P L D 2002 Karachi 427 (PLP)

The dispute referred to the learned Sole Arbitrator arises out of the claim of the plaintiff for four acres of land leased to him at NIA Malir Deh Dih, Karachi East. The plaintiff made payment of the occupancy charges of the land amounting to Rs.14,52,000 in addition to the annual ground rent. The vacant possession of the land was handed over to the plaintiff on 20‑5‑1992 in pursuance of agreement executed in favour of the plaintiff by defendant No.3. Mukhtiarkar, District East, Karachi. Apprehending an adverse action the plaintiff instituted a suit for declaration and permanent injunction against the defendants. The suit was contested by defendant No. 1 claiming the land to be a part of the area of 282 acres of land leased to defendant No.1 by the Government of Sindh. The possession whereof was handed over to defendant No. l on 29‑7‑1992. With the consent of the parties reference to arbitration was made in the suit to the learned Sole Arbitrator (Mr. Justice (Retd.) Syed Abdur Rehman) who entered upon 6th reference and filed his award in Court on 9‑6‑2000. Objections to the award were filed on 28‑8‑2001 by defendant No. l being C.M.A. No.2984 of 2001 alongwith an application under section 5 of the Limitation Act for condonation of delay in filing the objections (C.M.A. No.2507 of 2001). On the applications coming up for hearing Mr.Chaudhry Muhammad Jamil, learned Advocate for defendant No. l rightly conceded that the objections filed after the prescribed period of 30 days cannot be considered nor the delay can be condoned under section 5 of the Limitation Act, 1908. However, he stressed upon the point that their appear to be illegalities apparent on the face of the award. His contention is that no formal objections are required for considering these illegalities. His first contention was that after the reference was made vide order dated 25‑3‑1998 the learned sole Arbitrator entered upon the reference and made his award dated 22‑4‑2000 after a period of two years for which no extension of time was obtained from the Court as prescribed under section 28 of the Arbitration Act and as such the award is liable to be set aside. His second contention is that the issues were framed by the Court in Suit No.377 of 1992 and the learned Sole Arbitrator by framing the issues afresh acted illegally as issues are the points in controversy and constituted the reference. By adopting fresh issues the learned sole arbitrator failed to adjudicate and made the award beyond the scope of the reference and it is liable to be set aside. His third contention is that it was the duty of the learned sole arbitrator to summon defendant No.2 and to have procured the original record from the defendant in the absence of which award is illegal. The fourth contention is that while making award the learned Sole Arbitrator by the use of the words "consequently I give my award and decree the plaintiff's suit as prayed with costs" acted beyond the scope of his authority in a manner not envisaged under the provision of the Arbitration Act as only Court can decree the suit after making the award a rule of the Court. The fifth contention of the learned counsel is that notice of making the award was mandatory requirement and the award made without notice under section 14 of the Arbitration Act, amounts to misconduct of the proceedings. For the above contention the award is liable to be set aside. With regard to the first contention it is pertinent to note the diary of, the learned arbitrator dated 22‑2‑2000 which reads as follows: "Plaintiff and M/s. Raja M. Irshad and Zafar Iqbal present. The parties filed consent statement for extension of time to make award. The same is kept on record. Adjourned to 26‑2‑2000 for announcement of award." The joint statement of extension of time duly signed is available at page 77 of the files of the learned Sole Arbitrator. This objection is contrary to the facts on record as time was extended by consent of parties and the proceedings are legal and valid under the circumstances. In the case of WAPDA and others v. Messrs Khanzada Muhammad Abdul Haque Khan Khattak & Company, (PLD 1990 SC 359), the apex Court while examining the question of enlargement of time by consent of the parties has observed as: "Reading section 3, implied Condition No.3 in the First Schedule to the Arbitration Act and section 28 thereof together, the position of law appears to be clear that the parties are free to enlarge the time for making the award with their mutual consent as with the consent of all the parties, a term can be incorporated in the arbitration agreement giving powers to the arbitrator to enlarge the time for making the award. By Condition No.3 in the First Schedule, statutorily an implied term is incorporated in the agreement that the award shall be made within four months after entering upon the reference. By this statutory provision the term is to be taken as an integral part of the arbitration agreement and is subject to alteration with the consent of the parties like any other terms of a contract. If that were not the intention of the Legislature, section 28(2) would not make valid a provision in the arbitration agreement empowering the arbitrator or arbitrators to enlarge the time for making the award with the consent of the parties. If the parties after the expiry of the four months submit themselves to the jurisdiction of the arbitrator and take part in the proceedings enabling him to make an award, it cannot be said that the arbitrator acted without jurisdiction. In such a contingency, the principles of waiver and estoppel would apply with full force." In support of his second contention the learned counsel has placed reliance on the reports Sharifuddin v. Mst. Kishwar Jehan (1984 CLC 1133), Bhagirat Nathu Ram v. Ramnath (AIR 1951 Madhya Bharat 111) and Thola Chema Kesavulu and another v. Thola Veeraswami and others, (AIR 1933 Madras 862). The second contention has no force, contrary to the contention of the learned Advocate the very case‑law cited by the learned counsel goes to show that the issues do not constitute the reference, that the case is to be decided only on the basis of the issues is negated by the settled provision of law that the dispute is to be decided on the basis of the pleadings of the parties also supported by the case of Thola Chenna Kesavulu and others (supra) wherein it was held that: "It is well‑enough settled that where a dispute is referred to arbitrator through the Court the scope of their inquiry is the scope of the suit itself as disclosed by the pleadings and that they have no jurisdiction to extend it either as regards the subject‑matter or the persons affected by it. The leading case in this country is the Privy Council judgment Ju Ram Partap Ghamria v. Durga Parsad Chamria (1), a case which related not only to the inclusion by the arbitrators of a person not a party to the suit but also the statement of certain question neither raised nor foreshadowed in the plaint." The case of Bhagirat Nathuram (supra) also pertains to different point where a second reference was made by the Court while hearing an appeal from the order made on the first award and the Court observed that while first award was not set aside there was no occasion to refer the case again to the arbitrator in an appeal. Sharifuddin's case does not pertain to arbitration matter and it is not relevant to the present proceedings. His third contention is not supported by any material on record or law. It is the duty of the parties to procure and produce evidence. In the present case in addition to oral evidence sufficient record, certified copies and original document relied upon by the plaintiff are produced in evidence. There is nothing on record to show that the defendant ever made any request to the arbitrator for summoning the record of defendant No.2 and the same was not considered by the learned Sole Arbitrator resulting in misconduct. The fourth contention of the learned counsel is not substantiated by any limits imposed on the use of any words of any specific format. The learned arbitrator has filed his award before this Court in pursuance of the provisions of section 14 of the Arbitration Act, 1940 for making it a rule of the Court after giving his findings on the reference. In the present case as reference was made in the shape of a suit pending before this Court with a specific prayer for decree. The findings of the learned arbitrator to the effect of the decree of the suit are to be read in conjunction with the remaining portion of the sentence already reproduced above which does not leave an iota of doubt that the learned Sole Arbitrator gave his award which is not a decree of the Court within the meaning of section 2(2) of the Civil Procedure Code, 1908 the award is within the meanings of section 2(b) of the Arbitration Act, 1940 and has to be construed as such. This is confirmed by the fact that the learned Sole Arbitrator has filed the award for making it rule of the Court. A decree of Court as delivered under section 2(2) of the Civil Procedure Code would only follow after the award is made rule of the Court as such the mere use of the word decree which in the instant case, stands for the extent of claim allowed in the award does not render the award illegal. The fifth contention also has no force. On 25‑3‑2000 the date for making the award, on 22‑4‑2000 was fixed in the presence of the parties and the award was announced accordingly as such the parties had sufficient notice. The purpose of notice under section 14(2) of the Arbitration Act, 1940 is to enable the parties to file their objections, if any within the prescribed period of time. However, the fact of filing of award by the arbitrator that is already in the knowledge of the parties and their counsel does not render the .award illegal. As observed in the apex Court in the case of Ashfaq Ali Qureshi v. Municipal Corporation of Multan (1985 SCMR 597) and reproduced as follows:‑‑ "Apparently, the prevalent view is that as the provision of the law is meant to enable to the parties to know that the award has been tiled in Court so that they may file their objections, if any, within the time prescribed, a formal compliance in strict conformity with the relevant provision of law is not to be insisted upon when substantial compliance has been made of it. In keeping with this view where the fact of filing of the award by the Arbitrator had already been in the knowledge of the parties and their counsel had in response in notice issued by the Court appeared and taken time to file their objections, as in the present case an insistence on formal of notice under Order XXIX would be a mere technicality. Even otherwise, an objection on this score had neither been taken before the trial Court nor in the memorandum of appeal before the High Court and was, therefore, only an, afterthought not entitled to serious consideration. As regards the duty of the Court, not to act blindly on an award, which had' weighed with the High Court, it is no doubt that mere absence of objection was not altogether to absolve the Court from its responsibility of deciding whether the award was void on the face of it. An award may be remitted under section 16 if‑‑ (i) the award leaves any of the matter which were referred to arbitration, undetermined; (ii) a part of the award is upon a matter which was not referred to arbitration and that part cannot be separated from the remaining part without affecting the decision of the matter which was referred to arbitration; (iii) the award is so indefinite as to be incapable of execution; (iv) there is an objection to the legality of the award and. such objection apparent upon the face of it. An award can be set aside on one of the following grounds‑‑ (i) That an arbitrator or umpire has misconduct himself; (ii) that an arbitrator or umpire has misconduct the proceedings; (iii) that the award is made after the arbitration is superseded; (iv) that the award is made after the proceedings become invalid under section 35; (v) that the award is improperly procured; and (vi) that the award is otherwise invalid." The defendants had ample opportunities to raise the objections pertaining to the issues, time period and evidence during the proceedings before the learned Sole Arbitrator. They actively participated, without raising any objection and also consented to enlargement of time with consent of parties. The, learned Advocate in spite of his opposition which is understandable, has not been able to substantiate any of the objections so as to constitute an error apparent on' the face of the award resulting in misconduct within the meaning of section 30 of the Arbitration Act, 1940. The objections to an award are not to be heard as an appeal and no sufficient cause for not making the award a rule of the Court is on record. Accordingly C.M.As. Nos.2507 of 2001 and 2984 of 2001 are dismissed as not maintainable and the award of the learned Sole Arbitrator is made a rule of this Court. Q.M.H./M.A.K./H‑63/K Award made rule of Court