Ch. ljaz Ahmad, J.--Brief facts of the case are that the appellant filed a suit for recovery of an amount of Rs, 26,48,159/- on the basis of the work awarded by the respondent to the appellant before the learned Civil Judge, Okara. According to the averments of the plaint, the appellant had completed the work. The respondent filed written statement and controverted the allegations leveled in the plaint. The suit was decreed in the first instance vide judgment and decree dated 11.1.1999 under Rule 6 of Order XII C.P.C. which was challenged by the respondents before this Court through R.F.A. No, 184/1999, which was allowed vide order dated 28.2.2000 and the case was remanded. After the remand, the learned trial Court dismissed the suit vide judgment and decree dated 30.9.2000 on the basis of arbitration clause contained in the agreement executed between the parties. The appellant being aggrieved has filed the present appeal.
2. Learned counsel for the appellant submits that the appellant filed written statement before the trial Court in the shape of report of facts and parawise comments/departmental reply in which the respondent had not taken objection qua staying of proceedings before the trial Court on the basis of provisions of Section 34 of the Arbitration Act, 1940. The respondent filed application for amendment of the written statement before the trial Court under Order VI Rule 17 of C.P.C. which was dismissed vide order dated 11.1.1999. The appellant also filed an application under Rule 6 of Order XII of C.P.C. whereby the suit of the appellant was decreed vide judgment and decree dated 11.1.1999. He further submits that the judgment dated 28.2.2000 was consent decree and is binding upon the parties. Order dated 11.1.1999 to the extent of dismissing application for amended written statement was not set-aside by the D.B. of this Court, therefore, report and parawise comments/written statement filed by the respondent be considered as written statement. He further submits that the trial Court has allowed the respondent to file amended written statement.
He further submits that the learned trial Court erred in law by dismissing the suit of the appellant which power did not vest with the trial Court in view of the provisions of Section 34 of the Arbitration Act, 1940.
3. The learned Law Officer states that the case was remanded to the trial Court vide judgment dated 28.2.2000 with the direction to decide the case afresh on merits. The learned trial Court in the first instance decided two applications, one filed by the appellant under Order XII Rule 6 C.P.C. and the other filed by the respondent for amendment of written statement under Order VI Rule 17 of the C.P.C. which were decided by one consolidated order dated 11.1.1999, therefore, it is to be presumed that this Court has set-aside the order qua the application for amendment in the written statement. He further submits that it is duty and obligation of the trial Court to stay the proceedings in the suit under the provisions of Section 34 of the Arbitration Act, 1940. He further submits that application of the respondent for amendment of the written statement under Order VI Rule 17 be deemed to be pending adjudication and the respondent has also filed amended written statement alongwith the application, therefore, the trial Court was justified to dismiss the suit of the appellant in the presence of Arbitration clause in the contract/agreement which was executed by the parties of their free will.
4. We have given our anxious consideration to the contention of the learned counsel for the parties.
5. It is better and appropriate to reproduce Section 34 of the Arbitration Act, 1940 to resolve the controversy between the parties: "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 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 waiting to do all things necessary to the proper conduct of the arbitration, such authority may make an order staying the proceedings.'
6. Mere reading of the aforesaid provision of law shows that the impugned judgment and decree is not sustainable in the eye of law as the trial Court has no jurisdiction whatsoever to dismiss suit of the appellant in view of the presence of the Arbitration clause contained in the agreement executed between the parties. The question of law involved in this case has been considered and decided by the Hon'ble Supreme Court according to which the impugned judgment is not sustainable in the eye of law in Pakistan International Air Lines Corporation vs. Pak Saaf Dry Cleaners (PLD 1981 S.C. 553).
7. Under Section 34 of the Arbitration Act the defendant before filing his written statement or taking any other step in the proceedings can apply to the Court to stay the proceedings so as the matter may be referred to or considered by the Arbitrators under the agreement to which he and the plaintiff are parties. The plaintiff already having invoked a jurisdiction other than the Arbitrator by way of initiating proceedings against the defendant has by his choice waived his right to Arbitration. Similarly if the defendant before joining the proceedings before the Court/authority does not make such an application under Section 34 he also waives his right of Arbitration. It is thus obvious that the plaintiff by initiating a proceedings and a respondent/defendant by not applying under Section 34 of the Arbitration Act had waived their right, to Arbitration. Meaning thereby that both the parties to the arbitration agreement by their conduct had agreed not to go to Arbitration.
Thus the proceedings in the matter will continue in accordance with law. However if any such application is made then the Court/authority after considering the same, at the most can stay the proceedings till the Arbitration is finalized. However mere existence of arbitration agreement does not authorize a Court/authority to dismiss such proceedings outright.
It is pertinent to mention here that in the earlier round of litigation the order dated 11.1.1999 passed u/O. XII Rule 6 of CPC was only set aside. It is better and appropriate to reproduce para 4 of the judgment of this Court dated 28.2.2002.
"4. The learned counsel for the appellants accepts the offer of the learned counsel for the respondent and submits that he will be satisfied if the judgment and decree based on Rule 6 of Order XII of the Code of Civil Procedure is set aside and the suit is remanded and will not press the appeal for any other relief. This appeal is accordingly disposed of with the consent of the learned counsel for the parties. The impugned judgment to the extent it decreed the suit of the respondent under Rule 6 of Order XII of the Code of Civil Procedure is set aside and the suit is remanded to the learned trial Court for its decision afresh in accordance with law. The learned trial Court will dispose of the suit by 30.9.2005."
It is pertinent to mention here that the judgment of this Court is not agitated by any of the parties before any higher forum and judgment of this Court is binding upon the parties on the principle of resjudicata as law laid down in Pir Bakhsh versus The Chairman Allotment Committee and others (PLD 1987 SC 145). The operative part of the judgment of this Court clearly shows that the judgment & decree to the extent of order passed against the respondent in the earlier round of litigation on 11.1.1999 under Order XII Rule 6 of CPC only was set aside and the order passed on the application under Order VI Rule 17 CPC was not set aside. In this view of the matter the contention of the learned law officer has no force.
8. In view of what has been stated above, this appeal is allowed, the impugned judgment & decree is set aside, meaning thereby that the suit filed by the appellant shall be deemed to be pending adjudication before the learned trial Court. The parties are directed to appear before the trial Court on 20.9.2005, who is directed to decide the case afresh on merit in accordance with law without being influenced by the observation of this Court. The learned trial Court is directed to frame fresh issues keeping in view the divergent pleas taken by the parties in the pleadings and thereafter decide the case in accordance with law after recording evidence of the parties on merits.
It is pertinent to mention here that representative of the respondents have filed report of facts and parawise comments/departmental reply before the learned trial Court directly and not through any Advocate or Law Officer, which is not in consonance with the direction of the learned trial Court. The learned trial Court has directed the respondents to file written statement. The application under Order VI of Rule 17 CPC was dismissed alongwith the application of appellant under Rule 6 Order XII vide order dated 11.1.1999, which was challenged by the respondents before this Court in RFA No, 184/1999, which was allowed vide judgment dated 28.2.2000, as mentioned above, the same was set-aside to the extent of judgment & decree dated 11.1.1999 passed under Rule 6 of Order XII C.P.C. whereas, the order to the extent of Order VII of Rule 17 for amendment of the written statement was not set-aside. Anyhow, the respondents have not made any efforts through legal means/legal process for bringing on record amended written statement. In case all the facts be put in juxta position, then respondents are not pursuing the matter in accordance with law diligently. Keeping in view this fact let a copy of this judgment be sent to the Secretary concerned, who is directed to constitute a committee to probe into the matter that who is responsible officer/official to file report and parawise comments instead of written statement directly before the learned trial Court. In case the Committee finds any person responsible for that then he is directed to proceed against him under Efficiency and Disciplinary Rules and also in the light of the findings of the Committee criminal proceedings be initiated against the responsible officer. Respondents may take necessary steps to defend the case properly before all the forums in accordance with law.