P L D 1956 (W (PLP)

Moreover, it was not clear whether the intention of the parties was to refer the dispute to the arbitration of the officer holding the post of Secretary Civil Supplies at the time the contract was concluded or at the time when the dispute arose or at the time of the actual reference. This involved an uncertainty which vitiated the arbitration clause. A. R. Changez, Advocate‑General for Appellant. Malik Muhammad Ikram for Respondent. RAHMAN, C. J.‑

This is a first appeal from an order passed by Mr. Muhammad Ishfaq Ali, Civil Judge 1st Class, Lahore, by which he declined to stay proceedings in a suit lodged by Irfan & Co. against the Province of the Punjab for recovery of Rs. 60,

000. The Punjab Province has now been replaced by the West Pakistan Province. On behalf of the defendant‑appellant, reliance was placed in the trial Court on clause 5 of the agreement between the parties and it was pleaded that this was an arbitration clause binding on the parties and. compelling them to submit their dispute to the arbitrator named therein. Under section 34 of the Arbitration Act, it was requested that the suit be stayed pending the completion of the arbitration proceedings. The prayer was resisted by the plaintiff firm and the following issues were framed by the learned Civil Judge:-- (1) Whether the Civil Court has jurisdiction; if so, to what extent? (2) Whether the parties did not agree to refer the matter to arbitration? (3) Whether the case should not be referred to arbi tration? The learned civil judge held that the relevant clause in the agreement between the parties was not really an arbitration clause. In the alternative, he found that the defendant had taken a step in the proceedings before asking for stay of suit under section 34 of the Arbitration Act, and this disentitled the defendant from pursuing his remedy by arbitration. The learned Judge also observed that it had been argued before him on behalf of the plaintiff that no one could be appointed an arbitrator simply by reference to an office held by him, but he gave no express finding whether this vitiated the arbitration clause or not. The plaintiff's claim arose out of a contract entered into between the parties for the purchase of flood‑damaged wheat belonging to the Province amounting to some 1,800 toils on the terms and conditions embodied in a written agreement. Clause 5 of this agreement runs as follows:‑ "Any dispute under this contract will be referred to the Secretary to Government Punjab, Civil Supplies Depart ment. whose decision will be final and binding on the parties." The learned Civil judge has observed in the course of his judgment that there was no express mention in this clause that the Secretary Civil Supplies would act as an arbitrator. He also referred to two authorities of the Sind Chief Court Hormusji v. Local Board, Karachi (A I R 1934 Sind 200) and Des Ram v. Secretary of State (A I R 1936 Sind 201), in support of his view that the clause in question did not amount to an arbitration clause. In the first case; two clauses of an agreement called for interpretation. They provided that the President of the Local Board, Karachi, would be the judge for interpretation of the meaning and intention of the contract and for any complaint which the contractor may have and his decision would be considered to be final. The other relevant clause allowed the contractor to appeal from the order for decision of any subordinate of the Engineer, Sub‑overseer or Overseer etc. to the Engineer, and from the latter's order or decision to the President of the Board whose decision was then to be final. Clearly there was no indication here that any dispute arising under the contract was to be referred to the President of the Board as an arbitrator. The case is, therefore, not in point. In the second Sind case also, it appears that both parties did not construe the relevant clause in their agreement as an arbitration clause during the negotiations preceding the suit. The clause in question was in the following terms:‑ "Except were otherwise specified in the contract, the decision of the Superintending Engineer of the Division for the time being shall be final, conclusive and binding on all parties to the contract upon all questions relating to the meaning of the specifications, designs, drawings and instructions hereinbefore mentioned and as to the quality of workmanship or materials used on the work or as to any other question, claim, right, matter or thing whatsoever in any way arising out of, or relating to, the contract, designs, drawings, specifications, estimates, instructions, orders, or these conditions or otherwise concerning the works, or the execution or failure to execute the same, whether arising during the progress of the work or after the completion or abandonment thereof, or the contract by the contractor, shall be final, conclusive and binding on the contractor." The learned Acting 'Judicial Commissioner observed in that case that a mere agreement between two persons, to be concluded by the decision of a third, does not by itself constitute such third person an arbitrator. To give him that character, according to the learned judge, it should be intended that such third person should determine the dispute in a quasi‑judicial manner. He went on to add that the intention of the parties in any particular case must necessarily depend upon the true construction of the agreement between them. The learned judge was inclined to the view, after considering the correspondence carried on between the parties, that the Superintending Engineer was to decide the dispute using his expert knowledge only and not in a quasi‑judicial manner. The facts of the case are, therefore, distinguishable from those of the present, though I should have been disposed to hold on a fair construction of the clause in question there that it was a proper arbitration clause. It seems to me that the absence of express words like "arbitrator" or "arbitration" in. the clause under discussion here is not conclusive on the point whether there was animus arbitrandi between the parties or not. I am supported in this view by a D. B. judgment of the Lahore High Court as Governor‑General v. Simla Banking and Industrial Co. (A I R 1947 Lah. 215). In that case a clause similar to the one which fell to be construed in the second Sind case above, was held to be a proper arbitration clause, though it was not enforced on other grounds which will be noticed presently. I find myself in respectful agreement with that view and, in my opinion, the clause in question in the present case was not bad as an arbitration clause for mere want of express mention that the Secretary Civil Supplies would act as an arbitrator‑ B Having regard to the nature of the contract in the present, case, it is clear that the Secretary Civil Supplies could not be expected to give his opinion as a mere expert. He was obviously to act as an arbitrator if a dispute arose under the contract and I would have had no difficulty in holding that the clause was not vitiated on‑this ground. The second question that has been argued before me relates to the finding of the trial Court to the effect that the defendant‑appellant had taken a step in the proceedings which disentitled him to the relief envisaged in section 34 of the Arbitration Act. The suit was instituted on the 12th of July 1952 and the defendant was summoned for the 7th of October 1952. On that date the Government Pleader appeared on behalf of the Province and the order passed by the Court was in the following terms:‑ "The Government Pleader seeks adjournment for, instructions. To come up on the 8th of November 1952. '" The case was then adjourned to the 3rd of December 1952 as the 8th of November happened to be a holiday. On the 3rd of December, an application was moved on behalf of the Province by the Government Pleader under section 34 of the Arbitration Act praying that the suit be stayed. The learned Civil judge relied on Sarat Kumar Roy v. Corporation of Calcutta (1 L R 34 Cal. 443) and Messrs. Fleming Shaw and Co. v. Haji Yusif Ellias (40 1 C 81) as authorities for the proposition that an application for adjournment of a hearing is a step in the proceedings within the meaning of section 19 of the old Arbitration Act, which corresponds to section 34 of the new Act, irrespective of the intention with which the application is made. In the Calcutta case, the defendant had asked for further time to file a written statement. That was clearly, therefore, a step in the proceedings in the suit. In the second case, which was from the Judicial Commissioner's Court Sind, the counsel for the party concerned applied for postponement on the ground that documents bearing on the suit had to be discovered and the time allowed after service of the party on the summons was too short to permit of this being done. On the facts, it seems to me that both cases were distinguishable from the present one. My attention was invited by the learned Advocate General for the West Pakistan Province to Bhowanidas Ramgobind v. Pannachand‑Luchmipat (A I R 1925 Cal. 801 (S. B)) and Ramlal v. Haribux (A I R 1.934 Cal. 796 (S. B)). In the first case, a party proceeded against ex‑parte, applied for leave to enter an appearance and to ask for stay of proceedings under an arbitration clause. Leave to put in appearance was granted and it was held that the appli cation made did not constitute a step in the proceedings even though the party had asked for a copy of the plaint in addition. The test laid down in the ruling was that an act in the nature of an application to the Court, which indicates that a party is willing that the suit should‑proceed, would be a step in the proceedings within the meaning of section 19 of the old Arbitration Act. In the second Calcutta case, an application had been made for adjournment of summons taken out by the plaintiff firm to compel the defendant firm to file the written statement. Roy J. observed that he was not prepared to accept that this amounted to a step in the proceedings. There was, however, no discussion on the point contained in the judgment. On the other hand, Mr. Muhammad Ikram on behalf of the respondents cited Murlimal v. Messrs. Banarsidas Sons (A I R 1935 Sind 62 (D B)) and Subal Chandra v. Muhammad Ibrahim (A I R 1943 Cal. 484 (S B)). In the Sind case, it was ruled that an application made to a Court for postponement of hearing of a suit is a step in the proceed ings within the meaning of section 19 of the old Act and the intention of the party is not relevant in this context. The judgment in that case, with all respect to the learned Judges who decided it, is somewhat difficult to understand as it appears that an application for stay of proceedings had already been moved before the act relied on as a step in the proceedings was done. Apparently, therefore, the language of section 19 of the old Arbitration Act had been satisfied. In the Calcutta case, Das J. held that the criterion to decide whether an act constituted a step in the proceedings was (a) whether an application was made to the Court either on summons or orally arid (b) whether the act was such as would indicate that the party was acquiescing in the method adopted by the other side of having the dispute decided by the Court. If this criterion is applied to the facts of the present case, I do not think that it could be reasonably said, that the Punjab Province had acquiesced in the method of adjudication adopted by the other side. The Government Pleader had received and instructions in the case and he, therefore, asked for time to do so. It did not; to my mind, imply that there was no objection on the part of the Province to adjudication of the dispute by the Court. I am, therefore, inclined to the view, after a consideration of these authorities, that in the present case the act of the Government Pleader did not constitute a step in the proceedings within the meaning of section 34 of the Arbitration Act. There remains the question of vagueness or uncertainty to be determined. In Governor‑General v. Simla Banking and Industrial Co., the words "the Superintending Engineer of the Circle for the time being" were held to be vague and importing an uncertainty into the arbitration clause. The learned judges pointed out in that case that Mr. B. S. Puri was the Superin tending Engineer when the suit was instituted, it was not known who the Superintending Engineer was when the case came up for decision before the High Court for the first time and which other Superintending Engineers had been .in charge of the Circle from time to time. The words "for the time being" in the arbitration clause were not clearly referable either to the Circle or to the Superintending Engineer and this constituted an ambiguity. Even if, however, according to the learned judges, the expression "Superintending Engineer of the Circle" was to be taken collectively, it was not possible to say with certainty which of the Superintending Engineers who held charge of the Circle at various times was intended to arbitrate. In the words of the learned judges: "Was it the officer who held the office of the Superintending Engineer at the time when the suit was instituted or did it refer to the person who held that office at the time when the 'question, claim, right, matter' etc., arose for decision or in other words when the cause of action had accrued to the plaintiff?" It was pointed out that the persons who were occupying the office of Superintending Engineer at either of the two times mentioned above were no longer Superintending Engineers and had in fact retired from the service of Government. It was, therefore, held that it had become impossible to give effect to the agreement and it was declared unenforceable for want of certainty. In my opinion, the position in the present case is some what similar. It is conceded by the learned Advocate General that there is no officer with the designation of Secretary Civil Supplies existing. The Civil Supplies Department was re-designated as the Food Department some time ago and there now exists a Secretary Food but not a Secretary Civil Supplies. In terms, therefore, the clause sought to be invoked by the Province does not refer to any existing officer. Then again it is not clear whether the' intention of the parties was to refer the dispute to the arbitration of the officer holding the post of Secretary Civil Supplies at the time the contract was concluded or at the time when the dispute arose or at the time of the actual reference. In my humble judgment, this involves an uncertainty which vitiates the arbitration clause. I hold, therefore, that the clause is unenforceable as an arbitration clause. The order passed by the learned Civil judge can therefore, be sustained, though not on the grounds mentioned by him. I, therefore, dismiss the appeal, but leave the parties to bear their own costs in this Court. A. H. Appeal dismissed.