SH. RIAZ AHMAD, J.---Facts giving rise to the institution of this petition seeking leave to appeal are as under:-- "That the respondents, a private limited company was awarded a contract for the performance of work in the Ayub Medical College at Abbottabad. Respondent No.1 filed an application under section 20 of the Arbitration Act, 1940 in the Sind High Court at Karachi alongwith an application under section 41 of the Arbitration Act, 1940 read with Order 39, Rules 1 and 2 of the C.P.C. It is alleged that the petitioner was served through summons on 6-12-1995 at Abbottabad for appearance before the Sind High Court at Karachi on 7-11-1995 to show cause against the afore- referred application, which had been registered as a suit. An ex parte order was passed by the Sind High Court, and the applications were granted, and Nazir of the Court was appointed Commissioner for the purposes set out in CMA 5582/95."
2. Leave to appeal is being sought from this Court against the aforementioned ex parte order, and it is urged that the Sind High Court had no territorial jurisdiction to entertain the application under section 20 of the Arbitration Act, inasmuch as, the original contract was executed at Abbottabad, and the subject-matter of the contract, vis a vis, the installation of heating, ventilation and air- conditioning system at Ayub Medical College Abbottabad, and the petitioner also for the purposes of CPC resides at Abbottabad. It is further urged that sufficient notice was not given to the petitioner to defend himself in CMA 5581/95 and 5582/95. It is also urged that the respondents although having undertaken to complete the work within the stipulated period, had failed to do so despite extension in the, and penal action was thus proposed to have the work completed at the cost and risk of the respondents. Therefore, respondents in a mala fide manner had approached the Sind High Court Karachi, and the proceedings are not maintainable.
3. We have heard the learned counsel, and have perused the order impugned. Prima facie, the grounds raised have substance, therefore, we are inclined to grant leave to appeal to the petitioner. During the pendency of this petition, further proceedings before the Sind High Court at Karachi are stayed.