1. This judgment will dispose of with Suits Nos.434 of 1993 and 1014 of 1996. Earlier mentioned suit relates to confirmation or otherwise of an Award dated 11-7-1993 whereby, suit of the plaintiff for specific performance was dismissed. Late mentioned suit seeks cancellation of Sale-Deed in respect of very property, executed by the defendants Nos. 1 and 2 in favour of defendants Nos. 4 to 8 after the suit for specific performance was dismissed. In Suit No,476 of 1992, plaintiff has filed objections under sections 30 and 33 of Arbitration Act read with sections 11, 12 and 16 of the Arbitration Act, 1940 to the Award dated 11-7-1993 rendered by learned Arbitrator Mr. Justice (Retd.)
2. Zafar Hussain Mirza.
3. Briefly relevant facts appear to be that the plaintiff was and is tenant in a multistorey building constructed on Survey No,2/2/3, known as 'Ruby Centre', situated at Talpur Road, Opposite City Post Office, Karachi. It was claimed that under an Oral Agreement, defendant expressed his desire to sell the building. Pursuant thereto, the plaintiff bought out 16 tenements from various tenants. It is also claimed that such Oral Agreement was translated into writing on 6-6-1992. It was, however, averred that the defendants resiled from his commitment leading to the Suit being No,476 of 1992 for specific performance of the purported agreement by the defendants refuting the allegations made in the plaint. It, however, transpires that both the parties agreed to refer the dispute in suit to the Arbitration. Accordingly, the controversy, by consent, was referred to the learned Arbitrator vide reference -dated 18-8-1992. Evidence was recorded followed by the Award subject-matter of the instant proceedings, whereby, claim of the plaintiff for specific performance was dismissed.
4. Muhammad Sharif, learned counsel for the plaintiff seriously objected not only the reference but so also the Award rendered by the learned Arbitrator.
5. In brief his grounds of attack are (i) that the very reference is invalid, (ii) the Award was made without seeking extension in time rendering award invalid, (iii) no time frame was given by the Court while referring the matter to the Arbitrator vitiating the award, (iv) all interested parties were not joined in the proceedings, and lastly (v) misconduct on the part. of the Arbitrator, inasmuch as
(a) there was unintentional bias, (b) failure to consider the documents.
6. Referring to his objections as to the necessity of written application he contended that where there is no written application, Court on its own cannot refer the matter to the Arbitration. In support of his contention, he has placed reliance on (1) Messrs S.M. Qasim & Co. v. Messrs Sh. Azimuddin PLD 1962 (W.P.) Lahore 95 (106); (2) Kissen Gopal Nathani v. Murlidhar Chowdhury AIR 1962 Calcutta 581;
(3) Ghulam. Jilani and others v. Muhammad Hussain, (Privy Council) Indian Appeal, 1901 Volume XXIX, page 52 (57).
7. To elaborate his arguments, it was contended that the reference to Arbitiation in a pending suit could only be availed of by filing an application in writing; which according to Mr. Muhammad Sharif, is a condition precedent. According to Mr. Muhammad Sharif, when the matter was referred to Arbitration at the motion of both the parties to the suit then, in terms of section 23 of the Arbitration Act, it was obligatory on the part of the Court to fix time Since no time was fixed the reference itself is rendered invalid. In support of his contention, he has relied upon (1) Nusserwanjee Pestonjee and others v. Meer Mynoodeen Khan Wullud Meersubroodeen Khan Bahadpor (Privy Council), [Indian Appeal (page 134) Volume VI, 1854-7, by Edmund F. Moore, Esq.]; (2) Raja Har Narain Singh v. Chaudhrain Bhagwant Kuar and another .(Privy Council), [Indian Appeal (page 55)
8. Volume XVIII, 1890-91, by. Hervert Cowell, Esq.]; (3) Robindra Deb Manna v. Jogendra Deb Manna AIR 1923 Calcutta 410; (4) Ramakrishnamma v. Lashmibayyamma AIR 1958 Andhra Pradesh 497; (5)
9. Sowaran Singh v. Municipal Committee, Patlrankot and another AIR 1963 Punjab 427; (6) Messrs Universal Corporation v. Messrs S.A. Rauf & Co. PLD 1953 Sind 18 and (7) WAPDA v. Naeem Trading Co. 1982 CLC 353.
10. Adverting to the third objection that all interested parties were not joined. It was contended that Haji Ismail was a necessary party to the controversy. He was not joined in the proceedings. Learned counsel was confronted that this contention was considered in Suit No,476 of 1992 when his application for joinder of Haji Ismail through C.M.A. No,1373 of 1992 was declined after the matter was referred to the Arbitrator. He contended that since the order was passed by learned Single Judge, it is not binding on another Single Judge, who may take a different view of the matter. In support of his contention, he has placed reliance on Manu alias Mehthar and others v. The State PLD 1964 (W.P.) Karachi 34 (42).
11. Elaborating his last contention Mr. Muhammad Sharif, learned counsel for the plaintiff stated that Award is vitiated on account of unintentional bias on the part of the Arbitrator, as the plaintiff had moved an application for removal of the Arbitrator which though was declined by the Court, according to him, such act on his part adversely reflected on the proceedings inasmuch as that the Arbitrator allowed one Haji Siddiq, brother of defendant No,2 and son of defendant No,1 to attend the proceedings, his presence could not be justified nor could be explained. He asserted that the important evidence was not considered by the Arbitrator. According to him, step taken and money invested by the plaintiff in his exercise to buy out sixteen (16) tenants of the subject building and the fact that the plaintiff purchased the tenancy right from one of the tenants in insolvency proceedings were not considered. Plaintiff's witness Latif Was declared as interested witness, reasons for discarding his evidence are not convincing. He further argued that learned Arbitrator viewed that the plaintiff had shifted his stand by pleadings written agreement as against oral agreement in his suit. It was further asserted that the arbitrator refused to perform his duty to compare the signature on the sale agreement by Haji Ismail. In support of his contention, he has relied upon the case-laws reported as (1) J.F. C. Gollaher v. Samad Khan 1993 MLD Karachi 726 and Messrs Jointed Venture KG/Rist through D.P. Giesler G. M. Bongard Strasse 3, 4000, Dusseldorf-30, Federal Republic of Germany, C/o Shah Charagh Chambers, Lahore and 2 others v. Federation of Pakistan through Secretary Food, Agricultural' and Coop. and another PLD 1996 SC 108.
12. In contra, Mr. Khalil-ur-Rehman, learned counsel for the defendants seriously opposed the objections contended that the reference was made, by consent, at the request of the parties.
13. According to him, issue of non joinder of necessary party was set at rest vide Order dated 4-10- 1992 passed in Suit No,476 of 1992 which orders were upheld in appeal. Mr. Khalil-ur-Rehman learned counsel for the defendants contended that all the objections namely (a) time not having been specified by the Court while referring the dispute to the Arbitrator, (b) want of written application, (c) joinder of necessary/interested party, and (d) making award after the time were all considered by the Court at the motion of the pliantiff in Suit No,476 of 1992, this Court decided such controversy on 13-1-1993 which findings were affirmed in H.C.A. No,9 of 1993. According to him, no exception could be taken now. All such controversies having been set at rest and could not be re- agitated. On the first objection, Mr. Khalil-ur-Rehman, learned counsel for the defendants contended that consent of counsel of the parties was enough. He contended that parties deviating from prescribed procedure estopped by conduct and cannot complain of procedural deviation. In support of his contention, he has relied upon the cases reported as (1) Abdul Wahab and others v.
14. Habib All and others PLD 1969 Lahore 365; (2) Union Insurance Company of Pakistan Ltd. v. Hafiz Muhammad Siddique PLD 1978 SC 279 and (3) WAPDA and another v. Messrs Khanzada Muhammad Abdul Hague Khan Khattak & Company PLD 1990 SC 359. According to the learned counsel, this Court will not sit as a Court of Appeal over the award. He relied upon Joint Venture KG/Rist v. Federation of Pakistan PLD 1996 SC 108. He contended that unless perversity is apparent on the face of award, it cannot be interfered with.
15. Muhammad Sharif, learned counsel exercising right of rebuttal argued that there is no estoppel against Statute.
16. As stated above, the reference was made to the Arbitrator at the motion of both the parties, a consent order dated 18-8-1992 was passed in Suit No,476 of 1992 which order reads as follows:-- "Accordingly and by consent Mr. Justice (Retd.) Zafar Hussain Mirza is appointed as the Sole Arbitrator to adjudicate upon the disputes involved in the suit. It will be for the plaintiff, in the first instance, to submit before the learned Arbitrator copies of the pleadings and of the issues in this suit within a period of one week failing which such may be supplied by the defendants within another week's time. The learned Arbitrator would then entertain documents in the case from the two sets of parties and evidence would be recorded on the basis of affidavit-in-evidence subject to due cross-examination of witnesses. However, if any, witness has necessarily to be summoned such may be summoned at the discretion of the learned Arbitrator. As soon as intimation of this- order is received by the learned Sole Arbitrator he may fix such date of hearing in the reference as be deemed fit. The learned Arbitrator's fee tentatively and by consent is fixed at Rs,50,000 to be shared equally between the plaintiff on the one hand and the defendants on the other, payable directly to the learned Arbitrator.
17. In the foregoing terms, reference to arbitration is made."
18. Adverting to the first objection as to the invalidity of very reference for want of written application which according to learned counsel is mandatory requirement for making a reference to the arbitration. To appreciate this contention provision of section 21 of the Arbitration Act are reproduced as follows:-- "21. Parties to suit may apply for order of reference.---Where in any suit all the parties interested agree that any matter .in difference between them in the suit shall be referred to arbitration, they may at any time before judgment is pronounced apply in writing to the Court for an order of reference."
19. From a bare perusal of the above-referred section what occurs is that the requirement of application for reference to the arbitration is merely a directory requirement and not a mandatory requirement. The award cannot be invalidated merely on the ground that there was no written application. It is not disputed, as is also apparent from the orders reproduced above that the parties did agree to refer the subject-matter of the suit to the arbitration. It matters little, whether there was a written application or not. Once parties to a suit expresses their desire for resolution of a dispute through the medium of arbitration in a pending suit, and a consent order is passed to such an effect, then one party cannot resile from the bargain entered into by extending consent to such bargain. Learned counsel for the plaintiff was pointedly asked as to what prejudice has been caused, if at all, for want of application. Learned counsel for the plaintiff contended that the reference is in negation of mandatory provision of law. He, urged that once the policy of law is deviated then the question of prejudice as posed by this Court recedes into background. He placed reliance on the case of S.M. Qasim & Company PLD 1962 (W.P.) Lahore 95 (supra), the matter before the Court was in revision in respect of a controversy that had arisen in respect of written contract which apparently contained arbitration clause but on the preliminary objection as to the jurisdiction of the Court some evidence was directed to be recorded. During the course of proceedings, parties agreed for the reference of the dispute to the arbitration. The question as to reference of a dispute in a pending suit had incidentally arisen in the said suit and the Court concluded that application in writing is absolutely essential at page 106 it was held that ' in such a case, an application in written is absolutely essential', and in the absence of such application the Court cannot proceed to refer the matter to an arbitration. The above decision was rendered by a learned Single Bench and I humbly beg to differ.
20. Said case was also discussed in Bashir Akhter v. Muhammad Bashir 1981 CLC 423. Facts of the case were distinguished at page 429 it was held that "in view of the above discussion the correct proposition of law appears to be that if in pending case the parties consent to refer the matter to arbitration and sign the, proceedings in this behalf and the award is submitted the parties shall be estopped to question the validity of Award on the ground that the reference had not been made strictly in compliance with the provisions of section 21 of the Arbitration Act and there was no application in writing". In the instant case, as it appears from the record that the parties to the proceedings had appeared before the learned Arbitrator. They had also raised similar question by moving an application being C.M.A. No,2331 of 1991 in Suit No,476 of 1992, this Court while placing reliance on PLD 1964 Lahore 365 vide Order dated 13-1-1993 held that "where a party which leaves the Court to deviate from the normal procedure, is normally estopped from challenging the order passed by the Court on the consent of such a party". Apex Court in the case reported as Muhammad Ebrahim Khan v. Behram 1972 SCMR 608 repelled such contention and set the controversy as to written agreement at rest at page 610 as follows:-- "Section 21 of the Arbitration Act does not lay down that the agreement of all the parties should be in writing.
21. It will, therefore, be sufficient in our opinion, if such an agreement can be presumed or inferred from the conduct of the parties."
22. From the orders referring the matter to the arbitration as reproduced above the consent of the counsel could easily be deciphered. Even otherwise, such objections were very much raised, decided not only in very proceedings in suit but also upheld in H.C.A. No,9 of 1993 by learned Division Bench vide Order dated 18-2-1993. Therefore, a controversy that has been set at rest in the High Court appeal cannot be allowed to be raised by way of objections to is accordingly not sustained.
23. Adverting to the second objection that no time was fixed by the Court in terms of section 23 of the Arbitration Act, therefore, the award is invalid on such count. According to the learned counsel, mandates such fixation of time and unless time is specified the award so rendered would be nothing but nullity. Mr. Muhammad Sharif learned counsel contends that the provision of section 23 of the Arbitration Act are in contradiction to section 20 of the Act, the Court is bound to specify the time while referring dispute in suit to the Arbitrators under section 21 ibid, such provision does not confer any right into the parties or the arbitrators to fix time themselves. Again the counsel was confronted as to point out any prejudice that has been caused to the plaintiff which provides for extension of time by if at all where no time was fixed while matter was referred. He contended that since it is mandated by law question of prejudice or otherwise does not arise. According to the learned counsel, it is question of policy of law which requires a duty to be performed by the Court in a manner laid down under the law, according to him even extension of time by consent is invalid.
24. The controversy as urged now was also raised in Suit No,476 of . 1992 vide Order dated 13-1-1993 it was held that "I do not see any force in the contention as paragraph 3 of the First Schedule of the Arbitration Act already provides a period of four months for the submission of the Award.
25. Accordingly, there was no necessity to specify fixed time for the submission of Award'. Said findings were assailed in H.C.A. No,9 of 1993 as stated above, did not found favour, H.C.A. was dismissed in limine. It may be observed that in terms of arbitration agreement the provisions set out in section 3 of the Arbitration Act, unless a different intention is expressed in any arbitration agreement the provisions set out in the First Schedule insofar as they are applicable to the reference. First Schedule thereto, postulates implied condition of the arbitration agreement. Rule 3 to the First Schedule provides a period of four months for making an Award after entering into the section 23 reference or within such time as the Court may allow. Such implied terms and conditions as are referred to in. the First Schedule are applicable with full force not only to the reference made to the Arbitrators with or without intervention of the Court and even to reference made under section 21 of the Arbitration Act. The cases relied upon by Muhammad Sharif, Advocate are distinguished in 6 Moore Indian Appeals, it appears that the' case relates to an arbitration law which did not contain any provision analogous to section 28(2) of the Act of 1940 consent of the parties. Even the Award at page 17, para. 2 recorded that;-- "In view of the proceedings taken in the Court and other circumstances numerated above, the arbitration proceedings took more time than the statutory period of four months from the date the undersigned entered on the reference. However, from time to time both parties gave consent in writing to the extension of the period for making the award and the last such statement was jointly made by the parties on 23-6-1993 when the fall arguments were concluded, consenting to extension of time for passing the Award up to 15-7-1993."
26. Therefore, it cannot now be argued that, award was not rendered within time provided under the Arbitration Act. It needs no authority to say that where a party participates in a proceedings without objecting as to the timeframe cannot subsequently agitate such issue and the extension of time would be presumed on such conduct of the parties. [For reference, one may refer to WAPDA and another v. Messrs Khanzada Muhammad Abdul Haque Khan Khattak & Company PLD 1990 SC 359 and Engro Chemicals of Pakistan Ltd. v. Trading Corporation of Pakistan 1996 CLC 344]. ' Next objection Is to non-joinder of an interested party is concerned, suffice it to say that such controversy was also raised before the Court in Suit No,476 of 1992. The contention of Muhammad Sharif, learned counsel is that Haji Ismail who was Attorney and his consent was obtained. Such contention was repelled in the following orders:-- "I am not convinced with the submissions of Mr. Hashmi that Haji Ismail being the attorney of both the defendants was an interested person in the subject-matter of the present case. Admittedly both the defendants are the owners of the subject-matter. Since both of them have given consent through their Advocates, to refer the matter to arbitration, hence the consent of Haji Ismail appeared to be immaterial. Furthermore, both the defendants do not accept Haji Ismail to be their legally constituted attorney, and deny that he was even authorized to negotiate with the plaintiff in respect of the subject matter of the present suit. It was on this ground that application being C.M.A.No,1373 of 1992 moved by the plaintiff for impleading Haji Ismail as a defendant was dismissed by this Court on 4-10-1992."
27. Such order assailed in H.C.A.No,9 of 1993 did not find favour with the learned Division Bench. I do not find any justification to allow such contention to be raised by way of an objection to the award.
28. Adverting to the allegations of bias on the part of the Arbitrator, such objections were based on two-fold submissions namely (a) Unintentional bias, and (b) Failure to consider the evidence. It was urged by Mr. Muhammad Sharif, learned counsel that since he had made an application for the removal of the Arbitrator which was declined, such an attempt on his part prejudiced the mind of the learned Arbitrator which according to him is manifest from the award' He cited that Arbitrator allowed one Haji Siddique son of Haji Ismail and Zubaida brother of Noman to attend and participate in the proceedings but, he was not able to show that said Haji Siddique in any. way influenced the proceedings that has prejudiced the plaintiff. Learned counsel also attempted to point out that certain pieces of evidence were not considered. As for instance, the amount invested by the plaintiff in acquiring the tenancy against valuable consideration and that the evidence of the plaintiff's witness Lateef was brushed aside being interested witness and that the shift of stand taken in pleadings. I have perused the award, the learned Arbitrator is no less a person than a former Judge of the Supreme Court namely Mr. Justice (Retd.) Zafar Hussain Mirza, it cannot be said that the Arbitrator could be influenced by exercise of any legitimate right by the plaintiff to seek his removal. The learned Arbitrator has considered all the objections as are raised now before this Court. Learned Arbitrator overruled the contention raised at argument stage that Ismail acted as a Natural Guardian of Noman, who was said to be minor at the time of purported Sale Agreement dated 6-6-1992, as the case of the plaintiff, in pleadings as well as in evidence was that Ismail acted as an ' Attorney'. Even otherwise, from evidence produced before the learned Arbitrator, it had come on record that said Noman was major at the time of alleged Sale Agreement. His Secondary School Certificate and N.I.C. (Exhs. D/1 and 1)12) showed his date of birth as 3-3-1974, furthermore, the sale-deed, whereby, subject property was acquired in the name of Noman in April, 1981 itself record age of Noman as 7 years, all such evidence as to age of Noman shows that he was over 18 years of age at the time of purported Sale Agreement dated 6-6-1992 sought to be specifically enforced. Learned Arbitrator rightly held that "Exhs. 'P.14' and 'P.15' are in no way binding on defendant No,2". The agreement has not been proved nor the signatures of Haji Ismail on Exit.. No,P.14 were established. Learned Arbitrator in detail had discussed the veracity of the purported Sale Agreement evidence has been thoroughly examined. There is no justification to hold that the findings recorded by the learned Arbitrator on the basis of evidence is perverse in any manner. Unless the perversity on the face of record is shown the award cannot be set at naught. It has been repeatedly held by the apex Court that where even two opinions in respect of the same situation are possible then, this Court does not sit as Court ' of Appeal to substitute its own opinion, unless it is shown that the opinion expressed by the Arbitrator is so perverse and in uttered disregard of the settled principle of law thus cannot possibly be sustained, only then, perhaps this Court may interfere with such findings. Accordingly, finding no merits in the objections, same are dismissed and the Award is made Rule of the Court.
29. Now adverting to. Suit No,1014 of 1996, it appears that in a Suit being No,476 of 1992 for specific performance of agreement to sell, controversy was referred to Arbitration. Award was rendered on 1-7-1993 whereby suit of the plaintiff was dismissed.
30. Award was filed in Court on 14-7-1993 and registered as a Suit No,434 of 1993 wherein objections were filed.
31. It appears that after dismissal of suit for specific performance, the defendants Nos.1 and 2 being owner of the subject property through conveyance deed registered on 25-11-1993 sold the subject property to defendants Nos.4 to 8. On coming to know of said transaction, plaintiff filed Suit No,1014 of 1996 on 12-10-1994, inter alia, seeking cancellation of said sale-deed beside prohibitory orders from using said sale-deed in any manner and for any purpose. Claim in Suit No,1014 of 1996 rested on the entitlement of the plaintiff on the basis of purported agreement to sell for which suit for specific performance was filed. Such controversy has since been resolved in favour of defendant No,2 in Suit No,434 of 1993. No right of plaintiff now remains to be enforced in respect of subject property. On 19-11-2001, when C.M.A. No,6216 of 2001 under Order 39, Rules 1 and 2, C.P.C. was fixed for hearing. Learned counsel for both the parties stated that the decision in the Award proceedings which are still pending will have a direct bearing on the outcome of the suit. Counsel agreed to argue both the matters at same time. Suit for specific performance has since been dismissed. No cause, remains to keep the Suit No,1014 of 1996 pending suit alongwith C.M.A.
32. No,6216 of 2001 are dismissed.