1. ' MS. RUKHSANA AHMED, J.---Through this common order I would like to dispose of both the above listed applications, which were earlier reserved on 1 1 the August, 2010.
2. ' The facts leading to the filing of the present applications are that plaintiff filed the present suit for dissolution of partnership, Rendition of accounts, appointment of receiver and injunction. However, the defendants Nos. 2 and 3 filed the applications under section 34 of the Arbitration Act praying for a direction to the plaintiff to approach relevant Arbitration Forum in accordance with clause 23 of the Partnership Deed annexed as Annexure A to the plaint.
3. ' Initially learned counsel for the defendant No, 2 argued that instead of proceeding towards appointment of an Arbitrator as per Arbitration clause (23) as mentioned in the Partnership Deed, the plaintiff has instituted the present suit against the defendants and that neither any written statement has been filed by the defendant No, 2 nor has he taken any steps in the case proceedings, therefore, in view of this position the proceedings in the aforementioned suit may be stayed and plaintiff may be directed to approach the relevant Arbitration Forum.
4. ' In the case of defendant No,
3. Mr. Zahid Marghoob Advocate filed Vakalatnama and argued that according to clause 23 of the Partnership Deed in case of any dispute/differences which may arise between the parties/partners and/or their authorized representatives with regard to any matter touching the partnership deed and/or any other matter connected to accounts/or business or Firm/ Company affairs etc. Shall be referred to Arbitration for settlement under provisions of Arbitration Act 1940. It was further, argued that through instant suit the plaintiff has claimed relief touching the business account of the Firm/company affairs as such jurisdiction of this Court is barred under the provisions of Arbitration Act, 1940 and the proceedings of the present suit are liable to be stayed under section 34 of, the Arbitration Act, 1940.
5. ' On the other hand learned counsel for the plaintiff argued that due to fraud committed by the defendants the plaintiff had approached the Chairman ABAD Karachi on 3rd September, 2007 whereby plaintiff had sought help in order to obtain her right. However, Chairman ABAD issued several notices/remainders to the defendants. On receipt of one notice the defendant No, 3 had written a reply/correspondence to the Chairman ABAD, whereby in the letter it was mentioned that since the contention and allegation raised and levelled against the defendant No, 3 would require thorough probe and scrutiny by Civil Court, therefore, the defendant No, 3 intended to file civil suit against all such persons and it was further contended that if any Arbitration proceedings was conducted and or carried out, the same would not serve any purposes, facts and figures as the same being beyond the scope and jurisdiction of Arbitration proceedings. Moreso the same were falling within the purview of damages and accounts and which nature of dispute could only be decided by Civil Court of preliminary jurisdiction. It was further argued that defendant No, 3 filed a suit bearing No, 1547 of 2007 before this court for Declaration and Permanent injunction. Accounts and Damages valued at Rs, 3 crores against the plaintiff, plaintiff's husband and another. Therefore, once the Defendant No, 3 has replied to the correspondence received from the Chairman ABAD asking Chairman ABAD to desist from arbitrating the matter, the defendant No, 3 cannot re-agitate for re-enforcement of Arbitration clause.
6. ' As regards the case of defendant No, 2 is concerned, the plaintiff Advocate has argued that though several reminders/notices were issued to defendant No, 2 but there was no response to said notices/reminders and therefore, the defendant No, 2 cannot be allowed to seek stay of present case proceedings and pray for referring the matter for Arbitration.
7. ' I have heard the learned counsel for the parties and have perused the record. I would like to reproduce the pertinent clause 23 of the Partnership Deed:- "(23) That in case of any dispute/difference which may arise between the parties/partners and/OR their authorized representative with regard to any matter touching to this Partnership Deed and/OR any other matter connected to accounts/OR business of Firm/ Company affairs etc. Shall be referred to arbitration for settlement under the provision of Arbitration Act, 1940."
8. ' The case of the defendant No, 3 from the perusal of the record shows that though the plaintiff had tried to arbitrate the matter with the defendants Nos. 2 and 3 through Chairman ABAD but the defendant No,3 chose not to contest such proceedings before the Chairman ABAD and on the contrary informed the Chairman ABAD not to proceed with the application filed by the plaintiff.
9. Further the defendant No, 3 has also filed a suit for Declaration and Permanent Injunction, Accounts and Damages against the plaintiff and others in the Court of law. However, the defendant No, 3 instead of filing an Application under section 34 of the Arbitration Act at first instance has chosen to file counter affidavit to plaintiff's stay application on 19-7-2008 and the present application under section 34 of the Arbitration Act was filed by the defendant No, 3 only on 15-9-2008.
10. Therefore, under such circumstances, when the defendant No, 3 at the first instance has himself written to the Chairman ABAD restraining the Chairman ABAD from proceeding further in the matter and then the defendant No, 3 has filed a suit against the plaintiff and others, and lastly instead of filing the Application under section 34 of the Arbitration Act, the defendant No, 3 has chosen to contest the suit by filing detailed counter affidavit to the stay application filed by the plaintiff how can the defendant No, 3 now at this stage seek arbitration of the matter under clause 23 of the Partnership Deed at own whim. As the very concept of filing an Application under section 34 of Arbitration act has to be done promptly and immediately on receipt of information of case proceedings on the very first opportunity and delay on any pretext would stop party from seeking stay of proceedings in the suit. This has been upheld in PLD 2006 SC 196, wherein a similar application for stay of proceedings in suit was dismissed.
11. ' As regard the case of the defendant No, 2 being that defendant No, 2 has filed the present application promptly and has still not filed any written statement it is a matter of concern that on 4-5-2005 this court held the service upon defendant No, 2 as good and it was on 15-9-2009 when the counsel filed his Vakalatnama on behalf of defendant No,
2. Though the defendant No, 2 was fully aware of the present proceeding but he chose to remain silent and it was only on 16-9-2009 when the present application has been filed by the defendant No, 2.
12. ' In any event in my view where allegations of fraud are levelled by one party against another and if the same appear to be substantial, weighty and bona fide allegations, then case should be tried in court rather than to remit the same to Arbitrator for a decision. However; in the suit in hand, the plaintiff has levelled allegations of fraud on the part of the defendants and I am of the view the same should only be decided by the court of law instead of being referred to Arbitration proceedings.
13. ' Therefore in view of the above I am constrained to dismiss both the CMAs bearing CMA No, 8982 of 2008 and CMA. No, 8860 of 2009 filed by the defendants Nos. 2 and 3.