MIRZA VIQAS RAUF, J. The petitioner, through instant petition, has called in question the vires of judgment and decree dated 08th of October, 2004 passed by the learned Additional District Judge, Multan, whereby his appeal, against the judgment and decree dated 24th of February, 2001 passed by the learned Civil Judge, Multan decreeing the suit filed by the respondent No.1, was dismissed.
2. Precisely, the facts necessary for adjudication of instant petition are that the respondent No.1 filed a suit for declaration and permanent injunction claiming therein that he is owner in possession of the suit property by virtue of possessory rights and the petitioner as well as the respondents No.2 & 3 have no concern with the same. It is also averred in the plaint that the allotment accorded in favour of the petitioner by respondent No.2 and the entries to this effect in view of order dated 28.06.1993 by the Additional Commissioner Revenue, Multan are null and void.
The petitioner contested the suit by filling written statement wherein the assertions contained in the plaint were controverted. The respondents No.2 & 3, however, proceeded ex-parte. From the divergent pleadings of the parties, the learned trial Court framed the following issues:- ISSUES:
1. Whether the allotment of the suit land on behalf of defendant No.2 in favour of defendant No.1 and subsequent order dated 11-2-93 & 28-6-97 are illegal void, collusive, fraudulent and ineffective against the rights of the plaintiff? OPP
2. Whether the plaintiff is in possession of the suit land in the capacity of owner as well as cultivator?
3. Whether the plaintiff has not come to the Court with clean hands? OPD-1 1-A.
4. Whether the award is liable to be set aside or make rule of the Court? OP-Parties
5. Relief.
After framing of issues, both the parties were directed to adduce their respective evidence. During the proceedings of the suit, the matter was referred to the arbitrators namely Muhammad Sharif and Muhammad Bakhsh with the consent of petitioner and respondent No.1 vide order dated 11th of November, 1999. The arbitrators appointed, submitted award in the Court on 02nd of December, 1999. The petitioner objected the same by filing the objections, which were responded by the respondent No.1 by filing a reply. The learned trial Court, while discarding the objection petition made the award rule of Court by way of judgment and decree dated 24th of February, 2001.
3. The petitioner, feeling aggrieved from the said judgment and decree, filed an appeal before the learned Additional District Judge, Multan, however, the same was dismissed vide judgment and decree dated 08th of October, 2004. Hence this petition.
4. Learned counsel for the petitioner contended that the award submitted by the arbitrators is violative of Section 21 of The Arbitration Act, 1940. He added that the award is clearly lacking any reasoning. Learned counsel maintained that in view of these legal infirmities, the award cannot be made rule of Court. Learned counsel submitted that judgments of both the Courts below are the result of gross mis-reading and non-reading of evidence available on the record and both the Courts below have committed material irregularities, while making the award rule of Court.
Learned counsel placed reliance on "UMAR DIN through L.Rs. Versus Mst. SHAKEELA BIBI and others (2009 SCM R 29) and "PROVINCE OF PUNJAB through Collector, Jhang and 2 others versus Messrs SHER MUHAMMAD & CO. And 23 others" (PLJ 2002 Lahore 1).
5. Conversely, learned Assistant Advocate General submitted that the suit land was originally owned by the Government and the respondent No.1 was not qualified to be allotted the suit land.
6. The respondent No.1 was though duly represented by his counsel but nobody was in attendance on his behalf, consequently he is proceeded ex-parte.
7. I have heard the learned counsel for the petitioner as well as the learned Assistant Advocate General and perused the record with their assistance.
8. The respondent No.1 claimed proprietary rights in the suit land on the basis of possession. As per his stance, the petitioner who is his real brother, while taking advantage of close relationship deprived him from the membership of the respondent society, which resulted into recording of entries in his name in the relevant record vide order dated 11th of February, 1993 passed by the respondent No.3. The petitioner challenged the said entries by filing an appeal before the Additional Commissioner Revneue, Multan but the same was also dismissed vide order dated 28th of June, 1993. For the purpose of deciding the fate of instant petition, the above narrated facts lose their importance as during the pendency of the proceedings before the learned Civil Judge, Multan, the petitioner and the respondent No.1 agreed for referring the matter in issue to the arbitrators namely Muhammad Sharif and Muhammad Bakhsh for their decision. Learned Civil Judge, with the consent of the petitioner and the respondent No.1 appointed the above named persons as arbitrators vide order dated 11th of November, 1999 and the matter was referred to them for its resolution. On receipt of reference, the arbitrators proceeded with the matter and consequently, an award was announced by them and the same was submitted before the Court on 02nd of December, 1999, which was duly objected by the petitioner. As per award, both the Arbitrators held that the petitioner is in possession of 26 bigas whereas respondent No.1 is occupying Square No.31, Killa No.16, measuring 08 Kanals, Killa No.15, measuring 04 Kanals, Killa No.14, measuring 04 Kanals, Killa No.13, measuring 02 Kanals and in toto, he is in possession on 04 bigas, 02 Kanals including his residential house. They resolved that out of 26 bigas, 04 bigas and 02 Kanals shall go to the respondent No.1, while remaining 22 bigas would remain with the petitioner.
The learned trial Court by way of judgment and decree dated 24th of February, 2001, while discarding the objections filed by the petitioner made the award rule of Court and decreed the suit filed by the respondent No.1 in terms thereof.
9. There is no cavil that any matter in issue can be resolved by way of arbitration which can be made either with intervention or without intervention of the Court in the light of relevant provisions of The Arbitration Act, 1940 (hereinafter referred as "The Act"). Chapter-IV of "The Act" deals with the arbitration during the pendency of the suits and in terms of Section 21 of "The Act", parties to the suit may apply for order of reference that the matter in difference between them be referred to arbitration at any time before judgment is pronounced. Section 21 of "The Act" is reproduced below for convenience and ready reference:- "21. Parties to suit may apply for order of reference.--Where in any suit all the parties interested agree that any matter in difference between them in the suit shall be referred to arbitration, they may at any time before judgment is pronounced apply in writing to the Court for an order of reference."
Bare reading of the above referred provision of law postulates that in order to invoke the same it is pre-condition that all the parties interested must be in agreement in sending the matter in difference between them to the Arbitrators for its resolution. The order dated 11th of November, 1999 is evident of the fact that though respondents No.2 & 3 were party to the suit but their consent was not obtained for the said purpose despite the fact that the land in question is owned by the respondent society. This Court in the case of "PROVINCE OF PUNJAB through Collector, Jhang and 2 others versus Messrs SHER MUHAMMAD & CO. And 23 others" (PLJ 2002 Lahore 1), while interpreting the provision of section 21 of "The Act" on this perspective held as under:- "In the instant case, undisputedly, it was arbitration in a suit pending before the trial Court and to be governed by Section 21 of the Act. It could only be possible by agreement of all the parties and not at the choice or option of a party. If the plaintiff/respondent had to resort to the arbitration in the matter, he could either make reference in terms of Condition No.14 of the additional conditions of the agreement before filing of the suit or if the Court had to refer the matter it could be possible with the consent and the agreement of all. What is evident from the proceedings of this case is that the plaintiff/respondent made an application for appointment of arbitration by nominating its own arbitrator whereupon despite the objection by the appellants/respondents, the Court proceeded to refer the matter to arbitrators. This was not permissible in view of Section 21 of the Arbitration Act, 1940. The Court had no such power in view of Section 21 to impose arbitration on an unwilling party.
The importance of agreement of the parties in arbitral matter was also highlighted in Director Housing A.G.'s Branch, Rawalpindi v. Messrs Mukhdum Consultants Engineers and Architects 1997 SCM R 988.
12. The participation of the appellants/defendants before the arbitrators in the proceedings would not validate the reference. In Nand Kishore v. Mercantile Corporation (India) Ltd. AIR 1953 Cal. 415 it was held that where an order of reference was illegal, subsequent proceedings and participation of the parties could not make legal what was illegal. In Paragraph No.67 of the judgment relying upon Chhabbalal v. Kallu Lal AIR 1946 PC 72 it was held that "the reference being tainted with illegality at the root subsequent consent does not cure the defect. I, therefore, declare and adjudge that the award is invalid and a nullity. I also declare and adjudged that the order of reference was an invalid and a nullity and I revoke it. Thus, no amount of acquiescence or participation by the appellants in the proceedings before the arbitrators could validate what was invalid from its inception. In Messrs Awan Industries Ltd. v. The Executive Engineer, Lined Channel Division and another 1992 SCM R 65 the appellants therein had filed a suit such which remained pending before the Court for some time. On imposition of Martial Law in the year, 1977 they approached the Deputy Martial Law Administrator with a request to appoint a sole arbitrator in the case which request was acceded to by the Deputy Martial Law Administrator who appointed one Abu Saeed Khan, Director Highway, Hyderabad as arbitrator in the matter. The proceedings in pursuance of that appointment were taken by the arbitrator who gave an award later on. The award was filed before the Court who rejected the objections and made the award rule of the Court. The said judgment and order was challenged before the High Court by setting aside the judgment and decree of the trial Court. On an appeal before their Lordships of the Supreme Court, it was observed that:- "Where, therefore, an award is found to be nullity because of the invalidity of the arbitration agreement or, for any other reason, or the award is prima facie illegal and not fit to be maintained, the Court has power under Section 17 of the Act to set it aside without waiting for an objection to award being filed or without considering any application for setting it aside, if there be any, and irrespective of the question whether or not any objection to the award was filed or whether the objection, if filed, was not within time. In such cases Section 30, clause (c) of the Act is also attracted. Another example can be where a party appoints a sole arbitrator without prior notice to the other party, the award would be prima facie illegal and may be set aside. See Abdul Khaleq v.
Province of East Pakistan and another PLD 1964 Dacca 166 and Messrs S.M. Faisal and Company v.
Messrs Overseas Cotton PLD 1959 Kar. 739."
It was further held that:- "Even otherwise while examining the award for the purposes of making it rule of the Court, the Court could consider whether there was a valid arbitration agreement or reference to arbitration pursuant to which the award was given or whether the award was in existence. It is correct that an award could be set aside only on the grounds mentioned in Section 30 of the Act, but besides Section 17, this section also contains clause (c), which provides the ground that the award was given by an Arbitrator appointed by the Deputy Martial Law Administrator, Zone 'C' and not by the parties and the Deputy Martial Law Administrator himself named the sole arbitrator. Although, subsequently Respondent No.1 and the appellants had executed an arbitration agreement but it was based on the order of the Deputy Martial Law Administrator." (underlined by us for emphasis).
While going through the principles laid down in the judgment supra, no ambiguity is left that for invoking the provision of Section 21 of "The Act", it is incumbent that all the parties interested must agree that any matter in difference between them in the suit shall be referred to the arbitrators, which is clearly lacking in the instant case. It is well settled principle of law by now that when a thing is required to be done in a specific manner under some law then that should be done in the manner prescribed but in no other way. The appointment of the arbitrators and referring the matter in issue to them is clearly violative of section 21 of "The Act". The arbitrators even while proceeding with the arbitration did not make any effort to associate respondents No.2 & 3 in the said proceedings, which badly effects the validity of award.
10. The petitioner though objected the said award but objections were turned down. Section 17 of "The Act" casts a duty upon the Court to examine the award even by its own in order to see as to whether the same suffers from any patent illegality necessitating either the setting aside of the award or its remission to the Arbitrator even when no objection is filed by any of the parties.
Similarly it is bounden duty of the arbitrator that he shall state in the award the reasons for the same in sufficient detail to enable the Court to consider, any question of law arising out of the award as provided under Section 26 of "The Act". I have examined the award submitted by the arbitrators and the judgment passed by the learned Civil Judge, whereby the same was made rule of Court on the touchstone of Sections 17 and 26-A of "The Act" and this leaves no cavil for me to hold that the award in question lacks necessary reasons as required under Section 26-A of "The Act". The learned Civil Judge, while attending the objections filed by the petitioner discarded the same in a cursory manner without applying its judicial mind and taking into consideration the duty casts upon it in terms of Section 17 of "The Act". Guidance in this respect can be sought from "UMAR DIN through L.Rs. Versus Mst. SHAKEELA BIBI and others" (2009 SCM R 29). Relevant extract from the same is reproduced herein below:- "The above noted text of the award clearly depicts that the Arbitrators had failed to give out the reasons for reaching to the conclusion of their decision. On the basis of which document, or evidence they had arrived at that conclusion was not given out in the award so as to enable the Court making the award a rule of Court, to examine the correctness of the reasons and conclusions. No sufficient detail has been found by us in the above noted award as envisaged by section 26-A of the Arbitration Act, 1940, to perceive the decision noted in the award. Section 26-A of the Arbitration Act, 1940 which was inserted by Arbitration (Amendment) Ordinance XV of 1981, was not interjected into the Act without any aim or purpose behind it by the Legislature. The Civil Court which had to make the award the rule of Court was granted an opportunity and power to examine the reasons of adjudication of the subject-matter in dispute by the Arbitrators. As to how and on what basis, the Arbitrators had decided and made the award, was to be scrutinized critically by the learned Court, to check-up as to whether the award was based on whimsical grounds, without any foundation or reason or it was supported by and rendered on some basis, evidence and document. In other words, arbitrary, non-speaking, sketchy, careless and sleazy award, deciding the fate of the parties to the dispute was not to be blessed with approval to give them authority of Court, by making it a rule of Court. The award which does not contain reasons in sufficient detail has to be rejected and is not to be approved by the Civil Court so as to make it rule of Court. An arbitration award is enforceable and is to be granted approval of the Court to be transferred into the shape and form of rule of Court, when it complies with the essential characteristics and requirements as are contained in section 26-A of the Arbitration Act of 1940. In the instant case no reason has been given by the Arbitrators for deciding the dispute. Therefore, we fully endorse the view pronounced in 2001 SCM R 750, 2006 SCM R 614 and 2006 SCM R 1657 (supra) as referred to by the learned counsel for the appellants. The judgments in 1994 M LD 2348 (supra) and PLD 1958 SC 221 (supra) referred to by the learned counsel for the respondents are not applicable to the facts and circumstances of the present case, as the present award is devoid of any reason for making a decision."
The above view was further affirmed and reiterated by the Hon'ble Apex Court in the case of "A.
QUTUBUDDIN KHAN versus CHEC MILLWALA DREDGING CL. (PVT.) LIMITED" (2014 SCM R 1268).
11. The arbitration is a bilateral arrangement for investigation and determination of a dispute or disputes between the parties by one or more persons chosen by them, while avoiding the ordinary procedure for resolution of dispute. The consent of arbitration is based upon the principle of withdrawing the dispute from the ordinary courts in order to enable the parties to resolve their dispute through a domestic tribunal or forum. The arbitral tribunal derives jurisdiction either from the arbitration agreement or the reference transmitted to him with the consent of the parties litigating. Though the proceedings before the said tribunal or forum are not to be regulated in accord with the general principles provided under the Code of Procedure but at the same time such tribunal cannot be absolved from its liability to decide the dispute in a just and fair manner.
12. After examining and evaluating the judgment under challenge on the principles discussed above, I am of the considered view that both the Courts below have acted in an illegal and unlawful manner, while making the award rule of Court. Though there are concurrent findings of facts arrived by both the Courts below and this Court always exercises restraint while interfering with such findings but this is not a principle of universal application. The concurrent findings cannot abstain this Court in exercising its revisional jurisdiction when once it is established on the record that these findings suffer some patent legal error. The revisional jurisdiction is always exercised with great care and caution, however, when a judgment and decree suffers legal flaws enumerated in Section 115 of the Civil Procedure Code (V of 1908) then it is bounden duty of this Court to exercise its revisional jurisdiction in order to eradicate such infirmities.
13. For the foregoing reasons, referring of the matter to the arbitration by the learned trial Court by way of order dated 11th of November, 1999 and the award rendered on the basis thereof is held to be illegal and unlawful. As a sequel thereof, the judgments and decrees passed by both the Courts below are set-aside, consequently, the suit filed by the respondent No.1/plaintiff will be deemed to be pending before the learned Civil Judge, Multan, who shall proceed with the same from the stage where the proceedings were interpreted by the reference of arbitration. This petition is accordingly allowed in terms of above account with no order as to costs. Needless to observe that the learned Civil Judge will proceed afresh with the suit strictly in accordance with law even while referring the matter to the arbitration. Parties are directed to appear before the learned District Judge, Multan on 05.10.2015. Office is directed to transmit a copy of this judgment to the learned District Judge, Multan, for compliance.