The definition of the word judgement given in section 2(9) of the Code of Civil Procedure, 1908 does not include the word ‘formal’. 
  • The definition of the word decree given in section 2(2) of Code of Civil Procedure, 1908 includes the word ‘formal’.
  • Section 2(9) of the Code of Civil Procedure, 1908 describes the term judgement.
  • Section 2(2) of the Code of Civil Procedure, 1908 describes the term decree.
  • Judgement has no types. 
  • A decree is divided into three types.
  • Judgement may result in a preliminary decree or a final decree or an order by itself, the judgement is always final. 
  • The decree may be a preliminary or final or partly preliminary and partly final.
  • Judgement leads to the final disposal of the suit after the decree is drawn up.
  • After passing the decree, the suit stands disposed of since the rights of the parties are finally determined by the court.

Judgement 

The term Judgement is defined in Section 2(9) of the Code of Civil Procedure, 1908. A judgement contains facts of the case, the issues involved, the evidence brought by the parties, finding on issues (based on evidence and arguments). Every judgement shall include a summary of the pleadings, issues, finding on each issue, ratio decidendi and the relief granted by the court. On a daily basis, numerous judgements are pronounced and various cases are disposed of. Judgements play a very important role in the working of our judicial system because they act as precedents for cases to come in the near future. A judge in the judgement pronounced, always states the reasons for such a decision.

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Pronouncement of a judgement

The word pronouncement means to make an official public announcement. Pronouncement of a judgement means that after the hearing is completed i.e. after the Court has heard the pleadings of the parties, the judgement shall be announced by the Judges in an open Court, either at once or at some future day, after providing due notice to the parties or their learned counsels.

If a judgement is not pronounced immediately then it must be pronounced within 30 days from the date of the conclusion of hearing. However, sometimes it so happens that due to exceptional and some extraordinary reasons like a bank holiday, strike or some other situation it may be delivered within 60 days from the conclusion of the hearing. It is not mandatory for a judge to read out the whole judgement and it would be enough if only the final order is pronounced. The judge shall put the date on which the judgement was pronounced along with his signature. Rule 2 Order XX of Code of Civil Procedure, 1908 provides a judge with the right to pronounce the judgement which is already written but is not pronounced by his predecessor.

After the Amendment Act of 1976, the time limit was provided between the hearing of the arguments and the pronouncement of the judgement. Prior to this amendment no time limit was provided as such. Such a time limit was provided because there was indefinitely continuous imposition from all over India.

Copy of the judgement

Once the judgement is pronounced the copies of that particular judgement should be immediately made available to the parties on payment of costs as specified, by the party applying for such copy, of such charges as may be specified in the rules and orders made by the High Court (H.C.) Such a rule is specified in Order XX Rule 6-B of the Code of Civil Procedure, 1908.

Contents of the judgement 

According to Rule 4 Order XX of Code of Civil Procedure, 1908:

  • Judgements of a Court of Small Causes are satisfactory if they contain the points for determination and the decision thereon.
  • Judgments of other Courts shall contain:
  1. Summary of the pleadings which is a concise statement of the case;
  2. Issues which are the points for determination;
  3. Findings on each issue and the decision thereon;
  4. Ratio decidendi (reasons for such a decision); and
  5. The remedy, which is the relief granted.

Alteration of a judgement

Once a judgement is dated and signed by the judge it can only be altered or amended if:

  • There are arithmetical or clerical errors. (clerical errors refer to the errors made by clerks and arithmetical errors refer to errors made in numbers such as addition, subtraction, multiplication and division).
  • There are errors due to accidental slips or omissions (these errors take place when some essential element is left unnoticed) (Section 152on review (Section 114).

Decree 

The term decree is defined in Section 2(2) of Code of Civil Procedure, 1908. A decree always follows judgement and is based upon a judgement. It is divided into five types unlike judgement which is final in itself. A decree may be final or preliminary. It is a formal declaration or adjudication and is conclusive in nature. A decree is of three kinds namely, preliminary decree, final decree and partly preliminary & partly final. A decree may be delivered with an order. The decree contains the outcome of the suit and conclusively determines the rights of the parties with regard to the issues in dispute in the suit. After passing the decree, the suit stands disposed of since the rights of the parties are finally determined by the court.

Deemed Decree 

A decree shall be deemed to include the rejection of a plaint and any question within Section 144 of Code of Civil Procedure,1908 but shall not include:

  • any such sentence(adjudication) from which it appears that an appeal lies as an appeal from an order, or
  • any such order of discharge(dismissal) of default.    

Kinds of Decrees 

According to Section 2(2) of the Code of Civil Procedure,1908 decrees are divided into three categories:

Preliminary Decree

In general sense, the word preliminary means preparation for the main matter, initial, introductory, preparatory. In a legal sense, a preliminary decree is a decree where further proceedings have to take place before the suit can be completely disposed off. It decides the rights of the parties in respect to all or any of the matters of discussion but it does not completely dispose of the suit. In such a decree the rights and liabilities of the parties are stated leaving the actual result or decision to be worked out in future proceedings. A preliminary decree is passed in those cases where the proceedings are to be carried out in two different stages. The first stage is when the rights of the parties are adjudicated and the second stage is when those rights are implemented or executed.

Final Decree 

In general sense, the word ‘final’ means last, ultimate, conclusive or decisive. In legal sense, a final decree is a decree which completely disposes of the suit and settles all the questions in discussion between the parties and nothing is left further for deciding thereafter. It is only said to be final when such adjudication completely disposes of the suit.

Partly preliminary and partly final Decree

A decree is said to be partly preliminary and partly final when the court decides two questions by the same decree. For instance, if the court passes a decree in favour of one party along with a direction of inquiry for the other party, the former part of the decree is final while the latter part is a preliminary decree for which further proceedings have to take place. For example, in a suit of possession of a property with company ‘C’, if the court passes a decree of possession of the property in favour of the plaintiff and directs an enquiry into the company ‘C’, then the former part of the decree is final decree while the latter part is the preliminary decree.

The necessity of a Decree 

The Code of Civil Procedure requires the passing of a decree in all the suits. A decree is based upon judgement and it also follows a judgement which is the reason why it is an indispensable and essential requisite. The decree is indispensable or an absolute requisite. It is an essential part of the ultimate outcome of the suit. An appeal can be made against a decree and not against a judgement. If the decree is absent an appeal cannot be ‘put in motion’.

Contents of a Decree 

A decree always follows the judgement, coincide with it and contains:

  • The suit’s number – Every suit has a particular number and it should be mentioned in the decree. 
  • The names, description and registered addresses of the parties – Every decree shall have the names of all the parties of that particular suit, the proper description of the parties of the suit, and the registered addresses of all the parties of the suit.
  • The particulars of the parties claims or defence – Every decree shall contain the details of the claims and the defences the parties are claiming as an outcome of the said suit.
  • The relief or the remedy granted to the aggrieved party – The decree should in particular mention about the relief granted to the particular party as a remedy and not a reward.
  • The total amount of cost incurred in the suit-
  1. by whom; or
  2. out of what property; and
  3. in what portions are they paid or are to be paid.
  • The judgement’s date of pronouncement or delivery date of the judgement – The decree should mention the date on which the judgement was delivered followed by the decree.
  • The judge’s signature on the decree – The judge’s signature is an essential and indispensable element of any decree. The signature of the judge delivering the judgement is an essential requisite.

Drawing up of a Decree 

Rule 6A Order XX of Code of Civil Procedure,1908 states that a decree shall be drawn within 15 days of the judgement. An appeal can be favoured or preferred without filing a copy of a decree if it is not drawn within 15 days of the judgement.

Decrees in Special cases

  • In a lawsuit for the recovery or process of regaining or repossession of an immovable property(real estate), the decree shall include a description of such property so that it is sufficient to recognise or identify it.
  • In a decree for movable property(personality), it must mention with the exact amount of money to be paid as an alternative in case the delivery is not made due to any reason either it be reasonable or appropriate.
  • In a decree for payment of money, the Court may order that the payment of decretal amount i.e., the  amount mentioned in the decree shall be:
  1. postponed which is delayed to a future date; or
  2. made by installments with or without interests.
  • In a suit for the recovery or process of regaining or repossession of immovable property, the Court may pass a decree-
  1. for possession or gaining of property.
  2. for past rents or mesne profits. (mesne profits are the profits of an estate received by a tenant in wrongful possession and recoverable by the landlord)
  3. that is a final decree in respect of rent or mesne profits in accordance with results of such enquiry as mentioned.
  • Rule 12A of the Code of Civil Procedure,1908 states that a decree for specific performance of a contract for sale or lease of an immovable property which can also be termed as real estate shall specify the exact period within which the amount of money or other sum is to be paid by the purchaser or lessee.
  • Rule 13 of the Code of Civil Procedure,1908  states that the final decree shall be passed or delivered in accordance with the result of preliminary enquiry i.e., in a lawsuit for an account of any property either movable or immovable and for its due administration under the decree of Court, before passing a final decree, the court should pass a preliminary decree ordering accounts to be taken and enquiries to be made. 
  • Rule 14 of the Code of Civil Procedure,1908 states a decree in a pre-emption suit, it is a suit where the displacement of a lower jurisdiction’s laws when they conflict with those of a higher jurisdiction, where the purchase money has not been paid into Court, shall specify a particular day on or before which the purchase money has to be paid and direct that on payment to Court, the defendant shall deliver property to the plaintiff, but if the payment is not made on a specific day, the lawsuit shall be dismissed with costs. In cases the Court has settled upon rival claims to pre-emption, the decree shall direct:
  1. The claim or defence of each pre-emptor shall take effect proportionately if the claims decreed are equal in degree.
  2. The claim or defence of the inferior pre-emptor will not take place till the superior pre-emptor fails to make the payment if the claims decreed are different in degree.
  • In a lawsuit for dissolving of partnership or taking of partnership accounts, the Court can pass a preliminary decree before passing a final decree declaring the exact shares of all the parties, fixing of a particular day on which the partnership shall become dissolved and directing the accounts to be taken and other necessary actions to be done.
  • In a lawsuit for accounts between a principal person and agent, the Court can pass a preliminary decree before passing a final decree directing the accounts that has to be taken and it can also provide special directions in regards to the mode of taking accounts as well.
  • In a decree passed in a lawsuit for partition of property either movable or immovable or for separate possession of share in the property,
  1. the decree shall declare the rights of several parties interested in that property but shall direct partition or separation to be made by collector and in other cases of immovable property in case the estate is assessed to the payment of revenue to the government.
  2. the Court shall pass a preliminary decree declaring all the rights of the parties in estate and giving necessary directions and then the final decree is passed, if separation or partition cannot conveniently be made without further inquiry.
  • A decree where the defendant has been allowed leave or start with a  counterclaim against the initial claim of the plaintiff shall state with what amount is due to the plaintiff and what amount is due to the defendant thereafter.

Interest

In the general aspect, interest refers to the price paid for obtaining or any price received for providing, money or goods in a credit transaction which is calculated as a fraction of the amount or value of what was borrowed initially. Interest is the fraction of amount of money which the Court asks the losing party to pay to the aggrieved party as the initial principal sum was not paid on time or the expenses incurred by the winning party in filing the documents and making necessary contracts and legal notices. In a legal sense, the term interest is defined in Section 34 of the Code of Civil Procedure, 1908.

Award of Interest 

The Court in the decree orders interest at a rate as the Court finds reasonable and appropriate to be paid on the principal sum declared from the date of filing of the lawsuit to the date of passing of the decree. The Court even allows further interest at a rate not exceeding six percent per annum on the principal sum for any period prior to the institution of the suit from the date of passing of the decree to the date of the payment or any such earlier date as the Court finds appropriate and reasonable.

Division of Interest

According to the Code of Civil Procedure, 1908, the division of interest is divided into three types:

Pre-lite

It is the amount of interest which is accrued or received prior to the institution of the suit on the principal sum. The rate of interest is on the discretion of the Court but if the parties have decided a rate of interest the Court shall consider it.

Pendente-lite

This interest is in addition to the pre-lite interest. This means it is the additional interest on the principal sum declared by the court from the date of filing of the suit to the date of passing the decree. The word means the pendency of a lawsuit in the Court of law.

Post-lite

This is the interest in addition to the pre-lite interest on principal sum and pendente-lite interest on the principal sum. It should be added on the discretion of the Court and should not exceed more than six percent per annum.

Rate of Interest 

The rate of interest awarded by the Court from the date of the lawsuit to date of the decree is 12% and is just, appropriate and reasonable and there is nothing to interfere. However, in post-lite interest that is from the date of decree till realisation of the amount, rate of interest can be charged upto 6% p.a. In pendente-lite, the rate of interest is fixed between 9%-12%

Recording of Reasons 

It is on the discretion of the judge to provide the rate of interest. If the judge does not provide for the rate of interest or reduces or increases the rate then he has to state the reason behind doing so in writing. The stating of the reasons by the judge for not providing interest is essential so that no judge can make any arbitrary decisions. The providing of reasons also depicts that the judge is fair with his decisions and is not biased towards any party. 

Costs

In the general sense, the term cost means to incur a charge or to require payment of a specified price. It simply means to calculate or estimate a price. The term cost is defined in Section 35 of the Code of Civil Procedure, 1908. The primary objective of ordering costs is to provide the litigant with the expenses incurred by him during the litigation. The provision of providing costs is on the discretion of the court that it may grant order for payment of costs to the winning party by the losing party subjected to pay for the expenses incurred during the litigation period or while drafting legal notices and contracts. This is a kind of remedy and it shall not be treated as a reward for the winning party and punishment for the losing party. 

Granting of costs is at the discretion of the Court and if the court refuses to grant cost then it should give reasons for doing so in writing. The discretion is based upon facts and circumstances of the case and not by chance.

Kinds of Costs

The Code of Civil Procedure provides for the following kinds of costs:

General costs 

The term general costs are defined in Section 35 of Code of Civil Procedure,1908. General costs are the cost which is incurred by the litigants and depends upon the Court’s discretion. The general rule is that the losing party pays the winning party costs granted by the court. It is the amount which is not treated as a reward for the winning party and a punishment for the losing party but as a remedy. The judge can even refuse to grant costs but for that, a reason has to be stated in writing.

Miscellaneous costs 

The term miscellaneous in the literal sense is used as something which is diverse in its characteristics and cannot be placed in any specific category. Miscellaneous costs are defined in Order XX A of the Code of Civil Procedure,1908. These costs are also known as Specific Costs. They are granted under special circumstances as mentioned in Rule1 of the Code of Civil Procedure,1908:

  • Expenditure on notices required to be issued under the law by parties.
  • Expenditure on notices not required to be issued under the law by parties.
  • Expenditure incurred on typing, writing, printing, etc. on the pleadings.
  • Charges paid by parties for inspection of documents.
  • Expenditures on witnesses even though not summoned to the court.
  • In case of appeals, expenses incurred by parties for obtaining any copies of the pleadings, judgement, decree, etc.

Compensatory costs

The term compensatory can be generally defined as to make up for something, or to do something to correct a previous act. It means providing compensation to the aggrieved party by the way of damages or rewards or as the Court deems fit. Compensatory costs are defined in Section 35A of the Code of Civil Procedure,1908. Compensatory costs are granted in the cases where the claims of the other party are false or vexatious. Such costs are granted under two conditions, namely, firstly, the claim must be false or vexatious. Secondly, objections must be made by the other party that the party making the claim or defence had knowledge of the fact that such claim was false or vexatious.

Costs for causing delay

These are the costs which the parties are liable to pay in case of default made on their part such as appearing late in the Court, not submitting the required documents on the specified time, not paying the costs on time for which further fine has been imposed. These are the costs which are paid due to carelessness on the part of the parties. Costs for causing delay are defined in Section 35B of the Code of Civil Procedure,1908. This section was introduced by the Amendment Act,1976. These are costs which are imposed for causing the delay. It states that where a party did not take a step which it should have under the code or obtained an adjournment as regards the same, he will have to pay such costs to the other party so as to reimburse him for attending Court on the designated date. Unless such costs are paid, the plaintiff shall not be allowed to proceed further in his suit, if she should have paid the costs and defendant shall not be allowed to proceed with the defence if he was liable to pay such costs. If however, the party is unable to pay the costs due to circumstances beyond his control, the court may extend the time. 

Conclusion

Hence, it could be said that judgement is a set of which decree is the subset. Interests and costs are the amount to be paid to the winning party as a remedy and not a reward. It is not a punishment for the losing party but just a remedy for winning party so that it could incur the expenses caused due to drafting of legal notices, contracts and all expenses during the litigation period for the purpose of litigation.

References

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