Rule (1)

*When security for costs may be required from plaintiff

(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, or (when there are more plaintiffs than one) that all the plaintiff are, residing out of India and that such plaintiff does not possess or that no one of such plaintiffs possesses any sufficient immovable property with 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 to sub-rule (1).]

*Subs. by Act 66 of 1956, sec. 14 for rule 1 (w.e.f. 1-1-2024).

HIGH COURT AMENDMENTS

Allahabad.-In Order XXV, for rule 1, substitute the following rule, namely:-

"1. When security for costs may be required from plaintiff.-(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 reason 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, or (when there are more plaintiffs than one) that all the plaintiffs are, residing outside the State and that such plaintiffs does not possess or that one of such plaintiffs possesses any sufficient immovable property within the State other than the property in suit or that the plaintiff is being financed by another person.

(2) Whoever leaves that State 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 outside the State within the meaning of the proviso to sub-rule (1)." (w.e.f. 5-2-2024)

Madhya Pradesh.-In Order XXV, in rule (1), in proviso, at the end, insert the words "or that any plaintiff is being financed by a person not a party to the suit", (w.e.f. 16-9-2023)

Rule (2)

Effect of failure to furnish security

(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 such application has been served on the defendant.

HIGH COURT AMENDMENTS

Bombay.-In Order XXV, after rule 2, insert the following rule, namely:-

"3. Power to implead and demand security from third person financing litigation.-fl) Where any plaintiff has for the purpose of being financed in the suit transferred or agreed to transfer any share or interest in the property in the suit to a person who is not already a party to the suit, the Court may order such person to be made a plaintiff to the suit if he consents, and may either of its own motion or on the application of any defendant order such person, within a time to be fixed by it to give security for the payment of all costs incurred and likely to be incurred by any defendant. In the event of such security not being furnished within the time fixed, the Court may make an order dismissing the suit so far as his right to, or interest in the property in suit is concerned, or declaring that he shall be debarred from claiming any right to or interest in the property in suit.

(2) If such person declines to be made a plaintiff, the Court may implead him as a defendant and may order him, within a time to be fixed by it, to give security for the payment of all costs incurred and likely to be incurred by any other defendant. In the event of such security not being furnished within the time fixed, the Court may make an order declaring that he shall be debarred from claiming any right to or interest in the property in suit.

(3) Any plaintiff or defendant against whom an order is made under this rule may apply to have it set aside and the provisions of sub-rules (2) and (3) of rule 2 shall apply mutatis mutandis to such application." (w.e.f. 1-10-2023)

Gujarat.-Same as in Bombay,

Karnataka.-In Order XXV, in rule 2, after sub-rule (3) insert the following sub-rule, namely:-

"(4) The provisions of section 5 of the Limitation Act, 1963, shall apply to applications under this rule." (w.e.f. 30-3-2024)

Madhya Pradesh.-In Order XXV, for rule 3, substitute the following rule, namely:-

"3. Power to implead and demand security from a third person financing litigation.- (1) Where any plaintiff has, for the purpose of being financed in the suit, transferred or agreed to transfer any share or interest in the property in suit, to a person who is not already a party to the suit, the Court may order such person to be made a plaintiff to the suit, if he consents and may either of its own motion or on the application of any defendant order such person, within a time to be fixed by it, to give security for the payment of all costs incurred and likely to be incurred by any defendant. In the event of such security not being furnished within the time fixed, the Court may make an order dismissing the suit so far as his right to, or interest in the property in suit is concerned or declaring that he shall be debarred from claiming any right to, or interest in the property in suit.

(2) If such person declines to be made a plaintiff the Court may implead him as a defendant and may order him, within a time to be fixed by it, to give security for the payment of all costs incurred and likely to be incurred by any other defendant. In the event of such security not being furnished within the time fixed the Court may make an order declaring that he shall be debarred from claiming any right to, or interest in, the property in suit.

(3) Any plaintiff or defendant against whom an order is made under this rule may apply to have it set aside and the provisions of sub-rules (2) and (3) of rule 2 shall apply mutatis mutandis to such application." (w.e.f. 16-9-2023)