1. ' This application under section 27 of the Code of Civil Procedure is filed by the defendant/judgment-debtor in the case with a prayer that the execution may be dismissed against him as the decree passed against him on the basis of award dated 28-2-1976 is a nullity in the eye of law and is, therefore, in executable. In order to appreciate the contentions of the learned counsel it is necessary to state here in some detail the facts which formed the background of the present application. The defendant/judgment-debtor was awarded a contract for handling of rice cargo for export by the decree-holder. It appears that during the execution of the aforesaid contract dispute arose between the parties as to the interpretation of clause (13) of the agreement.
2. Accordingly on 14-3-1974 a reference was made to an Arbitration appointed in accordance with the arbitration clause for decision of the dispute. It further appears that while the arbitration proceedings were pending before the Arbitrator, another letter was addressed to him on 13-5/16- 6-1975 by the Director of Food, Ministry of Food and Agriculture, Karachi, which according to defendant/Judicial-Decree was a new reference superseding the earlier reference made on 14-3- 1974, while according to the plaintiff/decree-holder it was only a clarification of the earlier reference made to the Arbitrator on 14-3-1974. Be that as it may, it is an admitted position that after letter, dated 13-5-1975/16-6-1975, the proceedings continued before the Arbitrator in which both the parties fully participated and it finally came to end with the award dated 28th February, 1976.
3. After termination of the arbitration proceedings as aforesaid the award was filed in Court with an application under section 14 (2) of the Arbitration Act read with Rule 282(1) of the Sind Chief Courts Rules (O.S.) with a prayer that the award may be made rule of the Court. This application was registered as suit No, 625 of 1976. Notices of the filing of award were issued to the parties but within the time allowed by law no objections to the award were filed by any of the parties. However, an application under section 151, Cr.P.C. Filed by defendant Judicial Decree in Suit No, 625 of 1976 was disposed of by the Court on 18-9-1977 as follows: 18-9-1977.
4. "Mr. K. A. Ghani, Advocate for the plaintiffs. Defendant and his Advocate are called absent.
5. ' The defendant was served with the notice of the filing of the award on 17-12-1976. Thereafter, Mr. Moinuddin Ahmed, Advocate filed power on behalf of defendant on 14-12-1976. Two adjournment requests were made by application dated 18-3-1977 and by telegram dated 9-3-1977.
6. ' The defendant has filed application under section 151, C.P.C. This application cannot be treated objection to the award as it was filed on 7-4-1977 much beyond time. I, therefore, reject this application.
7. ' I see no reason to remit the award or any matter referred to the arbitration for reconsideration or to set aside the same. I, therefore, pronounce judgment according to the award and pass a decree in terms thereof the plaintiff shall also have interest on the two amounts mentioned in para. 1 of the award at the rate of 6 per cent per annum from the date hereof. JUDGE"
8. ' As a result of the above order the award dated 28-12-1976 was made the rule of Court and a decree followed in terms thereof which is now resisted by the defendant/Judgment-Debtor. The learned counsel for the defendant/Judgment-Debtor contends that the award dated 28-2-1976 is a nullity in the eye of law it was given pursuant to the reference of Central Government dated 31- 5/16-6-1975 which was void ab initio. It is contended by the learned counsel that after the notification dated 28th October, 1974, the only authority competent to make a reference to arbitration under the contract was R.E.C.P. (Rice Export Corporation of Pakistan).
9. ' Alternatively, it is urged by the learned counsel, that the award dated 28-2-1978 in addition to awarding a specific sum of money to plaintiff-decree-holder, also directed plaintiff-decree-holder to release payment of all bills in respect of various contracts entered into between the plaintiff and defendant which were withheld by the decree-holder, on the plea of pendency of arbitration proceedings; and as payments of these bills have not been released by the decree-holder so far the present execution application cannot be enforced without first release of payments of these bills.
10. ' In support of his first contention the learned counsel for the defendant/Judgment-Debtor relied on the Notification, dated 28th October, 1974 which reads as follows:- "No, 3(21)/74-E.VII.--Whereas the Federal Government has decided that from the 22nd August, 1974, the functions relating to receiving, storage, inspection, handling, clearing, forwarding and shipment of rice for export shall stand transferred to and be performed by the Rice Export Corporation of Pakistan Limited on behalf of the Federal Government and all contracts, in respect of all or any of the said functions entered into, or made in the name of the President of Pakistan on behalf of the Government of Pakistan by the Director-General of Food, or any other officer authorised in this behalf in the Ministry of Food, Agriculture, and Under-developed areas Division (Food Wing) or by the Trading Corporation of Pakistan Limited, shall stand transferred to and be performed and enforced by, the Rice Export Corporation of Pakistan Limited on behalf of the Federal Government.
11. ' Now, therefore, it is hereby notified for general information that the President of Pakistan is pleased to direct that the functions relating to receiving storage, inspection, handling, clearing, forwarding and shipment, stand transferred to and be performed by the Rice Export Corporation of Pakistan Ltd. On behalf of the Federal Government and all contracts, in respect of all or any of the said functions entered into or made in the name of the President of Pakistan by the Director-General of Food or any other officer authorised in this behalf in the Ministry of Food, Agriculture and under- developed Areas Division (Food Wing) or by the Trading Corporation of Pakistan Ltd. Shall stand transferred to and be performed and enforced by the Rice Export Corporation of Pakistan Ltd. On behalf of the Federal Government.
12. ' The President is further pleased to direct that the transfer of functions as aforesaid shall take effect and shall be deemed to have taken effect on the 22nd August, 1974."
13. ' On the basis of the above Notification, Mr. Asghar Hussain, contended that as and from the date of Notification the only authority competent to make a reference to the Arbitration in terms of the existing contract between the parties was R.E.C.P. And, therefore, the reference dated 31st May, 1975 made on behalf of the Government of Pakistan was wholly without jurisdiction and therefore, the award given by the arbitrator was void which could not be made rule of the Court, by the learned Single Judge. With regard to the other contention, Mr. Asghar Husain, relied on para. 7(V) of the award which reads as under:--
(V) The plaintiff should release all payments of bills towards various contracts entered into with the defendant which were withheld by him on the pleas of this Arbitration.
14. ' In reply to the above contentions of Mr. Asghar Husain, the learned counsel for the decee-holder, firstly contended that the executing Court is not competent to hold enquiry into the validity of the decree. The executing Court must accept the decree on its face value as it cannot go behind it to determine its validity. Alternatively the learned counsel contended that letter dated 31-5-1975 addressed to arbitrator on behalf of Central Government was only in the nature of a clarification of the original reference dated 14-3-1974, and no new reference was made by the Government to the arbitrator on 31-5-1975/16-6-1975 as contended by judgment-debtor. It is lastly contended by the learned counsel that in any case the judgment-debtor could not be allowed to attack the proceedings before the arbitration on ground of lack of jurisdiction as he not only appeared_ before him after 16-6-1975 without any protest but he participated fully in the proceedings by making claim before the arbitrator, leading evidence before him and also made several applications to this Court for extension of time before the arbitrator for giving the award.
15. ' Before examining the scope of authority of an executing Court to enquire into the validity of a decree, I will first determine whether the letter of Central Government dated 31-5-1975/16-6-1975 amounted to a fresh reference to the arbitrator or it was only a clarification of the original reference dated 19-3-1974 as in my view if the letter, dated 31-5-1975/16-6-1975 is found to be only a clarification of the original reference and not a fresh reference, it will be quite unnecessary then to examine here the other contention relating to validity of the decree. I may mention here that in so far the validity of the reference dated 14-3-1974 is concerned the same was not challenged by the learned counsel for the judgment-debtor. To determine the nature of the letter, dated 31-5- 1975/16-6-1975 it is necessary to reproduce here the two letters, dated 14th March, 1974 and 31-5- 1975/16-6-1975 addressed to the arbitrator. These letters read as follows: ' To ' 14th March, 1974 ' Mr. M. L Naqsh, ' ' Deputy Secretary (F&A), Ministry of Food and Agriculture, (Food Wing), ISLAMABAD.
16. ' Subject: APPOINTMENT OF AN ARBITRATOR UNDER ARBITRATION ' CLAUSE OF CONTRACT NO. RP-32/71/4, DATED 23-11-1971.
17. ' Sir, ' I am directed to state that the Government of Pakistan have been pleased to appoint you as Sole Arbitrator in accordance with clause 16 of the contract concluded between the Directorate General of Food, Government of Pakistan, Karachi and Messrs M. A. Agencies, 7-B Zam Zam Chambers, Dunolly Road, Karachi to adjudicate in the dispute arising out of the Interpretation of Clause XIII, Item (iii) sub-clauses (a to g) of the aforesaid contract.
(2) The terms of reference would be as to 'Whether the above (3) contractors are liable to pay the damages/compensation on account of breach of contract committed by them in respect of the aforesaid clauses'.
(4) Your fee as Sole Arbitrator has been fixed at Rs, 750 (5)
18. (Rs, seven hundred and fifty only) out of which 1/3rd will be credited to Government under the existing rules.
(6) Venue of the Arbitrator will be at Karachi.
19. ' Your obedient servant (Irshad Muhammad Baig)
20. ' Officer on Special Duty, Government of Pakistan. Tele: 20336.
21. ' Copy to:-- ' Messrs M. A. Agencies, 7-B Zam Zam Chambers, Dunolly Road, Karachi.
22. (Irshad Muhammad Baig)
23. ' Officer on Special Duty Government of Pakistan."
24. ' To 31st May, 16-6-1975.
25. ' Mr. M. L. Naqsh, ' Deputy Secretary (Finance & Accounts) Ministry of Food, Agriculture and Under- ' Developed Areas, ISLAMABAD.
26. ' Subject:-- APPOINTMENT OF AN ARBITRATOR UNDER ARBITRATION CLAUSE OF CONTRACT NO. RP- 32/71/4, DATED 23-11-1971.
27. ' Sir, ' Please refer to Letter No, RP-31/71/4 dated 14-3-1974 in the matter of arbitration between Directorate-General of Food and Messrs M.A. Agencies, Karachi.
(2) In clarification I am to inform you that your appointment arbitrator is in terms of agreement of reference contained in clause 16 of the contract between the parties and in terms therewith you have to decide the claims of parties submitted to you for decision.
(3) This will substitute and supersede Letter No, RP-32/71/4, dated 14-3-1974.
28. ' Yours obediently, (S.G. Jilanee) Director (Food),"
29. ' From perusal of the above letters it is quite clear that the dispute between the parties was referred to the Sole Arbitrator Mr. M.L. Naqsh of 14-3-1974 by Letter No, RP-32/71/4 and his appointment was made in accordance with clause 16 of the contract. It, however, appears that in the above letter it was mentioned that the terms of reference only authorised the arbitrator to decide whether the contractor was liable to pay the damages/compensation on account of breach of contract committed by him in respect of clauses XIII, items (III) sub-clauses (a to g). This position was clarified in the subsequent letter, dated 31-5-1975 wherein the arbitrator was informed that his appointment as an arbitrator was in term of clause 16 of the agreement and he is to decide the claims of parties submitted to him. It is, therefore, quite clear that the letter, dated 31-5-1975/16-6- 1975 did not amount to any fresh reference but only the scope of arbitration proceedings which had commenced under the letter, dated 14-3-1974 was clarified. I am, therefore, unable to agree with the learned counsel for the judgment-debtor that the letter, dated 31-5-1975/16-6-1975 amounted to a fresh reference to the arbitrator. Apart from it the learned counsel for the decree- holder rightly contended that the judgment-debtor having participated in the proceedings before the arbitrator after receipt of letter, dated 31-5-1975/16-6-1975, without raising any objection as to the competency of the proceedings cannot now be heard to say that the proceedings before the arbitrator were void. The record of proceedings before the arbitrator shows that on 7-1-1976 the judgment-debtor submitted the following additional claim 'before the arbitrator after service of the copy of letter, dated 31-5-1975/ 16-6-1975.
30. "That the defendant has been supplied with a copy of the letter, dated 31-5-1975 from Director Food addressed to the Arbitrator Mr. M.L. Naqsh and a copy of the same has also been served to the defendant on 23-12-1975 and in the light of the said letter the Arbitration has been requested by the plaintiff to decide the claims of the parties submitted, to him.
31. ' That the Arbitration proceedings were initiated on the reference Clause HI(iii), sub-clauses (a) to
(g) and accordingly on the said reference the answering defendant submitted his written statement and the arbitration proceedings proceeded in light of the said reference. That the conversion of the proceeding against the terms of reference and to proceed with the proceeding is to begin afresh and according to law the terms of reference it is to be prepared and the proceeding is to be conducted on such references.
32. ' That the present dispute between the plaintiff and the defendant is on the interpretation of the terms of Contract No, RP-32/71/4, dated 23-11-1971 but the statement of claim submitted by the plaintiff contains demurrage charges for the period from 15-5-1971 to 11-6-1971 which is not the period of contract and accordingly and obviously demurrage claim for that period cannot be the subject-matter of this Arbitration as the contract in question did not exist then.
33. ' As regards demurrage claimed by the plaintiff from 9-1-1972 to 2-3-1972 the defendant submits that no such claim can be saddled on him in the light of the terms of the said contract. The contract of the defendant was terminated on 13-2-1972 and it was restored on 18-2-1972 and as such when it was restored on 18-2-1972, large number of wagons were awaiting unloading. The unloading of the same would have been done by the contractor to whom the work was allotted, but because he did not comply, the work was restored to the defendant and as such the demurrage for that period cannot be saddled on the defendant. The demurrage claimed is not owing to the negligence of the defendant, rather the same is owing to the wishful act of the plaintiff.
34. ' That in reply to the claim of Rs, 3,00,732.29 as claimed in para. 6 of the plaintiffs claim and the annexure of the said plaint, the answer of the defendant is that this amount cannot be claimed because according to the terms of contract the answering defendant was to handle only 50,000 tons and security money was paid only for that quantity but there was no extension of the contract and accordingly the terms of the contract in question could not be enforced against the answering defendant without extension of the same by the plaintiff and consent of the answering defendant.
35. However, it is to be submitted in this connection that the plaintiff according to the terms of contract could not have cancelled a part of the contract and awarded this work to a different contractor.
36. The defendant is not liable for any damages which is not owing to the breach in the contract. Thus, the plaintiff cannot claim the aforesaid amount of Rs,3,00,732.29.
37. ' The written statement submitted previously shall form part of this written statement."
38. From reading of the above additional claim submitted by judgment-debtor before the Arbitrator, it is quite clear that he raised no objection as to the competency of the proceedings before the arbitrator after the letter, dated 31-5/16-6-1975 and the proceedings were treated by him in continuation of the earlier proceedings which commenced on the basis of letter, dated 14-3-1974. It is also sufficiently established from the record of proceedings before the arbitrator that after 31-5- 1975 the judgment-debtor appeared before the arbitrator on several dates produced evidence in support of his claim, disputed the claim of decree-holder, argued the case before the arbitrator and made several applications to this Court for extension of time for making award by the arbitrator. On the face of this conduct of judgment-debtor in the arbitration proceedings it is hardly open to him in law now, to challenge the competency of the arbitration proceedings. In view of the above discussion 1 find no substance in the contention of the learned counsel for the judgment- debtor that the decree which is sought to be executed against him is invalid, void or inexecutable. I may mention here, that lengthy arguments were addressed before me on the point whether an executing Court is competent to hold enquiry into the validity of the decree and large number of cases for and against the proposition were cited at the Bar. The learned counsel for the judgment- debtor cited the cases of Syed Mehboob Hussain Shah v. Anjuman Imdad-e-Karza AIR 1942 Lah.
39. 129; Sind Provincial Wholesale Co-operative Society v. Abdul Weavers Co-operative Society PLD 1960 Kar. 946; S. Miullick Brother v. Haji Muhammad Brothers PLD 1955 Sind 297 and Chabba Lal v.
40. Kallu Lal AIR 1946 P C 72 to support his contention that the executing Court is competent to hold an enquiry into the validity of decree if its validity is challenged before the executing Court by one of the parties to the case. On the other hand the learned counsel for decree-holder cited the case of Kazi Abdul Qadeer v. East Pakistan Provincial Co-operative Bank Ltd. 1969 SCMR 275; Brig (Retd.)
41. Muhammad Aslam Khan v. Azad Government of State of Jammu and Kashmir 1983 CLC 1204; Yousuf Aziz v. Aqeela Begum PLD 1978 Kar. 205 and Haji Ahmed & Co. v. Muhammad Siddique PLD 1965 Kar. 293 to contend that the executing Court cannot go behind the decree and determine its validity or invalidity. There appears to be some difference of opinion on the point argued before me but I will refrain from expressing my views on it as it is quite unnecessary to do so in view of my conclusion above that the proceedings before the arbitrator did not suffer from any legal default.
42. ' Before parting with the case I may mention here that the learned counsel for the defendant/judgment-debtor raised an alternate argument before me that the present execution proceedings cannot proceed until and unless the decree-holder complied with the other direction contained in para. 7(5) of the award which is already reproduced by me earlier in this order.
43. The relief granted to parties by the arbitrator are contained in para. 7 of the award which also includes the portion relied by the learned counsel for the judgment-debtor. I am, however, of the view that the enforcement of the relief granted to the decree-holder in the award is not dependent on clause (v) of para. 7 of the award relied by the judgment-debtor. The learned counsel for the judgment-debtor was unable to point out any direction in the award in this regard. The judgment- debtor if so advised, may apply for endorcement of the relief which according to him was grantd to him by the arbitrator in the award in accordance with the law. The objections filed by the defendant/ judgment-debtor are accordingly dismissed. Execution to issue as prayed.