Compensatory costs in respect of false or vexatious claims or defences

A. Compensatory costs in respect of false or vexatious claims or defences.-(1) If in any suit or other proceeding, not being an appeal, or revision any party objects to the claim or defence on the ground that the claim or defence or any part of it is, as against the objector, false or vexatious to the knowledge of the party by whom it has been put forward, and if thereafter as against the objector, such claim or defence is disallowed, abandoned or withdrawn in whole or in part, the Court, if the objection has been taken at the earliest opportunity and if it is satisfied of the justice thereof may, after recording its reasons for holding such claim or defence to be false or vexatious, make an order for the payment to the objector, by the party by whom such claim or defence has been put forward, of costs by way of compensation.

1. (2) No court shall make any such order for the payment of an amount exceeding three thousand rupees or exceeding the limits of its pecuniary jurisdiction, whichever amount is less : Provided that where the pecuniary limits of the jurisdiction of any Court exercising the jurisdiction of a Court of Small Causes under the Small Cause Courts Act, and not being a Court constituted under that Act are less than two hundred and fifty rupees, the High Court may empower such court to award as costs under this section any amount not exceeding two hundred and fifty rupees and not exceeding those limits by more than one hundred rupees : Provided further that the High Court may limit the amount which any Court or class of Courts is empowered to award as costs under this section.
2. (3) No person against whom any order has been made under this section shall, by reason thereof, be exempted from any criminal liability in respect of any claim or defence made by him.