ORDER DEEDAR HUSSAIN SHAH, J. - I intend to dispose of Suit No. 84/94 and J M. No. 10/95 by this common order as common questions of facts and law are involved and the parties in these matters are one and the same.
2, Brief facts of the case are that the plaintiffs are 'A' class No. Limit Contractors, who are enlisted with the defendant's agencies, departments etc. And pre-qualified with the defendants for their works and have carried out works of * millions of rupees of the defendants or otherwise. The plaintiffs, as such participated in the under- noted tenders floated by the defendants for their works as under: - "(i) Work of "Providing and Laying Sewerage disposal at Project No. 2, Gulshah-e-Jamal, Karachi estimated to cost Rs. 8,41,722/00 (on 12.2.1987) .% "(ii) Work of Providing and Laying Sewerage Disposal at Project No. 2-A, University Town Karachi estimated to cost Rs. 37,22,940/- (on 14.4.1988) ."
"(iii) Construction of culverts at Project No. 2-A1 at Depot Hill Station, Karachi estimated to cost Rs.
73,89,475/00 (on 4.4.1991)."
"(iv) Providing and laying sewrage line at Project 2-A1, estimated to cost Rs. 63,200/00 (in September, 1989).
3. The plaintiffs emerged as the lowest tenderers in respect of the works at
(i) to (iii) above. Regarding the-work at (iv) above, it is stated by the plaintiffs that they were the second lowest tenderer and M/s. Mobarak Naseem, contractor were the first lowest but the plaintiffs after opening of said tender against NIT dated 5.9.1989 offered through their letter dated 20.9.1989 that they were prepared to execute this work at their quoted rates for the other work on 14.4.1988, which will save the defendants from at least two million rupees. Whereupon the defendants did not accept the tender of the said other contractors and promised to award this work to the plaintiff. The plaintiffs preferred another claim regarding the tender in the year 1984 for the disposal of (20) number undeveloped commercial plots of 200 square yards each, at chanesar halt, Karachi, in project No. 8 for disposal in the open market, it is stated by the plaintiffs that they participated in the tender after deposit of earnest money and emerged as the highest bidders for the same at their quoted rate of Rs. 30,000/00 for each plot. According to the plaintiff they were to be issued allotment of the said plots by PRECHS/defendants against the payment/deposits of price of plots less the amount of the Earnest Money of tender paid by the plaintiff, whereupon they were to construct commercial units on the said plots and dispose of the same to the buyers in the open market.And such buyers were to be issued lease/s by the defendant/society, so as to enable such buyers to get their respective plots/construction thereon mutated in the appropriate record of rights. It is stated by the plaintiffs that, time to time, the defendant's secretary asstued/promised that work order will be issued but in vain. #tbs 1997 #to #tbs Key Law Reports #to I
4. , The parties had certain disputes referable to arbitration, consequently the plaintiffs appointed Mr, A. Qutubuddin Khan, Advocate as their Arbitrator and called upon the defendants to appoint their Arbitrator vide their letter dated 20.6.1993 (Exhibit APN-1). On failure of the defendant in appointing their arbitrator as per law, the plaintiff appointed Mr. A. Qutubuddin Khan as Sole Arbitrator in the matter of the said, dispute under intimation to defendants and requested the arbitrator to adjudicate uptin their elaims/disputes between the parties. l *
5. Mr. A. Qutubuddin Khan, the Sole Arbitrator, filed his award in the office on 3.2.1994. Thereafter notices to the parties on the Form 12-C to the Sindh Chief Court Rules were issued.
6. I have heard Mr. K.M.A. Samdani, learned counsel for the plaintiffs, who has contended: (1) that after receipt of the award, filed by the Sole Arbitrator, notice of the award was issued by this Court first through bailiff and second by registered post A/D and both were served on the defendants on 24.2.1994 and 10.3.1994 whereas objections were filed under the Arbitration Act on 7.5.1994; (ii) that period prescribed for filing objection under Article 158 of the Limitation Act is 30 days; (iii) that J.M. No. 10 is filed without seeking permission of the Court; (iv) that the application is also barred by time and the defendants cannot raise this issue at present (v) that the plaintiffs are not members of the Society, therefore, sections. 54. 70 and 70-A of the Co-operative Societies Act are hot applicable.
7. Statement of the Bailiff Hassan Shah, who served the notice on the defendants reads as under:- The notice was received by one clerk of M/s. Pakistan Railway Employes Cooperative Housing Society Ltd., copy of the notice bears stamp of the defendants. Notice issued through registered post A/D bearing No. 17870, dated 2 L2.1994, Saddar GPO, Karachi, was also served on the defendants.
9. Mr. K.M.A. Samdani has cited the following authorities:-
(1) (1984 SCMR 597) case of Ashfaq Ali Qureshi v. Muncipal Corporation
(2) (PLD 1994 K. 127) case of M/s. Shaft Corporation Ltd. v. Government of Pakistan
(3) (PLD 1979 K. 45) case of Haji Amir Bux v. Sono Khan
(4) (1991 CLC 258 K.) case of Akhlar Trading Co. v. Food Department and others
(5) (1987 CLC 83 K.) case of Ralli Borthers and Coney Ltd. v. Muhammad Amin Muhammad Bashir Ltd.
"S. .2(c)--Reference to arbitr.Ation-Requirement-For referring matter to arbitration, signature of parties on agreement not necessary-Such agreement however, was required to be in writing-Even if such agreement was not signed, parties would be bound thereby, and matter could be validly referred to arbitration." . (6) (PLD 1977 K. 37) case of Paracha Textile Mills Ltd. v. Manikram Shamandas.
"S. 30-Notice sent by arbitrators to defendant by Registered post A.D. Returned undelivered with endorsement of Postal Authorities as "refused"-Nb evidence adduced to displace presumption under law that notice was received or offered or delivered by Postal Authorities to defendant- Defendant, held, duly served with notice of proceedings by arbitrators in circumstances of case and he cannot plead that award was vitiated for want of notice to him of particulars of claim by other party."
(7) (1981 CLC 1667 K.) case of M/s. Gul Ahmed Textile Mills Ltd., Karachi v. M/s. Starko Ltd., Karachi. .
(8) (PLD 1981 K. 28) case of M/s. Sheikh Hussain Bux & Co. v, M/s. Zaib Tun Textile Mills Ltd #
(9) (AIR 1955 Rajasthan 153) case of Ismail v. Hansraj and another.
(10) (AIR 1954 Bombay 293) case of A.R. Savkur v. Amritlal Kalidas and others.
(11) (PLD 1960 (W.P.) Lahore 601)
(12) ' (AIR 1930 Allahabad 711)
(13) (PLD 1971 Karachi 899)
(14) (1980 CLC 1977 K.)
(15) (1984 CLC 691 Lahore)
(16) (PLD 1984 Peshawar 285)
(17) (Ni l 1991 Civil 352)
(18) (PLD 1955 Lahore 557)
(19) (PLD 1990 K. 216)
(20) (PLD 1977 S.C. 644)
(21) (1988 SCMR 723)
(22) (AIR 1928 Lahore 938)
(23) (AIR 1927 Allahabad 407)
(24) (AIR 1968 Allahabad 202)
(25) (AIR 1964 Madras 52)
(26) (PLD 1971 SC 784)
(27) (AIR 1931 Allahabad 136)
(28) (AIR (36) 1949 East Punjab 199)
(29) (AIR 1958 Calcutta 620)
10. Mr. Arshad Iqbal, learned counsel for the defendants has contended that: (i) question of limitation is to be counted from the date of knowledge; (iij that the defendants came to know on 9.4.i994 through postal service; (iii) that no copy of the award was attached with the process; (iv) that certified copy of the award was given to the defendants on 5.9.1994 and objections to the award were filed on 7.5.1994;(v) that no any notice, as contemplated u/S. 14 of the Arbitration Act for filing and signing of the award, was served on the defendants; (vi) that the reference made to the Arbitrator is challenged; (vii) that there is no any arbitration agreement between the parties;
(viii) that respondent M.A. Khan has filed CP No. D-402/94; (ix) that as there is no arbitration agreement, reference to the Arbitrator, should not have been made;(x) that in 4th absence of arbitration clause in any agreement this Court has no jurisdiction to make the award rule of the Court <\i) that this aspect is to be looked into by the Court, even if the application u/S. 33 of the Arbitration Act, 1940 is not made; (xii) that the respondent has not signed any agreement for referring the matter for arbitration; (xiii) that the plaintiff has approached the Federal Ombudsman, who referred the matter to Deputy Registrar, Cooperative Housing Socieues for amicable settlement of the dispute; (xiv) that Annexure 'C' page 27 is application of M.A. Khan (the plaintiff);
(xv) that there was no settlement before the Deputy Registrar, Co-operative Housing Societies; (xvi) that there is bar u/S. 70A of the Cooperative Societies Act and (xvii) that the applicant should have moved this Court after exhausting all the remedies available to him.
11. Mr. Arshad Iqbal has cited the following authorities:-
(I) (PLD 1970 SC 43) case of M/s. Badri Narayan Agarwala v. M/s. Pak Jute Balers Ltd. . '
4 The Honourable Supreme fcourt has observed as under:-- '
"Leave to appeal was granted in this case to consider three points. The first two points, namely, that the arbitrators had entered upon reference on the date the Registrar was alleged to have issued the notice to the appellant calling upon him to file his statement to the claim of the respondent and alternatively that if the same notice was not by the arbitrators the award was void as the appellant was not served with any notice by the arbitrators."
This authority of the Honourable Supreme Court is quite distinguishable and different from the facts of the case in hand.
As stated earlier after filing of the award the Additional Registrar (O.S.) issued notice to the defendants through bailiff as well as through registered post A/l)..For filing objection, if any.,Bofh the notices were served on the defendants and the second observation of the Honourable*^'ipreme Court was that the appellant was not served with any notice by the Arbitrators whereas in this case as per record the defendants were issued notices by the learned Arbitrator not only for once but the defendants were issued three notices through registered post A/D on the address of the defendants, postal receipt alongwith its A/D receipt has been filed with the R & P of the award.
Three registered post.A/D letters were issued by the learned Arbitrator but even then they had not participated in .The arbitration proceedings. By now it is settled law that a letter which is properly addressed, must be deemed to be received by the addressee unless it is proved to be contrary.
There, can be no better appreciation in this and I would like to reproduce the observations made by Zaffar Hussain Mirza, J. Of this Court reported in PLD 1977 Karachi page 3.7 relevant portion is as under: "The documents annexed to the award show that a notice dated 6.2.1973 was addressed to both parties whereby arbitrators had called upon them to appear before them on 16.2.1973 at 3.30 p.m.
At the office of Roberts Cotton Associates Limited, Second Floor, Cotton Exchange Building, Karachi, for the purpose of hearing the case. This notice was addressed to the defendant by registered post A/D at his office address at 4th Floor, Al-Yousuf Chambers, Frere Road, Karachi. The envelope shows an endorsement by the postal authorities as "Refused". The defendant in his written objection has pleaded that no notice from the arbitrators of the claim made by the plaintiff was delivered or offered to or refused by him. On the other hand the plaintiff's contention in his reply filed in this Court is that notice of the proceedings was duly sent to defendant at his proper address by registered post but the same was returned marked as "Refused". In the circumstances, the question is whether the notice issued by the arbitrators has been duly served or not . In Bashir Ahmed v. Mumtaz Khan (1) S.A. Mahmood, J. (as he then was), while considering a similar question with regard to the serve of notice by post u/S. 30 of the Displaced Persons (Compensation and Rehabilitation) Act, 1958, by a transferee to the tenant, after elaborately reviewing the case law on the subject came to the conclusion that by the combined effect of section 114 of the Evidence Act and section 27 of the General Clauses Act, a letter which is properly addressed must be deemed to be proved to have been received by the addressee unless proved to the contrary. In that case besides the mere derfial of the addressee, no other evidence was produced and as a result it was held the service of the notice had been proved to be effected.
In the present case also except for the mere denial of the defendant, no other evidence haS been adduced to displace the presumption under the law that the letter was received, offered or delivered by the postal authorities to the defendant. In view of this discussion, I have come to the conclusion that the defendant was duly served with notice of the proceedings by the arbitrators. In' spite of notice- being refused by the defendant, can he plead that the award has been vitiated for want of notice to him of the particulars of the claim by the other party. There is no warrant of such an argument that in all eventualities, even' if the party refuses to accept notice issued by the arbitrators for procuring his'presence before them, the arbitrators would be bound in law to commttnicate to him the claim. Even in a Court of Law if a defendant is duly served and defaults in appearing in Court, the Court is not required to wait from him, may proceed to hear the suit ex parte. The rule of natural justice cannot be stretched so as to make it incumbent for a domestic tribunal to do more than to given notice of the proceedings to the party. If the defendant had appeared before the arbitrators, they would have called upon the plaintiff to state his case and give opportunity to defendant to reply to the claim. For his inability to know the case of the plaintiff, therefore, the defendant must blam& himself for his refusal to except notice despatched to him in ordinary course. To hold otherwise would add an unnecessary burden upon the arbitrators to give two notices, one for the presence of the parties and the other for informing them the respective claims of the opposite parties. In fact the arbitrators are supposed to enter upon the reference as soon as they call upon 4th parties to submit their case before them. There is thus no warrant in law for holding that even after such notice the arbitrators would be required to wait for the party to appear at his choice on a subsequent date of hearing when he would be informed about the claim or to send separate notice of the claim to the party concerned. By his first default in appearing before the arbitrators, to my mind, the defendant had disentitled himself to the right to be informed about the claim of the plaintiff."
(2) (PLD 1982 Karachi 774) case of M/s. Nizari Co-operative Housing Society Ltd. v. Qamaruddin M.
Khimani and 4 others.
"Ss. 11, 20 & 33 read with Sindh Co-operative Societies Act (VII of 1925), S. 70-A-Jurisdiction- Provisions of Sindh Co-operative Societies Act, 1925 regulating arbitrations, held, not inconsistent with Ss. 11, 20 and 33 of Arbitration Act, 1940 but bar imposed by S. 70-A of Act, 1925 ousts jurisdiction of civil Courts and as such Courts cannot entertain any proceedings which in any manner relate to or challenge any award, order or proceedings before Provincial Government Registrar* his nominee or Arbitrator."
This authority of the learned Judge of this Court is also quite different and distinguishable from the facts of this case and is not applicable and favourable to the case of the defendants, inasmuch as, the plaintiff is not and has not been a member of the Pakistan Railway Employees Co-operative Housing Society. Furthermore the dispute in between the parties is not touching the business of \ Pakistan Railway Employees Co-operative Housing Society but here- is a dispute between a Contractor and Pakistan Railway Employees Co-operative Housing Society for construction work. l2. I would like to reproduce actual wording of sections 54, 70 and 70-A of the Cooperative Societies Act, which is as under:- "54. Arbitratio/i: If any dispute touching the business of a society other than a dispute regarding disciplinary action taken by the society or its committee against a paid servant of the Society arises-
(a) between members or past members of the society or persons claiming through a member or past member, or
(b) between members or past members of persons so claiming and any past or present officer, agent or servant of the society, or ^ (c) between the society or its committee, and past or present member of the society, or
(d) between the society or its committee and any past or present officer, agent or servant of the society, or a surety of such officer, agent or servant, whether shch surety is or is not a member of the society or a surety of such officer, agent or servant, whether such surety is or is not a member of the society, or-
(e) between a financing bank authorised under sub-section (1) of section 34 and a person who is not a member of a society.
It shall be referred' to the Registrar for decision by himself or his nominee, or if either of the parties so desires, to arbitration of three arbitrators who shall be the Registrar or his nominee and two persons of whom one shall be nominated by each of the parties concerned." j "70. Notice necessary in suits: No suit shall be instituted against a society or any of its officers in respect of any act touching the business of the society until the expiration of two months next after notice in writing has been delivered. To the Registrar, or left at his officer, stating the cause of action, the name, description and place of residence of the plaintiff and the relief which he claims; and the plaint shall contain a statement that such notice has been so delivered or left.
"70-A. Bar of jurisdiction: (1). Notwithstanding anything provided in any Other law for the time being in force, but save as expressly provided in this Act- fa) no Court or other authority whatsoever shall have jurisdiction to entertain, or to adjudicate upon, any matter which the Provincial / Government, -the Registrar, or his nominee, any arbitrator or liquidator, a society, a financing bank, a cooperative bank.Or any other person is empowered by or under this Act, or the rules or bye-laws framed thereunder, to dispose of or to determine;
(b) the validity of anything done or an order passed by the. Provincial Government, a society, a financing bank, a cooperative bank,the Registrar or any other person referred to in clause (a), under this Act or the rules and bye-laws framed thereunder, shall not be called in question in any manner whatever before or by any Court or other authority whatsoever, and .
(c) no Court or other authority whatsoever shall be competent togrant any injunction or pass any other order' in relation to any proceedings under this Act or any rules or bye-laws framed thereunder before the Provincial Government, a society, g C.C 21 financing bank, a co-operative bank, the Registrar or any other person referred in clause (a)."
13. The perusal of the above sections clearly show that there is no dispute touching the business of the society. Therefore, the provisions of the above sections of the Co-operative Societies Act are not attracted. ?
14. The contention of Mr. Arshad Iqbal that the respondent has not signed any agreement for referring the matter, for arbitration, is not correct.
15. I would like to reproduce clause 45 of Tender Documents which is as under:- "AH disputes or differences in respect of which the decision (if any) of the Architect has not become final and binding as aforesaid shall be finally settled under the- provisions of the Pakistan Arbitration Act of 1940 and the rules made thereunder as amended from time to time by two arbitrators one to be nominated by the Owner and the other by the Contractor and in the case of the arbitration not agreeing to the award of an umpire to be appointed by the arbitrators in writing before proceeding with the reference to the arbitration and the decision of the arbitrators or in the event of their dis-agreement of the umpire will be final and conclusive. The venue of the arbitration proceedings shall be in Karachi. The said arbitrators or umpire as the case may be shall have full power to open up review revise any decision opinion direction certificate or valuation of the Architect and neither party shall be limited in the proceedings before such arbitrators or umpire to the evidence of arguments put before the Architect for the purpose of obtaining his said decision.
No decision given by the Architect in accordance with the foregoing provisions shall disqualify him as being called as a witness and giving evidence before the arbitrators .Or umpire' on any matter whatsoever relevant to the dispute or difference referred to the arbitrators .-as afore-said. The arbitrators shall not enter on the reference until after the completion or alleged completion of the works unless with the written consent of the owner and the contractor provided always." *
16. I would like to reproduce the relevant observations of Saleem Akhtar, !.. Reported in 1987 CLC 83, which is as under: * "
"The next contention of the learned counsel for the defendants is that there is no agreement of arbitration between the parties, therefore, neither the dispute could be referred to arbitration, nor arbitrators could have.Been appointed and proceeded with the matter. It is an admitted position that the contract between the parties concluded by exchange of cables and that the plaintiffs are members of Liverpool Cotton Association, whereas the defendants are its associate members. It seems that the plaintiffs had sent contract notes for the signatures of the defendants but they refused to sign it. However, on the basis of the contract concluded on exchange of cable part of the goods were supplied by the defendants in Suits Nos. 320 of 1975- and 32P of 1975 and payments were made by the plaintiffs. In this background it has to be considered whether there was agreement between the parties for referring the matter to arbitration. It is true that there is no written agreement signed by the parties for referring the matter to arbitration but it is not necessary that an agreement for arbitration should be signed by the parties. It is sufficient if the agreement is in writing. Even if it is not signed, the parties will be bound by it and the matter can validly be referred to arbitration. In this regard Mr. Muhammad Ali Sayeed the learned counsel for the plaintiffs has referred to M/s. Hafiz Abdul Aziz Cotton Ginning Factory v. M/s. Haji Ali Muhammad Abdullah (PLD 1966 Kar. 197), M/s. Jamal Jute Baling Co., Dacca v. M. Sari & Sons, Dacca (PLD 1971 SC 784), Mst. Shamim Akhtar v. Najama Begum and others (PLD 1977 SC 644), Paracha Textile Mills Ltd., Karachi v. Nanak Ram Shamandas (PLD 1977 Kar.37), M/s. * Hussain Bux & Co. v. Zebtan Textile Mills Ltd: (PLD 1981 Kar.28), Gul Ahmed Textile Mills Ltd. v. Starco (1981 CLC, 1667), Shankar Lai Lachmidas v. Jamy Brothers (AIR 1931 A^l. 136), Jaggal v. S.G. Hurmuzji (AIR 1955 SC 812), Ramchandar Ram Nag v. Hussain Oil Mills and another (AIR 1958 Cal. 620) and Banarsi Das v. Cane Commissioner U.P. And another (AIR 1963 SC 1417). In all these authorities it has been held that the arbitration agreement should be in writing and shall be enforceable if agreed to even without the signature of any party. To constitute an arbitration agreement in writing it is not necessary that it should be signed by the parties. It is sufficient if the terms of the agreement are reduced in writing and consensus of the parties is established."
17. The contention of Mr. Arshad Iqbal is that the petitioner has filed CP No. D-402/94 and that the matter was referred to the Deputy Registrar, Cooperative Housing Societies,: as such the award'is void and may not be made rule of the Court, the Deputy Registrar Cooperative Housing Societies who was respondent No. 4 in the CP No. D-402/94, has stated in his comments as unden "it is fact that the petitioner and Secretary of the Society alongwitfi ex- Committee members and technocal advisors had a detailed discussion in my office. It is an old issue so far I re-collect. There was a difference of Rs. 5 lacs between the Soceity's offer and the Contractor's demand in addition to above, the Contractor demanded that he should be paid, some tangible amount to start with the work to which the Committee- men refused. Regarding the question of Arbitration it is submitted that the petitioner being a non-member could not seek the remedy under the provisions of section 54 of the-Co-operative Societies Act, 1925. Neither he filed any arbitration case nor any decision was pending with this office. "
From the comments it reveals that neither any arbitration case nor ariy decision was pendirig in the office of the Deputy Registrar of the Co-operative Housing Societies. CP No. D-402/94 was dismissed as withdrawn. _
18. Keeping in view the tender document vide clause 45 mentioned earlier ii is established that the matter has rightly been referred for the arbitration between the parties. As the defendant has failed to nominate their on. Arbitrator Mr. A Qutabuddin Khan the learned Arbitrator acted as sole arbitrator and issued 3 notices on different dates to the defendants. The notices were issued through registered post A/D at the addressee of the defendants through their secretary but even after service of die notices the defendant did not participate before the arbitrator and there was no oilier way out left to the arbitrator, as such, the learned arbitrator after hearing the plaintiff and perusing the necessary documents/papers announced the award. The award was filed in this Court and necessary process was issued as discussed earlier but even then the defendant failed to file any objection in time.
19. The case law cited by Mr. K.M.A. Samdani is very much relevant, applicable and helpful to the case of the plaintiff. The defendants have deliberately remained absent before the arbitrator and even after receipt of the notice through bailiff as well as through registered post A/D did not file any objection to the award in lime in the Court. Their plea that they were not. Served with the notice, is not home out from the record. From initial stage it appears that the defendants were not punctual and prompt to pursue their case at the proper time and place. The objection filed*by the learned counsel for the defendants are hopelessly time-barred and are not even fit to be considered. The contention of the learned counsel that the defendants came to know on 9.4.1994 through postal service is not borne by the record. Therefore, their plea that they came to know on 9.4.1994 is not believable and. Their contention that the limitation is to be counted from the date of the knowledge, is also not tenable. In view of the overwhelming documentary evidence wlTich is annexed with the R. & P. Of the case and the record of the learned Arbitrator, there is no any mistake in the award itself which has been awarded after observing necessary and legal formalities and hearing the plaintiff and perusing and verifying the relevant documents at issue.
For the foregoing reasons the award is made rule of the Court and as such J.M. 10/95 stands dismissed with no order as to costs.