1. ' The award made on 20th August, 1983 has been filed in the Court pursuant to the provisions of section 14(2) of the Arbitration Act, 1940 and rule 282 of the Sind Chief Court Rules (Original Side) by the arbitrator who has also prayed that the time for making the award be enlarged.
2. ' At the very outset it may be mentioned that on behalf of the defendants an application under sections 30 and 33 of the Arbitration Act, 1940 was filed objecting to the making of the award rule of the Court. The said application however was struck off by the Additional Registrar (O.S.) by order passed on 28-5-1984 for non-payment of process fee.
3. ' In view of above circumstance question, has arisen for considera tion as to whether the award which was made by the arbitrator beyond a period of 4 months after entering upon the reference, be made rule of the Court by enlarging the time as prayed for by the arbitrator.
4. ' In order to resolve the issue which thus has arisen, it would be relevant to point out that Mr. Mohajir who was appointed as the sole arbitrator by the defendant/Government of Pakistan by their letter dated 29th March, 1980 to adjudicate upon the disputes between them and the plaintiff under the Contract No. FGP-(7)/72/Sugar, dated 30-4-1972 was requested to give his award within two months as considerable delay had already taken place in settling the said disputes due to frequent changes of arbitrators in the past for one reason or the other.
5. ' The arbitrator entered upon the reference on 23rd April, 1980 and made his award on 20-8-1983 much beyond the period of two months as was required by the appointing authority while nominating him as the sole arbitrator as well as the period which is prescribed by para. 3 of the First Schedule to the Arbitration Act, 1940.
6. ' The arbitrator conscious of the delay while filing the award in Court also prayed that time for making the award be extended. It would, therefore, be relevant to briefly state the relevant facts which have bearing upon the issue involved. The arbitrator in support of the prayer for extension of time has given no reasons explaining the inordinate delay which took place. However, with the assistance of the learned counsel I have gone through the record which shows that after the arbitrator entered upon the reference, proceedings took place before him on 6-5-1980, 9-6-1980, 13-7-1980 and 17-8-1980. On the last mentioned date the case was adjourned as the arbitrator found that the period of 4 months within which the award was required to be made had already expired. None of the parties took any interest in the case thereafter consequently no further progress was made for almost 1 year and 9 months. The arbitrator finding that even the Government Advocate who at one stage agreed to move the Court for extension of time for making the award, had also not sent any information to him, on 13-5-1982 issued notices to the parties fixing 26-5-1982 as the date of hearing. The said date however was changed and the parties were asked to appear on 20-6-1982 fully prepared with evidence and also for arguments.
7. They were warned that if any party failed to appear, the case would proceed ex parte against him.
8. The case thereafter was adjourned to 12-9-1982, and finally to 30-11-1982. In reply to the notice fixing the last mentioned date, the Advocate for the plaintiff informed the arbitrator that he was appearing under protest for the reason that the arbitrator had no jurisdiction as he had retired from the Government service and thus no longer qualified to act as an arbitrator and that the time for making the award had already expired.
9. ' It is relevant to mention here that after 30-11-1982 no date of hearing was fixed, as the proceedings before the arbitrator apparently had concluded yet the award was not made until 20- 8-1983.
2. After the filing of the award in Court, notices were issued to the parties. The application filed on behalf of the defendant objecting to the making of the award rule of the Court on the ground inter alia, that it had been made after the expiry of the statutory period of four months was struck off for non-payment of process fee, as already noted above. It was, therefore, contended by the learned counsel for the plaintiff that the application filed by the defendants under section 33 of the Act having been struck off, a judgment according to award may be pronounced. This argument however omitted to take in to consideration the provisions of section 17 of the Act, which itself provides that where the Court sees no cause to remit the award or any of the matters referred to arbitration or to set aside the award the Court shall, after the time for making an application to set aside the award has expired or such application having been made, after refusing it, proceed to pronounce judgment according to the award.
10. ' Reference may also be usefully made here to the provisions of section 30 of the Act which reads as follows:- "An award shall not be set aside except one or more of the following grounds namely--
(a) that an arbitrator or umpire has misconducted himself or the proceedings;
(b) that an award has been made after the issue of an order by the Court superseding the arbitration or after arbitration proceedings have become invalid under section 35;
(c) that an award has been improperly procured or is otherwise invalid."
11. ' Interpreting the above referred section, the Honourable Supreme Court in the case of Badri Narayan Aggarwala v. Pak Jute Balers Ltd. PLD 1970 SC 43 at 50 observed:- "The appellant in the present case wants the award to be set aside on the ground that he did not execute the agreement which contained the arbitration clause. His case is that there was no valid reference. In my view such a relief comes within the purview of the expression "otherwise invalid" occurring in clause (c) of section 30. Section 30 does not lay down any procedure. Section 33, no doubt, uses the word "challenge" as compared to the words 'set aside' in section 30 but that in my view does not make any difference."
12. ' Thus, the power of the Court in an appropriate case to remit or set aside an award suo motu, and/or to set it aside as 'otherwise invalid' apart from the application which a party may make for its remission or reversal can hardly be questioned. This view also finds support from the case Abdul Khaleq v. Province of East Pakistan PLD 1964 Decca 166.
3. Now taking up the main question which has arisen for consideration in the case as to whether it is a fit case in which the time for making the award be extended, on the perusal of the record and after hearing the learned counsel for the parties. I find that not only the arbitrator but even the parties did not take the proceedings, seriously and that for the unreasonable delay which took place in making the award no explanation whatsoever has been given. There is no denial of the proposition that in exercise of its discretion conferred upon it under section 28 of the Arbitration Act, 1940 the Court may in an appropriate case extend the time even after the award has been filed in the Court but the discretion though very wide has to be exercised judicially on a consideration of all the circumstances of the case.
13. ' I may have refer to some of the cases which are relevant for determination of the question under consideration:-
(i) In the case reported as Firm of Motharam Dowlatram v. Firm Mayadas Dowlatram AIR 1925 Sind 150 as to the discretion of the Court to extend the time where the award was made out of time it was observed:- "The award has been admittedly made out of time. The arbitrator applied for an indulgence of the Court to extend the time for making the award and thereby to validate it. The Court must taken into consideration all the circumstances of the case and decide if the arbitrator should be granted such indulgence."
(ii) In the case of Bhogi Lal Purshottaram v. Chimanlal Aritlal AIR 1928 Bom. 49 a Division Bench of the Bombay High Court held that it was the duty of the arbitrator to see prima facie that the proceedings were conducted with reasonable diligence. In said case the arbitrator failed to make award for some five years. It was held by the learned Court, in the circumstance, that he had failed in material respects in his ordinary duties as an arbitrator and thus was guilty of misconduct.
(iii) The learned High Court of Nagpur in the case of Kesholal v. Laxman Rao AIR 1940 Nag. .386 observed that once an arbitrator is appointed the parties to the arbitration are entitled to insist that the arbitration should be proceeded with diligence and that if an award is given after a long delay he will be entitled to ask the Court not to file the award. The learned Court held:- "The authorities therefore clearly indicate that even a delay of one year in arbitration proceedings if not properly accounted for vitiates the award. As there is no explanation whatsoever in this case as to why the delay occurred the award could be set aside."
(iv) In the case of Amin Agencies Ltd. v. Haji Moosa Haji Oomar PLD 1953 Sind 57 a learned Judge of the then Chief Court of Sind observed:-
(v) "Entering on the reference is equivalent to starting of the actual performance of the duty as the arbitrator. Four months therefore, expired on 6th September, 1952 and the award being 19 days late is out of time, and will also be bad in law."
(v) Reference may then be made to the case of Pakistan v. Gayer & Co., Karachi PLD 1964 Kar. 3 wherein a learned Division Bench after observing that "entering upon reference" means that an arbitrator does something in pursuance of the reference made to him and that the step of issuing notice to the parties to appear before him amounts to entering upon reference, held:- "On this view of the matter, there is not the slightest doubt that the award filed by the learned arbitrator was much beyond time and could not be made rule of the Court unless time was extended under section 28 of the Arbitration Act, 1940."
14. ' ' In the same case, after discussing the law on the subject and holding that the discretion to be exercised by the Court under section 28 of the Act is to be exercised judicially and not arbitrarily, the learned Court refused to interfere with order of the trial Court declining to extend the time with the following observations:- "In our opinion, in the present case there is no explanation on the record why the arbitrator kept the proceedings pending from July, 1954 till August, 1957. In the letter of the arbitrator dated 24th April, 1957 it is admitted that more than a year's time was given for vetting of the defence by C.M.A. It is, therefore, abundantly clear that the arbitrator was not taking the reference made to him seriously and protracted the proceedings on flimsy grounds. He failed to discharge his duties properly. In these circumstances the learned Single Judge was perfectly justified in refusing to exercise his discretion in favour of the appellants. We find no ground to interfere with the view taken by the learned Single Judge in this respect. We would, therefore, repel the contentions raised on behalf of the appellants and hold that the learned Single Judge was perfectly justified in the circumstances of the case in setting aside the award."
4. On the principles discussed above and being of the opinion that neither the arbitrator nor the parties acted with reasonable diligence or took the matter seriously so as to finalise the arbitration proceedings and make the award in time prescribed by law and that no explanation whatsoever has been given by the arbitrator for the undue delay in making the award and that even the Advocate for the plaintiff on 30-11-1982 objected to the jurisdiction of the arbitrator on the ground of expiry of the period, I hold that no case has been made out for exercise of discretion under section 28 of the Arbitration Act, 1940 to enlarge the time for making the award.
15. ' The upshot of the above discussion is that the prayer for extension of time to make the award is rejected and accordingly the award being bad in law in the circumstances, is set aside.