Recovery of Costs from Government Employees for Lapses in Litigations

Recovery of Costs from Government Employees for Lapses in Litigations

Law laid down by Constitutional Court is binding on all and it is law in terms of A.141 of Constitution of India. In the leading decision of Punjab State Power Corpn Ltd v. Atma Singh Grewal [2013] GCtR 6208 (SC) it was held that "imposition of cost on the State/ PSU's alone is not going to make much difference as the officers taking such irresponsible decisions to file appeals are not personally affected because of the reason that cost, if imposed, comes from the government's coffers. Time has, therefore, come to take next step viz. recovery of cost from such officers". It was also held that "cost should be in real and compensatory terms and not merely symbolic."

"Sense of responsibility would drawn on such officers only when they are made to pay the costs from their pockets, instead of burdening the exchequer."

The principle was also followed in Assistant Director, ED v. Kamal Ahsan [2022] GCtR 1550 (SC) as well as in the case of NICL v. Phul Bhanu Bibi [2025] GCtR 1536 (Tripura).