P L D 1959 (W (PLP)

"That Messrs Sh. Mian Muhammad Allah Bakhsh do pay sum of Rs. 28,669/15/6 together with interest at nine (9) per cent. per annum thereon from 10th August 1951 till date of payment to Messrs Kila Chand Devchand & Co." The defendants have resisted his application which registered as a suit by filing their objections to it on the 2nd of January 1958. The plaintiffs submitted their reply to the objections on the 12th of April 1958. The defendants gave their counter reply on the 3rd of May 1958 and the plaintiffs submitted their rejoinder on the 21st of October 1958. The facts are that the plaintiffs entered into a ready contract on the 3rd of July 1951 to sell to the defendants 257 bales of 289E Saw‑ginned Cotton. The defendants failed to take delivery of the bales and therefore under Bylaw 39 of the Karachi Cotton Association Limited their disputes were referred to the arbitrators who gave their award on the 19th September 1951. They held that the defendants must take delivery of the bales within 48 hours against the payment of Rs. 1,57,604‑12‑0 and in default the plaintiffs should sell the bales at the market rate on the account and risk of the defendants and recover the price of the rate of Rs. 130 per maund with interest at the rate of 9 per cent. per annum. The award was filed in Court and on being made a rule of the Court in suit No. 164 of 1952 a decree followed on the 12th January 1953. The plaintiffs then applied for the execution of the decree but the application was dismissed on 15‑2‑1955 on the ground that the decree was not executable. The plaintiffs could apply under section 16 (1) (b) of Arbitration Act, 1940 for the remittance of the award to the arbitrators for making it definite and capable of execution or for removing its imperfection under section 15 of the Act. The plaintiff however adopted the course of making a new reference to arbitration in March, 1955 and ultimately a new umpire gave a new award in July, 1957 which is the subject‑matter of the present dispute. Mr. Zamirul Haq the learned Counsel for the defendants has argued that the claim of the plaintiffs had become time‑barred at the time of the second reference to arbitration and that therefore the umpire could not enter upon arbitration on being appointed as such on the 2nd of July 1957. Mr. Ramchandani on behalf of the plaintiffs contended that under section 14 of the Limitation Act the time during which the plaintiffs prosecuted the proceedings in suit No. 164 of 1952 should be excluded. Those proceedings had commenced on the 26th of December 1951 and the execution application was dismissed on the 15th of February 1955. If this entire period is excluded then the plaintiff's claim was within time in the middle of February 1955. They however nominated their, arbitrator on the 30th of March 1955 and called upon the defendants to nominate their arbitrator. There is no explana?tion of the delay from the 15th of February 1955 up to the 30th of March 1955. If the explanation is that 1?? months were required after the dismissal of the execution application to consider and decide upon the new course of action then I should point out that the objection regarding the executability of the decree was raised by the defendants on the 27th of February 1954. If the plaintiffs had made the second reference at that time it would have been in time. Section 14 of the Limitation Act is not applicable because it applied where the time occupied in prosecuting the previous proceeding could not bear fruit due to a" . . . . . . defect of jurisdiction or other cause of alike nature . . . ." and the Court was found to be "? unable to entertain it." In the present case there was no defect of jurisdiction and the Court was not unable to entertain the execution application. On the contrary it entertained the application and dismissed it on merits. Mr. Ramchandani, therefore, argued that the second arbitra?tion proceeding was in continuation of the first Arbitration proceeding and therefore the time spent in obtaining an executable award was spent during the course of one proceeding and as such the original reference to arbitration continued to be operative. He supported this argument by citing Ramdutt Ramkissen Das v. E. D. Sassoon & Co. (A I R 1929 P C 103) and Firm Behari Lal Baij Nath Prasad v. Punjab Sugar Mills Co. Ltd. (A I R 1943 All. 162). In the first case the Privy Council excluded the time which was taken up in deciding the validity of the sole arbitrator's appointment. Those facts were different from the facts of the present case. Here the second arbitration proceeding was entirely independent of the previous proceeding. It was in fact taken as a substitute for the previous proceeding. In the second judgment a Division Bench of the Allahabad High Court excluded the time which was wasted by the prolongation of arbitration proceedings and the withdrawal of one of the arbitrators. Those facts were also different from the facts of the present case. The principle of that case could apply to the time which was wasted by the inability of the two arbitrators who were appointed in March and April 1955 and the refusal of the first umpire to decide the case, whereupon the second umpire namely Mr. H. H. Pirbhai was appointed in July 1957. Mr. Ramchandani lastly and mainly relied on a judgment given in 1916 by the House of Lords in Chandanmull v. Donald Campbell & Co., which is reproduced, in another connection, as a foot‑note from page 707 to page 715 in the twenty‑third volume of Calcutta Weekly Notes. In that case the arbitrator had impliedly decided that there was a breach of the contract and had determined the rates but had not determined the amount which was payable. The purchasers who were the claimants, thereupon made out invoice based on the award and forwarded them to the seller and drew upon him by two bills. The seller dishonored the bills without giving any reason for doing so and "preserved a Sphinx‑like slience". The purchasers therefore referred the question. "Did the seller owe ?4,000, odd and had he disobeyed the first award" to another arbitrator who determined the amount which was payable on the ground that the first award was right and that it had decided that the seller was liable to pay damages due to his default. The seller contested the validity of the second award and Sir John Simon argued on his behalf that the second reference was not on a dispute on the original contract and that the second award was "an award upon an award" with a potential danger in it of arbitration upon arbitration ad infinitum. Lord Sumner observed :‑ "Incidentally, the effect of a prior award might come into question in an arbitration upon a dispute arising out of a contract if the defendants alleged and the claimant denied that the award already made had decided the matter in dispute. Possibly the effect of an award might directly be arbitrable matter as itself involving a dispute arising out of the contract, if, for instance, it directed how something should be done in performance of it or in satisfaction of the object of it. This, however, we need not now decide. The important thing here is whether Mr. Nevill (the second arbitrator) had before him a dispute arising out of .the contract. If he had the contract still stood as a binding obligation to submit it and he was validly appointed to decide it." The main consideration in the judgment was the scope of the arbitration clause and their Lordships held that the question referred to arbitration for the second time was covered by it. The consideration of Limitation might have been obviated as suggested by Mr. Zamirul Haq because under the contract‑ "an award for a sum certain was a condition precedent to bringing an action for any sum calculated as due on the footing of the first award". However that might have been, under subsection (1) of section 37 of our Arbitration Act, 1940 "all provisions of the Limitation Act, 1908, shall apply to arbitrations as they apply to proceedings in Court" and as question of limitation was not considered and decided by their Lordships their Judgment is not an authority on the present proposition. Earl of Loreburn met the objection of Sir John Simon that allowing repeated arbitrations amounted to making the process infinitesinal by pointing out‑ "that when an award assumes a shape which makes it available for a judgment enforcing it in a Court of Law, the process of infinitesinal repetition is at once arrested" and‑"it is only when there has been an effective adjudication that the right to arbitrate under a clause like this ceases to exist", Unless the second reference to arbitration is held to be within time the second award cannot be made a rule of the Court. The consequence of the decision that the reference was time‑barred is that an otherwise perfectly good claim of the plaintiff fails. It is a hardship but not harder than the principle of equity which underlies the Limitation Act and I cannot see my way to helping the plaintiff without distorting the principles which apply to this case. I set aside the award and dismiss the suit with no order as to costs. K. B. A. ????????????????????????????????????????????????????????????????????????????????????????????? Award set aside.