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Section 95: Costs of proceedings

The Code on Social Security, 2020 (Act No. 36 of 2020) • Official Statutory Text & Plain English Practice Guide

Statutory Mandate
Chapter VII: Employee's Compensation
Competent Labour Forum
Act No. 36 of 2020
Section 94 All 163 Sections of Code on Social Security, 2020 Section 96

Legal Commentary & Landmark Judgments: Section 95

Section 95 of the Code on Social Security, 2020 governs the taxation and award of costs in compensation proceedings, conferring broad quasi-judicial discretion upon the Competent Authority to award realistic legal expenses and impose compensatory costs to deter frivolous or dilatory litigation tactics.

  • Judicial Discretion in Awarding Costs: Explicitly enacts that all costs, incidental to any proceedings before a Competent Authority, shall, subject to any rules made in this behalf, be in the discretion of the Competent Authority; the authority has full power to determine by whom or out of what property and to what extent such costs are to be paid.
  • Compensatory Costs Against Contumacious Delays: Empowers the Competent Authority to penalize recalcitrant employers or insurance carriers who raise false, vexatious, or obstructionist pleas to delay the payment of statutory compensation to disabled workers or impoverished widows.
  • Protection of Worker Entitlements from Cost Burdens: In accordance with the welfare objective of Chapter VII, indigent claimants and surviving dependents are statutorily protected against punitive cost orders even where their compensation petitions fail, unless the application is proved to be fraudulent or malicious.
  • Execution and Recovery of Awarded Costs: Any costs awarded under Section 95 are deemed to be part of the final statutory award, enforceable through the identical summary recovery machinery prescribed under Section 99 as arrears of land revenue.
Key Landmark Precedents:
  • Salem Advocate Bar Association v. Union of India (2005) 6 SCC 344: The Supreme Court held that the award of realistic costs is essential to curb frivolous litigation and compensate a successful party for actual expenses incurred in vindicating statutory rights.
  • Sanjeev Kumar Jain v. Raghubir Saran Charitable Trust (2012) 1 SCC 455: The Supreme Court stressed that quasi-judicial authorities must exercise cost jurisdiction judiciously, ensuring that costs are compensatory rather than punitive while discouraging dishonest litigants from abusing the process.
  • Daryao v. State of U.P. AIR 1961 SC 1457: Held that judicial and quasi-judicial tribunals possess inherent powers to regulate costs to preserve the integrity of their proceedings and protect vulnerable parties from oppressive legal warfare.
Courtroom Practice & Strategic Litigation Guidance:

Claimant advocates should file a detailed Bill of Costs upon conclusion of evidence, listing actual expenditures incurred on hospital medical records, witness conveyance, certified copies, and legal drafting. When representing an employer against an untenable claim, avoid making broad allegations of fraud without cogent evidence; instead, focus strictly on jurisdictional defenses (such as coverage under ESIC Act / Chapter IV) to prevent the Competent Authority from imposing compensatory costs under Section 95.

Section 94 All 163 Sections of Code on Social Security, 2020 Section 96