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1995 MLD 187

SAEEDA BANO and others vs Mian MUHAMMAD AMIN

Citation1995 MLD 187
CourtLahore High Court
Case No.Civil Revision No,2322 of 1990
Date1994-10-27
Judge(s)Zahid Hussain Bokhari
ResultPetition dismissed

' Brief facts of the case are that there was dispute between Haji Muhammad Amin and Sabir Hussain with regard to the landed property situated in Chak No,220/R.B., Tehsil and District Faisalabad. To resolve this dispute they appointed Haji Abdul Karim and Muhammad Amin Farooqi, both residents of Faisalabad as their arbitrators through agreement dated 1-9-1980. Besides the parties to the agreement the same was also signed by the two witnesses, namely, Muhammad Younus and Shaukat Ali. On the reverse of this agreement there is endorsement dated 28-1-1981 signed by both the aforesaid parties and two witnesses to the effect that the parties also referred their dispute with regard to the monetary claim against each other to the same arbitrators for their decision along with the decision in the land matter. Accordingly the arbitrators entered into reference and gave unanimous award on 18-6-1991.

2. On 22-6-1981 Mian Muhammad Amin, respondent submitted application to the learned Senior Civil Judge, Faisalabad for making the award the rule of the Court. On 3-4-1982 reply of this application was filed in the Court of Ch. Muhammad Aslam, learned Civil Judge, Faisalabad (to whom the case was entrusted for adjudication) by Sabir Hussain, the predecessor-ininterest of the present petitioner, wherein execution of the arbitration agreement dated 1-9-1980 was admitted.

However, he pleaded that the arbitrators have committed misconduct inasmuch as they did not issue any notice to him prior and after the announcement of the award and that there was no justification for making the award rule of the Court. After framing the issues and recording the evidence of the parties, the learned trial Judge accepted the application of the respondent.

3. Both the arbitrators also appeared in the Court as A.W.1 and A.W.2. They affirmed that the arbitration agreement (Exh.A.W.1/2) was executed by the parties appointing them as arbitrators in the dispute of the land and the money transaction and after lengthy proceedings they decided the dispute on 18-6-1981. Muhammad Amin Farooqi, A.W.1 stated that the award was read over the parties who were supplied copies of the award and that the original award remained with Haji Abdul Karim. The latter endorsed A.W.1 and further stated that he handed over the original award to Muhammad Amin. The arbitrators deposed that the award was given by them after hearing the parties which was accepted by both the parties.

4. The learned trial Court held that the parties appointed the arbitrators for resolving the dispute which is evident from the arbitration agreement and admitted in the written statement. The learned trial Court also held that both the parties were aware of the award, copies whereof were delivered to them. However, it is admitted that no written notice was given to the parties at the time of announcement of the award but it was held that the arbitrators had verbally informed the parties and delivered to them the copies of the award. On the question that the record and proceedings of the arbitration were not produced in the Court, the learned Court held that there was no direction given by it to the arbitrators for production of such record or proceedings nor was request made by the parties to that effect.

5. Admittedly no objection petition was filed by the present petitioners against the award in accordance with section 33 of the Arbitration Act. The application for making the award rule of the Court was filed by the respondent herein, to which the deceased predecessor-in-interest of the present petitioners filed reply. He did not choose to file an objection petition challenging the validity of the award.

6. It was argued by the learned counsel for the petitioner that property mentioned in the arbitration agreement and the award are different properties. In this behalf both the learned Courts below have held that it is the same property about which there was dispute between the parties which was decided by the arbitrators. In para. 5 of the judgment the appellate Court held as follows:--- "The counsel for the appellants has argued that the agreement for arbitration pertained to some property belonging to the respondents whereas the arbitrators have announced an award in respect of some land belonging to Sabir Hussain. ExhA.W.1/2 is the agreement, the perusal of which suggests clearly that between the parties to the same there is a dispute in respect of land situated in Village 220/RB Faisalabad which belongs to the respondent along with his brothers. It has been an admitted fact that Syed Sabir Hussain had been appointed as a general power of attorney on behalf of Muhammad Amin the respondent alongwith his three other brothers bearing the power of selling their property situated in Chak No,220/RB Faisalabad on 28-6-1975 registered on the same date."

' The learned appellate Court further observed that: "There is nothing in the written reply which suggests that the property of the agreement and that of the award are different which eventually resolve this objection in the appeal as the only allegation in the written reply is that the arbitrators have misconducted as having not served any notice to him before or after the announcement of the award."

' Learned counsel for the petitioner argued that the judgments suffer from misreading of evidence on record. This contention of the learned counsel is without substance as the findings- given in the judgments by both the learned lower Courts are in accord with the evidence on record. These are mainly based on the arbitration agreement and the statements of both the arbitrators.

6. Learned counsel for the petitioner contended that the award was a nullity in law as the same was announced beyond the time of 4 months which is in violation of para. 3 of the First Schedule to the Arbitration Act, 1940, which reads as follows:--- "The arbitrators shall make their award within four months after entering on the reference or after having been called upon to act by notice in writing from any party to the arbitration agreement or within such extended time as the Court may allow."

' There is no evidence on record to show when exactly the arbitrators entered on the reference or when they were called upon to act by a notice in writing from any party to the arbitration agreement. However, both the arbitrators have stated that the parties, throughout participated in the proceedings and the award was announced in their presence but none of them took objection on any ground including limitation. The learned counsel for the petitioner contended that the date of the arbitration agreement which is 1-9-1980 shall be considered to be the starting point for the purpose of para.3 above. The learned counsel has, however, ignored the fact that the subsequent arbitration agreement with regard to other money transactions, about which there is endorsement on the reverse of the original arbitration agreement ExhA.W.1/2) was executed on 28-1-1981, which indicates that the arbitrators entered upon reference some time thereafter. He has referred to that para. Of the statement of the arbitrator where he states that:- {{URDU TEXT}} ' This part of the statement of A.W.1, Muhammad Amin Farooqi, one of the arbitrators, relates to the negotiation of the parties prior to the execution of the arbitration agreement. The fact remains that the arbitration agreement was executed initially on 1-9-1980, to which endorsement was made on 28-1-1981 and accordingly money dispute was also referred to the arbitrators for decision. Since the parties throughout participated in the arbitration proceedings before the arbitrators up to the announcement of their award without protest or objection on account of delay, as deposed by both the arbitrators, the petitioners cannot be allowed to take such objection after the award was announced against them.

7. The learned counsel for the petitioner vehemently argued that no notice was given by the arbitrators to the parties before the award was announced. He referred to section 14(1) of the Arbitration Act which states as follows:--- "When the arbitrators or umpire have made their award, they shall sign it and shall give notice in writing to the parties of the making and signing thereof and of the amount of fees and charges payable in respect of the arbitration and award."

The object of 'the notice under section 14(1) of the Arbitration Act is only to inform the parties of the award so that any one of them may make application for filing the award in the Court and after the same is filed in the Court, to file objection petition within thirty days as prescribed under Article 158 of the Limitation Act. The omission to give routine notice does not vitiate arbitration proceedings nor award itself. Reference may be made to Janardhanprasad v. Chandra and others AIR 1951 Nag.

198 and Ram Bharosey v. Pearay Lal AIR 1957 All.

265. In first case, it was held that the provisions for giving notice in writing to the parties of making this award and signing thereof and of the amount of fees and charges payable in respect of the arbitration and the award, is for the purposes of limitation under Article 158, Limitation Act entitling either party to apply to the Court for the filing in Court of the award.

' In this very judgment, it was further held that: "The award does not become invalid because notice of the making of it has not been given. The arbitrator is entitled to file an award in the Court under section 14, subsection (2). If he does so, the Court is bound to give notice to the parties of the filing of the award."

' In the second case referred to above, it was held that: "The validity the award does not depend upon the notice of the same being given to the parties. When an award is duly made, signed and filed in Court, it is a valid document." It was further held that: "If notice is ultimately given by the Court under clause (2) of section 14 the parties have full opportunity of filing objections to the validity of the award and omission of notice by the arbitrators under clause (1) of S.14 is, therefore, immaterial."

8. In this connection, it would be advantageous to reproduce a portion of judgment in Ghulam Mohy-ud-Din v. Federation of Pakistan PLD 1967 Lah. 204 (D.B.) which is as follows: "The fifth point raised by the learned counsel was that the arbitrator in this case had given the award after 4 months of his entering upon the reference and the same as such was void being in violation of paragraph 3 of the 1st Schedule attached to the Arbitration Act, 1940, provisions whereof were to be considered as implied terms of the Arbitration Agreement as laid down in section 3 of the Act. No doubt the award in this case was given beyond four months, but the point to be noticed is that the provisions of the 1st Schedule simply became the terms of the Arbitration Agreement and did not acquire a status higher than that. The proposition is well-settled that if the terms of any agreement are not complied with in this respect, the consequence is not that the award becomes invalid. If from the conduct of the parties concerned it can be inferred that they agreed to the proceedings being continued beyond the period stipulated, then the objection l9ses all the significance. This proposition was thrinshed out fully in a Division Bench ruling of this Court reported in Haji Sattar Haji Muhammad and 9 others v. Abdul Karim Haji Issa and 3 others (1), where it was laid down that the provisions of the 1st Schedule do not acquire any greater status than becoming implied terms of the Arbitration Agreement. It has been laid down in numerous rulings that when a party continues to take part in arbitration proceedings after the period stipulated in the agreement for concluding those proceedings, and does not take objection to their continuation, he cannot raise this objection afterwards. Reference can be made to Meman Tayab Sharif and another v.

Kasam Adamji, Haji Abdul Latif Ebrahim Bavani and others, (2), Bibi Patto Kumari Saheba v.

Upendra Nath Ghosh (3), Messrs Habib & Sons v. Messrs Virk Co. (4), Donald Campbell & Co. v.

Jeshraj Girdhari Lal (5), Asa v. Mst. Bhuran (6), Madura Mills Cos. Ltd. v. NMS Krishana Ayyar (7), Nani Bala Sana w/o Narayan Chandra Saha v. Ram Gopal Saha and another, minors, represented by pleader guardian Babu Kumar Gurukrama Mozumdar and another (8) and Madipalli Venkatachellam v. Madipalli Suryanarayanamurty and others (9). In view of the above weight of authorities we hold that the award cannot become invalid in the instant case due to the mere fact that it was not given within four months, the reasons being that the appellant did not raise this objection at the proper time and rather acquiesced in the continuance of the Arbitration proceedings, led evidence and took the chance of a favourable decision and when the decision has gone against him he cannot be allowed to say that the arbitration proceedings extended beyond the time limit implied in the Arbitration Agreement. If the terms of an agreement can be changed by the parties by their mutual consent (as for example by writing) then it is obvious that the terms about time matter could also be changed with their consent implied from their conduct.

In the instant case the consent of the appellant in continuation of these proceedings is obvious because he raised no objection with regard to it at any stage of the case before the arbitrator and it is the finding of the learned appellate Court as well."

' In the light of the these precedent cases, this objection is overruled.

9. Learned counsel for the respondent argued that there are concurrent findings of fact of both the Courts below which cannot be disturbed in exercise of revisional jurisdiction under section 115 of the C.P.C. He submitted that none of the conditions enumerated in section 115 of the C.P.C. Are present in this case, therefore, interference by this Court is not warranted. The learned counsel for the petitioners, however, contended that such findings, if based on misreading or non-reading of the evidence on record, can be interfered with. He relied on the judgment of the learned Supreme Court in Muhammad Bakhsh v. Province of Punjab 1994 SCMR 1836. However, the dictum of the learned Supreme Court that, "the learned High Court in the exercise of its revisional jurisdiction could legally set at naught the concurrent findings of facts of two Courts below if it is satisfied that the fording was based on misreading or non-reading of evidence." This dictum is not attracted to the facts of the present case as the learned counsel has not been able to establish misreading or non-reading of the evidence.

10. Learned counsel for the respondent submitted that no objection petition was filed by the deceased predecessor-in-interest of the present petitioners. According to him, since no objection was raised against the award on account of limitation, it cannot be raised by the petitioners, for the first time, in the revision petition. He has referred to the case of Haji Ghulam Mohy-ud-Din v.

Federation of Pakjstan PLD 1967 Lah.

204. The learned appellate Court has held as follows:-- "It thus remains settled that the arbitration agreement was executed with the free consent of the parties who submitted to the arbitrators and in whose attendance the arbitrators announced the award. As regards the production of the proceedings of arbitration on the file, there are three conditions which necessitate the placement of the arbitration agreement such as, upon the request of the party to the arbitration agreement, any person claiming under such party or if so directed by the Court. None of those occasions arose in the proceedings of the original petition, therefore, an argument on that score is not available to the learned counsel for the appellant. No misconduct as the one alleged has been brought home to the arbitrators as also no illegality is smacked in the same, therefore, there does not appear any bar to the declaration of the award as the rule of the Court."

11. I have considered the contentions raised by both the learned counsel during the arguments. I am of the considered view that the concurrent findings of facts given by both the learned lower Courts do not suffer from any legal infirmity. It is not proved on record that these judgments are based on misreading or non-reading of the evidence on record. It is an established rule of law that the arbitrators are the domestic tribunals and are not bound to record evidence in detail. It is sufficient for them to hear both the parties and consider their respective point of view and then pronounce the award on the basis of the conclusion arrived at by them. The learned Courts below were, therefore, justified in making the award rule of the Court in terms of section 17 of the Arbitration Act which states that where the Court sees no cause to remit the award or in all the matters referred to arbitration for reconsideration, or to set aside the award, the Court shall, after the time for making an application to set aside the award has expired, or such application having been made, after refusing it, proceed to pronounce judgment according to the award.

12. As observed earlier, the petitioners or their predecessor did not file application under section 33 of the Arbitration Act, challenging the award, without which the award could not be set aside, unless the award suffered from some patent illegality, ex facie. Section 33 ibid makes it obligatory on the parties to challenge the existence or validity of an arbitration agreement or an award or to have the effect of either determined. Section 33 is as follows:--- "Any party to an arbitration agreement or any person claiming under him desiring to challenge the existence or validity of an arbitration agreement or an award or to have the effect of either determined shall apply to the Court and the Court shall decide the question on affidavits: ' Provided that where the Court deems it just and expedient, it may set down the application for hearing on other evidence also, and it may pass such orders for discovery and particulars as it may do in a suit."

Such an application has to be in writing on which proper court-fee must be paid. Reference in this context may be made to Saha and Co. v. Ishar Singh and others AIR 1956 Cal. 321 (Full Bench). In this case it was held that: " after an award has been made, all grounds of objection to the award, including grounds of non- existence or invalidity of the agreement or reference, and all other grounds of nullity must be taken in application for setting aside the award and that no ground, not so taken, can be available after the time for making such an application has expired. All grounds not so taken must be deemed to have been waived."

' In the case of Kasiraju Lakshmikanta Rao v. Dendukuri Venkateswarlu AIR 1960 Andhra Pradesh 576 it was observed that: "This conclusion receives further support from the language of the proviso to section 33 which provides that where the Court deems it just and expedient, it may set down the application for hearing on other evidence also, and may pass such orders for discovery and particulars as it may do in a suit. It will be seen that there is no question of an oral application being set down for hearing. Therefore, to give effect to the argument of the learned counsel for the defendants that neither a written application nor the payment of court-fee on such an application is a prerequisite for setting aside the award, would have the result of rendering all the aforesaid provisions otiose."

13. As stated earlier, the predecessor-in-interest of the petitioners did not file any application/objection petition for modifying, remitting or setting aside the award. The written reply filed by him was a reply simpliciter to the respondent's application for making the award rule of the Court. The only prayer made in this written reply was that the application be dismissed with costs.

' In the case of Madan Lal v. Sunder Lal AIR 1964 All. 38 it was held: "Anything like a written statement is thus completely out of place in a proceeding under the Arbitration Act. There cannot be an application under section 33 without a prayer for certain relief. Though no form is prescribed for an application under section 33 and that even the words "under section 33" need not be written in the application, a written statement simpliciter containing no prayer at all, bearing no court-fee and filed after the expiry of the period of limitation for an application, cannot be treated as an application under section 33." Accordingly, even this written reply cannot be treated as an application under section 33 of the Arbitration Act, which was neither stamped nor did it contain the prayer for setting aside the award or declaring the same a nullity, as envisaged under section 33 of the Arbitration Act. Besides, the award was announced on 18-6-1981 and the application for making the same rule of the Court was made by the respondents on 22-6-1981, whereas the reply was filed in Court on 3-4-1982, much beyond the period of limitation prescribed under Article 158 of the Limitation Act.

14. For all these reasons this revision petition is dismissed without there -being any order as to costs.

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