1972 PLP 91 (SCMR)

M. R. KHAN, J.‑This appeal, by special leave, is directed against the judgment and order of the High Court of West Pakistan, Karachi Bench, dismissing in limine the appellant's Writ Petition No. 311 of 1966. The facts relevant for the purpose of this appeal are as follows That s. s. "Othon", a wrecked ship was pledged to the Sind Provincial Co‑operative Bank Ltd. (respondent No. 2 herein) by its owner Messrs Fine Textile Mills. The Sind Provincial Co operative Bank Ltd., which has since assumed the name of Sind‑Baluchistan Provincial Co‑operative Bank Ltd. (herein after called `the Bank'), held also a general Power of Attorney executed in its favour by Messrs Fine Textile Mills. In pursuance of the power conferred by the general Power of Attorney, the Bank agreed to sell the ship to the appellant for a consideration of 9,60,000 and an agreement embodying the various terms of sale was executed by the parties on the (the April 1957. This agreement provided a clause for referring disputes arising out of it to arbitration. A dispute having arisen between the parties out of this agreement, the Registrar of the Co‑operative Societies (respondent No. 1 herein) referred the dispute to arbitration on the 15th December 1960, under section 54 of the Co‑operative Societies Act, 1925 (hereinafter called `the Act'). In accordance with the provisions of the said section, the Registrar nomi nated Mr. J. S. Sherazi, and the appellant and the respon dent No. 2 respectively nominated Mr. Nasirullah and Mr. Irshad Ahmad as their nominees. Thereafter the arbitrators entered upon the reference and an award was made on the 17th November 1962. The Bank, however, made a revisional application on the 18th July 1965, before the Registrar for setting aside the award on the ground of illegality said to be apparent on the face of the award. After hearing the parties the Registrar, by his order, dated the 7th May 1966, set aside the award in the exercise of his power under section 54‑A of the Act and directed arbitration of the dispute de novo by his another nominee, Mr. Faiz Muhammad Soomro. The appellant then made a writ petition under Article 98 of the 1962‑Constitution calling in question the validity of the order of the Registrar setting aside the award. The High Court, as already stated, dismissed this writ petition in limine. Mr. Pesh Imam, learned counsel for the appellant firstly contends that the order of the Registrar setting aside the award was expressed to have been made under section 64‑A of the Co‑operative Societies Act, 1925 which section, however, according to the learned counsel, does not autho rise the Registrar to set aside an award. It is true that the Registrar set aside the award in the purported exercise of the power under section 64‑A of the Act. It is also true that the said section does not authorise the Registrar to set aside an award. However, section 54‑A of the Act clearly empowers the Registrar to set aside an award on the ground of illegality appearing on the face of it, among other grounds. Thus, the power to set aside an award being available to the Registrar under section 54‑A, the mere reference to section 64‑A in the Registrar's order setting aside the award is of no legal consequence. The learned counsel next contends that the grounds on which the award was set aside are not valid. The reference to arbitra tion in this case was made on the 15th December 1960, but the award was made as late as the 17th November 1962, that is, about 2 years after the making of the reference. Now, rule 32 of the Rules made under the Act provides :‑ "When any dispute is referred to the Registrar's nominee or to three arbitrators for decision and is not decided by them within two months or such further period as the Registrar may allow, the Registrar may decide the dispute himself or refer it again to his nominee for decision." It was stated in the Registrar's order that no extension of time was asked for by the arbitrators, nor was any extension given by him. Thus, the award was made much long after the expiry of the prescribed period of two months without having obtained any extension of time. The making of the award long after the expiry of the statutory period without obtaining any extension of time is an illegality which is apparent on the face of the award. Mr. Pesh Imam contends that by appearing it the arbitration proceeding and taking part therein, the Bani waived the condition as to tune for making an award. The question of waiver is mainly a question of fact, No material was placed by the appellant with regard to the alleged waiver nor was it agitated before the High Court. However, it appears from paragraph 20 of the award that the hearing of the arbitra tion proceeding took place in the 3rd week of February 1962, (19‑2‑1962), but the award was made on the 17th November 1962. Even if the Bank had participated in the arbitration proceeding, the delay of about 9 months between the hearing of the arbitra tion proceeding and the date of the award remained unexplained altogether. The arbitrators themselves must have ‑been respon sible for this inordinate delay that occurred after the conclusion of the hearing of the arbitration proceeding. Thus, the award suffered from an illegality on account of its not having been made within the prescribed time‑limit. It appears from the award that a sum of rupees one lakh was ordered to be refunded by the Bank to the appellant. This sum was said to have been paid by the appellant to the Bank as an advance towards the purchase price of the ship s. s. "Othon". The Registrar stated in his order that the question of refund of the sum of rupees one lakh was not referred to the arbitrators for arbitration, nor did the appellant claim any set off in respect of that sum. The Registrar was, therefore, of the opinion that the award suffered from illegality so far as it awarded rupees one lakh to the appellant. Mr. Pesh Imam con tends that the Bank having been found by the arbitrators to be guilty of breach of the agreement for sale, the direction in the award as regards refund of rupees one lakh to the appellant was only a consequential one and is not, therefore, questionable. It appears from the revisional application that in pursuance of the agreement for sale, the appellant started salvaging operations and removed materials and scrap from the wrecked ship and, on that score, paid Rs. 95,000 to the Bank, in addition to the advance of rupees one lakh, but failed to pay further instalments. There is nothing on the record to show if the appellant ever disputed or denied the Bank's contention that the appellant had removed materials and scrap from the wrecked ship. That being so, the question of refund of the advance of rupees one lakh was connected with the question as regards the quantity of scrap taken away by the appellant and its value. In the context of these facts, the award, so far as it directed the refund of rupees one lakh without any claim for set‑off for the same, was beyond the scope of the reference. The award was signed by the Registrar's nominee alone. It was, however, stated by the Registrar's nominee that he had discussed the issues involved in the arbitration proceeding with the parties' nominees and that they had submitted their dissenting findings in writing. The alleged dissenting opinions of the two nominees of the parties were not appended to the award. When the award was signed by the Registrar's nominee alone, the opinions of the parties' nominees should have been at least appended to the award as forming part of it. But this not having been done, the award appears to suffer from illegality on this count also. For all these reasons, the Registrar was justified in setting aside the award and referred it to his another nominee under section 54 of the Act. In the result, the appeal fails and is dismissed. Having regard to the points of law involved I would, however, leave the parties to bear their own costs. " WAHEEDUDDIN AHMAD, J.‑I agree. SALAHUDDIN AHMED, J.‑I agree. Appeal dismissed.