NAIMUDDIN, J.---This is an appeal under Article 185(2)(d) of the Constitution of Pakistan read with Article 2 of the Provisional Constitutional Order, 1981, from the judgment of the High Court of Sindh, dated 25-5-1982, whereby the High Court accepted the appeal in the following circumstances.
2. The earth work in excavation of Shadi Large was let out to appellants on B-2 (Item Rate) tender sanctioned vide Superintending Engineer, Left Bank Construction Circle, Hyderabad's letter No,TC/G-55, dated 17-12-1963 for Rs,3,46,375. The work was started by the contractor on 20-11-1961 with stipulated date for completion as 19-3-1962. One month's extension from 20-3-1962 to 19-4- 1962 was granted vide Executive Engineer, Lined Channel Division's letter No,TC/G-55, dated 19-3- 1962 on the grounds mentioned in the Award. On 16-5-1964, as stated in the Award, Mr. Nasrullah Abro, Sub-Divisional Officer incharge of the work issued completion certificate for the refund of the security deposit of the Contractors stating that the work executed by the Contractors was completed on 19-1-1962, which fell within the stipulated date of completion and that final measurement, was, however, recorded by him on 25-4-1962. The appellants vide their application, dated 9-5-1962 addressed to the Superintending Engineer, stated that the measurement at RD-88 to RD-106, Right Bank and between RD-15 to RD-17 at Tando Bago have yet to be recorded and that they have failed to get these measurements recorded and get a final settlement of account of earth work. They requested the Superintending Engineer to order for the recording of the final measurement and payment of final bill. On 1-8-1962, the appellants by their letter addressed to the Executive Engineer, Lined Channel Division, had stated that more than two lass Cft. Earth borrowed from Tando Bago Bridge and Rest House approximately at RD-16 to RD-17 both right and left banks was still not measured. They requested for its measurement and payment alongwith final bill.
3. The appellants continued to press for their demand for a long time and on 21-1-1969 filed a suit but on imposition of Martial Law in 1977 they approached the Deputy Martial Law Administrator, Hyderabad, who, by the letter dated 11th April, 1978, addressed to Abu Saeed Khan, Director Highways, Hyderabad, appointed him as Sole Arbitrator in the case of the appellant, attaching the copy of the complaint received from the appellants. It may be convenient for future reference if this letter, which is Exhibit No,3 is quoted here. It reads as follows: "Headquarters Deputy Martial Law Administrator Sector 2, Inspection Bangalow Barrage Colony, National Highway, Hyderabad.
Telephone - Mil 390 303/2/ML April 11, 1978 To Mr. Abbu Saeed Khan, Director Highways, Hyderabad.
Info: HQ MLA Zone 'C'---with ref to their ltr No,MLA/P/6/209 SMLA Hyderabad dated 27 Feb.1978.
Chief Engineering Irrigation Department, Kotri Barrage, Hyderabad.
Awan Industries Limited, 43/7/B/ Block No,6, P.E.C.H.S., Karachi-29.
Subject: Outstanding dues of Awan Industries Ltd., arising out of their dispute with Ex-En Line Channel Division (Irrigation) Tando Muhammad Khan.
You are hereby appointed as sole arbitrator in the case of Awan Industries Limited. The copy of complaint received from Awan Industries Ltd. Is attached for reference. Sd/- Deputy Martial Law Administrator (Salman Ahmed)"
4. It appears that pursuant to the order an arbitration agreement was entered into between the appellants and Executive Engineer, Lined Channel Division, Tando Muhammad Khan. It may be useful if that agreement is reproduced in extenso. It reads as follows: "Following the orders No,303/2/ML dated 11th April, 1978 issued by the Headquarters Dy. Martial Law Administrator Hyderabad appointing Mr. Abu Saeed Khan, Director Design Highway as sole arbitrator and subsequent upon withdrawal of Civil Suit No,15 of 1969 by M/s. Awan Industries Ltd.; on 19th April, 1978 from the Court of Civil Judge Class-I Hyderabad, we the undersigned jointly and severally accept Mr. Abu Saeed Khan, Director, Highways as our Sole Arbitrator in the matter of dispute between us regarding pending dues emanating from our agreement on Form B-2, dated 18th November, 1961 and the works executed by M/s. Awan Industries Limited, during 1961 and 1962.
The decision of Mr. Abu Saeed Khan shall be final, conclusive and binding upon both parties to the contract. The provisions of Arbitration Act, of 1940 being applicable in toto.
1. Sd/- Arshad Malik 18/5 MA, LL.B for Awan Industries Limited.
2. Sd/- Illegible, 18/5/78 Executive Engineer Lined Channel Division Dated 16th May, 1978. Tando Muhammad Khan."
5. The appellants filed their claim and the Executive Engineer filed objections denying that there was any dispute between the Lined Channel Division and the appellants and referred to the following certificate issued by the S.D.O. L.C. Sub-Division No,IV of 10th May, 1964. It reads: CERTIFICATE This is to certify that earth work on Shadiwah Large in RDs 10-30, 40-70 and 88-106 executed by M/s. Awan Industries Ltd., was completed on 19th April, 1962 which falls within the stipulated date of completion. The final measurement was however, recorded on 25th April, 1962. I have no objection to the refund of the Security Deposit of the contractor as his final bill will not be in Minus.
Sd/- (Nasrullah Abro)
S.D.O.
Dated 10th May, 1964. L.C. Sub- Division No,IV"
6. In the statement of claims the appellants in the opening paragraph stated as follows: "Sub: Reference for Dues pending since 1962 in Lined Channel Division.
Dear Sir, Following our dispute with the then Ex En Lined Channel Division our dues remain pending since 1962 subjecting us to losses to the tune of Lakhs of Rupees. (underlining is ours).
In order to delay, defeat and destroy our claims, the records of our files were tampered with, and mutilated. Papers were removed, destroyed and substituted. Back dated entries were attempted to be made with different inks visible to the naked eye. Field Book No,28 was removed from record in January, 1968 to destroy evidence. Letters sent by Registered Post of the following dates were removed and or destroyed to spite us and defeat our claim:
(i) 19th February, 1962.
(ii) 1st March, 1962.
(iii) 17th March, 1962.
(iv) 20th May, 1962.
(v) 6th June, 1962.
(vi) 31st July, 1962.
(vii) 20th August, 1962.
(viii) 20th March, 1963.
(ix) 30th April, 1963.
(x) 17th May, 1963.
(xi) 19th February, 1964.
(xii) 18th May, 1964.
When we filed Civil Suit No,15 of 1969, the attitude of the department was so negative that they did not let the case proceed normally and dragged it for years. There were 167 dates of hearing during nine futile years in Hyderabad alone in which the case made no material progress. The department lawyers kept on telling us that the case cannot be decided between us, may be it could be decided between our grandsons. And the department did not provide relevant records before the Court.
However we claim as follows:-"
And proceeded to state their claim.
7. In the statement of claim the appellants claimed two amounts of Rs,1,97,485 and 34,755 on account of balance of work done and a sum of Rs,1,68,000 on account of damages for breach of contract and another sum of Rs,1,77,999 as damages as per following statement: "Hence we claim a sum of Rs,1,77,999 as damages to restore us to a position where we would have been if Ex En had not taken away this work in contravention of clause 4 of our Agreement."
The appellants also claimed a total sum of Rs,44,960 on account of jungle cutting other than normal including cutting trees of over 2 ft. Girth. They also claimed various amounts as damages on account of litigation and devaluation of currency.
8. The respondents in their written objections denied that there was any dispute between the Lined Channel Division and the appellants regarding the pending dues of the appellants since 1962 and pleaded that the appellants could not and were not in a position to complete the work within the stipulated or extended time. Therefore, a part of the unexecuted work was let out to M.P.O., Water and Power Development Authority with the concurrence and consent of the appellants and they admitted the work as finalized and demanded their earnest money and security deposit which was refunded accordingly. In this connection reference was made to the application of the appellants dated 9-5-1962, which reads as follows: "We have completed work of the Excavation of Shadi way by about 15th April, 1962, (underlining is ours). The measurement at RD's 88106 right bank have yet to be recorded. The measurements at RD between RDs 15 and 17 at Tando Bago have also not been recorded. We have again failed in our efforts to get these measurements recorded and got a fixed settlement of accounts of Earth Work.
Since the work is complete (underlining is ours) we are idling away our time in Tando Bago and suffer huge losses on account of wages of Staff which cannot be shifted without settlement of account with the Department. We shall be highly obliged if the payment of the final bill after the due recording of measurement is ordered."
Reference was also made to several other applications in which the appellants have stated that "the excavation work was completed by us on 19th April, 1962". The respondents, however, denied in the written objections that there was any outstanding against the department.
9. The Arbitrator, however, gave his Award on 31-7-1978, whereby he awarded as follows:
(1) RD 60-70, 29, 99, 184 Cft. at Rs, 24 per % Cft.Rs, 71,980.00
(2) RD 82-106, 31, 59, 887 Cft. at Rs,22/75 per % Cft.Rs, 71.887.00 Rs, 143.867.00
3. Rs,50,000 awarded on the principle of Restitatio-in-Integrum as a lump sum.
And with regard to the compensation on account of devaluation and interest, observed as follows:- 'Though the claim for compensation on account of devaluation of Pakistan's Rupee has much weight yet it was a factor beyond the control of anybody. However, I award interest at Bank Rate as if the amount was deposited in Bank on long term Deposit/Fixed Deposit/Accumulated Deposits whichever is greater with effect from 1-7-1962 on all items included in this award except Item No,1 in which case the decision of the Superintending Engineer-in-charge of the work was arrived at on 13-11-1967 and a fortnight be given to the Department for making payment according to the Superintending Engineer's decision so the interest for Item No,1 awarded for Rs,1,74,735 should be reckoned with effect from 1-12-1967. The criteria in other items of work was date of completion which was 19-4-1962 and its final payment should have been made on or before 30-6-1962 so on these items the interest should be reckoned with effect from 1-7-1962.
10. It appears that the Chief Martial Law Administrator appointed a Committee for examination of the whole case from all angles. The Committee consisted of Mr. W. Kirmani, Secretary to the Government of Sindh, Wildlife and Forest Department, Chairman, Brig. Muhammad Afzal Ahmed, representative of Martial Law Authorities, Mr. Mazharul Haq Siddiqui, Secretary to the Government of Sindh, Finance Department, Mr. Munawar Ali Khan, Secretary to the Government of Sindh, Law Department, Mr. K.R. Solangi, Chief Engineer, Highways Department, Members. The Committee submitted its Report on 24-2-1979, the concluding paragraph whereof reads as follows:-- "Apart from the judicial verdict about the Contractor, there is no convincing explanation coming forth from him as to why he agitated for the claim so late, after the delay of three years. The only reply that he gave to the Committee was that in 1962 when his claims were settled and payments were made he was merely a lad of 19 years and therefore was not in a position to challenge the finalization of the case. Such a reply is enough indication as to how far and to what extent he may have gone to exploit the situation that had arisen on account of error in the calculations referred to above."
11. The Award was filed in the Court of IInd Senior Civil Judge, Hyderabad.
12. The respondents filed objections to the Award under section 30 of the Arbitration Act, 1940. One of the objections was that the Award given by the Sole Arbitrator has been rejected by the Martial Law Administrator, Zone 'Con the report of the Committee which was constituted by the Government of Sindh on 13-12-1978 and the said Committee, after hearing the representatives of the plaintiff and the defendants, submitted the report to the Governor and the Martial Law Administrator, Zone 'Cthat the Award has become invalid and no more in existence by virtue of the order, dated 2-12-1979 passed by Martial Law Administrator, Zone 'C'.
13. However, the learned Senior Civil Judge, Hyderabad, rejecting the objections, made the Award rule of the Court by the judgment, dated 273-1980. On appeal the High Court set aside the order refusing to set aside the Award. In deciding the appeal, in the concluding paragraph, the High Court observed as follows: "At page 344 of Russell on Arbitration (18th Edition) while discussing the subject of "Want of Jurisdiction" it is stated that, "The objection of want of jurisdiction covers two distinct cases, the first where a valid arbitration is in progress, but the arbitrator exceeds his jurisdiction, the second where the objection is that the whole arbitration is a nullity. In either case an action on the award may be defended on this ground, or an action brought for a declaration." In the instant case as is apparent from the contentions raised by the learned Additional Advocate-General on behalf of the appellant, it is quite obvious that the want of jurisdiction is being pleaded firstly, on the ground that the arbitration is a nullity, and secondly it is the case of the appellant that the arbitrator has exceeded his jurisdiction by misconducting himself and the proceedings by making the award. The evidence on record shows that the High Powered Action Committee before whom respondent No,1 appeared and argued each and every item of his clai, a and which made a detailed examination of the documents etc. Came to the conclusion that there was absolutely no material on record which could have justified the award on each item which was found in favour of respondent No,1.
The decision of the High Powered Committee was by majority of 4:1 and the member who represented the Martial Law Authorities did not dwell upon the documentary evidence etc. On record. In view of the circumstances stated on both the points, namely, the point of submission to arbitration and the point of the arbitrator misconducting himself and the proceedings on the very face of the record, it is not necessary to go into the other points raised. The appeal is accordingly allowed and the judgment and decree set aside with no order as to costs."
14. This appeal, as stated, has been filed as of right under Article 185(2)(d) of the Constitution.
15. We have heard Mr. Fakhruddin G. Ebrahim, learned Senior Counsel for the appellants and Mr. Abdul Ghafoor Mangi, Additional Advocate-General, Sindh for respondent No,1.
It was contended by the learned counsel for the appellants that no arbitration agreement or an award can be set aside, amended, modified or in any way affected otherwise than as provided in the Arbitration Act, 1940. In this regard he relied on section 32 of the Act, which reads as follows: "32. Bar to suit contesting arbitration agreement or award.-- Notwithstanding any law for the time being in force, no suit shall lie on any ground whatsoever for a decision upon the existence, effect or validity of an arbitration agreement or award, nor shall any arbitration agreement or award be set aside, amended, modified or in any way affected otherwise than as provided in this Act."
After the coming into force of Arbitration Act, 1940, the remedy of enforcing the award by a suit is taken away by section 32 of the Act. The first part of section 32 precludes filing of a suit for a decision upon the existence, effect or validity of an arbitration agreement or award. Its second part prevents the setting aside of the arbitration agreement or the award or modifying it except as provided in the Arbitration Act. Therefore, there could be no cavil with the submission of the learned counsel.
16. It was further contended by Mr. Fakhruddin G. Ebrahim that an award can be set aside on an application under section 33 of the Act on the grounds stated in section 30 of the Act. He further submitted that section 30 and section 33 are to be read together. Explaining, he submitted that while section 33 is procedural providing for the procedure for contesting the arbitration agreement or the award by an application. Section 30 of the Act lays down precise limits of the power or jurisdiction of the Court to set aside the award so that no award could be set aside except on the grounds mentioned therein. In support he relied on M/s. Umer Khan v. Chief Engineer, Roads and Buildings PLD 1978 Kar.
658. In this regard he further submitted that the Court is called upon to examine only such objections as are filed within the period of limitation prescribed in Article 158. Any objection filed after the expiry of limitation period is to be ignored. In support he relied on some reported judgments of various High Courts from foreign jurisdiction.
17. But, in his submissions, he ignored the provisions of section 17 of the Arbitration Act, which imposes a duty on Courts to see that there is no cause to remit the award or any of the matters referred to arbitration for reconsideration or to set aside the award. This can be done by the Court suo motu, apart from the application which a party may make for either remission of the award or its reversal. Where, therefore, an award is found to be nullity because of the invalidity of the arbitration agreement or, for any other reason, or the award is prima facie illegal and not fit to be maintained, the Court has power under section 17 of the Act to set it aside without waiting for an objection to award being filed or without considering any application for setting it aside, if there be any, and irrespective of the question whether or not any objection to the award was filed or whether the objection, if filed, was not within time. In such cases section 30, clause (c) of the Act is also attracted. Another example can be where a party appoints a sole arbitrator without prior notice to the other party, the award would be prima facie illegal and may be set aside. See Abdul Khaleq v. Province of East Pakistan and another PLD 1964 Dacca 166 and M/s. S.M. Fazail and Company v. M/s. Overseas Cotton PLD 1959 Kar.
739.
18. Now I would examine the case in the light of the principles stated hereinbefore.
19. In this case the objections to the award taken by respondent No,1 in the application under section 30 of the Arbitration Act, filed before the Senior Civil Judge, Hyderabad were that:
(1) there was no award in existence as the same was set aside by the Martial Law Administrator, Zone 'Cby the order, dated 2-12-1979 on the report of the Committee which was constituted on 13- 12-1978 and the said Committee after hearing the representatives of the appellantsand respondent No,1, submitted the report to the Governor and Chief Martial Law Administrator, Zone 'C', on which the Chief Martial Law Administrator, Zone `Cpassed the order.
(2) The award was invalid. The point of invalidity was further elaborated in the rejoinder to the counter-affidavit on behalf of respondent No,1 to support the objections against the award. It was stated as follows:- "5. That I say which I verily believed to be true that the application under section 14(2) of Arbitration Act, 1940 is totally misconceived, incompetent, its adds cannot be invoked in instant case for want of its pre-requisites and ingredients, there is no valid nor legal nor competent reference, thus the appointment of Arbitrator is bad. There is no valid and legal consent of defendant for the appointment of Mr. Abu Saeed Khan as Sole Arbitrator. His appointment is without jurisdiction and award is invalidated, the consent, waiver does not make it valid. The award has already been rejected and subsequent award of the committee and order dated 2-12-1979 of Learned Martial Law Administrator Zone 'Cis in existence, operative with full force and it attained finality which is never challenged by the plaintiff. The plaintiff is estopped to challenge the same now and the alleged award impugned before this Honourable Court does not exist in law and this Honourable Court had no jurisdiction to entertain the application under section 14(2) of Arbitration Act, 1940 and the proceedings before this Honourable Court are CORAM NON JUDICE."
20. The learned Senior Civil Judge ignored the explanation contained in para 5 of the rejoinder, though it was in elaboration of the objection as to the validity of the award taken in the objections under section 30 of the Act. Even otherwise while examining the award for the purposes of making it rule of the Court, the Court could consider whether there was a valid arbitration agreement or reference to arbitration pursuant to which an award was given or whether the award was in existence. It is correct that an award could be set aside only on the grounds mentioned in section 30 of the Act, but besides section 17, this section also contains clause (c), which provides the ground that an award has been improperly procured or is otherwise invalid." In this case the award was given by an Arbitrator appointed by the Deputy Martial Law Administrator, Zone 'Cand not by the parties and the Deputy Martial Law Administrator himself named the sole arbitrator. Although, subsequently respondent No,1 and the appellants had executed an arbitration agreement but it was based on the order of the Deputy Martial Law Administrator. The Arbitration Agreement has already been reproduced in para (4) of this judgment.
21. It will be seen from the opening line of the agreement that this was enterd into following the order of the Deputy Martial Law Administrator, Zone 'C', appointing respondent Not as Sole Arbitrator. Therefore, by this agreement the parties accepted respondent No,2 as the Sole Arbitrator. It will also be seen that the Government of Sindh was not a party to this agreement, nor its name is mentioned therein. It is also not mentioned that the agreement was made on behalf of or under authority of the Government, nor it is shown to us that the Executive Engineer, Lined Channel Division, who signed the agreement, had authority to enter into arbitration agreement or to accept the nomination on behalf of the Government. If the appointment of the arbitrator was made pursuant to the order of the Deputy Martial Law Administrator, and if the award given pursuant to it was referred to a Committee appointed by Chief Martial Law Administrator, Zone 'C', which consisted of three Provincial Secretaries, including those of Finance and Law and one representative of Martial Law Authorities and the Chief Engineer, Highways Department, and before which the appellants also appeared and presented their case and pursuant to its report, if the Chief Martial Law Administrator, Zone 'Cset aside the award, then what possible objection could be taken. If the original order passed by Deputy Martial Central Law Administrator, Zone 'C', was valid then, by parity of reasons, the second order passed by the Chief Martial Law Administrator, Zone 'C', will also be valid or if the first order passed by the Deputy Martial Law Administrator was invalid then the second order will also be invalid. In either case, either there was no valid reference or there was no award in existence which could be filed. A party cannot approbate and reprobate in the same breath. He cannot be allowed to blow hot and cold by saying that the reference was valid although it was not made firstly by the Provincial Government, secondly it was made under the directions of the Deputy Martial Law Administrator, and thirdly, the sole arbitrator was not named by the parties, but by the Deputy Martial Law Administrator, as the agreement also recite that the sole arbitrator was name following his (Deputy Martial Law Administrator's) orders.
22. There is yet another objection which is apparent on the face of the record. In the statement of claim before the arbitrator it was mentioned that the dues were pending since 1962. We have already reproduced in para 6 the heading and part of the opening paragraph which shows what I have stated above. It is obvious that the claim before the arbitrator was barred by time. It was also barred by time when Suit No,15 of 1969 was filed. It was hopelessly barred by time when reference to the arbitrator was made on 27-4-1978. Now, under section 37 of the Arbitration Act, all provisions of the Limitation Act, 1908 are made applicable to arbitration as they apply to proceedings in Court.
Under section 3 of the Limitation Act, it is duty of the Court to see that the claim is within limitation period. Accordingly, it was also the duty of the Arbitrator to see that the claim before it was within the period of limitation, notwithstanding whether such a plea was taken or not. Section 3 of the Limitation Act reads as follows: "3. Dismissal of suit, etc. Instituted etc., after period of limitation.- Subject to the provisions contained in sections 4 to 25 (inclusive), every suit instituted, appeal preferred and application made after the period of limitation prescribed therefor by the First Schedule shall be dismissed, although limitation has not been set up as a defence." (underlining is ours).
23. In the memo of reference the respondent has not claimed any acknowledgement or admission or agreement to pay a time-barred debt. Indeed, the case of respondent No,1 through out was that there were no dues outstanding.
24. It was the case of respondent No,1 before the Sole Arbitrator that there was no dispute in existence between the appellants and respondent No,1. The entire arbitration proceeded as if it was a dispute between the appellants and respondent No,1, not between the appellants and the Government of Sindh. If the Government of Sindh is not named as a party anywhere, either before the arbitrator or in the three Courts in which the matter was agitated, therefore, the arbitration proceedings were not between the appellants and the Government of Sindh and the Government of Sindh will not be bound by the award.
25. I therefore find no merits in this appeal and accordingly dismiss it, leaving the parties to bear their own costs throughout.