P L D 1980 Lahore 422_ (PLP)

This is an appeal against the order dated 14-12-1972 passed by Mr.Muzaffar Hussain, Administrative Civil Judge, Rawalpindi, dismissing the objections of the appellant against an Award of the Arbitrator, dated 21-11-1967.

2. The disputes between the parties arose out of a contract C. A. 'Pak. No, 29 of 1957-58 awarded to the respondent for construction of T. B. Hospital for Ex-Servicemen - at Rawalpindi for a lump sum of Rs. 13,33,

200. After the completion of the works, there arose certain disputes between the parties which were referred to Col. N. Humayune, as an Arbitrator. The Arbitrator gave the following Award: AWARD-C. A. No. PAK. 29 9F 1957-58 In the matter of the Indian Arbitration Act, 1940 as adopted in Pakistan and an arbitration between the President of Pakistan represented by D. W. & C. E. (Army) Rawalpindi-Respondent and Messrs M. A. Aziz & Sons Contractors, Rawalpindi-Claimants. Whereas in pursuance of an agreement in writing C. A. Pak. No. 29 of 1957-58 certain differences arose between the respondent of the one part and the Claimant of the other. part. And whereas request was made to act as the sole arbitrator to hear and determine the disputes arising out of ' the said contract agreement. Now I, Col. N. Humyune, having taken upon myself the burthen of the reference: Do hereby make and publish this my final award, in Writing to and concerning the matters so referred to me as follows :-- .

1. I am award and direct that the respondent shall pay to the claimant the amounts shown below :- Item No. of the Joint Award Statement Item No. Rs. 1 _ .. , 15,270 2 ... ... ... 30,350 3 ... ... ... 40,000 4 ... ... ... 15,100 5 .. -. ... 80,000 6 ... ... 29,778 7 . ... ... ... Nil 8 ... ... ... ... 4,350 9 ... ... .... ... .Nil 10 ... .:. ... Nil 11 ... ... ... Nil 12 . , ... ... ... 17,125 13-A ... ... ... ... 9,000 B ... ... ... ... 5,000 C ... ... ... ... Nil 14 ... ... ... ... Nil 15 ... ... ... ... 4,500

2. I award and direct that the claimant shall pay to the respondent the amounts shown below Item No. of the Joint Award . Statement Item No. Rs. 1 Nil ' 2 ,. ... ... Nil 3 .. ... .. .. .. 1,5666.31 4 ... ' ... ... 1,140.00 5 ... ... ... ... Nil 6 ... .. : ... ... Nii 7 ... ... . ... . .Nil

3. I award and direct that the respondent shall pay to the claimants a net amount of Rs. 2,47,766.69 (Rs. Two Lakhs, forty-seven thousand, seven hundred, sixty-six and .Paisas sixty-nine only) as a result. of the awards at 1 and 2 above, in full and final settlement of the disputes, as referred to me.

4. I award and direct that the final bill relating to this C. A. is NOT adjustable against this Award. The. final bill has already been adjusted in this award.

5. I further award and direct that each party shall bear its own cost of the reference and, that the respondent shall bear the full cost of the stamps affixed to this award viz. Rs. 48 only. ' (Sd.) Colonel Arbitrator (N. Humayune). As witness my hand this 21 day of November ]

967. Signed and Published In the presence of (Sd.) Witness.

3. After the award was filed by the arbitrator, the appellant filed objections alleging that the arbitrator had misconducted himself, had failed to. determine the real points at .issue, had exceeded the terms of reference and his jurisdiction in determining certain other items, had not followed the normal procedure or proper norms of a judicial inquiry, had not based his finding on evidence and acted on conjectures or personal knowledge and had not given any reason in support of his findings. Specific objections about some claims were also raised. (a) As regards the claim No. 1 it was stated .that it was about the changing of sites of Administration Block and Garage, although only the Administration Block was changed and not the . site for Garage yet the amount - claimed inter alia on account of change of. site of Garage was also allowed. Moreover, it did not involve- any excavation through a hard rock. The claimant was also estopped from making the whole or part of the claim. He had not adduced any evidence or furnished any data in support of it. (b) It was stated about Claim No. 2 that it was about extra brick work,; although no extra work was involved in it, This claim was also an afterthought. (c) Claim No. 3 in respect of air-conditioning work was inadmissible as the air-conditioning work was included in' the drawings shown against Serial Nos. 63 to 68 of the list of drawings and was covered by the lump sum : price, quoted by the contractor. This work was not executed and had to be deducted, from. the lump sum price. (d) Claim No.. 4, respecting extra cost of cement plaster was indmissible because no instruction was ever issued to the contractor to do plastering instead of cement" painting. (e) The last and important objection was about claim No. 5 that this claim for providing steel lockers was unfounded since only steel racks bad been supplied by the contractor and the same was included in the- lump sum contract."

4. Certain objections were also raised to that portion of the award which pertained to the counter claim of the appellant. It is unnecessary to describe these objections. '

5. The written statement consists of mostly bare denials. It may, however, be stated that it was admitted that the terms `lockers' and `racks' were synonymous and that steel racks were provided. It was, however stated that this was extra work.

6. The learned trial Court framed the following issues: (1) Whether the award is liable to be set aside on the grounds mentioned in the objection petition? O. P. P. . (2) Whether the proper party was not before the Court and if so to what effect? O. P. R. (based ,on preliminary objection No. 1)? (Onus objected to). (3) Whether the objections have properly been presented, signed and authenticated by an authorised person? O. P. D. (4) Whether the award cannot be set aside ' on the reasons given in paras. 7 to 14 of the objection petition? O: P. R. (based on preliminary objection No. 3). (5) Whether the objection has not' been drafted according to law, if so to what effect ? O. P. R. (6) Relief?

7. Issues Nos. 2, 3 and 5 were taken ,up together and they were found against the respondents. No arguments on these issues were addressed. It is. not, therefore, necessary to deal with them. It was, however, held under Issues Nos. 1 and 4 that the objections of the objector' were not covered by section 30 of the Arbitration Act. He found that the arbitrator did not deny to any party opportunity to produce evidence. He had also duly considered all - the points raised by the appellant which were agitated in the objections. It was not necessary for the objector to give any reason. It was not within the jurisdiction of the Court to appraise evidence produced before the arbitrator or to interfere with the award if the Court had taken a different view. The learned trial Court therefore; did not agree with the objections and made the award a rule of the Court.

8. The learned counsel for the appellant submitted that the learned trial Court had failed to consider that where the arbitrator had proceeded to decide what was not and could not be a dispute between the parties he clearly acted without jurisdiction. In this connection he argued that if the garage site was never changed, no compensation should be awarded by the arbitrator based on change of the site. Similarly, the steel racks having been supplied in terns of the lump sum contract, its price which was already included the contract could not be- awarded again by the arbitrator. Similarly air-conditioning being also included in the contract its value could not be awarded.

9. Mr. Abid Hassan Minto, on the other hand, submitted on behalf of the respondent that it is not open to the Court to consider any other document but the award for seeing whether steel racks or air-conditioning was provided in the lump sum contract or whether the site of the garage was or was not changed . He submitted that the award on such grounds could be set aside by the Court only if there was any error, apparent on the face. of the award. An erroneous. finding of the arbitrator could not bring home the charge of misconduct to him.

10. In this case, contract Exh. - Pl/1 was proved in the statement of the respondent himself in order to show 'that steel racks and air-conditioning vas included in the contract. The learned counsel argued that this document could not be taken into consideration since it was extraneous to the award. The learned counsel in this connection referred to Champsey Bhara & Co. v. Jlvray Bdlloo Spinning & Weaving Company Ltd. (1), Messrs Overseas Cotton Company v. Messrs S. M. Fuzad & Co. (2). He submitted that it was open to the arbitrator riot to give reasons, nor was it necessary for him to file in Court oral or, documentary evidence produced before him.

11. I agree with the arguments of the learned counsel for the respondent that it is not necessary for an arbitrator to give reasons for the A award. This principle in fact has never been departed from. Messrs Qamar Din Ahmad & Co. v. Paklstan-(3), Hamdard Dawakhana v. K. B. Joseph & Co. Ltd. (4), Messrs Pakistan Builders -Co. v. Pakisan (5), Muhamm Saghir Bhatti v. The Federation of Pakisan etc. (6), Balawal Khan v. Captain Muhammad Alam Khan (7). Raminder Singh v. Mohinder Singh - (8) The Union of India v. Mangldas N. Varma Bombay (9) and Rash Bahari Sen v. Anand Sarup Bhargava (10).

12. Similarly, I also agree with the argument that the Court cannot look at anything extraneous to, the award if the case is to' be decided on the basis of an error apparent on' the face of the award. But this principle will not apply to a case where the dispute is about the jurisdiction of the arbitrator to decide something which is not referable to him as a dispute.. The principle will apply when an award is challenged for misconduct or on ground of being improperly procured on matters within the jurisdiction of the Arbitrator. It does not apply to a matter which is not within the jurisdiction of the Arbitrator. In the latter case evidence extraneous to the award can be led to prove that the award relates to matter not within the jurisdiction of the Arbitrator. In Messrs Dutton Massery & Co. v. Messrs ,Jamnadas Harparsad (11) it was held that the examination of an Arbitrator in Court cannot be extended to scrutinize the reasons of decision on matters within his jurisdiction. The words within his jurisdiction make it clear that the principle is not applicable to matters which are not within the jurisdiction of the Arbitrator. In Champsey Ohara, & Company v. Jivraj Balloo Spinning & Weaving Company Ltd. it was held that where a cause or matters, in difference are referred to an arbitrator, the error of law must appear on the face of award or upon some paper accompanying and forming part of the award. Clearly, therefore, where the matter is not in dispute and has trot been referred to the Arbitrator and it is that point which has to be proved,, this narrow principle, of production of evidence cannot apply. In the Privy Council case another exception to this rule was also noted. It was held that this rule will not apply to a case where the award is the result of corruption or fraud. (1) A I R 1923 P C 66 (2) P L D 1958 Kar. 27 (3) P L D 1971 Lab. 38 (4) P L D 1971 Kar. 279 (5) P L D 1961 Kar. 365 (6) P L D 1958 S C 229 (7) P I. D 1956 Lab. 494 ' (8) A I R 1940 Lab. 186 (9) A LR 1958 Mad. 296 (10) A I R 1962 Punj. 51 (11)AIR1924Sind51

13. In the present case, one of the disputes is that some matters including the question of supply of steel racks were not the subject-matter of the dispute and consequently were never referred to the Arbitrator. The principle of law, laid down in the Privy Council case and other cases D relied upon by the learned counsel for the respondents will not, therefore, apply to such claims and it is open to the Court to look not only to award but also the contract Exh. P. 1/1. If on the basis of that document it is held that the supply of the steel racks was included in the lump sum contract, it will follow that this was not .matter of dispute between the parties and was not referred since the only matters referred were disputes arising out of the contract. The supply of the material contracted upon and paid for as a part of the lump sum contract cannot be a subject-matter of dispute between the parties unless the case of the contractor be based upon the liability of the Government to pay some extra costs or damages.

14. I have already referred to two exceptions to the rule that the Court must confine itself to discovering errors apparent on the face of the award viz. (i) the matter is outside the jurisdiction of the Arbitrator and (ii) the award is the result of fraud. In my view, there is another exception F too. If the award itself is not complete or is unintelligible, it cannot be relied upon as an exhaustive document for discovering the error apparent on it.

15. An award is a decision or a judgment on a cause or matted in difference referred to an Arbitrator who is, no doubt, the final Judge of all questions both of law and of facts. It is distinguishable from the F judgment in the sense that it is not necessary for the Arbitrator to discuss the facts or to give reasons. A judgment, on the other hand, must give facts in order to bring to the surface the dispute between the parties, the points of issue between them and all the. decisions on those points.

16. But it cannot be- doubted that the award must be a self-contained document which would decide all the disputes finally. In order to be immune from being interpreted or varied or contradicted by extrinsic evidence it must speak by itself. In Vallabhdas v. Keshavlal (1) it was held that where an award is ambiguous and the ambiguity is on the face of the document it is not competent for the Court to launch into an inquiry to ascertain which of the two possible interpretations should be accepted by the Court as correct. In view of the ambiguity of the award it was not made a rule of the Court. In Haminder Singh v. Muhinder Singh it was held that an Arbitrator is not bound by .the technical rules of procedure to write a reasoned judgment but he is required to give intelligible decision which determines the rights of the parties in relation to the subject-matter of the reference. In Maharajah Sir Joy Mangul Singly v. Mohun Ram Marwaree and another (2) two Arbitrators wrote and signed as their award separate papers bearing different dates. It was held that the award should be a single instrument complete in itself. Also see Lock v. Vullianny (3). In Balawal Khan v. Captain Muhammad Alam Khan and others it was stressed that conclusions must be stated on the points referred.

17. In order therefore to be immune from the possibility of extraneous matters having been referred to, the award must be intelligible, self-contained and complete document from which it could be found out, as to what was the dispute between the .parties and what is its decision. (1) A I R 1927 Rom. 428 (2) (1869) 12 W R 397 (3) (1833) 2 N & M 336

18. Looking at the present award, from this point of view it will be found out that it lacks all the essentials of an award. It cannot be found out as to what exactly are the disputes and which dispute has been refused and which has been allowed and how much amount has been allowed against what particular category of claim. In order to read this award, and to understand it, it would be necessary to go through other documents for example the claim and counterclaim which have not been made a part of the award by the Arbitrator. It is not, therefore, a document for which extraneous evidences can be said to be irrelevant. In fact it cannot be understood without extraneous evidence. I cannot, therefore, maintain the finding of the learned trial Court, that no other evidence would be relevant in the present case.

19. Moreover as stated above extraneous evidence can be led on the question whether there was a dispute between the parties within the meaning of para. 68 of the contract Exh. P. 1/1 which gives the power of arbitration to the arbitrator and which details the nature of the disputes.

20. Now the main contract is Exh. P. 1/1. It is strange that although Abdul Rahman who appeared as witness for the respondents proved this document he continued insisting that supply of steel racks was not a part of the lump sum contract. ' In fact, it is proved by item No. 27(b) of the contract under the heading `Fixtures' that the 'stem is part of the contract. Item 27(b) reads as under: "'Steel racks in store rooms." Item No. 5 of the claim is about the steel lockers but, as stated above; it is admitted in reply to the objections that steel lockers and steel racks are synonymous. It is not denied that price of the lump sum contract has been paid. In the circumstances when it was the liability of the .respondents to supply steel racks and they had been paid for it, there could not have been any dispute in regard to this item. The Arbitrator had, therefore, no jurisdiction to decide this matter.

21. Similarly air-conditioning work which was claimed in item No. 3 was provided under Item No. 66 of Schedule H of contract Exh. P. 1/1 but this was omitted later. The claim before the arbitrator reads as follows: Air-conditioning of the building was not included in our contract. D. O. Nos. 3 and 8 which have been prepared for the omission of this work are unjustified. The amount of these D. Os. should therefore be set aside and deduction secured from our final bill: Rs. (a) D.

0. No. 3 ... 47,000 (b) D. O. No. 8 .. 10,129 Total ... 57,129

22. To say the least this claim does not appear to be intelligible. If the air-conditioning work was not included in the contract this amount should not give any cause of action and yet the whole amount has been awarded. It appears to me that the claim of the claimant was that the omission of the air-conditioning ,plant being a unilateral act it was not justified. But if such be the case the claimant cannot claim nor can he be entitled to the entire cost of the air-conditioning plant which has never been installed. The dispute in this respect could be at most about the damages that accrued to the respondents by the omission of air-conditioning plant. These damages could be worked out only by deducting the cost of the plant from the value of that item in the contract. The Arbitrator's award cannot be sustained for this item also.

23. According to law, if an award consists of bad as well as good parts and the two are severable it can be maintained as regards the good I part. But in the present case it is not possible to maintain even the valid part since it appears that knowing that the supply of steel racks was a part of the lump sum contract and there was no dispute about it, and similarly, the air-conditioning plant having never been supplied there could be no dispute about its value except to the extent of' damages in view of the profits, the Arbitrator has allowed the claim of the respondents which proves misconduct on his part. 24. 1, therefore, allow this appeal with costs throughout, set aside the judgment of the learned trial Court, allow the objections of the appellant against the award and set aside the award of the Arbitrator. M. A. x. Appeal accepted.