1998 PLP 15 (CLC)

‑‑‑‑O.IX, R. 13‑‑‑Ex parte decision‑‑‑Setting aside of‑‑‑Sufficient cause‑‑‑Non appearance of counsel because of his engagement before other Benches Whether constitute sufficient cause. Hussain Bakhsh v. Settlement Commissioner, Rawalpindi and others PLD 1970 SC 1; Muzaffar Ali v. Muhammad Shaft PLD 1981 SC 94; S.A. Rizvi v. Pakistan Atomic Energy Commission and another 1986 SCMR 965; Riaz Hussain and others v. Board of Revenue and others 1991 SCMR 2307; Arbab Abdul Qadir v. Mst. Bibi Fatima and another 1984 CLC 546; Abdul Ghaffar v. Mirza Muhammad Hussain 1984 CLC 3023 and Lal Marwari and others v. Firm of Bridhi Chan Sri Lal AIR 1924 Pat. 603 distinguished. ' The Chief Settlement Commissioner, Lahore v. Raja Muhammad Fazil Khan and others PLD 1975 SC 331; M/s. Awan Industries Ltd. v. The Executive Engineer, Lined Channel Division and another 1992 SCMR 65; Muhammad Tayab v. Akbar Hussain 1995 SCMR 73; Meer Muhammad Sharif v. Mirza Muhammad Ashraf and 4 others 1980 CLC 1984; Ram Chander and others v. Janina Shankar and others AIR 1962 Raj. 12; Ganeshmal Bhawarlal v. Kesoram Cotton Mills Ltd. AIR 1952 Cal. 10 and Tasiruddin Brothers v. Faizullah Gungjee & Co. Ltd. PLD 1966 Dacca 145 ref. Choudhry Muhammad Jamil for Plaintiff. S. Irtiza H. Zaidi for Defendant. This is an application under Order IX, Rule 13 read with section 151, C.P.C. filed by the defendant praying that the order dated 30‑1‑1995 be recalled/set aside and that the objections filed by the defendants against the award dated 1‑9‑1992 be restored. On 30‑1‑1995 this Court dismissed the objections filed by the defendant to the award as none appeared on behalf of the defendant and proceeded to make the award, given by the arbitrator official Assignee as rule of the Court. Thus, the suit was decreed in terms of award. Instant application is filed against the said order.

2. In support of this application, Mr. S. Irtiza H. Zaidi, Advocate has filed his personal affidavit that on 30‑1‑1995 he was busy in other Court and that at 9‑30 a.m. he appeared in Court when the order as mentioned above was passed by this Court. It is stated by him in his affidavit that his absence was neither intentional nor deliberate. Plaintiff has filed his counter affidavit but did not specifically deny assertion of the learned counsel that he appeared on the said date at 9‑30 a.m. when the said order was passed. Without going into the merit of the allegations and counter‑allegations of the parties, the moot question which requires consideration is whether after passing of decree as a result of award made rule of the Court, an application under Order IX, Rule 13, C.P.C. is maintainable.

3. I have heard Mr. Choudhry Muhammad Jamil, Advocate for plaintiff and Mr. S. Irtiza H. Zaidi, Advocate for defendant. It was strenuously contended by Choudhry Muhammad Jamil that the instant application being in the shape of a review application is not maintainable as the right to seek review is a right created by the statute and that no such right is provided in the Arbitration Act, 1940. Reliance was placed on the case Hussain Bakhsh v. Settlement Commissioner, Rawalpindi and others (PLD 1970 SC 1). Muzaffar Ali v. Muhammad Shaft (PLD 1981 SC 94), S.A. Rizvi v. Pakistan Atomic Energy Commission and another (1986 SCMR 965) and the case of Riez Hussain and others v. Board of Revenue and others (1991 SCMR 2307). There is no cavil to the proposition of law that a right to seek review of an order is a statutory right. I may also like to observe that at the same time a Court or a Tribunal of special or limited jurisdiction is competent to suo motu recall or review an order obtained from it by fraud as fraud vitiates the most solemn proceedings and that no party should be allowed to take advantage of such fraud. (For any reference see the case of The Chief Settlement Commissioner, Lahore v. Raja Muhammad Fazil Khan and others (PLD 1975 SC 331). However, the instant application cannot be termed to be a review application as it has been filed under Order IX, Rule 13, C.P.C. which has never been treated at par with a review application.

4. It was submitted by Mr. S. Irtiza H. Zaidi that under the provisions of section 41(a) of the Arbitration Act, 1940 an application under Order IX Rule 13, C.P.C. is maintainable as Code of Civil Procedure, 1908 is. made applicable to all proceedings before this Court as well as before appellate Court. On the other hand, it was argued by Choudhry Muhammad Jamil that once a decree is passed, this Court becomes functus officio and cannot review the same, the only remedy available to the defendant was by way of appeal which he has not availed and, therefore, the instant application is not maintainable. Reference was made to the case of Arbab Abdul Qadir v. Mst. Bibi Fatima and another (1984 CLC 546) wherein a learned Single Judge of Balochistan High Court held, inter alia, that provisions of section 41(a) of the Arbitration Act have no application to proceedings where reference has already been made by the Court to arbitrators and that provisions of section 23(2) and section 41 of the Act 1940 are to be read together. However, facts of the present case are different' as the instant application has been filed after the award was made rule of the Court. Reference was also made to the case of Abdul Ghaffar v. Mirza Muhammad Hussain (1984 CLC 3023) where a learned Single Judge of this Court allowed Civil Miscellaneous Appeal and set aside the order rejecting an application under Order IX, Rule 13, C.P.C. In that case learned VIth Senior Civil Judge, Karachi made an award rule of the Court against which an application under Order IX Rule 13, C.P.C. was filed praying for setting aside the decree which application was dismissed by the learned Senior Civil Judge. It is pertinent to note that before dismissing application under Order IX, Rule 13, C.P.C. the learned Senior Civil Judge directed the judgment debtor to furnish security by a certain date which he failed and as a result application of J.D. under Order IX, Rule 13 was dismissed. Although there is no direct finding of this Court on the point whether an application under Order IX, Rule 13, C.P.C. is maintainable after a decree is passed iii terms of an award but impliedly contention of the appellant in that case to the c ‑dent that such an application would be maintainable was upheld. ..

5. It has not been denied by any of the parties the order of this Court dated 30‑1‑1995 was passed under section 17 of the Arbitration Act, 1940 and the award was made rule of the Court. With due respect to the learned Judge who passed the said order, it is not a speaking order and the decree was ordered to be passed on one single ground i.e. since the defendant failed to appear as such his objections were dismissed for non‑prosecution. In my considered view, Even if the learned counsel for the defendant was not there, this Court should have examined the objections filed by the defendant and then to have passed any order' according to law. Provisions of section 17 of the Arbitration Act cast a duty upon Court to‑ see that (i) no cause exists to remit the award (ii) any of the 8 matters referred to arbitration for reconsideration (iii) to set aside the award even in absence of any objections. It further empowers the Court to see whether the award is nullity because of the invalidity of the arbitration agreement or is prima facie illegal. I am fortified in my view by the case of M/s Awan Industries Ltd. v. The Executive Engineer, Lined Channel Division and another (1992 SCMR 65). The rule laid down by the Hon'ble Supreme Court in the case of Awan Industries was reiterated by another Full Bench of the Supreme Court in the case of Muhammad Tayab v. Akbar Hussain (1995. SCMR 73).

6. There are other cases where an award was ex parte made rule of the Court and which was set aside. The first case is of Meer Muhammad Sharif v. Mirza Muhammad Ashraf and 4 others (1980 CLC 1984) where a learned Single Judge of Lahore High Court, Aftab Hussain, J. (as his Lordship then was) allowed a Civil Revision filed under section 115, C.P.C. and set aside the decree through which an award was made rule of the Court on the ground that no notice was served upon the petitioner about the filing of award. In Ram Chander and others v. Jamna Shankar and others (AIR 1962 Rajasthan 12), it was held in line with the rule of case Ganeshmal Bhawarlal v. Kesoram Cotton Mills Ltd. (AIR 1952 Cal. 10) that where an ex parte decree is passed in terms of an award under section 17 of the Arbitration Act, it should be set aside on a summary application where such decree was passed without duly giving the notice of filing of the award or without allowing time to expire for applying to set aside the award. It was further held by a learned Single Judge of Rajasthan High Court in that case that the Court has inherent power and duty to do justice and to set aside a judgment and order passed ex parte without notice to the interested party.

7. The direct authority on the point in question is the case of Tasiruddin Brothers v. Faizullah Gungjee & Co. Ltd. (PLD 1966 Dacca 145) where an objection was raised before a learned Division Bench of erstwhile Dacca High Court that since the suit in that case was in connection with an award passed by the Tribunal, application under Order IX, Rule 13, C.P.C. was not maintainable. Reliance was placed on the case of ‑al Marwari and others v. Firm of Bridhi Chan Sri Lal (AIR 1924) Pat. 603). The submission of Advocate for the respondent in that case was not upheld, appeal was allowed, the ex parte judgment was set aside and the application under Order IX, Rule 13, C.P.C. was granted by the said Division Bench of Dacca (now Dhaka) High Court with the following observation which being complete answer to the objection of learned counsel for the plaintiff is reproduced as follows:‑‑ " .... The above grounds require investigation of the provisions of Arbitration Act and the Code of Civil Procedure. Section 41 of the Arbitration Act, and the rules made thereunder, the provisions of the Code of Civil Procedure, 1908, shall apply to all proceedings before the Court and to all appeals under this act and the Court shall have, for the purpose of, and in relation to, arbitration proceedings, the same power of making orders in respect of any of the matters set out in the Second Schedule as it has for the purpose of, and in relation to, any proceedings before the Court. From the aforesaid provisions of section 41 of the Arbitration Act, we find that the Code of Civil Procedure shall apply subject to the provisions of the Arbitration Act and the Rules made thereunder. No provisions of the Act or any rule made thereunder have been shown to us which can stand against the C application of the provision's of Order IX, rule 13, of the Code of Civil Procedure, to the proceedings in a suit arising out of an award made by the Arbitrators..."

8. In so far as application under Order IX, Rule 13, C.P.C. in an arbitration matter is concerned, I see no specific bar. However, such application may not be entertained where decree was passed on merits and after due consideration of objections by the other side. But where an award is made rule p of the Court in a summary manner as of instant case without considering objections of the othel side or on the grounds of non appearance of other party then such aggrieved party is entitled to file an application under Order IX, Rule 13, C.P.C. for seeking setting aside of ex parte decree. I am saying so as the recent trend of our superior Courts is to decide a lis on merits and not to knock out one party on technical grounds. Such practice may also save the parties from further round of litigation. In the instant case, this Court has not, considered the objections of defendant on merits nor considered the legality or otherwise of the award which act is violative of the provisions of sections 17 and 31 of the Arbitration Act, 1940. I may add here that the defendant has shown sufficient cause for setting aside ex parte decree as it has not been rebutted that Mr. I.H. Zaidi, Advocate, was busy before other Bench and had reached this Court at 9‑30 a.m. Instant application was filed on the next date of passing of impugned order. Pre‑occupation of an Advocate before other Bench has been held to be sufficient cause. For any reference see Babu Jan Muhammad and others v. Dr. Abdul Ghafoor and others (PLD 1966 SC 461).

9. As a result of above finding application under Order IX Rule 13, C.P.C. filed by the defendant is accepted but subject to payment of cost of Rs.10,000 (Rupees ten thousand, only) which the defendant shall deposit with the Nazir of this Court within thirty days. C.M.S./M‑195/K Application allowed