1993 PLP 439 (MLD)

This judgment shall dispose of Civil Revisions Nos.69‑D of 1992, 70 of 1992, 71‑D of 1992 and 72‑D of 1992 which are directed against the similar, judgements and decrees of the Court below and Involve same questions.

2. Respondent in all these petitions filed four civil suits for recovery Rs.24,000 against each of the petitioners who contested the same by filing the written statements which led to the framing of relevant issues whereafter evidence was also partly recorded. On 2nd October, 1990 a statement was made by the parties before the trial Court whereby they agreed, to appoint Ahmad son of Mani as arbitrator and undertook to be bound by his decision. On 28th May, 1991 when the matter came up before the trial Court, it was observed that Ahmed (the Referee) was present and his statement be recorded. Ahmad stated that the respondent/plaintiff was entitled to recover Rs. 24,000 from each of the petitioners. At that stage a request was made by the learned counsel for the petitioners that he be\ permitted to file objections on the statement of the referee. This request was, however, turned down with the observation that the Referee had been appointed with the consent of both the parties and no objection could, therefore, be raised. In view of the statement made by the Referee, all the four suits were decreed in favour of the respondent and against the petitioners.

3. Aggrieved by that decision, the petitioners filed four separate appeals which came up for hearing before the learned Additional District Judge, who on 21st September, 1991 directed that the petitioners should the first instance deposit the decretal amount under protest in Court is order of deposit of decretal amount was, however, not complied with. The Additional District Judge, therefore, on 30‑9‑1991 proceeded to miss the appeal for non‑compliance with that order and also on merits holding, that as Referee had been appointed with the consent the parties, his statement was binding upon them and the decrees in the nature of consent decrees, the appeals were not competent.

4. The learned counsel for the petitioners in support of these petitions has also contented that Ahmed had been appointed by the parties as an Arbitrator and not as a Referee and the Courts below have misconstrued and misinterpreted the statement made by the parties on 2nd of October, 1990. On these premises it was argued that the two Courts have acted illegally in decreeing the suits merely on the basis of statement made by Ahmad without following the procedure prescribed by the Arbitration Act, 1940.

5. Mr. Arshad Mahmood, the learned counsel for the respondents on the her hand argued that the intention of the parties as reflected in the statement, dated 2nd October, 1990, was to refer the matter to Ahmad as a Referee ant: not Arbitrator. It was emphasised that as Ahmad was not required to record any evidence before deciding the matter which was clearly indicative of the fact that he was to act as Referee. Reliance has been placed upon Muhammad Hanif Khan and another v. Ghulam Farid Khan and others PLD 1988 Lah. 250 and Faiz‑ul‑Haq and another v. Abdus Salam and 3 others 1090 MLD

106. The question which falls for consideration in these petitions is as to whether Ahmad was appointed by the parties as a Referee or as an Arbitrator. The distinction between a Referee and an Arbitrator has been explained with admirable clarity by Division Bench of this Court in Muhammad Hanif Khan and another v. Ghulam Farid Khan and others PLD 1988 Lah.250 wherein after exhaustive survey of the case‑law, it was observed that while determining the exact character of the person to whom the dispute is referred, it is the intention of parties which is of utmost importance and the nomenclature by which that person is called is not conclusive. If it was intended that the person appointed shall decide the mater on his own knowledge without holding any inquiry, then he would be deemed to be a Referee but if he is required to decide the matter on the basis of some material or evidence, the appointment should be taken to be that of an Arbitrator. Similarly while an Arbitrator has to decide the dispute by rendering an award, the Referee does not give decision but only makes a statement.

8. Applying these principles to the present case the first thing to be noticed is that in the statement made by the parties Ahmad was specifically mentioned as an Arbitrator. Although this fact is not conclusive, but the parties' further made their intention clear by stating that they were willing to have the dispute decided by Ahmad, whose `decision' shall be binding on them. The use of word (decision) twice in the statement is quite significant.

9. The contention of the learned counsel that as it was mentioned in the statement that the dispute shall be decided without recording any further evidence, the intention of the parties was to appoint Ahmad as a Referee is based upon misconstruction of the statement. What was stated by the parties was that they will not lead any further evidence and not that even the evidence already led should be ignored and the dispute be settled on the basis of his own knowledge by Ahmad. This part of the statement does not improve the case of the petitioner. From a reading of the statement of the parties as a whole, the conclusion which is inevitable is that they contemplated to appoint Ahmad as an Arbitrator. That being so the decisions rendered by both the Courts below are not sustainable. As a result of what has been stated above these petitions are allowed, the impugned judgments and decrees of both the Courts below are set aside and the suits are remanded to the trial Court for decision afresh in accordance with law. H.B.T./G‑61/L Petitions allowed