' FAZAL ELAHI KHAN, J.-By this Regular First Appeal under section 39 of the Arbitration Act the judgment and decree of the learned Senior Civil Judge, Abbottabad, dated 4th July, 1974, rejecting the Objection. Petition of the appellant and making the award as a rule of the Court, and the decree passed accordingly, under section 17 of the Arbitration Act, 1940 (Act No, X of 1940), is challenged before us.
2. The relevant facts giving rise to these proceedings are that M/s. Khanzada Muhammad Abdul.
Haq Khan Khattak & Co. Contractors of Village Shaidu, Tehsil Nowshera entered into a contract for the construction of residential building Phase IV at Tarbela Dam Project, Right Bank Colony, on 19th July, 1971. The dispute having arisen between the parties and a notice served under section 8 of the Act, on the appellant, to refer the dispute to the Arbitration according to the terms of the contract, the Executive Engineer contract on behalf of the General Manager and Project Director vide his letter, dated 23rd June, 1975 informed the Senior Civil Judge of the appointment of Sheikh Abdur Rehman, Chief Engineer, Planning and Investigation, Lahore, as the sole Arbitrator for the settlement of the dispute referred to by the contractor. Copy of this letter is Exh.1 P. W. 1/1, on the file.
3. The sole Arbitrator entered into arbitration and issued notices to the parties to appear before him and file their claims. On the basis of the claims made by the contractor and on the reply thereto of the opposite party certain issues were framed and enquired into after which an award was announced on 5th April, 1978, holding Water and Power Development Authority (respondent) liable to pay a sum of Rs, 13,01,118 to the petitioner.
4. In pursuance of the award so made and announced, an application under section 14 read with section 17 of the Act was filed in the Court of Senior Civil Judge, Abbottabad wherein a prayer was made to direct the arbitrator to file the award and thereafter to make the same the rule of the Court and to pass decree accordingly. In compliance with the order of the Court the arbitrator filed the award thereafter notices were issued to the respondent.
5. The Water and Power Development Authority on receipt of the notice filed an Objection Petition under sections 14/30/33 of the Act for the setting aside of the award on the following grounds : -
(a) That the arbitrator misconducted the proceedings.
(b) That the award is invalid because : the contract between the parties containing clause 64 under which a reference to arbitration was made was not stamped in accordance with the law and, therefore, was not admissible into evidence nor could be acted upon in the arbitration.
(c) '1 hate the award was not given within the period of four months in accordance with rule 3 of the 1st Schedule to the Arbitration Act, 1940, nor was the time given for the award was extended by the Court under section 28 of the aforesaid Act.
(d) On the date of signing of the award, the arbitrator discovered that the period of four months provided by the law has expired and no extension in that period had been obtained from the Court, but without any power to extent that period be extended that period upto the date of delivery of the award.
(e) The arbitrator claimed to have obtained the consent of the parties to the extension in the time for delivery of the award but the persons who are alleged to have given that consent were not competent to do so under the law nor they have any authority to give extension of time in accordance with the terms of the Contract.
6. The Objection Petition was resisted by the petitioner on several legal and factual grounds resulting in the framing of the following issues :-
(1) Whether the application made by the objectors is maintainable in law ?
(2) Whether the applicant/objector is estopped from making the application ?
(3) Whether the applications are bad for misjoinder of parties ?
(4) Whether the applications, have been properly verified ?
(5) Whether the award is bad in law as it was delivered after four months of entering of the reference ?
(6) Whether the arbitration agreement is inadmissible as it is not stamped ?
(7) Relief.
7. Haji Sana Ullah Khan, Assistant Director (XEN Contracts) Office of the General Manager and Project Director, Tarbela Dam was examined as P. W. 1 while Abdus Salam Khattak attorney of the petitioner appeared as P. W. 2 respondent did not produce any evidence rather they relied on the statement of Haji Sana Ullah Khan examined as P. W.
1.
8. The learned Senior Civil Judge in his detailed judgment in the light of the evidence produced before his came to the findings that the application under sections 14 and 17 of the Act was maintainable, that it was not bad for misjoinder, that the objector was estopped from making the Objection Petition, that the application was proper and duly verified, that the award was not bad on the grounds raised in the objection petition and thereafter made the award as the rule of the Court and passed the decree as provided for under section 17 of the Act.
9. The learned counsel for the appellant reiterated the same contention as raised in the Objection Petition reproduced above, however he further added that the application under section 14/17 of the Act is incompetent as the same is not signed by the authorised person on behalf of the firm.
10. Coming now to the contention raised we shall first take up the question of the maintainability of the application rather the authority of Abdus Salam Khattak under whose signature the application was made before the Senior Civil Judge. The objection of the learned counsel for the appellant is untenable on two-folds grounds. Firstly, that no such objection was raised throughout the proceeding pending before the learned Senior Civil Judge and secondly that there is a regular power-of-attorney Exh. P. W. 2/1 on the tile duly executed by the partners of the firm in his favour, authorising hi to act on behalf of the partners of the firm M/s. Khanzada Muhammad Abdul Haq.
There is no denial of the fact that the executants were and are the partners of the same firm. In this view of the matter no exception could be taken to the application made by him on behalf of the firm and it partners under his signature.
11. It was next argued that the arbitrator entered into arbitration on 17th January, 1976 while the award was made on 5th April, 1978 i. e. After the expiry of the period of more than two years, which is void, having been made beyond the statutory period of limitation and as such is to be set aside.
Reference was made to section 3 of the Arbitration Act read with item 3 of the First Schedule to the Act.
12. In order to appreciate the legal objection raised, the relevant provisions are reproduced as under : "Section 3.-Provisions implied in arbitration agreement.-An arbitration agreement unless a different intention is expressed therein, shall be deemed to include the provisions set out in the First Schedule insofar as they are applicable to the reference."
"Item 3 of the First Schedule.-The arbitrators shall make their award within four months after entering on the reference or after having been called upon to act by notice in writing from any party to the arbitration agreement or within such extended time as the. Court may allow."
13. Before going through the above provisions of law, there is doubt in our mind that by the application of section 3 of the Arbitration Act the period of four months for making an award is to be deemed to be a part of the arbitration agreement. However, by virtue of section 28, the period of four months can be extended from time to time with the permission of the Court. The arbitrator has also been invested with the power to extend the period of limitation by the consent of the parties to the arbitration agreement. Section 28(2) of the Arbitration Act reads as under :- "Section 28(2).-Any provision in as arbitration agreement whereby the arbitrator or umpire may, except with the consent of all the parties to the agreement, enlarge the time for making the award, shall be void and of no effect."
14. From the perusal of the award, as pointed out by the learned counsel for the petitioner it is evident that the time was extended with the consent of the parties thrice, the last being on 5th April, 1978, the date on which award was announced. The learned counsel for the respondent, however, disowned the authority of Haji Sana Ullah Khan, Executive Engineer to consent to the extension of time. Reference was made to the letter of authority in favour of Haji Sana Ullah Khan issued by the General Manager addressed to the Arbitrator which is as under :- "Haji Sana Ullah Khan, Executive Engineer of this project is hereby authorised to attend arbitration hearing in the above-noted Contract."
15. During the entire arbitration proceedings Haji Sana Ullah Khan was reprensented the respondent and during these proceedings was acting as an authorised agent he consented to the first extension of time on 5th September. 1976, thereafter we have also on the file copy of a letter, dated 28th September, 1976 whereby adjournments were asked for of the arbitration proceedings.
The letter reads as under :- "64106 729-WAPDA House, WAPDA, Lahore. Lahore, 28-9-1976.
CE (P&l)Arb/Tarbela/PA.
(1) M/s. Khanzada Muhammad Abdul Haq Khan Khattak & Co. Village and Post Office, Shaidu, Tehsil Nowshera, District Peshawar.
(2) Ch. Muhammad Tufail Basraa, Advocate, Turner Road, Lahore.
(3) Mr. A. K. Dogar, Advocate Temple Road, Lahore.
' Subject : Contract 762-Construction of Buildings.-On request from General Manager Tarbela, the heating of subject case is now postponed to 5th October, 1976 at 14-30 hrs. In Room No, 729-WAPDA House, Lahore.
(Sd.)
(Sh. Abdur Rehman) Chief Engineer, Planning and Investigation, Arbitrator.
' C. c. General Manager Tarbela in continuation of my wireless message, dated 28th September, 1976.
16. In this respect reference can also be made to the statement of Haji Sana Ullah Khan when examined in Court wherein he admitted having represented the General Manager and Project Director during the arbitration proceedings from its start to its completion and he supplied all the documents including the drawing etc. To the arbitrator. He also admitted having received T. A. And D. A. For all his journeys from Tarbela to Lahore and back for the period from 17th January, 1976 to 5th April, 1978 during the arbitration proceedings. These bills were passed by the General Manager.
He also admitted having consented to the three extensions in the time in making the award last one that of 5th April, 1978. It is also evident that during the period of these two years of the arbitration proceedings at no stage an objection to the expiry of the time for making the award was ever raised.
17. It was held in Memon Tayab Sharif and another v. Kasam Adamji etc. that arbitration award was made beyond the statutory period of four months is voidable and not void. However if an objector consented and continued with the arbitration proceeding no exception could be taken to an award made thereafter. It was also held in Messrs Sind Cotton Exporters v. Messrs A. B. Sadiq Brothers that the principle of "no estoppal against the statute' does not apply to the arbitration proceeding and the parties have a right to waive or renounce statutory provision operating to their benefit.
18. In Haji Ghulam Mohyud Din v. Federation of Pakistan after discussing a chain of authorities on the subject their Lordships held as under :- "In view of the above weight of authorities we hold that the award cannot become invalid in the instant case due to the mere fact that it was not given within four months, the reason being that the appellant did not raise this objection at the proper time and rather acquiesced in the continuance of the arbitration proceedings, led evidence and took the chance of a favourable decision and when the decision has gone against him he cannot be allowed to say that the arbitration proceedings extended beyond the time limit implied in the Arbitration Agreement. If the terms of an agreement can be changed by the parties by their mutual consent (as for example by writing) then it is obvious that the terms about time matter could also be changed with their consent implied from their conduct."
19. It was also held in West Pakistan through the Executive Engineer, Rawalpindi v. MJs. Azhar Brothers that a party participating in proceedings before an arbitrator without any objection to his authority and competence to act as such and thus displaying an intention to be benefited by the award to be made in his favour is estopped from raising an objection to the jurisdiction of the arbitrator at later stage. This view is also appeared in the judgment Chief Engineer buildings Department Provincial P. W.D. Government of Sind v. Pak National Construction Company where the principle of acquiescence waiver and estoppel was made applicable to the case.
20. From all this what has been stated above and numerous authorities on the subject cited, we are satisfied that the respondent had all along been making appearance before the arbitrator through Haji Sana Ullah Khan, without having taken any objection to the expiry of the initial period, is1 2 3 4 5 estopped to raise any objection on that score. Even we are otherwise satisfied that Haji Sana Ullah Khan having been authorised to represent the respondent during the arbitration proceedings had the authority to consent to the extension of time. Furthermore, his authority to give such statement can be spelt out by making resort to the provision of section 186 (187) on the Contract Act by implied rectification by the respondent as discussed earlier. Reliance can be placed on Glulam Fatima v. Government of Punjab.
21. The learned counsel next contended that the arbitration agreement required to be stamped under section 3 read with Article 5(c) of Schedule to the Stamp Act, 1899, not so stamped had not to be acted upon, hence the entire proceedings before the arbitrator are vitiated by this illegality, in view of section 35 of the Stamp Act. Reliance was placed on Pakistan Cement Industries Ltd. v.
Teekaef Trading Co. wherein it was held that an arbitration agreement not stamped in accordance with section 3 read with Article 5(c) of the Schedule to Stamp Act, 1899 cannot be acted upon in view of section 35 of the Stamp Act and an arbitration proceedings held on the basis of unstamped or deficiently stamped document was held as illegal and without jurisdiction. It was further held that proceeding could not be validated by the fact that person raising objection was a party to unstamped document and had participated in the proceedings before the arbitration and this would not amount to an estoppel as consequent of waiver, being in contravention of section 35 of the Stamp Act.
22. However this question again came for consideration before their Lordships on the Supreme Court in Union Insurance Company of Pakistan Limited v. Hafiz Muhammad Siddique wherein it was held as under :- "It prescribes that no instrument, which is not properly stamped, shall be admitted in evidence for any purpose or shall be acted upon "Now merely because an instrument cannot be admitted in evidence for any purpose as because it cannot be acted upon by the persons specified in the section, does not mean that such an instrument is invalid, and it is not irrelevant to observe here that the words which I have quoted have to be construed strictly, because they are to be found in a provision of a penal nature. Therefore,. It would be against all cannons of construction to enlarge the meaning of these words, so as to render invalid instruments which fall within the mischief of the section. After all, instruments, which are not duly stamped, are executed every day, but I venture to think that most persons, who incur obligations under such instruments, honour their liabilities under such instruments, regardless of the provisions of section 35. In any event, this section is attracted only when an instrument is produced before the persons specified in the section. But, for example an instrument would be produced in evidence only when there is a dispute about it, therefore, if the intention of the Legislature had been to render invalid all instruments not properly stamped, it would have made express provision in this respect, and it would also have provided some machinery for enforcing its mandate in those cases in which the parties did not have occasion to produce unstamped instruments before the persons specified in the section.
' Additionally, I find nothing in the section which would support the appellants plea that an instrument become invalid, if it falls within the mischief of the section. After all, if an instrument is invalid, it must be invalid for all purposes, but proviso (d) to the section expressly saves unstamped instruments in most criminal proceedings whilst the other provisions to the section enable the parties to overcome the disabilities attached to an instrument not properly stamped by paying the requisite duty together with a penalty, therefore, this would suggest that the object of the section is to protect public revenue. Again, if an instrument is invalid, it should not be admissible in evidence, and it is so stated in section 35. But the next section prescribes that if an instrument has been admitted in evidence, howsoever erroneously, its admissibility cannot be questioned at any stage thereafter, and even the appellate Court's powers to entertain an objection about the admissibility of documents have been removed by section 61 which instead empowers the appellate Court to6 7 8 collect the duty payable on the unstamped instrument together, with a penalty. These provisions as well as other provisions in Chapter IV of the said Act, such as sections 33, 38, 39 and 40, can only lead to the conclusion that the object of the Legislature in enacting the said Act was to protect public revenues and not to interfere with commercial life by invaliding instruments 'vital to the smooth flow of trade and commerce."
23. The authority reported in PLD 1971 Lah. 522 was distinguished as in that 'case the objection was raised during the arbitration proceedings while in the present case no such objection was ever raise during the arbitration proceedings before the making of the award. It is also important to note that even though this objection has been raised in the objection petition before the learned Senior Civil Judge, no effort was mad to place on the record the agreement to show as to whether the agreement has been properly stamped or not. In such case a course had been adopted the subsequent stage for making up the deficiency in the stamp could have been resorted to.
24. No other point was urged before us.
25. In the circumstances of the case there being no force in all the contentions raised by the learned counsel for the appellant, we dismiss thi D appeal.
26. Next we come to the Cross Objection, filed under Order XLI, rule 22 of the Civil Procedure Code, by the petitioner in which prayer for allowing interest on the decretal amount is made. It is admitted at the bar that no such prayer was made before the learned trial Judge when application under section 17 was filed to make the award the rule of the Court. However the learned counsel relied on section 29 of the, said Act which reads as under :- "Interest on award. -Where and insofar as an award is for the payment of money the Court may in the decree order interest, from the date of the decree at such rate as the Court deems reasonable, to be paid on the principal sum as adjudged by the award and confirmed by the decree.
27. The grant or refusal of interest under section 29 of the said Act is analogous to section 34 of the Civil Procedure Code with a slight difference) that under the Arbitration Act interest may be allowed from the date of the decree and not more. We are aware of the fact that to allow interest is discretionary with the Court and that the discretion exercised legally is not to be interfered with lightly by the appellate Court. However to ascertain the fact whether discretionary power has been exercised or not there must be something available on the record or it must be spelt out from the judgment of the Court expressly or by an inference that the Court has applied his mind to the matter while giving his decision. In cases in which no such inference can be drawn or where the exercise of the discretion in the matter is not visible, in the judgment of the trial Court, it all the more become necessary for the appellate Court to look into the matter and exercise the same powers as is available to the trial Court. This power is to be exercised by the Court irrespective of the fact whether any prayer for the same has been made before the trial Court or not. In view of the provision of section 29 of the Arbitration Act reproduced above.
28. As a matter of fact it has been proved that respondent i. e. WAPDA is withholding the payment of the amount though awarded by the arbitrator and decreed by the Court. It is also evident from the letter bearing No, CMF/C762/672, dated 14th May, 1978, by General Manager and Project Director addressed to the Member (Water) WAPDA, the competent authority, that the approval for the payment of the decretal amount was asked for but even then no such approval was accorded.
The relevant part of the letter which is helpful in resolving this aspect of the case is reproduced as under :- "We draw your kind attention to our letter No, SMA/C672/7168 dated 12th/20th December, 1974 whereby we submitted our Report and Recommendations in respect of the settlement of Contract No, 762. The assessm ent made in our above-mentioned letter in the year, 1974 was to make a payment of Rs, 6,71,000 to the Contractor for settlement of his claims under this contract. The amount awarded in the year 1978 by the Arbitrator is Rs, 13,01,117."
"We have studied "WAPDA Book of Financial Powers" and find that under section XI(A) of this Book General Managers are competent only to make "Payment under Court order" upto Rs, 25,000 only.
As such payment of arbitral award of a sum of Rs, 13,01,118 is beyond our competency."
"It is, therefore requested that the payment for the awarded sum may kindly be approved by the Competent Authority for releasing the same to the Contractor."
29. The fact that in spite of the letter referred to above no effort has been made to make the payment to the petitioner, is sufficient to entitle the petitioner to be allowed interest at the decretal amount. Support for this view can be sought from Safia Bai v. Karachi Co-operative Housing Society Union Limited a judgment of the Karachi High Court.
30. Consequently on the acceptance of the Cross Objection, the judgment and decree of the learned trial Court is modified, the petitioner is further held entitled to the interest over the decretal amount at the rate of Rs, 8% per annum from the date of decree to the date of payment.
31. As several important questions of law and facts were involved in this case, the parties are, therefore, left to bear their own costs.
PLD 1955 Sind 224 PLD 1955 Sind 268 PLD 1967 Lah. 204 PLD 1977 Lah. 1013 PLD 1981 Kar. 553 PLD 1978 Lab. 998 PLD 1971 Lab. 522 PLD 1978 SC 279 PLD 1967 Kar. X98