This is an Award given by the Umpire after the two arbitrators, each appointed by both the parties dissented with each other on three different claims.
2. The brief facts of the case are that the plaintiff-respondent to the defendant's invitation for the contract relating to the expansion and improvement of Dow Medical College, Karachi, particularly for the construction of Auditorum, Library and Reading Room. On 23-5-1970 the plaintiff's tender was accepted and an agreement was executed with the arbitration clause. Since there arose some dispute in respect of payments, the matter was referred to the arbitration by this Court order dated 5-8-1978. However, the appointed arbitrators failed to proceed in the matter. Again on 9-12- 1979, by consent of the parties Mr. Shamsul Arfin, the then Deputy Secretary, Home Government of Sindh, was appointed arbitrator on behalf of the plaintiff and Mr. Abu Saeed was appointed on behalf of the defendants. After the disagreement between the arbitrators as to the appointment of Umpire, the matter came up before this Court and on 25-3-1984 by consent of the parties Mr. Justice (Retired) Dorab Patel was appointed as Umpire. The plaintiff filed their claim which was vehemently opposed by the defendants. Out of the pleadings of the parties, following consent issues were framed by the learned arbitrators:--- "(1) Whether the defendants are estopped from raising any objection as to the reference of the dispute to arbitration having accorded their consent for making reference to arbitration before the Hon'ble High Court. If so, to what effect?
(2) (a) Whether defendants committed. Any breach of contract? If so, to what effect?
(b) Whether the plaintiffs are entitled to damages in respect thereof under the contract?
(3) Whether the plaintiffs are entitled to claims of items 1 to 17, as mentioned in the Memorandum of claims?
(4) Whether 18th Running Bill dated 2-3-1974 is a Final Bill or Running Bill?
(5) What should the Award be?
3. The learned arbitrator for the plaintiff answered the Issue No.1 in affirmative after finding that the defendants were estopped from raising the belated objections as to the arbitration clause under the principle of acquiescence, waiver and estoppel, The learned arbitrator for the defendants has agreed with the findings of the plaintiff's arbitrator. Issue No.2 was answered in affirmative by the plaintiff's arbitrator while issue No.3 was answered item wise as mentioned in the para. No.4 hereunder. Issue No.4 was also answered in affirmative and under Issue No.5 an amount of Rs.9,18,541.51 was awarded by the plaintiff's arbitrator. The defendant's arbitrator has not disputed with any of the findings of plaintiff's arbitrator except on three items/bills. Therefore, in these circumstances, the controversy before the learned Umpire was limited up to the settlement of three claims as objected by the defendant's arbitrator. The defendants in their objections have not challenged the findings of their arbitrator nor they raised such objections before the learned Umpire.
4. The dispute between the parties relates to 17 different claims. The claim No. l was for Rs.19,003 which was granted by both the arbitrators. Claim No.2 which was for Rs.4,32,643 and Claim No.4 for Rs.98,510.61 was granted by the .Plaintiffs' arbitrator while rejected by the defendants' arbitrator.
Claim No. 14 was for Rs.8,93,959, the plaintiffs' arbitrator allowed the same to the extent of 15 % and awarded Rs.2,13,170 while the defendants' arbitrator dissented but awarded an amount of Rs.63,951.90. Therefore, a total amount of Rs.2,38,168.62 was awarded by the defendants' arbitrator who has consented to the views of Mr. Shamsul Arfin Qureshi (arbitrator of the plaintiffs) on all issues and claims except the three items as mentioned above. The learned arbitrator for the plaintiffs rejected Claim No.5 which was for Rs.30,165.18 and did not allow Claims Nos.7 to 13. Claim No. 14 was granted upon to the extent of Rs.2,13,173. Again Claims Nos. 16 and 17 were rejected.
Finally, the plaintiffs' arbitrator awarded a total sum of Rs.9,18,541.94.
5. The learned Umpire Mr. Justice (Retired) Dorab Patel in his elaborate findings agreed with the views of plaintiffs' arbitrator on major issues and' announced his Award as follows:--- "Although the plaintiffs' arbitrator had awarded Claims 3 and 6 and the defendants' arbitrator has not even examined these claims, no arguments were advanced on these two claims either by Mr. Iqbal Kazi or by the plaintiff (whom I mean his Attorney). Therefore these claims cannot be allowed.
Accordingly as I have upheld the findings of the plaintiffs' arbitrator and the sums awarded by him for claims 1, 2 and 14, 1 award Rs.6,64,819 to the plaintiff. I also award Rs.50,000 as costs to the plaintiff because he has been driven to unnecessary litigation and I regret to say that the defendants' conduct in resting the second claim of the plaintiff has not impressed me."
6. I have heard Mr. Iqbal Kazi, Advocate for plaintiff and Mr. Syed Ahmed Farooqui, Advocate for defendant. Mr. S.A. Farooqui has raised a preliminary objection that since the plaintiff claims to be a partnership company and it is not registered, as such the present proceedings are not maintainable. In reply, Mr. Iqbal Kazi has objected on raising such legal objection at this belated stage and stated that the defendant never raised this objection at the time when for the first time arbitrators were appointed as far back as in the year 1978 and again when the Umpire was appointed. He has referred to the cases of Messrs United Cotton Factory, Hyderabad v. Ahmad Khan PLD 1960 Kar. 774 and Messrs Qamaruddin Ahmad & Co. v. Haji Din Muhammad and another 1970 SCM R 402. It is an admitted position that the arbitration proceedings are spread over the period of nearly 17 years i.e. From 5-8-1978 when for the first time two arbitrators were appointed and till 1-6-1994 when the Award was given by the Umpire. During all this period the defendant never raised this objection. It was argued by Mr. Iqbal Kazi that the defendants have waived their right to raise such objection and secondly, since it is a mixed. Question of law and facts, it cannot be decided at this stage.
7. In the case of Messrs Qamaruddin Ahmad & Co. v. Haji Din Muhammad and another 1970 SCM R 402, it was argued before the Supreme Court that the respondent being an unregistered partnership firm could not participate in the proceedings in view. Of section 69 of the Partnership Act, 1932. This argument was not upheld on the ground that the petitioners never agitated this ground earlier nor filed any objections in this regard. The question of application of section 69 of the Partnership Act, 1932 also came up before a Division Bench of this Court in the case of Messrs United Cotton Factory, Hyderabad v. Ahmad Khan PLD 1960 Kar. 774. In this reported case, the appellant factory was registered as a Partnership firm on 1-5-1950 for a period of three years and, therefore, the registration stood expired on 1-5-1953. The three applications which were filed by the appellant company under section 20 of the Arbitration Act, 1940 before the Sub-Judge 1st Class, Hyderabad were dismissed on the grounds as mentioned in section 69 of the Partnership Act, 1932.
The objection raised before the Division Bench of this Court by the appellants' counsel on the application of section 69 of the Partnership Act, 1932 was accepted in the following words:--- "11. I would now advert to Mr. Noor-ul-Arfin's argument on the second aspect of the case, on which he appears to be on a sound footing. Section 69 of the Partnership Act is a technical and a penal provision interfering with the ordinary rights of the individuals to form a business association as a legal entity to sue or be sued without any further legal formalities. It should, therefore, be construed strictly in the sense that the words employed in it must be given their true literal import in the context in which they are used, all doubts being resolved in favour of the persons affected thereby ... ... ... .. ... ... ... ... ... ....... Both subsections (1) and (2) mention the word "suit", which although not defined in any statute has got a well understood forensic connotation including its main indicia of the presentation of a plaint. Subsection (3) of section 69 contains the words "set-off or other proceeding" and it is contended by Mr. Noor-ul-Arfin that their meaning has to be limited in the context in which they are used in relation to suits mentioned in subsections (1) and (2) of the same section. "Other proceeding", according to his contention, means any other proceeding in the nature of a claim of set-off which may have the effect of the defeating a suit or destroying it by a counter claim against the plaintiff. According to this interpretation, "other proceeding", used in this subsection means other proceedings in the suit itself taken by the defendants to off-set the claim of the plaintiff. There is a great force in this contention. I am of the opinion that if the legislature had by this provision intended to cover all sorts of proceedings to be hit by section 69, the proper place for the words "other proceedings" should have been in juxta position to the word "suit" in subsections (1) and (2) of section 69 and not as they appear in subsection (3) closely allied to the words "claim of set-off"."
8. There are other reported cases from the Indian jurisdiction wherein it is held that the question of non-registration of a partnership firm as provided under section 69 of the Partnership Act, 1932 is a mixed question of law and fact and that it cannot be raised at belated stage of the proceedings. In this regard the first case I would like to refer is Goverdhandoss Takersey v. M. Abdul Rahiman and another AIR 1942 Mad. 634 wherein a Division Bench of Madras High Court has held that the Court is not bound to dismiss suo motu a suit for non---registration of the firm and that such provision be strictly construed In the case of Muhammad A.I v. Karji Kondho Rayaguru AIR 1945 Pat. 286 a Division Bench of Patna High Court held that the question whether a Partnership firm was registered or not is a mixed question of law and fact and that such point cannot be raised for the first time in second appeal. This view was followed by the Rajasthan High Court in the case of Kalyan Sahai v. Firm Lachmmarain Shambhulal AIR 1951 Raj.
11. The Orrisa High Court has gone to the extent of saying that unless the objection as provided under section 69 of the Partnership Act is pleaded in the written statement it cannot be raised at a subsequent stage. (See Chiman Ram and others v. Ganga Saha AIR 1961 Orissa 94). This view was followed by a Division Bench of Madras High Court in the case of N.A. Munawar Hussain Sahib and another v. E.R. Narayanan and others AIR 1984 Mad. 47 whereunder somewhat similar circumstances it was held as follows:--- "17. Under Order 8, Rule 2, C.P.C. The defendant must raise in his written statement all matters which could show how the suit is not maintainable and in this case, the written statement filed by the appellants in O.S. No.671 of 1978 does not disclose that any objection had been raised by them regarding the maintainability of the suit based on section 69 of the Indian Partnership Act. Mulla on Civil Procedure Code (19th Edition, page 769) states that a question of fact which had not been put forward in the written statement cannot be allowed to be raised later and cites as example the plea of non-registration of a partnership. Further, the plea regarding the maintainability of the suit by reason of the operation of section 69 of the Partnership Act is a mixed question of fact and law and if such a plea is not raised at all, there will be no evidence relating to the aspect with the result that the facts necessary for its determination would be absent. It is on account of this that Courts have consistently taken the view that if the plea had not been raised in the written statement, it would not be allowed to be raised at a later stage in the proceedings. Further, unlike the provisions in the Limitation Act, there is no provision in the Partnership Act which compels the Court to dismiss the suit on the ground of non---registration of the firm suo-motu, even if no plea in that regard had been raised by the defendants in the suit."
9. It is very strange to note that the defendant never raised any objection or plea of registration of plaintiff firm despite the fact that they were in business since 1970. During all this period from 1970 till 1996 the defendant for the first time has raised this objection before this Court. It is pertinent to note that both the learned Arbitrators and the Umpire are unanimous on the findings of all issues which had successfully established estoppel on the part of the defendant to raise objection to the maintainability of arbitration proceedings. I would like to refer the case of Province of Sindh and 4 others v. Waseem Construction Co. 1991 CLC 66 which was between the same parties as in the instant proceedings. But even during the previous litigation the defendant never raised this plea of non-registration and the Award was made Rule of the Court. It is now too late in the day for the defendant to raise such plea at this belated stage. In view of the above discussed law, I am in full agreement with Mr. Iqbal Kazi, Advocate for plaintiff that the objection as to the maintainability of the present proceedings in view of section 69 of the Partnership Act as raised by the defendant is a mixed question of law and fact and cannot be allowed to be raised at this belated stage, I, therefore, overrule, this objection. Accordingly, C.M.A. 2012/96 stands dismissed.
10. The other objections of the defendant are on the merits of the case. Neither any illegality nor any misreading in evidence was pointed out by Mr. S.A. Farooqi. On 18-8-1996, with the help of the defendant's representative I have scrutinised the entire evidence brought on record during the arbitration proceedings. It is a settled law that this Court does not sit in appeal in a proceeding for making an award rule of the Court. (For any reference see Province of Sindh and 4 others v.
Waseem Construction Co. 1991 CLC 66 and Messrs .Joint Venture KG/Rist v. Federation of Pakistan PLD 1996 SC 108. The Award given by the learned Arbitrator of the defendant is binding on the defendant. The said Arbitrator has only objected on the three items and has not disputed as far as other payments were concerned, with the Arbitrator of the plaintiff. The learned Umpire has fully dealt with the reasoning of both the Arbitrators arid I do not see any infirmity or illegality apparent on the face of Award which warrants interference by this Court. In addition to the amount of Award and cost as allowed/granted by the learned Umpire, I also grant interest at the rate of 12% per annum from the date of decree till its realisation.
With the above addition, Award is made rule of the Court. Decree to follow.