' These appeals have been placed before me upon a difference of opinion between my learned brothers Rana Bhagwan Das, J. And Ghulam Nabi Soomro, J. Such divergence of opinion is essentially on a limited aspect. Ghulam Nabi Soomro, J. Has dismissed the appeals with no order as to costs, whereas Rana Bhagwan Das, J, has dismissed the appeals with costs. As a Referee Judge I have to determine the limited question i,e, having been dismissed, whether these appeals ought to warrant dismissal with or without costs.
2. The facts of the case are sufficiently detailed in the opinions of both the learned Judges, who had earlier heard the matter, and it would serve no useful purpose to repeat the same.
3. The law pertaining to costs in civil cases can be found codified in sections 35 and 35-A of the C.P.C. The costs, that can be awarded' under section 35 are the actual costs whereas the ones awardable under section 35-A are compensatory costs in respect of false or vexatious claims or defences. In their wisdom the law-makers have maintained this clear distinction between the fields occupied by sections 35 and 35-A, respectively.
4. Both the provisions of sections 35 and 35-A, confer discretionary powers upon a Court of law to award costs, if and when the pre-conditions prescribed therein are met. The discretion of course cannot be exercised unreasonably, arbitrarily and unjustly, and on the contrary must be exercised objectively and reasonably strictly in accordance with law.
5. The discretion to award costs under either of the provisions of law under discussion (i,e, sections 35 or 35-A) are no doubtava. Liable to the original Court hearing the case, however, the Appellate Court hearing the matter has been denuded with the power to award compensatory costs under section 35-A, in view of the bar contained in the proviso to Order 41, rule 33 of the C.P.C. Not only this, but section 35-A also itself has excluded "an appeal" from its purview as it provides "section 35-A(1) if in any suit on other proceedings, (including an execution proceedings), not being an appeal, ..." (Underlined for emphasis). In Muhammad Hanif Shibli v. Deputy Settlement Commissioner, Gojra at Lyallpur 1983 SCMR 1273, the High Court while dismissing an intra-Court appeal, nothing harassm ent caused by the appellant to the respondent, awarded exemplary costs.
The Supreme Court found that such exemplary costs could not be awarded by an Appellate Court in view of the exclusion in section 35-A and the bar contained in the proviso to order 41, rule 33. The order of burdening the appellant with exemplary costs was set aside. Subsequently, the Supreme Court of Azad Jammu and Kashmir in Sharaf Din v. Mst. Maqbool Jan 1995 MLD 1602 was pleased to take the same line as taken by our Supreme Court in Muhammad Hanif Shibli (cited supra). In fact the Court went a step ahead so as to hold that the bar under the proviso to Order 41, rule 33 in awarding exemplary costs under section 35-A not only applies to appeals but also to revisions. The Court went on to further hold that the costs under section 35 are to be the actual costs; accordingly, the costs of Rs,14,000 under section 35, awarded by the appellate/revisional Court, which were arbitrary and partook the character of exemplary costs were also set aside.
' Thereafter, in Azad Government v. Syed Muhammad Afzal Shah 1996 MLD 260 the Supreme Court of Azad Jammu and Kashmir took the same view, while holding that the power to award exemplary costs under section 35-A were not available to the High Court in terms of order 41, rule 33, C.P.C., which equally applied to revisions; the Court was also pleased to hold that under section 35 no exemplary costs could be awarded but only actual costs could be awarded.
6. The discussion as aforesaid would amply reveal that the Appellate Court has no power to award costs under section 35-A, which deals which vexatious, meritless and frivolous claims and defence.
In other words, if the Appellate Court comes to the conclusion that the appeals is false take, frivolous or vexatious, it would have no power and authority to award costs on that count. Such is the clear mandate of law.
7. In Khurshid Ahmed Naz Afridi v. Bashir Ahmed 1993 SCMR 639 Saleem Akhtar, J., as he then was, wrote for the Court and found the object behind award of costs to be two-fold i,e, one to compensate and the other to penalize. In this respect the relevant extract from the judgment is reproduced as follows:-- "Costs are granted to a person who succeeds in a litigation. Such costs are to be paid by the unsuccessful party. The object of granting such costs may be two-fold. One, to compensate the aggrieved party, who in successful assertion/defence of his right, has been put to unnecessary litigation and harassm ent. The other object is to penalise a party who may have initiated any action or passed the order in complete disregard of the obvious and glaring facts and provisions of law which a reasonable person would not do unless he acts with highhandedness, arbitrarily, mala fide or with ulterior motive. Where a person acting in his official capacity in complete disregard of the clear records and documents and having no authority to pass order of a particular nature, passes such an order, then while setting aside such order the Court awards costs to be paid by him personally, it will be proper exercise of discretion. But such discretion is based on the facts and circumstances of the case and conduct of parties. As the order granting costs is discretionary, it should be based on well-recognized principles of justice and equity and should not be fanciful, arbitrary, whimsical or capricious. Such discretion is exercised with regard to the party that will be charged with costs, the amount and the manner in which costs are to be paid. The discretion exercised by a Court should not be lightly interfered with in appeal unless well-settled principles are violated.
' The above judgment of the Hon'ble Supreme Court is an analysis of the cumulative effect of sections 35 and 35-A. The judgment does not dispel or offset the settled view regarding the distinct fields occupied by sections 35 and 35-A (see paras. 5 and 7 above). Section 35 deals with actual costs. The said section 35 does not deal with costs on account of false, frivolous and vexatious claims or defences, which is only dealt by section 35-A. Actual costs under section 35 imply the statutory allowance which a successful party is entitled to get from the losing party to reimburse himself for expenses incurred in defending or prosecuting the proceedings. The idea here is not to award any bonus to the successful party [see AIR 1976 All. 111 and AIR 1977 Guj. 140 (FBI. The Civil Procedure Code as originally enacted was found to lack in providing costs for false and vexatious claims/defences. It was through the Civil Procedure (Amendment) Act, 1922 that section 35-A was inserted so as to empower the Court to award costs in respect of false or vexatious claims or defences. 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 scrutinized. 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.
8. I have tried to convince myself to come to the conclusion that even if the Appellate Court enjoys no power to award costs for vexatious appeals under section 35-A, such power could be exercised under section 35 or even under the inherent powers i,e, under section 151 read with section 107(2) of the C.P.C. However, and unfortunately I cannot come to the said conclusion as explained hereinbelow.
9. The powers of the Appellate Court are very wide. Section 107(2) of the C.P.C. When read alongwith section 151 of C.P.C. Equips the Appellate Court with the power to pass all such orders which would be necessary to meet the ends of justice, and such powers can be exercised by the Appellate Court in the same manner as could be exercised by the trial Court (see N.-W.F.P. Government v.
Abdul Ghafoor Khan (PLD 1993 SC 418) and Province of Punjab v. Abdul Majid (1997 SCMR 1692).
However, the inherent powers under the Code cannot be exercised when there is some other specific provisions to cater for such eventuality (see Karamatullah Khan v. Government of West Pakistan) PLD 1967 Lah. 171, Conforce Ltd. v. Syed Ali Shah (PLD 1977 SC 599) and Manohar Lal v. Seth Hira Lal (AIR 1962 SC 527, para. 39). The latter principle would apply even more evidently when the specific provision is in the shape of an exclusion or bar to the exercise of powers. 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.
10. In para. 3 of his opinion Rana Bhagwan Das, J. Has found the appeals to be absolutely frivolous and had observed that the same did not even deserve admission. The learned Judge has observed that on such account i,e, appeals being absolutely vexatious, he was inclined to award special costs against the appeals, however, he declined to do so as he observed that "perhaps special compensatory costs cannot be awarded in an appeal". To the latter extent the learned Judge is absolutely correct (see paras. 5 and 6 supra). However, once the learned Judge had found the appeals to be absolutely vexatious/frivolous, with due respect and utmost humility, no costs could have been awarded for such reasons as done by him since that amounts to awarding costs under section 35-A; which deals with costs for vexatious and frivolous defences/claims; and which clearly falls outside the jurisdiction of the Appellate Court, as already discussed above. I am afraid the law on this point is quite inadequate. There appears to be every conceivable reasons to equip the Appellate Court with the powers to award costs, under section 35-A for frivolous and vexatious appeals. However, till such time an amendment is introduced the Courts will have to abide by the express mandate of law.
11. The upshot of the above discussion is that I agree with the opinion of Ghulam Nabi Soomro, J.
And would dismiss the appeals with no order as to costs.