1. SHUJAAT ALI KHAN, J.--- Through this appeal the appellants have challenged judgment and decree dated 6-3-2012 passed by the learned Civil Judge, Multan.
2. 2.Succinctly, the facts, forming factual background of instant appeal, are that the respondent/plaintiff instituted a suit for specific performance of contract. Pursuant to notice issued by the learned trial Court, Mr. Irfan Haider Shamsi, Advocate, filed his power of attorney on behalf of the appellants/defendants on 2-6-2010 and the proceedings were adjourned for 4-6-2010 on which date the said Advocate got recorded his statement to the effect that the defendants are selling and purchasing products of the plaintiff and the items are also lying in the Display and the proceedings were adjourned to 10-6-2010 for filing of written statement/reply and the same was not done so till 3-7-2010 when the appellants/defendants filed an application under section 34 of the Arbitration Act, 1940 (hereinafter to be referred as the Act), for stay of proceedings in view of arbitration clause in the agreement. The reply to the said application was submitted by the respondents/plaintiff. Thereafter the same was fixed for final arguments on 12-10-2010 on which date instead of passing any order on the application filed by the appellants/defendants ex parte proceedings were directed against them as nobody appeared on their behalf. The appellants/defendants moved an application for setting aside the ex parte proceedings which was dismissed by the learned trial Court vide order dated 27-1-2007 and suit of the respondent/plaintiff was decreed vide judgment and decree dated 6-3-2012; hence this appeal.
3. 3.Learned counsel for the appellants/defendants while opening his arguments submits that after recording of statement of learned counsel for the appellants/defendants learned trial Court should have passed an order under Order XV, rule 1, C.P.C. instead of directing the appellants/defendants to file written statement as the relief sought by the respondent/plaintiff was admitted by the appellants/defendants; that after filing application under section 34 of the Act, learned trial Court was duty bound to examine as to whether proceedings were to be stayed and the matter was to be referred to an arbitrator in view of the arbitration clause contained in the agreement or not; that the application filed by the appellants/defendants could not be dismissed for non-prosecution; that for special damages the respondent/plaintiff was required to specifically plead and prove the personal injuries and damages suffered by him due to alleged non-performance of contract by the appellants/defendants which exercise could not be completed without affording an opportunity of cross-examination to the appellants/defendants and that the impugned judgment and decree is result of undue haste shown by the learned trial Court while conducting proceedings in the suit filed by the respondent/ plaintiff. In support of his stance, learned counsel for the appellants/ defendants has placed reliance on Abdul Majeed Khan v. Tawseen Abdul Haleem and others (PLD 2012 SC 80).
4. 4.Conversely, learned counsel appearing for the respondent/ plaintiff defends impugned judgment and decree by contending that application that application under section 34 of the Act should be filed promptly without any loss of time or taking any other steps in the proceedings but the appellants/defendants instead of filing such application on the very first date of hearing sought certain adjournments for filing of written statement, therefore, the said application was not maintainable; that damages/compensation can be awarded under section 73 of the Contract Act, 1872, or Specific Relief Act, 1877; that conduct of the appellants/defendants disentitle them from any relief as they played hide and seek with the court. In addition to his oral submissions, learned counsel for the respondent/plaintiff has referred the cases reported as Muhammad Farooq v. Nazir Ahmad and others (PLD 2006 SC 195), Messrs Dada Steel Mills v. Metalexport and 5 others (2009 CLC 1431), Province of Punjab through Collector Sargodha and others v. Muhammad Asghar (2008 YLR 300) and India General Navigation and Railway Company Ltd. v. Eastern Assam Co. Ltd. (AIR 1921 Calcutta 315).
5. 5.We have heard learned counsel for the parties at consideration length and have also perused the documents appended with this petition as well as record of the trial Court in addition to the case- law cited at the bar:--- 6.The respondent/plaintiff filed the suit, subject-matter of instant appeal, with the following prayer:--- "It is humbly prayed that the decree in favour of the plaintiff and against the defendant No.1 may pass to the fact that the defendant No.1 to fulfil the terms and conditions of the Contract dated 16- 9-2005 and to display the products of the plaintiff at their utility stores under his control and to make payments of sold items and to render the accounts of products and the mandatory injunction to the fact that the defendant No.1 to sell the products at his stores and stop to return the same and also purchase the remaining stocks from the warehouse of the plaintiff and in the alternative a decree for damages/ compensation of 20 million rupee with 20% increase from the filing of the case be passed in favour of the plaintiff against the defendant No.1. Any other relief which this honourable Court may deem fit be granted in the larger interest of Justice."
6. A perusal of afore-quoted prayer clause of the plaint demonstrates that main grievance of the respondent/plaintiff was regarding display and purchase of his produces as per agreement dated 16-9-2005. When the same is adjudged while putting it in juxtaposition to the statement made by learned counsel for the appellants/defendants before the trial Court on 4-6-2010 it appears that claim of the respondent/plaintiff stood admitted and no cause of action was left with the respondent/plaintiff. In this situation, provisions of Order XV, rule 1, C.P.C. come into play and the court can dispose of the suit forthwith. Instead of doing so, or giving any reasoning for further proceedings, the learned trial Court adjourned the case for submission of written statement and on two subsequent dates the case was adjourned for the same purpose, however, prior to filing written statement the appellants/defendants moved an application under section 34 of the Act and the case was adjourned to 12-10-2010 for arguments on the said application on which date instead of passing any order on the said application ex parte proceedings were ordered against the appellants/defendants. On 13-12-2010 the main suit was fixed for arguments for 22-12-2010 and proceedings were adjourned for future date for the same purpose. However, on 8-2-2011 the respondent/ plaintiff filed an application for permission to produce additional evidence which was allowed on 10-2-2011 and the matter was fixed for arguments on the main case for 28-3-2011 on which date, all of a sudden the learned trial Court came to know that in fact proceedings were being conducted on the application under section 34 of the Act. Resultantly, in order dated 28-3- 2011, it has been mentioned that arguments on application under section 34 of the Act have been heard and the matter was fixed for 13-4-2011 for announcement of order on which date the same could not be announced due to pre-occupation of learned Presiding Officer in other matters and the case was adjourned to 20-4-2011 when the leaned trial Court dismissed the said application for non-prosecution. From the above narration of facts it is clear that approach of the learned trial Court, while conducting proceedings in the suit of the respondent/ plaintiff was totally inconsistent inasmuch as while derogating from the established procedure that prior to taking any action in the main suit the learned trial Court should have decided the fate of the application of the appellants/defendants but in the matter under discussion the Presiding officer conducted proceedings according to his own whims. While dealing with a similar question, a Division Bench of this Court in the case of Westinghouse Electric Corporation, the Quadrangle 4400 Alafaya Trail Orlando, Florida, U.S.A. and 3 others v. Wak Orient Power and Light Limited, Gulberg-III, Lahore (PLD 2001 Lahore 143).
7. "7.At this stage it may be pertinently mentioned that one of the applications which was filed by the appellants was for stay of proceedings in view of the arbitration agreement between the parties.
8. That application too was dismissed by the learned Civil Judge on the same date when the decree was passed. It is beyond one's comprehension as to how could defendant be penalized for not filing the written statement when he had filed an application under the Arbitration Act for stay of proceedings. Before first disposing of that application neither the written statement could be called for nor any penalty could be imposed." (Emphasis supplied)
9. 7.Now the question which requires determination by this Court is as to whether after hearing arguments on the said application learned trial Court was obliged to dismiss the same for non- prosecution. In this regard we are of the view that the said approach of the learned trial Court is totally alien to the well-established procedure regarding trial of the civil suits and miscellaneous applications, thus, the same is not sustainable in the eye of law.
10. 8.Now coming to the objection raised by learned counsel for the respondent/plaintiff that the application under section 34 of the Act was not maintainable as the same was filed after availing number opportunities. In this regard, we are of the view that there is no cavil with the proposition that the said application should have been filed promptly and if the same is filed after taking other steps the same can be dismissed on such score but in the instant case the proposition is totally different viz. the learned trial Court was not obliged to dismiss the said application in default especially when the same was fixed for pronouncement of orders after hearing the arguments, as is evidence from order dated 28-3-2011. Thus, the cases relied upon by the learned counsel for the respondent/plaintiff stand distinguished from the proposition involved in the instant case.
11. 9.Another salient feature of the instant case is that though the appellants/defendants disappeared after joining proceedings but soon after dismissal of their application under section 34 of the Act they filed application for setting aside of ex parte proceedings against them which was dismissed by the learned trial Court on the ground that they remained absent for several months. In this regard, we are of the view that in view of controversy involved between the parties the appellants/defendants were entitled to defend themselves by joining the proceedings. Even otherwise, law favours adjudication of matters on merits instead of technicalities.
12. 10.For what has bee discussed above, we are of the view that conduct of the learned trial Court and the manner in which proceedings were conducted, invited serious objections. Consequently, instant appeal is allowed, the impugned judgment and decree is set aside and the matter is remanded to the learned trial Court for decision afresh, by or before 31st of December, 2013, including decision on application filed by the appellants/defendants under section 34 of the Act, on merits. Parties are directed to appear before the learned trial Court on 8-4-2013. No order as to costs.