2005 PLP 1949 (CLC)

SYED HAMID ALI SHAH, J.

The appellant has assailed in this appeal, the judgment and decree dated 5-10-1999 passed by learned District Judge, Jhang, wherein the suit of the plaintiff was decreed on the basis of statement of referee.

2. The respondent instituted a suit, under Order XXXVII, rule 2, C.P.C., on the basis of a promissory note, for a sum of Rs.7,00,

000. The said promissory note was statedly, executed on 2-8-1996. The appellant also executed receipt dated 2-8-1996 in confirmation of the promissory note. The appellant in response to the requisite summons, appeared and filed the application for leave to appear and defend the suit, which was accepted, on the condition of furnishing the security for the sum in dispute, to the satisfaction of the Court. The appellant filed written statement controverting the assertions of the plaint, including the denial of the execution of the promissory note. The learned trial Court framed the following issues on 1-7-1997:-- (1) Whether the impugned D.P. Note is under-stamped, post-stamped and the revenue stamps affixed thereon are not properly cancelled? If so, its effect? (2) Whether the defendant got from the plaintiff, the disputed sum of Rs.7,00,000 as loan and executed in his favour the impugned D.P. Note/receipt dated 2-8-1996? (3) Whether the impugned D.P. Note is the result of collusion and forgery? (4) Whether the suit of the plaintiff is false and vexatious to his knowledge and the defendant on that account, entitled to get special costs from the plaintiff? If so to what extent? (5) Relief.

3. During the course of proceedings both the parties agreed to resolution of their dispute through the decision if referee. The statement recorded by both the parties is reproduced as under:-- The parties as well as their learned counsel signed the order-sheet. The parties also affixed their respective thumb-impressions.

4. The referee was to record his statement on 24-9-1999. The appellant, moved an application, seeking revocation of authority of referee on the ground that the referee has joined hands with the other side, called parties to make statement and has assumed the role of Arbitrator. The learned trial Court did not require the respondent to file reply to the application and dismissed the application on 5-10-1999, consequently, the suit of the respondent was decreed on the basis of the statement of referee vide impugned judgment and decree of even date, hence the present appeal.

5. Learned counsel for the appellant contends that the referee summoned both the parties at his Dera and wanted to record the evidence and he has acted as an Arbitrator, thus, by calling the parties has lost the status of a referee. He further adds that the learned trial Court has appointed the referee without setting any terms of reference, which are illegal and therefore, his appointment stands vitiated on this score. The promissory note was not exhibited in evidence and no decree can be passed on the basis of such document. In support of his contentions, he places reliance on the judgments in the cases of Ali Hussain v. Rafiquddin and 9 others PLD 1977 Lah. 418; Sher Zaman Khan v. Noor Zaman Khan and another PLD 1977 Lah. 672 and Ghulam Farid Khan v. Muhammad Hanif Khan and others 1990 SCMR 763.

6. Learned counsel for the respondent, on the other hand, states that both the parties agreed to the decision of their dispute, on the statement of Mian Zahoor Sajid, Advocate, who was appointed on the Joint request of both the parties. The appellant cannot resile from his statement and decision of the referee is binding upon the parties. Respondent is bound by the decision of the referee. In this respect, he has referred to Article 33 of the Qanun-e-Shahadat Order, 1984. He further states that the referee conducted the proceedings strictly in accordance with law and has made the statement before the Court as a referee and not as an Arbitrator. The appellant bound himself by the decision of the referee and has given assurance to the Court that he will not raise any objection against the decision of the referee. He then contended that the decision on the basis of' the report of the referee was held to be the satisfactory of disposal of the matter, held by the Honourable Supreme Court in the case of Muhammad Akram v. Nawab Din and others 1989 SCMR 1083. He also refers to the case of Rehmat and others v. Residents of Deh and others 1988 CLC 1922 to contend that the Court has ample jurisdiction for accepting the plea that the parties may use any mode for settling the dispute and any decision which is based upon the parties' consent, cannot be assailed.

7. We have heard the learned counsel for the parties and perused the available record.

8. The statement got recorded by the parties, is signed by their learned counsel as well. The decision of the referee, in its letter and spirit has the binding impact. It is evident from the statement of the parties that authority of the referee was irrevocable and was not subject to termination. The learned Court has rightly dismissed the application for the revocation of the authority of the referee.

9. The plea taken by the appellant that the referee after having summoned the parties to record their statement has lost his status as a referee, does not carry any weight. The referee got recorded his statement before the trial Court as under:-- The statement of the referee shows that his statement is on the basis of personal knowledge and wisdom about the point in issue. His statement was not based on any local inquiry etc. Mere calling the parties to appear before him does not in any manner change his character from referee to an Arbitrator. The Division Bench of this Court in the case of Muhammad Arif and others v. Farrukh Hafeez 2005 YLR 3106 (referred by the learned counsel for the respondent), has decided this principle by declaring as follows:

The mere fact that the referee had made inquires would not denude him of his character as a referee and turn him into an arbitrator. Reference in this behalf may be made to the judgment of the Supreme Court of Pakistan reported as Mst.Lalan v. Noor Muhammad and 12 others 1994 SCMR 1771, wherein the referee decided the matter after recording the evidence. A contention was raised before the Supreme Court of Pakistan that in view of the fact that the referee had recorded the evidence he had become an arbitrator. This contention was repelled by the Supreme Court of Pakistan.

4. This view also finds support from two judgments of this Court, namely: Mushtaq-ur-Rehman and 4 others v. Muhammad Akbar and 5 others 1981 CLC 364 and Mehr Din and 2 others v. Siraj Din and 2 others PLD 1980 Baghdad-ul-Jadid 45.

10. As a result, we are inclined to hold that there is no infirmity in the impugned judgment. The suit has right been decreed and the present appeal has no merit, hence the same is dismissed. The parties to bear their own costs. M.B.A./T-101/L Appeal dismissed.