P L D 1960 (W (PLP)

If any party fails to appear on the appointed day, time and place, the matter will be proceeded ex parte." This notice was served on the defendant on 25th May 1959, vide Exh.

20. By letter dated 30th May 1959, (Exh. 13) defendant's counsel Mr. Mazhar‑ul‑Haq, Lahore, challenged the validity of the arbitration agreement and wrote the following letter to the arbitrator "My client Mst. Razia Begum wife of K. B. Gabole, has placed before me your letter dated 21‑5‑1959, reference No. A/68‑

59. I am instructed by my client to inform you, that my client has sent a legal notice to her husband in which she has demanded a divorce from him, failing which my client will file a civil suit. This notice was served on my client's husband before he nominated you as the sole arbitrator. The agreements mentioned by you in your letter are a fraud played upon my client, about which legal action will also be taken by my client. My client does not accept any arbitration. The matter of her divorce is for a Court of law to decide. I am instructed by my client to inform you to refrain from interfering in the matter as the proceedings before you will be illegal. My client is expecting an immediate reply from you in the matter, otherwise my client will have to approach the Civil Court in this respect also and obtain an injunction order restraining you to act as an arbitrator." This notice clearly shows that the defendant treated the agree ments, on the basis of which the reference was made to the arbitrator, as fraudulent documents and also showed her unwillingness to participate in the arbitration proceedings. The diary of the arbitration proceedings dated 2nd June 1959, shows that the plaintiff on this date flied his written statement and by a written application asked foe arbitrator to immediately proceed with the arbitration proceedings ex parte, but the learned arbitrator gave further opportunity to the defendant and adjourned the case to the 11th of June 1959. The relevant portion of the order is reproduced below: "Razia Begum must be given one more opportunity to file her written statement and lead any evidence she desires. The proceedings are, therefore, adjourned to the 11th June 1959, at 4 p.m. when Razia Begum must file her written statement and the parties lead their evidence. The proceedings will go on from day to day from the 11th June 1959." It is thus obvious that the learned arbitrator did not take any ex parse proceedings against the defendant on 2nd of June 1959. On the contrary he issued a fresh notice to the defendant Exh. 17 on 2nd June 1959, which reads as under "In the matter of Arbitration of the disputes between Khan Bahadur Gabole and Mst. Razia Begum. Please take notice that on this day, the 2nd June 1959, Khan Bahadur Gabole filed a written statement, a true copy of which is attached herewith Your representation made by Mr. Mazhar‑ul‑Haq, Advocate, Lahore, by his notice dated 30th May 1959, addressed to the Arbitrator, asking him to refrain from the proceedings with the arbitration, have been rejected. The question of the legality of the agreement will be considered on the next date fixed by the Arbitrator provided you supply full particulars of the grounds together with the date of the agreement which you want to attack.

2. The next date fixed for the hearing of the above noted matter is 11th June 1959, at 4 p.m. from which day the matter will proceed from day to day." Two notices were issued to the defendant, one through her counsel Mr. Mazhar‑ul‑Haq, 5, Turner Road, Lahore, and the other at Room No. 24, Bright Land Hotel, The Mall, Murree where the defendant was staying at the relevant time. The notice through the advocate contained a note in the following terms: "Copy of the written statement, referred to in para. 1 above, sent to Mst. Razia Begun, Room No. 24, Bright Land Hotel, The Mall, Murree." This notice was served on the defendant through her advocate on 5th June 1959, vide Exh.

44. It was also delivered about the same time to her bankers at Murree, but the letter of the bank dated 31st July 1959, (Exh. 22) shows that they forwarded it on 31st July 1959, to the defendant. It is perfectly clear that the defendant before the ex parte proceedings was taken against her did not at all know the dispute referred and pending before the learned arbitrator. This fact is confirmed by telegram dated 9th June 1959, (Exh. 18) sent by Mr. Mazhar‑ul‑Haq on behalf of the defendant, which reads as under; "Recd letter dated 2nd June terms of reference not included client in Lahore did not receive your letter and terms of reference correspondent care of my address stop proceedings letter follows." This telegram further proves that the defendant on 9th June 1959, was at Lahore, that she had not received the reference stated to have been sent to her at Murree, that her lawyer asked the arbitrator to stay the proceedings and requested him to correspond with the defendant care of his address and also informed him that a letter follows, presumably to explain the position of the defendant. The learned arbitrator on 11‑6‑1959 brought this telegram to the notice of the plaintiff and his counsel. They insisted that the matter should be proceeded ex parte, but he adjourned the hearing to 13th June 1959, for the letter of the defendant's counsel. He, however, proceeded ex parte in the absence of any letter from the defendant's counsel and gave his award on 16th June 1959. Prima facie on the facts of this case it appeared to me that the learned arbitrator proceeded on the reference against the defendant without informing her of the claim of the plaintiff of the disputes referred to him for decision and had acted against the principles of natural justice in not providing her adequate opportunity to meet the plaintiff's case, I therefore called upon Mr. Lari, plaintiff's counsel, to satisfy me that the award in this respect is valid. Mr. Lari contended that on 21st May 1959, the arbitrator called upon the two parties to file their claims or written statement on 2nd June 1959, and further intimated that if any party defaulted, proceedings will be taken ex parte. According to the learned counsel the arbitrator entered on the reference on 2nd June 1959, when the plaintiff filed his case and the defendant refused to participate in the proceedings and in these circumstances it was unnecessary for the arbitrator to intimate the claim put forward before him and he was justified in proceeding ex parte against the defendant. He also contended that the learned arbitrator having been validly appointed as sole arbitrator and the defendant having refused to participate in the arbitration proceeding the defendant had lost her right to get further opportunity to defend the case. In support of this contention the learned counsel place reliance on The Grahams Trading Co. (India) Ltd. v. Chandulal Parmanand (A I R 1935 Sind 228) at page

231. But this case is clearly distinguishable. In that case there was no dispute that the objector was never apprised of the other side's claim and had no knowledge of the dispute referred to arbitration. The documents proved on the record fully establish that neither the dispute was referred in the notice addressed to the defendant to nominate her arbitrator nor was it specified in the letter of appointment of sole arbitrator and the notice issued by the arbitrator for the hearing of the case. By 2nd June 1959, the first date of hearing before the arbitrator, the plaintiff's counsel only informed the defendant by letter Exh. 24, dated 17‑4‑1959 that amongst the other several and serious disputes that have arisen between her and his client the latest one is her leaving his client's house without permission etc. But what was the other "several and serious disputes" did not come on the surface till they were filed in the shape of the written statement before the learned arbitrator on the first date of hearing. In these circumstances it is possible that the defendant might have thought that the plaintiff had only referred the question of restitution of conjugal rights, which could not be the subject matter of arbitration and ignored the arbitration proceedings. Even assuming that the defendant was wrong in this respect, the learned counsel for the plaintiff was unable to satisfy me that the defendant before the award had the knowledge of the Plaintiff's claim put forward before the arbitrator. Mr. Lad met this point by drawing my attention to section 42 of the Arbitration Act. He contended that the learned arbitrator sufficiently discharged his duty by giving notice to the defendant of the Plaintiff's claim. According to Mr. Lari, a notice as required by section 42 was served on the defendant and it was not open to the defendant to urge that she had not been legally posted with the contents of the claim made against her by the plaintiff. This contention is not well‑founded. Section 42 of the Arbitration Act provides as under: "Any notice required by this Act to be served otherwise than through the Court by a party to an arbitration agreement or by an arbitrator or umpire shall be served in the manner provided in the arbitration agreement, or if there is no such provision, either‑-- (a) by delivering to the person on whom it is to be served, or (b) by sending it by post in a letter addressed to that person at his usual or last known place of abode or business in India and registered under Chapter VI of the Indian Post Office Act, 1898." Admittedly the arbitration agreement in this respect was silent and the notice in this case ought to have been served on the defendant either by delivering it personally to her or by registered post at the usual or last known place of abode or business of the defendant in Pakistan. There is no dispute between the parties about any other notice except the notice (Exh. 17) dated 2‑6‑1959. Now this notice was addressed by the arbitrator to the defendant on two addresses namely through her counsel at Lahore and the second one at Bright Land Hotel, Murree. The notice addressed through her counsel, which admittedly came to the notice of the defendant on or about 5th June 1959, did not contain the Plaintiff's claim against her and fixed her only with the knowledge that the next date of hearing before the arbitrator was fixed for 11th June. But Mr. Lari argued that the notice addressed to the defendant at Bright Land Hotel was sufficient notice under section 42 irrespective of the fact whether it was served on her or not. He contended that even a temporary stay in a hotel at a hill station can be the last known place of abode of a person. He invited my attention to certain English decisions in which the temporary residence of a person was considered as sufficient to render him liable under the Income‑tax Act. These decisions have no relevancy on the decision of this case. It appears to me that the question whether a particular address is or is not a place of abode of a particular person is rather a question of fact than of law. Erle, C. J. in Courtis v. Blight (31 L J (1861‑62) 48) in this connection held "But whether or no, a house occupied by the objector, and which he uses occasionally, is or is not his place of abode, within the meaning of that section, is rather a question of fact than of law." Their Lordships of the Privy Council in Srinivasa Moorthy v. Venkatavarada Iyengar and others (38 I A 129) considered the meaning of the words "taken up abode" and observed: "The question of jurisdiction is too plain for argument. Both Courts held that the cause of action arose partly within the jurisdiction of the High Court, and although the Judge of first instance thought himself bound by a decision which had really no application to the case to hold (contrary to his own opinion) that the defendant was not `dwelling' within the jurisdiction, the High Court not unnaturally thought that inasmuch as he had taken up his abode with his wife and family in a hired house in Madras, meaning to remain there several months, and was actually living there when the suit was instituted, he could not be heard to say that he was not `dwelling' within the jurisdiction of the High Court." In The Queen v. Hammond (17 E R 1477) in a quo warranto information case the question was whether a voting paper in which the place of a business of a person was mentioned was valid as under the relevant statute the voter was required to give the place of abode of the candidate. It was held that it was not a place of abode of the candidate. Lord Campbell, C. J. in that connection at page 1480 observed: "After an attentive consideration of the Act of Parliament, we are of opinion that by place of above it means the place of residence of the candidate. Such is the usual meaning of this expression. In Johnson's Dictionary `abode' is defined to be `habitation. dwelling, place of residence;' and `residence' is defined to be `place of abode : dwelling.' A man's residence, where he lives with his family and sleeps at night, is always his place of abode in the full sense of that expression; and, if this be stated to be his place of abode, no doubt nor difficulty can occur. In some instances he may be quite as well known if described of the place where he carries on his business; but this is never the place of abode in the ordinary sense of the expres sion; and he may have a place of business to which he goes very rarely, and which may be known to few as belonging to him." At page 1481 the Lord Chief Justice further observed "We have been much pressed by the fact in the present case that the defendant was as well known by his place of business as by his place of residence; but, if we were to hold that the place of business is sufficient, we must lay down a general rule upon the subject, which, if unqualified would in many instances defeat the object of the Legislature, and, if qualified with the condition that the candidate is as well known by his place of business as by his place of residence, might lead to great uncertainty and much litigation. We think it the safer and better course to conclude that the Legislature used the words in their plain and ordinary sense, and required that the voting paper shall contain the candidate's place of residence, by which in all cases he may easily be identified." As pointed out by the learned Lord Chief Justice in Johnson's Dictionary abode is defined to be "habitation, dwelling place, residence" and residence is defined to be "place of abode, dwelling." I have no doubt that a temporary stay of a person in a hotel at a hill station cannot by any stretch of imagination be considered to be habitation, dwelling place or residence of a person. Blackburn, J. while considering the question what is inhabitance or residence in Wescomb's case reported in ((1869) 4 Q B 110, 113) observed: "There is no strict or definite rule for ascertaining what is inhabitance or residence. The words have nearly the same meaning. Sleeping once or twice in a place would not constitute inhabitance. There is no precise line to be drawn. It is always, if the inhabiting is bona fide, a question of more or less. The question is whether there has been such a degree of inhabitance as to be, in substance and in common sense, a residence. When a person has a country and a town house, it is a mere question of fact whether he has two, or only one residence. When, as in this case, a man leaves one residence to go elsewhere to transact real business, whether he has two residences depends on quantity and amount. It is a pure question of fact." After careful consideration it appears to me that a temporary stay of a person at a place cannot be considered to be his place of inhabitance, unless and until there is such a degree of inhabitance as to be in substance and in common sense a residence. On this view of the matter the notice sent to the defendant at the Murree Hotel was not a valid notice within the meaning of the Arbitration Act. This being the legal position, the learned arbitrator after receiving the telegram dated 9th of June 1959 from the counsel of the defendant ought not to have proceeded ex‑parte against the defendant unless and until he was satisfied that the defendant bad been informed about the claim of the plaintiff made before him. It was urged by Mr. Lari that no such duty is cast on the arbitrator under the Arbitration Act. The learned counsel referred me to the various provisions of the Arbitration Act and pointed out that although an arbitration agreement and the reference has been defined, but it nowhere enjoins that the dispute should be raised by the parties in the reference. He referred me to the definition of "Arbitration Agreement" and "Reference" in the Act to support his contention. He also referred me to sections 4 and section 9 of the Act and contended that a reference under them does not necessarily involve a formal reference to arbitration and the word "Reference" is used in these sections only in rela tion to the appointment of arbitrator by virtue of the arbitration agreement which is the pivot of all references to arbitration. No doubt these provisions of law do not specifically lay down any such rule but that does not mean that at no stage the parties should disclose the disputes, which the arbitrator is called upon to settle or arbitrate. The moment these disputes are brought to the notice of the arbitrator, it is his duty as a fair‑minded and impartial person to inform the other side of the claim preferred before him. Unfortunately this elementary duty, of which the arbitrator was fully conscious, was not properly discharged. Russell in his Commentary on Arbitration at page 147, while dealing with the duties of arbitrators, at page 149 stated "At the same time, he should satisfy himself that the sub mission is wide enough to cover the disputes with which he is to deal. In this connection he should go beyond a mere formal examination to make sure that he has authority to decide the dispute put before him. In addition, he should as soon as he knows what the real nature of the dispute is consider whether he is authorised to deal effectively with it, or whether something further is not needed some special power to give directions, for instance, or authority to deal with some related dispute that ought to be dealt with at the same time if it is not to lead to multiplicity of proceedings between the parties. Such matters are best settled at the earliest possible moment, for if they are left until a late stage of the arbitration it will often be found that one side or the other refuses to agree to amendment of the submission in the hope of thereby securing some tactical advantage; whereas at the inception of the arbitration it is less likely that the giving of additional powers to the arbitrator will seem to favour one side or the other. In cases where the arbitrator has at that stage sufficient understanding of the dispute, points of this sort can with advantage be dealt with at the preliminary meeting." Later on the learned author under the heading "The Preliminary Meeting" observed: It is customary for the arbitrator to hold a preliminary meeting with the parties, before commencing the actual hearing. The proceedings at this‑preliminary meeting are somewhat in the nature of the proceedings on a summons for directions in an action in the High Court". The learned author at page 15 J further stated as under: "Whether the parties particularly wish it or not, the arbitrator must obtain a clear statement of the disputes which are submitted to him for his decision, particularly if the disputes are not already defined by the terms of the submission. For example, in the case of disputes arising, out of a contract in which there is an arbitra tion clause, it not infrequently happens that at the date of the appointment of the arbitrator the disputes are not fully defined. An account may have been delivered, disputes may have arisen upon that account, an arbitrator may have been appointed yet at the date of the preliminary meeting on the hearing (sic) it may not be clear what is in dispute between the parties or what it is the parties desire the arbitrator to decide." and the learned author further ' added under heading "Particulars" "The arbitrator has implied power to order each party to deliver particulars of the claim, and of the counter‑claim if there should be one, in order to enable his opponent to know the case he has to meet and to prepare his evidence for the trial. `What particulars are to be stated must depend on the facts of each case. But in my opinion it is absolutely essential that the pleading, not to be embarrassing to the defendants, should state those facts which will put the defendants on their guard, and tell them what they will have to meet when the case comes on for trial." I agree with the view of Lobo, A. J. C. in MacDonald & Co. v. Naraindas Pokerdas (A I R 1927 Sind 126) that a submission clause in a contract followed by the nomination of an arbitrator by the parties, whether each of the parties to a contract nominates his own arbitrator or whether one party nominates both arbitrators on failure by the other party to nominate his arbitrator having been called upon to do so renders the appointment, of an arbitrator complete even when a reference is drawn up and has been accepted by the arbitrator subsequently. But all the same on the completion of the appointment of an arbitrator, it is his duty to find out what are the disputes that have been referred to him and whether the reliefs claimed fall within the four corners of the reference. In Kunwar Puran Singh and another v. Mst. Bahal Kunwar and another (A I R 1930 All. 319 (2)). Bennet, J. in this connection observed: "We consider that any such agreement between the parties should clearly set forth what are the matters in difference between them on which the arbitrators are required to arbitrate. Such points be set forth clearly in the form of issues. On the contrary, the agreement of 12th April 1929 is couched in vague language and makes no attempt to set forth the points at issue." And on this ground the learned Judges observed: "We consider that there was no authorization in the agree ment to refer to arbitration for the arbitrators to decide any matter between Mst. Bahal Kunwar and Mst. Javitri Kunwar defendants". I am not prepared to go to this extent because in my opinion as pointed out by Russell there can be cases of arbitration clause in pursuance of which parties appoint their arbitrators and call upon them to decide their disputes and those disputes, as in the present case, might not have been specified in the reference, but that will not render the reference as bad. It appears to me that in such cases it is incumbent on the arbitrator to call upon the party responsible to refer the disputes to arbitration to state his claim and to inform the other side of such claim and thereafter proceed on the reference, and decide it: Unless and until such a procedure is adopted an arbitrator has no jurisdiction on an uncertain refer ence to decide a dispute which has never been brought to the notice of the other side. This view is fortified by a decision of an Indian Court in Laxman Prasad v. Ram Dularey Gupta (A I R 1952 Vidh. Pra. 25). In my opinion also an award procured in such circumstances will be void. It further appears to me that although an arbitrator is allowed considerable latitude in the procedure to be followed by him at the hearing, it is his paramount duty to afford the parties a reasonable opportunity to know the case against them for defending it before him. He cannot condemn a party without letting him know the case against him: If he makes an award without complying with such elementary principles of natural justice, he does so at the risk and peril of his award being set aside on grounds of miscon duct. In my opinion in order to justify an arbitration proceeding ex‑parte a very strong case must be made out of wilful delay of the party at fault and if a reasonable cause is shown it is the duty of the Court to set aside such an award. The defendant's counsel telegram dated 9‑6‑1959 shows anxiety on defendant's party to know the terms of reference. It also shows change of attitude and the possibility, that on knowing the plaintiff's claim, she might have chosen participate in the arbitration cannot be ruled out. But the learned arbitrator did not appreciate the implication of the telegram and failed to give the defendant reasonable opport unity to defend the plaintiff's claim before him. There is not the slightest doubt in my mind that the learned arbitrator did not communicate the disputes and claims of the plaintiff pending before him to the defendant, he proceeded in the matter in utter haste and by‑passed the ordinary principles of natural justice which are inherent in all quasi judicial proceedings. It was his duty to wait till such time as the defendant was apprised of the plaintiff's claim before proceeding ex‑parte. The learned arbitrator did not proceed against the defendant on 11‑6‑1959 ex‑parte and had no justification to do so on 13‑6‑1959. He should have communicated with the defendant's counsel and conveyed the plaintiff's claim against her and adjourned the case to some other date. This would have enabled her to make ‑up her mind finally either to participate or not to participate in the arbitration proceedings which were likely to deprive her of valuable property and rights. Had he followed this procedure and on default of the defendant taken ex parte proceedings, the award would be perfectly valid. But since he failed to do so, the award is defectively and cannot be upheld. Accordingly I set aside the award on the ground that the arbitrator committed legal misconduct. On this view of the matter I don't propose to deal with the other objections raised by the defendant. The defendant along with the objections under section 30 of the Arbitration Act has also prayed for the revocation of the agreement under section 33 of the said enactment. In my opinion this application ought not to have been joined with the objections and should have been made separately. Since the award has been set aside, the defendant, if she is so advised, is at liberty to file a. fresh application in this behalf. The order in this case was orally announced. Mr. Lari made an oral request that the matter 'be sent back to the same sole arbitrator. In law this is not possible. The award is set aside under section 30 of the Arbitration Act, which contains no provisions to refer back the matter to him. 'Besides any award given by the arbitrator will be invalid as the statutory period of four months for making an award has already elapsed. It will, however, be open to the parties to refer their disputes afresh under the Arbitration Clause till such time as it is revoked. For the reasons given above the award is set aside and subject to the above the objections are allowed with costs. A. H. Award set aside.