QADEERUDDIN AHMED, J.-----These are two Letters Patent Appeals which arise from the same judgment of a learned Single Judge of this Court dated the 1st of April 1966, by which he made the award, which was given by Khan Bahadur Muhammad Solaiman as the sole arbitrator, a rule of the Court and allowed interest at 6 per cent. From the date of the application which was made for making it rule of the Court till the amount which was awarded was realised.
2. The facts which form the background according to counsel for the parties are that a suit was filed for dissolution of partnership and accounts by the partners of the firm "Khan Saheb Muhammad Usman" impleading as defendants two gentlemen who were said to be the sub- partners of the firm. During the pendency of the suit a Receiver was appointed who was also given the power to arbitrate on the disputes which were existing amongst the parties. It was found that there was a dispute between the parties to the suit and the Karachi Co-operative Housing Societies Union Limited which was not a party to the proceedings, but a letter was addressed by the Union to the Presiding Judge on the 2nd of May 1961, stating in it that the Directors of the Union had passed a resolution to refer their disputes to the Sole Arbitration of Khan Bahadur Muhammad Solaiman and had already contacted him in this behalf. The parties to the suit made an application requesting the Court for an adjournment of three months on the ground that the disputes were being referred to arbitration. The adjournment was granted and an agreement of reference was prepared on the 11th of June 1961. The parties to the suit could not sign it because a Receiver had been appointed, the agreement was therefore, drawn as follows and signed by the Receiver ---An agreement made at Karachi this 11th day of June 1961, between Mr. Suleiman E. H. Jafi'er of Karachi the receiver representing the heirs and partners of K. S. Muhammad Usman, deceased of the one part------------ The agreement was signed by the Receiver and on behalf of the Union and arbitration proceedings commenced. The first meeting took place on the 23rd of January 1962, but nothing substantial was done until the 6th of August 1962. What happened during this time, is summarized, in the application of the Receiver, which was made at a later stage as follows "(6) That the aforesaid arbitrator gave notice of Arbitration to the parties and the first meeting was held on 23-1-1962 when the petitioner filed a claim of Rs. 5,52,365.00 against the respondent who was granted time up to 19-2-1962 to file their reply.
(7) That on 19-2-1962, the respondent again applied for extension of time for filing the reply, which was granted by consent up to 17-3-1962.
(8) That on 17-3-1962, the respondent remained absent whereupon the petitioner applied to expedite the matter and to order the respondents to produce the measurement book etc.
(9) That on 4-J-1962, the respondents appeared and again took time on the ground of illness of Mr. S. A.I Akber, their President.
(10) That on 18-6-1962, the petitioner applied to the Arbitrator that the respondents have not filed their reply and that a suitable date be fixed at an early date.
(11) That on 6-8-1962 the arbitrator sent to the petitioner a copy of the written statement filed by the respondent wherein a counter-claim of Rs. 60,000.00 was made against K. S. Mohammad Usman.
(12) That by this time due to default and delay caused by the respondents, the time for making the award expired. The arbitrator by his letter dated 6-8-1962 asked parties to get the time extended.
The said letter is filed herewith and marked C."
As nothing substantial was accomplished and apparently a feeling had arisen that the permission of the Court was not granted to the Receiver, to refer the disputes to arbitration, the Court was requested to grant the permission retrospectively and to permit the Receiver to apply for extension of time because it was felt that the amount involved in the arbitration proceedings bang above Rs.
25,000 the jurisdiction about the arbitration matters would be with the High Court. The trial Court made the following order on the 8th of September 1962 ---Heard Advocate. The Receiver has referred the dispute between the defendants and the Karachi Co-operative Housing Societies Union to the Arbitration of K. B. Mohammad Sulaiman without previously obtaining permission of this Court for the purpose. By this application parties jointly apply that such permission be granted retrospectively. The permission is accordingly granted. The parties or the receiver are also granted permission to move the High Court having jurisdiction over the matter referred for extension of time for award.---
3. An application was accordingly made in the High Court for extension of time on the 15th of September 1962. It was opposed by the Union vide the counter-affidavit submitted by its Executive Officer dated the 14th of November 1962. It was con--tended in it that the reference to the arbitration by the receiver was without authority but it was signed by the Union owing to misrepresentation made to it. The application was accepted by Mr. Justice Abdur Rahim Kharal of this Court sitting as a Single Judge and the objection raised by the Union was overruled. The order is dated the 6th of December 1962 and is reported in Sulaiman Ebrahim H. Jafar v. Karachi Co- operative Housing Societies Union Ltd. (PLD 1963 Kar. 316). The relevant observations of the learned Single Judge are as follows ---It is true that the Receiver had no direct authority from the Court, on 31-7-61 for the purpose (of making the reference). The circumstances are that the parties and the Receiver had obtained adjournments of the case and perhaps the Receiver, applicant thought that to be an implied authority from the Court. Subsequently, however, the Court on 8-9-62 has given the applicant explicit authority retrospectively. The objection about the want of authority in the applicant for nomination of Khan Bahadur Muhammad Sulaiman was raised for the first time by the respondents (the Union in the present petition), and long after the Court had given authority retrospectively to the applicant for the purpose on 8-9-62.--- Further ---The parties and the heirs of K. S. Muhammad Usman have not repudiated the authority of the present applicant to nominate Khan Bahadur Muhammad Suleiman as arbitrator. The arbitrator has been accepted by the respondents (the Union) also. The respondents have appeared before the arbitrator and got the arbitration proceedings adjourned for one reason or the other. The respondents have also put their counter claim before the arbitrator.--- Further "As stated already, the parties to Suit No. 144/57 agreed and do still adhere to their behalf."
Further ---It may once again be emphasised that the applicant (the Receiver) is only acting as an agent of the parties and the Court for the purpose of nominating the arbitrator. This has nothing to do with his power as a Receiver as such.--- Time was extended by four months and the parties were directed to appear before the arbitrator on the 10th of December 1962. Thereafter, the evidence of the parties was partly recorded and need for more time was felt therefore, another application for extension of time was made on the 15th of March 1963, by the arbitrator as well as the parties. Here it should be noted that the Union was a consenting party to the application without raising any objection. The application was accepted and more time was given, during which period also the proceedings could not be completed therefore, the arbitrator and the Receiver made another application for extension of time on the 7th of August .1963, which was accepted and further two months' time was granted. After this, the arbitrator gave his award on the 22nd of November 1963. He allowed a total claim of Rs. 1,50,000 against the Union. The arbitrator then applied to this Court on its original side for making the award rule of the Court on 23rd of April 1963. That application was, on the one hand opposed by the Union and on the other hand, criticized by the others on the ground that the arbitrator had disallowed a part of their claim. The objections raised on behalf of the Union were dismissed, so was the application by the other party and the award was made a rule of the Court on the 1 of April 1966, as mentioned above.
4. The Union as well as the other party have come in Letters Patent Appeals to this Court. The appeal of the Union is L. P. A. 187 of 1966 and the appeal of the other party is =L. P. A. 205 of 1966. Mr. K. A. Ghani says that L. P. A. 205 ~of 1966, according to him has become infructuous because the arbitrator has in the meantime died. Mr. A. A. Fazeel has no objection to the dismissal of that appeal. It is dismissed as 4nfructuous.
5. In support of L. P. A. 187 of 1966, Mr. Fazeel has advanced four arguments.
(i) The reference by the receiver was bad because he had no authority to make it.
(ii) The reference being defective ab initio, could not be ratified retrospectively.
(iii) The Union had not appealed against the order dated the 6th of December 1962, by which its objections were overruled and had also agreed thereafter, to the extension of time to the arbitrator for giving the award, yet is not estopped from pressing the objection based on the absence of authority of the Receiver because it affects the jurisdiction of the arbitrator to give the award.
(iv) The agreement which was executed by the Receiver was in his own name whereas it ought to have been in the name of the parties.
We take up the first objection and should mention that according to the counsel for the parties also this is the most important amongst those which have been raised. The angle from which Mr. Fazeel,st attacked the award was that the reference having been made by the Receiver without the authority to do so, the arbitrator did not acquire the jurisdiction to sit in judgment between the parties. From this point of view he argued that the reference was bad ab initio and that it could not be ratified because an invalid award could not be validated by the sanction which was subsequently granted by the Court. In support of these contentions he has referred us to
(1) Batnasami Pillai v. Sabapathy Pillai AIR 1925 Mad. 318.
(2) T. S. Subba Rao v. Appaduari AIR 1925 Mad. 621.
(3) S. Ghosal v. Smt. Deorajin Debi AIR 1960 SC 941..
(4) Gopal Das v. Baij Nath and others AIR 1926 All. 238.
(5) Ram Harakh Singh v. Mumtaz Husain and others A I 8--1949 All. 679.
(6) Deo Narain Singh v. Siabar Singh AIR 1952 Pat. 461.
(7) Mr. K. A. Ghani has, on the other side, cited.
(8)Khartar Sao v. Pradip Singh and others AIR 1952 Pb. 234.
(9) Messrs Ahmad Bakhsh Abdur Rashid v. Muhammad Aslam~ & Brothers PLD 1954 Lah. 620.
(10) Re John Hopton Wyld 3 L R 794.
(11) Parman v. Ghanthu 511 C 484.
(12) Das Chowdhuri v. N. B. Das Chowdhuri 63 I C 843, and the observations of Basu in his Book on Receivers at: page 943.
Additionally, he has referred to sections 196 and 197 of the Contract Act in support of his proposition that ratification must always take place retrospectively ; and that therefore, the order of the Court authorizing the receiver retrospectively cannot be: rejected to.
7. In so far as the contention of Mr. Fazeel relating to the jurisdictional nature of his objection is concerned we do think that this aspect of the matter has its peculiar significance which cannot be disregarded while considering cases in which institution of suits and other agreements may have been the subject of con--tentions between the parties, but we also feel that an arbitiator is after all a Judge appointed by the parties ; therefore, the element of agreement in the conferment of jurisdiction on him should not be lost sight of. We believe that it was the result of such consideration that in Gopal Das v. Baij Nath and others it was observed that acquiescene of the parties may result in estopping the party which has acquiesced from raising objections to the award. This consideration has been more directly taken into account in Re : John Hopton Wyld. It was a case of reference to arbitration and the fact under which the reference was --made contained an express provision to the affect that prior sanc--petition bad to be obtained. The reference was, however, made without fulfilling the pre-requisite condition but the award was, upheld with the following observations :- "Having acted fully under the submission and taken then chance of having an award in his favour, he cannot now seek to get rid of the award against him on account of an informality in the submission even if this objection might have been prevailed if taken in due time."
Let us note in the present case that the parties to the suit, on whose behalf reference was made by the Receiver, have not objected either to the reference or to, the award to this date.
Moreover, it is on record as found by the late Mr. Justice Kharal that the objection about the want of authority in the Receiver for nomination of the arbitrator was raised for the first time by the appellant in the counter-affidavit filed on 14th November 1962 to oppose the application made in the High Court by the Receiver for extension of time and long after the Court had given authority retrospectively to the Receiver. The stand, which has been taken by Mr. Fazeel, is purely of a technical nature. The nature of acquiescence of Mr. Fazeel's client has its own signifi--cance. The Union once expressly agreed to the extension of time granted by the Court to the arbitrator for giving his award and once it objected to extension but without objecting to the jurisdiction of the arbitrator or the validity of the reference.
8. We shall revert to the fact of the Union's agreement to extension of time but here would like to add that the reference to arbitration was made by the receiver as the parties to the suit had jointly requested the Court for an adjournment with the express object of referring their disputes with the Union to arbitration. The receiver was also a party to that request. Thereafter, a reference was drawn up on the said action and Khan Bahadur Muhammad Sulaiman was the sole arbitrator. In view of this background the late Mr. Justice Kharal had come to the conclu--sion that an implied authority was given by the trial Court to the receiver to make the reference. When it was pointed out to him that there was no sanction on record and the parties desired that the sanction be granted retrospectively it was granted by the trial Court. These facts are peculiar and give the impression not only of an implied authority to the receiver to make the reference but also the understanding of the parties to the suit in this respect about the authority of the receiver was existing. The same authority was made explicit on the request of the parties to make a retrospective order. We accordingly overrule the first objection.
9. The second objection does not arise because we have held that implied authority was existing and that the Union is estopped from raising the objection.
10. The third contention is one of the aspects of the same objection as the first one. Emphasis is laid on it on the jurisdictional nature of the proceedings of an arbitrator. Since we have held that there was an implied authorization and that the jurisdiction of an arbitrator cannot be completely divorced from the nature of the source which is the agreement of the parties and that a party cannot be allowed to let things drift in the hope of deriving an advantage from them and then ultimately turn round and try to undo all that has happened on coming to know that the hope of getting the benefit has been lost. In the circum--stances of this case, we think that the arbitrator had the jurisdiction from the beginning and that the Union is estopped from objecting to the award on the ground that the Court made an order subsequently to retrospectively empower the receiver to make the reference.
11. The fourth contention is of a highly technical nature inasmuch as it is a criticism of the form in which the agreement of reference was drawn. There is no law requiring in formal manner of drawing up that agreement. Mr. Fazeel contended that the agreement was drawn by the receiver in such a manner as to make it binding on himself and the Union and not on the parties to the suit but a reference to the opening words of the agreement which are reproduced above in this judgment will show that the receiver has stated in the agreement that he was representing the heirs and partners of K. S. Muhammad Usman deceased.
12. In conclusion we dismiss the appeal with no order as to costs.