2023 PLP 362 (MLD)

SAFDAR SALEEM SHAHID, J.

The instant first appeal under section 39(1)(iv) of the Arbitration Act, 1940, is directed against the order dated 15.07.2014, whereby the learned Civil Judge, Faisalabad, accepted the application under section 20 of the Arbitration Act, 1940, filed by the respondent; appointed an arbitrator to proceed with the matter in accordance with the law and terms of Section 10.2 of Power Purchase Agreement (PPA).

2. Brief facts of the case necessary for disposal of the instant appearance that an application under section 20 of the Arbitration Act, 1940 was filed on behalf of the respondent Galaxy Textile Mills Limited (GTML), a public limited company, through its General Manager Muhammad Arshad Iqbal, alleging that in the year 2009 the Pakistan Electric Power Company (Private) Limited (PEPCO) under the Ministry of Water and Power, Golernment of Pakistan, approved and issued a policy framework for New-Captive Power Producers (N-CPPs), whereupon the respondent offered to establish a gas-fired generation facility and sell the surplus capacity of 11.6 MW through its letter No.GTML/LIIR/2010/2011/166 dated 11.03.2011 and the appellant under the recommendations of National Transmission and Dispatch Company (NTDC) vide letter No.CPPA/DT-11/17-67/2690-92 dated 25.03.2011, confirmed its interest in purchasing gas based power on 11 KV Bus Bar at the nearest Grid Station from the proposed generating facility offered by the respondent through letter No.26470 dated 11.06.2011. Resultantly, pursuant to the decision of BOD, FESCO, dated 23.07.2011 power purchase agreement (PPA) setting out the terms and conditions of sale and purchase of 11.6 MW electric power was executed between the parties on 22.08.2011. Pursuant thereto on 25.05.2012 the respondent successfully established a gas fired electric power generation plant after huge investment and started performing its obligations as per PPA, but the appellant after making regular payments in accordance with the terms of PPA, for initial two months against the invoices of May and June, 2012, stopped payments of Financial Cost Component (FCC) from July, 2012, resulting in default of total FCC outstanding up to December, 2012 as Rs.87,951,193/-, hence the application under the arbitration clause of PPA seeking recovery of the unpaid amount and all the investments including the total outstanding debt and equity made in establishment and commissioning of power generation plant together with loss of profits etc.

3. The appellant contested the application, inter alia, on the grounds that neither constitution nor duly verified resolution of the respondent; that procedure laid down in PPA has been followed; that except for section 10.2 of PPA there is no independent arbitration agreement between the parties; that the application is premature as neither requisite notice has been given nor any attempt to resolve the dispute amicably in accordance with the timeframe work set out in section 10 of PPA; that grievance of the respondent is mainly against the subsequent determination of tariff by NEPRA approved through notification dated 28.02.2013.

4. The learned Civil Judge after hearing the arguments of the learned counsel for the parties, accepted the application under section 20 of the Arbitration' Act, 1940, filed by the respondent and appointed an arbitrator to proceed with the matter in accordance with the law and terms of section 10.2 of Power Purchase Agreement (PPA).

5. The appellant challenged the above order by filing an appeal before the District Court. However, the respondent filed an application under Order VII, rule 10, C.P.C., for return of the appeal on the ground that since the subject matter exceeded the pecuniary limits the said Court had no jurisdiction to hear the appeal. The learned appellate Court accepted the application and returned the appeal to the appellant for filing before this Court through order dated 14.10.2014.

6. Arguments heard. Record perused.

7. Instead of dealing with the contentions of the parties with regard to merit or other wise of the main case, it is to be noted that the appeal filed by the appellant was returned with the observation that since the outstanding amount upto December, 2012 was Rs.87,951,191/-, in view section 18(2) of the Punjab Civil Courts Ordinance, 1962, the said Court had no jurisdiction to hear the appeal. However, the forum of appeal was to be determined on the basis of original value of the suit and pecuniary jurisdiction of the District Judge was always to be derived from valuation mentioned in the plaint. The meaning ascribed to the expression "value of original suit" in section 18(1) of the Ordinance is confined to the valuation given in the plaint. A perusal of the application filed under section 20 of the Arbitration Act reveals that the respondent had not provided any valuation therein but claimed an amount to be outstanding against the appellant, which can only .be said to be the disputed amount and cannot be presumed to be the value of the subject matter. In the circumstances, the appellant had rightly approached the District Court by filing an appeal and the view of the learned Additional District Judge was not in accordance with the provisions of the relevant law. Reliance in this regard can be placed on the case of Muhammad Ayub and 4 others v. Dr. Obaidullah and 6 others (1999 SCMR 394), wherein it is held "that the forum of appeal is to be determined according to the value of the suit as mentioned in the plaint and the fixation of the price of the disputed property by the trial Court is totally irrelevant". Reference in this regard can also be made to the cases of Muhammad Younas v. Surya Bibi and another (2003 MLD 168), Nigar Bibi and others v. Salah-ud-Din and others (2012 MLD 604) and Jan Son Construction through Saida Jan v. Government of Khyber Pakhtunkhwa and others (2013 CLC 127).

8. The appellant has also filed an application under section 5 of the Limitation Act seeking condonation of delay occurred in filing the instant appeal with the explanation that the appeal before the lower Appellate Court was required to be filed within thirty (30) days and the appellant instituted the said appeal within twenty-one (21), which remained pending for sixty-six (66) days, whereas the appellant filed the instant appeal within six days and as the limitation for approaching this Court was ninety (90) days and as such the total period spent for filing the instant appeal comes to 102 days and if period of eight (8) days spent for obtaining copies for both the appeals is excluded, the instant appeal is barred by time for four (4) days, which has been occurred only due to filing appeal before the lower forum in the first instance and as such is liable to be condoned. However, since it has been held that the appellant had rightly approached the District Court to challenge the impugned order, the point of limitation in filing the appeal before this Court need not to be discussed any more.

9. For what has been discussed above, the instant appeal is allowed with the observation that the learned Additional District Judge erred in law while passing the order dated 14.10.2014 whereby the appeal filed by the appellant was returned. Resultantly, the said order is set aside, the appeal of the appellant before the learned Additional District Judge shall be deemed to be pending and shall be decided on merits in accordance with law. There shall be no order as to costs. SA/F-15/L Appeal allowed.