Hamid Ali Mirza, J.--This civil appeal with leave to this Court, dated 18 July, 2000 is directed against the order dated 23.12.1989 in Civil Revision No, 1998 of 1999 passed by learned Single Judge of the Lahore High Court, Lahore, whereby the said civil revision was dismissed in limine thereby order dated 17.11.1999 passed by learned Additional District Judge, Faisalabad was maintained and learned Civil Judge was directed to proceed with the suit in accordance with law.
2. Brief facts of the case are that respondent Nazir Ahmad filed suit for partition and rendition of accounts. Suit was registered and notices were issued to the appellant/defendant. Appellant appeared and made an application under Section 34 of the Arbitration Act for stay of proceedings which was resisted by the respondent/plaintiff. The trial Court after hearing arguments accepted the application made under Section 34 of the Arbitration Act, 1940, vide order dated 8.12.1998 which order was assailed by the respondent/plaintiff in appeal and was heard by learned Additional District Judge, Faisalabad who allowed the appeal vide judgment dated 17.11.1999 consequently application under Section 34 of the Arbitration Act was dismissed. The appellant/defendant preferred Civil Revision No, 1998 of 1999 before the Lahore High Court, Lahore which civil revision was dismissed in limine maintaining the order of learned Additional District Judge.
3. We have heard the parties in person and perused the impugned judgments and he record minutely.
4. Leave was granted by this Court to consider the true import and significance of the words "taking any other steps in the proceedings" in Section 34 of the Arbitration Act and to find out whether the alleged acts of the appellant can be classified as "steps in the proceedings" as envisaged by the said section of Arbitration Act. The appellant/defendant has referred to so called Iqrar Nama for Arbitration at page 66 of the Paper Book and submitted that in terms of the said agreement, the respondent/plaintiff was bound to refer the matter for decision to sole Arbitrator Ch. Muhammad Siddique Randhawa, Advocate, consequently in terms of Section 34 of the Arbitration Act, learned Civil Judge could not proceed with the suit in view of the bar contained in the said provision of law.
5. The appellant in person submitted that learned Single Judge of the High Court and the First Appellate Court have committed material irregularity in rejecting the application filed under Section 34 of the Arbitration Act considering that the respondent/plaintiff had entered the arbitration arrangement to refer the matter to Arbitrator who in the reply impliedly admitted the execution of agreement. He further submitted that the appellant cannot be said to have taken steps in the proceedings of the suit as envisaged under Section 34 of the Arbitration Act by filing adjournment application considering that no written statement was ever filed indeed he moved an application for stay of proceedings of suit as soon as Presiding Officer was found to be in the Court.
He has placed reliance upon Pakistan International Airlines Corporation v. M/s Pak Saaf Dry Cleaners (PLD 1981 SC 553).
6. Respondent/plaintiff submitted that in fact the alleged krar Nama to refer the dispute to Arbitrator is a forged and fabricated document and as such not binding upon him. He submitted that learned Single Judge of the High Court and the First Appellate Court have rightly and in accordance with law decided the matter which requires no interference by this Court.
7. We do not find any merit and substance in the contentions of the appellant.
8. The admitted position is that the appellant/defendant for the first time appeared in the Court on 28th of March, 1998 when the same was adjourned to 17.4.1998 for submission of the written statement and filing power of attorney. The written statement was not filed as such suit was adjourned to 30.4.1998 when the learned Presiding Officer was on leave. The suit was accordingly adjourned to 13.5.1998 yet on the said date written statement was not filed. Learned counsel for the appellant/defendant requested for adjournment to file written statement which was allowed and suit was adjourned to 18.5.1998 but as the Presiding Officer was on leave, therefore the suit was again adjourned to 30.5.1998 when application under Section 34 of the Arbitration Act was moved.
From the above proceedings in the Court it would be clear that the appellant even after the receipt of notice of the plaint got three clear dates for filing written statement but the application under Section 34 of the Act was moved on the fourth date. Above acts of the appellant on number of dates stated above would show that he intended to participate and defend the suit before the Court. In this process he engaged a counsel and filed adjournment application or requested for adjournment on the above dates. We may also observe that test for determining whether an act is a step in the proceedings or not, this Court in the case of Pakistan International Airlines Corporation v. M/s. Pak Saaf Dry Cleaners (PLD 1981 SC 553) at page 559 in the last para has observed:-- "As would be seen from above, the mere existence of a clause providing for arbitration does not bar a suit or other legal proceeding in Court. It only entitles a party to have the legal proceedings stayed.
In order that a stay may be granted under the provisions of this section, certain conditions must be fulfilled. The party must take the objection and apply for stay proceedings before taking any step, for example, the filing of the written statement, that is, before he placed his cards on the table. The provisions of the section, further imply that the Court should, first of all, examine whether the arbitration clause applies to the dispute, and if it does, whether the nature of the dispute is such that the ends of justice will be better met by the decision of the Court than by that of private forum chosen and agreed upon, and to which the parties had made themselves bound to adhere and adopt in case that type of dispute arose between them. The Legislature has, of course, clearly implied in the language used in the section that the arbitration clause should be respected, but has also made it abundantly clear that the party seeking to avail of the provision of stay under this section must clarify his position at the earliest possible opportunity, so as to leave no manner of doubt that he wishes to have resort to arbitration proceeding. If he hesitates in this regard, or allows the suit to proceed in any manner, that conduct would indicate that he has abdicated his claim to have the dispute decided under the arbitration clause, and to have thereby forfeited his right to claim stay of the proceedings in the Court."
In para 3 at page 564 of the above cited decision this Court has observed:-- "In my opinion, the true test for determining whether an act is a step in the proceedings is not so much the question as to whether the party sought an adjournment for filing the written statement although of course that would be a satisfactory test in many cases but whether taking into consideration the contents of the application as well as all the surrounding circumstances that led the party to make the application display an unequivocal intention to proceed with the suit, and to give up the right to have the matter disposed of by arbitration. An application of such nature, therefore, should prima facie be construed as a step in the proceedings within the meaning of Section 34 and the whole burden should be upon the party to establish why effect should not be given to the prima facie meaning of the application."
9. In the instant case it would appear that the appellant/defendant has been obtaining adjournments on the ground that he intended to file written statement and power of attorney. On all the three dates he made such request for postponement for filing written statement which clearly indicated that he had intention to contest the suit and not to resort to so called Iqrar Nama of arbitration. Frequent requests for adjournment for filing written statement would fall within the purview/ambit of the phrase "taking any other steps in the proceedings" within the meaning of Section 34 of the Arbitration Act.
10.It may also be observed that on perusal of the so called arbitration agreement which is dated 30.9.1996 no time period is fixed and in terms of para 3 of Schedule 1 to Arbitration Act which reads as follows:-- "3. The arbitrators shall make their award within four months after entering on the reference or after having been called upon to act by notice in writing from any party to the arbitration agreement, or within such extended time as the Court may allow."
11.This alleged agreement for arbitration being without the intervention of the Court wherein no time period has been fixed within which award is to be made, the arbitrator has to make award within four months from the date of entering on the reference or where the arbitrators are required to act as such by notice, within four months from the date of such notice. In the instant case it is not the case of the respondent/plaintiff that any one of the parties was to give notice to arbitrator named in the so called agreement for entering upon the reference. In terms of the agreement none of the parties having given any notice or Arbitrator not taking any initiative would lead to a conclusion that the parties had given up to have the dispute resolved through the Arbitrator.
Arbitrator has also not produced any extension of time having been granted by the Court under Section 28 of the Arbitration Act. This will lead to a conclusion that authority of arbitrator was revoked as such the said agreement for arbitration, if any, having been made stood revoked and came to an end. Indeed it and was not subsisting to place reliance for the purpose of staying the proceedings of the suit. It may further be observed that respondent/plaintiff has denied the execution of agreement for arbitration. In fact nothing has been produced and we do not find any thing on record that there existed any such agreement between the parties considering that only a photo copy has been placed on record and original has withheld from all the Courts below.
Provision of Section 34 of the Arbitration Act would indicate that the party has to promptly act raising the plea of referring the matter to the arbitrator at the very first opportunity and delay on any pretext in raising the plea would estop the party from raising the said plea of staying all proceedings. It may be observed that the appellant/defendant made the aforesaid application after about six months of service of summons of the suit and during the said period he went on seeking adjournment twice for filing written statement. He had even contested the application for interim injunction and had also applied for rejection of plaint and thus the appellant/defendant had taken positive steps for furtherance of the proceedings in the suit. Consequently application for stay of suit under the aforesaid provision of law was rightly rejected by the First Appellate Court and affirmed by the learned Single Judge.
11. We may also observe that the appellant is real brother of the respondent. Both parties were present today with their father when the latter stated before us that he being the father had gifted the property in equal shares to both of his sons whereas the appellant has declined to give the share of his brother, respondent/plaintiff; even latter's share in monthly amount of rent of Rs, 37,000/- which is being received by the appellant only. Learned Single Judge in the impugned order after making reference to (i) New Bengal Shipping Company v. Eric Lancaster Stump (PLD 1952 Dacca 22), (ii) Nuruddin Abdulhusein u. Abu Ahmed Abdul Jalli (AIR (37) 1950 Bombay 127), (iii)
Subal Chandra Bhur v. Md. Ibrahim and another (AIR (30) 1943 Calcutta 484), (iv) Badsha Meah Sowdagar v. Nurul Haq & others (PLD 1967 Dacca 250) in para 4 has observed as follows:-- "4. It is clear that the condition precedent is that this application should be moved before filing the written statement or taking any other steps in the proceedings. In the present case as already noted above the written statement was not filed but petitioner was given time to file written statement and on 13.5.1998 specific request was made on his behalf for the grant of time to file the written statement. This clearly amounted to taking steps and acquiescence in the proceedings. If this test is applied then the petitioner has taken steps in the proceedings before filing the applications, therefore, the same was liable to be dismissed. Learned counsel has relied on the judgment in the case of P.I.A. supra. The facts in that case are clearly distinguishable."
12. In view of aforesaid reasoning we do not find any merit and substance in this appeal which is consequently dismissed with costs.