P L D 1959 (W (PLP)

S. M. Hafeez for Defendant 2. Date of hearing : 3rd March 1959. The applicant has pleaded that there was an agreement dated the 4th of August 1952, between him and opponents No. 1 and 2. He called upon the opponents by a notice dated the 8th of November 1953 to appoint their arbitrator and informed them that he had appointed one Mr. S. M. Rizwanullah as his arbitrator. The opponents failed to appoint an arbitrator and therefore the applicant appointed Mr. Rizwanullah to act as the sole arbitrator in the reference. The sole arbitrator, however, did not give his award and virtually refused to act. The applicant therefore called upon the opponents again to appoint another arbitrator for themselves and informed them that he had appointed Mr. S. M. Taufiq to be his arbitrator in the place of Mr. Rizwanullah. The opponents refused to appoint an arbitrator on their own behalf, and therefore the applicant has made the application praying that the opponents may be called upon to appoint one arbitrator for themselves, and that in the event of their failure to do so, the Court should appoint an arbitrator on their behalf. The opponents hove filed lengthy replies to the application and raised contentions as if the disputes which exist between the parties were to be decided in these proceedings. They have also raised objections to the maintainability of the application, and their learned counsel has urged the following objections before me in this regard :‑ (a) The agreement to refer the disputes to arbitration con tained in the so‑called partnership deed is void, because the object of the partnership deed is illegal traffic in licences and as such the document is viod. (b) Transfer of licences is against public policy and therefore an agreement which is based on transactions of this nature cannot be enforced under law. (c) Sections 8, 11 and 12 of the Arbitration Act under which the application has been made are not applicable. The applica tion should have been made under section 20 of the Arbitration Act and that it should be treated as having been made tinder this section. (d) The application is time‑barred. Before discussing the contentions of the parties, I may men tion that admittedly Mr. S. M. Taufiq died before the application came up before me for final hearing. The present position, there fore, is that there is no arbitrator of the applicant and that the prayer made in the application that the opponents should be called upon to appoint an arbitrator or that the Court should appoint an arbitrator on their behalf so that there may be two arbitrators to hear and decide the disputes of the parties, is no longer suitable. The applicant, however, does not appear to appreciate the situation, and he has made an application under O. VI rule 17 Civil P. C., for the amendment of his main application by including in it a prayer for the removal of his former arbitrator namely Mr. Rizwan ullah. This is clearly misconceived. He has also made another application in which he has prayed that his main application may be treated as under section 20, and that a prayer may be allowed to be added in it that the agreement be filed in Court, and that arbitrators be appointed under section 20 of the Arbitration Act. The details of the provisions of the partnership deed are not relevant for the present proceedings ; nor is it relevant for the present purposes as to what disputes are existing between the parties. The disputes are to be considered by the arbitrators. I have, however, to consider whether the agreement to refer the disputes to arbitration is illegal and therefore incapable of being enforced or recognised under law. The first two objections raised by the opponents to the legality are obviously far‑fetched. The licensing authorities knew when they allowed the licences of the applicant to be used that the buses were not owned by the applicant. Counsel for the applicant has explained the devices by which this use of the licences was regularised and counsel for the opponents has admitted that the authorities allowed such use of the licences until they changed their policy in November 1953. In these circumstances, the use of the licences cannot be said to be illegal, nor can it be condemned as opposed to public policy. No provision of law has been pointed out by learned counsel for the opponents which has been violated ; nor is there any reason to come to the conclusion that the policy adopted by the authorities was contrary to public policy only because subsequently a different policy was adopted. Learned counsel for the parties had a good deal to say regarding the applicability of the sections under which the appli cation purports to be. They are sections 8, 11 and 12 of the Arbitration Act. I should think that there is no dispute between the parties as to them now, because the opponents have pleaded that the application should be treated to be under section 20 of the Arbitration Act, and the applicant has applied that it should be so treated. The real question, therefore, is not whether the application is maintainable or not maintainable under the pro visions of the Arbitration Act, 1940, but as to whether any relief can be granted, and, if so, what it should be. Now that the parties have taken the stand that the present application should be treated as one under section 20, there should be little difficulty in finding an answer to these questions. Subsection (1) of section 20 lays down that where any persons have entered into an arbitration agreement and where a difference has arisen to which the agreement applies, they may instead of proceeding under Chapter II apply to the Court that the agree ment be filed in Court. The Court has then to order the agreement to be filed, if no sufficient cause to the contrary is shown, and after .that to make an order of reference to the arbitrator. Suitable prayer in this regard is not contained in the application, but, as stated above, the applicant wants to amend it so as to bring it under section 20. The proposed amendment answers the suggestion made in this regard by the opponents, but Mr. S. M. Hafiz for opponent No. 2 has contended that these prayers of the applicant cannot be granted. The present con tention of counsel contradicts the plea raised by him in para 8 of the written statement submitted by him on behalf of opponent No. 2, yet I must consider whether the objection is legally fatal, because if it is so, then it must prevail inspite of self‑contradiction of learned counsel. The main reason why according to him, the proposed prayer of the applicant cannot be granted is subsection (4) of section 20, which is as follows :‑ "Where no sufficient cause is shown, the Court shall order the agreement to be filed, and shall make an order of reference to the arbitrator appointed by the parties, whether in the agree ment or otherwise, or, where the parties cannot agree upon an arbitrator, to an arbitrator appointed by the Court." Counsel has contended that there are repeated references to "an arbitrator" and "the arbitrator" in the above provision and, therefore, it could be applicable to those cases only where only one arbitrator is to be appointed. In the present case, admittedly, two arbitrators are to be appointed and therefore, counsel con tended that section 20 is not applicable. This interpretation of the section cannot be correct. Had it been correct then sub section (1) could not make the section to be an alternative provision to Chapter II of the Act, because the provisions of that Chapter apply to those cases also in which there may be more arbitrators than one. Subsection (1) prescribes the pre‑requisites for the application of the section. They are all fulfilled in the present case and therefore the section applies to it. I would therefore treat this application as under section 20 inclusive of the prayer for filing the agreement in Court and for appointment of arbitrators. The application would now be numbered and registered as a suit under subsection (2) of section 20 of the Arbitration Act, 1940. This will make no difference except with reference to relief, because the hearing of the case has been com pleted. The defendants have already filed elaborate "written statements" and addressed final arguments at length on all objections raised by them. Before deciding what relief may be granted, I have to dispose of the last objection. Counsel for the defendant has brought to my notice no provision of law under which this "suit" can be said to be time‑barred. This is a suit for purposes of number and registering it as such and therefore also for purposes of the comparatively more elaborate procedure which may be followed in it but it is not a suit for purposes of the Limitation Act. "Suit" is defined negatively in clause (1) of section 2 of the Act, but the expression "suit" is otherwise clear as pointed by the Privy Council in Hansraj Gupta and others v. Official Liquidators of Dehradun (I L R 54 All. 1067), that unless there be something to the contrary in the context it means a Civil proceeding instituted by the present ation of a plaint. An application made under section 20 of the Arbitration Act, 1940, is not a suit when it is presented and therefore no period of time, as is computable under section 3 of B the Limitation Act for presentation of plaints can be applicable to it. The present suit thus is not time‑barred as a suit. But I should also consider whether the original application was barred by time. Article 181 of the Limitation Act prescribes three years as the period of limitation for all applications for which no period of limitation is provided in the First Schedule of that Act or section 48 C. P. C. The Article is generally applied to applications made under C. P. C. only not because its operation is expressly so limited but because ,ejusdem generis rule is applied to it. Even with this limitation 'it should apply to an application made under section 20 of the Arbitration Act, 1940, because it is numbered and registered as a suit and C. P. C. applies to it immediately after it is made. Kapur J. has recognised a much wider scope of the Article than this and has held in Union of India v. Firm Kiroo Mal Nawal Kishore (A I R 1952 Ph. 423), that it applies to all "applications made under the various provisions of the Arbitration Act". In Shah & Co. v. Isher Singh Kirpal Singh & Co. (A I R 1954 Cal. 164), S. R. Das Gupta, J., applied the Article to an application which was made under section 33 of the Arbitration Act. In both of these judgments ejusdem generis rule was held to be ineffective for excluding the application of the Article to the Arbitration Act, 1940. Under this Article the period of limitation begins to run from the time when the right to apply accrues. The plaintiff made the present application (now suit) on 3‑2‑55, and stated that the cause of action arose on 1‑11‑51 "when the share of profits for October 1951 was not paid" to him and because his subsequent demands went unheeded. This' being the date of the cause of action his application is obviously time‑barred. Non‑payment of a share of profit 'discloses existence of disputes. The reason behind the disputes admittedly was that the defendants repudiated the partner ship deed including the arbitration clause as illegal and not binding on them. This repudiation undoubtedly gave to the plaintiff the right to apply to Court that the agreement be filed in Court and enforced. The last objection of the defendants as to limitation thus prevails. Apart from the above considerations, I have also to consider under subsection (4) of section 20 of the Arbitration Act, whether or not there is sufficient cause against making an order that the agreement be filed. I should think that there is sufficient cause against making the order because if the agreement is now filed and arbitrators are appointed then it would amount to calling upon them to adjudicate an obviously time‑barred claim of the plaintiff. The expression "sufficient cause" is wide in meaning and import and includes grounds of justice, equity and good conscience as pointed out in Girdharl Lal v. Goberdhan Das (A I R 1937 Oudh 436). As a result of the above discussion I dismiss the suit with costs. The injunction order stands discharged. K. B. A. /A. H. Suit dismissed.