1. ' SARDAR MUHAMMAD NAWAZ KHAN, J.---This appeal arises out of the following facts:-- ' M/s. Ameen General Enterprises through its Managing Director respondent herein, brought a suit for recovery of Rs,3,39,67,353 against the appellants herein, in the Court of District Judge Muzaffarabad on 9-8-1999. The respondent claims the above amount due to non-fulfilment of contractual obligations by the appellants. They solicited relief on the basis of different grounds like delay in commencement of their construction work due to non-availability of revised/redesigned drawings, delay in supply of revised drawings of Stage-I activity, the damage of stage-I construction work in account of cloud burst on July 25, 1995 as the Stage-II work could not be started due to delay in supply of revised drawing, additional effort in transportation of construction material due to closure of By-Pass road on account of enemy firing, the payment of overhead in profit on the account of contract price exceeding 15%, unjust and contrary to contract deductions of the 2nd Flood Damages and compensation for mental agony etc. ' The defendants/appellants resisted the suit on various grounds through their written statements wherein they raised certain preliminary objections regarding maintainability of the suit along with clause-wise denial of the averments in the plaint. During pendency of the suit, both the parties agreed to arbitration in this case consequently, 2 arbitrators namely Ch. Muhammad Zaman then Chief Engineer of Central Design Office Muzaffarabad and Ch. Sadaqat Ali a retired Secretary AJ&K Government were appointed. The matter was referred to them by the Court with the following term of reference.
2. ' No, 1 . Whether the plaintiff is entitled to Rs,3,39,353 in view of the contents of the plaint filed in the Court of District Judge Muzaffarabad and under what circumstance ' No,2. Whether the suit of the plaintiff is not maintainable in view of the preliminary objections and parawise reply of the plaint filed in the Court.
3. ' The arbitrators could not arrive at a unanimous conclusion resultantly they submitted separate reports to the Court. Ch. Muhammad Zaman through his report submitted that the claim put forward by the respondent (firm) was not established whereas Ch. Sadaqat Ali accepted the claim partially.
4. ' Both the parties submitted their objections to the reports by the arbitrators. They also submitted 2 separate applications one by respondent (firm) for appointment of Umpire and other by the appellants under sections 30 and 33 of Arbitration Act. The Court allowed the application by the respondent (firm) and appointed Mir Mohi-ud-Din Project Director NESPAK as Umpire however, he refused to do the job consequently, Syed Nisar Hussain Shah Judge Ehtesab Court Muzaffarabad was appointed as Umpire. The said Umpire filed his award in the Court which subsequently was made as rule of the Court through impugned judgment and decree.
5. ' Both the learned Counsel for the respective parties addressed the Court at length covering legal and factual aspects of the case. The learned counsel for the appellants apart from his arguments on merits of the case laid much emphasis on legal and technical aspect of the award by the umpire and the reports submitted by the arbitrators initially appointed by the Court with the consent of the parties, He raised the following points while dealing with the legal side of the case:-- ' No,
1. The reports by the arbitrators were submitted beyond the time limit specified by the Court.
6. The Court neither extended the time nor it was prayed by the arbitrators therefore, arbitrators had become functus officio at the time of submitting their reports.
7. ' No,2. The appointment of Umpire was unlawful consequently, the award filed in the Court was also illegal having no effect whatsoever.
8. ' No,3. The arbitrators and the Umpire both failed to answer the term of reference therefore, neither the reports by the arbitrators nor the award by the umpire could not made rule of the Court.
9. ' The learned counsel while addressing the Court on the above mentioned points relied upon section 3, section 8 and Schedule 1 Rule 2 of Arbitration Act and case law like PLD 1952 Sindh 52., 1983 CLC 3273, PLD 2002 Karachi 457, 2000 CLC 388, 2004 PLC (C.S.) 843, 2000 YLR 253, PLD 2000 Lahore 314. 1998 SCMR 328, PLD 1983 SC 243 & PLD 1967 SC 314.
10. ' The learned counsel while resorting to above legal reports submitted to set aside the impugned judgment and decree as the same has been based on an invalid award filed by the umpire.
11. ' Conversely, the learned counsel representing the respondent (firm) while supporting the impugned judgment and decree contended that the trial Court was fully competent to enlarge the time for filing of award and the said Court was also empowered under section 8 of Arbitration Act to appoint Umpire in case of disagreement between the arbitrators. It was further submitted that the appointment of Umpire was not challenged at the time of his appointment neither the appellants raised any objection to his appointment and voluntarily participated in the proceedings before the umpire therefore, they were precluded to question his award on the basis of which the impugned judgment and decree has been passed. It was next argued that the award could only be set aside on the ground available under section 30 of Arbitration Act and in the present case no such ground was available. The learned counsel while supporting his arguments relied upon section 8, section 28 section 30 of Arbitration Act along with legal reports like 1993 .MLD 1303, 1985 CLC 721, PLD 1967 AJ&K 13, NLR 1983 752, PLD 1966 Dacca 54, PLD 1983 Kar. 601, AIR 1949 All. 399, 1978 DLR SC 21, 1971 DLC 335, PLD 1956 Lah. 444, AIR 1955 Punj. 240, PLD 1955 Sindh. 268, PLD 1956 Lah. 494, 1979 CLC 32, 1989 MLD 1487, PLD 1971 Kar. 292, AIR 1954 All. 673, AIR 1958 Cal. 415, MLR 1981 529, 1982 CLC 175, 2001 YLR 3398, 1988 SCMR 723, PLD 1985 SC AJ&K 1, PLD 1987 Kar. 575, PLD 1988 SC 39, PLD 1987 SC 393, PLD 1987 Kar. 429, 1989 CLC 885 and 1989 MLD 404.
12. ' After having examined the facts of the instant case and case-law on the subject, the following are the moot points which go to the roots of the case and are sufficient to decide the fate of this appeal.
13. ' No,1 . Whether the trial Court was seized with the jurisdiction to appoint Umpire if not then what is the validity of his award.
14. ' No,2. Whether the Umpire failed to answer the term of reference if yes whether his award can be held as a valid award.
15. ' The other point like filing of reports by the arbitrators beyond time specified by the Court, condonation of delay in time, submission of appellants before arbitrators or non-appointment of Umpire by the arbitrators and its consequences are not material and need not to be dilated upon because the award has been filed by the Umpire appointed by the Court and not by the arbitrators.
16. ' Coming to the second objection raised by the learned counsel for the appellants about the validity of award by the Umpire appointed by the Court, it may be observed that it is a case of arbitration during pendency of a suit and Chapter IV of Arbitration Act deals with it. Under section 25 of this chapter, section 8 of the Act has been applicable to the case under the said chapter which gives powers to the Courts for appointment of umpire and is advantageously reproduced as under:-- "8. Power of Court to appoint arbitrator or umpire.---(1) In any of the following cases:--
(a) where an arbitration agreement provides that the reference shall be to one or more arbitrators to be appointed by consent of the parties, and all the parties do not, after differences have arisen; concur in the appointment or appointments; or
(b) if any appointed arbitrator or Umpire neglects or refuses to act, or is incapable, of acting, or dies, and the arbitration agreement does not show that it was intended that the vacancy should not be supplied, and the parties or the arbitrators, as the case may be, do not supply vacancy; or
(c) where the parties or the arbitrators are required to appoint an Umpire and do not appoint him any party may or serve the other parties or the arbitrators, as the case may be, with a written notice to concur in the appointment or appointments or in supplying the vacancy.
(2) If the appointment is not made within fifteen clear days after the service of the said notice, the Court may, on the application of the party who gave the notice and after giving the other parties an opportunity of being heard, appoint an arbitrator or arbitrators or umpire, as the case may be, who shall have like power to act in the reference and to make an award as if he or they had been appointed by consent of all parties".
17. The above provision of law shows that where the parties or the arbitrators are required to appoint an umpire and they do not appoint him; any party may serve other party or arbitrators as the case may be with a written notice to concur in the appointment/appointments or 'supplying vacancy.
18. Here in this case, the Court is found to have nominated even number of arbitrators therefore, under Rule 2, Schedule I they were required to appoint umpire not later than one month from the last date of their respective appointments however, they failed to do so. None of the parties served them with the notice to do the needful neither as required by subsection "C" of section 8 of Arbitration Act any appointment of Umpire was made by a party neither the other party was asked to supply the vacancy. Subsection (2) of the section 8 of Arbitration Act indicates that the Court in case the notice is served by a party and the appointment of umpire is not made within 15 clear days shall on the application of the party who gave the notice assume the jurisdiction to appoint the Umpire after hearing the other party. When as stated earlier, the parties to the arbitration failed to comply with the legal requirement provided under section 8 of the Act and no application was made to the Court for appointment of Umpire the trial Court was not competent to appoint umpire. There is no provision in the Act empowering the court to appoint the Umpire during pendency of a suit except section 8 of the Act therefore, the appointment of the Umpire in the instant case by ignoring the legal requirement for his appointment is an act without jurisdiction on behalf of the trial Court. The position which therefore, emerges out is that the appointment of the Umpire has been made by the authority (Court) having no jurisdiction. This appointment when seen in its true legal sense is non- existent because it is found to have been made by an ab initio void order. The Court could assume jurisdiction only on the application of the party who appointed Umpire and asked the other party to concur in the appointment or supply the vacancy and the needful is not done within 15 days. The edifice raised on the strength of such a void order thus, cannot be allowed to stand as such the award by Umpire is not a valid award which could be made basis for rule of the court. The objection regarding appointment of Umpire was raised before the trial Court however, the same did not prevail. The question therefore, arises as to whether this objection could be allowed to be raised before this Court in appeal against the final judgment. The answer is in affirmative because, under law, appeal has been provided against final judgment of the trial Court and all the legal points available could be raised at the time of appeal against the final judgment. The appointment of Umpire was made when the case was pending before trial Court against whose judgment the appeal has been provided therefore, the question of appointment of Umpire has rightly been raised before this Court through the present appeal. Reference may be had to 1998 SCMR 328. The appointment of umpire being judicial act of great importance requires compliance of procedure provided under section 8 of the said Act. When a particular procedure is prescribed for doing a thing in a particular manner it should be done in that way 'alone.
19. ' Reference may made to 1983 CLC 3273, PLD 2002 Karachi 457, 2002 SCR 146.
20. The next question which arises is that the appellants whether by submitting before the Umpire are debarred to challenged his award. The answer, in the estimation of this Court, is in negative. The reason being that when appointment of an Umpire is made by a competent authority though by violating the law on the subject and any party does not raise objection to his appointment and submits before his jurisdiction then of course, such party can be estopped to question the validity of his award. But when the appointment has been made by an incompetent authority having no jurisdiction to do so, mere submission of a party before umpire does not debar such party to challenge the validity of his award. Here in this case, the trial Court had no jurisdiction to appoint umpire under the circumstances as stated above therefore, submission of the appellants before Umpire and participation in the proceedings does not cover the legal defect in the appointment of Umpire. Reference may be had to PLD 1983 SC 243 and PLD 1967 SC 314.
21. ' The Umpire whose award has been made rule of the Court sat with an inherent legal defect in his appointment therefore, it cannot be said that the present case is not covered by section 30 of the Arbitration Act. The said provision of law envisages that an award can be set aside inter alia on the ground of legal misconduct. The award filed in the Court is an act performed by the umpire whose appointment is found to have been made without jurisdiction. It is surely a case of legal misconduct covered by section 30 of the Act. This award thus, has wrongly been made rule of the Court therefore, the impugned judgment and decree is not sustainable.
22. ' There is yet another ground on the basis of which the impugned judgment and decree is liable to be set aside. The Umpire failed to answer the term of reference. The trial Court in view of the agreement between the parties asked the Umpire to answer the following questions:-- ' No,
1. Whether the plaintiff is entitled to Rs,3,39,67,353 in view of the averments in the plaint filed in the Court?
23. ' No,2. Whether the suit by the plaintiff is not maintainable in view of the preliminary objections?
24. ' The Umpire answered the question No,1 however, no reply about question No,2 has been submitted to the Court and the award' is silent on this point. This failure on the part of umpire is also a legal misconduct covered by section 30 of the Act. Reference may be had to 2000 YLR 253 and PLD 2000 Lahore 314.
25. With the above discus sion this Court arrived at the conclusion that the award filed by the Umpire is found suffering from legal misconduct and it has wrongly been made rule of the Court. The impugned judgment and decree therefore, is set aside and the case is remanded to the trial Court with the direction to provide a further chance to the parties for arbitration and, in case, they fail to do so the Court shall proceed with the case by closing the chapter of arbitration however, it should be kept in mind that in case of arbitration the procedure available shall be strictly followed.
26. 'Appeal allowed and the case remanded.