' MUHAMMAD KHALID MEHMOOD KHAN, J.---The petitioners filed an application under section 17 of Arbitration Act before learned Civil Court Sahiwal against respondents praying that award dated 30-4-1983 be made Rule of Court. The petitioners asserted in their application that respondents Nos.3 to 9 are minors and they have been arrayed through their mother whose interest is not against the interest of minors. It was further asserted that petitioners and predecessor in interest of respondents were at dispute regarding a Shop No,81-A Arifwala, cash and jewelry. On 26-2-1983 both the parties appointed ,Haji Ghulam Hussain, Haji Muhammad Ishaque, Muhammad Ismail and Mehr Abdul . Rashid as arbitrators. The said arbitrators announced their award on 30-4-1983.
According, to the award the possession of shop was handed over to petitioners. The predecessor in interest of respondents died two months ago and respondents are now trying to dispossess the petitioner from the shop and, are also refusing to accept the award. The respondents submitted written statement, the dispute between the parties was admitted, however, the award dated 30-3- 1983 was attacked on the ground that it is an ex parte, partial, no possession was handed over to petitioners, the arbitrators Abdul Rashid and Muhammad Ismail have no knowledge about the award, Shop No,81-A is the absolute ownership of respondents and application is an attempt to usurp the.Respondents property.
2. Learned trial Court out of divergent pleadings of parties framed the following issues:-- '
"ISSUES.
(1) Whether the award dated 30-4-1983 merits to be made a rule of court? OPA
(2) Whether the applicant has no cause of action? OPR
(3) Whether the arbitrators Muhammad Iqbal and Abdul Rashid have not given the impugned award? OPR
(4) Whether the defendants are entitled to special costs under section 35-A of C.P.C.? OPD
(5) Relief'.
8. Both the parties adduced their respective evidence both verbal as well as documentary. Learned trial Court vide judgment dated 15-4-1989 accepted the application and award dated 30-4-1983 was ordered to be made rule of Court. The respondents assailed order dated 30-4-1983 by way of appeal which was allowed vide judgment dated 3-12-1991, hence the present petition.
4. Learned counsel for petitioners submits that learned appellate Court has failed to appreciate the evidence available on record. He submits that learned appellate Court has wrongly held that guardian ad litem of the minors under Order XXXII, C.P.C. Was not appointed, the respondents have admitted the contents of pars 1 of petition in toto and as such this objection was not available to respondents, learned appellate Court has wrongly held that petition was not competent. Learned counsel submits that findings of learned appellate Court that award was announced without hearing the parties is against facts. He further submits that award was finally signed by the empire and that remained in custody of empire who was Chairman of Municipal Committee. He further submits that learned appellate Court has fallen in error when he criticized the statement of empire.
In fact there was no necessity of empire as there was no dispute between the arbitrators and as such the findings of learned appellate Court are against law.. He adds that judgment .Of learned trial court is well reasoned. He adds that learned appellate Court has wrongly interfered in the award as the Civil Court was not the Court of appeal of arbitrators. Learned counsel submits that learned appeal Court while examining the legality of award cannot substitute its own findings on appreciation of evidence in place of one. Given by arbitrator, even if the court reach to a different conclusion. Learned appellate court has failed to point out any misconduct of arbitrators. The statement of a hostile witness cannot be used against the party to produce the witness. He has relied on United Bank Limited v. Consolidated Exports Limited and 3 others (1996 M LD 1727), Mst.
Rasul Bibi v. Nasrdlah Khan (1994 CLC 1774) and Mst. Farrukh Jabin v. Magbool Hussain through legal representatives and others (PLD 2004 Supreme Court 499).
5. Learned counsel for the respondents supports the impugned judgment and submits that it is, a proven fact on record that award was collusive specially when the two arbitrators themselves have deposed on oath that they signed the blank papers and award was not written before them. He further submits 'that the umpire (Sarpunch) was never appointed by the parties and it was the so called arbitrator who unauthorizedly appointed empire without any necessity.
6.. Heard. Record perused.
7. From the perusal of record and pleadings of parties it appears that there was a dispute between petitioner and predecessor in interest of respondents regarding the distribution of assets, it also appears that four persons namely Ismail, Haji Abdul Rashid, Ghulam Hussain and Muhammad Ishaque were appointed arbitrators for resolution of dispute. The authority to appoint arbitrators are Exh.A2 and Exh.A4. Exh.A2 shows the petitioners appointed Haji Ghulam Hussain and Haji Muhammad Ishaque then arbitrators and Haji Ghulam Muhammad the predecessor in interest of respondents appointed Muhammad Ismail and Mehr Abdul Rashid. The terms of reference in the authority of arbitrator is shown, that there is a dispute of property and the debit and credit of cash.
Exh.A1 is an award which shows that it has been signed by 5 persons i,e, Sh. Muhammad Iqbal Chairman Municipal Committee Arifwala being Sarpunch (umpire) along with 4 arbitrators named above. The petitioners when filed application under section 17 of Arbitration Act, the respondents denied the appointment of umpire and also the award. A.W.1 is Muhammad Iqbal the alleged umpire. He appeared in witness box and deposed that there was a dispute between the parties of property. Both the parties appointed two arbitrators each and I was their Sarpunch. Four arbitrators dictated the award they signed the award as arbitrators and he signed the award as Sarpunch.
The award was not implemented in his presence. The parties have not informed him about its implementation. However, he asked from the parks about their signatures and they admitted it.
They further admitted that arbitrators have given the correct award. In cross-examination he admits that Exh.A1 remained in his custody and when he was seized to be the Chairman of Municipal Committee Arifwala, the award remained in Town Hall Committee. The parties asked him about the award, he told them that it is not with him, after that he inquired from the Municipal Committee. The award was traced and he received the award from the office of Municipal Committee 3/4 months ago. I never went at site for implementation of award. He admits that when he signed the award, the parties were not present. He also admits when the arbitrator brought the award before him, it was pre-signed. They have not dictated the award in his presence. He admits that the parties have not appointed me arbitrator but they admitted him as Sarpunch orally.
Muhammad Ismail one of the arbitrators appeared as A.W.3, he deposed that we four persons were appointed as arbitrators. He and Abdul Rashid was on behalf of Ghulam Muhammad. We heard the dispute between the parties and resolved small issues. Last issue was the dispute of shop, in his absence the other arbitrators dictated the award and his signatures were obtained on blank paper. In cross-examination he admits that when the arbitrators signed the award he was not present. Asghar son of Ishaque asked him to sign the blank paper and he signed the blank paper on his asking. The .Writing of all other proceedings were conducted in my absence, A.W.4 is another arbitrator Abdul Rashid, he deposed that Haji Ghulam Muhammad appointed him arbitrator. The arbitrators appointed Sarpunch. We after completing the award handed over the same to Sarpunch. He admits his signatures on award, however, he deposed that they have not got implemented the award. He also deposed that he is not aware whether the award was implemented or not. In cross-examination he admits that it is correct that when Sarpunch announced the award, they were not present. He admits that Exh.A1 bears his signatures, but it was written subsequently. He further admits that Muhammad Ali informed us that their dispute is only about the gold ornaments and there is no dispute about the property. He admits that the award was not announced in his presence. He further admits that arbitrators were not authorized to appoint Sarpunch.
8. A.W.5 Muhammad Ishaque is also an arbitrator. He deposed that we were appointed arbitrators.
We dictated award on white paper and subsequently it was written on stamp paper by Mustafa. All arbitrators signed the award on white paper. After dictating the award we handed over it to Muhammad Iqbal Chairman Municipal Committee and after that what happened is not aware.
9. The petitioner appeared as A.W.6. He deposed another story that there was a dispute of shop. We tried to resolve the dispute amicably but when failed to resolve we asked Sh. Muhammad Iqbal Sarpunch Chairman Municipal Committee to resolve our dispute. Sh. Muhammad Iqbal asked two arbitrators from each party. All the four arbitrators convened meeting. They resolved the dispute and parties accepted it. In cross-examination he admits that the disputed shop is in the ownership of Ghulam Muhammad. He stated that he is not in possession of application given to Sh.
Muhammad Iqbal for resolution of their dispute. He, however, admits that the award was given by the arbitrator. One of the respondents Muhammad Sharif appeared as R.W.1. He deposed that his father have three children. They were doing joint business. Subsequently, they distributed their business after that a dispute arose between them, he was present with him at the shop when Abdul Rahim and Abdul Rashid came and ask that they will resolve their dispute. There was a stamp paper and register with them along with three white papers. They asked his father to sign stamp paper. My father died and after his death he received a notice, then he came to know about the alleged award. We have not appointed Abdul Rashid or any other person, our arbitrator. We have not appointed Sh. Muhammad Iqbal as Sarpunch, he even does not know Sh. Iqbal. Shop No,81-A. Arifwala was purchased by his father from Municipal Committee in auction and this shop was not the dispute between the brothers.
10. The dispute between the parties is whether they agreed an arbitration between them and if agreed what was its terms. Exh.A2 and Exh.A4 are two authority letters which shows that parties entered into an arbitrator agreement but these documents did not show. That they agreed for appointment of umpire/Sarpuneh. It is a settled proposition of law that umpire is a person who has to make the award if two arbitrators disagree. Where two or more arbitrators are appointed and the arbitration agreement itself provides that in the event of their disagreement, the matter in dispute shall be referred to the decision of third person, the umpire acts only when there exists difference between the arbitrators themselves. Jurisdiction of umpire commences only after difference of opinion between the arbitrators and not before. If umpire acts and takes part in the deliberation before difference arose between the arbitrators then the active participation in proceedings be deemed to be an illegality. The alleged award is Exh. Al shows that it is written by five persons, four of which are arbitrators and one is Sh. Muhammad Iqbal Sarpunch. The petitioners themselves have not alleged that their arbitrators were not in agreement with each other and there was a dispute, hence, no question of appointment of umpire (Sarpunch) arise. The arbitrators who appeared in witness box themselves admits that no authority was given to them for appointment of umpire, they also admit that they dictated their decision and handed over the same to Sh. Muhammad Iqbal the umpire and after that they are not aware what happened. The award Exh.A1 itself negates the statement of. Arbitrators who appeared in the witness box as this award is signed by five persons jointly. This means that Sh. Muhammad Iqbal umpire himself interfered in the proceedings of arbitrators. Sh. Muhammad Iqbal was never authorized or appointed by the parties to act as umpire. It appears that a dispute was between the parties, the arbitrators were appointed but they have not decided the dispute and before the announcement of their award the predecessor in interest of respondent died. The Petitioner in consultation with arbitrators then managed the award Exh.A.l which is signed by five- persons including Sh.
Muhammad Iqbal. Sh. Muhammad Iqbal when asked who appointed you the umpire he frankly admits that parties have not appointed him as umpire. He deposed that 4 arbitrators dictated the award and then he signed the award himself. This statement of A.W.1 is belied from examination of award Exh.A.1. This award starts from his name, hence, the deposition of umpire is belied from record to the effect that arbitrators have written the award and then he singed it. In cross- examination he admits that it is the arbitrators who appointed him Sarpunch. This very admission on the part of alleged umpire is sufficient to discard the arbitration award even if it is admitted that .Parties appointed, four persons as their arbitrators.
11. A.W.3 when appeared in the witness box who is one of the Arbitrators he frankly admits that award was announced in his absence and he signed blank white paper only. In cross-examination he admits that it is Asghar son of Ishaque who asked him to sign the blank white paper and on his asking he affixed his signatures and all other proceedings were completed in his absence. Another arbitrator Abdul Rashid appeared as A.W.4. He deposed that the arbitrators appointed Sarpunch.
He further deposed that they handed over the award to Sarpunch and after that he is not aware what happened. In cross-examination he admits that when Sarpunch announced the award they were not present. He is not aware about the award. He admits that Exh.A1 was signed blank and text was written subsequently. He admits that Muhammad All asked them that their dispute, is only about golden ornaments and not the property. He admits that they were not authorized to appoint Sarpunch. A.W.3 and A.W.4 are the petitioners' witnesses. They have disclosed the entire proceedings which led to believe that it was a collusive award and acts of arbitrators amounts to misconduct.
12. The argument of learned counsel for petitioner is that witnesses become hostile and as such their evidence could not be read. The record shows that petitioners have not got declared the witnesses as hostile. The witnesses were cross-examined by the other party and the petitioners continued to rely on both the witnesses before the two courts below. If according to the petitioners the witnesses become hostile it was their duty to get them hostile and to cross examine them but the petitioners have failed to do so. Even if the witnesses become hostile and courts declares them hostile and prosecution/ petitioners cross-examine them, even then the court has to see what is the truth and their statement cannot be ignored completely.
13. The above said discussion will show that award itself was a void document and it was announced by the Sarpunch who was not authorized to participate in the arbitration proceedings.
If for the sake of arguments it is admitted that arbitrators were authorized to appoint umpire, even then the umpire has no role to play in the circumstances of the case. There was no dispute between arbitrators and as such the help of umpire was not required. The argument of learned counsel for petitioner that two courts below were not the court of appeal of arbitration has a force but the court before making the award as rule of court is bound to see whether the arbitrator has mis-conducted himself and award is partial one. The circumstances of this case show the arbitrators have mis-conducted, they involved a Sarpunch who participated in proceedings, rather, he influenced all the arbitrators being the Chairman Municipal Committee Arifwala. He has not handed over the award to parties, but he kept the same with him and after that he handed over the award to petitioners, who filed instant application before the Court. No notice was issued to respondents before announcement of award.
14. The upshot of above said, discussion is that learned appellate Court has rightly set aside the award and dismissed petitioners' application. The petition thus fails and dismissed.
15. There is no order as to costs: