' MUHAMMAD ASHRAF BHATTI, J.---In connection with the construction of overhead bridge at Ghari Shahu, the Lahore Development Authority (hereinafter referred as "appellant") entered into a contract with respondent No,1 regarding fulfilment of the various conditions settled between the parties. Under this contract a dispute arose between them ultimately prompting respondent No,1 to file a suit for recovery of Rs,7,53,14,100 against the appellant on 7-7-2000. In pursuance of process issued a Clerk on behalf of the appellant appeared in Court on 31-7-2000 and sought adjournment for filing written statement and then the case was fixed for hearing on 21-9-2000. Before the written statement could be filed on the aforesaid date of hearing an application was moved by the appellant in terms of section 34 of the Arbitration Act, 1940 to seek reference of the dispute to arbitration in terms of the relevant clause of the aforesaid contract dated 11-8-1997 which was contested by respondent No,1 only as on the relevant date respondent No,2 had been proceeded in ex parte and then vide order dated 22-5-2001 the learned trial Court declined the request of the appellant for the proposed reference which is now subject matter of the appeal in hand.
2. It was opposed by the learned counsel representing respondent No,1 only.
3. Both the parties have been heard and available record perused.
4. It may be mentioned here that any party to an arbitration agreement or any person claiming under him if brings a civil suit against any other party to such an agreement who had in respect of the matter agreed to be so referred to arbitration, section 34 of the Arbitration Act, 1940 empowers the court taking cognizance thereof to make such reference in terms of the relevant clause of the said agreement if any party to such "legal proceedings" makes any application before a written statement is filed or any other step taken therein.
5. It may further be observed that the competent forum if satisfied ordinarily has to refer the matter to the arbitration on having satisfied itself that no sufficient reason exists for not making such reference in accordance with the arbitration agreement particularly when a person making such application had always been ready and willing to perform his part of the agreement at the time when such legal proceedings were initiated.
6. Perused of the record as also the order passed by the learned trial Court gives the impression that the learned trial Court did not take care of the fact that the appellant was not properly represented when for the first time a Clerk appeared and then a representative not disclosing his designation/position in the said Authority appeared and sought adjournment for filing written statement. Passing reference, however, was made by the said Court regarding a notice issued by respondent No,1 to the appellant on the subject without property appreciating contents thereof or taking into account the conduct of the appellant with reference to his duty under the said judgment to abide by the terms and conditions thereof.
7. Confronting with the above position of the case both the learned counsel for the parties have stated that they would have no objection to the acceptance of this appeal, set aside the impugned order and remand the matter to the learned trial Court for decision afresh, on merits and in accordance with law in line with the parameters and guidelines provided by section 34 of the Arbitration Act, 1940.
8. In the light of the above, this appeal is accepted, impugned order is set aide and the case is remanded to the learned trial Court for decision afresh of the application moved by the appellant under section 34 of the Act ibid deemed to be pending for disposal, on merits and in accordance with law under the provisions of section 34 of the Arbitration, 1940, within a period of one month positively, without having been influenced by the above observations made by this Court. No order as to costs.
9. Parties are directed to appear before the learned Civil Judge, 1st Class, Lahore on 25-5-2009 for further proceedings in the above terms.