This Civil Revision arises from an order dated the 23rd of November, 1981, of the learned Civil Judge 1st Class, Lahore, whereby he dismissed an application brought under sections 8 and 31 of the Arbitration Act by the petitioners.
2. The petitioners held a sub-contract with the respondent Messrs Gammon Pakistan Limited vide an agreement dated the 26th of September, 1966. It contained an arbitration clause. The respondent cancelled it on the 12th of August, whereupon the petitioners lodged a claim with them for certain amount on the 14th of August, 1967. It appears that the respondent spurned the petitioner's claim and instead brought the present suit for recovery of Rs. 8,17,814.03. The petitioners invoked the arbitration clause of the agreement by making an application under section 34 of Arbitration Act but the same was dismissed on the 29th of January, 1974. After having failed there, they served the respondent with a notice under section 8 of the Arbitration Act to agree to appointment of an arbitrator but on their refusal to do so, preferred the present application under sections 8 and 31 of the Arbitration Act on the 8th of June, 1974, for getting a declaration that the agreement between the parties contained an arbitration clause and to appoint an arbitrator for its determination.
3. The respondent Messrs Gammon Pakistan Limited contested the application maintaining that it was barred by time and was not even maintainable in law vis-a-vis the suit.
4. The objections raised by the respondent were upheld and the petitioners application was dismissed.
5. Section 8 ibid required a notice by the petitioners to the respondent. They claimed to have served it upon them. A period of fifteen days is given thereunder to the opposite party to agree to the appointment of the arbitrator. This period admittedly expired on the 13th of March, 1970. If there is no response the, party may make an application under section 8 ibid. To the Court and the period for such application was three years under Article 181 of the Limitation Act. Terminus a quo for the present application was the 13th of March, 1970, and the period of three years expired on the 12th of March, 1973, whereas the present application was filed on the 8th of June, 1974. It was obviously barred by time.
6. Counsel sought extension of time under section 14 of the Limitation Act by showing that they had been prosecuting their application under section 34, Arbitration Act, during the period between the 1st of September, 1972, and the 29th of January, 1974, and that its exclusion could be asked for under section 37 of the Arbitration Act. The contention was seriously opposed on the ground that no such point was canvassed before the trial Court, nor was it discussed in the impugned judgment, nor was any formal application made in this behalf. Still further, it was urged that the time once started running could not have been stopped by any subsequent inability of the petitioners to make the application within three years of such a starting point. Section 9 of the Limitation Act was relied upon in this respect. There was considerable substance in the objection. In fact, the period of three years for making this application started running from the 14th of March, 1970, whereas the present suit was subsequently instituted on the 2nd of September, 1970, and the application under section 34 ibid. Was made on the Ist of September, 1972. Obviously the limitation kept on running from the 14th of March, 1970, to the 31st of August, 1972, and it could not have been stopped by making the application under section 34 on the Ist of September, 1972. It was a supervening event which could not cause break in the continuity of the limitation which had already begun running against the petitioners. For this reason, even if they were genuinely pursuing the proceedings under section 34 ibid., they could not be given the benefit thereof.
7. Reliance on M. Imam-ud-Din Janjua v. The Thal Development Authority, Jauharabad (PLD 1972 SC 123) and M/s. Combined Enterprises v. WAPDA, Lahore (PLD 1988 SC 39(50)) for claiming exclusion of time on the basis of prosecuting other proceedings would not be helpful here because.
The implications of section 9 of the Limitation Act were not considered in those cases.
8. On the other hand, the terminus a quo for the present application was said to be the 12th of August, 1967, when the main agreement was rescinded Karachi Shipyard and Engineering Works Ltd. v.-Muhammad Aslam Khan (PLD 1979 Kar 635), M/s. Alpha Contracting Co. v. M/s. National Motors Ltd. Etc. (1984 CLC (Kar.) 3458) and M. Imam-ud-Din Janjua v. The Thai Development Authority, Jauharabad (PLD 1972 S.C. 123) were cited in support of the contention that the limitation would start from the date of the rescission of the contract rather than on the expiry of fifteen days notice under section 8 of the Arbitration Act.
9. Even on the assumption professed by the petitioners that the terminus a quo was the expiry of 15 days' notice under section 8 ibid., they could not be granted exclusion of the time taken by them in a subsequent or supervening inability. The finding of the lower Court as to expiry of limitation was unexceptionable and the same is affirmed.
10. The revision petition is dismissed.
H.B.T./M-1394/L