1. ' SAEEDUZZAMAN SIDDIQUI, J.--This appeal under clause (10) of the Letters Patent, was filed against the order of a learned Single Judge of the High Court 9f Sind & Baluchistan, dated 11-11-1971, rejecting the objections filed by the appellant against the award of Umpire and making it the rule of court.
2. The dispute which was referred to the Arbitrators in this case had arisen in the following circumstances. The appellant was appointed as the Sole Selling Agent of respondent by a written agency agreement dated 25-11-1966 in respect of Karachi for the crushing season of 1966-67 but the agreement admittedly continued up to 1-4-1967. In accordance with the paragraph 3 of the agreement the appellant was entitled to receive a sum of Re. 1 as commission on each bag of sugar sold. The respondent could appoint other selling agent in other places in Pakistan except Karachi and appellant was prohibited from dealing with any other manufacturer of sugar in Pakistan. Paragraph 12 of the agreement provided that in the event of any dispute arising out of agreement between the parties the matter was to be referred to two Arbitrators one to be nominated by each party. It appears that dispute had arisen between the parties as the appellant alleged that the respondent had sold two lac bags of sugar in Karachi directly to some parties. The appellant accordingly instituted a suit for accounts against the respondent being Suit No, 979/67 in the Court of 1st Civil Judge, First Class, Karachi. This suit was stayed by the court on an application filed under section 34 of the Arbitration Act by the respondent. Thereafter parties appointed Messrs Ismail A. Moosa and Manzoor Alam, as the two Arbitrators to decide the dispute between them and these arbitrators in their turn appointed one S. M. Sayeed Behari as an Umpire before entering upon the dispute. The appellant claimed before the arbitrators a sum of Rs, 2,00,000 by way of commission on the alleged sale of two lac bags of sugar by the respondent to parties in Karachi directly and a further sum of Rs, 29,307 by way of damages for non-supply of 750 bags of sugar.
2. The respondent counterclaimed a sum of Rs, 89,264.04 before the arbitrators as the price of 592 bags of sugar sold by the appellant and not accounted for. The two arbitrators appointed by the parties were unable to decide the dispute and accordingly they referred the dispute to the Umpire named above. The Umpire recorded evidence of the parties and after hearing them gave a decision on 19-1-1969 and filed it in court under section 14(2) of the Arbitration Act. It was treated as an award and was registered as Suit No, 207/69. The operative part of the above decision given by the Umpire was as follows:- "This being the state of oral and documentary evidence which is unsatis-factory, I as Umpire am unable to decide one way or the other.
3. ' In the circumstances the parties are at liberty to seek redress in a court of competent jurisdiction.
4. The order is announced and copies are delivered to the parties."
5. ' The present appellant filed an application under section 151, C. P. C. In Suit No, 207/69 praying that the award filed by the Umpire in the above suit be returned for presentation in Suit No, 979/67 which was stayed under section 34 of the Arbitration Act, and in which reference to arbitrators was made. The learned Single Judge before whom the above suit came up for hearing did not agree with the contention of appellant raised in the above application under section 151, C. P. C. And remitted back to the Umpire his decision with the direction to apply his mind to whatever evidence is placed before him by the parties or any additional evidence that may be produced and to give award determining the dispute between the parties. This order was passed by the learned Single Judge, on 17-11-1969 and four months time was allowed to the Umpire to give his award. On 6-2- 1970 the Umpire made an application to the court under section 28 of the Arbitration Act praying for extension of time up to the month of July, 1970 on the grounds stated in the application which was granted on 2-3-1970 and time was extended by 3 months from the date of expiry of time originally granted by the court. The Umpire thereafter gave an award on 14-6-1970 and filed it in court on 2-7-1970 which was registered as Suit No, 278/1970. It appears that the office in the meantime put up a note in Suit No, 207 of 1969 pointing out that in spite of expiry of time granted by the court the award was not filed by the Umpire. The matter was accordingly placed in court on 17- 8-1970 but on that date only the Advocate of appellant appeared and obtained adjournment up to 24th August, 1970. On 24th August, 1970 the court overruled the office objection and disposed of Suit No, 207/1969 with the observation that the award, was already filed by the arbitrator in court and was registered as Suit No, 278/70, and therefore parties could file their objections if any to the award after receiving the notice of the filing of the award in that suit. Both the appellant and respondent filed their objections to the award in Suit No, 278/1970 after service of notice of award.
6. The appellant in support of their objections examined one Hafiz Nisar Ali, a partner of the appellant's Firm but the respondent lead no evidence. The learned Single Judge after hearing the objections filed by the parties rejected them and made the award of Umpire rule of the court with the modification that the respondent was held entitled to interest on the amount awarded to him at the rate of 6% from the date of decree till realisation. This order of learned Single Judge is impugned in this appeal. The learned counsel for the appellant has raised the following contentions before us :-
(1) That the decision of Umpire dated 19-1-1969 was not an award and therefore the order of the court dated 17-11-1969 remitting it back to the Umpire for reconsideration and decision was an order without jurisdiction and therefore all subsequent proceedings taken by the Umpire after the remand which resulted in the award dated 16-6-1970 was a nullity in the eye of law.
(ii) That the learned Single Judge failed to consider that there was an error apparent on the face of award inasmuch as the Umpire found in his award that the total number of bags supplied by the respondent to the appellant were 27,555 only out of which 26,963 bags were sold by the appellant and price thereof was paid to the respondent and another 218 bags were returned by the appellant to the respondent but the Umpire still awarded costs of 592 bags of sugar to respondent when according to the above finding of Umpire there were only 374 bags left with the appellant.
(iii) That the Umpire disallowed the claim of appellant for commission on direct sale of sugar bags in Karachi by the respondent amounting to Rs, 2 lacs on a misconceived view of law that the sole agent (appellant) was not entitled to any Commission on sales directly made by the principal (respondent), and
(iv) That the Umpire was disqualified to act in the matter as he has personal interest in the matter being a Director of respondent at the time of deciding the dispute which was not in the knowledge of the appellant earlier.
7. ' All the above four contentions raised by the learned counsel for the appellant were repelled by the learned Single Judge.
8. In so far the first contention of the learned counsel for the appellant is concerned we may say that although the decision of the Umpire dated 19-1-1969 is now claimed by the appellant was not an award but when it was filed in the court and was treated as an award and registered as Suit No, 207/69 he did not raise any such objection to it and on the contrary he filed application under section 151, C. P. C. On 15-9-1969 in the above suit describing it as an award and praying that it may be returned for filing in Suit No, 979/67 before the 1st Civil Judge, First Class Karachi. The appellant made following assertion in paragraphs 4, 5 and the prayer clause of his application : - "(4) That, thereafter, the defendant filed an application in the Court of 1st Civil Judge, 1st Class, Karachi, that since the Umpire has given Award directing the parties to seek redress in the court of competent jurisdiction, the Suit No, 979/67 which had been stayed under section 34 of Arbitration Act as aforesaid, he proceeded with. Plaintiff has filed counter-affidavit in that court.
(5) That, the defendant has no objection to the finding given by the Umpire that the parties are at liberty to seek redress in the Court of competent jurisdiction. But it is submitted that the Award ought to have been filed in the lower court i. e. 1st Civil Judge, 1st Class, in which the defendant's Suit No, 797/67 was stayed. As such it is submitted that this hon'ble Court has no jurisdiction in this matter.
9. ' It is, therefore, prayed that this hon'ble Court be pleased to return the Award to be filed in the court of proper jurisdiction and to pass such other order as may be deemed fit and proper."
10. A perusal of the" above paragraphs will show that the appellant had treated the decision of the Umpire dated 19-1-1969 as an award and objection was taken only as to the jurisdiction of the court to hear the same. Apart from it when Suit No, 207/69 came up for hearing before the learned Single Judge on 17-11-1969 and he remitted it back to Umpire for reconsideration no such contention was raised by the appellant before the learned Single C Judge. It is also not without significance that after the award was remitted back to the Umpire, the appellant not only appeared before him but took part in the proceedings without raising any objection as to the competency of Umpire to proceed with the case. In these circumstances we do not find any substance in the 1st contention of the learned counsel for the appellant and overrule the same.
11. ' It is next contended by the learned counsel for the appellant that according to the finding of Umpire the total number of sugar bags supplied to the appellant by the respondent were 27,555, out of which the price of 26,963 of sugar bags was paid by the appellant and 218 bags were retured to the respondent and therefore the left over quantity of sugar bag if any, in the hands of appellant was only 374 bags. As against this the Umpire awarded cost of 592 bags claimed by the respondent. The learned counsel for the respondent is unable to controvert this position. The claim of respondent for recovery of price of 592 bags of sugar is considered by the Umpire in his award as follows:- "Messrs Bhawani Sugar Mills Limited has produced documents in support of its claims that it has supplied to Messrs Karachi Trading Agency, the 27,555 bags of sugar for sale on Commission basis under the agreement referred to above. The price of 26,963 bags of sugar was paid by the Karachi Trading Agency to Messrs Bhawani Sugar Mills Limited after deduction of usual commission and charges in accordance with the said Agency Agreement and 218 bags of sugar powder were returned to Messrs Bhawani Sugar Mills Limited by the Messrs Karachi Trading Agency, Karachi but the price of 592 bags of sugar which was sold by Messrs Karachi Trading Agency to the third part was not paid to Messrs Bhawani Sugar Mills Limited, Karachi."
12. A reading of the above paragraph will show that the total left over quantity of sugar bags with the appellant was only 374 while the Umpire awarded costs of 592 bags against the appellant which is an obvious error. We are, therefore, convinced that the Umpire committed an error in awarding the price of 592 bags to respondent which is apparent on the face of the award.
13. ' The appellant had claimed a sum of Rs, 2 lacs as Commission on sale of two lacs bags of sugar by the respondent directly to parties in Karachi, ' The appellant had also claiined a sum of Rs, 29,307 as damages on account of non-supply of 750 bags of sugar. The Arbitrator while dealiea with the above claim of appellant held as follows:- "In the course of Arbitration proceeding before me Mr. Chundrigar, learned Advocate on behalf of Messrs Bhawani Sugar Mills Limited, Karachi raised a legal point in support of his client's case that according to Indian Contract Act, 1957 at page 624 Sole Agent is not entitled to claim any Commission on direct sale to other parties by the principle."
14. ' The Umpire did not elaborate the proposition of law canvassed before him by the respondent nor he referred to the specific provision of law under which the claim of appellant was rejected. Mr. A. I.
15. Chundrigar, the learned counsel for the respondent was also unable to point me any specific provision in the Contract Act which provided that a sole agent is not entitled to claim commission on direct sales made to parties by the principal. We have gone through the terms of agency agreement and noticed that the appellant as the sole selling agent of respondent for Karachi was entitled to commission at the rate of Re. 1 per bag on the sale of sugar. It is also provided in the agreement that during the currency of the agency agreement the appellant was E debarred from dealing with any other manufacturer of sugar but none of these factors were taken into consideration by the Arbitrator while disallowing the claim of appellant. We, therefore, hold that the Umpire misdirected himself in failling to decide the claim of respondent on a misconceived view of law.
16. ' The last contention of the learned counsel for the appellant is that Mr. S. M. Sayeed Behari, who was appointed as Umpire in the dispute was disqualified as he was personally interested in the subject-matter. In the evidence recorded before the learned Single Judge Hafiz Nisar Ali (Exh. 5) stated on oath on behalf of appellant that the Umpire is one of the Directors of the three Companies of the respondent which fact was not in the knowledge of the appellant and they came to know of it after the award was given. This witness was not cross-examined by the respondent's counsel who on the contrary made statement before the learned Single Judge that at the time of decision, the Umpire S. M. Sayeed, was Chairman of Al-Noor Mills and a Director of respondent and that the registered office of respondent company and the other two companies in which S. M.
17. Sayeed was Director are the same and some of the Directors are common in all the three companies. In these circumstances we are of the view that the Umpire should have disclosed these facts to appellant before he accepted the office of Umpire and by failing to disclose these facts he was disqualified from acting as an Umpire in the disputes.
18. ' For the aforesaid reasons we accept this appeal and set aside the award of Umpire. We are informed that the Umpire Mr. S. M. Sayeed is now dead and accordingly we direct that the two Arbitrators appointed by party shall appoint another Umpire in place of S. M. Sayeed and the Umpire so appointed shall within four months of his appointment give his award in the matter after hearing the parties and after recording such further evidence a the parties may desire to produce before him. We will, however, leave the parties to bear their respective costs in the appeal.