P L D 1993 Karachi 543 (PLP)

This suit was filed on 8th August 1985 on the basis of the following

2. Government of Sindh (defendant No.1) vide Notification No. S.O. (C-1) 16 (2)/84, dated 24th April 1985 directed Sindhi Cooperative Housing Authority, Karachi (defendant No.3)' to take over control of New Town Cooperative Housing Society and by another Notification of the same date defendant No.2 was appointed Enquiry Officer to conduct enquiry into the affairs of the said Society. The plaintiff-firm, which is a firm of developers and building contractors, had been enoged by the said Society but there were serious allegations of malpractices against the plaintiff-firm and the Society had issued show-cause notice dated 15-4-1985 to the plaintiff for cancelling the agreement of its engagement dated 6-12-1981. The plaintiff-firm replied it on 29-4-1985 ' and again furnished another reply (of which date is not disclosed) but defendant No.2 vide order dated 2-7-1985 withdrew the authority given to plaintiff-firm by the superseded Society to represent the Society before various Courts and to defend suits and criminal proceedings against the Society and on its behalf. Subsequently, by another order dated 29th July 1985, defendant No.2 informed the plaintiff-firm that it had ceased to be developers and ordered them to vacate the land of the Society. The plaintiff-firm claim that it has invested Rs.37,48,000 in the development of the land and it could not be thus thrown out. Hence, through this suit, the plaintiffs sought the following reliefs:-- (a) For a declaration that the orders/directions dated 2-7-1985 and 29-7-1985 issued by the defendant No.2 are illegal, unlawful, arbitrary, mala fide andwithout lawful authority and jurisdiction and of no legal effect. (b) For a permanent injunction restraining the defendants, their offi&rs,' 1993 Ashrafi Abbasi Associates v. New Karachi 545 Town Cooperative Housing Society Limited (Salabuddin Mirza, J) agents and servants from resuming possession of the said land, namely about 54 acres in Deh Jamshoro, Taluka Hyderabad in contravention of the agreement dated 6-12-1981 and/or resuming possession of the same or any part or portion thereof and/or from dispossessing the plaintiffs therefrom and/or from preventing/obstructing the plaintiffs from carrying on development work on the said lands in accordance with the agreement dated 6-12-1981. (c) For a decree directing the defendant No.1 to direct the defendant No.3 to implement the terms of the Agreement dated 6-12-1981 to enable the plaintiffs to complete the development work on the remaining/balance portion of the land. (d) For a permanent injunction restraining the defendants from interfering with the plaintiffs' right/entitlement to book/dispose of the plots in terms of clause 7 of the agreement dated 6-12-1981. (e) In t he alternative for a decree for damages/compensation in the sum of Rs.97,48,000 against the defendants jointly and severally with interest thereon at 14% per annum from the date of the suit until realization. (f) For costs of this suit. (g) For - such further and other relief/reliefs as the nature a circumstances of the case may require.

3. Defendant No.2 who is the only contesting defendant, did not tile the written statement but moved an application under section 34 of Arbitration Act on 25th August 1985 (C.M.A. No.2437/85). The plaintiff-firm, through its counter-affidavit which was filed in the Court on 31-8-1985, opposed this application. However, as would appear from the order of the Court dated 1-3-1987, the parties agreed to refer the dispute to arbitration and appointed Justice (Retd.) KA. Ghani as Umpire whereas the plaitniffs appointed Mr. SA. Nizami, Addl. Secretary, Ministry of Justice as their arbitrator and the defendants appointed Syed Ahsan Ali Shah, ex-Memeber of Service Commission, as their Arbitrator. f ? 1714.7

4. Prior to the reference to the arbitration, Official Assignee was appointed Comm' ioner to assess the work done by the developers and his iss report dated 17-12-1986 is on record. Subsequent thereto, M/s. Civil Engineering Services had valued the work and their valuation report dated 14th September 1986 is also on the record. According to this report, the value of the construction work done by the plaintiff-firm up to the time of their expulsion from the site is Rs.55,71,861.45. .

5. Eventually, the Arbitrators jointly prepared the Award which is dated 4th June 1989 and filed it in the Court on 3-7-1989. It shows that the 546 Karachi All Pakistan Legal Decisions Vol. XLV krbitrators had arranged meetings of the parties and theiri counsel which -esulted in a compromise and a consent Award was announced by the krbitrators which also stipulated that if any dispute or difference arose >etween the parties it shall be referred to the said Arbitrators and in case of a lifference between the Arbitrators, it would be referred to "an umpire".

6. Defendant No.2 riled objections to the Award on 30-11-1989 but it has ~rongly described itself as 'defendant NoX, perhaps because the Arbitrators a their application under section 14(2) of the Arbitration Act had listed lefendant No.2 as defendant No.1 and had listed defendant No.3 as defendant 4o.2 and had omitted to implead Government of Sindh (defendant No.1) in he suit. The gist of the objections is that the matter was last fixed before the %,rbitrators on 24-5-1989 but there were disturbances in Hyderabad on that day knd therefore the objectors could not appear before them and thereafter no totice for appearance was received by the objectors who did not thereafter kppear before the Arbitrators, that the objectors had given no consent to the erms contained in the Award and that both the Arbitrators colluded with the )laintiffs in giving a fra ' udulent Award. I have also gone through the affidavit n-rejoinder filed by the plaintiffs on 16-9-1990 and the counter-affidavit filed Yy the objectors on 10-8-1992 and I have also heard learned counsel of the parties.

7. Mr. Daudpota brought to my attention notice dated 18-5-1989 from he Arbitrators to the -parties and their counsel informing them that the next meeting would be held on 24th May 1989. This is Annexure 'B' to the objections. He however claimed that on this date no work was done as the Administrator of the defendant Society had not reached Karachi from Hyderabad due to disturbance in the latter city but no next date was fixed and hereafter no further notice was received by the defendant Society and hereafter all the proceedings taken by the Arbitrators were, taken at the back of the defendant Society. This notice (Annexure 'B' to the Objections) is not from the Arbitrators but from one Alta( A. Siddiqui Arbitration Clerk. I have ),one through the Arbitration file and I find that no such Orson was appointed, in Arbitration Clerk nor any other such notice was available. Besides, this notice does not fit in with the order-sheet maintained by the, Arbitrators. On 2-4-1989 all the learned counsel of the parties were present before the arbitrators when it was noted that negotiations took place between the parties and the matter was adjourned to 6-4-1989 for "further proceedings" and on 5-4-1989 it was observed that "the parties conveyed their consent to the compromise as proposed on 2-4-1989". The proceedings thus stood concluded on 6-4-1989. And on 4-&1989 it is noted that "Award made and signed. Notice of the parties".. There is therefore no occasion that on 18-5-1989 notice should have been issued to the parties for 24-5-1989 vi ' de Annexure W. It appears that Annexure 'B' is a fake document and no reliance can be placed on it. What is clear from the record is that on 2-44989 all the counsel of the -parties were present, including Mr' Khalid Daudpota, Advocate when the compromise proposals, were discussed and the matter adjourned to 6-4-1989 when the parties are reported to have conveyed their acceptance of the compromise. Mr. Daudpota also pointed out that the order-sheets of 2-4-1989 and 6-4-1989 do not bear the signatures of the counsel of the parties and therefore they may not be relied upon because all other orders on the order-sheet bear the signatures of the counsel of the parties which showed that there was an established practice that when the hearing was adjourned to a next date signatures of those who were present were taken on the order-sheet and the failure to follow this practice showed that on 2-4-1989 counsel of the parties were not present a nd nor were they present on 6-4-1989. This claim of Mr. Daudpota is not borne out by the record. For example, diary of 16-7-1988 also does not bear signatures of the counsel of the parties. Similarly, diary of 4-8-1988 also does not bear the signatures of the counsel of the parties. As such no adverse inference can be drawn by the absence of such signatures on the diaries on 2-4-1989 and 6-4-1989. Mr. Daudpota has relied on three judgments in support of his plea'that the Award may be set aside. They are Brooke Bond V. Conciliator (PLD 1977 SC 237), Abdur Razzak v. Mst. Qaiser Sultan and others (1984 MLD 147) and Usman Ahmed Ansari v. M/s. Union Steel Milis (1984 MLD 1983). The first is in respect of the misconduct of an Arbitrator and it is held that a misconduct of an Arbitrator need not amount to fraud or moral turpitude and it may even consist of any act on the part of the arbitrator which may have resulted in substantial miscarriage of justice. In the second judgment it is observed that if the arbitrators adjourn a case sine die, then all the parties are entitled to notice, including a party which was not present on the last date when the case was adjourned sine die. In the last judgment (1984 MLD 983) it is held that when the proceedings before an arbitrator are in the nature of conciliation proceedings initiated on the basis of a letter from the plaintiff without preferring any specific claim and the conduct of the arbitrator also indicates that he was not acting as an arbitrator, then such proceedings are not arbitration proceedings and the decision of the arbitrator is not an Award and deserved to be set aside. The facts of all the three authorities are distinct from the facts of the present case and none of them is relevant to the facts of the present case. No act of the Arbitrator has been shown to have resulted in substantial injustice to any party. The plea that both the Arbitrators acted mala fide at the back of the parties has already been rejected as untenable. It is significant to note that Mr. Daudpota denies that he was present before the Arbitrator on 2-4-1989 but he has not filed his affidavit in support of his claim. On the contrary and this is very significant--Mr. Maqbool Khan Harz, the then Managing Director of defendant No.2 (Sindhi Cooperative Housing Authority) has sworn affidvait on 23rd June 1992 in which he refutes the allegations raised by Mr. Daudpota. Paras. 2 and 3 of his affidavit are relevant and are quoted below:-- "

2. That during the proceedings before the Arbitrators on 2-4- 1989, the plaintiff alongwith his Advocate, myself alongwith my Advocate Mr. Noorul Hassan and Mr. Khalid Daudpota, Advocate for defendant No.1 were present. On the said date negotiation took place between the parties for compromise in the matter and at the joint request the matter was adjourned to 6-4-1989 for further proceedings. 3 That on 6-4-1989 the parties above named conveyed their compromise in respect of the dispute and agreed to award being made by consent of the parties. Accordingly, the consent award was issued by arbitratiors."

8. Since all the parties were present before the Arbitrators on 2-4-1989, there is no occasion to contemplate whether notice for 6-4-1989 should or should not have gone to the parties. There cannot be two opinions on the point that since on 2-4-1989 all the parties were present and the case was adjourned to 6-4-1989, there was no necessity for notice for 6-4-1989 and as such the judgment in the case of 1984 MLD 147 is of no help to Mr. Daudpota. The arbitration proceedings were also not instituted on the basis of any letter of the plaintiff. They were instituted by the Court on the joint request of the parties and a specific claim was referred to the Arbitration and as such the judgment in the case of 1984 MLD 983 also is not attracted to the facts of this case. 9. 1 would therefore conclude that the Arbitrators acted bona fide and made the Award in accordance with the compromise arrived at between the parties. As held by Mr. Justice Waheeduddin Ahmed in Mrs. Keas Byrne v. M. Obaidullah Khan (PLD 1959 Lah. 146) the arbitrators were within their rights in accepting the compromise and basing their Award on the said compromise.

10. In view of what has been discussed above, I reject the objections riled by M/s. New Town Cooperative Housing Society, accept the Award and make it Rule of the Court. Under the circumstances the patties are left to bear their own costs. AA./A-1337/K Award accepted