Step 1: Understand the purpose.
Section 35B of the Code of Civil Procedure, 1908 is a rule meant to stop parties from causing needless delay in a case. It encourages everyone to do their part on time so trials move faster.
Step 2: Read what the section covers.
The section applies when a party fails to take a step that the court had asked it to take on a fixed date. The question is what the court may do in that situation.
Step 3: Find the power given.
Section 35B allows the court to order the defaulting party to pay costs. These costs are paid to the other side to make up for the delay and the wasted time.
Step 4: See the real aim.
The idea is not to punish by throwing out the case, but to discourage delay through a money penalty. It keeps the case on track without ending it.
Step 5: Remove the wrong options.
Granting adjournment as a right (option 1) is not what the section says. Dismissing the suit (option 2) is too harsh for this provision. Proceeding ex-parte (option 4) is a different remedy under different rules, not Section 35B.
Step 6: State the answer.
So the court may impose costs on the defaulting party. \[ \boxed{\text{Impose costs on the defaulting party.}} \]