1. ' SYED SAEED-UD-DIN NASIR, J.---This order will dispose of C.M.A. No, 12492 of 2013 which is an application under sections 20 and 34 of the Arbitration Act, 1940 read with section 151 of the Code of Civil Procedure, 1908 made by the defendant, praying therein that the present suit may be referred to the Arbitrator as per clause 15 of the agreement dated 28-7-2007 filed by to plaintiff along with the main plaint as Annexure P/1. Mr. Iftikhar-ul-Hassan, Advocate, the learned counsel appearing for the defendants has inter alia contended that since there is an arbitration clause in the agreement entered into between the defendant and the plaintiff dated 28-7-2007 i,e, para 15; which contemplates that the disputes arising between the parties shall be settled by the Hon'ble City Nazir as arbitrator, the present suit should be referred to the arbitration. For the sake of convenience the aforesaid clause 15 of the agreement dated 28-7-2007 is reproduced as under:- Clause 15: That disputes, of whatever nature, between the parties arising from this agreement shall be settled by the Honourable City Nazim as arbitrator. The Arbitration proceedings shall be conducted under the Arbitration Act, 1940 at Karachi."
2. ' The learned counsel or the defendants further argued in support is application that since there is no City Nazim in the present set-up and an Administrator has been appointed by the Provincial Government of Sindh under its Executive authority, therefore, some other suitable person may be appointed by this Court as the arbitrator to fulfill the requirement of the agreement dated 28-7- 2007 and to fill-in the place of the Arbitrator, earlier agreed upon by the parties which has fallen vacant on account of non-availability of the City Nazim. With this submission Mr. Iftikhar-ul-Hassan Advocate concluded his arguments.
3. ' Mr. K.A. Wahab learned counsel appearing for the plaintiff has vehemently opposed the grant of this application and has submitted that undoubtedly there is an arbitration clause in the agreement dated 28-7-2007, which contemplates that in the event of any dispute arising between the parties, the same shall be referred to the City Nazim who shall be the sole Arbitrator in the Arbitration proceedings, however, in the event of the office of the City Nazim falling vacant due to non-availability of the City Nazim, and an Administrator being appointed by the Provincial Government of Sindh, the Arbitration clause 15 of the aforesaid agreement has already become infructuous inasmuch as the plaintiff reposed trust in the City Nazim, as he being elected by popular vote of the people of the City of Karachi as opposed to the Administrator, appointed by the Provincial Government of Sindh under the executive authority of the Government, who is not a public representative. The learned counsel for the plaintiff further contends that the prayer of the defendants to appoint some other person as Arbitrator can only be granted if both the parties to the dispute appoint an arbitrator by consensus inasmuch as the earlier Arbitrator was also appointed by the mutual consent of both the parties in clause 15 of the agreement dated 28-7- 2007. Turning now to Act 34 of the Arbitration Act of 1940, the learned counsel for the plaintiff has submitted before the Court that Section 34 required that if any party to the legal proceedings who is also a party in the arbitration agreement wants that the matter in dispute should be referred to arbitration and wants to apply for stay of the proceedings in the Court, must do so before filing a written statement or taking any other steps in the proceedings pending before the Court. Mr. K.A.
4. Wahab the learned counsel for the plaintiff has pointed out that the present suit was filed on 18-6- 2013, when the notices were issued to the defendants for 25-6-2013 and an ad interim order was also passed. On 25-6-2013. Mr. Khursheed Javed Khan, counsel for the defendants appeared before this Court and undertook to file memo of appearance and also filed statement dated 25-6- 2013 along with para wise comments dated 26-6-2013 of the Director Veterinary Services Department U.M.C, a copy of which was also supplied to the learned counsel for the plaintiff Mr. K.A.
5. Wahab Advocate, thereafter, having participated in the proceedings of the present case as aforesaid, the defendants filed the present application i,e, C.M.A. 12492/2014 on 8-11-2013 i,e,, after about 5 months of the institution of present suit.. Therefore, the defendants are barred by section 34 of the Arbitration Act from seeking stay of the present suit. In support of his arguments learned counsel for the plaintiff has relied upon the following case-law:--
(1) PLD 2006 Supreme Court P.196 wherein the Hon'ble Supreme Court has held as follows at pages 199, 2009, 2011 Notes B,C,E,F.
6. "ARBITRATION ACT (X OF 1940)....
7. ' Section 34 - Stay of proceedings in Suit - Filing of application under section 34 of the Arbitration Act, 1940 by defendant, after having availed several adjournments for filing written statement, contested application for interim injunction and applied for rejection of plaint validity - plea of referring matter to arbitrator should be raised promptly at the very first opportunity and delay on any pretext would estop party from seeking stay of proceedings in the suit such act of defendant would show his intention to participate and defend suit before Court - Frequent requests for adjournment for filing written statement would fall within the ambit of phrase "taking any other step in the proceedings" as used in Section 34 of Arbitration Act, 1940---Defendant had taken positive steps for furtherance of proceedings in suit---Application for stay of proceedings in suit was dismissed in circumstances.
8. ' In this judgment the Hon'ble Supreme Court has observed that the test for determining as to whether an act is a step in the proceedings or not, is laid down by the Hon'ble Supreme Court in the case of Pakistan International Airlines Corporation v. Messrs Pak Saaf Dry Cleaners reported in PLD 1981 SC 553 at page 559, wherein the Hon'ble Supreme Court has held that "the party seeking to avail of the provisions of stay under this Section must clarify his position at the earliest possible opportunity, so as to leave no manner of doubt that he wishes to have resort to arbitration proceedings. If he hesitates in this regard or allows the suit to proceed in any manner, that conduct would indicate that he has abdicated his claim to have the dispute decided under the arbitration clause and to have thereby forfeited his right to claim stay of the proceedings in the Court."
(2) 1987 CLC (Karachi) P.2205 at page (2210). A This court has held "that party applying for stay of legal proceedings in Court under Section 34 of the Arbitration Act, 1940 must show that he had neither filed written statement in the case nor had taken any step in the proceedings Expression 'taking any other steps in the proceedings' in Section 34, being of general nature and having wide import, would include in its meaning any actions by party which would show that he had acquiesced in jurisdiction of the Court - steps taken by the applicant clearly showing both acquiescence in jurisdiction of Court as well as participation in proceedings and prompting its further progress had disentitled the applicant to seek stay of proceedings under section 34 of the Arbitration Act 1940."
(3) 2013 CLC 799. In this judgment the Hon'ble Lahore High Court has held that defendant had filed application for rejection of plaint under Order VII, Rule 11, C.P.C. And thereafter made application under section 34 of the Arbitration Act, 1940 for stay of proceedings---Said application under section 34 of the Arbitration Act, 1940 was rejected on the ground that after making an application under Order VII, Rule 11, C.P.C. And thereby party having participated in the proceedings of the suit before the court, could not request stay on legal proceedings under section 34 of the Arbitration Act, 1940.
(4) PLD 1952 Dacca 22 NEW BANGLA SHIPPING COMPANY V. ERIC LAN CASTER STUMP. In this matter the Court held at page 27 that " " On adjournment defendant filed two applications one for further time to file written statement and the other under Section 34 of Arbitration Act, 1940 for staying the suit objection Petition was confined to question of jurisdiction, it contained grounds on merits of the case and was without reservations. All this amounts to step in proceedings, therefore stay cannot be granted.
(5) In this matter also the Hon'ble Lahore High Court has held that application under Section 34 of the Arbitration Act, 1940 for invocation of the Arbitration clause and further stay of suit was to be made possibly on the first day before taking any step in aid of decision of Court. Application under section 34 of the Arbitration Act, 1940 dismissed.
9. It is admitted position in the present case that the defendant did not make an application for the stay of the present suit under Section 34 of Arbitration Act, 1940 in the first instance, but instead the defendants chose to be present before the Court on 25-6-2013 when their counsel undertook to file memo of appearance and also filed a statement along with para wise comments of the "Director Veterinary services Department" UME, a copy of which was supplied to the counsel for the plaintiff.
10. Thereafter, the defendants filed the present application under section 34 of the Arbitration Act at a belated stage on 8-11-2013 praying therein that the present suit may be referred to the Arbitration as per clause 15 of the agreement dated 28-7-2007. In the given set of circumstances of this case admittedly section 20 of the Act is not applicable inasmuch as the suit had already been filed.
11. ' In view of the above I am of the considered opinion that the B instant application under sections 20 and 34 of the Arbitration Act, 1940 read with section 151 of the Code of Civil Procedure, 1908 has no merit and is liable to be dismissed, which is consequently dismissed. However, there shall be no order as to costs. revisions by the competent authorities. Therefore, it is advisable to consult the official sources or legal professionals for the most up-to-date and accurate information.