2013 PLP 604 (CLD)

MUHAMMAD FARRUKH IRFAN KHAN, J.

Through this revision petition under section 115 of C.P.C. the petitioners call in question the validity of impugned order dated 28-8-2008 passed by the learned trial court, whereby, the said court rejected the application of the petitioners under Order VII, Rule 11, of C.P.C.

2. Facts of the case in brief are that respondent No.4 filed an application under section 14/17 of The Arbitration Act, 1940 (hereinafter referred to as Arbitration Act) for making award dated 28-8-2008 rule of the Court. The petitioners moved application under Order VII, Rule 11 of C.P.C. for rejection of aforesaid application, inter alia, on the grounds that the award dated 28-8-2008 was an unregistered and unstamped document as such respondent No.4 had no cause of action and the application under section 14/17 of the Arbitration Act was not proceedable and liable to be rejected. Respondent No.4 contested the said application by filing written reply. The learned trial Court after hearing the arguments of the learned counsel for the parties rejected the application of the petitioners under Order VII, Rule 11 of C.P.C. vide impugned order dated 28-8-2008. Being aggrieved the petitioners have filed the instant revision petition. 2.(sic) Learned counsel for the petitioners submits that the learned trial court erred in law while passing the impugned order; that the award was not written on stamp paper in accordance with law as such the same was not admissible in the evidence; that under the law award creating and extinguishing rights and liabilities of the parties are required to be registered compulsorily and the learned trial court overlooked this important aspect of the matter while passing the impugned order which is not sustainable in the eyes of law.

3. Conversely, learned counsel for the respondents submits that Arbitration Act, 1940 is a special law and provisions of C.P.C. are not applicable as such application under Order VII, Rule 11 of C.P.C. was not maintainable before the learned trial court; that the award which was to be made rule of Court was not required to be compulsorily registered; that registration of award is only required after the same was made rule of the Court; that under the law mere fact that the award was not on stamp paper will not make the same invalid and the court can order a party for fulfillment of the deficiency of the court fee; that the arbitrator was appointed with the consent of the parties, therefore, the respondent No.4 had cause of action to file an application for making it rule of Court.

4. I have heard the arguments advanced by the learned counsel for the parties and gone through the record.

5. For proper adjudication of the question as to whether the application under Order VII, Rule 11 of C.P.C. is maintainable in proceedings under section 14/17 of Arbitration Act, it appears expedient to reproduce Rule 11 of Order VII of C.P.C. which reads as under:-- (11) Rejection of plaint.

The plaint shall be rejected in the following cases. (a) Where it does not disclose a cause of action. (b) Where the relief claimed is undervalued and the plaintiff on being required by the court to correct the valuation within a time to be fixed by the court, fails to do so. (c) Where the relief claimed is properly valued, but the plaint is written upon paper insufficiently stamped, and the plaintiff, on being required by the court to supply the requisite stamp paper within a time to be fixed by the court, fails to do so. (d) Where the suit appears from the statement in the plaint to be barred by any law. A plain reading of the above rule would show that it is only applicable on "plaint" in connection with a "suit". A plaint is not defined in the C.P.C. It is, however, regarded as a written memorial tendered to a Court in which the plaintiff sets forth the cause of action and seeks order or judgment and decree as a consequential relief. The learned counsel for the petitioners is unable to convince this Court that an "application" under section 14 or 17 of the Arbitration Act is deemed to be a plaint or suit. In case reported as Government of Sindh and another v. Ch. Fazal Muhammad and another (PLD 1991 SC 197) an application under section 12(2) of C.P.C. was filed by applicant to challenge the award and the Hon'ble apex Court held that:-- "It will be seen from the above that the appellants had opportunity to take all the objections to the award and if they did not plead all the facts and raised all the objections to the award which were available to them for an application under sections 30 and 33 of the Arbitration Act they have to blame themselves. Under section 12(2), C.P.C. a party can question the validity of a judgment, decree or order on the plea of fraud etc. In this case the challenge is not the judgment, decree or order but to the award itself. This could be done only under section 30 or 33 of the Arbitration Act. Even a review of the judgment, decree or order could not be sought because if new or important matter was discovered the appellant had to satisfy, in order to succeed, that they had exercised due diligence and inspite of that- the facts pleaded in the application under section 12(2) were not within their knowledge."

6. There is no denying the fact that specific provisions are provided in the Arbitration Act on the basis of which an award can be set aside by a Court of competent jurisdiction e.g.:-- Section 30 of the Arbitration Act 1940 provides as under:--

30. Grounds for setting aside award.

An award shall not be set aside except on one or more of the following grounds, namely. (a) that an arbitrator or umpire has misconducted himself or the proceedings. (b) that an award has been made after the issue of an order by the Court superseding the arbitration or after arbitration proceedings have become invalid under section 35; (c) that an award has been improperly produced or is otherwise invalid." Section 32 of the Act ibid lays down as under:-- "

32. Bar to suits contesting arbitration agreement or award.

Notwithstanding any law for the time being in force, no suit shall lie on any ground whatsoever for a decision upon the existence, effect or validity of an arbitration agreement or award, nor shall any arbitration agreement or award be set aside, amended, modified or in any way affected otherwise than as provided in this Act." Section 33 of the Act ibid reads as under:-- "

33. Arbitration agreement or award to be contested by application.

Any party to an arbitration agreement or any person claiming under him desiring to challenge the existence or validity of an arbitration agreement or an award or to have the effect of either determined shall apply to the Court and the Court shall decide the question on affidavits:

7. It is well settled principle of law that where a procedure has been defined in the Arbitration Act, 1940 the provisions of CPC shall be excluded to that extent. Reliance is placed on case reported as Messrs Combined Enterprise v. Wapda (PLD 1988 Supreme Court 39) where if has been observed as under:-- "Therefore, the reference and the award could only be interfered with in the manner laid down by sections 30, 31, 32 and 33 and to that extent the provisions of the Code of Civil Procedure are expressly excluded and no Court other than that mentioned therein could deal with the matter. The statutory bar created by sections 30, 31, 32 and 33 of the Act was affirmed in Prafulla Chandara Karmakar v. Panchanan Karmakar (AIR 1946 Calcutta 427) in the following words; "In the first place, the operative part of S.41 is prefaced by the words "subject to the provisions of the Act' and therefore the Civil Procedure Code can apply only subject to the provisions of Ss. 23(2) and

32. Since these provisions forbid interference with reference and the award exception as provided for in the Act, to that extent the Civil Procedure Code is excluded. Indeed it seems to me that the scope of S.41, is limited to attracting the procedural rules of the Code to proceedings before the Court under the Arbitration Act." In the light of above discussion, it can safely be concluded that the application under O.VII, Rule 11 of C.P.C. is not maintainable in proceedings under section 14/17 of the Arbitration Act.

8. Even otherwise, on merit the petitioners have sought rejection of application under section 14/17 of the Arbitration Act, 1940 filed by respondent No.4 on the following grounds:-- (a) Impugned award was not drawn on stamp paper. (b) Impugned award is an unregistered document and cannot be made rule of Court.

9. So far as the first ground is concerned, section 33 of the Stamp Act, 1899 provides a procedure of impounding a document which is chargeable with a duty and has been filed before any Authority including Court and by adopting that procedure deficiency of stamp can be cured and rectified. Article 12 of the Act ibid provides procedure for levying of stamp on the award delivered by the Arbitrator and if there is any deficiency in respect thereof the same can be ordered to be fulfilled by the trial court at any stage. Mere fact that the award was not drawn on a proper stamp paper is not fatal for rejection of application for making award rule of the Court. Reliance is placed on case reported as Mst. Farida Malik and others v. Dr. Khalida Malik and others (1998 SCMR 816), wherein it has been laid down as under:-- "The plea, that the Award as was not drawn on properly stamped paper and was made and signed on a plain paper is invalid, is without merit. The Award was scribed on a plain paper on which all the three arbitrators admittedly affixed their signatures and later proper stamp had been supplied and duty was paid. Section 3 of the Stamp Act read with Article 12 thereof prescribes levying of stamp on the award to be delivered by the Arbitrators. So an unstamped Arbitration Award contravenes Article 12 of the Stamp Act. But only because the Award is not on a stamped paper it will not make the award invalid within the meaning of section 30 of the Arbitration Act. In case of unstarnped award, it is open to the parties to take such steps, if any, as were available to them at law for curing the deficiency arising from the Award being on an unstamped paper. Section 33 of the Stamp Act prescribes the procedure of impounding the document which is chargeable with a duty and has been filed before any authority including Court, and by that procedure the deficiency for want of stamp can be cured and rectified, as otherwise, in view of section 35 of the Stamp Act, the award in question could not have been admitted in evidence as it was chargeable with duty under Article 12 of the Stamp Act. Learned Judges of the High Court were, therefore, right in holding that the duty having been paid, the Award by Arbitrators, without intervention of the Court could be received in evidence and made rule of the Court."

10. Now coming to the second objection regarding non-registration of the Award. There is a plethora of judgments of this Court as well as Hon'ble apex Court that the registration of an award is necessary only when the same has been made rule of Court. Award which had not been made a rule of Court, is not required to be compulsorily registered as the same would not create any right or title. In case reported as Inayat UIIah Khan v. Obaid Ullah Khan and others (NLR 2000 Civil 76) it has been laid down that:-- "This point would be considered in the perspective, as to whether an award filed under section 14 of the Act affecting immovable property as of Rs.100 or rnoreso as to be made rule of the Court would be compulsorily registerable in the light of the following observation in AIR 1968 Punjab and Haryana 204:-- (1) If an award is registered, it is still a waste paper unless it is made a rule of the Court. Thus registration does not in any manner, add to its efficacy or give it any added competence. Section 32 of the Arbitration Act is specific for no right can be founded on an award as such after coming into force of the 1940 Arbitration Act; and (2) It is not disputed and indeed it could not be that the Court has the power, under section 16, to remit the award from time to time. If registration of an award is an essential pre-requisite before it could be made rule of the Court under section 17, every time an award is remitted and a new award is made, the new award will require registration. The result would be that in the same controversy there can be not only one registration but a number of registrations regarding the same title, a situation which is not even envisaged by the Registration Act. (3) In view of the aforesaid two reasons and the reasons in Senorain Lal's case, AIR 1958 Pat.252 there can be no manner of doubt that an award, after the coming into force of the Indian Arbitration Act of 1940, does not require registration before it can be made a rule of the Court." And again, "The award is a useless document unless it is made a rule of the Court; and once it is made a rule of the Court, it being a decree of the competent Court does not require registration. So far as the Court decree is concerned, it, to revert back to the objection of the Registration Act, fulfils each one of those requirements. The only exception, where a decree requires registration, is where it deals with property outside the subject- matter of the controversy. But otherwise decrees dealing with the property, which are subject matter of the controversy do not require registration. On this proposition, there is no dispute."

9. It has been further clarified in this judgment, "No party can be prejudiced by the mere existence of an award. It does not become operative and enforceable until it has been filed in Court and The Court adjudicates about its validity." Reference can also be made on cases reported as Haji Muhammad v. Syed Manzoor Hussain Shah (PLD 2003 Lahore 208), Lachman Dass v. Rama Lal and others 1990 PSC and Sher Muhammad v. Sh. Muhammad Aslam etc. (1989 MLD 4508). 11s. For what has been discussed above, the learned trial Court has not committed any illegality or irregularity while dismissing application of the petitioners under Order VII, Rule 11 of C.P.C. warranting interference by this Court in its revisional jurisdiction. Resultantly, this revision petition stands dismissed with no order as to costs. SAK/A-166/L Revision dismissed.