Order XXV Rule 2 CPC: Effect of Failure to Furnish Security for Costs
Order XXV Rule 2 of the Code of Civil Procedure, 1908 explains what happens when a plaintiff fails to provide security for costs within the time fixed by a civil court, and when a dismissed suit may be restored.
Meaning and purpose of Order XXV Rule 2
Security for costs is an assurance ordered by the court to protect a defendant against costs incurred or likely to be incurred in defending a suit. Order XXV Rule 1 CPC governs when such security may be directed; Rule 2 provides the consequences of failing to furnish it.
Legal provisions under Order XXV Rule 2 CPC
Sub-rule (1): Dismissal for non-compliance
If the required security is not furnished within the time fixed, the court shall dismiss the suit unless the plaintiff or plaintiffs are permitted to withdraw it.
Sub-rule (2): Setting aside dismissal
A plaintiff whose suit was dismissed under this rule may apply to set aside the dismissal. If the court is satisfied that sufficient cause prevented the plaintiff from furnishing security within the permitted time, it shall set aside the dismissal on such terms concerning security, costs or otherwise as it considers fit and fix a date for proceeding with the suit.
Sub-rule (3): Notice to defendant
The dismissal cannot be set aside unless notice of the application to restore the suit has been served on the defendant.
When can a dismissed suit be restored?
The plaintiff must show sufficient cause for not furnishing the security within the prescribed time. This means a reason the court accepts as adequately explaining the failure; merely wishing to continue the case is not enough. The court may impose conditions relating to the security, costs or other appropriate matters.
How to apply for restoration
The plaintiff may file an application before the court that dismissed the suit under Order XXV Rule 2(2), explaining the circumstances that prevented timely compliance and providing supporting material. Notice must be served on the defendant under Rule 2(3). If sufficient cause is proved, the court sets aside the dismissal on appropriate terms and fixes a date for the suit to continue.
Difference between Rule 1 and Rule 2 of Order XXV
Rule 1 concerns the court's power to require security for costs from a plaintiff. Rule 2 concerns dismissal for failure to provide that security and the procedure for setting aside such dismissal.
Important points
Dismissal under this rule follows non-compliance with an order for security, subject to the court permitting withdrawal. Restoration is not automatic: the plaintiff must establish sufficient cause, and notice to the defendant is mandatory. The operation of the provision should also be checked against applicable state or High Court amendments and procedural rules.
Official legal reference
Read the Code of Civil Procedure, 1908 on India Code (official PDF), First Schedule, Order XXV, Rules 1 and 2. The explanation above paraphrases the central statutory provision; consult the official text for exact wording.