SINDH INDUSTRIAL TRADING ESTATES through its Secretary, Karachi vs Mst.

ORDER

' HAMID ALI MIRZA, J.---This is a civil petition for leave to appeal directed against the judgment dated 6-11-1998 passed by learned Division Bench of Sindh High Court, whereby High Court Appeal No,57 of 1994 (Sindh Industrial Trading Estates v. Mst. Qamar Hilal and 5 others was dismissed, holding that special costs for vexatious and frivolous defence/claim would clearly fall outside the jurisdiction of the appellate Court in terms of section 35-A of C.P.C.

2. The brief facts of the case are that respondent No,1 filed Suit No,8 of 1988 against respondents 2 to 6 wherein petitioners were not made party who came to know about filing of the said suit in December 1992 consequently applied under Order I, Rule 10, C.P.C. To become party to the suit, but the plaintiff/respondent No,1 filed an application under Order XXIII, Rule 1, C.P.C. For withdrawal of suit, which application was allowed by the learned Single Judge of the High Court on 31-10-1993 stating therein that Mr. Samad Khan had no locus standi to object to the withdrawal of the suit. The petitioners applied for compensatory costs under section 35-A, C.P.C., but the application was dismissed on 19-12-1993. The petitioners filed High Court Appeal No,57 of 1994 against the order dated 19-12-1993 passed by the learned Single Judge, which too was dismissed by the learned Division Bench, when one of learned Judges (Ghulam Nabi Soomro, J.) dismissed the appeal with no order as to costs, while the learned second Judge (Rana Bhagwan Das, J.) of the Bench while agreeing with the order of dismissal of the appeal, ordered dismissal of the appeal with costs. In view of difference of opinion with regard to dismissal of the appeal with or without costs between the two learned Judges, the matter was referred to third Referee Judge (Dr. Ghous Muhammad, J.) who, as per impugned order, agreed with Ghulam Nabi Soomro, J., holding dismissal of the appeal with no order as to costs.

3. We have heard the learned counsel for the petitioners, perused the record and case-law cited.

4. The contention of the learned counsel is that the word "party" in section 35-A, C.P.C. Should be construed as to include all those who ought to have been made parties by the plaintiff but were not made and a fortiori when such persons themselves apply to become parties, the suit filed so is withdrawn by the plaintiff and such conduct of the plaintiff would amount that the claim of the plaintiff was false and vexatious within the meaning of section 35-A, C.P.C. Liable to special compensation costs. The learned counsel has placed reliance upon (1970) 2 All England Reports 871 at 891 wherein Lord Diplock has observed that statutory provisions should be given literal and purposive approach in construction. Section 35-A reads as follows:-- "35-A.Compensatory costs in respect of false or vexatious claims or defence.---(1) If in any suit or other proceeding, including an execution proceeding, not being an appeal, any party objects to the claim or defence on the ground that the claim or defence or any party of it is, as against the objector, false or vexatious to the knowledge of the party by whom it has been put forward, and if thereafter, against the objector, such claim or defence is disallowed, abandoned or withdrawn in whole or in part, the Court, if the objection has been taken at the earliest opportunity and if it is satisfied of the justice thereof, may after recording its reasons for holding such claim or defence to be false or vexatious, make an order for the payment to the objector by the party by whom such claim or defence has been put forward, of costs by way of compensation.

"(2) No Court shall make any such order of payment of an amount exceeding five thousand rupees or exceeding the limits of its pecuniary jurisdiction, whichever amount is less: ' Provided that where the pecuniary limits of the jurisdiction of any Court exercising the jurisdiction of a Court of Small Causes under the Provincial Small Causes Courts Act, 1887, and not being a Court constituted under that Act, are less than two hundred and fifty rupees, the High Court may empower such Court to award as costs under this section any amount not exceeding two hundred and fifty rupees and not exceeding those limits by more than one hundred rupees: ' Provided further that the High Court may limit the amount which any Court or class of Courts is empowered to award as costs under this section.

"(3) No person against whom an order has been made under this section shall, by reason thereof, be exempted from any criminal liability in respect of any claim or defence made by him.

"(4) The amount of any compensation awarded under this section in respect of a false or vexatious claim or defence shall be taken into account in any subsequent suit for damages or compensation in respect of such claim or defence."

5. The above provisions of law specifically bar award of compensationary costs in respect of false and vexatious claims or defences in case of an appeal. The word "party in Corpus Juris Secundum has been defined as follows:-- ' "With reference to judicial proceedings, the word 'party' is generally used as meaning one of two opposing litigants, he or they by or against whom a suit is brought, whether at law, or in equity, the plaintiff or defendant, whether natural or legal persons."

' Ballentine's Law Dictionary defines the word "party" as follows:-- ' "A person who had engaged in a transaction or made an agreement. One of the opposing litigants in a judicial proceeding -- a person seeking to establish a right or one upon whom it is sought to impose a corresponding duty or liability, including any person by whom or against whom a suit, either at law or in equity, is brought. For the purposes of a right to appeal, persons named as parties in the original pleadings and persons who subsequently come or are brought into the action for the purpose of seeking relief or of being subjected to relief..."

Parties are the persons whose names appear on the record of the suit as plaintiff or defendant. The words "any party" in legal parlance relate to the party in the proceedings and the person who has applied the Court to become party cannot be so-called as party unless orders are passed by the Court allowing the request for his addition as party to the proceedings. It would he the judicial discretion of the Court to be exercised under the law to allow the request of the applicant, allowing or disallowing him to be party to the proceedings, therefore, a person cannot be termed to be party to the suit or other proceedings unless he is so made under the orders of the Court, therefore, the person not party to the suit or proceedings could not object to the claim and defence of the plaintiff alleging to be false and vexatious in terms of section 35-A, C.P.C. The learned Referee Judge in his judgment, after discussing and referring the case-law, has observed at page 6:-- ' "Accordingly, when a Court awards costs on the score that the case is false or frivolous, it will necessarily do so under section 35-A. It is also a settled principle of interpretation of statute that the substance and not the form of actions and events have to be scrutinised. So, accordingly even where the Court awards costs for false or vexatious claims/defences by stating it to be under section 35 it will necessarily be in substance the costs under section 35-A."

' At page 7 of the judgment it has been observed:-- ' "Where the Code specifically debars the appellate Court from awarding costs in the case of frivolous and false appeals (see section 35-A read with Order 41, rule 33), it would be quite inconceivable to imagine that the inherent powers under the Code could be resorted to for such purpose."

However, once the learned Judge has found the appeal to be absolutely false and vexatious, no costs could be awarded for such reasons as it would amount to awarding costs under section 35- A which provision dealt with costs for false or vexatious in case of suit or other proceeding (including execution proceedings) and not an appeal, consequently award of compensatory costs in appeal would clearly fall outside the jurisdiction of the appellate Court.

6. In view of the aforesaid reasonings, considering the legal provisions of law, we find no merits and substance in the contention of learned counsel for the petitioner, consequently leave to appeal is refused and the petition is dismissed.