Lemuir Air Express IATA Cargo Agent vs Air India

V. Kanagaraj, J.—The above appeal suit is directed against the judgment and decree dated 3.2.1987 made in O.S. No. 4820 of 1984 by

the II Assistant Judge, City Civil Court, Madras. The appellant is the second defendant in the suit and the respondent/plaintiff has filed the suit for

recovery of a sum of Rs. 96,546.33 with interest and costs against one Dewan International as the first defendant (which is not a party to the

appeal) and the appellant as the second defendant.

The suit has been filed on averments such as, that the plaintiff is a Government Corporation constituted under the Air Corporation Act, 1953;

that the first defendant carries on business and it is a proprietory concern; that the second defendant is a IATA recognised Cargo agent; that the

plaintiff in the course of its air carriers business with the first defendant entrusted two consignments to be air freighted from Madras to Rome; that

the second defendant issued air way bills for both the consignments, the first one dated 24.3.1981 and the second one dated 23.3.1981; that as

per the terms of the AWB, the plaintiff, by their letter dated 29.5.1981, informed the first defendant that the consignment covered under AWB

098-3220 8282, dated 24.3.1981 had not been taken delivery of by the consignee and also regarding the second consignment they informed the

first defendant in the same manner marking a copy of the letters to the second defendant also. After many communications to the first and second

defendants ultimately the plaintiff was informed by the delivery carrier at Rome that the subject consignments had been abandoned to the local

customs authorities in Rome and that the shipment was likely to be auctioned and the plaintiff requested to arrange payment of freight charges

payable by the first defendant; that ultimately they were given to understand that both the consignments were confiscated by the Italian customs as

per their laws due to non-clearance by the consignees and they are stating that the matter has been closed; that the freight charges for the first

consignment came around Rs. 27,865 and the same for the second consignment was at Rs. 33,279; that inspite of many demands made to collect

the said amount, since the defendant did not come forward to pay the same in favour of the plaintiff, ultimately the plaintiff had been left with no

option but to file a suit for recovery of a total sum of Rs. 95,546.33 being the freight charges, storage and other charges inclusive of interest at

18% per annum from the date of AWB payable by the defendant jointly and severally.

In the written statement filed on the part of the first defendant and the second defendant separately, they would not only generally deny the

allegation of the plaint, but also put the plaintiff to strict proof of some of the allegations of the plaint. They would also specifically rebut the

allegations and ultimately pray to dismiss the suit with costs.

The trial Court based on the pleadings, after having framed four issues for determination of all the questions that arose in the suit, ordered the

trial to be conducted, in which, on the part of the plaintiff he would examine one witness for oral evidence and mark 22 documents as Ex.A-1 to

Ex.A-22 for documentary evidence. Likewise, the defendant would examine two witnesses and no documents were marked on their side.

The learned trial Judge then having discussed the facts and circumstances as pleaded by parties, in the light of the evidence placed on record

and after appreciating the same in the manner expected by law, would ultimately arrive at the conclusion to decree the suit with costs as prayed for

against the first defendant and dismiss the suit against the second defendant without costs as per its judgment and decree dated 3.2.1987. It is only

the second defendant to the suit having become aggrieved that he has not been provided with the costs by the lower Court while dismissing the suit

against him, has come forward to prefer the above appeal on grounds brought forth in the memorandum of appeal such as

(1) that the lower Court has failed to note that a successful party is entitled to its costs;

(2) The Court below ought to have granted exemplary costs;

(3) The lower court ought to have seen from the evidence let in, in the case that the claim of the respondent against the appellant was vexatious and

false, and

(4) that the lower Court has committed grave illegality in not allowing the costs for the appellant, and failing to give any reason for the same.

During arguments, the learned Counsel appearing on behalf of the appellant pointing out to Section 35(2) of Civil Procedure Code, wherein it is

contemplated that, ""Where the Court directs that any costs shall not follow the event, the Court shall state its reasons in writing"". Learned Counsel

would also cite a judgment delivered by the Apex Court in Kali Prasad Singh Vs. Ram Prasad Singh and Others, , wherein it is held that ""the costs

must follow the event"" and would submit that it is the costs that follow the event and since the suit filed against this second defendant had been

dismissed, the lower Court ought to have allowed the costs and besides refusing to allow the costs, the Court below has not even assigned reasons

in compliance with Section 35(2) of CPC and would pray to allow the appeal as prayed for.

Section 35(2) does not in any manner contemplates to allow the costs in favour of the appellant and a plain reading of the Section would clearly

reveal that it only seeks the Court to assign reasons in writing for not allowing the costs.

There is no denying of the fact that the appellant/second defendant is also involved in the transit of goods from Madras to Rome and in fact the

appellant has issued the air way bills for both consignments that were air freighted from Madras to Rome. Therefore, the second defendant is a

necessary party to the suit proceedings. Since the suit should not suffer for non-joinder, the plaintiff with abundant caution has impleaded the

second defendant as a party to the suit, but at the same time the Court points out that it is only the first defendant who agreed to pay the freight

charges and not the second defendant, as a result of which, it has rightly held that the second defendant was not liable to pay the freight charges as

it is demanded generally by the plaintiff from both the defendants and therefore, ultimately the Court has decreed the suit as against the first

defendant with costs and dismissed the same as against the second defendant without costs. There is absolutely nothing wrong in the lower Court

arriving at a conclusion, deciding in the manner as aforementioned and the lower Court has assigned proper reasons for arriving at such

conclusions. It is a genuine grievance of the plaintiff that freight charges were not paid, whereas in the act of sending the goods through the

plaintiff''s air corporation both the first and second defendants have taken active participation and hence both were the necessary parties to the suit.

For that matter, since the case of the plaintiff is genuine, it cannot be mulcted with the costs, just for the simple reason that the second defendant

was made a formal party or was impleaded as a necessary party to the suit proceedings.

The reasons that are expected u/s 35(2) from the lower Court for not allowing the costs are implied in paragraph 14 of the judgment, though the

same has not been specifically spelt out on the part of the lower Court. Therefore, it cannot be said that the lower Court has failed even to assign

the reasons in writing.

In result, there is no proper basis for the above appeal, nor is there any reason on the part of this Court to interfere with granting the relief

sought for in the appeal. In result, the above appeal fails and the same is dismissed. No costs.