2026 PLP 737 (CLD)

MUHAMMAD EJAZ SWATI, J.

The appellant is aggrieved against the impugned order dated 19-3-2024, passed by learned Civil Judge/Judicial Magistrate-VIII Quetta (executing court), whereby the executing court partly allowed the execution application to the extent of Rs. 136335587/- and refused to allow markup i.e. 9% per annum, which according to the appellant was awarded in the award dated 10-09-2013 (the award) by the sole Arbitrator (the Arbitrator) and was made rule of the court vide judgment dated 19-12-2013.

2. The facts of the case are that the appellant was awarded contract namely "Construction of Musa Khail-Taunsa Road (35 KM)" started to be constructed with Zhob. After award of the contract the appellant/contractor started the work in accordance with the contract agreement. During execution of the work dispute arose between the parties. The appellant invoked arbitration clause by way of filing application under Section 20 of the Arbitration Act 1940 (the Act) before the learned Civil Judge Quetta on 05-09-2012. The learned Civil Judge Quetta allowed the application on 30-04-2013 and referred the matter to the sole Arbitrator namely Meer Ahmed Mengal, Executive Engineer, Communication and Works Department, Government of Balochistan, Quetta (The Arbitrator). The Arbitrator has rendered award dated 10-09-2013 (the Award). In paragraph 22 of the Award, the Arbitrator awarded Rs.136335587/- (the award amount) in respect of compensation of markup stated as under, "The Awarded amount of Rs. 136,335,587/- be paid to the Claimant within the period of 30 days from the date of this Award and in case of failure on the part of the Respondents or Pak PWD to make the payment, the Applicant will be further entitled for a compensation of markup @ 9% per annum."

3. After filing of the award and deciding objections, the learned Civil Judge made the award rule of the court vide order and decree dated 19-12-2013. The respondents challenged the above judgment and decree by way of filing appeal under Section 96 Civil Procedure Code (C.P.C.), which was dismissed by learned Additional District Judge-II Quetta vide judgment dated 13-09-2022. The Civil Revision Petition No.822 of 2022 filed by the respondents was also dismissed by this Court vide judgment dated 01-11-2023. On filing execution petition by the appellant before the Civil Judge-IX Quetta for realization of the decreetal amount i.e. Rs.136335587/- had also claim Rs.252902,515 /- being 9% per annum interest on the awarded amount w.e.f October 2013 till April 2023 (for a period of 9 years and 06 months) and thus claimed following amount, "

1. Total decreetal amount Rs.136335587/-

2. Total 9% interest per annum Rs.252902,515/-"

4. The learned Judicial Magistrate-VIII Quetta/Civil Judge Quetta vide impugned order dated 19-03-2024 partly allowed the execution application to the extent of decreetal amount of Rs.136335587/- and same was dismissed to the extent of compensation of markup at the rate of 9% w.e.f October 2013 till realization of the decree and the respondents/judgment debtor were directed to make payment of decreetal amount i.e. Rs.136335587/- to the appellant. The appellant has assailed the impugned order dated 19-03-2023 passed by the learned Civil Judge Quetta/Judicial Magistrate-VIII Quetta to the extent of 9% markup on the basis of award.

5. The learned counsel for the appellant contended that the award was made rule of the court vide judgment and decree dated 19-12-2013 without modification of the same, therefore, the compensation of markup of 9% awarded in the award in favour of the appellant is included, therefore, the appellant was also entitle for markup of 9% per annum. That the execution petition was result of decree passed under Section 17 of the Act and not under C.P.C., therefore, subsection (2) of Section 34, C.P.C. was not ispo facto attractive in arbitration matter where the award had been made the rule of the court without any modification. That under Section 152, C.P.C, the executing court either on his own motion or on the application of the parties can correct any error in the impugned judgment and decree, therefore, there was no occasion under the law for the executing court to decline compensation awarded by the Arbitrator and the executing court has ample power under the afore said provision to correct the mistake in the judgment and decree. The learned counsel for the appellant relied upon the case reported in 2006 YLR 1523.

6. The learned DAG, AAG assisted by the learned counsel for the respondents contended that judgment and decree dated 19-12-2013 passed by the trial court, whereby the award was made rule of the court specifically reflects that total amount awarded in the decree was Rs.136335587/- and decree is silent with regard to markup at the rate 9% per annum. That the appellant had neither challenged the decree nor filed any cross objection before the appellate court, whereby appeal filed by the respondents was dismissed by the learned Additional District Judge-II, Quetta nor before this Court when Civil Revision Petition No.822 of 2022 filed by the respondents/judgment debtor was dismissed vide judgment dated 01-11-2023, therefore, the judgment dated 19-12-2023 has attained finality.

7. We have heard the learned counsel for the parties and perused the record. The contention of the learned counsel for the appellant that C.P.C. is not applicable to the proceedings under the Act is not tenable. Section 41 of the Act makes provision of C.P.C. applicable to all proceedings, subject to provision of the Act and rules made under and would be limited only to the extent to which same was not in conflict with provision of the Act. The appellant filed execution application before the executing court for realization of the decree dated 19-12-2013 and also claimed compensation/markup 9% to be paid to the claimant from the date of the award till realization of the decree. The learned trial court vide judgment and decree dated 19-12-2013, while rejecting the objections of the respondents made the award rule of the court, the relevant Para of the decree is reproduced herein below, "This suit coming in this court for final disposal before me, ABDUL WAHEED BADINI, JUDICIAL MAGISTRATE-IX/CIVIL JUDGE QUETTA, in the presence of Mr. Mujeeb Ahmed Hashumi Advocate for applicant and Mr. Mushtaq Ahmed Anjum Advocate for respondents. It is ordered that the award passed by the arbitrator is made rule of the court and the following amounts awarded by the arbitrator to the respondents are directed to be paid by the respondents to the applicant, S. No. Description Amount claimed by the contractor Amount awarded in this award 1 Payment against interim payment Certification No.9 80,132,740/- Rs.80,132,740/- 2 Payment on account of idleness charges 21,417,499/- Nil 3 Verified cutting Quantities of IPC # 8 Less Entered in MB 7,727,604/- Rs.7,727,604/- 4 Verified Embankment Quantities of IPC# 8 Less Entered in MB 1,228,024/- Rs.1,228,024/- 5 Withheld in MB (Page # 67) 20,131,122/- Rs.20,131,122/- 6 70% Recovery of Hard Rock (Page # 67) 5,172,376/- Nil 7 Remaining Retention Money in MB (Page # 59) 3,938,676/- Rs.3,938,676/- 8 Remaining Amount of Structures due to Reduced rate 912,285/- Rs.912,285/- 9 Payment of Old Alignment 22,265,186/- Rs.22,265,186/- Total Amount 162,925,462/- Rs.136,335,587/- Total Amount Awarded in the Award Rs.136,335,587/-

8. The respondents assailed afore said judgment and decree in Civil Appeal No.54 of 2021 which was dismissed by the learned Additional District Judge-II, Quetta vide judgment and decree dated 13-9-2022. The respondents have also challenged the above judgment and decree of the appellate court in Civil Revision Petition No.822 of 2022 before this Court which was dismissed vide judgment dated 01-11-2023. The appellant in the afore said proceedings i.e. appeal and civil revision petition has neither filed any cross objection within the meaning of Order XXI, Rule 22, C.P.C. nor such courts considered any objections within the meaning of Order XXI, Rule 33, C.P.C. in favour of the appellant, thus, the judgment and decree dated 19-12-2013 had attained finality. The appellant is claiming compensation of markup at the rate of 9% per annum in execution proceedings on the basis of award which according to law is not executable unless followed by the decree, whereby, the award has been made the rule of the court. It is well settled law that when award announced by the arbitrator, is vetted by the court it shall be converted into a decree in which case the award would cease to exist as an independent cause of action. All the rights of the parties would thereafter be enforceable under the decree and not under the award. After the award merged in the decree, the award becomes for all purpose non-existence as a source of title or right between the parties and there will, therefore, no longer be any distinction between a decree passed on the basis of an award and decree can be passed in term of award that can be executed. The decree dated 19-12-2013, is silent in respect of compensation of markup at the rate of 9% per annum.

9. There is no dispute between the parties that decree which was put to execution did not contain any order or direction for the payment of any interest on the amount which was payable to the decree holder. It is well settled principle of law that the executing court cannot travel beyond the scope of the decree and the decree is to be realized with metes and bounds. It may be stated that a pre-decree matter cannot be pressed into service in the execution proceedings until and unless the same in incorporated in the decree. In Dilsukh Rai v. Lachman Das (AIR 1927 Lahore 894 (2)) it was held that executing court has no power to go beyond the terms of decree, and thus any previous agreement regarding the mode of execution of decree cannot be taken into consideration. Section 34, C.P.C authorize a court to award interest from the time of institution of the suit till up to the date of realization. Subsection (2) of Section 34, C.P.C. further provides that where such decree is silent with respect to payment of further interest on such aggregate sum as the afore said from the date of the decree to the date of payment or the earlier date the court shall be deemed to have refused such interest and separate suit thereof shall not lie.

10. Since the decree is silent with regard to markup in question and it cannot be awarded in the execution proceedings as the court cannot go beyond the scope of the decree. The law with regard to the entitlement of a contractual party the grant of interest was reiterated by the Honorable Supreme Court of Pakistan in case titled Najm Koreshi v. Chase Manhattan Bank Now Muslim Commercial Limited, Lahore and others (2015 SCMR 1461) as under, "It is clear from the foregoing provisions of section 34, C.P.C. that the Court passing a decree has discretion to order interest at such rates as it deems reasonable, accruing for different periods either on principal or aggregate amounts. The said legal provision expressly contemplates the award of interest pendente lite on the principal sum adjudged and also post decretal further interest on the aggregate of the said principal sum together with interest accrued thereon till the date of payment of the aggregate amount. As the award of interest on a decree is discretionary therefore, the terms on which it is ordered must be spelled out clearly in the contents of the decree. Otherwise, silence of the decree in the matter of further interest is to be deemed as refusal under section 34(2), C.P.C. The rate at which interest is ordered to accrue and whether such interest is to be calculated at a simple rate or a compound rate are also discretionary elements that ought to be specified in a decree."

11. The contention of the learned counsel for the appellant that Section 29 of the Act authorize the court to award interest in money suit on the basis of award irrespective that the same has not been mentioned in the decree is not tenable. In so far awarding markup against claim awarded in favour of the appellant (decree holder) by the Arbitrator is concerned, it would-be advantageous to refer to the provision of Section 29 of the Act which deals with the interest on award as under, "Interest on award;- Where and in so far as an award is for the payment of money the Court may in the decree, order interest, from the date of the decree at such rate as the Court deems reasonable, to be paid on the principle sum as adjudged by the award and confirmed by the decree."

12. According to the above provision of the law, the learned Arbitrator under no circumstances grant any markup on the principle amount from the date of award till payment, as it is the prerogative of the court to grant or otherwise in terms of the above provision. Reference in this respect is to be made case titled Ascon Engineers (Pvt.) Ltd. v. Province of Punjab through Secretary, Housing and Physical Planning Department (2002 SCMR 1662), University of Engineering and Technology through Vice-Chancellor, Lahore v. Messrs Moderate Builders through A Qutabuddin (2001 MLD 233), Messrs A.Z. Company v. Messrs S. Maula Bukhsh Muhammad Bashir (PLD 1965 SC 505), Dawood Cotton Mills Ltd. v. K.F. Development Corporation Ltd. (2006 SCMR 1555), Yousuf Aziz v. Mst. Aqeela Begum and 3 others (PLD 1978 Karachi 205) and Raja Shah Zaman and others v. Zamindaran Birgal through representatives (1997 MLD 745). In case titled Ghulam Abbas v. Trustees of the Port of Karachi (PLD 1987 SC 393), wherein the Honorable Supreme Court of Pakistan observed as under, "As far as the grant of interest from the date of the award until the payment of the principal sum it may be observed that he Arbitrator can under no circumstances award interest for the period beyond the passing of the decree by the Court on the award for the simple reason that the statutory provisions contained in section 29 of the Arbitration Act take over and it is the Court within whose discretion lies the power to order interest from the date of the decree at such rate as the Court deemed reasonable, to be paid on the principal sum as adjudged by the award and confirmed by the decree. From this it necessarily follows that future interest with effect from the date of the decree could not legally be awarded by the Arbitrator. However, the facts are that the award was made the rule of the Court by the learned Single Judge with the result that the part of the award granting interest beyond the date of the decree until payment was also incorporated in the decree passed by the Court. As held in Sheikh Mahboob Alam v. Sheikh Mumtaz Ahmed (PLD 1956 Lahore 276), although, the court could set aside this part of the award, it was open to it to exercise its own power under section 29 of the Arbitration Act and grant interest. Therefore, in making this portion of the award a part of the decree the court must be deemed to have adopted it in the exercise of its own power under section

29. However, in his statement of claim the appellant had claimed interest only upto 3rd October, 1973. The issues were framed by the learned Arbitrator on the pleadings of the parties and therefore, interest beyond 3rd October, 1973, was not the subject matter of reference for adjudication before the Arbitrator. The Arbitrator, therefore, exceeded his authority, in any case, to have awarded future interest for the period between the date of the award and the date of the decree on any basis."

13. In the instant case, while passing the decree the trial court has not adopted the portion of the award regarding markup in the exercise of its own power under Section 29 of the Act and the silence of the decree in matter of interest is to be deemed as refused under Section 34(2), C.P.C. Besides, the decree has not been challenged by the appellant. In view of above, the Civil Miscellaneous Appeal No.17 of 2024 is dismissed. The parties are left to bear their own cost. MH/9/Bal. Appeal dismissed.