' CH. MUHAMMAD MASOOD JAHANGIR, J.---The facts necessitated for the disposal of the instant writ petition are that Mohammad Iqbal and Mohammad Akram, respondents Nos.1 and 2 filed application under section 14 of the Arbitration Act, 1940, against the present petitioners, with the prayer that the arbitration award dated 27-3-1996 announced by Mr. Liaquat Ali Chatha, Magistrate, be made rule of Court while passing a decree in this regard.
2. Brief facts as narrated in the said application filed by respondents Nos.1 and 2 are that a dispute had arisen regarding a plot measuring 15 marlas and for the resolution of the same, the parties agreed to appoint Mr. Liaquat Ali Chatha, Magistare/ respondent No,3 as arbitrator vide agreements/references dated 21-3-1996 and 27-3-1996 (Ex:AWI/1 and Ex:AW1/2); that the arbitrator after hearing the parties announced the award (Ex:A 1) on 27-3-1996 which should be made rule of Court.
3. The said application was contested by the petitioners with the assertion that the arbitrator being Magistrate had got registered a false criminal case on behalf of respondents Nos.1 and 2 against petitioner No,1 and others, which was 'cancelled thereafter being baseless and that the agreement for reference being forged was in-effective upon the rights of the petitioners. The learned trial court captured the disputed area of fact by framing the issues. Both the parties adduced their evidence in pros and cons before the learned trial court, who after appreciating the evidence available on file, decided issues Nos.6 and 7 in favour of respondents and against the petitioners while accepting the application filed by respondents Nos.1 and 2 under section 14 of the Arbitration Act, 1940, and award dated 27-3-1996 was made rule of Court vide order dated 2-2-2001. Feeling dissatisfied, the present petitioners preferred a revision before the learned lower revisional court, who dismissed the same vide order dated 17-7-2003, hence this civil revision.
4. Learned counsel for the petitioners has argued that the impugned orders passed by both the learned courts below are against the law and facts; that the alleged agreement for reference was illegal being based on fraud and coercion which was not signed by all the parties to be affected; therefore, the agreement for reference was not in existence in the eye of law; that the failure to comply with the mandatory provisions of sections 17 and 26-A of the Arbitration Act, 1940, have rendered the impugned orders illegal, invalid and non-maintainable; that the alleged arbitrator Mr. Liaquat Ali Chatha/Magistrate was a biased person, who got registered a criminal case (FIR No,117 Ex:R1) against the petitioners, but the said fact has not been considered by both the learned courts below; that the arbitrator had acted beyond its jurisdiction; that the alleged agreement/reference for the appointment of arbitrator was alleged to be executed on 27-3-1996, whereas, on the same day the disputed award was announced by the arbitrator/respondent No,3; that the arbitrator had committed misconduct and passed an ex-parte award without hearing the petitioners. He lastly prayed for the acceptance of the instant writ petition and setting aside of the impugned orders passed by the learned courts below.
5. Conversely, learned counsel for respondents Nos.1 and 2 has argued that the parties with their free, consent had appointed Mr. Liaquat Ali Chatha, agistrate/respondent No,3 as their sole arbitrator, who after hearing the parties delivered the award; that the respondents administered special Oath on Holy 'Quran' on the demand of the petitioners and on the basis thereof, the award was announced by the arbitrator. He supported the impugned orders passed by both the learned courts below and prayed for the dismissal of the instant writ petition.
6. Arguments heard. Record perused.
7. The basic concept and object of arbitration is a settlement between the parties for determination of a dispute through a person or more persons selected by them. One of sole requirement of the arbitration is resolution of dispute through a decision not as a regular court, but through one or more persons acting as arbitrators. The concept behind it is based upon the principle of withdrawing the dispute from the ordinary courts and enabling the parties to get settled their dispute through a domestic tribunal. The arbitrator or arbitrators appointed by the concerned parties derived their jurisdiction from the reference sent by the parties through agreement for their appointment as arbitrators.
8. In the present case, the petitioners asserted by filing their written reply before the learned trial court that the arbitration agreement allegedly attributed to them was fictitious having been prepared under the stress and coercion of arbitrator, who was at that time a Magistrate and also got recorded a criminal case against the petitioners.
9. It has transpired from the record available on file that the agreement for appointment of arbitrator (Ex:AW1/2) allegedly executed by the petitioners is found to be reduced into writing on 27-3-1996, whereas, the award was also announced by Mr. Liaquat Ali Chatha, Magistrate/arbitrator/respondent No,3 on the same day i,e, 27-3-1996. A bare perusal of the said award (Ex:AW1/1) reveals that it was announced by the said arbitrator on the administration of special Oath on Holy 'Quran' by the respondents. The arbitrator failed to get recorded the version of the parties and even no evidence was recorded by the said arbitrator to resolve the alleged dispute which was referred to him.
10. Section 26-A of the Arbitration Act, 1940, is relevant which is reproduced here-under:-- "Award to set out reasons:---(1) The arbitrator or umpire shall state in the award the reasons for the award in sufficient detail to enable the Court to consider any question of law arising out of the award.
(2) Where the award does not state the reason in sufficient detail, the Court shall remit the award to the arbitrator or umpire and fix the time within-which the arbitrator or umpire shall submit the award together with the reasons in sufficient detail: ' Provided that any time so fixed may be extended by subsequent order of the Court.
(3) An award remitted under subsection (2) shall become void on the failure of the arbitrator or umpire to submit it in accordance with the direction of the Court."
11. The contention of learned counsel for the petitioners that the disputed award is totally silent as to on what basis or reasons the arbitrator had delivered the same, which is against the mandate of the aforesaid provision, has force. The arbitrator without probing the matter simply passed the said award on the basis of alleged administration of Oath on Holy 'Quran' by the respondents. The arbitration agreements which are available on file as Ex:AW1 and Ex:AW2, did not authorize the arbitrator to decide their dispute on administration of special Oath on Holy 'Quran' and as such the arbitrator travelled beyond its jurisdiction, who was bound of the authority given in the reference by the parties. The cursory glance of assigning the award was not permissible under the law. The courts were required to minutely discuss each and every aspect as disclosed in the award. It is an admitted fact that the arbitrator neither recorded the evidence of the parties nor assigned any reason for the announcement of the said award. The court is not supposed to authenticate each and every award by simply making the same rule of Court, but the basic responsibility imposed by the Statute to make an award rule of the Court is that the courts below are bound to evaluate the award and see that whether it is capable to be endorsed as such or not.
12. There is no cavil with the proposition that prior to insertion of section 26-A in the Arbitration Act, the arbitrator/umpire was not supposed to give reasoning for the award, but it must not be lost sight off that award is not to be made in vacuum, but the entire evidence and record is required to be considered. It is also a misconceived notion that prior to insertion of section 26-A, the arbitrator could deliver award of his own whims and wishes, which could not be an object of the Arbitration Act. When the parties had chosen through their will and consent a person to resolve their dispute by delivering an award, then the arbitrator must not be guilty of any act which can possibly be construed as indicative of partiality or unfairness.
13. In the present case, it was admitted by Mohammad Iqbal AW2 (petitioner of the petition under section 14 of the Arbitration Act) that a criminal case (FIR No,117) was got registered by the order of said arbitrator. The arbitrator was appointed on 27-3-1996 and he announced the award on the same day, which does not appear to be fair play on his behalf. Logic behind the added section 26- A is that after insertion, thereof, it has become obligatory upon the arbitrators to announce the awards by assigning the reasons and sufficient details for enabling the court to consider any question of law arising out of the award. In the present case, the arbitrator appears to have announced the award without application of his judicious mind or assigning any good reason, rather he had also failed to determine the real dispute diligently. Even it has been pleaded by the respondents in para No,2 of the application filed under Section 14 ibid that the arbitrator had to resolve the controversy after affording opportunity of hearing to the parties, but there is nothing on the record that as to what proceedings were conducted by the said arbitrator, who also failed to reduce into writing that how the parties arrived at the option for disposal of their dispute on special Oath while bypassing the normal procedure of producing evidence. In the absence of such material on the record, no authenticity is attached to the award delivered by respondent No,3.
14. Mr. Liaquat Ali Chatha, Magistrate/arbitrator appeared as AW1 before the learned trial court and during his cross-examination deposed as under:- {{URDU TEXT}} Similarly, Muhammad Iqbal AW2 (petitioner of the petition under section 14 of the Arbitration Act) deposed in his statement-in-chief as under:-- {{URDU TEXT}}
15. The said evidence led by the respondent has proved the fact that the arbitrator neither heard the parties nor recorded any evidence regarding the dispute, whereas, the evidence led by the petitioners reveals that the arbitration agreement (Ex:AW1) was got scribed under coercion.
Signatures of Arshad Mehmood Anwar under the writing of stamp vendor are different with the signatures of the said party which is available on the first page of the said agreement (Ex:AW1/2).
16. As observed supra that the award is neither based upon any evidence nor the arbitrator assigned any reason in the same, therefore, the questioned award has no value in the eye of law.
There must be purity in administration of justice as well as in the process which was conducted by the arbitrator, who was required to set out the differences arose between the parties which he was required to settle after perusing the entire record regarding purchase of the disputed plot with independent and diligent application of mind.
17. For the foregoing discussion, this court is of the firm view that both the learned courts below have failed to consider that the award announced by the alleged arbitrator was beyond the authority given to him by the parties, which had rendered the same of no legal effect and the same being not binding upon the parties could not be made rule of the Court, but both the learned courts below while passing the impugned orders also failed to exercise the authority conferred upon them under the law in a proper manner rendering the same without jurisdiction, illegal, unlawful and arbitrary.
18. Sequel of the above discussion is that the impugned orders passed by both the learned courts below are set aside while allowing the instant writ petition, the award rendered by arbitrator Mr. Liaqut All Chatha/Magistrate/respondent No,3 is also set aside with the direction that main application filed under section 14 ibid shall be deemed to be pending before the learned trial court, who shall appoint another arbitrator after obtaining consent of the parties. The parties ' are directed to appear before the District Judge, Gujrat, on 15-5-2014, who will entrust the file of the case to a court of competent jurisdiction.