AJMAL MIAN, J.-- This appeal is directed against an order dated 31-10--1984 passed by a learned single Judge of this Court in Suit No.155 of 1984 whereby he allowed the respondent's Civil Misc.
Application No.3713/1984 under section 34 of the Arbitration Act (hereinafter referred to as the Act) and stayed the above suit filed by the present appellant for the recovery of Rs.19,406. It seems that the appellant had appointed the respondent as their clearing agent on the terms and conditions contained in the appellant's letter dated 10-9-1976 (hereinafter referred to as the contract) signed by both the parties. It is the case of tile appellant that during the period from March, 1980 to December ,1981 the respondents apart from the payment in respect of their bills received a sum of Rs.7,69,406 from the appellant on account of octroi charges payable to the KMC for payment and that the above octroi amount was refundable to the appellant after movement of octroi goods outside the Municipal limits. It was also the case of the appellant that out of the above amount the respondent refunded only a sum of Rs.2,50,000, thus leaving a balance of Rs.5,19,406. Upon the service of the summon the respondent filed above application under section 34 of the Act unsupported by an affidavit to which the appellant filed objections. Thereupon. The respondents filed an affidavit-in-rejoinder. The learned single Judge after hearing the parties by the order under appeal stayed the suit. The appellant being aggrieved by the above order has filed the above appeal.
2. In support of the above appeal Mr. Muhammad Sharif, learned counsel for the appellant has urged as follows:
(i) That the dispute is not covered by the arbitration clause.
(ii)That in the application under section 34 of the Act the dispute which was sought to be referred to the arbitration was not specified and, therefore, the application should have been declined.
(iii) That the respondent had not filed any affidavit in support of the application stating therein that at the time when the proceedings were commenced and still remains ready and willing to do all things necessary to the proper conduct of the arbitration.
On the other hand Mr. Shamsul Arfin, learned counsel for the respondent has contended as under: (i)That a perusal of the contract will indicate that all disputes are covered by the arbitration clause.
(ii)That the application contains the dispute which was sought to be referred to the arbitration
(iii) That the very fact that the respondent had filed an application indicated that they were ready and willing to perform their part as to the proper conduct of the arbitration; and that in any case before the hearing of the above application the respondent had stated on oath before the learned single Judge that when the proceedings were commenced and still they were ready and willing to do all the things necessary for the proper conduct of the arbitration.
3. Adverting to the first submission of the learned counsel for the parties, it may be observed that under para. 7 of the contract the appellants were to pay agency commission and other amounts in connection with the clearance of the goods including terminal tax under sub-para(iv) with the caption "Municipal Charges", of para-B of above para 7. Mr. Shamsul Arfin has referred to the case of Pakistan Tobacco Co. Ltd. v. Karachi Municipal Corporation (PLD 1967 S.C.241) to indicate that terminal tax in fact is octroi. The above case indicates that under the Karachi Municipal Act, 1933 and the rules framed thereunder octroi was defined as a terminal tax. It may be observed that para 16 of the contract provides settlement of dispute and states that "all disputes, differences and questions which may at any time arise between the parties hereto, their representatives or assigns touching or arising out in respect of the letter of appointment the subject-matter thereof shall be referred to a single arbitration in accordance with the provisions of the Arbitration Act, 1940 or any statutory modification. The above clause is quite wide in its scope and, therefore, will cover even the dispute in question.
4. As regards the second submission of the learned counsel for the appellant that the application had not specified the dispute which was sought to be referred to the arbitration, it may be observed that he has referred the following cases.
(i) Novelty Cinema Lyallpur v. Firdaus Films and others PLD 1958 (W.P.) Lahore 208, in which a learned single Judge of the erstwhile High Court of West Pakistan declined an application under section 34 of the Act inter alia, on the ground that no dispute was specified in the application.
(ii) Muhammad Yousuf Burney v. S. Muhammad A.I (1983 CLC 1498)
On the other hand Mr. Shamsul Arfin has referred to the case of G. M. Pfaff A.G. v. Sartaj Engineering Co. Ltd., Lahore (PLD 1970 Lahore 184), in which a Division Bench of the Lahore High Court held that there is no particular form prescribed for an application under section 34 of the Arbitration Act and observed as follows:-- "Leaned counsel for the appellant then submitted that no application under 788uection 34 was ever made by the respondent at all and, therefore, the question of stay did not arise. There is no particular form of application provided in section 34 and, therefore, if it can be demonstrated that the respondent made it clear to the Court that he was refusing to submit its jurisdiction because there was a subsisting arbitration agreement between the parties, which required that submission of the particular dispute to arbitration, the respondent would be deemed to have discharged his duty of making an application. Such an intention was clearly notified to the Court by the first few paragraphs of the so-called "written statement". There is no doubt, however, of the fact that the respondent did not present a separate application under section 34 but there is no indication whatsoever in this section requiring such a step to be taken."
He has also referred to para. 1 of the above application under section 34 which reads as follows: "It is prayed on behalf of the defendants above named that this Hon'ble Court may be pleased to stay the above suit to enable the parties to have recourse to arbitration proceedings for resolution of the dispute/claim raised in this suit."
5. We are inclined to hold that since in the application the suit claim was mentioned, therefore it cannot be urged that the dispute, which was sought to be referred to the arbitration was not specified in the application.
6. As regards the above third submission of Mr. Muhammad Sharif, learned counsel for the appellant that the respondent had not filed any affidavit in support of the application stating therein that they were at the time when the proceedings were commenced and still remained ready and willing to do all things necessary to the proper conduct of the arbitration, it any be observed that he has referred to the following cases:
(i) Anderson Wright Ltd. v. Morn & Co. (AIR 1955 S.C.53) in which the Indian Supreme Court while construing section 34 analysed it as follows: "Thus in order that a stay may be granted under this section, it is necessary that the following conditions should have been commenced by a party to an arbitration agreement against any other party to the agreement.
(2)the legal proceeding which is sought to be stayed must be in respect of a matter agreed to the referred.
(3)The applicant for stay must be a party to the legal proceeding and he must have taken no step in the proceeding after appearance. It is also necessary that he should satisfy the Court not only that he is but also was at the commencement of the proceedings ready and willing to do everything necessary for the proper conduct of the arbitration; and
(4) the Court must be satisfied that there is no sufficient reason why the matter should not be referred to an arbitration in accordance with the arbitration agreement."
(ii) Middle East Trading Co. Bombay v. The New National Mills Ltd. Ahmedabad (AIR 1960 Bombay 292). In the above case a learned single Judge of the Bombay High Court while construing section 34 held that a defendant who asked the stay for the suit must aver that all the requirements of the section, which are necessary in order to obtain stay of the suit and that one of the necessary conditions to be fulfilled before stay could be granted under section 34 is that the applicant for stay must be a party, and he must also to satisfy the Court not only that he is but also was at the commencement of the proceedings ready and willing to do everything necessary for the conduct of the arbitration.
(iii) N. C. Padmanabnan and another v. S. Srinivasan (AIR 1967 Madras 2o1), in which a learned single Judge of the Madras High Court has held an applicant in an application under section 34 must satisfy the Court with his readiness and willingness to do everything necessary for proper conduct of arbitration proceedings.
(iv) Srish Chandra Guha v. The Food Corporation of India (AIR 1975 Calcutta 215). In the above case a learned single Judge of the Calcutta High Court held that the applicant's readiness and willingness is one of the most vital factor on the basis whereof the Court has to exercise its discretion under section 34 and if such a submission is not verified the Court cannot rely thereon.
(v) Uzin Export Import Enterprises v. M. Iftikhar and Company (PLD 1986 Karachi 1), in which a Division Bench of this Court referred to the observations of the Indian Supreme Court in the above- cited case of AIR 1955 SC 53 and observed as follows: "Viewed in the light of the opinion expressed by the Supreme Court of India, we have to see whether the UZINS had fulfilled the following condition to entitle them for a stay: "It is also necessary that he should satisfy the Court not only that he but also was at the commencement of the proceedings ready and willing to do everything necessary for the proper conduct of the arbitration.
Mr. Muhammad Sharif has also referred to para 564 from the Halsbury's Laws of England fourth edition which, reads as follows: "564. Applicant ready and willing to arbitrate.-- The applicant must satisfy the Court not only that he is, but also that he was at the commencement of the proceedings, ready and willing to do everything necessary-for the proper conduct of the arbitration. He must also file an affidavit to this effect in support of his application for a stay and unless the Court is satisfied on the point the application to stay must be dismissed. A party may be "ready and willing" within the meaning of this condition notwithstanding his intention to contend before the arbitrator that the time for arbitration limited in the arbitration agreement has expired."
On the other hand Mr. Shamsul Arfin has referred to the case of Sansarchand Deshraj v. State of M.P. And others (AIR 1961 Madhya Pradesh 322), in which a Division Bench of the Madhya Pradesh has held that if the defendant in his reply to the suit draws attention of the Court to subsistence of the arbitration agreement and points out that reference to arbitration was the correct remedy for the plaintiff to follow the defendant must be held to have shown that he is ready and willing to have the matter decided by arbitration because the expression of his readiness is implicit in the objection raised by him.
7. It seems that though in the application the above averment as to the readiness and willingness by the respondent was not made but in the affidavit in reply to the objection in para 9 it was averred that the defendants have all along I been and still are willing to have the dispute referred to arbitration in accordance with law. It seems that in the objection the appellant had not raised any specific plea as to the non-avertment of the defendants readiness and willingness. The learned single Judge has dilated upon this aspect and has held that the respondent has shown their readiness and willingness to do all things necessary) for the proper conduct of arbitration.
8. We are inclined to hold that keeping in view the above Division Bench judgment of the Lahore High Court in the case of G. M. Pfaff A.G. v. Sartaj Engineering Co. Ltd. And because of the fact that before hearing of the above application under section 34. Of the Arbitration Act the respondent had made an averment on oath that they had all along been and still were willing to have the dispute referred to arbitration in accordance with the law, the learned single Judge could have held that the compliance of above section 34 of the Act was made.
9. We may also observe that under section 34 of the Act the trial Court has a discretion in the matter and if such discretion is exercised properly, such an order cannot be interfered with in appeal. We see no reason in the present case to interfere with the order under appeal.
10. The appeal is, therefore, dismissed but there will be no order as to costs.
H.B.T./P-101/K