' Through this civil revision, judgment/order dated 23-5-2000, passed by learned Additional District Judge, Rahimyar Khan in Civil Appeal No,9 of 2000 (Rana Muhammad Akram and others v. The Province of Punjab through Collector, Rahimyar Khan and 3 others), has been challenged, which has upheld the order, dated 14-4-2000 passed by learned Civil Judge 1st Class, Rahimyar Khan under section 34 of the Arbitration Act, 1940, by which the matter was referred to the Deputy Commissioner, Rahimyar Khan for arbitration between the parties.
2. Facts, in brief, are that the present petitioners had got lease for the collection of toll tax, from Municipal Committee, Sadiqabad for the year 1999-2000 but filed the suit on 15-1-2000 in the Court of learned Senior Civil Judge, Rahimyar Khan with the prayer that a declaration be granted in their favour, against Municipal Committee, Sadiqabad, including the Province of Punjab and others that the plaintiffs were not A liable to pay any amount with regard to the lease money of June, 2000 as no amount was outstanding against the plaintiffs. It was further prayed that the defendants/respondents were not entitled to recover any amount of lease money from the plaintiffs. As a consequential relief, mandatory and prohibitory injunctions were also prayed for restraining the defendants from recovering the lease money for the period of January, 2000 to 30- 6-2000 in any manner or for creating hindrance in the recovery of toll tax by the plaintiffs/petitioners. Prayer for rendition of accounts and passing of preliminary decree after it, was also prayed for in the aforesaid suit. With filing of and on the basis of this suit, the plaintiffs/petitioners got a stay order issued on 20-1-2000, from the learned Civil Judge with these words, "meanwhile status quo be maintained uptil 15-2-2000". As no extension in the aforesaid order was specifically made, therefore, the defendants on 23-2-2000, while appearing in the Court, filed an application for grant of permission to file reply to the application for temporary injunction, in which the respondents had also referred that there was a condition No,16 in the contract of lease, entered into between the parties to refer the dispute to the Deputy Commissioner as an Arbitrator and without complying with that condition, that suit was filed by the plaintiffs and got the order of status quo passed on 20-1-2000, which was not extended but it might be clarified as to its effectiveness in future, because on the basis of that order, the plaintiffs were collecting the toll tax, although their contract had already been cancelled. It is pertinent to point out that copy of above noted application has not been produced along with this civil revision by the petitioners. Before the learned Civil Judge, another application under section 34 of the Arbitration Act, 1940 praying for reference of dispute to Arbitrator, was also moved separately by the defendants. So, the learned Civil Judge decided on 14-4-2000 that the plaintiffs and the defendants were bound by condition No,16 of the lease contract and the matter was referred to the Deputy Commissioner/District Collector for Arbitration. After remaining unsuccessful in the appeal before learned Additional District Judge on 23-5-2000, the present revision has been filed.
3. Learned counsel appearing on behalf of the petitioners has argued that the impugned orders passed by the learned Additional District Judge as well as by the learned Civil Judge were against the provision of section 34 of the Arbitration Act, 1940. The matter could not be referred to the Deputy Commissioner because the defendants/ respondents had taken steps in the proceedings of the suit. It has further been argued that as the Deputy Commissioner was made party to the suit, therefore, a reference for arbitration to, the Deputy Commissioner was illegal.
4. The learned counsel appearing on behalf of the respondents has vehemently replied that the reference to arbitration was rightly ordered and the respondents/defendants had not taken any material steps, which could bar for the reference of the dispute to the Arbitrator concerned.
5. After considering the arguments of both the learned counsel and analyzing the record, it is necessary that the provision contained in section 34 of Arbitration Act, 1940, be reproduced so, as to determine the applicability of it on the facts and circumstances of the instant case:-- "(34).' Power to stay legal proceedings where there is an arbitration agreement. Where any party to an arbitration agreement or any person claiming under him commences any legal proceedings against any other party to the agreement or any person claiming under him in respect of any matter agreed to be referred, any party to such legal proceedings may, at any time before filing a written statement or taking any other steps in the proceedings, apply to the judicial authority before which the proceedings are pending to stay the proceedings; and if satisfied that there is no sufficient reason why the matter should not be referred in accordance with the arbitration agreement and that the applicant was, at the time when the proceedings were commenced, and still remains, ready and willing to do all things necessary to the proper conduct of the arbitration, such authority may make an order staying the, proceedings. (Line has been provided to highlight the relevant wordings)."
6. The abovenoted section has stipulated two situations, one that a party to the suit/proceedings can claim for the making of a reference to the Arbitrator when the party has not filed written statement or had not taken any other steps in the proceedings. It is an admitted fact that no 'written statement was filed by the defendants/respondents. The emphasis has been laid down upon the filing of application for clarification of the status quo order passed by the Court.
According to the learned counsel appearing on behalf of the petitioners/plaintiffs, this was a step in the proceedings, therefore, the learned Appellate Court could not refer the dispute to the Arbitrator. As earlier noted, the plaintiffs/petitioners had got issued an ex parte order against the defendants/respondents of "maintaining of status quo" meanwhile on 20-1-2000 with the filing of the suit, and on the basis of this order, collection of toll tax was started and being continued by the 'plaintiffs/petitioners, therefore, respondents were compelled by the circumstances created by the petitioners to file application for the interpretation of the status quo order, from the learned Civil Judge. Even in para. No,3 of the application dated 29-3-2000, a reference was made to another earlier application dated 23-2-2000, filed by Municipal Committee, Sadiqabad, defendant, copy of which has not been produced with the civil revision, wherein defendants/respondents had clearly mentioned therein that the plaintiffs were bound to comply with condition No,16 of the lease contract which had bound down the parties to refer the dispute to the Deputy Commissioner for arbitration. The intention of the defendants/ respondents was being clearly expressed at the very outset, that they were not abandoning and abdicating their stand of referring the dispute to the Deputy Commissioner/Arbitrator but were trying to get clarification of an ex parte order got passed by the plaintiffs and on the basis of D which, the plaintiffs were enjoying the collection of toll tax. A separate application, moved for that purpose under section 34 of the Arbitration Act, 1940 by the respondents/defendants was also corroborating the intention of the defendants/respondents. The words "or taking any other steps in the proceedings" have been interpreted through many judicial decisions. According to consensus, these are steps which are indicative of the intention of a party to the proceedings that the party was not going to raise objection to the jurisdiction of the Court or was not ready to refer the dispute to the Arbitrator or was willing to contest the suit before the learned Court through his act and conduct, express or impliedly. The citations referred to by the learned counsel for the petitioners as The Province of the Punjab v. Messrs Irfan & Co. PLD 1956 (W.P.) Lah. 442 and Novelty Cinema, Lyallpur v. Firdaus Films and another PLD 1958 (W.P.) Lah. 208 are not relevant to the facts and circumstances" of this case. In fact the latest from those rulings are Badshah Meah Sowdagar v. Nurul Haq and others PLD 1967 Dacca 250 and Island Textile Mills Ltd., Karachi v. V/O Technoexpert and another 1979 CLC 307. In the former ruling application for appointment of receiver was filed by the plaintiffs. The defendants on appearance had sought adjournment to submit reply and on the next date, he not only submitted reply but had filed an application for referring dispute for arbitration. In that case even, the matter was referred to the Arbitrator. The same is the case of 1979 CLC 307, in which an application was contested but even then reference to Arbitrator was upheld. In fact, the criteria to determine as to whether steps in the proceedings have been taken or not by the party is the act or conduct of the party, which_is manifested by his intention to waive the objection and to submit to the jurisdiction/ proceedings of the suit to be conducted by the learned Civil Judge. If no such intention is found to be coming out from the facts and circumstances, the bar of section 34 of taking further steps in the case would not apply. In the instant case the explicit words used in the application were serving the intention of the defendants that they were pressing for the arbitration clause of the contract to be applied, and wanted to get the resolution of the dispute from the agreed Arbitrator. Therefore, the impugned orders are not violative of any essentialities of section 34 of the Arbitration Act of 1940.
7. As regards the second objection that the Deputy Commissioner was party to the suit, so the reference to him for arbitration was not proper, cannot be made a ground to reverse the impugned orders. It has got no effect because the plaintiffs/petitioners had themselves made him party to the suit. The aforesaid officer had not entered appearance in the suit and had no personal or any other kind of grudge, alleged by the petitioners, which could be considered a ground for withholding the reference. By merely making party to the suit and that too by the petitioners themselves, it cannot be held that the aforesaid officer would not act independently or fairly and his impleadment in the suit would debar him from proceedings with arbitration.
8. Therefore, I do not see any illegality or material irregularity in the exercise of jurisdiction by, the learned Appellate Court or by the learned Civil Judge. So, the civil revision is dismissed with costs.