2005 PLP 1850 (YLR)

Arbitration proceedings

Arbitration proceedings were considered to be sacred and sanctity had been given to said proceedings because such domestic Tribunals could resolve the disputes in a befitting manner

Once parties agreed to refer a dispute to the arbitrators, Arbitration Act, 1940 would come into action and jurisdiction of all the Courts and Authorities would cease

Any party to the arbitration proceedings had to take required steps under said law

Arbitrators lay down their own procedure and if the demand of the arbitrators was unjust, local Court could be approached under Arbitration Act, 1940

If the arbitrators had mis-conducted, remedy under Arbitration Act, 1940 was available to the aggrieved party

No action and that too of criminal nature, could be initiated against arbitrators

Arbitrators were the people in whom people reposed confidence and they could not be disgraced in any manner. Muhammad Alamgir Khan Warir for Petitioner. Ehsan-ul-Haq Malik for the State. Gauhar Zaman Khan Kundi for Respondent No.2. Date of hearing: 14th April, 2005. Through this unusual petition under section 561-A, Cr.P.C. the petitioner has requested for the quashment of F.I.R. No. 173 dated 16-10-2003 of Police Station. Domail, District Bamm. Apparently it appeared to be a rare type of application as normally the F.I.Rs. are not subjected to quashment proceedings and the misuse of the process of the Court could be looked into at a later stage. This objection was also raised on behalf of the complainant/ respondent No.2. The learned counsel at the very outset argued that the prosecution may not be strangulated in the beginning and any interference in the F.I.R. at the initial stage would amount to its killing in infancy.

2. The learned counsel for the petitioner, however, brilliantly justified the maintainability of the petition and explained the situation leading to the present proceedings. He referred to the original application of the complainant dated 7-8-2003 addressed to Superintendent of Police, Bannu wherein he has simply requested for the assistance of police for the return of two vehicles from the petitioner. It was stated therein that arbitrators were appointed by the parties for the, settlement of their partnership dispute and the arbitrators demanded a sum of Rs.5,00,000 from each of the party as security and instead of depositing the amount in cash, the complainant handed over two vehicles, along with the documents, to the arbitrators. The said application further reveals that the arbitrators, with mala fides, transferred both the vehicles to Haq Nawaz (the present petitioner) who was using the vehicles. The application further discloses that the arbitrators have not announced their award but they were demanding a sum of Rs.1,50,000 as compensation and they were not returning the vehicles. Therefore, the application, practically asked for the return of the vehicles along with documents. This application was processed by the investigation staff of police and they found that practically the allegations stated in the application constitute criminal offences under sections 406/403 read with section 34, P.P.C. Hence, F.I.R. No.173 was registered on 7-8-2003 in Police Station, Domail against Haq Nawaz and three other persons who were stated to be the agreed arbitrators for the settlement of dispute in relation of accounts between partners Muhammad Khan (Complainant) and Haq Nawaz (Petitioner).

3. There is no denial of the fact that the powers under section 561-A, Cr.P.C. are of extraordinary nature and they are to be used consciously in exceptional circumstances when no other remedy is available. The F.I.Rs. cannot be quashed on the grounds of factual controversy or on the basis of unfair investigation. This power can certainly not be exercised to stifle the prosecution case and it is an admitted principle that the prosecution has to be allowed to prove the case instead of strangulating the issue in infancy. However, in view of the nature of the basic complaint, reproduced in the F.I.R., there is a justification for interference. Even if the prosecution is allowed to proceed further and the case is allowed to be tried, the ultimate redressal of the grievance of the petitioner is not at all possible either through the prosecution or by a criminal Court. The complainant has never intended through the said application to take any penal action against the so-called accused. The only claim against them is the return of vehicles which falls beyond the responsibility of the police. The remedy of the complainant lies elsewhere for which an appropriate course has to be adopted. There is an admission in the said application, being the part of the F.I.R. itself, that the vehicles were handed over by the complainant to the arbitrators with his own sweet will. He was not required to have given the vehicles. He could deposit the cash as per demand of the arbitrators and instead of Rs.5,00,000 as security, the vehicles were given to the arbitrators. Hence the delivery of vehicles amounted to furnishing security for compliance with the award of the arbitrators. It was, in any case, a matter of civil liability and neither any offence appears to have been committed by the petitioner nor by the arbitrators.

4. The arbitration proceedings have been considered to be sacred and the sanctity has been given to these proceedings because such domestic Tribunals can resolve the disputes in a befitting manner. Once parties agree to refer a dispute to the arbitrators, the Arbitration Act, 1940 comes into action and jurisdiction of all the Courts and authorities ceases. Any party to the arbitration proceedings has to take the required steps under the said law. The arbitrators lay down their own procedure and if the demand of the arbitrators was unjust, the local Court could be approached under the Arbitration Act. If the arbitrators had mis-conducted, the remedy under the Arbitration Act was available in any case. No action, and that too of criminal nature, can be initiated against the arbitrators. In this case the arbitrators have been cited as accused who have neither committed any offence nor the complainant intended to prosecute them for any crime. The arbitrators are the people in whom the people repose confidence, they cannot be disgraced in this manner. The demand for the recovery of the vehicles is not the subject-matter of the criminal proceedings. If the vehicles were misused or somebody has trespassed beyond his authority, a suit for damages will certainly be maintainable. However, in this particular case the registration of the F.I.R. was not at all warranted. Both the sections of law are not applicable.

5. Although the petitioner appears to have been allowed bail to avoid any harassment by the investigating agency but still the process of investigation and the proceedings of the trial would be fruitless, rather illegal, if they are allowed to continue. Section 561-A, Cr.P.C. can be appropriately applied in this case in the interest of justice because no other remedy is available to the present petitioner or to the arbitrators to protect themselves from undue harassment. The ultimate result of the trial is known in the very beginning and therefore, it will be a sheer wastage of time and energy to allow the continuation of the proceedings under the F.I.R.

6. With these observations the petition is allowed and the F.I.R. in-question is quashed. H.B.T./383/P F.I.R. Quashed.