Pt. Hardawari Ram vs Dr. Vidya Sagar

Mehar Shingh, J.—The only question for consideration in this second appeal is that of costs. The Appellant brought a suit for pre-emption against the Respondent. The matter was taken to the High Court in second appeal on a preliminary question. The High Court accepted the appeal and remanded the case for retrial on merits. In the matter of costs it ordered that "the other costs including the costs of the first appellate Court will be costs in the cause and shall abide the event".

In the end the pre-emption suit of the Appellant was dismissed on appeal by the High Court and the order as to costs by the High Court was that the parties shall bear their own costs throughout. It means that ultimately the successful party in the suit was the Respondent.

The Respondent then made an application in the executing court for realization of the costs under the earlier order of the High Court in the appeal on the preliminary question. The executing court disallowed his application, but on appeal the learned District Judge has reversed that order and has directed the executing court to proceed in execution for realization of those costs from the Appellant. It is against the appellate order that the Appellant has come in second appeal before this Court.

Sub-Section 2 of Section 35, Code of Civil Procedure, pro vides that "where the Court directs that any costs shall not follow the event, the Court shall state its reasons in writing". The normal rule thus is that the costs follow the event, in other words that the successful party is entitled to costs, unless the Court chooses to disallow costs to it, in which case it has to give reasons for the same in writing. In Reid Hewitt & Co., v. Joseph 1918 AC 717 (A), the House of Lords has held that

the expression ''the costs shall follow the event'' in the second proviso to Order XLV, Rule 1, which regulates the costs in jury actions, means that the party who on the whole succeeds in the action get the general costs of the action,

The meaning of the expression "costs in the cause" was considered in American Trading Co. Vs. Bird and Co., and the learned Judges held that when the Judge either in Chambers or on motion makes order that the costs of the application or motion shall be costs in the cause, he makes an order that those costs should be received by the party who gets the general costs of the action, and it is not open to the Judge who hears the cause to interfere with that order.

What this means is that when in an interlocutory application or in an appeal from a preliminary question the order is that the costs shall be costs in the cause, then such costs follow the general costs of the action, that is, if the successful party gets the general costs of the action, that party will also get costs in such an application or appeal and if the successful party is disallowed general costs of the action, it will also not be allowed costs I in such an application or appeal.

In other words, while the discretion as regards general costs of the action remains vested in the Judge, the costs in the previous application or appeal is no longer a matter of discretion with the Judge and shall be governed by the discretion exorcised by him in regard to the general costs of the action.

The learned Counsel for the Appellant, contends that in the present case the High Court allowed costs in the cause and therefore when ultimately in the action the High Court with regard to the general costs passed an order that the parties shall bear their own costs throughout that order settles also the matter of costs in the previous appeal arising out of a preliminary question.

If in the appeal from a preliminary question the order of the High Court was only confined to saying that the costs were to be costs in the cause, the argument of the learned Counsel would be acceptable. However, the order of the High Court is not that, but what it says is that "the other costs including the costs of the first appellate Court will be the costs in the cause and shall abide the event". It is apparent that there appears to be some inconsistency in this order inasmuch as the costs could not be in the cause and at the same time abide by the event.

The learned Counsel further urges that the word ''event'' means no more than the word ''result'' in this context. It is not correct. The meaning) of the expression ''costs shall abide the event'' as explained above is quite clear and that is that the successful party must get the costs.

Where the order is that the costs shall abide the result, the whole matter is in the discretion of the Court, in this way that not only has the Court discretion to allow or disallow the general costs of the action, but also to allow or disallow costs in an interlocutory application or appeal from a preliminary question. The two expressions do not mean the same thing.

There is thus inconsistency in the order of the High Court in regard to costs, but if the argument of the learned Counsel for the Appellant is accepted it would render part of the order of the High Court redundant, because if the costs in the appeal from the preliminary question are to be according to the order as to costs in the final appeal, the order that the costs shall abide the event can have no meaning in the circumstances.

So the only reasonable reading of the order of the High Court is that the successful party in the suit, that is, the Respondent is entitled to costs in the appeal from preliminary question as those costs arc to abide the event and they also become costs in the cause. This reading of the order of the High Court makes that order consistent and avoids redundancy In a part of that order. The consequence is that the successful party is entitled to costs according to the order in the appeal from the preliminary question and so the decision of the first appellate Court is correct.

This appeal fails and is dismissed with costs.