MIRZA VIQAS RAUF, J.- This single judgment shall decide the instant petition as well as connected Civil Revision No.840 of 2011 as there is similarity and commonality of question of facts and law in both these petitions
2. The petitioner assails the vires of judgment and decree dated 15th of March, 2010, whereby the learned Additional District Judge, Mandi Bahauddin, while allowing the respective appeals filed by the respondents set aside the judgment and decree dated 18th of July, 2006 passed by the learned Civil Judge, Mandi Bahauddin.
3. Briefly stated facts giving rise to the filing of instant petition are that Haji Sardar Khan/ deceased (respondent No.3) being arbitrator filed two applications before the learned Civil Judge for making award dated 27.08.1996 as rule of Court. As per application submitted by the Arbitrator in terms of Section 14 of The Arbitration Act, 1940, he was appointed as sole arbitrator to resolve the dispute between the petitioner and respondents No.1 & 2. On filing of award before the Court, the petitioner filed application in terms of Sections 30 & 33 of The Arbitration Act, 1940 challenging the Arbitration Agreement and seeking setting aside of award on various grounds. The same was resisted by the respondents by way of written reply. From the divergent stance of the parties, the learned Civil Judge, Mandi Bahauddin after consolidating all the petitions framed the following issues.
ISSUES
1. Whether the arbitration agreement and arbitration award dated 27.8.96 is liable to be set-aside?
OPA.
2. If issue No.1 is proved in negative, whether the arbitration award dated 27.8.96 is liable to be made a rule of court? OPR.
3. Relief.
After framing of issues, both the parties were directed to produce their respective evidence. The petitioner himself appeared as AW-1 and also tendered arbitration agreement as Exhibit-A1 and awards as Exhibit-A2 and Exhibit-A3. On the other hand, on behalf respondent No.1 his special attorney namely Shan Muhammad appeared as RW-1 whereas Khizar Hayat and Khan Muhammad were examined as RW-2 and RW-3 respectively. The respondents also tendered arbitration agreement in evidence as Exhibit-R1. Upon completion of evidence and hearing both the sides, the learned Civil Judge, while allowing the application filed by the petitioner set aside the award dated 27.08.1996 by way of judgment dated 18th of July, 2006. The respondents No.1 & 2 being aggrieved from the said judgment and decree filed their respective appeals before the learned Additional District Judge. The appeals were consolidated and were allowed vide judgment and decree dated 15th of March, 2010, hence this petition.
4. Learned counsel for the petitioner submitted that as per arbitration agreement, it was settled between the parties that dispute will be resolved by two arbitrators Sardar Khan and Aurangzeb Khan, however, while playing fraud with the petitioner, the respondents only mentioned the name of Sardar Khan as Arbitrator in the Arbitration agreement. He added that the award was not tenable on this score alone. Learned counsel contended that the proceedings conducted by the Arbitrator are tainted with malafide and Arbitrator committed misconduct, while holding arbitration proceedings. Learned counsel maintained that the award was procured in an illegal and unlawful manner. Learned counsel argued that the award filed by the Arbitrator lacks any reasoning and the same was rightly set-aside by the learned Civil Judge. It is further contended that the learned Additional District Judge while setting aside the well reasoned judgment and decree of the learned trial Court has erred in law.
5. Conversely, learned counsel representing the respondents while defending the impugned judgment submitted that no illegality has been committed by the learned lower appellate Court while setting aside the judgment and decree of the learned trial Court. He added that the matter was duly referred to the Arbitrator who submitted his award after conducting the proceedings strictly in accordance with law. Learned counsel maintained that no ground exists to set aside the award dated 27.08.1996 and evidence was rightly appraised by the learned Additional District Judge, while making award rule of Court.
6. I have heard learned counsel for both the sides and also perused the record with their assistance.
7. After having examined the record carefully in the light of respective contentions of learned counsel for both the sides, it is observed that the award in the instant case was filed before the Court by the Arbitrator namely Sardar Khan in terms of Section 14 of the Arbitration Act (X of 1940) (hereinafter referred as "The Act, 1940") for making the same rule of Court. The petitioner being dissatisfied with the same filed an application under Sections 30 and 33 of "The Act, 1940", challenging the validity of arbitration agreement as well as award. The proceedings of Arbitrator were questioned on various grounds.
It was the stance of the petitioner that it was agreed between the parties to refer the matter to two Arbitrators namely Sardar Khan and Aurangzeb and to this effect, the petitioner while reposing confidence on one of the Arbitrator namely Sardar Khan, handed over an unwritten stamp paper to him, who obtained the signatures of petitioners upon the same malafidely. It is further averred that later on petitioner conveyed his intention that he is not willing to resolve the matter by way of arbitration. On the other hand, stance of the respondents was that the matter was referred to the Arbitrator with the consent of both the sides and in this regard, Sardar Khan was appointed as sole Arbitrator. In view of divergent stance of both the sides qua appointment of Arbitrator, the evidence led by both the sides attains significance importance.
8. The petitioner while appearing as AW.1 reiterated his stance. Though, he has specifically narrated in his statement that two arbitrators were appointed but to this effect he was not cross-examined. It is by now well settled principle of law that whenever a deposition is made to a particular fact and the same is not challenged in cross-examination, the same shall be deemed to be admitted as true. Reliance in this respect can be placed on the judgment in the case of Abdul Rehman and another vs. Zia-ul-Haque Makhdoom and others (2012 SCM R 954) and Muhammad Akhtar vs. Mst. Manna and 3 others (2001 SCM R 1700).
9. Leaving aside above aspect, it is noticed that respondent No.1 himself did not appear in the witness box rather one Shan Muhammad, being special attorney, appeared on his behalf as RW.1. He was also shown as one of attesting witness of arbitration agreement. Perusal of his statement clearly reflects that for the resolution of dispute two Arbitrators were appointed. After his admission, no further discussion is required to this effect. When there were two Arbitrators to settle the dispute between the parties, submission of award by one of them is of no legal value.
10. The award was made on 27.08.1996 whereas notice to the parties were sent by the Arbitrator on 06.02.1998 and application in terms of Section 14 of the Act, 1940 was moved on 25.02.1998 by the Arbitrator. The delay caused by the Arbitrator also casts some doubt regarding his proceedings of arbitration, especially in view of serious objections raised by the petitioner. Even otherwise, it is the bounden duty of the court receiving the award for the purpose of making it rule of Court to see by itself as to whether it is fit to be maintained or it suffers some illegality or attaches any such perversity floating on the face of the record, rendering the same nullity in the eye of law. Powers so vested in the Court are judicial in nature and not ministerial which are to be exercised even in absence of any objections from the parties concerned.
11. While examining the award, it is observed that the same is clearly lacking any reasoning. The Arbitrator while forming his opinion based his findings on the oath administered to respondents No. 1 & 2. No evidence was recorded by the Arbitrator to resolve the dispute, which was referred to him.
Section 26-A of "The Act, 1940" casts a duty upon the Arbitrator to set out the reasons for the award in sufficient detail enabling the Court to consider any question of law arising out of the same.
Section 26-A is reproduced below for ready reference and convenience:- "S. 26-A. Award to set out reasons.---
(1) The arbitrators 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 reasons in sufficient detail, the Court shall remit the award to the Arbitrators 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 arbitrators or umpire to submit it in accordance with the direction of the Court."
It is manifest from the above that award which did not disclose any reasons qua the decision of Arbitrator, was to be rejected and was not to be approved by Civil Court so as to make it rule of Court. The proceedings conducted by the Arbitrator are not sacrosanct. The same was to be tested on the parameters prescribed in Section 30 of "The Act, 1940". The manner of proceedings conducted by the Arbitrator and submission of award before the Court if analyzed in view of objections raised by the petitioner leaves no room to hold that the same is arbitrary, non-speaking and sketchy, which is sufficient to render the award invalid. In the case of Umar Din through L.Rs. vs. Mst. Shakeela Bibi and others (2009 SCM R 29), the Honorable Supreme Court of Pakistan, while outlining the object and scope of Section 26-A of The Act, 1940, held as under:- "The above noted text of the award clearly depicts that the Arbitrators had failed to give out the reasons for reaching to the conclusions 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 not 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 or 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 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 reasons 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 reasons for making a decision."
Reference can also be made to the case of A. Qutubuddin Khan vs. Chec Millwala Dredging Co.
(Pvt.) Limited (2014 SCM R 1268).
12. In view of above discussion, I am of the considered view that learned Civil Judge was right in his approach to set aside the award and refuse to make the same rule of Court. The learned Additional District Judge, however, in appeals filed by the respondents, while allowing the same set aside the judgment and decree dated 18.07.2006 and made the award dated 27.08.1996 as rule of Court.
13. There is no cavil that ordinarily in case of conflict of decision in the Courts below, preference is to be given to the decision of learned lower appellate Court, but it is neither a principle of universal application nor inflexible. Whenever there is divergence of opinion between the lower Courts, this Court, while exercising its revisional powers has to analyze both the decisions independently and then to lean in favour of decision, which is more appropriate and in accord with law. The revisional jurisdiction is though circumscribed to the conditions embodied in section 115 of The Civil Procedure Code (V of 1908) but whenever it is found that any of the Court below has committed any illegality, material irregularity or has misread the evidence, the revisional powers will come into play with full rigour and force in order to curb such perversity. Reference in this respect can be made to the case of Iqbal Ahmad vs. Managing Director Provincial Urban Development Board, N.W.F.P. Peshawar and others (2015 SCM R 799).
14. For the foregoing reasons, the instant petition is accepted and the judgment and decree dated 15.03.2010 is set-aside with the result that judgment and decree dated 18.07.2006 is restored, with no order as to costs.