' This case has a checkered history. Brief facts for the purpose of disposal of this case are that on 22-12-1986 defendant Muhammad Tayyeb entered into an agreement with Mir Noor Hussain Talpur and with Akber Hussain, the plaintiff, for obtaining agricultural land of the defendant measuring 155 acres 2 ghuntas for a period of two years which was to be expired in the month of December, 1988.
The important term of this agreement was that at the time of expiry of this agreement i,e, in the year December, 1988 defendant will further execute lease agreement for next three years on the previously agreed terms and conditions but at the enhanced rate of Rs,275 per acre. It was further agreed that in case, "God forbids if there appears any dispute between the parties, the same shall be referred to the Arbitrator". This agreement was produced before the Arbitrator as Exh.P/A. It is very interesting to note that the plaintiff some more than 14 months prior to the date of expiry of the first contract issued notice Exh.P/H to the defendant calling upon him to execute lease for three years in his name as well as in the name of Mir Noor Hussain otherwise plaintiff will claim Rs,1,00,000 as damages and Rs,20,000 as compensation for the loss. Through this letter, which is dated 10-9- 1987, plaintiff appointed one Aftab Ahmed Khan, Advocate as his Arbitrator and further called upon the defendant to appoint his Arbitrator within 15 days otherwise arbitration proceedings shall proceed before the Sole Arbitrator. However, the plaintiff failed to disclose the full address and other particulars of his nominated Arbitrator. "
2. Since the defendant failed to reply Exh. P/H, which is a notice dated 10-9-1987, plaintiff Akber Hussain and Mir Noor Hussain filed their claim before the Arbitrator Mr. Aftab Ahmed Khan, Advocate for Rs,1,00,000 as damages and Rs,20,000 per month recurring compensation. On 1-10- 1987 Arbitrator issued notice to the party and fixed 13-10-1987 at 11-00 a.m. As date of hearing. On 7- 10-1987 notice was issued to the defendant by hand as well as by post. It was ordered that the notice by hand was to be served by Ghulam Muhammad. The diary dated 12-10-1987 of the Arbitrator shows that the report of the process-server was not received. On 13-10-1987, which was the date of hearing fixed by the Arbitrator on 1-10-1987, plaintiff Akber Hussain appeared while Mir Noor Hussain and Muhammad Tayyeb (defendant) were called absent. It was ordered that notice through registered post be jutted against Mir Noor Hussain and Muhammad Tayyeb and a copy of the same be pasted on the Autaq of both the parties and the proceedings were adjourned to 19- 10-1987 at 12-00 noon. On the same day, notices were issued as it appears from the diary.
Thereafter, diary of the arbitration proceedings are silent as to what was the result of the notice issued through registered post and of the pasting on the Autaq of the abovementioned two parties.
However, on 19-10-1987 plaintiff Akber Hussain and Mir Noor Hussain appeared and made a statement that some negotiations for compromise are under progress with defendant Muhammad Tayyeb who is ready to execute three years lease in the name of plaintiff. In these circumstances, Arbitrator directed the parties to produce defendant Tayyeb before him on 16-11-1987 otherwise he will proceed with the proceedings. Thereafter, on 16-11-1987 evidence of Akber Hussain and Mir Noor Hussain was recorded. On 26-11-1987 Arbitrator further recorded statements of the prosecution witnesses and on 28-11-1987 it was ordered that on 10th December at 3-00 p.m. Award will be announced. Accordingly, award was announced on 10-12-1987 in absence of the defendant.
3. On 2-1-1981 (sic) Arbitrator filed petition under section 14(2) of the Arbitration Act, 1940 before this Court praying that the award dated 10-12-1987 be made rule of the Court. Since the defendant failed to file his objection within time, this Court on 14-4-1988 made the award as rule of the Court against which the defendant went into appal under section 3 of the Law Reforms Ordinance, 1972 which was dismissed in limine on 6-6-1988 by a learned Division Bench of this Court. Against the order of the Division Bench of this Court, the defendant went before the Supreme Court seeking leave to appeal which was granted and later on the appeal was heard and was disposed of on 17- 10-1944 (sic) in the following terms:--(See 1995 SCMR 73).
"6. In the circumstances we are of the view that learned Single Judge in the High Court should not have refused to go into the merits of the case on the ground that objections were filed beyond stipulated time particularly in view of the plea taken by the appellant that he was not served with notice in the arbitration proceedings. We, therefore, set aside the impugned judgment in High Court appeal and also impugned order of the learned Single Judge making award rule of the Court and remand the case to learned Single Judge in the High Court to examine the record of the arbitration proceedings to find out whether the plea taken by the appellant about non-service of notice is justified or not. This seemingly can be done without going into the question of limitation as is observed in the ruling mentioned above. The appeal is allowed in the terms stated above."
4. In compliance of the above-quoted order of the Hon'ble Supreme Court of Pakistan, parties were heard at length and the record of the arbitration proceedings was scrutinized with the help of both the leained counsel. I have heard Mr. Dewan Bashir Ahmed, Advocate for the plaintiff, Mr. Qamar Muhammad Khan, Advocate for auction-purchaser and Mr. Iqbal Kazi, Advocate for the defendant.
It is vehemently contended by Mr. Dewan Bashir Ahmed, Advocate that the scope of hearing before this Court has been circumcised by the Supreme Court up to the extent of non-service of notice before the Arbitrator. He said that the notice to the defendant was properly served who deliberately avoided to appear and contest the arbitration proceedings. He has supported award and has prayed that the same may be made rule of the Court. On the other hand, Mr. Iqbal Kazi has stated that the scope of hearing is not only limited to the service of notices but this Court can also look into the legality of the award in view of the law laid down by the Supreme Court of Pakistan in the case of M/s. Awan Industries Ltd. v. The Executive Engineer, Lines Channel Division and another (1992 SCMR 65). He has strongly contended that the defendant was never properly served before the arbitration proceedings and as such he has been condemned unheard. He has relied upon sections 42 and 43 of the Arbitration Act. He has vehemently urged that the proceedings before the Arbitrator was nullity in law inasmuch as there does not arise question for damages as the period of first lease never came to an end. He has relied upon PLD 1959 Kar. 739 and PLD 1964 Dacca 166.
5. Section 42 of the Arbitration Act, 194.0 provides mode of service of notice by the parties or by an Arbitrator or 'Umpire. The first mode provides that notice shall be served in a manner as provided in the arbitration agreement and if there is no such provision in the agreement then by delivering it to the person on whom it is to be served or by sending it by post in a letter addressed to that person at his usual or last known address of his residence or business place in Pakistan. This provision envisages that notice must be delivered to the person to whom it is addressed or it must be sent through post. The entire record of arbitration is silent on the aspect whether the notice issued on 7- 10-1987 by hand through Ghulam Muhammad was "delivered" to the defendant and whether the notice sent to the defendant on 13-10-1987 through registered post was served or not. The record is also silent about the fate of the pasting of notice on the Autaq of defendant. Notice issued to the defendant by registered post was returned un served which is available on file at page 197. No reason appears on this envelope as to why it was returned by the postal authorities but it is sufficient proof of the fact that the notice was never delivered to the defendant Muhammad Tayyeb. Simple issuance of notices is not the actual compliance of section 42 of the Arbitration Act, 1940. The word "delivering" as used in section 42(a) means that a notice must reach of the person on whom it is to be served. Word 'delivery' is defined in the Legal Thesaurus Dictionary by William Statsky as "the act by which something is placed within the possession or control of another." In Black's Law Dictionary, it is defined as an act by which the res or substance thereof is placed with the actual or constructive possession or control of another. According to the Ballentine's Law Dictionary, the word 'delivery' is explained as "A handing over; the surrender of possession to another by making a thing available to another, placing it within his reach..." In the present case, there is no evidence available on record to show that the notice issued by the Arbitrator was actually delivered to the defendant.
6. The words "sending it by post" used in section 42(b) likewise mean that the notice should reach on the last known address of the person to whom it is addressed. It would be pertinent to observe that before depriving any person of his right to appear and contest the arbitration proceedings, it will be just and proper for the Arbitrator to ensure that the notice has reached to the person it was addressed. Section 42 of the Arbitration Act, 1940 is in no manner violative of the principles of natural justice. However, I am in full agreement with the arguments of Mr. Dewan Bashir Ahmed, Advocate that provisions of Order V, Rule 20, C.P.C. Are not attracted before the Arbitrator but in my opinion, it does not mean that the Arbitrators are exempted from recording their satisfaction about service or non-service of the notices on the parties. This is more essential for the Arbitrators to record their opinion about the service of the notices for the purpose of suppressing any mischief which may be committed by the either side.
7. Mr. Dewan Bashir Ahmed, Advocate has vehemently urged that a Division Bench of this Court in H.C.A. No,61/88 has upheld service of the notices on the defendant as good and, therefore, the same cannot be reviewed by this Court. With regret, I may say that this argument is misconceived as the Supreme Court of Pakistan in Civil Appeal No,344-K of 1980 Muhammad Tayyeb v. Akber Hussain (1995 SCMR 73) has set aside the judgment of High Court appeal as well as order of this Court dated 24-4-1988 through which the award was made rule of the Court. Then Mr. Dewan Bashir Ahmed has invited my attention to the fact that after the award became rule of the Court the property was auctioned and its sale proceedings were adjusted towards the damages and compensation order vide the above said award. I am of the view that consideration of these facts are not within the scope of this Court which should have been agitated by the plaintiff before the Supreme Court.) However, it will be suffice to observe, as held in the case of Yousuf Ali v, Muhammad Aslam (PLD 1958 SC 103) and followed by a Division Bench of Balochistan High Court that if the initial order is declared void then the whole structure created thereon is bound to fall. In the words of Mr. Muftakhlruddin, J. Which I reproduce as follows:-- "For the above reasons there is no difficulty in holding that the decree dated 14-3-1981 based on the report of the tribunal dated 24-2-1981 was a nullity in law and non-existent being void. It has been held by the Hon'ble Supreme Court in Yousaf Ali v. Muhammad Aslam Zia's case (PLD 1958 SC 103) that if on the basis of a void order subsequent orders have been passed either by the same authority or by other authorities, the whole series of such orders, together with the superstructure of rights and obligations built upon them must fall to the ground because such orders have as little legal foundation as the void order on which they are founded...."
(For reference see the case of Karim Dad v. Member, Board of Revenue and 5 others reported in PLD 1985 Quetta 252).
8. At this stage when I have dictated this order up to this extent, Mr. Dewan Bashir Ahmed, Advocate for the plaintiff had appeared and has cited some reported cases on the question of service of notices on defendant. The first case cited by him is of Butto Kristo Roy and others v. Gobindaram Marwari and another (AIR 1939 Patna 540). In this case, a Division Bench of Patna High Court held that there was no proof that the letter was served on the plaintiffs. It was observed by the said Division Bench that if a letter sent in a registered cover which is received back as the addressee refused to accept it, but the peon who endorsed the refusal on the cover was not examined nor handwriting of such person was examined, this is not a proof of letter served on the plaintiff. It was held that a letter posted and not received back through the Dead Letter Office shall be presumed to have been received by the addressee. This situation was clarified by the Patna High Court by further observing that this presumption will not apply where the letter was returned as being refused by the addressee. This case is of no help to the plaintiff as the letter through which the notice issued to the defendant by the Arbitrator was returned un served with no postal remark. In fact, this case fortified my view as held in paras. 5 and 6 above.
9. In another case of Nalini Ranjan Guha v. Union of India (AIR 1954 Cal. 462), it was held by a Single Judge of Calcutta High Court that the notice was properly served on the Union of India as the notice was properly received in the concerned department and that it was not denied in the affidavits by the Union of India. In the present case, the defendant has vehemently denied the receipt of notice issued by the Arbitrator. Therefore, the rule laid down in this reported case is also not applicable. In the third case, reported as Kapur and Sons, Amritsar v. Raj Kumar Khanna and another (AIR 1955 Punjab 235), it was held by a Division Bench of Punjab High Court while interpreting section 42 of the Arbitration Act, 1940 that what the section requires is that a notice has to be sent by post to the Party's usual place of business which must be the last known place of abode and business but facts of this reported case are clearly distinguishable inasmuch as there was sufficient evidence before the learned Division Bench of the Punjab High Court about party's refusal to accept the notice and in this circumstance, service of notice was held good. In the instant case, the Arbitrator failed to record his satisfaction either about the service of notice or about the conduct of defendant in accepting or refusing the said notice.
10. Then Mr. Dewan Bashir Ahmed, learned counsel for the plaintiff has relied upon three other reported judgments from the High Courts of Karachi and Lahore which are again of no help to plaintiff. In the case of Messrs Ahmad Bakhsh Abdul Rashid v. Muhammad Aslam & Brothers and another (PLD 1954 Lah. 620), it was held by Mr. S.A. Rehman, J. (as he then was) that arbitrator has power to proceed ex parte but such power is discretionary and to be exercised on proof that one party is deliberately avoiding appearance. The rule laid down in this case clearly goes against submissions of the learned counsel for the plaintiff. Following is the relevant para. Of the above said reported judgment which supports my view as discussed earlier:-- " He also points out that the method of service of a notice by the arbitrator to a party, prescribed by section 42 of the Arbitration Act, 1942, is either personal service or dispatch of a letter by registered post and a telegraphic notice is not one of the specified methods. The notice was consequently not in accordance with the provisions of section 42 of the Act and could not be described as a valid notice. There seems to be force in this contention. Apart from that, it seems to me that it was the duty of the arbitrator to investigate whether Muhammad Aslam and his brothers had a valid excuse for not appearing before him or not. If a reasonable excuse for not attending the appointment could be shown, the Court will set aside an award made by the arbitrator who has proceeded ex parte..."
11. In the case of Ch. Abdul Rauf and another v. Muhammad Saeed Akhtar and others (PLD 1958 Kar.
145), a learned Single Judge of this Court held that the Arbitration Act does not prescribe any procedure as to how proceedings before the Arbitrator should be conducted and that all it requires is that nothing should be done ex parte and that the parties should have notice in the sense that they know when the matter is to be taken up by the arbitrators. In the present case, there is no sufficient proof of the service of first notice issued by the plaintiff to the defendant while appointing Arbitrator. Neither there is proof of service of second notice issued by the Arbitrator to the defendant. In the circumstances, I am satisfied that the defendant was having no knowledge of the appointment of Arbitrator and of the proceedings conducted before the said Arbitrator. Therefore, the law laid down in the case of Ch. Abdul Rauf is not applicable in the circumstances of the present case. The last case relied upon by the learned counsel for the plaintiff is of A. Qutubuddin Khan v. Karachi Electric Supply Corporation Ltd., Karachi (1980 CLC 1977) wherein Mr. Ajmal Mian, J.
(as he then was) held that the registered letter containing the notice of filing of the award was served on the defendant as there was a clear acknowledgment appearing on postal acknowledgment receipt which was brought on record as Exh.4/1. In the reported case, there was sufficient material available before the learned Judge to observe that the defendant had chosen not to participate in the arbitration proceedings and, therefore, the plaintiffs statement remained unchallenged. In the present case, there is no sufficient material available on the record to show that the defendant deliberately avoided receipt of the notice or that it was in the knowledge of the defendant that the arbitration proceedings are in progress. Therefore, the rule laid down by Mr. Ajmal Mian, J. (as he then was) is not applicable in the circumstances of the present ease.
12. The net result of the above discussion is that the plea about non-service of notice raised by the defendant is justified and I accordingly hold that the defendant was not properly served. The Sole Arbitrator acted in haste to proceed with the arbitration proceedings and to announce the abovesaid award. He being an Advocate was required to act judicially and reasonably. In the circumstances, I hereby set aside the award dated 10-12-1987 with no order as to costs.