P L D 1963 (W (PLP)

3. The partners of deceased Muhammad Usman filed suit No. 144/57 for accounts against the legal heirs of the deceased, before the Court of 6th Civil Judge, 1st Class, Karachi. During the proceedings the present petitioner was appointed receiver of the property of the parties in the suit.

4. By an agreement, on the 31st July 1961 (sic) the petitioner and the respondents nominated Khan Bahadur Muhammad Suleman, retired Chief Engineer of the Central Government, as the sole arbitrator. On 23-1-61 (sic) the first meeting was held before the arbitrator where the petitioner filed his claim. On the various dates, subsequently fixed by the arbitrator, the proceedings were adjourned at the request of the present respondents who also filed their counter claim before the arbitrator during the course of the proceedings. On 6-8-1962 the arbitrator asked the parties to the arbitration to get time extended from the Court (arbitrator's letter Exh. 9). On 15-9-62 the petitioner filed the present application for extension of time.

5. The parties in the suit had on 3-7-61 (sic) sought an adjournment for 3 months from the Court in Suit No. 144/57 on the ground that the dispute about the assets of the firm was being referred to the arbitration of Khan Bahadur Muhammad Suleiman which was granted by the Sub-Judge (documents Exh. 4/1 and Exh. 6). On 31-8-61 the present petitioner and the parties in the suit applied to the Court for a formal retrospective per mission for appointment (nomination) of Khan Bahadur Muhammad Suleiman as arbitrator. On 8-9-62 the Court granted the permission in these words " . . . by this application the parties jointly applied that such permission be granted retrospectively. The permission is accordingly granted. The parties or the receiver are also granted permission to move the High Court which is the Court having the jurisdiction over the matter for extension of time for award."

6. The application for extension is opposed by the respon dents. The main ground of attack is that when the respondents on 31-7-61 (sic) agreed to the nomination of the arbitrator as per agreement Exh. 8 they were under the impression that the A Receiver-applicant had the authority of the Court to execute the agreement Exh.

8. The respondents claim that the Receiver had raised them, by informing the respondents that he had such an authority. It is true that the Receiver had no direct authority from the Court, on 31-7-61 for the purpose. The circumstances are that the parties and the Receiver had obtained adjournments of the case and perhaps the Receiver-applicant thought that to be an implied authority from the Court. Subsequently, however, the Court on 8-9-62 has given the applicant explicit authority retrospectively. The objection about the want of authority in the applicant for nomination of Khan Bahadur Muhammad Suleiman was raised for the first time by the respondents in the present petition, and long after the Court had given authority retrospectively to the applicant for the purpose on 8-9-62. I asked Mr. Azmatullah to show me any law to support his contention that he could avail of the alleged original defect in the applicant's nomination even though the Court had granted him express authority subsequently for the purpose retrospectively. Mr. Azmatullah frankly stated that he had no law that he could show in his support.

7. The agreement for nomination Exh. 8 starts with these words :- "An agreement made at Karachi this 11th day of June 1961, between Mr. Suleiman E. H. Jaffer of Karachi the receiver representing the heirs and partners of K, S. Muhammad Usman, deceased of the one part . . . . . ." Thus the present applicant has signed the agreement on behalf of the partners and heirs of Khan Sahib Muhammad Usman. In other words the applicant was acting on behalf of the contracting parties to the reference, in the original agreement of 1954. These parties and the Receiver had applied to the Court and had obtained retrospective authority also. These parties and the heirs of K. S. Muhammad Usman have not repudiated the authority of the present applicant to nominate Khan Bahadur Muhammad Suleiman as arbitrator. The arbitrator has been accepted by the respondents also. The respondents have appeared before the arbitrator and got the arbitration proceedings adjourned for one reason or the other. The respondents have also put their counter claim before the arbitrator.

8. The learned counsel for the respondents referred me to Order XLI and the ruling reported in Ratnasami Pillai v. Sabapathy Pillai and others (A I R 1925 Mad. 318) and emphasised that there was no power in Court to authorise the Receiver-applicant to nominate the arbi trator inasmuch as such an authority was beyond the scope of Order XLI. Here the position is different. The Receiver was authorised by the Court only to show its approval of the nomination made by him. The Receiver was not acting as a Receiver but as an agent of the parties to the suit, and the authority given by the Court was a formal approval to Receiver's so acting. As stated already, the parties to Suit No. 144/57 agreed and do still adhere to their authority to the Receiver to nominate the arbitrator on their behalf. It was held in Toyo Menka Kaisha Ltd. v. Sohansing Harnamsing (A I R 1944 Sind 51) that "A person who is a party to a reference cannot object to an award made thereon on the ground that another person who is interested in the subject-matter of the reference did not join in the reference, when such person does not object to the reference." It may once again be emphasised that the applicant is only acting as an agent of the parties and the Court for the purpose of nominating the arbitrator. This has nothing to do with his powers as a Receiver as such. Mr. Azmatullah during the course of his arguments also referred to the fact of one of heirs of K. S. Muhammad Usman being a minor. The learned Advocate for the applicant, however, said that the person concerned was no longer a minor at the time of the nomination. At any rate, no such objection was taken by the respondents in their objections or affidavit filed in Court. It was admitted by the learned counsel for the respondents that the authority given to the applicant to nominate on behalf of the parties need not be in writing.

9. On the facts I find that this is a fit case where extension should be granted. The respondents have not alleged anything against the arbitrator or his conduct of the proceedings as far as they have gone before him already. The respondents appeared before the arbitrator even after the time had expired and raised no objection to the proceeding. Under the original 1954 agreement the arbitration is compulsory. Even if time is not extended another arbitrator will have to be appointed. There is no allegation that either party is in collusion with the arbitrator (8 I C 224 and A I R 1957 Cal. 658). Application is allowed. Four months time is given to the arbitrator from today to make an award. The parties will appear before the arbitrator on 10th December 1962. K. B. A. Application accepted.