P L D 1956 Lahore 494 (PLP)

The second and the third objections to the award have, however, force. The real point which the arbitrators had to decide was whether on account of Muhammad Rafiq's failure to execute the pre‑emption decree, Muhammad Rafiq lost all rights in the preempted land and Captain Muhammad Alain and his sons retained their rights as owner and occu pancy tenants. This point the arbitrators did not decide. The award gives no reasons for the decision and simply states the decree that the arbitrators are passing. (I call it a decree because the operative part of the award is to be the basis of a decree). Although the arbitrators are not bound to state reasons for their conclusion they must at least state theirs conclusion on the point or points in dispute. The decree which they have passed shows that they had not decided the point in dispute at all. If Muhammad Alam was the owner of the property the question of his paying Rs. 2,500 did not arise. If, on the other hand; he was not the owner of the property, the arbitrators could not grant him possession on payment of any sum, for it was not the plea of Muhammad Alam that even if he was not found to be owner he should have, for some reason, to be given possession of property on payment of any sum. Instead of deciding the matter in dispute the arbitrators have passed a kind of compromise order, which they were not entitled to pass. The arbitrators have also ordered that the mortgage in favour of Captain Muhammad Alam should stand redeemed, a matter which was not the subject‑matter of either of the two suits and which had not been referred to arbitration. Learned counsel for the petitioner urges that the award, in so far as it relates to the mortgage, is separable. I do not see how the Court can separate it. Whether Captain Muhammad Alam pays Rs. 2,500 or not the mortgage is to stand redeemed. The award makes no reference to the rights of the sons of Captain Muhammad Alam. It is all very well to say that Captain Muhammad Alam and his sons are really one person but in law they are not, and the sons are entitled to have their rights adjudicated. The award makes no reference to them at all. Learned counsel for the petitioner contends that even if second and third objections be good the award could not be set aside on these grounds and the only jurisdiction possessed by the Court was to remit the award for reconsideration of the arbitrators. Reliance is placed in this connection on sections 30, 16 and 17 of the Arbitration Act, which I quote below:‑ Section Section

30. An award shall not be set aside except on one or more of the following grounds, namely:‑ (a) that an arbitrator or umpire has misconduct himself or the proceedings: (b) that an award has been made after the issue of an order by the Court superseding the arbitration or after arbitration proceedings have become invalid under section 35; (c) that an award has been improperly procured or is otherwise invalid: Section

17. Where the Court sees no cause to remit the award or any of the matters referred to arbitration for reconsideration or to set aside the award, the Court shall, after the time for making an application to set aside the award has expired, or such application having been made after refusing it, proceed to pronounce judgment according to the award, and upon the judgment so pronounced a decree shall follow, and no appeal shall lie from such decree except on the ground that it is in excess of, or not other wise in accordance with, the award. Section 16. (1) The Court may from time to time remit the award or any matter referred to arbitration to the arbitra tors or umpire for reconsideration upon such terms as it thinks fit‑ (a) where the award has left undetermined any of the matters referred to arbitration or where it determines any matter not referred to arbitration and such matter cannot be separated without affecting ‑ the determination of the matters referred; or (b) where the award is so indefinite as to be incapable of execution; or (c) where an objection to the legality of the award is apparent upon the face of it. (2) where an award is remitted under subsection (1) the Court shall, fix the time within which the arbitrator or umpire shall submit his decision to the Court Provided that .any time so fixed may be extended by subsequent order of the Court. (3) An award remitted under section (1) shall become void on the failure of the arbitrator or umpire to reconsider it and submit his decision within the time fixed." Under section 30 an award can be set aside only if it is covered by clause (a) or (b) of the section or is otherwise invalid. Under section 17, if it is not found to be invalid a decree must be passed in accordance with it. Under section 16 it could be remitted for reconsideration if it suffers from any of the, defects mentioned in that section. Learned counsel for the petitioner argues that a defect of the kind mentioned in section 16 does not make the award invalid and that the decree must be passed on its basis unless it is remitted. According to learned counsel, there are three kinds of awards:‑ (1) valid; (2) invalid; and (3) those which are neither, valid nor invalid and are liable to be remitted. I have no hesitation in repelling the contention of learned counsel. An award which is not valid must be invalid. There is no third category. The legislature has conferred a jurisdiction on the Court to get the defects in some of the invalid awards cured i e., if the defect is covered by the provisions of section

16. It will be observed that in the Arbitration Act of 1899, there was no limitation on the power of the Court to remit the award. It could be remitted for reconsideration whatever the defect in the award. Section 13 of the Act of 1899, for which the present section 16 has been substituted, ran thus " (1) The Court may, from time to time, remit the award to the reconsideration of the arbitrators or umpire. (2) Where an award is remitted under subsection (1), the arbitrators or umpire shall, unless the Court otherwise directs, make a fresh award within three moths after the date of the order remitting the award." Under this section the Court had power to remit the award whatever the defect from which it was suffering though in practice awards were remitted to an arbitrator who had acted mala‑fide. The jurisdiction to remit the award, however, was there and it had been held in a Number of cases that if the misconduct of the arbitrator be of a technical kind the award could be remitted for reconsideration vide, Firm N. D. Jaggi & Co. v. Firm Ganga Ram Vishendas (A I R 1924 Sind 132); Hari Singh Nehai Chand v. Kankinarah Co. Ltd. (A I R 1921 Cal. 657 ), Crompton & Co. Ltd. and Mohan Lal Re. Arbitration Between (1 L R 41 Cal. 313) and Messrs. Louis Dreyfus & Co. v. R. K. Rajagopala Aiyar & Bros. (A I R 1923 Mad. 222). In these cases it had been assumed, as is expressly stated in Hari Singh Nehai Chand v. Kankinarah Co. Ltd., that" the Court has authority either to set aside the award or to remit it to the arbitrators." The Arbitration Act is based on the English Law of arbitration (which is now consolidated in the Arbitration Act of 1950, (14 George VI, Chapter 27) and so far as the law in England is concerned, there can be no doubt that setting aside and. remission are regarded as alternative courses to be adopted with respect to invalid awards. It is sufficient to quote here the following extracts from Russell on Arbitration, (page 263 of 1952 Edition):‑ " The Court has a general discretion to remit an award to the reconsideration of the arbitrator or umpire. This discretion is in general exercisable upon substantially the same grounds as will justify the setting7aside of an award. Thus the grounds for remission have been stated as follows:‑ (1) Where the award is bad on the face of it; (2) Where there has been an admitted mistake and the arbitrator himself asks that the matter may be remitted; (3) Where there has been misconduct on the part of the arbitrator; and (4) Where additional evidence has been discovered after the making of the award." In a case decided before the 1889 Act, the grounds of review of an award were stated to be corruption or fraud', error appearing on the face of the award, mistake admitted by the arbitrator and accompanied by a request for review and excess of jurisdiction; but in so far as that case suggests that corruption on the part of an arbitrator would be a ground for remission, it is submitted that it would not be followed. It is difficult to conceive a case where an award would be remitted to an arbitrator against whom, for instance, a charge of fraud had been made. In such a case it would be more grope; that the award should be set aside indeed setting aside has been held to be the correct remedy even where the arbitrator had‑ acted bona‑fide, the complaint made against him being such that it is probable that his mind will be prejudiced against the party applying for the remission. Both remedies are discretionary; and in considering cases upon remission in particular it should be remembered that the section gives the Court a complete discretion in the matter. The cases merely illustrate how in particular instances the Courts have exercised their discretion. Counsel for the railway company seem to me to treat the authorities they relied upon as though they cut down the jurisdiction of the Court. The jurisdiction of the Court is statutory, and cannot be increased or cut down in that way. The reported decisions of the Court only show the principles, which have guided the Court from time to time in exercising its jurisdiction, and, though they may afford a valuable guidance, they do not restrict either the jurisdiction of, the Court in deciding other cases, or the duty of the Court to look at the facts in each particular case. It will be observed that even in the case of misconduct a jurisdiction to remit exists. As I have explained in Nawab Din v. Abdur Rashid (1) the power to remit an award was granted to the Courts in England by section 8 of the Common Law of Procedure Act of 1854. Before that it had been held that there was no power in the Court to refer the award back to the arbitrators for consideration in cases where there was no such provision in the agreement of arbitration. As a result, all awards, which can now be remitted, were set aside on the ground of invalidity. If, I were to accept the argument of learned counsel for the petitioner then, even if the award were to result in a decree, which would be, on the face of it, illegal, for instance, a decree of a kind which neither Court nor arbitrator could pass, the award would be valid and a decree would have to be passed. The award might grant a decree for the custody of the wife to the husband. It may pass a decree for the defendant being subjected to physical violence. Still, accord ing to learned counsel, the award would not be invalid, though it could be remitted for it would be covered by clause (c) of section 16 (PLD 1954 Lah.58). A simple reply to the argument of learned counsel on this point is that the provision for remission is discretionary and not obligatory, as was held in Choohur Singh v. Jeet Singh and C Chunda Singh (64 P R 1870(FB)); Sita Ram v. Dhani Ram (92 P R 1903) and Sant Singh and others v. Jiwan Singh (41 P R 1905). These judgments imply that the award which is not remitted is being set aside. In any case, if we interpret section 16 as discretionary there is an end of the argument of learned counsel. According to him, a decree must be passed on the basis of every award which is not set aside and only an invalid award can be set aside. So, according to learned counsel, if the Court does not think it fit to remit the award for reconsideration the result would be that a decree would have to be passed. This position is wholly untenable. Also, suppose the arbitrator to whom an award is being remitted continues making awards which are covered by some clause of section 16, what is the Court to do except to set aside the award? It cannot go on remitting the award to the arbitrator ad infinitum. I am, therefore, of the opinion that the award was properly set aside. Before concluding I have to mention that the respondent cited a number of cases laying down that revision does not lie when the Court, after considering the objections to an award, has set it aside though in doing so it may have reached some wrong conclusion of law or fact. It is not necessary for me to go minutely into the matter as I have found the award to be invalid. I may point out, however, what I regard to be the general principle applicable. Conclusions of law or fact are not per se grounds for revision. But if a Court misinterprets the law relating to its own jurisdiction with the result that while under the law it ought to have proceeded under the provisions relating to arbitration, it wrongly tries the case on merits, that would be a good ground for revision. This application for revision fails and is dismissed with costs. A.H. Petition dismissed.