P L D 1967 Lahore 1221 (PLP)

SAJJAD AHMAD, J.‑This is a first appeal by the Anjuman Islamia Punjab, Lahore, whose suit for certain reliefs as described in the sequel was dismissed by Khan Ziaullah Khan, Civil Judge 1st Class, Lahore, on the 21st of May, 1954. The suit pertained to the appellant's claim for 2,144 kanals and 2 marlas of land situated in Chak No. 415, Tahsil Samundari, District Lyallpur, and two buildings, one known as Rifaat Manzil situated on the McLeod Road, Lahore, and the other as Nizam building situated on Mohni Road, Lahore, and mesne profits of the aforesaid pro perties from the 15th of November 1946, up to 5th of November 1949, which was the date of the institution of the suit, on the plea that the properties in question were made over into a wakf by the defendant‑respondents in deference to the wishes of their predecessor‑in‑interest, Khan Saadat Ali Khan, who was the owner of these properties by inheritance from his grandfather, K. B. Barkat Ali Khan. Both Barkat Ali Khan and Saadat Ali Khan had served the appellant as President and Secretary respec tively for many years. The famous Barkat Ali Muhammadan Hall in Lahore is due to the former's philanthropy. It was claimed by the appellant that it was appointed Mutawalli of the properties under the wakf. It was alleged that the defendant respondents, namely, Saadat Ali Khan's father's sister Mst. Asgher Kbatun (defendant No. 1), his two sisters Mst. Sarwar Khatun and Mst. Namwar Khatun (defendants Nos. 2 and 3 respectively) and his widow, Mst. Kishwar Khatun (defendant No. 4) had unanimously agreed to refer the question of the distribution of the estate of Saadat Ali Khan between them as heirs and also the allocation of the part of the property of Saadat Ali Khan as wakf property, in compliance with his wishes, to the arbitration of Muhammad Idrees Khan, a cousin of the deceased Saadat Ali Khan and the maternal‑uncle of Mst. Namwar Khatun response dent. The agreement (copy Exh. P. 8) was executed in this behalf which provided inter alia that the arbitrator shall have the authority to give directions for creation of a wakf alal aulad or wakf fi-sabilillah or to give directions for erection of a suitable building to commemorate the memory of the deceased (Saadat Ali Khan) and his ancestors. As it is necessary to determine the precise nature of the authority given to the arbitrator in the matter of creation of a wakf and as the parties have sought to put their own interpretation on the relevant text of the agreement, the original, which is in Vernacular, may be quoted :‑ The agreement bears the thumb impressions of all the four defendant respondents but that of Mst. Asghar Khatun was disputed at the trial. It was attested by Mubarak Ali Khan, a son of Mst. Asghar Khatun, and Abdul Hamid Khan, a relation of the defendant‑respondents. The arbitrator gave his award on the 12th of January 1946 and a note is appended at the end of it that it was duly read over to the parties who signed it in token of its acceptance, except Mst. Asghar Khatun, who was ill and for that reason her son, Mubarak Ali Khan, signed it on her behalf. The part of the award bearing on the creation of the waqf which, is in dispute in this case, translated into English, is as follows:‑ "During inquiry I have come to know that the grandson of Deputy Barkat Ali Khan deceased, namely, Saadat Ali Khan deceased, and whose wishes are regarded by all the heirs as worthy of compliance by them, had wanted that he should create a waqf fi sabilillah of a portion of his property and appoint the Anjuman Islamia, Punjab, Lahore, as its Mutawalli. Consequently, the late Saadat Ali Khan had carried his desire of setting up the waqf to the point of writing to K. B. Azimuddin Khan, Additional Commissioner, Meerut to prepare a draft of the waqf deed and despatch it to him as early as possible. The Khan Bahadur took some time in preparing the draft and in the meanwhile Saadat Ali Khan died suddenly and his wish was not carried to fruition. Besides, it has been proved during the inquiry that after the death of Saadat Ali Khan there was a unanimity between the signatories of the arbitration agreement, as heirs of Saadat Ali Khan, to carry into effect this will of the deceased and undertook in the presence of K. B. Azimuddin Khan, Additional Commissioner, Meerut, to create a waqf fi-sabilillah of one‑fifth of Saadat Ali Khan's property. In order to uphold this unanimous decision of the heirs, I direct that the following properties (i. e. the properties in dispute) be created into a wakf fi-sabilillah within a year of this award. The heirs should appoint the Anjuman Islamia, Punjab as the Mutawalli and band over possession of the properties to the Anjuman."

2. On the 20th of March 1946, Mst. Kishwar Khatun moved an application under section 14 of the Arbitration Act, 1940, to the Senior Civil Judge, Lahore, impleading the other respondents and also the arbitrator, Muhammad Idrees Khan, and prayed that the award be filed in Court and a decree made in accordance with it. In consequence of this, the arbitrator filed the award on the 5th of April 1:946, deposing to its correctness. On that very date, Pandit Kristian Chandar, an Advocate and counsel for Mst. Asghar Khatun, Mst. Sarwar Khatun and Mst. Namwar Khatun, appeared in Court and admitted the correctness of the award and asked for a decree in its terms, which was granted on the same day. This was followed by an inheri tance mutation of the estate of Saadat Ali Khan which was entered on the 27th of September 1945 and attested in favour of the four female heirs on the 29th of September, 1946. The directions in the award for the creation of waqf fi-sabilillah and delivery of 1/5th of the property of Saadat Ali Khan to the Anjuman Islamia, Punjab were ignored, leading to the institution of the suit by the appellant.

3. The respondents in their rejoinder denied the Anjuman's right to claim the property as waqf. They did not admit the execution of the arbitration agreement and took the plea that they were purdanashin ladies and were unaware of what had been done in their name and on their behalf. It was averred on behalf of Mst. Asghar Khatun respondent that she was insane at the time of the alleged execution of the arbitration agreement, which did not have her consent. It was contended that no waqf was created under the agreement. Assuming that it is valid, the arbitrator could only give a direction for the creation of the waqf to the respondents which was not followed. The Anjuman was, therefore, not the Mutawalli and the beneficiary of the properties in dispute.

4. The following issues were framed in the case :‑ (1) Whether the award by Muhammad Idrees Khan created a valid waqf of the property in dispute? (2) Whether the award was not explained and understood by the defendants when it was made the rule of the Court? (3) Whether the reference to arbitration was bad and can the defendants question it now ? (4) Does a suit of specific performance of the completion of direction given in award regarding the completion of the waqf lie? (5) If issue No. 4 is answered in the affirmative, can the defendants change the terms of the decree? (6) Was defendant of unsound mind at the time of reference? (7) Relief.

5. The trial Court answered issues Nos. 1, 2, 3 and 6 against the plaintiff on the main ground that Mst. Asghar Khatun, respondent No. 1, was insane at the time of the execution of the agreement, and that the entire arbitration proceedings and the award qua her share in the disputed properties were invalid and inoperative. It was held by the trial Judge that so far as the other respondents are concerned, they had entered into the arbitration agreement after fully comprehending its terms and had also accepted the award by their conduct. It was, however, held that neither the arbitrator nor the respondents had created a waqf, the latter by their acceptance of the award, although it was followed by a decree. Issue No. 4 was answered in the negative and it was added that the plaintiff being a stranger to the arbitration agreement had no locus stand! to enforce the award, or any part of it based on that agreement. The issue on limitation was decided in favour of the appellant, the suit having been instituted within three years of creation of the waqf by the award. In the ultimate result the suit was dismissed.

6. An appeal was preferred to this Court, which was heard by a Division Bench consisting of Mr. Justice Muhammad Ydqub Ali (as he then was) and Mr. Justice Abdul Hamid. They differed in their conclusions, the former upholding the appellant's claim, while the latter rejecting it and endorsing the reasoning of the trial Judge. The case was referred to Mr. Justice Shabir Ahmad under section 98 of the Code of Civil Procedure and clause 26 of the Letters Patent of the Lahore High Court. The last mentioned held, vide his judgment, which is reported in P L D 1962 Lah. 993, that the order of reference not having been made jointly by the two Judges who had heard the appeal and having been made by only one Judge, it was in contravention of clause 26 of the Letters Patent and the third Judge, i e., he himself, had no jurisdiction to dispose of the appeal. It is in these circumstances that this appeal has been heard afresh by this Bench under the orders of the learned Chief Justice.

7. The learned counsel for the respondents raised a preli minary argument that as the two learned Judges who had first heard the appeal have not stated the point of law on which they had differed, the decree of the trial Court stands confirmed under section 98(2) of the Code of Civil Procedure. In advancing this argument the learned counsel ignored the provisions of the subsection (3) of section 98 of the C. P. Code which referred to the provisions of the Letters Patent of the High Court, as governing the matter and which were left unaltered and unaffected and according to which where in a case heard by a Division Court composed of two or more Judges is divided in opinion as to the decision to `4 be given on any point. Such point shall be decided according to the opinion of the majority of the Judges, if there be a majority, but if the Judges be equally divided, they shall state the) point upon which they differed and the case shall then be hear a upon that point by one or more of the other Judges and the point/ shall be decided according to the opinion of the majority of the Judges who have heard the case, including those who had first heard it. It is clear that under clause 26 of the Letters Patent, reference to a third Judge in case of a difference of opinion between the two Judges can be both on points of law and of face and this provision of the Letters Patent is not controlled by section 98 of the Civil Procedure Code. In fact, it is the reverse, f. e., clause 26 would have the governing effect as against section 98 of the C. P. Code. But this question does not arise in the present appeal because, as already pointed out, the reference to the third Judge (Mr. Justice Shabir Ahmad) was found by him to be invalid and the learned Chief Justice has convened a fresh Division Bench for the hearing of the appeal, upholding the view point of Mr. Justice Shabir Ahmad. The respondents did not take any steps to challenge the validity of those orders. The appeal has been heard by us not on a reference under section 98 of the C. P. Code or under the Letters Patent but as a first appeal in the ordinary course.

8. On merits, the main points convassed before us were, firstly about the insanity of Mst. Asghar Khatun at the time of the execu tion of the arbitration agreement on the 14th of September 1945, and it was argued on that basis that the agreement was null and void and so was the award that followed it. It was also pointed out that the agreement does not bear the signatures or thumb impression of Mst. Asghar Khatun. It was argued, secondly, that on the language of the award no valid waqj was created in favour of the appellants, as the award in terms of the original agreement merely made a direction to the respondents to create a waqj with which the respondents have not complied and their compliance cannot be compelled. The learned trial Judge has upheld the plea that Mst. Asghar Khatun was of unsound mind and he has in this connection relied on the statement of Dr. Ghulam Muhammad (D. W. 1) and Mr. Muhammad Ali (D. W. 2). The former had deposed that he had been visiting the family of the respondents for the last 30 years and he bad found that Mst. Asghar Khatun was having attacks of insanity. He admitted, however, in his cross‑examination that he had never treated this lady for insanity. According to Dr. Muhammad Ali (D. W. 2), be had been treating Mst. Asghar Khatun during the life‑time of Saadat Ali Khan and found her in an unsatisfactory mental condition. The other oral evidence led on the point tried to show that Mst. Asgbar Khatun was insane although she was having some lucid intervals. Mirza Ashraf Beg, a finger print expert, who was produced by the respondents as D. W. 4, deposed that the thumb‑impression on the agreement of reference purporting to be that of Mst. Asghar Khatun was not hers, as it did not tally with her specimen thumb‑impression. As for her thumb‑impression appearing on the Wakalat nama of Pandit Krishan Chandar, Advocate, who had appeared as her counsel in the proceedings for making the award the rule of the Court, it was said that the impression was blurred for recognition. We consider that the learned trial Judge has ignored certain pertinent circumstances in accepting the plea of insanity on the part of Mst. Asghar Khatun at the time of the execution of the agreement of reference or at the time of making of the award and the proceedings which followed. The first is that the arbitrator, who was appointed in the case, namely, Muhammad ldrees Khan, was a relation of the respondents who was respected by them and was held in high esteem by the family, as admitted by D. W. Mubarak Ali Khan, the son of Mst. Asghar Khatun. There was no reason for him whatsoever to wrong any of the respondents and to deprive them of their properties without their consent or for that matter to say that the agreement of reference enjoyed the unanimity of all the heirs, including Mst. Asghar Khatun if Mst. Asghar Khatun was in fact insane and was incapable of giving consent. There is a recital in the award that the arbitrator had frequently discussed the entire issue with all the respondents who produced their respective evidence before him, and there is no reason to hold that this recital is factually untrue. The agreement of reference bears the thumb‑impression of Mst. Asghar Kbatun, attested by her own son, Mubarik Ali Khan, and Abdul Hamid, another relation. Mst. Asghar Khatun did not observe pardah from Muhammad Idrees Khan and there was no question of a mistaken thumb‑impression or a forged thumb‑impression of Mst. Asghar Khatun appear ing on the agreement of reference. That the arbitrator was very punctilious in the mattef of obtaining thumb‑impressions of the respondents in token of their acknowledgement is clear from the circumstance that when he read over his award to the respondents he particularly mentioned in a note appended to it that Mst. Asghar Khatun was not present owing to her illness and that the award was accepted by her son Mubarik Ali Khan, on her behalf, who appended his signatures to it. The medical evidence on the point of insanity of Mst. Asghar Khatun produced by the respondents is inconclusive. The statement of Dr. Ghulam Muhammad is hardly of any value as he did not treat Mst. Asghar Khatun for her insanity, although he had been visiting the respondents' family for over thirty years. Mubarak Ali Khan, a son of Mst. Asghar Khatun, admitted that she had not been treated for insanity by anyone which be attributed to her conservatism. Dr. Muhammad Ali (D. W. 2) said that he did not remember if he examined her in 1945 which was the year of the execution of the agreement of reference. He admitted that when she was in her lucid moments, she observed pardah, conceding thereby that she did have lucid intervals, and that he was called in only when she had had an attack. He states that as a family doctor he had advised the respondents to consult a Specialist of mental diseases for the treatment of Mst. Asghar Khatun but, curiously enough, he did not know if his advice was acted upon. This shows lack of solicitude of a long time patient, specially on the part of a family doctor. As against this, there is adequate circumstantial and documentary evidence showing that Mst. Asghar Khatun was in possession of her senses at the time when the agreement for reference to arbitration was executed and subsequently when the award was made the decree of the Court. We have already referred to her thumb‑impression on the agreement itself, as attested by her own son Mubarak Ali Khan and vouchsafed by the arbitrator himself. On the 5th of April 1946, the arbitrator while producing the arbitration agreement had deposed that all the parties to the agreement had acknowledged the correctness of the award. The Civil Judge recorded the statements of the counsel for the parties and on those statements made the decree Exh. P.‑13 in the following 1 terms :‑ "I order that the award be made a rule of the Court and that a decree be passed in accordance therewith." The statement of Mirza Ashraf Beg that Mst. Asghar Khatun's thumb‑impression on the Wakalatnama in favour of Pandit Krishan Chandar, Advocate, was blurred does not negative the presumption that Mr. Krishan Chandar did represent her in the Court of the Civil Judge, Mr. Manohar Lai, with full instructions, and made a statement, committing her with full authority to the correctness of the award. It is admitted that on the 14th of November 1946, Mst. Asghar Khatun executed a power‑of‑attorney in favour of Mubarak Ali Khan, her son, appointing him as the Manager of her estate, which had come to her by virtue of the award and the decree passed on it. This power‑of‑attorney was presented for regis tration at the house of the respondents and registered by Khawaja Dil Muhammad, Sub‑Registrar, on the 18th of November 1946. It is also in evidence that on the 3rd of March 1949, all the respondents including Mst. Asghar Khatun executed another power‑of‑attorney in favour of Mirza Muhammad Aslam Beg, making him the Manager of their properties. This is also signed by Mubarak Ali Khan and was duly attested by the Sub‑Registrar on the same day. The aforesaid Mirza Muhammad Aslam Beg produced the copies of the award and the decree before the revenue officer for the attestation of the mutation in favour of the various respondents. According to the evidence of Mirza Ashraf Beg, the thumb‑impression of Mst. Asghar Khatun on the two powers‑of -attorney, admittedly, executed by Mst. Asghar Khatun in favour of Mubarak Ali Khan and Mirza Muhammad Aslam Beg, were also blurred which is a curious coincidence. It appears to us that not much faith can be put on the specimen thumb‑impressions of Mst. Asghar Khatun that were obtained from behind the curtain by the officer who executed this job on the identity of Mst. Kishwar Khatun and Mubarak Ali Khan. About the latter there is a remark by the trial Judge in the course of his recorded deposition that his conduct was not straightforward. It should be observed that the thumb‑impressions of Mst. Asghar Khatun bearing on the two‑ powers‑of‑attorney, executed by her in favour of Mubarak Ali Khan and Mirza Muhammad Aslam Beg respectively, which were found blurred by Mirza Ashraf Beg, bore the attestation of Mubarak Ali Khan and one of them was in his own favour. We are, therefore, not in any doubt that Mst. Asghar Khatun had thumb‑impressed the agreement for reference to arbitration in full comprehension and understanding of her act in doing so.

9. The next point argued before us by the learned counsel for the respondents was that neither the respondents nor the arbitrator had created a waqf of the suit properties. It was urged that according to the agreement the arbitrator was only authorised to issue a hidayat without any binding effect and that he did actually do so in his award knowing the limitations of his autho rity and that the respondents were rights to ignore the hidayar of the arbitrator, After carefully reading the agreement of reference and the award of the arbitrator, we have no hesitation in holding that what the respondents really intended in the arbitra tion agreement was that a waqf out of the properties of the late Saadat Ali Khan was to be created as a matter of obligation in deference to the wishes of the deceased and the arbitrator was entrusted with the task of giving it a practical shape by fixing the identity and the extent of the property to be constituted into waqf. The word "hidayat" in this context has to be interpreted as a mandatory direction, which compelled obedience. This is made clear by the further statement of the extent of the arbit rator's authority in this respect to the effect that "whatever decision the arbitrator would give regarding the disputed proper‑ c ties would be absolute and would be acceptable by us in all circumstances without demur and none of the parties would have any right to annul it. In Muslim Law there is no set formula for creating a waqf. The only requirement is a clear intention for creating a waqf and a declaration by the waqf to that effect and the appointment of a Mutawalli. This was clearly done by the respondents when they admitted the waqf as created by the arbitrator's award in consequence of their own agreement, to be correct and when they undertook to abide by its terms both before the arbitrator and in the Court of the Civil Judge who made it the rule of the Court. The decree which was obtained was acted upon in the sense that the inheritance mutation was duly attested in their favour according to the terms of the award and in addition Mst. Kishwar Khatun has been in management of the entire property on an allowance of Rs. 250 per mensem over and above her own share of income in the property as enjoined by the arbitrator in the award. In our view, when the respondents appeared before the civil Court and asked for a decree in terms of the award, including a decree for the creation of the waqf, it was an unambiguous declaration on their behalf about the creation of the waqf from which there can be no retraction. Under the Muslim Law, as stated in Amir Ali's Muhammaden Law, Vol. I., 1884 Edition, at pages 174 and 175, no formality is required for the creation of a waqf. Only the intention of the donor is to' be seen. At page 185 of the same book, it is stated that a waqf is like emancipation (of a slave) and the right of donor becomes extinguished by merely stating that he has made a waqf, even if no object is mentioned. At page 188 the learned author says that if a person says that his land is sadqa moqufa after his death for a year, it becomes a permanent waqf by means of his bequest. At page 189 it is stated that according to Abu Yusuf, mere saying that "I have made this property waqf" is sufficient to extinguish the proprietor's rights of the waqf, for by that the property is assigned away to God, like the emancipation of a slave. Once the words are pronounced, neither the emancipator nor his heir s creditors can question the absoluteness of the emancipation. We consider that not only the respondents as owners of the properties had made a declaration of a waqf in this case in deference to the wishes of the late Saadat Ali Khan but the arbitrator also as the agent of the respondents had done so and he was fully invested with that authority by unanimous agreement between the heirs. As in the Contract Act, so under the Muslim Law (See Hedaya, Vol. 111, Book 23) a person can appoint an agent to represent him in dealing with third parties and to act on his behalf. Gifts can be made through agents and a waqf is nothing but a gift to charity. The arbitrator's statement in the award that one‑fifth of the estate was waqf according to the will of Saadat Ali Khan, which has to be implemented, is binding on the principles, namely, the respondents. 10-The trial Court also non‑suited the plaintiff‑appellant on its finding on issue No. 4 on the ground, the plaintiff being a stranger to the arbitration agreement had no locus stand! to enforce the award or any part of it, based on that agreement. The learned trial Judge, in our opinion, has not viewed the question in its true perspective. It is not possible to dispute the common law principle as affirmed by the House of Lords in Dunlop Pneumatic Tyre Co., Ltd. v. Self ridge & Co., Ltd. (1915)AC847) that only a party to a contract can sue on it and that a stranger to the consideration cannot sue on the basis of the contract even though it is made for his benefit. But that principle is hardly attracted to the instant case. The plaintiff did not sue as bene ficiary under the agreement of reference, nor the suit is for the enforcement of the award. The award had already been made a rule of the Court by the consent of all the parties to the agreement of reference. The plaintiff's suit is founded on the consent decree by which the award pronounced by Muhammad Idrees Khan was made a rule of the Court and which inter alia created a waqf fi sabilillah in respect of the 1/5th of the property of late Saadat Ali Khan and appointed the plaintiff a trustee of the waqf property. Indeed, the respondents hold property of the deceased under the same award and not as his Muslim Law heirs. It is not disputed that Mst. Asghar Khatun one of the beneficiary under the award) is not a Muslim Law heir to the deceased and, therefore, but for the award no part of his estate would have devolved upon her. On no discoverable principle, therefore, can the defendants be permitted to abide by the award only in so far as it to their advantage dividing 4/5th of the estate of the deceased among them, and to repudiate it in so far as it creates the waqf with regard to the remainder 1/5th and appoints the appellant as its sole Mutawalli. The cardinal fact in the case is that award in its entirety was made a rule of the Court and must, therefore, take effect as much.

11. And then common law rule that a stranger to a contract cannot enforce it, is subject to an important exception. The Courts have recognized the right of "cestui que trust" to sue on the basis of a contract even though not a party to the contract. Any such right as pointed out by Lord Haldane in the case of Dunlop Pneumatic Tyre Co. does not arise by way of contract, as such, that right being vested in the trustee but arises from the interest, the beneficiary has in the property, the subject of the trust. Shamia v. Joary (1958)1 Q B 4482) is a recent English case in which a third party was allowed to enforce a contract on the principle of "money had and received". In that case a debtor had promised at the request of the creditor to pay money owed to him to a third party (creditor's brother) who was also informed of the arrangement arrived at between the debtor and the creditor. On debtor's failure to pay him the stipulated amount, the creditor's brother sued him, inter alia, "for money had and received by the defendant to the plaintiff's use". The claim was decreed against the debtor on the ground that there was a "fund" in his hand at the time when he accepted his creditor's instructions and promised to make the payment to his brother, the plaintiff. We consider that the principle in the precedent case can well be extended to the instant case.

12. In view of this discussion, we hold that the suit pro perties are waqf fi sabilillah and the appellant being the Mutawalli is entitled to their possession. Accordingly, we accept this appeal and decree the appellant's suit with costs. The appellant had claimed Rs. 100 tentatively as the mesne profits for the period from the 5th of September 1945 up to the date of the institution of the suit and court‑fee was assessed on the same. The appellant had prayed that it will put more court‑fee on the proper assess ment of the mesne profits. This assessment will have to be done by the trial Court. K.M.A. Appeal accepted.