P L D 1960 (W (PLP)

Dates of hearing : 21st and 22nd March 1960. Muhammad Shafi, Muhammad Rafi, Muhammad Sakhi and Muhammad Zaki, sons of Malik Rukan Din, and their dead brother Muhammad Taqi's sons Muhammad Sabir and Muhammad Jafar, entered into an arbitration agreement on the 20th of April 1955 appointing Hayat Muhammad contractor as the sole arbitrator to partition between them three houses mentioned in the agreement according to the stated shares. He had also to take into account, at the time of the partition, the construction of house No. 3 which had been made by Muhammad Shafi at the expense of Rs. 1,

150. Hayat Muhammad divided the three houses into five portions. He then drew up the lots in which house No. 1 fell to the share of Muhammad Shafi, house No. 2 to the share of Muhammad Sakhi, house No. 3 to the share of Muhammad Sabir and Muhammad Jaffar, house No. 5 to the share of Muhammad Zaki and house No. 4 to the share of Muhammad Rafi. A chit showing the portions which had fallen to the share of each co‑sharer was signed by all these persons except Muhammad Zaki on whose behalf his son signed it on the 22nd of August 1955. On the same day, Hayat Muhammad had a detailed draft of the award written by Abdul Aziz, petition writer (P. W. 1), who prepared its, six copies and gave one copy to each of the co‑sharer. This award was copied down on the stamped paper on the 11th of November 1955. It was presented for registration on the 14th of November 1955 and registered on the 26th of November 1955. The copies of the registered award were also sent to all the persons affected by it. On the 12th of January 1956, Muhammad Sabir and Muhammad Jafar made an application in the Court of Senior Civil Judge, Sialkot, for filing the award and for pronouncing the judgment in accordance with it and upon the judgment so pronounced to draw up the decree. Muhammad Rafi conceded judgment. The application was contested by Muhammad Shafi, Muhammad Sakhi and Muhammad Zaki. They raised several objections which formed the subject‑matter of the following issues :‑ (1) Whether the parties made a valid reference to arbitration and what was the scope of reference ? (On applicants). (2) Whether the arbitrator in view of the reference has given an award and to what terms ? (On applicants). (3) Whether the agreement of reference to arbitration was brought about by fraud ? (On respondents). (4) Whether the agreement of reference to arbitration is unenforceable in law as it contravenes the provisions of section 23 of the Contract Act ? (5) Whether the award is unenforceable as the arbitrator has been guilty of misconduct and corruption vide grounds given in para. No. 4 of the objection petition ? (On respondents). (6) Whether the award is unenforceable as it was given after the expiry of the period of limitation ? (7) Whether the award is unenforceable as it affects certain third persons who were not parties to reference ? (On respondents). (8) Whether the present application is not maintainable under section 17 of the Arbitration Act ? (On respondents). (9) Whether the application is barred by limitation ? (On respondents). Both the parties Jed their evidence. The learned trial Judge accepted the award as a legal and valid document and made it a rule of the Court. He pronounced judgment according to the award and ordered that a decree should be drawn up according to such judgment. Muhammad Shafi etc. have come up on appeal against this judgment and decree. The appeal was dis missed in default on the 14th of December 1959 because no one appeared before me on that day. An application was, however, subsequently made by Mr. Ghias Muhammad, the learned counsel for the appellants, for the restoration of the appeal, and I have given notice of this application to the other side. I had also ordered that the appeal would be heard the same day in case it was restored. Before hearing the appeal I asked the learned counsel for the respondents if he had any objection to the restoration and as he had none, therefore, I restored the appeal and proceeded to hear it on merits.

3. Though the questions that were agitated in the Court below ranged over a wide area, many of them have been abandoned in the arguments before me and the scope of controversy, therefore, in this Court has been considerably narrowed down. The first objection which has been taken to the application is that it has not been tiled within the statutory period and should. Therefore is missed on is ground alone. It will be convenient first to 'set out, in so far as it is necessary, the legislative history of the Arbitration Law in India, of which Pakistan once formed an integral part and its certain salient features which are relevant for the purpose of the decision of this case. Originally the provisions which governed the arbitration both in suits and without the intervention of a Court were governed by the Second Schedule appended to the Code of Civil Procedure. Under para. 20 of this Schedule where any matter was referred to arbitration without the intervention of a Court and an award was made thereon, any person interested in the award could apply to any Court having jurisdiction over the subject‑matter of the award that the award be filed in Court. The application under this paragraph was to be made within six months from the date of the award under Article 178, Schedule I, Limitation Act of 1908. The date of the award meant the date on which the award was given to the parties, that is to say, the date on which the award was published and not the date which the award bore. By Arbitration Act X of 1940, which came into force on the 1st day of July 1940, the law relating to arbitration in India was consolidated and amended. Schedule II of the Code of Civil Procedure was, as a consequence thereof, completely repealed. According to the new law, unlike Schedule 11 of the Code of Civil Procedure, as soon as the parties referred a matter to one or more arbitrators, the Civil Court having jurisdiction to decide the questions forming the subject‑matter of the reference, if the same had been the subject‑matter of a suit, came into the picture at once. The arbitrator or arbitrators under the First Schedule are to make their award within four months after entering on the reference or after having been called upon to act by a notice in writing from any party to the arbitration agreement or within such extended time as the Court may allow. The authority of an appointed arbitrator or umpire cannot be revoked except with the leave of the Court unless a contrary intention is expressed in the arbitra tion agreement. Under section 11, the Court on the application of any party to a reference may remove an arbitrator who failed to use all reasonable dispatch in entering on and proceeding with the. reference and making an award. The arbitrator under section 13 can state a special case for the opinion of the Court on any question of law involved or state the award wholly or in part in the form of a special case of such question for the opinion of the Court. After an award is made the arbitrator must sign it and give notice of it in writing to the parties of the making and signing thereof and of the amount of fees and charges payable in respect of the arbitration and award under section

14. Under subsection (2) of section 14, the arbitrator shall, at the request of any party to the arbitration agreement or any person claiming under such party or if so directed by the Court and upon payment of the fees and charges due in respect of the arbitration and award and of the costs and charges of filing the award, cause the award or a signed copy of it, together with any depositions and documents which may have been taken and proved before them to be filed in Court, and the Court shall thereupon give notice to the parties of the filing of the award. The Court has the power to modify or correct an award under certain circumstances and also to remit it or any matter referred to arbitration to the arbitrators under sections 15 and 16 of the Act. The Court can also set aside the award for the reasons mentioned in section 30 of the Act, that is to say, (a) that an arbitrator has misconducted himself or the proceed ings ; (b) that an award has been made after the issue of an order by the Court superseding the arbitration or after arbitration proceedings have become invalid under section 35 ; and (c) that an award has been improperly procured or is otherwise invalid. Under section 17 where the Court sees no cause to remit the award or any of the matters referred to arbitration for reconsidera tion or to set aside the award, the Court shall, after the time for making an application to set aside the award has expired, or such application having been made, after refusing it, proceed to pronounce judgment according to the award and upon the judgment so pronounced a decree shall follow, and no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with, the award. The order, however, of setting aside or refusing to set aside an award is appeal able under section 39.

4. Section 49 and Fourth Schedule of the Arbitration Act substituted Article 178 of the Limitation Act in the following form :‑, Article

178. Under the Arbitration Act, 1940, for the filing in Court of an award. 90 days. The date of service of the notice of the making of the award. The argument which is advanced at the Bar is that the award was admittedly given on the 22nd of August 1955, in the presence of the petitioners. They should have, therefore, made an appli cation within 90 days‑of this date, that is to say, on or before the 20th of November 1955. The application presented by them on the 11th of January 1956, was clearly barred by time. In support of this contention the learned counsel, has quoted before me Ganga Yam v. Radha Kishan a judgment of the Punjab High Court reported in (A I R 1952 Pb. 350). In this case Khosla, J. interpreted the words "the date of service of the notice of the making of the award" as meaning the date when the applicant came to know of the existence of the award. ‑The learned Judge held that as the award in that case was signed by both the parties on the 21st of January 1943, Radha Kishan, therefore, knew that the award had been made on that date. He should have it was held made an application for filing the award within 90 days of that date. This judgment was, however, dissented from in a later Division Bench authority of the same Court Ganga Ram v. Radha Kishan reported in (A I R 1955 Pb. 145). The brief history of the arbitration law which has been given above clearly shows that the words "the date of service of the notice of the making of the award" have a technical meaning attached to A them and can only mean the notice provided by section 14 of the Arbitration Act, i. e., a notice in writing to the parties of the making and signing of the award. The mere fact that the parties had the knowledge of the fact that the award had been made or the fact that they had signed the award would not start the time running under Article 178 of the Limitation Act. This is the view which was taken in the Punjab authority referred to above as well as in Jai Kishen v. Ram Lal Gupta reported in (AI R 1944 Lah. 398), I quote with respect the observations made by Abdur Rahman, J:‑-- "The notice referred to in Col. 3, (Article 178 of the Limitation Act) is the notice mentioned in section 14 (1), Arbi trration Act, according to which an arbitrator is required to give a notice in writing to the parties of the making and signing of the award, and therefore, limitation could have started only from the date on which that notice would have been served, and as such a notice could not have been given to the parties as both of them were present when the award was made column 3 of Article 178 was inapplicable." The same view was taken in Jayantilal Jamnadas v. Chhaganlal Nathoobhai (A I R 1945 Bom, 417).

5. A critical reading of section 14 of the Arbitration Act makes it perfectly clear that after an award is given any party to the arbitration agreement or any person claiming under such party may request the arbitrator or the umpire to cause the award Or a signed copy thereof together with any deposition or document which may have been taken and proved to be file f in Court. The "Court" means the Civil Court having jurisdic tion to decide the question forming the subject‑matter of the reference. Such Court can also direct the arbitrators or the umpires to cause the award or a signed copy thereof to be filed in Court. No limitation has been provided by the Limita tion Act for any party to the arbitration agreement to request the arbitrator or the umpire to cause the award to be filed in Court nor is there any limitation prescribed in the Limitation Act for the arbitrators or umpires to cause the award to be filed in Court upon such request. If a party to the arbitration agreement does not make a request to the arbitrator or umpire for filing the award in Court, it can directly comp to the Court and request it to order the arbitrator or to umpire to file the award or a signed copy thereof in Court. Such an application will be governed. by Article 178 of the Limitation Act if notice of the award has been given to the applicant, as provided by Subsection (1) of section

14. But if no notice is given then the my Article which would be attracted would be the residuary Article 181 o the Limitation Act, which provides a period of three year from the date when the right to apply accrues. T e right to apply accrues to a party immediately when an award is made and he receives the knowledge thereof. Some High Courts have taken the view tat if no notice is given to a party to the agreement of making the award then an applica tion by such a party would be considered to have been made under section

17. I do not feel quite sure if such a view is correct. In my opinion whether a notice is given, or not, an application by a party to the Court to direct the arbitrator or the umpire to file the award will be covered by subsection (2)I of section

14. I am also unable to follow the argument advanced in Ganga Ram v. Radha Kishan that as under section 38 of the Arbitration Act a party to the arbitration agreement has a right to obtain possession of the award through the assistance of the Court, he must be presumed to have a corresponding right to apply to the Court for the filing of the award, because otherwise he would be seeking the assistance of the Court under section 38 to no practical purpose. Section 38 only comes into picture when there is a dispute with regard to the fees payable to, the arbitrator. The Court has been given a power to decide ash to what fees should be paid to the arbitrator, otherwise, so far as the question of limitation is concerned, I do not find any relevancy of section 38 at all.

6. Even if it be conceded for the sake of argument that in case no notice of the making of the award is given to the parties to the reference section 14 has no application still I think an application can be made for filing the award by any party to the arbitration agreement under the general principle embodied in the maxim "where there is a right, there is a remedy." Section 14 of the Arbitration Act is not exhaustive but is only inclusive.

7. As no notice was given in this case and none indeed could be given, because the parties were present at the time when the award was given, Article 178 of the Limitation Act has no application whatsoever. As no other Article is applic able, the only Article which would be attracted to the case would be the residuary Article 181 of the Limitation Act. The present application is, therefore, within time having been made within three ears of the making of the award.

8. The second objection against the award which has been raised before me is that it was invalid, because it was not made within four months after the arbitrator had entered on the reference as is provided by para. No. 3 of the First Schedule of Arbitration Act of 1940. The argument is based upon the fact that agreement of reference was executed on the 20th of April 1955 and the award was given on the 22nd of August 1955, i e., two days after the expiry of four months. The learned counsel has contended that the arbitrator " entered on the reference" on the date when the agreement of reference was executed and, therefore, the award should have been given by him within four months of that date. The words "entering on the reference" have not been defined in the Arbitration Act, but they certainly cannot mean that the arbitrator enters on the reference on the day when the arbitration agreement is executed. Supposing for example, two persons enter on arbitration agreement and appoint B as an arbitrator, but on account of the absence of B at the time of the execution of the arbitration agreement the parties are not able to inform him of his appointment as such till say four months after the execution of the agreement. In such a case, it will be absurd to say that the arbitrator entered on the reference on the day when the arbitration agreement was executed and as four months had expired, therefore, he was not competent to give an award at all. In my opinion, the words "entering on the reference" clearly mean the day when the arbitrator enters upon the matter of the reference. This can only be done when the parties are before the arbitrator and he takes some definite step towards resolving the dispute referred to him for arbitration. The case where the arbitrator receives the information that he has been appointed an arbitrator but he fails to take any step towards deciding the dispute is visualised by the Legislature itself by making a provision in para. 3 of the First Schedul attached to the Arbitration Act which provides that the arbitrato in such a case can be given a notice in writing from any party to the arbitration agreement to enter upon the reference and four months would start running from the date. of the notice. In the instant case, there is nothing on the record to show as to when did the arbitrator take the first substantial step towards deciding the matter in dispute, but is perfectly clear that he could not have taken this step until all the parties to the reference had put their signatures on the agreement. Muhammad Sabir, one of the applicants, has appeared in the witness‑box and has stated on solemn affirmation that at the time when the agreement of reference was written or executed he had gone out to Narowal from where he returned five days later and then signed the agreement. His statement is not controverted by any evidence upon this record. Muhammad Sabir, therefore, signed the agreement of reference on the 25th, so the time of four months, even if the argument of the learned counsel for the respondents be correct, would be taken from this date which would make the giving of the award well within four months: I, therefore, see no substance in the second objection as well and reject it.

9. The third objection raised by the learned counsel, for the appellants against the award is that on the date when the award was written on the stamped paper the arbitrator had become functus officio. The first award being not registered and being not on a stamped paper could not be admitted into evidence at all. It is quite clear to me that the arbitrator finally decided the dispute on the 22nd of August 1955, and had the rough draft written by Abdul Aziz petition‑writer and in order to make the award valid it had to be written on the stamped paper and registered. This was done on the 11th of November 1955. The position taken up by the learned counsel for the appellant is wholly untenable. The arbitrator decided the dispute finally on the 22nd of August 1955. The draft award was written on that day which was copied down in verbatim on the stamped paper on the 11th of November 1955. After the arbitrator decided the dispute between the parties he was incapable of giving a fresh decision upon such dispute, but he cannot be said have ceased to be arbitrator or the purpose of writing the draft award on a stamped paper and having it registered. In fact the arbitrator retains his position as an arbitrator until the award is filed in Court and is made a rule of law. The objection that the arbitrator had become functus officio on the day when the draft of award was written is on the face of it unacceptable.

10. The fourth objection taken up by the learned counsel for the appellant is that the arbitrator has been guilty of mis conduct in so far as he divided the property into five parts without first assessing the value of the property. A reference to the agreement would show that the arbitrator was given full power to divide the property into five parts and it was not mentioned that he could only divide it after assessing the market value of the three houses. In any case, the division of the houses into five parts and the subsequent drawing of the lots was agreed to by all the parties, and in token thereof they signed the chit Exh. A‑

1. Muhammad Zaki's son signed it on his behalf. He had authorised his son to do so in the presence of the arbitrator by a written chit. All the share‑holders had, therefore agreed to the division of the houses into five parts as well as to the lots drawn in their presence. They cannot now come forward and object to such division. Lastly, it has been lukewarmly argued that the agreement of reference was not signed by the appellant who had put the signatures on blank stamped paper which was written later on. Apart from the fact that the assertion of the appellants is not corroborated by any evidence, it has been definitely proved by the evidence on the record that the agreement was written, read out and then signed by the appellants. In any case, they took part in the arbitration proceedings and, as I have already stated, signed the chit Exh. A‑

1. This is a complete negation of their assertion that they had not entered into any agreement referring the dispute to the arbitration of Hayat Muhammad. I, therefore, reject all the objections which have been taken up by the learned counsel for the appellant and dismiss the appeal with costs. K.M.A. Appeal dismissed.