The petitioners have assailed the vires of the judgment and decree, dated 25.7.1992 passed by learned Additional District Judge, Sahiwal, whereby he accepted the appeal filed by the respondents against the judgment and decree dated 25.7.1990 passed by the learned Civil Judge 1st Class, Sahiwal and remanded the suit to the learned trial Court with the direction that it should be decided on merits after recording the remaining evidence on the issues already framed by the Court.
2. The facts, in brief, are that the petitioners filed a suit for specific performance of the contract dated 4.12.1968 in respect of the land fully described in the head-note of the plaint with consequential relief of permanent injunction restraining the defendants/respondents, their representatives, agents, servants or anybody else acting on their behalf from dispossessing the petitioners from the disputed land or transferring it to any other person except the plaintiffs/petitioners. It was stated that the predecessor-in-interest of the defendants/ respondents, namely Muhammad Hussain Shah applied for allotment of the suit land under Tube- well Installation Scheme of 1959. He offered the predecessors of the plaintiffs/petitioners to become share-holders in case of allotment was made in his favour. Under the agreement arrived at between the predecessors of the parties, the predecessors of the present petitioners started development of the land and it was further agreed that the Tube-well would be installed jointly. All expenditures towards leveling, development, installation of tube-well and payment of Government dues were to be borne in ratio of 50: 50% and the land was also to be purchased from the Government jointly. It was further contended that the land was. 'Banjar Qadeem' and the predecessors of the petitioners brought it under plough. They also contended that in Kharif, 1968, it was agreed that the land would be alienated in favour of predecessors of the plaintiffs/petitioners for a sum of Rs.61,000/- out of which a sum of Rs.60,000/- was paid and the remaining amount of Rs. 1,000/- was to be paid at the time of the registration of the sale deed and the procedure of the defendants/respondents undertook to get the entries made in the revenue record in their favour and subsequently the agreement to sell was executed on 4.12.1968. They contended that their predecessors had not only paid a sum of Rs.60,000/- to the predecessor of the defendants/respondents but also incurred a huge amount on the development of the land. They alleged that the defendants/respondents did not perform their part of the contract. Hence the suit.
3. The defendants/respondents contested the suit on factual and legal grounds. It was contended that neither any agreement to sell was executed nor it was legally permissible and if there was any such agreement, the same was illegal and against the law. The other contentions raised by the petitioners were also controverted. They further contended that Muhammad Hussain Shah, their predecessor was an old illiterate and simpleton villager, who could only affix his signatures so any agreement deed or receipt, if prepared, is against the facts, forged and ineffective qua their rights.
They asserted that they had been paying `Zar-i-Laghan' and after cancellation of the allotment, got it restored and also paid the total sale price from their pocket. The learned trial Court accordingly framed following issues:--
1. Whether the parties made joint venture to develop the property in dispute in result of settlement?
2. Whether the Muhammad Shah predecessor-in-interest of the present defendants entered into a valid agreement of sale with Plaintiffs No. 1 and 2 and predecessor-in-interest of Plaintiffs No. 3 to 13 and also received Rs. 16500/- as earnest money and also Rs.60000/- as consideration and the same was registered on 4.12.1968?
3. Whether the plaintiffs remained prepared and willing to perform their part of contract?
4. Whether the suit cannot proceed in view of preliminary Objection No. 1 of the written statement?
5. Whether the decree cannot be passed in suit in view of preliminary Objection No. 2 of written statement?
6. Whether the alleged agreement is void because of inadequacy of the consideration?
7. Whether the Muhammad Hussain Shah deceased was not able to understand the consequence of agreement at the time of said agreement?
8. Whether plaintiffs have made any investment in the suit land, if so to what extent?
9. Relief.
4. On 16.7.1988, learned counsel for the petitioners/plaintiffs, learned counsel for Defendant/Respondent No. 2, learned counsel for Defendants/Respondents No. 1, 3 to 15, Muhammad Yousaf Plaintiff No. 4 and attorney of Defendant No. 2 got a joint statement recorded to the effect that Ch. Nafees Ahmad, Advocate, Sahiwal, be appointed as sole arbitrator for decision of the suit. It was further stated, that after hearing the parties and recording the necessary evidence, whatever award would be announced by him, the same would be binding on the parties and the case be decided in terms of the same. It was also stated that this statement was made under the instructions of all the parties and they would be bound by the same and that they were aware of the consequences of their statement. On this joint statement, the learned trial Court appointed Ch. Nafees Ahmad, Advocate, as sole arbitrator and directed him to file the awarded till 4.9.1988.
5. The arbitrator after recording the evidence and conclusion of the proceedings pronounced the award to the effect that on the basis of the evidence available on the record, the suit is decreed ex parte in favour of the plaintiffs (petitioners) and against the defendants (respondents).
6. The Defendants/Respondents No. 3 to 15 filed objections on this ward to the effect that the arbitrator had no authority to pass the decree in favour of the plaintiffs/petitioners and has, thus, exceeded his jurisdiction; that the reference, was not clear as the points requiring determination by the arbitrator were not specifically mentioned in the same; that the award was passed without affording an opportunity of hearing to the defendants/respondents and without their knowledge as no notice was issued to them; that Ch. Noor Elahi, Advocate, was not their counsel during the proceedings as he had been superseded by Ch. Ghulam Ahmad, Advocate, Sahiwal; that Ashiq Hussain original Defendant/Respondent No. 1 had died on 27.5.1989 so no award could have been announced against him on 30.5.1989; that the scribe and the witnesses of the alleged agreement to sell have not been examined so the findings recorded by the arbitrator were against the facts; that the arbitrator illegally proceeded ex parte against the Defendants/ Respondents 3 to 13 as no notice was served on them and that the arbitrator had not pronounced the award within the time limit prescribed by the Court so the award was liable to be set aside on this ground.
7. The plaintiffs/petitioners controverted these objections and maintained that the award was legal and unexceptionable.
8. After hearing the parties and perusing the record, the learned trial Court made the award rule of the Court vide judgment and decree dated 25.7.1990 by modifying it to the extent that the suit of the plaintiffs is decreed in their favour and against the defendants. The defendants/respondents assailed the said judgment and decree before the learned District Court and the learned ADJ accepted the same through the impugned judgment as mentioned above.
9. I have heard the arguments advanced by Ch. Muhammad Ashraf, Advocate, learned counsel for the petitioners and Malik Muhammad Latif Khokhar, Advocate, learned counsel for the respondents at length and perused the record with their able assistance.
10.Learned counsel for the petitioners has contended that the learned ADJ has erred in holding that submission of separate application in writing is essential for making a reference to the arbitrator; that the mere fact that Plaintiffs/Petitioners No. 10 to 12 were minors, does not vitiate the award; that the learned ADJ could have not acted as appellate forum of the arbitrator and could have confined only to the question as to whether the award was passed legally or not; that the respondents/defendants were served through their learned counsel and as such no illegality or irregularity was committed; that the statements made by the parties personally or through their counsel would be deemed to be an application under Section 21 of the Arbitration Act, 1940 and that the father of the minor plaintiffs was their natural guardian and next friend so no illegality was committed in entering into an agreement to refer the matter to the arbitrator. In support of the contentions raised, reliance is placed on Province of Punjab and another v. Messrs Industrial Machine Pool, Lahore (PLD 1978 Lahore 829), Tariq Hussain and another v. Additional District Judge, Vehari and 2 others (2006 CLC 514) (Lahore), Messrs Ahmed Constructions through Sole Proprietor v. Messrs Neptune Textile Mills and another (PLD 1990 Karachi 216), Murad Khan and another v.
Dildar Khan and others (PLD 1966 (W.P.) Peshawar 173), Syed Mukhtar Hussain Naqvi v. Mst. Hajiani Zubeda and another (2003 YLR 3289)(Karachi) and Ashfaq Ali Qureshi v. Municipal Corporation, Multan and another (1985 SCMR 11.Controverting these arguments, learned counsel for the respondents has contended that the application in writing signed by the parties is necessary for making a reference to the arbitrator; that the arbitrator had no authority to decide the suit and pass a decree in favour of the petitioners and as such has transgressed his limits; that Syed Mohsin Ali was attorney of Syed Zulfiqar Ali, Fayyaz Hussain, Riaz Ali, Hassan Raza, Abbas Raza, Syeaa Kalsoom Fatima, Syeda Nasim Akhtar and Syeda Nisar Fatima but he had no authority on behalf of the other respondents, who were not served with any notice and as such they were condemned unheard; that their learned counsel had categorically informed that they be served in person so it was imperative for the arbitrator to issue notice to them as their learned counsel were not under obligation to appear before the arbitrator and that the Court had prescribed a time limit for announcement and filing of the award, which was not adhered to by the arbitrator and no extension was granted by the Court so the award was vitiated and void on this score alone.
12.The statement made before the Court on 16.7.1988 clearly reveals that counsel for the plaintiffs/petitioners, counsel for the Defendant/Respondent No. 2 and counsel for the remaining defendants/ respondents categorically stated that Ch. Nafees Ahmad, Advocate, be appointed as arbitrator for decision of the suit. One of the plaintiffs/ petitioners and attorney of the original Defendant No. 2 also put their signatures. The learned counsel had stated that were making the statements under the instructions of the concerned parties. By putting signatures on the joint statement, the petitioners had impliedly admitted that the learned counsel were duly authorized in this respect. Even otherwise the power of attorney executed in favour of the counsel bears and authority in favour of the counsel to make the statement about compromise, arbitration or decision on special oath. The contention that the statements were made without authority, therefore, has no force.
13.Section 21 of the Arbitration Act, 1940, does provide that before pronouncement of the judgment, the parties may apply in writing to the Court for an order for reference but the words 'apply in writing' would not confine to the formally drafted application rather it will include the duly recorded statements before the Court, which, of course, are in writing. In this case, categorical and unambiguous joint statement was made on oath by learned counsel for the parties, one of the plaintiffs and attorney of the one of the defendants so the requirement of law had duly been fulfilled and for all intents and purposes it would be deemed that the parties had applied in writing within the meaning of Section 21 of the Act ibid. In this respect, reliance is placed on Province of Punjab and another v. Messrs Industrial Machine Pool, Lahore (PLD 1978 Lahore 829), Tariq Hussain and another v. Additional District Judge, Vehari and 2 others (2006 CLC 514) (Lahore), Messrs Ahmed Constructions through Sole Proprietor u. Messrs Neptune Textile Mills another (PLD 1990 Karachi 216), Syed Mukhtar Hussain Naqui v, Mst. Hajiani Zubeda and another (2003 YLR 3289)
(Karachi) and Messrs U.I.G. (Put.) Limited through Director and 3 others v. Muhammad Imran Qureshi (2011 CLC 758) (Karachi) so the findings of the learned ADJ to this extent are not sustainable.
14.No doubt Plaintiffs Nos. 10 to 12 were minors at the time of making of reference to the arbitrator but they were being represented by their real father as next friend. It is true that Order XXXII, Rule 7 CPC provides that any agreement or compromise on behalf of the minors, entered into without the leave of the Court would be voidable. In the instant case, no prejudice was caused to the minors and, in fact, the award was passed in their favour, which shows that their natural guardian i.e. father, who had no interest adverse to their interest, looked after their interest vigilantly and effectively. There is no defect in the award or the decree on this account.
15.However, there is another important aspect of the matter. Under order dated 16.7.1988 the learned trial Court had directed the arbitrator to file the award in the Court on 4.9.1988. The proceedings recorded by the arbitrator on 4.2.1989 reveal that this time, was extended till 11.2.1989.
There is nothing on the record to show that any further extension was given thereafter. The Court had ample powers to enlarge the time for making of the award under Section 28 of the Arbitration Act, 1940, but as observed supra, the time does not appear to have been extended. There was no clause in the agreement empowering the arbitrator to enlarge the time so all proceedings conducted by him after the expiry of the fixed date are without authority as he had become functus officio. The award made by the arbitrator after expiry of the prescribed date without a formal enlargement of time by the Court or a clause in the written agreement empowering him in this behalf is void and is not binding on the parties. The disputed award suffered from this legal infirmity and could have not been made rule of the Court. The arbitrator passed the ex parte decree in favour of the plaintiffs/petitioners, and against the defendants/respondents. Legally speaking an arbitrator is not authorized to pass the judgment and decree in favour of either of the parties as the award does not operate to create any right unless the same is' made rule of the Court and a decree is passed in terms of the same, which falls within the domain of the Court only.
16. The perusal of the record reveals that the arbitrator did not get the notices served upon all the defendants/respondents. Under Section 42 of the Arbitration Act, 1940, the notices issued by the arbitrator can be served in the following manner:-- (a)by delivering it to the person on whom it is to be served, or (b)by sending it by post in a letter addressed to that, person at his usual or last known place of abode or business in Pakistan and registered under Chapter VI of the Post Office Act, 1888.
The said provisions of the Arbitration Act, 1940, are similar to the provisions of Order V Rules 10 and 10-A CPC. The learned counsel was not under obligation to appear before the arbitrator. Learned counsel for Respondent No. 2 had expressed his inability to accept the service on the ground that he had not received any instruction in this behalf. Naturally, he was under obligation to appear before the Court only and not the arbitrator unless authorized by the petitioners in this regard specifically. The respondents are residents of District Sheikhupura and the notices should have been served upon them in one of the above mentioned modes. The order of the arbitrator to the attorney of some of the respondents to produce the power of attorney on behalf of others was not enough to establish that they had been served in accordance with law. The mere fact that Syed Mohsin Ali had made a promise to produce power of attorney on behalf of others and subsequently failed to do so was not enough to proceed ex parte against those, who were not represented by the attorney and were not served in accordance with law. For all these reasons, the disputed award was not sustainable and was rightly set aside by the learned ADJ. The impugned judgment does not suffer from any illegality or infirmity to this extent for the findings recorded in the foregoing paras. The revision petition is without merits and he same is hereby dismissed.