Step 1: Read the question.
Under Section 35B of the CPC, 1908, if a party fails to take a required step on the fixed date, what can the court do.
Step 2: Understand the purpose.
Section 35B was added to stop delays and to make parties follow the court's directions on time.
Step 3: Learn the power.
When a party causes delay by not doing a required act, the court may order that party to pay costs to the other side.
Step 4: See how the costs work.
The court may make payment of these costs a condition before that party can continue with the suit or the defence.
Step 5: Check the other options.
The section does not order dismissal of the suit. It does not let the suit go on with no condition. And adjournment is not a matter of right.
Step 6: Final answer.
So the court may impose costs as a precondition for allowing further prosecution.
\[ \boxed{\text{Impose costs as a precondition for allowing further prosecution.}} \]