1. ' This award by the Umpire is filed under section 14(2) of the Arbitration Act with the prayer that the award be made rule of the Court. Only defendant has filed objection to the award under section 30/33 of the Arbitration Act. The award has been given by the Umpire in the following circumstances:- ' The plaintiff was awarded a contract on 1-11-1976 for construction of G.T.G. foundation in K-Area, Korangi, Karachi, by the respondent. On completion of the work the defendant demanded a no- claim certificate from the plaintiff to enable them to release security deposit of plaintiff lying with the defendant. On 27th March, 1979 the plaintiff gave the required no-claim certificate to the defendant and requested for release of their payment. However, while giving the no-claim certificate the plaintiff listed 3 claims against the defendant. These claims were specified as under:
(1) Escalation of cement.
(2) Extra work done due to floods and rains 1977.
(3) Penalty/Bonus for U/G and 0/Head Tank.
2. ' It appears that the aforesaid claims made by the plaintiff were not accepted by the defendant wheieupon the plaintiff invoked the arbitration clause and appointed the Arbitrators. It further appears that while submitting his claim before the arbitrators, the plaintiff included various other items of claim in addition to those which were mentioned in the letter dated 27th March, 1979. The defendant took objection before the arbitrators on- the maintainability of the claims other than those which were mentioned by the plaintiff in its letter dated 27th March, 1979. The two arbitrators appointed by the parties disagreed on the question of maintainability of the claim for items which were in addition to those mentioned in plaintiff's letter, dated 27th March, 1979, whereupon the matter was referred to the Umpire who held that the claim of extra items made by the plaintiff before the arbitrators is maintainable in law.
3. ' In his objection to the award the learned counsel for the defendant has raised two-fold objections.
4. It is firstly contended that the plaintiff having given their no-claim certificate are debarred from raising any claim other than those which were specifically mentioned in their no calim certificate.
5. In the alternative, it is contended that by giving their no-claim certificate, the plaintiff has in fact remitted their claim, if any, within the meaning of section 63 of the Contract Act, in respect of those items of work which were not mentioned in their no-claim certificate dated 27-3-1979 and, therefore, they could not raise the same before the arbitrators. In reply to above contentions, the learned counsel for the plaintiff, contended that the letter, dated 27th March, 1979 was obtained by the defendant under a threat of detention of huge sum of money belonging to the plaintiff lying with the defendant as a 'security deposit' and, therefore, under section 15 of the Contract Act the same is not binding on the plaintiff, as it was obtained by exercising coercion on the plaintiff. It is further contended by the learned counsel for the plaintiff that the no-claim certificate dated 27th March, 1979, was given by the plaintiff only for account purposes and could not come in the way of the plaintiff in preferring their claim with regard to other items, which though not specified in the letter, dated 27th March, 1979, were otherwise due to them.
6. ' The learned Umpire has dealt with the above contentions which were also raised before him. The learned Umpire rejected the contention of plaintiff that the no-claim certificate was obtained by the defendant under coercion. He also disagreed with the learned counsel for the defendant that the plaintiff having given their no-claim certificate, in A fact, remitted all other claim which were not mentioned in the no-claim certificate within the meaning of section 63 of the Contract Act. No exception can be taken to these conclusions of the learned Umpire and I find no reason to disagree with the learned Umpire. The learned Umpire however refused to go into the question of jurisdiction of the Arbitrators and the Umpire with regard to maintainability of the calim on the ground that such a question is not open for decision by the Umpire or the arbitrators and is to be decided by the Court. Mr. Noor-ul-Hassan, the learned counsel for the defendant contended that the effect of giving a no-claim certificate by the plaintiff is that there is no real dispute in existence other than those which were specified in the no-claim certificate, which could be referred under the arbitration clause in the agreement. It is contended that in order to refer a dispute to the arbitrators the dispute must be alive, real and in existence and not an imaginary dispute. In support of his contention the learned counsel referred to the cases of Friends Trading Co. v.
7. Muhammad Usman Moula Bux PLD 1954 Sind 56 and Muhammad Sharif Atte Muhammad v. Metha Bhai Natho PLD 1960 Kar.
10. The cases relied by the learned counsel have no application to the facts and circumstances of the present case. In the first noted case the application to refer the dispute to the arbitrator under section 20 of the Arbitration Act was opposed by the defendant on the ground that there was adjustment between the parties and, therefore, there was no dispute in existence which could be referred to the arbitrators. The learned Judge while dismissing the application under section 20 of the Arbitration Act in that case reached the conclusion on the basis of evidence produced before him that contention of defendant was not controverted before him and therefore, there was no dispute between the parties which could be referred under section 20 of the Arbitration Act. The following paragraph which appears at pages 58-59 of the report in the case clearly bears out the reason for rejection of the application:- "The contention of the defendants is that the plaintiff was indebted to one M/s. Amir Agencies for an amount of Rs.8,410 who in turn was indebted to the defendants. The plaintiff wrote to Messrs Amir Agencies on 5th March, 1953 asking them to collect the said amount of Rs.8,410 from the defendants. The letter in question has been filed by the defendants. The defendants have further contended that they undertook to adjust Rs.10,200 to M/s. Oriental Commercial Syndicate and a sum of Rs.5,280 to M/s. Fazal Gulzar on behalf of the plaintiffs and gave a cheque for Rs.8,000 to the plaintiff. The total amount thus comes to Rs.31,920. The plaintiff has filed the letters of the defendants as regards these transactions. It is noteworthy that no counter-affidavit has been filed to controvert these facts. The allegations of the defendants remain unrebutted. It was open to the plaintiff to file a rejoinder denying the adjustment claimed by the defendants. In view of the fact that no rejoinder has been filed to the counter-affidavit filed by the defendants the uncontroverted facts come to this:-
(1) That the defendants admit the claim of Rs.13,680 and
(2) That the same had been adjusted between the parties.
8. ' It is well-settled law that an existing dispute is an essential condition for reference to an arbitration. This condition is as essential as a cause of action in a civil suit."
9. ' In the second noted case which was an application under sections 5 and 33 of the Arbitration Act the learned Judge came to the conclusion that the claim filed by the plaintiff before the arbitrators was clearly time-barred and accordingly it was held that the dispute referred to the arbitrators was not a real dispute but only a mere pretence of the dispute and the reference to the arbitrator was revoked. In the present case no doubt in the letter dated 27th March, 1979 written by the defendant to the plaintiff a no-claim certificate was given to the plaintiff and only 3 disputes were specified but this does not necessarily mean that the plaintiff was precluded from making any other claim if they really had one against defendant. The learned counsel for the plaintiff invited my attention to the letters, dated 31st May, 1979 and 22nd July, 1979 (C/28/1 and C/29/1) which were written by the plaintiff to the defendant immediately after the no-claim certificate, dated 27-3-1979 and before invoking the arbitration clause. The plaintiff in its letter, dated 31st May, 1979 clearly stated that if the defendant did not finalize the claim made by the plaintiff and they are compelled to refer the dispute to the arbitrators then they reserve the right to resubmit their full claim in addition to the agreed items. It will be pertinent to reporduce here paragraph 3 of their letter which is as follows:- "This statement of ours is not made merely on an argument but it would really be unchallengeable by the Corporation. We do not intend to opt any such course in spite of the huge losses we have suffered in the work, and are still suffering due to blockade of our huge amount of money. We are making another request to your goodself to be kind enough to order for payment to relieve us from the distress we are having as a result of depriving us from settlement of our rightful claims. The few items recommended by the Corporation and promised by higher executives are very meagre as compared to the actual investments. We are willing to wait for the settlement of our issues relating to payments for items of extra work done, extra cement cost and waiving (off penalty, provided we are paid our Final Bill as passed by t he Deputy Chief Engineer (C & K) and release of Security Deposit. We may humbly suggest to appoint a committee of competent officers of the Corporation for examining these issues and we hereby undertake to accept its considered decision instead of compelling us to ask for Arbitration in case of which we reserve our rights to re-submit our claims in addition to the aforesaid agreed items. The early release of the settled and undisputed amount will be highly appreciated and will be helpful in arriving at amicable settlement of these items."
10. ' Similarly in their letter, dated 22nd July, 1979 the plaintiff wrote to the defendant, withdrawing the condition not to submit the case to the arbitration ars held out in their letter, dated 31st May, 1979 as follows:- "As it will pass sixty days on 31-7-1979 to the submission of our letter d ated 31-7-1979 we will withdraw our undertaking given in the aforesaid letter about not opting for Arbitration. In pursuance, of our aforesaid letter, we will submit our case with full claims in exercise of our rights for Arbitration on and about 1st August, 1979."
11. 'In view of above clear stand taken by the plaintiff it cannot be argued that the plaintiff had given up his claim unconditionally in respect of other items which they subsequently raised before the arbitrators. The learned Umpire rightly held that the letter, dated 27th March, 1979 was only by way of admission on the part of the plaintiff that they have no other claim except those which were specified in the letter, against the defendant and which shifted the onus of proving their claim before the arbitrators on them. I, therefore, find no ground to interfere with the award given by the Umpire and accordingly reject the application/objection filed by the defendant under section 30 read with section 33 of the Arbitration Act. The Award is made rule of the Court. Decree to follow accordingly.