2014 PLP 1119 (CLC)

ATIR MAHMOOD, J.

Through this constitutional petition under Article 199 of the Constitution of Islamic Republic of Pakistan, 1973, the petitioners have challenged the judgment dated 5-9-2009 passed by the learned Additional District Judge, Faisalabad who accepted the revision petition filed by respondent No.1 against the order dated 28-1-2009 passed by the learned Civil Judge, Fasialabad, whereby the application under section 34 of the Arbitration Act, 1940 for stay of the proceedings filed by respondent No.1 was dismissed.

2. Brief facts of the case are that petitioner No.1. Muhammad Ramzan (deceased) filed a suit for possession against respondent No.1 in respect of House No.2253/D, measuring 3-1/2 Marlas, situated in Ghulam Muhammad Abad, Faisalabad. The Plot No.2253/D was allotted to the petitioner in the year 1956 by Rehabilitation Department, Faisalabad and house was constructed by the petitioner. Thereafter the petitioner had died during the pendency of suit and petitioners No.(i) to (vii) were impleaded as legal heirs of the petitioner No.1. It is stated that the respondent No.1 instead of filing written statement, filed an application under section 34 of Arbitration Act with the request to adjourn the suit sine die for the reasons that there is already an application pending under sections 14 and 17 of the Arbitration Act, 1940 to make an award dated 20-10-1995 as Rule of Court. The petitioner filed reply of the application, in which he stated that no arbitration was took place between the parties and the alleged decision of the Arbitrator is based on fraud. The learned Civil Judge, Faisalabad vide order dated 28-1-2009 dismissed the application filed by respondent No.1. The respondent No.1 filed revision petition against the order dated 28-1-2009 which was accepted by the court of learned Additional District Judge, Faisalabad vide judgment dated 5-9-2009, hence this civil revision.

3. Learned counsel for the petitioner has contended that the impugned judgment is against the law and facts; that the decision of the Arbitrator is specifically denied being based on fraud; that the alleged decision of the Arbitrator/Award is dated 13-10-1995 and there was no reason to wait for such long time to make it Rule of Court; that the impugned judgment is illegal and has been passed without any lawful authority. He has placed on record a copy of judgment dated 17-12-2011 passed by the civil court whereby application under section 17/14 of the Arbitration Act for making the award dated 20-12-1995 as rule of the court was dismissed. Learned counsel prays that this writ petition be allowed and the impugned judgment may be set-aside. He has relied upon the case reported as Muhammad Farooq v. Nazir Ahmad and others PLD 2006 SC 196.

4. On the other hand, learned counsel for respondent No. 1 has vehemently opposed this writ petition and fully supported the impugned judgment. He has further contended that the impugned judgment is well reasoned and the learned court has committed no illegality or irregularity in delivering the same, therefore, this petition is liable to be dismissed.

5. Heard. Record perused.

6. The question which is to be determined by this Court is as to whether in view of section 34 of the Arbitration Act, proceedings of a suit can be stayed. In this regard, the language of section 34 of the Act is to be taken into consideration in its true perspective which is reproduced below:

"Power to stay legal proceedings where there is an arbitration agreement.

Where any party to an arbitration agreement or any person claiming under him commences any legal proceedings against any other party to the agreement or any person claiming under him in respect of any matter agreed to be referred any party to such legal proceedings may, at any time before filing a written statement or taking any other steps in the proceedings, apply to the judicial authority before which the proceedings are pending to stay the proceedings and if satisfied that there is no sufficient reason why the matter should not be referred in accordance with the arbitration agreement and were commenced, and still remains, ready and willing to do all things necessary to the proper conduct of the arbitration, such authority may make an order staying the proceedings." (underline is mine) Bare reading of this section clearly establishes that when the matter is mutually agreed between the parties, then proceedings of the subsequent suit can be stayed under section 34 ibid but in the present case from the very outset, the factum of any alleged arbitration was denied by the present petitioners, therefore, there was no legal occasion to stay proceedings of the suit filed by the petitioners by the civil court. Furthermore, the conduct of the petitioners for non-filing the written statement before filing the application under section 34 of the Arbitration Act, smacks mala fides and is fully covered in the case-law relied upon by learned counsel for the petitioners reported as PLD 2006 SC 196 (Muhammad Farooq v. Nazir Ahmad and others). Relevant paragraph is reproduced as under:

"

8. The admitted position is that the appellant/defendant for the first time appeared in the Court on 28th of March, 1998 when the same was adjourned to 17-4-1998 for submission of the written statement and filing power of attorney. The written statement was not filed as such suit was adjourned to 30-4-1998 when the learned Presiding Officer was on leave. The suit was accordingly adjourned to 13-5-1998 yet on the said date written statement was not filed. Learned counsel for the appellant/defendant requested for adjournment to file written statement which was allowed and suit was adjourned to 18-5-1998 but as the Presiding Officer was on leave, therefore, the suit was again adjourned to 30-5-1998 when application under section 34 of the Arbitration Act was moved. From the above proceedings in the Court it would be clear that the appellant even after the receipt of notice of the plaint got three clear dates for filing written statement but the application under section 34 of the Act was moved on the fourth date. Above acts of the appellant on number of dates stated above would show that he intended to participate and defend the suit before the Court."

7. In view of the above discussion, the impugned judgment dated 5-9-2009 passed by the learned Additional District Judge, Faisalabad is not sustainable in the eye of law and is liable to be set aside being passed without application of judicious mind and in excess of jurisdiction vested with the revisional court.

8. Furthermore, on account of subsequent development when the proceedings under sections 17/14 of the Arbitration Act have come to an end by way of judgment given by the civil court vide order dated 17-12-2011, there remains no occasion to justify the stay of the proceedings before the court. This petition is accordingly allowed by setting aside the impugned judgment dated 5-9-2009 and the order dated 28-1-2009 passed by the learned Civil Judge, Faisalabad is upheld. AG/M-70/L Petition allowed.