' This first appeal under section 96, C. P. C. Is directed against the order dated 15-12-1981, passed by Mr. Abdul Rahman Shaikh, Senior Civil Judge, Dadu whereby he dismissed the objections to the award filed in Suit No, 106 of 1977, and made it rule of the Court, in the following :circumstances.
2. The respondent/plaintiff filed a suit, being Suit No, 106 of 1977, for declaration, injunction, damages and settlement of accounts. During the pendency of the suit the Advocate for appellants/defendants Nos. 1 to 3 filed an application under section 21 of the Arbitration Act stating that defendants Nos. 1 to 3 desire that the matter be referred to arbitration. The appellants suggested the name of Mr. Abdul Karim Shaikh, Retired Superintending Engineer. The respondent and his Advocate made an endorsement on the application agreeing to the appointment of Mr. Abdul Karim Shaikh, as sole arbitrator. Accordingly, by the order, dated 2-5-1978, the Senior Civil Judge, Dadu, appointed Mr. Abdul Karim Shaikh, Retired Superintending Engineer as sole arbitrator.
The Court directed that the arbitration fee and costs of arbitration would be paid by the parties as decided by the arbitrator and further directed that the award would be filed on 5-6-1978.
3. Thereafter, the arbitrator proceeded with the arbitration but could not give the award within the time allowed by the Court. He, however, before the expiry of the time applied to the Court for extension of time which was granted and the time was extended.
4. But, before the expiry of the period, another application under section 151,C. P. C. Was made on behalf of defendant No, 3 praying for removal of Mr. Abdul Karim Shaikh as sole arbitrator and appointment of another arbitrator. It was stated in the application that the consent for appointment of Mr. Abdul Karim Shaikh was given by a junior officer of Highways Department who appeared on behalf of the appellants without obtaining prior approval of the higher authorities and that no fair and roper justice will be done by the sole arbitrator. The respondent did ot file any objection to this application. However, on 3-1-1979, the earned Senior Civil Judge, Dadu on agreement of both the parties ppointed Mr. Allah Warayo Shaikh, Retired Chief Engineer, Buildings and Roads Department, as sole arbitrator in place of Mr. Abdul Karim haikh, and directed that the new arbitrator would start arbitration proceedings from the stage where Mr. Abdul Karim Shaikh had left. He new arbitrator was allowed four months time to complete the arbitration proceedings and parties were directed to deposit Rs, 200 towards expenses for conducting the arbitration proceedings. The parties were allowed 15 days time to deposit the amount. The new arbitrator firstised the question of fixation of his fee by agreement and the matter was ken to the Court and after necessary order for his fee was passed, the arbitrator on 20-5-1979, started the arbitration proceedings and the me were concluded, on 19-4-1980, as stated at the Bar by both the counsel. Is further stated at the Bar that meanwhile the arbitrator, on 13-1-1980 plied for extension of time which was extended by two months. Ultiately, the new arbitrator gave his award on 8-5-1980, and filed the same Court on 11-11-1980, after the respondent had moved an application der section 38 of the Arbitration Act, on 19-5-1980, for a direction to liver the award or file the same in Court. After the award was filed in court notices were served on the appellants and they filed objections to e same.
5. Thereafter, the respondent filed an application under section 28 of the Arbitration At for extension of time for making the award till it was filed in Court inter alia stating that time was extended for two months and the sole arbitrator informed the Court that he had completed the hearing on 26- 4-1980, and that he had called Muzaffar, accountant from the Office of the appellants for certain explanations and on 30-4-1980, the sole arbitrator gave notice to the parties that he would publish the award on 8-5-1980, but refused to file the award in Court unless he was paid his fee. It is further stated that the respondent was compelled to make an application under section 38 of the Arbitration Act for a direction to the arbitrator to file the award and the Court directed the parties to deposit the arbitration fee in Court and that the appellants took time to deposit their shares of the arbitrator's fee and after the amount of arbitrator's fee was deposited by the parties in Court, the Court called upon the arbitrator to file the award in Court. It is also stated that the appellants had been attending the arbitration proceedings and also participating in the proceedings without any protest or objection and it could be inferred from their conduct that they had willingly acquiesced in the proceedings and had willingly taken part in the proceedings before the arbitrator.
6. In the application containing objections to the award, it is, inter alia, stated that the sole arbitrator gave the award on 8-5-1980, without any valid extension of time and that every claim by the respondent should have been justified in the light of the record produced before the arbitrator and that the arbitrator neither considered codal rules nor he visited the site of the work to see the actual position of the work and that the arbitrator has given his award without giving detail reasons on which his award is based.
7. However, before the learned Civil Judge the Advocate appears to have urged that the award was filed beyond the time and the arbitrator had neither considered the codal rules nor he visited the site of the work to see the actual position of the work. The learned Civil Judge, Dadu dismissed the objections holding that the award could not be filed by the arbitrator within the time on account of non-payment of arbitration fee and made the award rule of the Court by the judgment, dated 15- 12-1981, now impugned in this First Appeal. It may be stated that it appears from the Court diary that on 3-9-1980, appellants had presented a cheque bearing No 23931, dated 2-3-1980 for Rs, 15,000 drawn on the National Bank of Pakistan:
8. I have heard Mr. A. R. Akhtar learned counsel for the appellants and Mr. Kishanchand learned counsel for the respondent.
9. The learned counsel for the appellants has raised before me the following three grounds :
(1) That the appointment of Mr. Allah Warayo Shaikh was invalid.
(2) That the award given was beyond the time.
(3) That the award does not at all state the reasons for awarding huge amount of Rs, 9,62,553.
10. With regard to the first point it is submitted by the learned counsel for the appellants that according to the Arbitration Clause two arbitrators, one by each party, were required to be appointed and therefore the dispute could not have been referred to the sole arbitrator. He laid much emphasis on the following clause contained in the contract.
(c) In the event of any dispute arising in accordance with the limitations provided in sub-clause
(a) of this clause the same shall be referred to the decision of a Sole Arbitration to be appointed by the Chief Engineer Incharge of the work from among the officers of the Department not below the rank of Superintending Engineer, and other than Superintending Engineer, Incharge of the contract work. In case of claim is preferred for an amount upto Rs, 1 Lakh only the decision of the Sole Arbitration in such cases shall be final and binding on the parties concerned. In case the amount of claim preferred is over Rs, 1 lakh the dispute shall be preferred to the award of the Arbitrations to be appointed from the Superintending Engineers of the Department other than Superintending Engineer incharge of the work one to be nominated contractor, in the case of the said two Arbitrations not agreeing the case shall be referred to the award of an Umpire who shall be an officer of the Department not below the rank of a Chief Engineer, to decision of the arbitrations/ Umpires as the case may be, shall be final and binding on the parties concerned. Where the matter involved claims for the payment or recorvery of reduction of money only the amount if any award in Arbitration shall be recoverable to respect of the matter so referred.".
11. In support of the first ground he relied on Devi Prasad Sri Krishna Prasad Ltd. And another v.
Secretary of State (1), Munawar & Co. v. Messrs S. A. Rauf & Co (2), Nalini Kanta Roy v. The Province of East Pakistan and another (3) and Messrs Oil & Gas Development Corporation v. Messrs Karachi Buildings (4).
12. So far as this ground is concerned I find no force in it for firstly, no such objection was taken in the objections filed to the award, secondly, the sole arbitrator was appointed on an application made by the appellants themselves. It may be pertinent here to state that even in the objections filed by the appellants they have stated in paragraph 4 as follows : "4. That the defendants submitted the list of names to be selected by the plaintiff as arbitrator but the plaintiff did not agree to select Arbitrator among the list submitted by the defendants and as such Mr. Allah Warayo Shaikh, retired Chief Engineer, Buildings and Roads was agreed as sole arbitrator by defendant No, vide his No, TC/G-55/F. C. No, 106-77-11, dated 2-1-1979."
13. A ground somewhat similar in nature was taken in The Chief Engineer Building Department, Provincial P. W. D. Government of Sind V. Messrs Pak. National Construction Company (5), wherein also incidentally, Mr. A. K. Akhtar Advocate was appearing for the Government and he had then cited three out of four cases now cited before me and I had dealt with ground, it stated therein, as follows : "There cannot be any quarrel with proposition that an arbitrator named in the arbitration agreement either by name or by designation only has jurisdiction to decide the dispute between the parties under the arbitration agreement but if subsequently the parties agree to the arbitration of another person or they acquiesced with full knowledge of all circumstances in the appointment and participate in the {{FOOT NOTE}}
(1) AIR 1941 All 377 (2) PLD 1959(W P.) Kar. 325
(3) PLD 1961 Dacca 536 (4) 1978 SCM R 278
(5) PLD 1981 Kar. 553 {{FOOT NOTE}} arbitration proceedings without any objection or protest then they will be precluded from objecting to such appointment."
' I have also discussed in detail the three cases namely, Munawar & Co. v. S. A. Rauf & Co. ; Nalini Kanta Roy v. The Province of East Pakistan and another ; Messrs Oil & Gas Development Corporation v. Messrs Karachi Building ; cited before me in The Chief Engineer Building Department, Provincial P.
W. D. Government of Sind v. Messrs Pak. National Construction Company. I, therefore, need not deal with these cases again here. However, Devi Prasad Sri Krishna Prasad Ltd. And another v. Secretary of State was not then cited. I must, therefore, refer to this case. In reply to the question on what point he has cited this case the learned counsel for the appellant referred to the following passage which appear at page 383 of the report.
"It is generally agreed that the provisions of section 30, Government of India Act, are mandatory and for a contract to be enforceable by or against the Secretary of State the terms of this section must be complied with. It is also a matter of general agreement that an oral contract is not within the purview of section 30, and subsection (2) of this section implies execution of a document and excludes oral contracts, but there is a controversy on the question whether the contract should be expressed by a formal deed or whether it is a sufficient compliance of the statute if the agreement is in writing, though not expressed by a formal deed."
14. I think that reference to this case is wholly irrelevant for no such point was raised in the objections. Moreover, in the present case the appellants had themselves applied in writing to the Court, first for appointment of Mr. Abdul Karim Shaikh, Retired Superintending Engineer, as sole arbitrator and then, again in writing for appointment of Mr. Allah Warayo Shaikh, stating that nomination of Mr. Abdul Karim Shaikh was unauthorised and without the consent of the higher authorities. Further, in the objections the defendants themselves have stated that Mr. Allah Warayo Shaikh. Retired Chief Engineer, Buildings and Roads was agreed as sole arbitrator by defendant No, 1 vide his No, T. C./G-55/F. C. 106/77/11, dated 2-1-1979.
15. It is not the case of the appellants at any stage of the proceedings, even not before me, that the application for appointment of Mr. Allah Warayo Shaikh, Retired Chief Engineer as sole arbitrator was unauthorisedly made and such a submission could not be made in view of paragraph 4 of the objections quoted hereinbefore in extenso. In any case the B appellants are estopped by their conduct from raising such an objection as they had agreed for appointment of Mr. Allah Warayo Shaikh, Retired Chief Engineer as sole arbitrator. Further, that they acquiesced in the proceeding by taking part in the proceeding before the sole arbitrator.
16. This brings me to the second point that award was given beyond time. There is no doubt that the award was given beyond the time fixed by the Court but the Court has impliedly extended the time on an application under section 28 of the Arbitration Act and it cannot be said that on the facts and circumstances of the case and for the reasons given by the learned Senior Civil Judge, he exercised the discretion arbitrarily or capriciously. The exercise of discretion is not even otherwise not questioned before me. Therefore, this ground has also no force.
17.So far as third point is concerned it has substance for by Ordinance XV of 1981 section 26-A was added which provides that the arbitrator or umpire shall state in the award the reasons for award in sufficient detail to enable the Court to consider any question of law arising out of the award, and 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. So far as proceeding pending at the commencement of the Ordinance are concerned it is provided therein that if, the Court finds that the award does not, or does not in sufficient detail, state the reasons, for the award, the Court may remit the award, to the arbitrators or umpire with a direction to state the reasons for the award in sufficient detail. I may here quote the entire section 26-A for ready reference.
"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."
3. Power of the Court to remit cases pending at commencement of Ordinance.-(1) If, in any case in which proceedings in relation to an award which has been filed in Court are pending in any Court immediately before the commencement of this Ordinance, the Court finds that the award does not, or does not in sufficient detail, state the reasons for the award, the Court may remit the award to the arbitrators or umpire with a direction to state The reasons for the award in sufficient detail.
(2) Where an award is remitted under subsection (1) the Court shall fix the time within which the arbitrator or umpire shall submit to the Court an award stating the reasons therefor in sufficient detail : ' Provided that any time so fixed may be extended by subsequent order of the Court.
(3) Any award remitted under subsection (1) shall become void on the failure of the arbitrator or umpire to submit it in accordance with the direction of the Court."
' It cannot be disputed that the award does not give reason for awarding the amount of Rs, 9,62,553.
' However, it is submitted by Mr. Kishan Chand that the Court has discretion to remit or not to remit the award even if it does not state any reasons.
18. Since at the time when the Ordinance was promulgated the proceedings were pending and objections were not disposed of the provisions of section 26-A of the Ordinance are, therefore, clearly attracted. However, the question is whether there are any valid reasons for not remitting the award for stating the reasons and I find none. On the contrary, I find that in the objections the appellants have stated that the arbitrator has given the award without detailing the basis on which it is made. In view of the objections which have not been dealt with by the learned Senior Civil Judge in the judgment impugned in this appeal, I find it at all more necessary to remit the award to the sole arbitrator to state the reasons. Accordingly, I remit the award to him for stating the reasons for the award. He shall do so within two months from the date of receipt of the record and after the arbitrator has given his reasons it will be open to the parties to file within 30 days fresh objections to the award which will not include the objections which have already been disposed of by this judgment. The original record of the suit will be transferred to the Court of Senior Civil Judge, Dadu and the arbitrator will file the statement of reasons in the Court of Senior Civil Judge, Dadu. On such reasons being filed in Court, the Court will issue notice to the Parties.
19. I may record here that if the arbitrator fails to submit the reasons for award in Court within the time allowed then the award shall become void unless the time is extended by this Court subsequently on an application that may be made by either party.