P L D 1972 Lahore 517 (PLP)

13. The first question which naturally requires determina tion in this case is regarding the effect of the award made by the Divisional Commissioner on the 25th of November 1959 and of the decree passed by the learned Senior Civil Judge, Sahiwal, on the 15th of September 1964, by making the award the rule of the Court. From the narration of events, as given in the opening paragraphs of this judgment, there can be no doubt whatsoever that reference to arbitration was necessitated by the desire of the petitioner‑Company to utilise some of the area for agricultural purposes, and by the refusal of the canal authorities to supply water for the same. It was precisely for this reason that an interim order was obtained from the learned Commis sioner on the 24th of October 1958, directing that canal water should be supplied for the entire area. It is instructive to note that in this order the Commissioner wrote that,‑ "I have also taken the opinion of the land valuation experts in regard to the difference in the price of land of this descrip tion without canal water supply and in the price of land to which the canal water supply is made, considering the exact amount of extra money which should be levied from Aziz Tanneries for being granted the facility of canal water supplies. The Tanneries have agreed to pay to the State in the normal instalments whatever sums are held to be due in my capacity as arbitrator. The proprietor has requested that as the Rabi sowing season is right on us, facilities may be granted for the supply of canal water in this area at once. I think it is in the public interest that these facilities should be granted on the undertaking by him as already referred to."

14. The interim order, partly reproduced above, shows unmistakably that whatever the scope of the arbitration clause, as contained in paragraph 12 of the sate‑deed, the petitioner was seeking a conversion from industrial to agricultural purposes and was also demanding water supply for the same. It is therefore, not possible to accept the contention raised on behalf of the respondents that the Provincial Government or the Superintending Engineer were not aware of the real purpose of the arbitration proceedings, nor is it possible to agree that the Superintending Engineer was not bound by the award, or the consequential decree of the civil Court, as he was not a party to those proceedings. The assertion is factually incorrect, as in the judgment and decree granted by the Senior Civil Judge the Superintending Engineer and the Province of West Pakistan are both cited as defendants. In the copy of the arbitration award, placed on the record, the names of the defendants are clearly stated to be the same as were arrayed before the civil Court. In any case even an interim order had already been issued by the arbitrator for supplying canal water. The Irrigation Depart ment was therefore fully involved. We further find that in the detailed order, recorded by the Superintending Engineer on the 7th of April 1965, it is clearly mentioned that the Irrigation Department had actively considered the advisability of filing an appeal against the judgment and decree of the learned Senior Civil Judge, Sahiwal, but the idea was dropped on the advice of the Solicitor to the Provincial Government. Finally, in terms of sec tions 79 and 80 of the Civil Procedure Code it was not; necessary to cite the Superintending Engineer as a defendant, and it was sufficient if the Provincial Government was sued through the Collector of the district concerned. Any decree passed against the Province, acting through the Collector, would be binding on all the departments of the Provincial Government. It would be an altogether untenable position to maintain that individual departments of the Provincial Government are not bound by a decree granted against the Government as a whole.

15. We may now examine the contention that the arbitration award and the decree of the civil Court are not binding on the defendants for the reason that they go beyond the scope of the arbitration clause contained in the sale‑deed executed by the Provincial Government in favour of the petitioner. The relevant clause reads as under:‑ "12. (i) If any question or difference whatsoever shall at any time thereafter arise between Government and the grantee in any way touching or concerning this grant, or the cons truction making operation or effect thereof or of any clause herein contained or as to the rights, duties or of liabilities of either party under or by virtue of this grant, or touching the subject‑matter of this grant, or arising out of or in relation thereto, then, save in so far as the decision of any such matter has been hereinbefore provided for and has been so decided, the matter in difference shall be referred to the arbitration of the Commissioner, who shall have power to decide any matter as referred, including the following questions:‑ (a) Whether any other provision has been made in these presents for the decision of any matter and if such provision has been made, whether it has been finally decreased accord ingly, and (b) whether the grant should be terminated or has been rightly terminated, and what are or will be the rights and obligations of the parties as the result of such termination. (ii) The decision of the arbitrator shall be final and binding, and when any matter so referred to arbitration involves a claim for the award, increase or reduction of a sum of money by way of compensation or any other payment or recovery of money, only the amount decided by the arbitrator shall be recoverable in respect of the dispute so referred."

16. It is submitted by the learned counsel for the res pondents that the arbitration clause clearly refers to disputes which might arise between the parties with regard to the grant of land as such, and does not include extraneous questions like the supply of canal water. It is contended that accordingly any decision given with regard to the supply of canal water must be held to be outside the purview of the dispute which could be referred to arbitration under clause 12 of the sale‑deed.

17. A careful examination of the arbitration clause does not support the contention put forward by Mr. Qadir Bakhsh. It will be seen that the purpose of the grant, as stated in clause 2 of the deed, is the "installation of a tannery and collateral industries". The petitioner desired a change in this purpose so as to enable it to utilise the area for agriculture, as a consequence where of two questions arose:‑ (a) The enhancement of the price to be paid by the vendee, and (b) the supply of canal water for agricultural purposes. This was clearly a dispute touching the grant and was referred to the Divisional Commissioner in accordance with clause 12 of the deed. Both the parties clearly regarded the entire dispute as falling within the purview of the arbitration clause. We do not see how the Provincial Government can be permitted, at this late stage, to take up the position that the question of supply of canal water was not included in the dispute referred to arbitration, or that it went beyond the scope of the arbitration clause. 18. 1n any case, what is important is not the scope of the arbitration clause but the scope and nature of the dispute actually referred to arbitration. Even if the question of the supply of canal water be held to be not strictly covered by the arbitration clause, the fact remains that by mutual consent the Forties referred this dispute to the Divisional Commissioner as arbitrator. The binding effect of an arbitration award arises not from the scope of the arbitration clause, but from the nature and extent of the dispute actually referred to arbitration by the parties thereto. In the instant case, the enhanced price of the land assessed by the Commissioner clearly took into account the fact that canal water would be made available to the area in dispute. In the interim order made by him on the 24th of October 1958, he stated that he had "taken the opinion of the land valuation experts in regard to the difference in the price of land of this description without canal water supply and in the price of land to which canal water supply is made". Thus it is clear that the dispute referred to arbitration by the parties included the question of the supply of canal water to this land.

19. A perusal of the application made by the petitioner under clause 12 (1) of the sale deed places this matter completely beyond doubt. Paragraphs 9, 10 and 11 of the submission made by the Company deal at length with its efforts to obtain supply of canal water and the refusal of the Collector and the Irrigation officials to sanction the same. The prayers made in the concluding paragraph of the submission are:‑ (i) That the Collector may kindly be asked to restore the canal water supply immediately; (ii) that the applicants be allowed to make this land fit for cultivation in accordance with the layout plan; and (iii) that the applicants may kindly be paid for damage done to standing crops which have been dried for want of canal water.

20. No material has been placed on the record by the respondents to show that they objected to the jurisdiction of the arbitrator to go into the question of the supply of canal water. In these circumstances, we must hold that even if the original arbitration clause did not embrace the dispute regarding the supply of canal water, yet the submission to arbitration clearly related to this dispute, thus giving the arbitrator, by mutual consent, jurisdiction to make an award in this behalf.

21. As a result of the foregoing discussion, we have reached the conclusion that the arbitration award given by the Divisional Commissioner on the 25th of November 1959, does not suffer from any illegality or infirmity, that it was within the scope of the arbitration clause which embraced all question touching the grant, and that in any case the actual submission to arbitration Included the dispute regarding the supply of canal water. The Provincial Government and the Superintending Engineer concerned were parties to the arbitration and the proceedings in the civil Court, and therefore the award as well as the decree are binding upon them. Even if the Superintending Engineer was not a party to the arbitration proceedings, he would be bound by the award and the decree for the reason that the Provincial Government was a party to both proceedings. The real dispute referred to arbitration related to the supply of canal water, and an enhancement of the price payable by the petitioner was based solely on this consideration. Accordingly, the present petition has to be accepted on this ground alone.

22. Even otherwise, we find that the order made by the Superintending Engineer on the 7th of April 1965, and the subsequent order made by the Divisional Canal Officer on the 30th of May 1966, could not be said to b e illegal or without jurisdiction. The case essentially fell within the scope of section 20 of the Canal and Drainage Act as the petitioner had applied for the supply of water through an existing water course, namely, outlet RD‑65500‑R on Distributory 9‑L, Ganji Canal Lower Bari Doab). The water supply had previously been refused by the Executive Engineer on intimation given to him by the Collector of the district to the effect that the land had been sold to the petitioner‑company for an industrial purpose. The Superintending Engineer dealt with the matter in the light of the award given by the Divisional Commissioner and the decree passed by the learned Senior Civil Judge. He did not, however, decide the matter finally but left it to the Divisional Canal Officer to take formal action in accordance with the procedure prescribed by section 20 of the Act.

23. A perusal of the decision given by the Divisional Canal Officer on the 30th of May 1966, shows that he fully complied with the formalities prescribed by the section. He has stated that notice was issued by him on the 25th of April 1966, and properly served upon the shareholders of the watercourse under the rules and the case was heard by him on 24th May 1965. In the presence of this recital in the order of the Divisional Canal Officer, it is not open to the Superintending Engineer or the Provincial Government to raise the objection that no notice was given to the concerned persons.

24. Similarly, the objection that the proceedings should, is the first instance, have been initiated by the Divisional Canal Officer is nothing but a sheer technicality in the circumstances of this case, when the dispute had already gone up in arbitra tion to the Divisional Commissioner and to the civil Court, and no appeal had been filed against the orders made in those proceedings. However, the Superintending Engineer, as already stated, did not docile the matter finally on the 7th of April 1965, and instead directed the Divisional Canal Officer to comply with the procedure prescribed in section 20 of the Act. Thus even the technicality of the Divisional Canal Officer dealing with the matter, in the first instance, and then referring his decision to the Superintending Canal Officer for confirmation was fully observed.

25. Mr. Qadir Bakhsh, the learned counsel for the res pondents, referred us to Kadir Bakhsh v. Bhagat Rain and others (71 P R 1888), Ganga Sahai and others v. Emperor (A I R 1929 All. 271), Ruksan and others v. Emperor (56 I C 717), Kania Lal and others v. Narain Singh (50 I C 299) and Hetam Lambardar v. Mokha (P L D 1956 Lah. 490) in support of his contention that an exact compliance with all the essential provisions of the section was absolutely necessary to give finality to an order passed under section 20 of the Act. We find that out of the cases cited by the learned counsel only the first is directly relevant in the present context, the remaining four being concerned with slightly different matters. We have, however, already recorded the finding that there has been no non‑compliance with the provisions of section 20 of the Act by the Divisional Canal Officer inasmuch as he took proper proceedings after issuing notice to the persons mentioned in the section.

26. Coming now to the order passed by the Superintending Canal Officer on the 11th of September 1966, we find that there is substance in the submission made by the learned counsel for the petitioner that it suffers from a serious infirmity, as it does not give any reasons whatsoever for rejecting the well‑considered decision embodied in the Divisional Canal Officer dated the 30th of May 1966. It is true that in terms of section 20 of the Act the decision of the Divisional Canal Officer requires confirmation by the Superintending Canal Officer, but in matters affecting valuable property rights, confirmation cannot be allowed to be withheld without assigning cogent reasons.

27. In Ali Haider v. Ijaz Hussain Malik, District Magistrate, Rawalpindi and another (1968 P Cr. L J 127) their Lordships of the Supreme Court, while dealing with the withdrawal of the arms licences held by the petitioner observed that ‑ "the withdrawal of a licence is a penalty and the act of imposing a penalty must be based on an objective assessment of the material on which it is made and the matter cannot be left to the arbitrary will or caprice of the revoking authority. When the statute require that the revoking authority must give reasons for its action, we feel that the issue then travels outside the mere subjective satisfaction of the authority and reaches a domain where the absence of reasons or the scrutiny of the reasons will fall for determination of the High Court in its supervisory jurisdiction under Article 95 of the Constitution. In our mind this is a fit case in which we must hold that the order of the learned District Magistrate, revoking the licences of the petitioner is without any lawful authority, as it contains no reason for the action taken and no reason exists relatable to the statutory purpose for which the licences could be cancelled under section 12 of the Ordinance."'

28. The necessity for assigning cogent reasons in a matter of this kind had earlier been indicated by the Supreme Court in the case of Adamjee Jute Mills Limited v. The Province of East Pakistan (P L D 1959 S C (Pak.) 272) and was reiterated in Mir Ahmad Nawaz Khan Bughli v. Superintendent, District Jail, Layallpur and others (P L D 1966 S C 357). Although both these cases related to judicial orders made by the High Court, yet the observations made therein have a direct bearing on the validity of even quasi‑judicial orders. Their Lordships have emphasised that "a judicial order must be a speaking order manifesting by itself that the Court has applied its mind to the resolution of the issues involved in their proper adjudication."

29. As already stated, the learned Superintending Engineer has not given any cogent reason in his order dated the 11th of September 1966, for rejecting the decision given by the Divisional Canal Officer on the 30th of May 1966. The statement that "I have studied the case thoroughly and the decision of the learned Divisional Canal Officer, Montgomery Division, has been studied", hardly carries any meaning and cannot be said to amount to a valid reason for refusing confirmation of the Divisional Canal Officer's order. In these circumstances, we are constrained to hold that the order dated the 11th of September 1966, must be declared to be without lawful authority and of no legal effect. As a consequence, the decision rendered by the Divisional Canal Officer on the 30th of May 1966, shall hold the field.

30. It now only remains to consider whether the order made by the Divisional Canal officer sanctioning water supply is in any manner against any provision of law or of rules having a bearing on this point. It was submitted by Mr. Qadir Bakhsh that the authority to include additional area within the irrigation boundary rested with the Chief Engineer and the Provincial Government, and both these authorities had rejected the petitioner's request after fully applying their mind to the matter. The learned counsel referred us to paragraphs 13.1 and 13.19 of the Public Works Department, Punjab (Irrigation Branch). Revenue Manual, Fourth Edition. The first mentioned paragraph lays down that "in the absence of specific delegation, no officer has the power to authorise any change in the water allowance sanctioned by Government for any tract of country". Paragraph 13.19 contains instructions intended to secure uniformity and efficiency in the record and checking of outlets. One of the registers mentioned in this paragraph is the Chakbandi register. It is stated that the Chakbandi for the relevant outlet was sanctioned by the Superintending Engineer in 1941 and it excluded the area in dispute from the culturable commanded area of the outlet.

31. Reference was also made to certain definitions contained in Chapter I of the Irrigation Practice Manual in an effort to show that the area now in dispute could not be included in the irrigation boundary without the sanction of the Chief Engineer.

32. We regret we do not see any merit in these submissions. In the first place, the order of the Superintending Canal Officer, which is impugned before us does not rest on any of the paragraphs referred to by Mr. Qadir Bakhsh. The Superintending Engineer has treated the case, and rightly, as one failing under section 20 of the Canal and Drainage Act. This section provides for supply of water from a canal which is to be conveyed through an existing watercourse. It is clear that ordinarily an application under section 20 would be for an area which was previously not receiving such irrigation. It cannot be said that any such case must be submitted to the Chief Engineer for sanction, as it need not necessarily involve a change in the irrigation boundary. From the technical data embodied in the closing paragraph of the order of the Divisional Canal Officer, dated the 30th of May 1966, we find that the gross area included in the irrigation boundary of outlet RD‑65500‑R on Distributory 9‑L is 1075 acres and the culturable commanded area is 557 acres. With the inclusion of the area in dispute the gross area still remains the same and the culturable Commanded area (i.e. C.C.A.) is increased to 754‑16 acres. It would appear from these figures that there is no change in the gross area. A study of the irrigation map produced by Mr. Qadir Bakhsh left us with the impression that there was no change in the irrigation boundary either. In other words, the only increase is in the area to which water would be actually supplied, within the irrigation boundary already sanctioned as well as the gross area attached to the outlet concerned. An increase in the C. C. A. is possible consequence of any sanction accorded under section 20 of the Act. We cannot therefore accept the contention that the order made by the Divisional Canal Officer amounts to changing the irrigation boundary of the outlet concerned.

33. The position which therefore emerges in this case is that in the first place the dispute, which was referred to arbitration, concerned primarily the question of the supply of canal water to the acre in dispute, and the Provincial Government as well as its Irrigation Department are bound by the award given by the Divisional Commissioner on the 25th of November 1959 and made a rule of the Court by the learned Senior Civil Judge, Sahiwal, on the 15th of September 1964. If canal water was not to be supplied, then there was no justification whatsoever for enhancing the price payable by the petitioner. The award given by the learned Commissioner places this matter beyond doubt, and the same position emerges from a perusal of the submission to arbitration as contained in the petitioner's application in this behalf. In the second place, the order made by the Superintending Engineer on the 7th of April 1965, further clinches the issue by clearly stating that the question of filing an appeal against the decree of the learned Senior Civil Judge had been actively considered by the Irrigation Department, but it was decided not to do so, and it was for this reason that the Superintending Engineer directed the Divisional Canal Officer to take proceedings under section 20 of the Act. This officer complied with the essential requirements of the section before passing his order of the 30th of May 1966. The order appears to be justified even on the technical plane in the light of the data contained in its concluding para graph. The learned Superintending Engineer, who has passed the impugned order, dated the 11th of September 1966, has acted without lawful authority in rejecting the decision of the Divisional Canal officer, as he has not given any cogent reason in support of his order. Valuable property rights could not be allowed to be dealt with in this arbitrary manner. As a result, the petitions is clearly entitled to the supply of water in terms of the decision rendered by the Divisional Canal Officer on the 30th of May 1966, in the light of the arbitration award and the decree of the civil Court. Finally, the case was not one involving change in the irrigation boundary, and therefore no question arose of obtaining the sanction of the Chief Engineer or the Provincial Government.

34. For the foregoing reasons, the petition is accepts with costs, and the impugned order dated the 11th of September 1966 is declared to be without lawful authority and of n legal effect. The Provincial Government and the Irrigation Department are directed to supply canal water in accordance with the decision of the Divisional Canal officer, dated the 30th of May 1966. Petition accepted.