1979 PLP 685 (CLC)

Tariq Hussain for Defendant. . These; are two applications, the first by the plaintiffs praying that the award filed in 'this case by the arbitration be declared to have become the rule of the Court in terms of the . order dated 13-5-1977 ; and the second by the defendants under section 151, C. P. C. questing that the furnishing of security may be dispensed with and the objection of the defendants to the award be entertained. Briefly the facts forming the background of these applications are that award in this case was filed on 13-4-1977 by the arbitrator purporting to have arbitrated the dispute between the parties. Pursuant to notice of the filling of the award the defendants put in appearance and by a. consent order dated 13-4-1977 the defendants were directed to furnish security in the sum of (?) awarded by 30-5-1977. The defendants then filed their objections to the award under section 30 of the Arbitration Act. However, before the expiry of the period prescribed ' for furnishing security on 28-5-1977 the defendants moved for extension of time and again with consent of parties by orders dated 31-5-1977 the defendants were granted extension to furnish security as already ordered within four weeks subject to the condition that in case of failure the award would become the rule of the Court automatically. Admittedly, however, the security was not furnished within the time allowed. It will be pertinent to mention that the extended time allowed for furnishing security expired during the summer vacations and upon the re-opening of the Court after the vacations on 9-8-1977, the defendants submitted an application under section 151, C. P. C. praying for dispensing with the furnishing of Security, in view of the amendment in law omitting the second proviso from section 33 of the Arbitration Act. On this application the Additional Registrar by his order dated 17-8-1977 directed the defendants to file proper application mentioning full facts for the consideration of the Court in view of the order passed on 31-5-1977. Accordingly the defendants submitted the present application on 17-8-1977 on the same day. Subsequently on 28-11-1977 the plaintiffs submitted their application with the aforesaid prayer. As the common question of law have been raised for consideration of the two applications, this order will dispose of both the said applications. Now section 33 of the Arbitration Act enable any party to an arbitration agreement to ,inter alia, challenge the validity of an award or to have its effect determined. The section originally had one proviso appended to it but a second proviso was added by the Law Reforms Ordinance (XII of 1972) which provided that no .application, inter alia, challenging the validity of an award shall be entertained by the Court unless the applicant has deposited in the Court the amount which he was required to pay under' the award or has furnished security of such sum. It was in pursuance of the aforesaid second proviso that orders were passed requiring the defendants to furnish security. However, with effect from 24-7-1977 by Arbitration (Amendment) Ordinance, 1977 the second proviso was omitted. It is the contention of the learned counsel for the defendants that by aforesaid amendment of law the defendants were no longer under an obligation to comply with the order of the Court and that their objection to the award can now be entertained. He argued that the last date for furnishing of security all during the summer vacations when the Court was closed and, therefore, the award did not become the rule of the Court on expiry of the four weeks period. Before the re-opening of the Court the law, stood amended which wiped off the order of the Court for security, learned counsel supported his submission on the principle that amendment in procedural law takes effect retrospectively and would be applicable to pending proceedings. Learned counsel for the plaintiffs, on the other hand, contended that before the amendment of law on 24-7-1977 the period prescribed by the Court for furnishing security having expired, the award was confirmed and became the rule of the Court automatically as ordered. He urged that amendments in the procedural law cannot be constructed to be retrospective in effect if any party has acquired a vested right under the law before amendment. Reliance in this behalf was placed on Advan Afzal v. Sher Afzal (PLD1969SC187) wherein their Lordships laid down the rule that if the law touches a right in existence at the time of passing of the Act then the Legislation would not operate retrospectively unless the Legislature by express enactment or by necessary intendment gave it such effect. As already stated the defendants -were granted . extension for furnishing security within four weeks from 31-5-1977 and it is not disputed that this period expired during the summer vacations of this Court. Therefore, under section 10 of the General Clauses Act it was open to the defendants to comply with the order upon the re-opening of the Court in August 1977. (See A I R 1959 Madh. Pra.

352. It was argued on behalf of the plaintiffs that since it was ordered by the Court that security be furnished within four weeks, the office of the Court would have accepted the security if it had been tendered within time notwithstanding the fact that the Court was closed on account of summer vacations. It may be so but under the law, as already stated, the defendants had a right to comply with the order upon there opening of this Court. In my opinion, therefore, the direction embodied in the order that the award shall become the rule of the Court could not come into operation until the defendant's failure to comply with it on the re-opening day of the Court. The next question that, therefore, arises for consideration is as to the effect of the amendment of law before the order for making the award rule of the Court became operative. In the circumstances, the position was that the application for setting aside the award was pending and could be entertained upon furnishing of security for which there was still time, but in the meantime, the second proviso to section 33 which prevented the application from being entertained, was amended and omitted. This being the position, to my mind, the question whether the amendment should be construed retrospectively or not is immaterial. The prohibition contained in the second proviso was that the application for setting aside the award could not be "entertained" without the defendants furnishing the security, but this bar on the power of the Court to entertain the application was removed by the omission of the proviso itself at the time when the. Court could in terms of section 17, Arbitration Act pass a judgment in terms of the award. Therefore, the defendants had a right on the re-opening day of the Court to be heard in support of their objections. In consequence the award could not automatically become the rule of the Court. In Ahamdi Begum v. National Bank of Pakistan (P L D 15176 Kar. 723) a D. B. of this Court to which I was a party had occasion to consider a somewhat similar question. In that case there was a question of the interpretation of rule 90 of Order XXI, C. P. C. In this rule also by the same legislation, namely; Ordinance (XII of 1972), a second proviso was inserted almost on identical terms requiring the applicant who wishes to have a sale in execution of a decree set aside to deposit such amount not exceeding 20 % of the sum realized at the sale or to furnish such security as the Court may direct, before his application can be entertained. It was observed that a proviso is not to be interpreted so as to have greater affect than the strict construction of the proviso renders necessary and that the enacting part of rule 90 is an enabling provision which provides for remedy to an aggrieved party if the sale is tainted with irregularity or fraud. It was further observed that the object of procedural law is to promote the dispensation of justice and extend, where possible consistently with the language of the statute, the remedy to avoid injustice. The observations of their Lordships in Toor Gul v. Mumtaz Begum (P L D 1971 S C9) were cited to the effect that the rules of the Code of Civil Procedure are in the nature of enabling provisions and are made for advancement of justice so that, as far as possible, they should not be allowed to operate so as to defeat the ends of justice. The above said observations are fully attracted in the present case and the question at issue has to be decided in the light of the same. It can hardly be disputed that the second proviso to section 33 is a procedural provision and section 33 is itself a remedial enactment. It has, therefore, to be construed so as to advance the remedy and prevent the ends of justice from being defeated. The argument that by lapse of time the plaintiffs had acquired a vested right has no substance. For the foregoing reasons, I have come to the conclusion that the order for automatic confirmation of the award did not come into operation on account of the amendment of law which was effective on the date when the order could become final and, therefore by the removal of the embargo the application of the defendants for setting aside the award can be entertained. In the result, I grant the application of the defendants and dismiss the application of the plaintiffs the case shall now be set down for bearing of the objections to the award. S. Q. Order accordingly.