MUHAMMAD AKHTAR SHABBIR, J. - This appeal has been filed against the order dated 26.6.2003 passed by the learned Additional Rent Controller, Rawalpindi Cantonment.
2. The facts giving rise to the present appeal are to the effect that an ejectment petition under Section 17 of the Cantonment Rent Restriction Ordinance 1963, has been filed by Yezdia Home Kaikobad, appellant herein, against Feroze Sons Limited and two others on 31.8.2001, the learned Additional Rent Controller issued process against the respondents to face the, ejectment petition.
The respondents were served who appeared on 20.9.2001 in person as well as through their counsel and Mr. Munir Bashir Ansari, Advocate, filed memo, of appearance on behalf of respondents Nos. 1 and 2 but the Court again summoned them for 23.10.2001. On the date too Mr. Munir Bashir Ansari, Advocate filed memo, of appearance on behalf of all' the three respondents. The case was then adjourned to 13.11.2001 and the request was made by the counsel-for the respondents to file the reply of the application/ejectment petition. The case had been adjourned due to one reason or the other. On 17.1.2002, two applications under Order 1, Rule 10. CPC and one application under Section'34 of the Arbitration Act have been filed " by the respondents. The learned Additional Rent Controller after hearing the objections of the parties accepted the application filed under Section 34 of the Arbitration Act, 1940 and, referred the matter for arbitration but did not make any order on the two applications: This order has been assailed by the appellants through the instant appeal.
3. The moot point for determination before this Court is that whether the application for referring the matter to arbitration was filed within time and the Court was competent to refer the dispute for its resolution through arbitration.
4 Learned counsel for the respondents when confronted that, on the very first day, the application for referring the matter for arbitration has not been filed and on many dates, the proceedings of the ejectment petition were conducted by the learned Additional Rent Controller contending that he had filed the applications under Order 1, Rule 10. CPC so that the question of implementation of necessary party be decided.
5. On the other hand, learned counsel for the appellants vehemently opposed the arguments of the learned counsel for the respondents contending that the application for referring the matter to arbitration, if there was any arbitration clause in the agreement, would have been filed at the earliest on the very first day of the appearance of the respondents.
I have heard the learned counsel for the parties and perused the record. Respondent No. 3 appeared in Court with his counsel and Mr. Munir Bashir Ansari, Advocate, had also filed Memo, of appearance on behalf of respondents Nos. 1 and 2 and thereafter on 5.10.2001 he filed another Memo, of appearance on behalf of respondent No. 3 and on 13.11.2001, he requested for .Adjournment for filing the reply of the application and the ejectment petition was adjournment to 6.12.2.001 and on 17.1.2002, three applications under Order 1, Rule 10, CPC and one under Section 34 of the Arbitration Act, 1940, were filed.
7. Before commenting on the merits of the case, it. Would be appropriate to reproduce the relevant provisions of Section 34 of the Arbitration Act, 1940, which is as under:- S. 34. Power to stay legal proceedings where there is an arbitration agreement. - Where any party to an arbitration agreement or any person clarifying 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's 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 will to do all things necessary to the proper conduct of the arbitration, such authority may make an order staying the proceedings.''
8 From the bare reading of the above provisions of the Statute, it is quite clear that any party to the proceedings may at any time before filing a written statement or taking any step in the proceedings can apply to the Court for referring the matter to the arbitration must without any ado and before submitting to the jurisdiction of the Court inform the Court in an unequivocal terms that he is going to insist upon the implementation of the Arbitration Clause, but where the party/defendant appears in the Court, obtains adjournments for filing written statement such party deemed to. Have waived his right and proceedings could not be stayed Reliance in this behalf can be placed on Muhammad' Ilyas Khokhar \/s. Ihsan Illahi Mughal (2000 CLC 206 (Lah.), Sahan Kumar Bhattacherjee Vs. Sunil Kumar Bhattacherjee and others (AIR 1948 Cal. 59), New Bangal Shipping Company \/s. Eric Lancaster Stump (PLD 1952 Dacca 22), Muhammad Idris and others Vs. Tobarak Hossain (PLD 1965 Dacca 260), Mubarak Cotton Factory Vs. Messrs General Agencies, Multan (PLD 1980 BJ 1), Akbar Cotton Mill's Ltd. Vs. Messrs VES/Ojuanojo Obtedinenije Teck/Amesh Export and another (1984 CLC 1605), Messrs ASLO Marines Ltd. Vs. M.T. Magda and another (1985 Kar. 745) Eckhardt & Company Marine GMBH, West Germany and another l/s. Muhammad Hanif (PLD. 1986 Kar. 138), Uz in Export Import Enterprises Vs. Iftikhar & Company Ltd. (PLD 1936 Kar. 1) and Messrs Alazizia Industries Uch Sharif Road, Ahmadpur East Vs., Messrs Alfalah Insurance Company Ltd. And 4 others (PLD' 1993 Lah. 306).
9. Lt is an admitted position that the respondents have failed to apply to the Court for referring the matter to.; arbitration before filing of the written statement or taking any other steps in the proceedings, the adjournment sought by the respondent was a step in the proceedings.
10 ln the case of New Bangal Shipping Company Vs. Eric Lancaster Stump (PLD 1952 Dacca 22), the defendant asked for adjournment of the case to file written statement and after that the defendant applied to the Court for the stay .Of the proceedings and his application was rejected on .The ground that it was not filed at the earliest possible opportunity and the Honourable Judges of the Dacca High Court observed as under:- On adjourned date defendant filed two applications one. For further time for filing written statement and the other under Section 34 of the Arbitration Act for staying the suit. Objection petition was not confined to question of jurisdiction, lt contained grounds on merits or case and was without, reservation and all this amounts to step in proceedings , and the suit was not stayed." ln Muhammad Idris and others' case (PLD 1965 Dacca 260) (supra), a Division Bench of Dacca High Court relying on New Bangal Shipping Company Vs. Eric Lancaster Stump of Singapore held that:- "An application for time to file written statement to certain circumstances might be regarded as amounting to steps in the proceeding within the meaning of Section 34 of the Arbitration Act and in this Muhammad' Idris's case the. Petitioners did hot ask for stay before taking any step in proceedings and it was held that . The filing of written statement is surely a kind of step taken in the proceedings and a prayer for - time to put in written statement for the purpose of contest in surely another kind of step within the meaning of Section 34 of the Arbitration Act." ln case of Mubarik Cotton Factory (PLD 1980 BJ 1) (supra) it was held that:- An early application for extension of time to file written statement amounts to taking step in the proceedings and in this case ex-parte proceedings were ordered and the defendant applied to set aside the ex-parte proceedings through an application which was set aside on 15.9.1968 and thereafter, the application for stay was filed and during the pendency of the stay application adjournments were obtained thrice on 15.1.1968, 31.1.1968 and 16.2.1968 for a compromise. His Lordship Mr. Justice Abdul Shakoor-ul-Islam who became the Chief Justice of the Lahore High Court afterwards; observed that while getting the adjournments on stay application for a compromise the party had submitted, to the jurisdiction of the Court and did not insist upon the implementation of the Arbitration Clause and thereafter, the party was not entitled to ask for stay of proceedings." ln case of Akbar Cotton Mills Ltd.. (1984 CLC 1605)- his Lordship Mr. Justice Saeed-uz-Zaman Siddiqui, Judge of Sindh High Court (then Honourable Chief Justice of Supreme Court of Pakistan) observed that;- "A party applying under Section 34 of . The Arbitration Act does not have a right to obtain stay of legal proceedings in Court. Such an order purely discretionary and in appropriate cases, the Court may refuse to stay the proceedings in spite of an arbitral clause in the agreement between the parties which provided for reference of dispute arbitration. No doubt the Court has to exercise this discretion in a judicious manner but the discretion conferred on the Court can neither be curtailed nor circumvented by means of agreement between the parties, lt is .True and ordinarily when a, party has entered into an agreement of which the arbitral clause is an integral part, he should, not receive assistance from .The Court, if he resiles from, it, but this does not mean that even in a case where the Court is satisfied that the very purpose and objection of the arbitration would be frustrated or it is not likely to be achieved it will stay the legal proceedings and direct that parties to have recourse to arbitral clause. No doubt one of the commonly understood' object' of inserting an arbitral clause in commercial agreements is to avoid expenses and the conventual delays experienced in Court of law but the paramount and avowed object of arbitration still remained the same namely the resolution of dispute between the parties in a fair, just and impartial manner. This latter stated object cannot be sacrificed in the name of less expensive and speedy mode to settle the dispute between the parties. Therefore, where the Court finds that a party to the dispute is not likely to get a fair, just or impartial treatment of his cause in arbitration proceedings it' may refuse to stay the legal proceedings in Court brought in contravention of the arbitral clause in the agreement under Section 34 of the Arbitration Act."
5. Ln view of the above discussion and following the dictum laid down in the case referred supra, I am of-the considered view that the appellants had not applied to the Court at the first date of hearing' of the ejectment petition and failed to take the benefit of Section 34 of the Arbitration Act, 1940, while after seeking adjournment of the case.
6. For the foregoing reasons, this petition is accepted and the impugned order dated 26.6.2003 passed by the learned Additional Rent Controller referring the matter to arbitration is set aside and the petition shall be deemed to be pending-before him, who will decide the same within a period of ninety days from the date of this order in accordance with law.