Section 35B of the Code of Civil Procedure, 1908 deals with the consequence of a party failing to take a step that the court required on a fixed date. Each option can be tested against what this specific provision actually empowers the court to do.
- Impose costs as a precondition for allowing further prosecution: Section 35B was inserted specifically to penalise delay caused by a party's default in taking a required step, by empowering the court to award costs to the other side and to direct that the defaulting party may not proceed further with the suit or defence until those costs are paid. This is the precise mechanism the section creates.
- Dismiss the suit: Section 35B does not provide for outright dismissal of the suit merely because a party failed to take a procedural step on a date. Dismissal for default is dealt with under separate provisions, not under Section 35B, which is concerned only with costs for delay.
- Proceed with the suit without imposing any condition: this would defeat the entire object of Section 35B, which was inserted precisely because courts were allowing defaulting parties to continue without any consequence, causing chronic delay.
- Grant adjournment as a matter of right: Section 35B, read with the general scheme of the CPC, treats adjournments as something within the court's discretion and often subject to costs, not as an entitlement a defaulting party can claim as of right.
Only the first option correctly describes the power Section 35B actually confers, using costs as a check on delay, rather than dismissing the suit outright, allowing default without consequence, or treating adjournment as an automatic right.
So the correct answer is impose costs as a precondition for allowing further prosecution.