1. ' This is an application under sections 16, 30, 31 and 33 of the Arbitration Act, 1940, praying for setting aside the award dated 30-8-1972, filed in this Court on consideration of the objections contained therein.
2. Briefly stated, the facts leading to the award giving rise to the application are that the Government of Pakistan, the defendant 1 May 1968, floated tender enquiry for supply of 70,000 yards of sheeting cotton white of the description mentioned in the Tender Enquiry for export on behalf of the Government of Pakistan to Zambia as gift to the Government of Zambia by the Government of Pakistan. One of the terms of the Tender Enquiry which is relevant reads as follows "No export Bonus would be admissible as this would not be foreign exchange earning transaction.
2. Exemption from Excise Duty and other Taxes will be granted. Tenderers should therefore quote excluding all duties and taxes."
3. ' Messrs Variety Traders, the plaintiff submitted their tender which was accepted by the Government of Pakistan on 26-7-1968. One of the terms namely, clause 19 of the acceptance of the Tender provides that no export bonus would be admissible in this case as this would not be foreign exchange earning transaction. The exemption from the payment of Excise Duty and other taxes will be arranged by the Government.
4. ' It is agreed on all hands that the contract was performed by the plaintiff for export of goods within the specified time. However, the dispute arose when the plaintiff claimed refund of the Excise Duty paid by it to the manufacturer of the goods from whom they had purchased the same as according to the term of the contract exemption from the payment of Excise Duty was to be arranged by the Government. However after the contracted pods were shipped by the plaintiff on 18-4-1969 and 24-5-1969, they wrote a letter dated 20-3-1970, to the Secretary Export (Refunds and Rebates) Central Board of Revenue Islamabad claiming the refund of the Excise Duty and endorsed a copy to the Deputy Director-General Export Promotion Bureau, Government of Pakistan, Karachi, with a request that their case be recommended to, the Central Board of Revenue and necessary arrangement for getting the refund/rebate exempted as per clause 19 of the contract. The request made in the copy of the letter endorsed to the Deputy Director found favour with him who by his letter dated 23-4-1970, recommended the case of the plaintiffs for refund of the excise duty to them. The plaintiff again wrote another letter dated 20-4-1970, to Central Board of Revenue through the Director-General Investment Promotion and Supplies who forwarded it to the Secretary, Exports (Refunds and Rebates) Central Board of Revenue alongwith his letter dated 25- 4-1970, wherein it is stated as follows "As per clause 19 of the subject A/T (copy enclosed) it was provided that "NO EXPORT BONUS" would be admissible in this case as this would not be foreign exchange earning transactions. Exemptions from payment of Excise duty and other taxes will be arranged by the Government. The refund of taxes as provided in the acceptance of Tender and applied by the firm may please be allowed."
5. ' On failure of the Government to meet the claim of the plaintiff, the plaintiff requested the defendants to nominate and appoint an arbitrator in accordance with clause (21) read with clause
(15) of the Form P. S. 35 as amended to date read with clause (iv) thereof. Accordingly, the Government on 30-3-1972, appointed Mr. S. Zarif Ahmed who before his retirement was an officer in the Ministry of Law and Parliamentary Affairs, as the sole Arbitrator. The said Officer gave his Award on 30-8-1972, which is before me for confirmation and in respect whereof the objections have been filed which are presently under-consideration.
6. ' Mr. Tahir Hussain Advocate for the defendant has raised before me the following objections to the validity of the award.
7. "(1) The Claim was barred by time and the arbitrator did not decide this objection.
(2) The Award is based on no evidence and has been given by the Arbitrator on his personal knowledge.
(3) The decision on issue No, 1 namely, "whether according to law the Contractors were to obtain the Exemption from Excise Duty under rules 12 and 12-A of Central Excise Rules, 1944 prior to shipment"? Is based on equity which is not warranted by law.
(4) No specific finding has been given on issue No, 3."
8. ' Taking up the first objection raised by Mr. Tahir Hussain Advocate that the claim made by the plaintiff was barred by time it would suffice to point out that the issues raised before the sole Arbitrator do not include the issue of limitation. It is true that the plea of limitation is mentioned in the objections filed before the sole arbitrator but it would be deemed to have been given up as no issue was raised on this plea before the sole Arbitrator. Even otherwise, it was not pleaded how the claim was barred by time, no particulars or dates were given in the objections filed by the respondent. It is stated at the bar that the contract was performed in two parts on 18-4-1969 and 24-5-1969, and the price of the goods was paid after the performance of the contract. According to the statement made in the Award the Reference was made on 30-3-1972. Therefore, it is clear that the reference was made within three years of the performance of the contract. However, Mr. Tahir Hussain contends that the date of accrual of the cause of action is the date when the Excise Duty was paid.. According to Mr. Tahir Hussain Advocate Article 83 of the Limitation Act applies to the facts of the case, while it is contended by Mr. Sajjad Hussain Advocate that Article 113 of the Limitation Act applies to the case. Under both the Articles the period of limitation is the same, i,e, 3 years but with this A difference that under Article 83 period of limitation commences from the time when the plaintiff is actually indemnified while under Article 113 it commences from the time when the plaintiff has notice that the performance is refused. In my opinion the present case is one of refusal of performance of the contract and not of indemnity, for a contract of indemnity is one by which one party promises to save the other from loss caused to him by the conduct of the promise himself, or by the conduct of any other person. The present case is not one of the loss caused to the plaintiff by the defendant. The claim for refund of the amount of the duty was made by the plaintiff by his letters dated 20-3-1970, and 25-4-1970, which were for warded to the Central Board of Revenue with recommendation which would show that there was no dispute as regard to the entitlement of the plaintiff to refund of the amount of the Excise Duty. The Government did not refuse to refund the amount by the letters mentioned hereinabove. On the contrary, the liability was acknowledged by the Government. The refusal came from the Central Board of Revenue, for the first time, by the letter dated 21-10-1971. The claim was preferred within 3 years from 21-10.1971 and was therefore, within time. The objection has therefore, no substance and is accordingly overruled.
9. ' The next ground urged by the learned counsel for the defendants is that the findings as to the payment of the Duty is not based on any evidence at all. It is submitted by the learned counsel for the defendants that the Arbitrator has decided this issue on his personal knowledge. A similar question was raised in Suleman Haji Muhammad & Co. v. State Bank of Pakistan (1) Waheeduddin Ahmed, J., after reviewing considerable case-law on the question observed as follows : "On consideration of the case law on the subject it is very clear that the Court hearing the application for setting aside an award cannot constitute itself into a Court of appeal over the decision of an arbitrator and cannot make a sitting investigation of the entire proceedings before the arbitrator unless it is first shown that the award is bad on the face of it. I have already cited the view of their Lordships of the Privy Council that arbitrators are both Judges of law and facts and in my view once the matter is found to be within the jurisdiction of the arbitrators, it is not permissible for Courts of law to find out whether their decision is right or wrong on the facts urged before them by travelling outside the award for finding out what evidence was led before them and whether their conclusions are based on sufficient evidence. I am fortified in my view by a decision of the Lahore High Court reported in .1. Kaikobad v. F. Khambatta AIR. 1930 Lah.
280. In that case also it was urged that the finding of the arbitrator was based on insufficient evidence, but the Division Bench observed.
10. ' An arbitrator is fully justified in rejecting in part the case set up by either party and ascertaining the real facts according to his own view of the evidence. A counsel is not entitled to attack the findings of facts given by the arbitrator on the evidence led by the parties. Whether his conclusions are right or wrong is not a matter which is open for consideration by the trial Court or the appellate Court on revision.
11. ' This view is in accord with the view taken by this Court in Messrs Overseas Cotton Company v.
12. Messrs S. M. Fazail & Company PLD 1958 Kar. 27 approved on appeal by a Division Bench of this Court in PLD 1959 Kar.
320. I therefore do not find any force in the contention raised by the learned counsel for the defendants and hold that in law it is not open to this Court to consider the evidence led by the parties before the arbitrator not set out and discussed in the award."
13. ' However, assuming for the sake of argument that it was permissible to examine such question, it cannot be denied that the cloth supplied by the plaintiff was manufactured in Pakistan and was subjected to Excise Duty either under section 3, subsection (1) of the Central Excise and Salt C Act, 1944, read with item No, 27, in the First Schedule thereto, or under sub-rule (4) ibid. This is why the defendant had undertaken in clause (19) of the Contract to arrange for exemption from payment of Excise Duty and other taxes. Further, in para. 1 of the statement of claim filed before the arbitrator the plaintiff had made the following claims : "(a) Excise Duty Claim on Raw material. 54687 lbs, Rs, Cotton Yarn 21/S (Medium Claim @ Rs, 1.50 per lb. Consumption 5 Qaz. Of yarn per sq. Yd. 70,000 yds. @ 90=1,75,0C sq. Yds. 82,030.50.
(b) Excise Duty Claim on Finished goods (Fabrics).-Sheeting cloth 1,75,000 sq. Yds. Excise Duty @ 0.20 per sq. Yd. 35,000.00.
(c) Excise Duty Claim on Bleechings and Finishing.- 1,75,000 sq. Yds. @ 0.02 paisas per sq. Yd 3,500.00. 1,20,530.50"
(1) PLD 1960 Kar, 78 ' The defendants in their written statement in reply to this paragraph had submitted that the plaintiff was not entitled to any amount mentioned above and the claim was false, frivolous and imaginary and against the provisions of the relevant law and rules. However, the quantity of the cloth, the rate of Excise Duty and the amount claimed as such were not denied. Further the Deputy Director, Export Promotion Bureau, Government of Pakistan, under the cover of his letter dated 23- 4-1970, addressed to the Central Board of Revenue had forwarded the letter of the plaintiff dated 20-3-1970, which contained the claim for the same amount as mentioned in the statement of claim and which he would not have normally forwarded, if the plaintiff's claim was false or exaggerated, or frivolous as it was his department which had entered into the contract on behalf of the Government with the plaintiff, and which had also been entrusted with the export of the cloth supplied under the contract. It was pointed out in this letter that since the cotton pieces were to be supplied to the Government of Zambia as gift from the Government of Pakistan, the quotations invited were exclusive of Excise Duty and other taxes for a clause was inserted in the contract to the effect that the exemption from payment of Excise Duty and other documents would be arranged by the Government. There is yet another letter dated 25-4-1970, from the Assistant Director (Supplies) signed on behalf of the Director-General Investment Promotion and Supplies addressed to the Secretary, Export Refund and Rebate, Central Board of Revenue informing the Board that the subject contract was placed with Messrs Variety Traders, Karachi to supply sheeting cotton white to the Government of Zambia as a gift, from the Government of Pakistan and the stores duly inspected and accepted had already been supplied to Government of Zambia, and requesting that "the refund of taxes as provided in the acceptance of Tender and applied by the firm may please be allowed." Further, under instruction 1 of the Special Instructions contained in the tender form, it is provided that "Exemption from Excise Duty and other Taxes will be granted, the tender should therefore quote excluding all duties and taxes." This instruction also shows that the Excise Duty and Taxes were charged on the cloth.
14. ' The learned counsel referred to certain certificates and cash memos produced by the plaintiff before the Arbitrator. The objection of the learned counsel for the defendant was that the certificate dated 29-6-1970, from Dost Muhammad Cotton Mills Ltd., refers to three bills dated 10-5- 1969, 13-5-1969 and 19-5-1969, and the certificate dated 11-8-1970 from the Colony Textile Mills Ltd., refers to three bills , dated 1-4-1969, 30-4-1969 and 10-5-1969, but the goods had already been exported. However, this objection is not correct as according to the statement made in the award the goods were shipped as per Inspection Notes dated 18-4-1969 and 24-5-1969. Therefore, the Certificate relates to goods which were all purchased before the dates of two inspection notes.
15. Therefore, it cannot be said that the award is based on no evidence or is based on personal knowledge of the Arbitrator of any facts.
16. ' The learned counsel referred me to Sheoduta v. Pandi Vishuatta and another (1) and Kh. Ghulam Rasool Lone v. Azad Jammu & Kashmir Government (2) in support of his contention that when award is based on personal knowledge and the agreement does not authorise the Arbitrator to use hi personal knowledge in reaching a decision his award is bad. However, a
(1) AIR 1955 Nag. 116 (2) PLD 1971 Azad & K 127 discussed above, I have found that the award is not based on personal knowledge of any facts and is based on evidence mentioned hereinbefore.
17. ' Therefore, I find no substance in this ground also.
18. ' The next ground urged by the learned counsel for the defendant was that under rule 12, sub-rule
(9) of the Central Excise Rules, 1944 the claim for rebate had to be preferred in a formal way within the specified time but it was not so made. As already noticed Condition No, 19 of the contract provides that "no Export Bonus would be admissible in this case as this would not be foreign exchange earning transaction. Exemption from payment of Excise Duty and other Taxes will be arranged by the Government." Therefore, according to this Condition it was the duty of the Government to arrange for the exemption and in such circumstances the question of compliance or non-compliance of rules 12-A of the Central Excise Rules, 1944 does not arise and the findings of the Arbitrator that the provisions of rules 12 and 12-A of the Central Excise Rules, 1944, are applicable to ordinary export and were hardly applicable to transaction in question are unexceptional and in the circumstances of this case it cannot be said that there was error of law apparent on the fact of the award.
19. ' The last ground urged by the learned counsel is that the Arbitrator has not given specific finding on issues No,
3. This ground is also without substance for an arbitrator is not under statutory obligation to give reasons of his decision on each and every issue separately. If any authority is needed reference may be had to Pakistan Builders Co. v. Pakistan (t) wherein Farruqui, J., observed as follows :- "But an arbitrator is not bound to give reasons for his decision, nor is he bound by any technical rule or procedure and he need not record separate findings on the point on which the parties are at issue. What has to be seen is whether he has given an intelligible decision which determines the rights of the parties in relation to the subject-matter of the reference."
20. ' Reference may also be had to Hamdard Dawakhaua (Wakf) Karachi v. Messrs K. B. Joseph & Co.
21. Ltd. (2) and Trading Corporation of Pakistan Ltd., Karachi v. Messrs Aslam Saeed & Co. And 3 others (6). In the latter case Ghulam Rasool K. Shaikh, J., at page 75 of the report observed : "Thus an Arbitrator is not bound to give specific finding on each of the issues, for he is required to a state reasons for his conclusions. What is required is that he should give a clear decision on the case. So where the award is silent as to the objections raised before the arbitrator, it will be presumed that he had considered those objections and had rejected them."
22. ' In the result, I find no substance in the application and dismiss it with costs and make the award rule of Court and pass a decree in terms thereof. The plaintiff shall also had interest at 9 per cent.
23. Per annum from the date hereof till satisfaction of the decree.
24. ' The decree shall be satisfied within a period of three months from the date hereof.
(1) P L 13 1961 Kar. 365 (2) PLD 1971 Kar. 279
(3) PLD 1973 Kar. 65