' The dispute in the present case relates to Shop No, 23, situate at Chakwal which was in the name of Muhammad Bashir respondent No. 1. Mst. Akhtar Bashir petitioner is the wife of Respondent No. 1 while Muhammad Alam respondent No, 2 is his real brother. Muhammad Alam respondent No, 2 filed a civil suit before the Civil Judge, Chakwal claiming 1/2 of the aforesaid shop which was decreed on the statement of Muhammad Bashir respondent No. 1 on 7-1-1970. The petitioner had also filed a suit claiming ownership in the shop in question as having been given to her by Muhammad Bashir respondent No. 1 in lieu of dower. This suit was also decreed on the statement of respondent No. 1 on 5-1-1970. The petitioner filed another suit challenging the decree passed in favour of respondent No, 2 in which both Muhammad Bashir and Muhammad Alam were shown as the defendants. Muhammad Alam also filed a suit for the rendition of accounts as he claimed share in the profits. On 14-4-1970 all the parties agreed to refer the dispute to Mr. Iftikhar Hussain Natiq, Arbitrator, by a statement made in Court and signed by the parties. The case was adjourned to 28-7-1970 for the arbitrator to submit his award. The proceedings of 14-4-1970 being relevant may be quoted below :- {{URDU TEXT}} ' This statement was recorded in both the suits. The arbitrator delivered the award on 17-74970 which was filed in Court on 20-7-1970.
2. The petitioner filed the objections to the award on 1-9-1970 while Muhammad Alam filed on 15-9- 1970. The trial Court rejected both the objections vide its order dated 13-9-1971. The petitioner filed an appeal which was also dismissed by the District Judge, Jhelum on 23-12-1972. Respondent No, 2, however, did not pursue his objection any further.
3. This revision raises some important questions of law which may be formulated as under :-
(1) Whether the order of reference in a pending suit could be made without any application as provided under section 21 of the Arbitration Act ?
(2) Whether the entire subject matter of the suit could be referred to arbitration without formulating the matter of difference between the parties ?
(3) Whether the Courts below were justified in rejecting the objections.
4. Before adverting to the points involved in the present case it may be pointed out that Mr. Iftikhar Hussain Natiq consolidated both the suits by a joint statement of the parties dated 15-6-1970 and struck down the following issues :-
(i) Whether the plaintiff Mst. Akhtar Bashir was owner of one-half share of shop No, 23?
(ii) Whether the defendant No, 2 has any share in the said shop?
(iii) Whether the defendants have a joint business in the disputed shop, if so, what are their shares?
(iv) In case Issue No, 3 is proved whether the defendant No, 2 was entitled to receive any amount from defendant No. 1?
' The arbitrator after recording the evidence came to the conclusion that there was no justification for Muhammad Bashir respondent No. 1 to have given the shop in lieu of the dower to Mst. Akhtar Bashir as only a sum of Rs, 120 was fixed and had already been paid, the decree passed on 15-1- 1970 in favour of the petitioner was collusive and had been passed only to affect the rights of Muhammad Alam respondent No,
2. As regards the rendition of accounts it was observed by the arbitrator that no joint business had been done by the parties. Mst. Akhtar Bashir did not object to the validity of the reference on the ground that it had been made without any application under section 21 of the Arbitration Act. Similarly, no objection had been raised that the entire subject- matter could not be referred to arbitration. The only point that had been urged before the lower Appellate Court was that both the suits could not be consolidated.
5. Arbitration in pending suits are dealt with in Chapter IV of the Arbitration Act which contains sections 21 to 25. Section 21 provides that where in any suit all the parties interested agree that any matter in difference between them in the suit shall be referred to arbitration, they may at any time before judgment is pronounced apply in writing to the Court for an order of reference. Section 22 lays down that the arbitrator shall be appointed in such manner as may be agreed between the parties. Section 23 provides that the Court shall, by order, refer to the arbitrator the matter in difference which he is required to determine, and shall in the order, specify such time as it thinks reasonable for making of the award. Under subsection (2) the Court is precluded from dealing with the matter which has been referred to the arbitrator. Section 24 relates to a situation when reference to arbitration has been made by some of the parties only to the suit. Under section 25 the provisions of the other Chapter have been made applicable so far as they can be, to the proceedings under Chapter IV relating to the arbitration in pending cases.
6. In order to resolve the first question as to whether a reference in a pending suit could only be made by an application in writing, section 21 of the Arbitration Act may be reproduced below :- ' Section 21.-Where in any suit all the patties interested agree that any matter in difference between them in the suit shall be referred to arbitration, they may at any time before judgment is pronounced apply in writing to the Court for an order of reference.
' In a case reported as Mahabir v. Manohar Singh (1), the facts of the case were that on the date of hearing of the suit the pleaders of the parties stated that they had agreed to arbitration and wanted to refer the matter in dispute to a certain pleader. Their statements were recorded by the Court and a reference was made in accordance with their agreement. The arbitrator made an a mad to which certain objections were taken by the defendants, but they did not state that the reference was invalid because it was not in writing, or that they had not authorised their pleaders to make it. The objection was taken in the revision under the corresponding provisions of paragraph 1 of the Second Schedule attached to the Code of Civil Procedure that the agreement ought to have been in writing. The contention was not accepted and the relevant observations may be reproduced below :- "An objection is now taken that under paragraph 1 of the Second Schedule attached to the Code of Civil Procedure the agreement ought to have been in writing; but a record taken down of an oral statement made by the parties or their pleaders is as much an agreement in writing as a written application ,made by the parties or their pleaders themselves. The personality of the writer makes no difference. In Shama Sundaram Iyer v. Abdul Latif (1900) 27 Cal. 61 and Abdul Hamid v. Riazuddin (1908) 30 All. 32 it was accordingly held that where both the parties to a pending suit consented to a reference to arbitration and an order of reference was then and there made by the Court in the presence of the parties, though not upon a written application ; it was not open to the Court to supersede that reference. An award is not invalid merely because an application for an order of reference is not made in writing. In Umed Singh v. Seth Sobhog Mal Dhadha (1916) 43 Cal. 290 (P C) their Lordships of the Privy Council held that where a guardian ad litem of a minor party was in Court and had assented to the application for reference to arbitration the omission {{FOOT NOTE}}
(1) AIR 1924 All. 540 {{FOOT NOTE}} ' of the guardian to sign the application was immaterial. The application therefore fails and is rejected."
' Reference may be made to another judgment reported as Waliullah v. Bhaggan (I) interpreting paragraph 15 of Schedule II to the Code of Civil Procedure which was analogous to section 30 of the Arbitration Act. It was held in this case that where parties prefer an amateur Court to a professional Court, they take the risk that the decision may not be technically perfect. It was further observed that the law is not supposed to assist such persons to get a second decision from a professional Court, because they are dissatisfied with the decision of the amateur tribunal which they themselves have chosen. As regards the objection that an arbitration agreement must be in writing it was observed as under :- "The first objection that the reference was not in writing is met by the decision of the Allahabad High Court reported in Abdul Hakim v. Riazuddin (1907) 30 All.
32. In this case the reference was made by the Court and the parties both appeared and conducted their case before the arbitrator. Under these circumstances a written reference was hardly necessary and I do not think that the award could be set aside on this ground."
' In the case of Nidarnurthi Karishnamoorthy and another v. Garigipattl Ganapathilingam (2) even the application for adjournment, in which the Court was asked to send the record to certain arbitrator to whom the parties had already referred the matter in dispute in the pending suit was considered to be an application under Schedule II, para. (1) of the Civil Procedure Code to the Court itself to make a reference to the said arbitrator. It was further observed that the Court having acted upon the application it was considered to be a question of estoppel against the parties raising the objection as to the validity of the award on the form of the application. Reliance was placed on a Privy Council decision in Ghulam Khan v. Muhammad Hassan (3).
' In Ve. N. K. R. M. A. Venkatachellam Chettiar v. Ve. N. K. Ram. A. Ramanathan Chettiar etc. (4) the plaintiff and the only defendant interested in the subject matter of the suit agreed in writing to refer then disputes, including those in suit to arbitration and the plaintiff presented an application that, as the matter in suit as well as other netters had been referred to arbitration the suit should be kept pending and adjourned till an award was made and the Court accordingly granted the adjournment and kept the suit pending. The Court granted adjournments from time to time for the arbitrator to pronounce the award. On the award having been filed the objection as regards the form of the reference was raised which was dealt with in the following manner :- "On careful consideration, however, I see no reason to differ from the view taken in Kulsum Fatima v.
Ali Akbar (1917) 39 All. 401 that it is not open to either party to raise this objection. One reason which operates strongly in my mind is this : that, in a case like this, when arbitrators had been selected and had taken up the consideration of the matters, if it were to be held that the parties, could not subsequently legally treat the procedure as a reference, no legal reference could be made at all, however much the parties wished the arbitrator's award to be treated as one under reference. If the strict requirements of the schedule are to be adhered to, the Court must, before the arbitration {{FOOT NOTE}}
(1) AIR 1925 Oudh 269 (2) AIR 1917 Mad. 656
(3) 29 I A 51 (P C) (4) AIR 1922 Mad. 429 {{FOOT NOTE}} ' commences, refer to the arbitrator the matter in difference which he is required to determine and it follows that if the matter has already been referred by agreement, no reference can be made by the Court. I cannot imagine any result more unfortunate. I see no reason why parties should not, even when they did not originally intend the matter to be treated as a reference through Court, subsequently agree that it should be so treated as to get a finality to the decision."
' In Parsotam Das etc. v. Jagan Nath and others (1), one of the parties had not signed the application but made oral application and took part in arbitration. It was held that such a party was estopped from disputing the award on the ground that reference was not signed boo him.
Similarly in Jaimai Singh v. Tib Ram (2), some of the parties had not joined the reference but all the parties appeared before the arbitrator to plead. It was held that defect in the reference stood cured.
8. The learned counsel for the petitioner has relied on Messrs S. M. Qasim & Co. v. Messrs Sh.
Ziauddin (3), where the question was whether the Court after staying proceedings under section 34 of the Arbitration Act, 1940 should allow the parties to follow their own course to enforce the arbitration clause in the agreement, or should itself proceed to enforce the arbitration clause in the agreement. It was held that section 34 does not provide that the Court shall proceed the arbitration clause in the agreement. It was further observed that the intention of the Legislature was that in a case of this nature, the parties should be left to pursue their own course to enforce the arbitration agreement in accordance with its terms. It was in this connection that the arguments of the respondents that an application under section 34 of the Arbitration Act may be treated as an application under section 21 of the Arbitration Act was . Considered and repelled by the following observations :- "The learned counsel for the respondents has further argued that the agreement of the counsel for the parties for reference to arbitration may be deemed to be an application under section 21 of the Arbitration Act. Section 21 lays down that where in any suit all the parties interested agree that any matter in difference between them in the suit shall be referred to arbitration, they may at any time before judgment is pronounced apply in writing to the Court for on order of reference. Admittedly, no application in writing was presented by the counsel for the parties for an order of reference. In such a case, an application in writing is absolutely essential, and in the absence of such an application the Court cannot proceed to refer the matter to an arbitrator."
' This decision is not applicable to the facts of the case. The question involved in the present case is whether after the reference had been made with the consent of the parties and the award having been made in a pending suit the same could be challenged on the ground that the application was not made in writing was not considered. The learned counsel for the petitioner has also relied on a judgment reported as Pakistan through Director of Storage and Inspection (Foodgrains), Ministry of Agriculture and Works, Karachi v. Chaudhry Brothers Ltd., Lahore (4). In this case also a similar question had arisen and a similar objection had been made to the award. In paragraph 6 the contentions of the appellant were recorded but they were not agreed in {{FOOT NOTE}}
(1) AIR 1919 All. 381 (2) AIR 1930 Lah. 523
(3) PLD 1962 Lah. 95 (4) PLD 1978 Kar. 362 {{FOOT NOTE}} ' view of the submissions of the opposite-party that the appellant had not only participated in the arbitration proceedings but accepted the appointment of the arbitrator by invoking the jurisdiction of the Court from time to time by making miscellaneous applications. The question was not finally decided and as such the said case does not in any way advance the case of the appellant. The relevant observations at page 366 may be quoted below :- "However, it is not necessary to decide the question whether noncompliance strictly with the requirements of sections 21 to 23 of the Act makes the award a nullity, because we are firmly of the view that the Court's order dated 20-9-1961 was not an order of reference to arbitration under section 23 of the Act."
9. In view of the above discussion the correct proposition of law appears to be that if in pending case the parties consent to refer the matter to arbitration and sign the proceedings in this behalf and the award is submitted the parties shall be estopped to question the validity of the award on the ground that the reference had not been made strictly in compliance with the provisions of section 21 of the Arbitration Act and there was no application in writing. In this case no objection was even taken before the Courts below as to the validity of the award on this ground. The first contention raised by the petitioner is hereby repelled.
10. The question whether the subject-matter of the whole suit could be referred to the arbitrator without particularly specifying the matter in dispute may now be attended. In a case reported as Jagmohan v. Suraj Narain (1) it was held that where the parties agree that the arbitrator should decide the matter in dispute between the parties as set out in the pleadings the reference cannot be said to be vague. It was further held that it was sufficiently definite as regards the points of difference between the parties. In this case after framing of the issues the parties agreed that the matter in dispute be referred to arbitration. The agreement was recorded in the proceedings which was signed by the parties and their respective pleaders. No objection was raised on behalf of; the parties about the arbitrator having no jurisdiction to proceed with the matter. It was observed that the parties could not object to the mode of reference in the circumstances of the case. In the present case the arbitrator had framed the issues and the parties knew that the subject-matter of the suit had been referred to arbitration. The award could not be knocked down on the ground that the reference was vague. The learned counsel for the petitioner has relied on some observations made in Jumma Khan etc. v. Mahmud Khan etc. (2). This judgment does not deal with the point in dispute. It has been held in this case that the reference to arbitration had to be confined to the subject-matter of the suit and any award on matters not covered by the suit would be void to that extent, and that this would also apply to consequential decree that might be passed by the Court in terms of such an award. In the circumstances of the present case it, therefore, cannot C be said that there was no valid reference of the matters in dispute before the arbitrator. The second contention raised up the petitioner has also no force.
11. As regards the objection actually raised before the Court the only point which had been stressed was that the arbitrator was not competent to consolidate both the suits. The learned District Judge had observed that the arbitrator was not bound by rules of procedure and as such the award in both the suits was valid. No evidence has been brought on {{FOOT NOTE}}
(1) AIR 1935 Oudh 499 (2) 1973 SCMR 289 {{FOOT NOTE}} ' record to show that the arbitrator had misconducted in the proceedings. As a matter of fact this point has not been seriously urged by the learned counsel for the petitioner. As regards the powers of the arbitrator, reference may be made to a judgment reported as Safia Bai etc. v. Karachi Co- operative Housing Societies Union Ltd. (1). It was held in this case that when the parties referred their dispute for settlement to the arbitrator the award made by him is generally final. No appeal lies against this award which can only be challenged by reasons provided under section 30 of the Arbitration Act, and the procedure for which is laid down under section 33 of the Arbitration Act. It was further held that the arbitrator was the Judge of both law and fact and was not bound by the technical rules of procedure and Evidence Act. Where the arbitrator considers all the evidence, documents and the arguments of the parties the award cannot be set aside on any technical ground. To set aside the award it must be shown that the arbitrator had misconducted himself and that the award was the result of corruption. No such condition had been proved in the present rise.
No ground has been made out for interference in the exercise of the revisional jurisdiction.
12. This revision has no force which is hereby dismissed with costs.
(1) PLD 1967 Kat. 598