P L D 1962 (W (PLP)

(3) That the respondent was not ready and willing to refer this matter to arbitration and, hence, proceedings in the suit could not be stayed. (4) That the arbitration clause was ambiguous and vague and as the post of Secretary to the Government of India in the Army Department was no longer in, existence, the matter could not be referred to any such officer.

7. To support the first‑mentioned contention, the learned counsel referred to the following authorities: ‑ (1) The Karnani Industrial Bank Ltd. v. Satya Niranjan Shah and others A I R 1924 Cal. 789. (2) Sahal Chandra Bhur v. Md. Ibrahim and another A I R 1943 Cal. 484. (3) Roop Kishore v. United Provinces Government A I R 1945 All. 24. (4) United Provinces Government v. Sri Har Nath A I R 1949 All. 611. (5) Union of India v. Girish Chandra and other's A 1 R 1953 All. 149 and (6) New Bengal Shipping Company v. Eric Lancaster Stump P L D 1952 Dacca 22.

8. In the first mentioned authority, it was held that a verbal prayer by defendant's counsel, for further time to file a written statement, in reply to the Court's question was taking a step in the proceedings. In the second‑mentioned case, it was held that when the counsel for the defendant appears and applies for and obtains time to file his client's affidavit, in opposition to the application for appointment of a receiver, and also applies for and obtains directions and leave from the Court to inspect the books of account and records, the conduct of the defendant clearly implies a statement to the effect that the defendant would proceed to defend the action and would not insist on the right to have the dispute disposed of by arbitration and that by acting as he does he is taking a step in the proceeding. In the last mentioned case, it was held that the presentation of an application asking for time to file a written statement amounted to a step in the proceedings, within the meaning of section 34 of the Arbitration Act. Somewhat similar views had been expressed in the other cases referred to above.

9. On behalf of the respondent, a reference was made to a case of the Lahore High Court, decided by a Single Judge, and reported as Messrs Prem Nath Pran Nath v. Amba Parshad (A I R 1941 Lah. 64). It was held in this case that it was impossible for a defendant to know what the case is about until he is supplied with a copy of the plaint and that the proceedings could not be said to have commenced until the defendant had been supplied with a copy and that if time was then fixed for preparation of the written statement, it could not be regarded, in any sense, as a step taken in the proceedings by the defendant.

10. The principle which appears to have been followed in all such cases is that where the defendant has given an indication that he would submit to the jurisdiction of the Court, either by making a request for an adjournment, or by filing an application for some other purpose, he had "taken a step" within the meaning of section 34 of the Arbitration Act and, therefore, at his request, proceedings in the case cannot be stayed, but where a defendant had not been even supplied with a copy of the plaint and he did not know what the case of the opposite party was, if he asks for a copy of the plaint to enable him to file a written statement, it cannot be assumed that by obtaining a copy of the plaint and asking for an adjournment he had submitted to the jurisdiction of the Court, and hence, had "taken a step" in the proceedings, within the meaning of section 34 of the Arbitration Act. Although in the case decided by a Single Judge of the Lahore High Court, the law on this subject was not fully discussed and no reference to the previous authorities was made, the reasoning., of the learned Judge is unassailable that merely by asking for a copy of the plaint and time for filing the written statement, a defendant cannot be deprived of the right conferred on him by section 34 of the Arbitration Act. The facts of the cases relied upon by the appellants were different, because in almost all those cases the defendants knew what the case of the opposite party was and, without objecting to the jurisdiction of the Court, they asked for adjournments, or made a request for inspection of documents, or for other purposes. It could not, therefore, be said that no steps in the proceedings had been taken by them.

11. The facts of the present case are entirely different, because when the preliminary objection was raised by the Advocate‑General to the jurisdiction of the Court to try the suit in the presence of the arbitration clause, no written statement, in the true sense of that term, had been filed. In fact, up to this date no written statement has been filed. The document which has been described as a' written statement was, in fact, an objection in writing which the Advocate‑General had raised to the jurisdiction of the Court. The record does not indicate as to whether the request for the grant of adjournment came from the Advocate‑General, or whether the Court, of its own accord, adjourned the case to enable the respondent to file a written' statement, after a copy of the plaint had been supplied. Even if it be assumed that the request had come from the Advocate- General, he could not, without having examined the plaint, know what the appellants' case was and whether the arbitration clause applied to the proceedings, or not. It cannot, therefore, be urged that a step in the proceedings was taken by the Advocate -General when the case was adjourned from the 8th June 1959 to the 20th June 1959. The contention raised by the appellants,) in this respect, being without any force is, hereby, overruled.

12. As to the second point, the learned counsel for the appellants contended, firstly, that there being no dispute as to the "meaning or effect" of the arbitration clause, that clause did not apply to this case and, secondly, that the Commander of the Lahore District being competent to assess compensation in accordance with clause 11 (13) of the agreement of lease and that officer having assessed a sum of Rs. 1,86,228 as compensation payable to the appellants, there was no "dispute" between the parties which could be referred to arbitration. Neither of these contentions, in my opinion, has any force. The words "meaning or, effect" mentioned in the arbitration clause [III (3)] are wide enough to cover all disputes between the parties which arise, out of the agreement of lease and the dispute about the amount of compensation payable to the appellants would, without any doubt, be a dispute of the nature referred to in this clause. As to the contention that the Commander, Lahore District had assessed the amount of compensation payable to the appellants, it was not even alleged in the plaint that any such determination had been made by the Commander. In paragraph 9 of the plaint it was‑stated that in course of one of the meetings the representatives of the defendant offered a sum of Rs. 2,38,02,4, as the amount of compensation, due to the plaintiff, but it was not disclosed who those representatives were. Further on, in paragraph 11 of the plaint, it was stated that in a meeting held on the 24th of June 1954, which was attended by representatives of both the parties, an offer of Rs. 1,86,228 was made by the respondent, by way of compensation. No indication. was given in either of these two paragraphs, that the offers were made by the Commander, Lahore District, or that the respondent's offer was preceded by a determination by the Commander, Lahore District, of the amount of compensation payable to the appellants. Even if it be assumed, for the sake of argument, that any such determination had been made by the Commander, the right conferred by the arbitration clause, which came at the end of the document, could not be taken away simply because the Commander had exercised the power conferred on him by an earlier clause, unless it be that the respondent had waived the arbitration clause and had accepted the determination made by the Commander. The names of the alleged representatives of the respondent, who had made the two offers have not been disclosed in the plaint, nor, is it alleged that they had the authority to bind the respondent with any such offers. In these circumstances, it cannot be held that the arbitration clause did not apply to .the matters in dispute.

13. As to the contention that the respondent was not ready and willing to refer this matter to arbitration, much need not be said. The learned Senior Civil Judge has observed in paragraph 10 of his judgment that the Advocate‑General, who appeared for the respondent, made a statement at the Bar that the respondent was ready and willing to refer the matter to arbitration. He accepted that statement of the Advocate -General as good evidence of the fact that the respondent was so ready and willing. There is nothing on the record to indicate that the Advocate‑General had made this statement without the authority of the respondent, nor was anything else placed on the record to indicate that in spite of the statement made by the Advocate‑General, the respondent was not ready and willing to refer the matter to arbitration. I, therefore, see no force in this contention also.

14. As to the last of the four points mentioned in an earlier part of this judgment, the appellants' counsel referred to a case of the Lahore High Court reported as Governor‑General- in‑Council v. Simla Banking Industrial Co. Ltd. (A I R 1947 Lah. 215), and contended that the arbitration clause was ambiguous and vague in the sense that the meaning of the expression "for the time being" mentioned in that clause was not clear and it could not be said whether the Secretary to the Government of India, who was to act as an Arbitrator, was to be the person who was holding that post at the time of the agreement, or at the time when the dispute arose, or at the time when the reference was to be made. The relevant clause in the reported judgment was similar to the arbitration clause in the present case and was worded as follows: ‑ "The decision of the Superintending Engineer of the Circle for the time being shall be final as to any other question, claim, right, matter or thing in any way arising out of, or relating to the contract . . . whether arising during the progress of the work, or after the completion or abandonment thereof." It was held that the words "for the time being" in the agreement were too vague and indefinite and it was not possible to have the matter decided by the person who held the office of Superintending Engineer, either at the time of the accrual of the cause of action or even when the suit was instituted, and that as those Superin tending Engineers had retired from service of the Government it was impossible to give effect to the agreement which was, therefore, declared to be unenforceable for want of certainty.

15. A somewhat similar question arose in Criminal Appeal No. 34 of 1962 Muhammad Anwar Babar v. The State (unreported) which was decided by a Division Bench of this Court on the 7th of March 1962. The appeal, in this case, which had been filed by the State, had been presented by Maulvi Mushtaq Husain Addll. Advocate‑General, and it was! contended, on behalf of the accused, that as Maulvi Mushtaq Husain was not Public Prosecutor for the West Pakistan Government, on the 26th of May 1960, when the appeal was filed, he was not authorised to file it. On behalf of the State, reliance was placed on the following notification which had been issued by the Government of West Pakistan on the 15th of October 1955. "In exercise of the powers conferred by subsection (1) of section 492 of the Code of Criminal Procedure, 1898, the Governor of West Pakistan is pleased to appoint the Assistant Advocate‑General, for the time being, to be Public Prosecutor generally for West Pakistan." It was contended that as Maulvi Mushtaq Hussain was not holding the post of an Assistant Advocate‑General on the date when this notification was issued, he could not be considered to be a Public Prosecutor "for the time being". The Court held that "the phrase `for the time being' may, according to its context, mean the time present, or denote a single period of time, but its general sense is that of time indefinite, and refers to indefinite state of facts which will arise in the future and which may (and probably will) vary from time to time." The Court further held that "it could hardly be controverted that Maulvi Mushtaq Husain being an Assistant Advocate‑General was also Public Prosecutor on the date on which this appeal had been filed."

16. My attention was also drawn to Stroud's Judicial Dictionary, Third Edition, page 3030, where the expression "for the time being" has been defined in the same manner in which it was defined in the unreported judgment mentioned above. No doubt, the expression does not refer to any particular time, but it cannot be said to be indefinite in the sense that no meaning can be gathered from it. Its meaning has to be understood with reference to its context and, if that be so, the facts to which it refers can make the time definite or ascertainable. The expression may, under certain circumstances, refer to the time of execution of an instrument, or under other circumstances to the time when a dispute arises between the parties, or when a certain action is to be taken. If this distinction is borne in mind, it cannot be said that in the arbitration clause only the Secretary at the time of the execution of the agreement was to be appointed as an arbitrator, nor can it be said that the person to be so appointed was to be the Secretary at the time when the dispute arose between the parties. In my opinion, the intention of the contracting parties was to appoint that person as an arbitrator who was holding the post of the Secretary at the time when the reference was to be made. The expression "for the time being", would, therefore, mean the Secretary at the time when the reference was to be made and not the Secretary at the time of execution of the agreement, or at the time of the accrual of the cause of action. It cannot, therefore, be held that this clause is vague and ambiguous and is not enforceable.

17. The learned counsel for the appellants contended further, that as the post of Secretary to the Government of India, in the Army Department, is no longer in existence, the matte could not have been referred to the arbitration of any such officer. There can be no doubt that as a result of Partition o this sub‑continent the former Government of India has dis appeared and so has its Army Department. The Secretary of that department also, for the same reason, has ceased to hold his office. The question arises as to whether the Defence Secretary to the Government of Pakistan has taken the place of the Secretary to the Government of India, in the Army Department, and whether, in accordance with the arbitration clause, the matter can be referred to him. Assuming for the sake of argument that the Defence Secretary to the Government of Pakistan has, so far as the Government of Pakistan is concerned, replaced the Secretary to the Government of India, in the Army Department, the question still remains as to whether, without doing violence to the arbitration clause, that officer can be appointed as an arbitrator in accordance with the provisions of that clause.

18. Section 9 of the Indian Independence Act, 1947, conferred powers on the Governor‑General and the Governor to pass such orders as appeared to them to be necessary and expedient for bringing the provisions of that Act into operation and for other purposes and a number of adaptation orders, by which the texts of various enactments were modified or amended, were passed by the Governor‑General, or Governors, in pursuance of the powers so conferred. One such Order was the Pakistan (Provisional Constitution) Order, 1947, (Governor- General's Order No. 22 of 1947), by which the Government of India Act, 1935, was amended and various changes made in the existing laws, which had been saved by subsection (3) of section 18 of the Indian Independence Act, 1947. No reference was made in this Adaptation Order, to any instruments and hence the changes made in the various laws could not have applied to instruments unless such instruments also had the force of law. Another order passed under the same provision of law was the Indian Independence (Rights, Property and Liabilities) Order, 1947 (Governor‑General's Order No. 18 of 1947). According to clause 8 of this Order, all contracts made on behalf of the Governor‑General‑in‑Council before the appointed day, if such contracts were for exclusive purposes of the Dominion of Pakistan were to be deemed to have been made on behalf of the Dominion of Pakistan instead of the Governor‑General‑in‑Council from the appointed day, while the remaining contracts were deemed to have been made on behalf of the Dominion of India from that day. In pursuance of the liabilities and rights created by this clause, the Government of Pakistan became entitled to enforce the agreement of lease, which had been entered into between the parties. That Government also became liable for discharging all obligations arising out of that agreement. Beyond laying down the obligations of the Governments and conferring rights on them, to enforce those obligations against other parties, the Indian Independence (Rights, Property and Liabilities) Order, 1947 did not make any adaptation, or changes, in the contracts which had been entered into on behalf of the Governor‑General‑in‑Council, prior to the appointed day. The effect of clause 8 of that order was that certain agreements became enforceable by the Govern ment of Pakistan, but that clause, in my opinion could not be used for the purposes of making any other change in the various instruments which remained as before unaltered. This means that although the respondent became entitled to enforce the agreement of lease entered into between the parties and also became liable to discharge its obligations, the agreement remained unaltered in all other respects. The Governor‑General, no doubt, had power to make adaptations, by way of amendments or additions, in such instruments, but that power does not appear to have been exercised and hence the arbitration clause [III (3)] remained unaltered; the result being that only the person named therein, namely, the Secretary to the Government of India, in the Army Department, and no other person could be appointed as arbitrator. As that officer has ceased to exist, the arbitration clause cannot be enforced because, no reference for arbitration can be made to any such officer. For reasons given above, I hold that the arbitration clause of the agreement between the parties is unenforceable and, hence the proceedings in the suit could not have been stayed under section 34 of the Arbitration Act. Consequently, I accept this appeal, set aside the order of the trial Court and direct that the suit shall, proceed in accordance with law. In the peculiar circumstances of the case, I make no order as to costs. A. H. Appeal accepted.