P L D 2002 Karachi 420 (PLP)

MUSHIR ALAM, J.‑‑Appellants have impugned through instant High Court Appeal order passed on C.M.A. No.5817 of 2001 under Order 39, rules 1 and 2, C.P.C in Suit No.1051 of 2001 filed by the Respondent No.l against the appellants and respondents Nos.2 and 3 whereby the learned Single Judge granted the injunction and the respondents Nos.2, 3 and 4 were restrained from releasing/refunding the security till further orders of the Court. Brief facts necessary for disposal of this appeal are that the respondent No. l/plaintiff Rana Refaqat Ali and appellants/defendants Nos. 2 and 3 are partners of the appellant/defendant No.1 firm in the business of cargo luggage and vans, having head office at Lahore, branch office at Karachi Cantt. City Railway Station, Karachi and at other Railway Stations in different cities. It was claimed by the respondent No.1/plaintiff that he contributed capital in the firm to execute the contract awarded by the respondents Nos.4 to 6 in favour of the appellants/defendant No.1 firm and the respondent/plaintiff No. l was managing the office at Karachi. It appears that some disputes arose between the partners and apparently the same were subjected to arbitration proceedings. The respondent No.1 claimed that the office at Karachi. was shutdown by the appellants in connivance with the staff of respondents Nos. 2 to 4, necessitating the suit referred to the above seeking inter alia winding up, dissolution of the firm, rendition of account, appointment of receiver and restraint orders from against release/refuted of the security of the contract subject‑matter of the suit. Alongwith suit plaintiff filed the application under Order 39, rules 1 and 2, C.P.C, whereupon the impugned orders were passed. Learned counsel for the appellant firstly contended that the principal office of the partnership firm is at Lahore, contract awarded to the firm was executed at Lahore and the defendant therein, permanently reside at Lahore, therefore, this Court has no jurisdiction. Secondly that, the partnership provides for settlement of dispute through arbitration, therefore, the suit cannot proceed. Lastly it was urged that once the arbitration was resorted to and matter was decided, controversy cannot be raised in the suit. Learned Single Judge in Chamber after hearing the parties granted the injunction referred to in the earlier part of the order. Mr.Hamid Ali Shah learned counsel, for the appellant in support of his contention has relied upon following cases: Durga Das alias Durga Parsad v. Jai Narian and others (Allahabad High Court Civil Revision No.70 of 1918, March 7, 1919), Niranjan Singh and others v. Kundan Singh and others (Allallabad High Court First Appeal from Order No.5 of 1919, July 29, 1919), Gordhandas Kaliadas v. Dowlatram Kanayalal (AIR 1926 Sind 238), Nihal Chand and another v. Jai Ram Das (AIR 1931 Lahore 673), Muhammad Idris d. Rati Ram & Sons and others (AIR (29) 1942 Oudh 250), S. Zafar Ahmed v. Abdul Khaliq (PLD 1964 (W.P.) Karachi 149), .Messrs Brady & Co. (Pakistan) Ltd. v. Messrs Sayed Saigol Industries Ltd. (1981 SCMR 494) Pakistan State Oil Company Ltd: v. The Karachi Electric Supply Corporation and 24 others (PLD 1991 Karachi 365), Mst. Iqbal Begum v. Farooq Inayat and others (PLD 1993 Lahore 183), Muhammad Farooq v. Province of Punjab through Secretary, Industries and Mineral Development Department, and others (PLD 1993 Lahore 56), Ch. Muhammad Siddique and another v. Mst. Walayat Begum and 8 others (1993 MLD 121), Amir Zaman and another v. Abdul Khaliq and 2 others (1993 CLC 1394); Province of Punjab and others v. Messrs Rana & Sons (1996 CLC 69), Mst.Razia Jaffar and others v. Government of Balochistan through the Secretary, Department of Revenue Civil Secretariat, Quetta and others (1998 CLC 1738), Rehmat Ali v. The Additional District Judge, Multan and others (1999 SCMR 900). Learned counsel for the respondent, however, contended that since branch office was located at Karachi and cause of action accrued to the respondent No.1/plaintiff when he was ousted from the branch office at Karachi City Railway Station within the jurisdiction of this Court, therefore, Court at Karachi would have jurisdiction. It was further submitted that no application under section 34 of the Arbitration Act was filed for referring the disputes to arbitration and that the alleged award did not relate to the dispute in suit. We have heard the arguments and perused the record. Adverting to the first contention of the learned counsel for the appellant that this Court has no jurisdiction. Such argument is premised on the ground that the head office of the firm is at Lahore, the defendant resides at Lahore and the contract subject‑matter of the partnership business was also awarded at Lahore. Large number of cases cited by the learned counsel for the petitioner does not support the case of the petitioner, for the simple reasons that admittedly the business of the firm of which plaintiff/respondent No. l was made Incharge was at the branch office Karachi. The case nearest to his argument that could be relied upon is M/s. Brady & Co. (Pakistan) Ltd. v. M/s., Sayed Saigol Industries Ltd. (1981 SCMR 494). In this case it was held that subordinate office simpliciter will not give jurisdiction to the Court as law did not recognize subordinate office of Corporation to be converted through a deeming clause into a place where Corporation "carries on business". In the said case suit brought at the place where branch office was located, was not considered giving cause of action to file a suit but at the same time it was held that if a cause of action arose at a place where branch office was located then the Court at such place would have jurisdiction. In the case of Durga Das (supra) and Muhammad Adrees (supra), it was held that a suit for dissolution of partnership firm with the usual and ancillary relief can be brought where the contract was arrived, agreed to be performed or where cause of action had arisen. In the case of West Pakistan Industrial Development Corporation v. M/s. Sheikh Muhammad Amin & Co. (1992 CLC 2047), the subject contract of which breach was claimed was entered into between the parties at Lahore, but breach, therefore, took place at Karachi, it was held that as the breach of contract was committed at Karachi, therefore, Court at Karachi would have jurisdiction to entertain and decide the suit. In the instant case also from the adverted facts it appears that the parties though entered into a partnership agreement at Lahore and also the defendant therein also resides at Lahore, yet the partnership firm had branch office at Karachi, of which the plaintiff/respondent No. l was the Incharge. The case set‑up by the plaintiff in the suit is that the branch office at Karachi was shutdown in connivance with the Railway Authorities and the plaintiff therein was ousted from the partnership business, Such fact simply demonstrated that not only the branch office was located at Karachi but the cause of action also arose at Karachi. Cause of action refers to the facts which give occasion to and form the foundation of the suit. It comprises of bundle of facts taken together. Once the party to a contract irrespective of place of principal office is able to successfully demonstrate that the cause of action accrued at a place other than the principal office or at a place other that where contract was originally executed then the principal office or at a place other than where contract was originally executed then the place at which breach had occurred or at a place where a party suffered some injury on account of some act of ommission or commission relatable to the contract inter se then the cause of action will be considered to have accrued at such place and the Court at such place will always have jurisdiction. Accordingly in our opinion since injury complained of accrued at Karachi, it will give jurisdiction' to the Courts at Karachi, Where two Courts may have jurisdiction in respect of a same claim then it is the prerogative of the plaintiff that weighs more in determining the place of suing. Finding no merits, on the score of jurisdiction, same are accordingly Adverting to the second contention of the learned counsel for the appellant that the suit is not maintainable in view of the Arbitration Clause in the partnership agreement. Contention seemingly attractive, is devoid` of force for the simple reasons that mere existence of Arbitration Clause in the agreement between the parties does not bar the jurisdiction of tile Civil Court it only provides that where a party to an agreement commences any legal proceeding against another party to the agreement, then such a party before filing a written statement or taking any other step in the proceeding may apply to the Court before which the proceeding is pending to stay the proceeding and the Court may if it is satisfied, that there are sufficient reasons for referring the matter to arbitration, stay the proceedings. Under section 34 of Arbitration Act, Court does not act suo motu. A party, seeking stay of the proceeding has to apply to the Court where the proceedings have been initiated through a proper application. Merely taking a defence in a written statement or in a counter‑affidavit to any interlocutory application does not fulfil the requirement of section 34 of the Arbitration Act and the Court on its own cannot refer the matter to the arbitrator simply because the agreement so provides. Such view finds support from the cases reported as Messrs Universal Business Equipment (Pvt.) Limited v. Messrs Kokusal Commerce Inc. and others (1995 MLD 384), Messrs Hohnson and Phillips (Pakistan) Ltd. through Chief Executive v. Sahibzada Muhammad Ayaz and another (1997 CLC 1177) and Muhammad Younas and another v. Muhammad Siddique and another (1998 CLC 1238). Adverting to the last contention, that the controversy urged in the suit was already referred to the arbitration, an award has been given and therefore, suit is not maintainable. In the light of such arguments it would be necessary to examine the disputes/controversy which was referred to the arbitration and which is apparent from Annexure D/2 at page

87. A perusal thereof reveals that all the parties, had appointed arbitrator to decide the disputes between the parties without specifying a single dispute. Consequently the arbitrators gave an award inter alia providing; that the respondent No.l/plaintiff will regularly receive amount up to 10‑4‑2001 from the appellants Nos.2 and 3; that all the parties will be bound to have the account of firm audited from charted accounts; that parties will keep accounts at the Railway Station office; that respondent No. l /plaintiff is bound to restore the record which he had taken over from different offices; that the parties will be bound by clause‑II of the partnership and the partnership business will not be interfered by M/s. Sahfawat, Rana Naseem Akhtar and Shajid Rafi; that the parties shall withdraw complaint if made before the police and they will refrain from doing so again, and that all the affairs of Karachi office will be decided by the parties and the parties will be bound to deposit daily cash from Karachi City, and other stations in Lahore office. The award was given on 23‑5‑2001. It also appears that the parties further agreed and executed mutual agreement on, 15‑6‑2001 as Annexure D/3 at page

95. What section 32 of the Arbitration Act provides is that award cannot be set aside, amended or modified in any way or effected through any proceeding except as provided under the Arbitration Act. Learned counsel for the appellant was not able to show that any of the relief claimed in the suit in any manner seeks to set aside, amend, modify or effect the award referred to above. It is also pertinent to note that none of the parties to the suit has made any efforts to make the award rule of the Court we may refer to Abdul Karim v. Mirza Bashir Ahmed (PLD 1974 SC 61) wherein it was held that mere making of an award simpliciter was of no. value and did not create, extinguish or pass any right, title or interest and no party could be prejudiced by mere existence of the award. It only becomes effective when it is made rule of the Court. Till the decree is passed the award has no status in the eyes of law. Such view is supported by Ram Sahai v. Babu Lal (AIR 1965 Allahabad 217), Ch. Muhammad Saleem v. Ch. Muhammad Akram and others (PLD 1971 SC 516), Abdul Karim v. Mirza Bashir Ahmad (PLD 1967 Lahore 365) and Rai Batey Khan and another v. Raja (1991 MLD 587). In view of the foregoing discussion, we find no merits in this appeal, which is accordingly dismissed alongwith all the pending applications, with no orders as to costs. Q.M.H./M.A.K./I‑54/K Appeal dismissed