2007 PLP 1247 (CLC)

SAJJAD ALI SHAH, J.

By this order I intend to decide the objections filed on behalf of Mst. Rukhsana Parveen under section 30 read with section 33 of the Arbitration Act, 1940 in suit No.,785 of 2004 wherein the award was made rule of Court, and an application under section 12(2) read with section 151, C.P.C. (J.M. 36 of 2005) for setting aside the order dated 24-11-2004, (whereby the award was made rule of the Court) and a decree was passed. Briefly stated the facts for determining the aforesaid objections as well as application under section 12(2), C.P.C. are that Syed Shabahat Hussain (hereinafter referred to as Decree-Holder) on 1-7-2004, filed an application under section 14(2) of the "Arbitration Act, 1940" before this Court asserting therein that on 5-8-2003 he entered into an agreement with Mrs. Rukhsana Parveen (hereinafter referred to as "judgment-debtor") whereby he was to arrange an industrial plot admeasuring 10 acres in Port Qasim Authority for the judgment-debtor who agreed to pay a hum of Rs.13,50,000 per acre to the decree-holder for the purchase of said plot, the judgment-debtor further executed an authority letter dated 4-8-2003 in favour of decree-holder who started pursuing the matter with Port Qasim Authority on behalf of the judgment-debtor. However, in the meanwhile a dispute arose which by consent and as per the terms of agreement was referred to a sole arbitrator through a joint application dated 10-9-2003. The arbitrator thereafter on 12th September, 2003, in the presence of nominated representatives of the respective parties pronounced the award which was duly signed by the parties and their authorized representatives. The award directed the judgment-debtor to pay a sum of Rs.35,00,000 to the decree-holder within nine months, however, the judgment-debtor failed to pay the said amount within the period as provided in the award, therefore, the decree-holder filed an application under section 14(2) of the Arbitration Act which was registered and numbered as J.M. 28 of 2004, seeking direction against the Arbitrator to file the award in Court. The record of J.M. 28 of 2004 reflects that the matter was placed in Court on 5-7-2004 and a notice was ordered for 14-7-2004, and 14-7-2004 following order was passed:- "14-7-2004. Mr. M.A.I. Lakhan, Advocate. Nusrat Ali Chohan, Respondent No.1 who is present in person submits that he shall file the Award during the course of the day. The respondent No.2 has remained un-served. Let notices be issued to the respondent No.2 afresh. (Sd.) Judge." The Additional Registrar's diary dated 20-8-2004 in J.M. No.28 of 2004 reflects that the notice of C.M.A. No. '676 of 2004 under section 41 of the Arbitration Act filed along with application under section 14(2) of the Arbitration Act was duly served upon the judgment-debtor whereas the notice of main application under section 14(2) of the Arbitration Act was not served. However the Arbitrator on the same day viz. on 14-7-2004 filed the award in Court as undertaken and it was registered and numbered as Suit No.785 of 2004 and J.M. No.28 of 2004 having served its purpose was consigned to record. Upon filing of award in Court, it was registered and numbered as Suit No.785 of 2004, notices were issued to the decree-holder as well as to the judgment-debtor as reflected from the dairy sheet dated 19-7-2004, maintained by the Additional Registrar, notice was served upon the judgment-debtor on 2-9-2004, as is reflected from the record, thereafter the matter had come up before the Registrar on 30-9-2004 who directed the parties to file objections within 30 days from the receipt of notice, since no objections were filed by any one therefore the case was placed in Court and vide order, dated 24-11-2004 the award was made rule of Court and decree was drawn accordingly. The decree-holder thereafter on 2-2-2005 filed an application for the execution of the decree which was registered and numbered as Execution No.8 of 2005. It appears that notice of the execution application was served upon the judgment-debtor on 12-4-2005, whereafter judgment-debtor on 3-5-2005, filed an application under section 12(2) read with section 151, C.P.C. in Suit No.785 of 2004 for setting aside the order, dated 24-11-2004, whereby the award was made rule of Court and the decree passed in consequent thereto, the application was numbered as Judicial Miscellaneous Application No.36 of 2005, the judgment-debtor in addition to the above application further on the same date filed objections under section 30 read with section 33 of the Arbitration Act in suit No.785 of 2004 for setting aside of award. The judgment-debtor in her application under section 12(2), C.P.C. as well as in objections under section 30 read with section 33 of the said Act has totally denied the case of the decree-holder. The judgment-debtor has not only denied the agreement in respect of land to be purchased by the decree-holder in her name from the Port Qasim Authority but has further denied the appointment of Arbitrator, the arbitration proceedings, receipt of notice from this Court except in execution proceedings, leading to filing of application under section 12(2) as well as objection to the award. However, the judgment-debtor has not said any thing about the allotment of 10 acres of land in her name by the Port Qasim Authority at the rate of Rs.10,00,000 per acre. Mr. Nazar Akbar counsel for the judgment-debtor while arguing the applications has contended that the judgment-debtor had no knowledge of any proceedings pending before this Court neither any notice was served upon her either in J.M. 28 of 2004 wherein the decree-holder sought directions for filing the award nor any notice was received by her in Suit No.785 of 2004, despite the award was made rule of Court and a decree was drawn accordingly. Mr. Nazar Akbar has read the bailiff report in J.M. 28 of 2004 as well as in suit No.785 of 2004 which reflect that summons were handed over to the maid servant who went inside and got it signed from the judgment-debtor and has contended that no direct service was effected upon the judgment-debtor and the manner judgment-debtor is shown to be served is no good service at all. He has further invited my attention to the fact that in both the said cases neither the notices were issued through courier service nor through registered post and has contended that since the judgment-debtor has not been served in accordance with law therefore the ex parte proceedings against her are liable to be recalled. In support of his contention the learned counsel has placed reliance on the case of Mst. Nigar Bibi and others v. Salahuddin Khan PLD 1990 SC

76. It was next contended that assuming there was an Arbitration between the parties and the award was validly passed even then the application under section 14(2) of the Arbitration Act i.e. J.M. No.28 of 2004 was hopelessly barred by time for the simple reason that the award itself reflects that it was passed. in the presence of the parties on 12th September, 2003, whereas application under section 14(2) of the Arbitration Act was presented in Court on 1-7-2004 i.e. after almost nine months, whereas Article 178 of the Limitation Act provides limitation of 90 days from the receipt of notice of award. Learned counsel has contended that since the award reflects that it was announced in the presence of the parties, therefore, for the purposes of Article 178 the date on which such award was announced would be the date from where the limitation would commence for the reasons that the notice as envisaged under section 14 of the Arbitration Act could be oral. In the end Mr. Nazar Akbar argued that even if no objections were filed to the award, still it was the duty of the Court to satisfy itself as to the entitlement of the decree-holder before making the award as rule of Court and in support of his contentions has relied on the case of Pakistan through General Manager Railways v. Messrs QMR Expert Consultants PLD 1990 SC

800. On the other hand Mr. Shafaat Hussain learned counsel for decree-holder has contended that notice of application under section 14(2) of the Arbitration Act was duly served upon the judgment-debtor in J.M. 28 of 2004 on 19-7-2004 which was received by the judgment-debtor herself. It was further contended that notice in Suit No.785 of 2004 was also duly received by the judgment-debtor on 2nd September, 2004, as is evident from the bailiff report, the learned counsel further invited my attention to the notices issued in execution proceedings one of which admittedly was received by the judgment-debtor, and contended that the signatures of the judgment-debtor may be compared with the notices received by judgment-debtor in J.M. No.28 of 2004 and Suit No.785 of 2004 and a bare look of naked eye would reveal that the summons, notices, in all the cases were duly received by the judgment-debtor herself, consequently neither the objections can be entertained for want of service nor the judgment and decree can be set aside on this ground. While justifying the delay in filing of application under section 14(2) of the Arbitration Act the learned counsel for the decree holder has contended that as per the terms of award judgment-debtor was bound to pay the amount determined against her in nine months, consequently, after announcement of award on 12th September, 2003 the decree-holder waited for a period of nine months which expired on 11th June, 2004, and upon non-payment of the amount as directed in the award the decree-holder on 1st July, 2004, filed an application under section 14(2) of the Arbitration Act. The learned counsel in addition to the above justification further contended that notice in writing is a mandatory requirement under section 14(1) of the Arbitration Act and since in this case no notice in writing admittedly was issued by the arbitrator, therefore, the limitation would not commence for the purposes of Article 178 from 12th September, 2003, i.e. the date of announcement of award. The learned counsel in support of his contention has relied on the case of Muhammad Wasi Saigal v. Shaikh Rashid Ahmed 1988 CLC

267. It was next contended by Mr. Shafaat Hussain that the award was filed in Court on 14-7-2004 and notice was served upon the judgment-debtor on 2nd September, 2004, consequently the judgment-debtor was bound to file the objections on or before 1st October, 2004, consequently the objections filed on 3-5-2005 are barred by more than seven months and therefore, the application is liable to be dismissed being barred by time. As to the application of the judgment-debtor under section 12(2) Mr. Shafaat Hussain has contended that in the circumstances and in respect of proceeding under the Arbitration, application under section 12(2) of C.P.C. is incompetent and not maintainable. In support of his contention learned counsel has placed reliance on the case of Messrs Combined Enterprises v. WAPDA Lahore PLD 1988 SC 39 and Government of Sindh v. Fazal Muhammad PLD 1991 SC

197. In rebuttal Mr. Nazar Akbar while asserting the maintainability of application under section 12(2), C.P.C. in the present proceedings has placed reliance on the case of Muhammad Yasin v. Shaikh Hanif Ahmed 1993 SCMR

437. I have heard the learned counsel for the respective parties at length and have very carefully perused the record as placed before me, and before I could finally pass the order I felt it appropriate to examine the parties in order to verify the record, specially the denial of applicant/J.D. of her signature on various places including the bailiff reports, the parties, therefore, were directed to appear in Court. However, Mr. Nazar Akbar on 15-8-2006 made a statement in Court that the applicant being Parda observing lady and it is against her beliefs to appear in Court, therefore, she cannot appear as directed, however, the statement of the counsel was found inconsistent with the record as she had appeared in Court to sign various applications, counter-affidavits as well as rejoinder. In the circumstances the applications are being decided on the basis of record. The record reflects that notice of application under section 41 of the Arbitration Act in J.M. 28 of 2004 filed along with application under section 14(2) of the Arbitration Act was served upon the judgment-debtor though through her maid servant but the service report of the bailiff contain signature of judgment-debtor reflecting receipt of notice on 19-7-2004, whereas in Suit No.785 of 2004 bailiff report of service on notice issued under section 14(2) of the Arbitration Act contains similar signatures reflecting receipt of signature on 2nd September, 2004. Likewise bailiff reports whereby notice of execution application No.8 of 2005 were served upon the judgment-debtor on 24-3-2005, and 12-4-2005 also contain similar signatures. The judgment-debtor denies to have received notices in J.M. No.28 of 2004 as well as notice under section 14(2) of the Arbitration Act in Suit No. 785 of 2004 but admits to have received one notice in Exh.No.8 of 2005 which as per bailiff report was served on her in the presence of her husband and brother-in-law in consequence whereof the judgment-debtor had filed objections as well as application under section 12(2), C.P.C. I have compared the signature on all the four notices and am of the view that a bare look of naked eye reveals that the signatures on all the four notices are of the same person and since the judgment-debtor admits to have received the notice issued in execution application, consequently, it leaves no doubt in my mind in concluding that the notices/summonses were duly received by the judgment-debtor in J.M. No.28 of 2004 on 19-7-2004, of the application under section 41 of the Arbitration Act as well as notice under section 14(2) of the Arbitration Act in Suit No.785 of 2004 on 2-9-2004. Consequently the objections filed by the judgment-debtor under section 30 read with section 33 of Arbitration Act in suit No.785 of 2004 cannot sustain being barred by more than seven unexplained months. As to the second contention that since the award was announced in the presence of the parties on 12th September, 2003, the application under section 14(2) of the Arbitration Act filed on 1-7-2004 i.e. J.M. No.28 of 2004 was hopelessly barred by time and therefore, the arbitrator/umpire could not have been directed to file the award. In this respect the decree-holder does not dispute the announcement of award on 12th September, 2003 in the presence of the parties and filing of the application under section 14(2) on 1-7-2004 which even otherwise is established from record therefore, the only point which requires consideration and determination is as to whether the announcement of award in the presence of the parties would be a sufficient notice as required under section 14(1) of the Arbitration Act. Mr. Nazar Akbar has placed reliance on the case of Pakistan through General Manager Pakistan Railways (supra) wherein the Honourable 'Supreme Court has held that notice of application under section 14(2) served on the Advocate by the Court is sufficient and valid notice. However, there is a marked distinction between notice under section 14(1) and section 14(2) of the Arbitration Act. Notice under section 14(1) is issued by the arbitrator or umpire to the parties of making and signing the award, whereas notice under section 14(2) of the Arbitration Act is issued by the Court after the award has been filed in Court. The Honourable Supreme Court in the case of Pakistan through General Manager Pakistan Railways (ibid) has considered the effect of notice under section 14(2) of the Arbitration Act issued by the Court after the award was filed and held that oral notice to the counsel is suffice, for the reason that subsection (2) of section 14 of the said Act does not 'prescribe any form of notice, whereas subsection (1) of section 14 of the Arbitration Act requires the arbitrator to give to the parties of making and signing of award a notice in writing. The addition of words "in writing" in subsection (1) after the word "notice" and its omission in subsection (2) is meaningful, and distinguishes the form of notice issued by the Court than the one issued by the arbitrator, therefore, the principles laid down by the Honourable Supreme Court in the case of Pakistan through General Manager Railway (supra) are not attracted to this case. The Honourable Supreme Court in the case of Muhammad Mushtaq Saigal v. Muhammad Wasi Saigal 2001 SCJ 96 has held: "(10) It may be noted that under subsection (1) of section 14 of the Act, it is mandatory that notice of making and signing of the award is to be given in writing to the parties whereas under subsection (2) of section 14 of the At there is no such requirement as it inter alia provides that the Court shall thereupon give notice to the parties of the filing of the award without stating that it would be in writing. From the above reports it is evident that it has been held by the Courts that a notice by a Court under subsection (2) of section 14 of the Act need not be in writing and it may be given even orally for the purpose of limitation. Whereas, as regards subsection (1) of section 14 of the Act it has been held that notice of making and signing of the award to the parties should be in writing for the purpose of computing the period of limitation. However, in none of the cases it has been held that there is any format of notice under subsection (1) of section 14 of the Act. The requirement is of a notice in writing." "(15) We are therefore, of the view that factually in the case in hand the arbitrator had given notice in writing to the parties by making and signing the award in their presence and by obtaining their signatures on the diary of the above dates reproduced hereinabove. The requirement of subsection(1) of section 14 of the Act, was complied with as it does not provide a format for the notice contemplated therein." In the circumstances it leaves no doubt in my mind that the notice as required to be given by the arbitrator under subsection (1) of section 14 of the Arbitration Act unless given in writing in any form would not commence the period of limitation for the purposes of Article 178 of the Limitation Act, consequently the application under section 14(2) of the Arbitration Act filed by the decree-holder before this Court cannot be ruled as barred by time. As to the maintainability of application under section 12(2) of the Code of Civil Procedure. The Honourable Supreme Court in the case of Muhammad Yasin (supra) after considering the effect of its judgments in the case of Messrs Combined Enterprise as well as Government of Sindh (supra) came to the conclusion that:

"In both these judgments question whether a decree passed on the basis of the award can be challenged by an application under section 12(2), C.P.C. was not considered. Sections 30 and 33 refer to only award and not decree passed on the basis of the award under the "said Act" there is no provision for challenging such decree on the ground that it has been obtained by misrepresentation and fraud. Therefore, the applicability of section 12(2), C.P.C. has not been excluded." Respectfully fallowing the dicta laid down by the Honourable Supreme Court I hold that the application under section 12(2), C.P.C. is maintainable. However, the judgment-debtor has to point out the fraud or misrepresentation in obtaining such decree. The case of the judgment-debtor as set up in application under section 12(2), C.P.C. is of total denial. She has denied the agreement, containing arbitration clause, joint request for the appointment of arbitrator, award receipt of notices from this Court. As to the receipt of notice I have already held that the judgment-debtor had received all the notices issued by this Court personally. The signatures of the judgment-debtor are available on the agreement, the breach whereof resulted in the arbitration proceedings, joint request, whereby both the parties had appointed arbitrator award, notices of this Court and her NIC and a bare look of a naked eye would reveal that all the signatures are of the same person. It is also very significant to note that the judgment-debtor has not denied the allotment of plot admeasuring 10 acres in her name at the rate of Rs.10,00,000 by the Port Qasim Authority nor has given any explanation in respect of allotment letter dated 16-8-2003 issued by the Port Qasim Authority showing her proprietor of Pervaiz & CO. In the circumstances, I do not find any justification for allowing the application under section 12(2) of the Code of Civil Procedure as I am convinced that it has been filed only to abuse the process of this Court. As to the last contention of the learned counsel for the judgment-debtor that despite no representation on behalf of the judgment-debtor it was the duty of the Court to examine the award before making it rule of Court. The learned counsel for the judgment-debtor could only point out from the record of J.M. 28 of 2004 that on 14-7-2004, notice was ordered to be issued to the judgment-debtor despite no notice was issued, however, the counsel failed to point out any prejudice caused to the judgment-debtor on account of non-issuance of such notice or any right of the judgment-debtor to such notice. No doubt record reflects that on 14-7-2004, notice was ordered to be issued to the judgment-debtor, however, since the arbitrator was served and he undertook to file the award during the course of the day, therefore, no notice was actually issued as the application itself had served the purpose of subsection (2) of section 14 of the Arbitration Act 1940 prescribes the procedure of filing the award in Court in the following terms:

"(2) The arbitrators or umpire shall, at the request of any party to the arbitration agreement or any person claiming under such party or if so directed by the Court and upon payment of the fees and charges due in respect of the "Said and award and of the costs and charges of filing the award, cause the award or a signed copy of it, together with any depositions and documents which may have been taken and proved before them, to be filed in Court, and the Court shall thereupon give notice to the parties of the filing of the award." A minute perusal of the above provision would clearly reveal that the law envisages issuance of notice to the parties after the award has been filed in Court and there is nothing even to infer the issuance of notice to the parties to the arbitration proceedings upon an application seeking direction against the arbitrator to file award in Court, therefore, I am of the view that non-issuance of notice to the judgment-debtor in J.M. No.28 of 2004 is of no consequence. For the reason discussed above C.M.A. No.1903 of 2006 in Suit No.785 of 2004 as well as J.M. No.36 of 2005 stand dismissed. M.B.A./R-17/K Applications dismissed.