P L D 1993 Quetta 99 (PLP)

Briefly stating the facts leading to rile instant revision are that during the pendency of a money it for recovery of Rs. 14,66,999.99 riled by the petitioner against the respondents, the parties appointed sole Arbitrator Muhammad Naecm Khan Tareen, Superintending Engineer, Public Health Engineering, Government of Balochistan. On 8-11-92 respondents moved an application under section 11 of the Arbitration Act (hereinafter referred to as an 'Act') alleging misconduct against Arbitrator and prayed that he be removed and another person be appointed as an Arbitrator. The Court on entertaining the application directed the Arbitrator to restrain from performing the functions. Such order was duly served upon the arbitrator, on the same very day i.e. 8-11-1992. The petitioner riled reply to the application repudiating the allegations of misconduct against the arbitrator, however, the trial Court vide order dated 25th November, 1992, accepted the application and removed the Arbitrator. Thus instant revision has been filed. Mr. Basharatullah, learned Advocate appeared for the petitioner, whereas Messrs Riaz Ahmad, Standing Counsel and Mr. Tariq Mehmood, Advocate, addressed the Court to support the view-point of respondents. Mr. Basharatullah, Advocate pointed out that the application under section 11 of the Act had become infructuous because on the day when stay order was passed the Arbitrator had already given the Award. As the copy whereof was not riled alongwith the petition nor the respondents' counsel had knowledge about it therefore, the record of the Court below was summoned to ascertain the correct position. On the receipt whereof, it transpired that Arbitration Award dated 8-11-1992, is tagged with the file pertaining to the proceedings of application under section 11 of the Act. In view of the changed position the learned counsel appearing for parties were asked to address the Court to examine the implication of such Award of the Arbitrator. The petitioner's Advocate contended that the impugned order is bad in the eye of law because alleged misconduct against the Arbitrator was not proved by the respondents and merely on the basis of assertions made in the application, it was not fair to remove the arbitrator. He further submitted that since an Arbitration Award has been riled, therefore, the application under section 11 of the Act, had become infructuous and the lower Court was under obligation to issue notices to both the parties intimating factum of filing the Arbitration Award with opportunity to rile objections, if any. On the other hand Mr. Tariq Mehmood, Advocate, strenuously argued that as far as the filing of the Arbitration Award is concerned that is not in the knowledge or notice, of the respondents. So much so the trial Court also had no intimation about it, as such, if any award has been given by the Arbitrator that has no sanctity in the eye of law, particularly for the reasons that on 8th November, 1992, the Court had restrained the Arbitrator not to discharge the functions and the order was duly communicated to him. If despite the notice of stay order Arbitrator has given the award that has no sanctity in the eye of law. As far as misconduct on the part of Arbitrator is concerned that was apparent from the proceedings which were drawn by him and as the parties did not express desire to produce the evidence, therefore, the Court was quite justified to determine the application on the basis of the affidavits riled alongwith the application and its reply submitted by the petitioner. I have heard the learned counsel for parties and with their assistance the record of the main case as well as record of the proceedings drawn on application under section 11 of the Act alongwith Arbitration Award tagged with this rile, have been perused carefully. It would not be out of place to mention here that learned Judge in the lower Court passed stay order on application under section 11 of the Act against the Arbitrator restraining him not to proceed with the case. The order was duly served upon him, but surprisingly despite the service of the stay order, the Arbitrator proceeded to give the Award on the same day. In my opinion the Arbitration Award was compiled subsequently with the back date of 8th November, 1992. This fact gets proved from the fact that Arbitrator received the stay order on 8th November, 1992, and duly signed the notice on the back side of which, the order of the Court referred to above, was reproduced. According to order-sheet dated 8-11-1992, maintained by the Arbitrator the representative of the respondents, Mr. Shah Jehan, Executive Engineer, Central Civil Division No.l., Quetta was directed by the Chief Engineer, Pakistan P.W.D. to make it convenient to attend the hearing daily with effect from 8-11-1992, till its finalization on 6-00 p.m. at Federal Lodge, Zarghoon Road, Quetta. The order sheet further reveals that he has attended the Arbitrator on 8-11-1992 at 6-00 p.m. Therefore, the conclusion would be that on 8th November, 1992, the Arbitrator took up the matter after 6-00 p.m. whereas the Court had already passed a stay order against him which had been necessarily communicated to him during the working hours i.e. before 2-30 p.m. In this context, an argument can be raised that the stay order was served upon the arbitrator after 6-00 p.m. when he had already completed the proceedings. In This regard it would be relevant to refer to the cast of Abdul Rashid Khan and 2 others v. Mst. Naseem Akhtar (1974 SCMR 509). The operative portion whereof, reads as under:-- "It would appear that the High Court while accepting the application for restoration of possession of the land in dispute, has relied on Karam Ali and others v. Raja and others, a Full Bench decision of the Lahore High Court. In that case, after examining the case-law, on the subject, it was held that both on principle and authority of Order XLI, rule 5, the stay order operates from the time that such order is made and not from the time it is communicated to the executing Court." Besides the above proposition, it is also clear from the reply of the application. under section 11 of the Act that on 8th November, 1992, Arbitrator had not given the Award. Had it been so the petitioner would have conveniently stated in the reply and in absence thereof, it would be presumed that the Arbitration Award was not announced on the said date. The record of main case and the application revealed that the Award was neither submitted to the Senior Civil Judge or in his office on 8th November, 1992 or subsequent thereto. As it does not contain initial of the Presiding Officer or any one of his other officials. I failed to understand that how this Award has been tagged with the application under section 11 of the Act. It may also be seen that when the reference was made to the Arbitrator, judicial rile as per order-sheet dated 15-2-1992 was also sent to him, through Civil Nazir which was received back on 5-12-1992, when the case was fixed for further proceedings. On the receipt of file on 26-12-1992, the petitioner-plaintiff was directed to produce the evidence by the Government. It means that till that date i.e. 5-12-1992, no Award was available in the file. Even otherwise it is settled principle that the Arbitrator shall compile the Arbitration Award on the requisite non-judicial papers, as specified under the law and shall deposit it either with the Presiding Officer or with his permission, before the Court officials. In view of the facts noted above, I am convinced to hold that the Arbitrator, after coming to know, that the referring Court had restrained him not to proceed with the matter to frustrate the application under section 11 of the Act gave the award subsequent to that day. Now the question would be that Arbitration Award which in view of the circumstances discussed above appears to have been given after 8th November, 1992, can be treated as a valid Arbitration Award. Mr. Basharatullah, Advocate stressed that an Arbitration Award can only be nullified by adopting procedure envisaged under section 30 of the Act. He further pleaded that under these circumstances, the application under section 11 of the Act be ordered to be dismissed, and case be remanded to the trial Court for issuing notices to the parties regarding the filing of Arbitration Award as well as for raising objection if they desire to do so. authority to proceed with the matter therefore, any proceedings drawn by him subsequent to the stay order had no sanctity in the eye of law. At this juncture, to solve the dialemma, I am confronted with two points, firstly agreeing with the petitioner's counsel the case should be sent back to the lower Court after setting aside the impugned order to draw the proceedings under the Arbitration Act relating to setting aside the Arbitration Award or whatever the position may be and secondly in exercise of suo motu revisional jurisdiction the validity of the Arbitration Award should be examined at the High Court level. As far as the first point is concerned, I found myself in a difficult position in referring the case to the lower Court because it has been established from the record of the case that the Arbitrator exercised jurisdiction after issuing of stay order on 8th November, 1992, for which he had no lawful authority to discharge his functions. Therefore, any act or action done by him would be nullity in the eye of law, which has rendered the Award legally non-existent. As far as the second point is concerned, although under section 30 of the Act, the Arbitration Award can be set aside on the ground enumerated therein, but when the Arbitration Award is the product of an illegal action the proceedings conducted by the Arbitrator after the issuance of stay order, then even without adhering to the provisions of section 30 of the Act, Award can be set aside being void and illegal. Although the revisional jurisdiction has to be invoked or exercised where no alternate remedy is available by riling the appeal etc. but in the peculiar circumstances of the case and in order to meet with the ends of justice, even without affording opportunity to the parties of raising the objections on the Arbitration Award or filing the appeal, the revisional jurisdiction under section 115, CY.C., can directly be exercised. In this behalf reference can be made to PLD 1975 SC

678. Thus it is held that the so-called Arbitration Award has no legal sanctity in the eye of law and even without formally setting aside the-same, has to be ignored as being non-existent in the eye -of law, on the strength of dictum laid down by the Hon'bic Supreme Court, in the case of Chairman, District Screening Committee, Lahore and another v. Shareef Ahmad Hashmi PLD 1,976 SC

258. Now adverting to the other limb of the arguments of Mr.Basharatullah Advocate, namely that after giving the award by the Arbitrator, application under section 11 of the Arbitration Act has become infructuous. The learned Advocate in support of his contention placed reliance on 1975 SCMR 312. 1 have gone through the facts mentioned in this reported judgment, which are obviously distinguishable from the case in hand. In that case, an application for the removal of the Arbitrator was moved but no stay order was passed. by the Court and during the pendency of the application, the Arbitrator, riled the Award. Whereas in this case, the Senior Civil Judge on 8th November, 1992 stayed the proceedings before the Arbitrator. Under these circumstances the authority being relied upon by the learned counsel is inapt. Thus while summing up, it is observed that since the Arbitration Award allegedly given on 8th November, 1992, has been termed illegal, void and non-existent in the eye of law, therefore, the application under section 11 of the Arbitration Act would Mr. Basharatullah, then urged that the Court below was under obligation to frame an issue to examine whether the Arbitrator has misconducted himself as well as the proceedings and opportunity should have also been granted to the parties to prove their respective contentions through the evidence and then the Court should have formed its view in the light of material so collected. He relied on Abdul Hamid v. Government of West Pakistan through Secretary, Communication and Works Department and another PLD 1975 Lahore 1427. In this judgment, it was held that the application under section 11 of the Arbitration Act should be decided after recording evidence and giving an opportunity to meet with the allegations. Mr. Tariq Mehmood, Advocate vehemently contended that the Arbitrator, in the instant case has nothing to say because after the riling of application under section 11 of the Arbitration Act, by the respondents, Arbitrator himself appeared before the Court and made a verbal request that the respondents have challenged his authority and dignity, for which, Court should initiate contempt against them and if the Court has no such authority and power then it should take its rile back and he do not want to remain Arbitrator and by uttering such words he left the Court premises. According to the learned counsel this very attitude of the Arbitrator indicates his vindictiveness, therefore, the Court had no option but to remove him within the terms of section 11 of the Arbitration Act. A perusal of the impugned order confirms the contention put forth by the learned counsel for the respondents. Although the misconduct has not been defined in the Act but the superior Courts have discussed this expression, time and again. In this regard in 1970 SCMR 1, the Hon'blc Supreme Court, defined the legal misconduct, in the following terms:-- "Legal misconduct means, misconduct, in the judicial sense, arising from some honest through erroneous, breach and neglect of duty on the part of Arbitrator causing miscarriage of justice." If the case in hand is tested at the touchstone of the above dictum of Hon'ble Supreme Court, keeping in view the proceedings drawn by the Arbitrator, which are available alongwith the so-called Arbitration Award, it becomes manifestly clear that there was serious tussle between the Arbitrator and representative of respondent in respect of non-cooperation and non-providing of full opportunity to defend the case etc. Although the subordinate Court has not noted these facts in the impugned order because at the time, when the impugned order was passed the proceedings attached with the Arbitration Award were not available on the file but in any case while exercising revisional jurisdiction these irregularities and illegalities cannot be allowed to go unnoticed, particularly in view of the fact that Arbitrator had anxiety to give the Award despite the fact that he was stopped by means of stay order not to proceed with the matter. One can safely reach the conclusion that the Arbitrator misconducted himself as well as the proceedings. I am in respectful agreement with the principle laid down in the case of Abdul Hamid Butt referred to hereinabove but it has no application on the facts and circumstances of the instant case. For the foregoing reasons I am inclined to hold that the Arbitration Award dated 8th November, 1992, has been given by the Arbitrator without lawful authority and jurisdiction, hence it being so, is void and non-existent in the eye of law and is liable to be ignored without adhering to the provisions o! section 30 of the Arbitration Act. The impugned order does not suffer from any illegality or irregularity warranting interference by this Court in exercise of revisional jurisdiction and the petition " no merits is dismissed with costs. AA./449/0 Revision dismissed.