1. To resolve amicably the dispute over movable and immovable property left by Amir Jehan, his two sons Inayatuallh Khan and Obaidullah Khan and the legal heirs of his 3rd son, namely, Abdullah Khan since dead, through Hamid Khan entered into an arbitration agreement and in consequence thereof appointed Colonal (Retd.) Amanullah Khan, Major (Retd.) Saifullah Khan and Major. Raham Zad Khan as arbitrators who announced their award. Since, however, the parties were not ready to act according to the terms of the award, the arbitrators filed an application in the Court of competent jurisdiction to make the award rule of the Court and pass decree accordingly.
2. 2.The Court of Senior Civil Judge, Bannu being seized of the matter, issued notices to all the parties to the award and subsequently on the pleadings of the parties framed the following issues: -- (1)Whether the petitioners/plaintiffs have got a cause of action?
3. (2)Whether petition is time-barred and hence liable to the dismissed.
4. (3)Whether necessary parties have not been impleaded in the present petition?
5. (4)Whether all the sons were party to the arbitration?
6. (5)Whether signatures of all the sons are present on the agreement.
7. (6)Whether the said arbitration is illegal and void?
8. (7)Whether the arbitrators acted one sidedly, if so what effect?
9. (8)Whether arbitration award can be made as rule of the Court.
10. (9)Whether petitioners/plaintiffs are entitled for decree in their favour against the respondents?
11. (10)Relief.
12. By his judgment and decree dated 10-7-1989, Mr. lhsanullah Babar, Senior Civil Judge, Bannu, came to the conclusion that the award was within time; that the petition,was bad for non-joinder of necessary party in that Mst. Maluka daughter of Amir Jehan who had been given share in the property and was alive, had not been made party; that the award was defective, for, besides being Mst Maluka one of the legal heir of Amir Jehan Khan not being party to the arbitration agreement, on behalf of the legal heirs of Abdullah Khan, only Hamid Khan one of his L.Rs, had consented to the arbitration agreement who had not been authorised by the other L.Rs, of Abdullah Khan to act on their behalf and, therefore, the award was not binding on those not party to it; and that the award was the result of personal interest of the arbitrators who had violated the terms; of the award.
13. Consequently the petition was dismissed.
14. 3.Aggrieved by the decision of the Senior Civil Judge, Bannu, one of the arbitrators, namely Colonal (Retd).) Raham Zad Khan preferred an appeal in the Court of the District Judge, Bannu. Mr. Abdur Rehman Khan, then Additional District Judge Bannu, by his judgment dated 10-7-1990 accepted the appeal and setting aside the judgment and decree of the Senior Civil Judge remanded the case with the direction to analyse the sanctity and value of the arbitration agreement as well' as the contents of the award in consonance with the evidence led by the parties after referring the matter to the arbitrators, and thereafter, decide the case afresh in accordance with the law. Inayatullah Khan Respondent challenged this order of the Additional District Judge in revision in this Court and by mutual consent the judgment and decree of the appellate Court were set aside and the case was remanded to the Court of Additional District Judge for decision of the appeal on merits and in accordance with law.
4. On remand the learned Additional District Judge Bannu, Muhammad Sher Khan who was then seized of the appeal, by his judgment dated 11-1-1994 dismissed the appeal and upheld the findings of the trial Court, which has obliged Obaidullah Khan to challenge the vires of the conclusions arrived at by the two Courts below by invoking the revisional powers of this Court under section 115, C.P.C.
5. Arguments of Mr. Dost Muhammad Khan, Advocate for the petitioner and of Syed Zafar Abbas Zaidi, Advocate on behalf of the contending respondents have been heard and record of the case has been thoroughly scrutinized with their assistance.
15. 6.It is not disputed that the parties were involved in a dispute over property left by their predecessor-in-interest, Amir Jehan and to resolve the present and future differences they entered into an arbitration agreement. It is well-settled that law acknowledges and encourages the sanctity of an agreement, if not opposed to public policy or if by such an agreement no law is violated. The law of arbitration is neither more nor less but a law of compromise. As such the arbitration agreement entered into by the parties of their free choice was for all practical purposes a valid agreement within the four corners of section 3 of the Arbitration Act. Like every agreement, arbitration agreement is binding upon the parties thereto and unless tainted with fraud, coercion or undue influence, its binding force cannot be avoided. Learned counsel for the contesting respondent has contended that since all the parties concerned had not signed the agreement it was void. Elaborating, he submitted that Mst. Maluka one of the L.Rs, of deceased Amir Jehan and, expecting Hamid -Khan, the rest of the L.Rs, Obaidullah Khan, deceased son of Amir Jehan, have not signed the agreement and that Mst. Maluka was not even made party to the proceedings of making the award rule of the Court. He submitted that the provisions of section 3 and rule 6 of the First Schedule to the Arbitration Act having not been complied with the said agreement could not be acted upon and all the actions flowing from the said agreement are violative of law.
16. 6.The bare reading of rule 6 aforesaid would reveal that parties to the reference and all persons claiming under them submit themselves; Firstly: to be examined by the arbitrators or umpire on oath or affirmation; Secondly: produce before the arbitrators or the umpire all their books, deeds, papers, accounts, writings and documents, which may be in their possession or power that may be required or called for by the arbitrators; and Finally: do all other things which the arbitrators or umpire ask them to do.
17. Now Mst. Maluka is not party to the reference. The arbitration agreement did not involve decision over the inheritance of Amir Jehan who had died long before i,e, somewhere in 1958. There was no claim by Mst. Maluka before the arbitrators nor was it contained in the terms of agreement for arbitration. Had the arbitrators been appointed to divide the property of Amir Jehan between his L.Rs,, Mst. Maluka would have been a necessary party, and her non-joinder in the proceedings should have resulted in dismissal of the petition being bad for non-joinder of a party necessary. On the contrary reference to the arbitration was regarding partition of the property in possession of Inayatullah, Obaidullah sons and legal heirs of Abdullah, the deceased son of Amir Jehan. The arbitration agreement nowhere authorised the arbitrators to travel beyond the terms of the agreement nor could it go into the question of inheritance of Amir Jehan as to oblige the arbitrators to make all the L.Rs, of Amir Jehan party both to the arbitration agreement, as also party to the proceedings in hand. No doubt the arbitrators did give some property to Mst. Maluka but the question would arise whether the property given to Mst. Maluka had been objected to by any of the parties, to the agreement or for that matter Mst. Maluka herself expressed her reservation over the property given to her. The perusal of the award would reveal that the award had been signed by all the three executories of the agreement in token of acceptance. This all happened as far back as 28-12-1979 and for almost four years no one took any exception to the award of the arbitrators regarding the integrity of the arbitrators or the validity of the award on some technical grounds now being agitated to avoid its mandatory effects. The contention of the learned counsel that Hamid Khan had no written authority to either enter into the arbitration agreement or becomes signatory to the award on behalf of the rest of the L.Rs, of Abdullah Khan and the said L.Rs, being necessary party to the agreement, the award and the resultant proceedings were all coram non judice for want of necessary parties. it is again not tenable, in that, Hamid Khan had been conducting on behalf of the rest of the L.Rs, of Abdullah, his father, and during all the arbitration proceedings no objection whatsoever from any quarter was raised regarding the competency of Hamid Khan -to act on behalf of the other L.Rs, of Abdullah Khan. So much so that Inayatullah Khan the star opponent of the award did not object to the validity of the agreement or the arbitration proceedings on that score. The conduct of the parties, both the executants of the agreement and of the arbitrators, does suggest that they were well-aware of the legal implications of the proceedings and had there been any doubt regarding the authority of Hamid Khan to represent the other L.Rs, of Abdullah Khan this must have been checked at the initial stage, but the circumstances disclose otherwise. Under section 186 of the Contract Act authority of an agent expressed or implied is duly acknowledged. Under section 187 of the said Act an authority is said to be express when it is given by the words spoken or written. It is further provided that an authority is said to be implied when it is to be inferred from the circumstances of the case and the things spoken or written, or ordinary course of dealing may be accounted circumstances. In the light of the conduct of the rest of the L.Rs, of Abdullah Khan coupled with the fact that neither of the said L.Rs, in response to any notice from the Court of original jurisdiction, then in the appellate Court in the first instance, in the proceedings in the first revision petition in this Court, again in the appellate Court after remand and finally in this Court in the instant proceedings did not defend the cause and have been proceeded against ex parte all along, would lead to the only inference that they had reposed full confidence and authority in Hamid Khan and did not feel the necessity of questioning his agency in any manner. Thus, it can be safely inferred from these circumstances that Hamid Khan did possess the authority to act on behalf of the other L.Rs, of, his deceased father Abdullah Khan and the agreement was quite competent in its form and was not bad for want of one of necessary parties. The award based on the basis of the agreement by the arbitrators is not open to challenge on that score, because once, parties select a domestic tribunal for resolution of their differences and disputes, they are not allowed to rely upon technicalities such as absence of a written authority in favour of Hamid Khan. Reliance may well be placed on Shafi Corporation Ltd.
18. V. Government of Pakistan (PLD 1981 Karachi 731).
19. 7.It was argued by the learned counsel for the respondent that the award was given on 24-12-1979 and the petition was brought on 20-11-1983. Referring to section 24 read with Article 178 of the Limitation Act the learned counsel contended that the application for making the award rule the Court was hopelessly barred by limitation. He further contended that nobody amongst the parties came to the Court praying for making the award rule of the Court in four years. According to the learned counsel although no time was fixed for filing the award still it cannot be kept pending for years and years.
20. 8.Regarding the objection of the learned counsel that neither of the parties applied for making the award rule of the Court, it would suffice to say that arbitrators or umpire in arbitration proceedings are competent parties and it is the consistent judicially established view that filing of the award is a ministerial act and section 14 of the Arbitration Act nowhere precludes the arbitrators from filing of the award suo mom. On the other hand a party other than the arbitrators can only file the award in Court when specifically authorised by the arbitrators. Thus, for all intents and purposes it is the role of the arbitrators either to file the award himself to make it a rule of the Court or may permit/authorise the parties or one of the parties to file it. There was, therefore, no handicap/legal hurdle in the way of the arbitrators to file the award and to pray for its making rule of the Court. As regards the objection that the award had been filed in the Court at a very belated stage, the learned counsel has himself concede that no time limit is prescribed for filing of the award. On the contrary it is now well-settled that neither the Arbitration Act nor has the law of limitation prescribed any time frame within which the arbitrators have been subjected to file the award. In a case reported as Luxmi Bai v. Shridhar (AIR 1943 Bumbai 223) it was held that no time is fixed either by the Arbitration Act or by the Limitation Act within which the arbitrators should give notice of the making and filing of the award. It was observed that the omission in the law was deliberate with the result that the arbitrators are left with a free hand on that point. Time frame on the other hand is fixed for setting side the award and for filing of the award after notice to the parties and not in the case of a petitioner for making the award rule of the Court by the arbitrators. Learned counsel for the petitioner has contended that since respondent No,1, the pivot critic of the award did not file objections within 30 days of the notice by the Court of the filing of the award, the trial Court should have made the award rule of the Court. He argued that the order sheet of the trial Court dated 11- 3-1984 would disclose that respondent No,1 appeared in Court on that date in response to the Court notice to filing of the award. He, however, submitted his written statement on 28-4-1994 and, therefore, under Article 158 of the Limitation Act it was barred by limitation. I, however, do not agree to this proposition of the learned counsel. Article 158 prescribes the 30 days period for an application for setting aside the award or for getting an award remitted for reconsideration. It is not the case here. It was rapt an application in terms of Article 158 of the Limitation Act but a written statement to the application filed by the arbitrators praying for making it rule of the Court. For written statement under Order VIII, Rule 1, C.P.C. no period has been prescribed and the defendant may, and, if so required by the Court, shall, at or before the first hearing or within such time as the Court may permit present a written statement of his defence. There is nothing on record to suggest that the respondent failed to file the written statement within the time fixed by the Court. On the basis of my discussion aforesaid I hold that the award could be filed by the arbitrators or any one of them and that there is no time prescribed for applying for making award rule of the court by the arbitrators.
9. Learned counsel for the respondent. contended that under section 17 of the Registration Act, the award comprising property valuing more than Rs,100 required compulsory registration and that under section 49 of the said Act a document required to be registered but unregistered is not permissible under the law to operate to create, declare, assign, limit or extinguish whether in present or in future any right, title or interest, whether vested or contingent to or in immovable property. The contention of the learned counsel is without any force for with the amendment brought in section 49 of the Registration Act through Ordinance XLV of 1962, documents compulsorily registerable but not registered have been saved from being in admissible in evidence due to elimination of clause (c) therefrom. The question of admissibility or otherwise of a document, being a matter of procedure, must have to be governed by the law prevailing presently in this behalf. The award being a document which is made subject to a decree by a Court of competent jurisdiction does not in itself operate to create title or interest in the property. In Kh.
21. Muhammad Yousuf. v. Kh. Abdur Rashid and another (PLD 1967 Karachi 508) it was held that an award unless made rule of the Court does not in itself become effective and operate in the manner provided by the section until it has been filed in the Court and made rule of the Court. It was observed that an unregistered award effecting immovable property of value of more than Rs,100 is, therefore, admissible in evidence. It was concluded that the Court is not precluded from dealing with the award under section 17 of the Arbitration Act for want of registration. In the light of the legal position involved I am of the view that since neither the award had been acted upon, in that, no changes had been brought about in the Revenue Record or other proprietary documents, it did not require compulsory registration and the Court should have proceeded to deal with the Award in terms of section 17 of the Arbitration Act. Since the Award was given by Arbitrators who had been appointed by the parties in litigation with free consent and a valid agreement to refer the dispute to arbitrators had been entered into and was fully acted upon, the two Courts below erred in not making it rule of the Court, because it is an elementary rule that submission to arbitration is a contract and under section 5 of the Arbitration Act, the authority of the Arbitrators is not revocable, except with the leave of the Court,. or unless a contrary intention is expressed in the arbitration agreement. The contents of the arbitration agreement nowhere suggests a contrary intention. As earlier observed, unless tainted with fraud, coercion or undue influence, an arbitration agreement cannot be warded off, nor can the arbitrators' authority be revoked. In Province of Punjab and others v. Messrs Industrial Machine Pool, Lahore, reported as PLD 1978 Lahore 829, it was held that award is to be construed liberally and in accordance with common sense, to be so read to be given effect, and not so read as to nullify efforts of arbitrators appointed by parties. It was further held that parties to arbitration agreement are estopped by their conduct to challenge the jurisdiction of the arbitrators once they submit to their jurisdiction.
10. I am, therefore, firm in my view that the Award is not hit by any disabling clause. The arbitrators had been appointed by consent pursuant to a valid agreement to refer the dispute to arbitration: After such enquiry as the arbitrators thought just, an award was given. Parties to the agreement to arbitration put their signatures to award. Neither of the party came to the Court to question the legality of the award or competency of the Arbitrators. As regards the legal objections raised, the same have been discussed in detail. Thus, for all intents and purposes, the award was a valid one and has the binding force. I accordingly order to make it rule of the Court.
22. 11.Before I part with, I would like to take notice of the fact that under Article 12 of the Stamps Act, the Award had to be stamped with duty for the amount or value of the property to which it relates, subject to a maximum of Rs,50. In this connection,, it is held that an unstamped award can be admitted in evidence and filed in Court after payment of penalty under the provisions of the Stamp Act. Reliance in this context could be placed on West Pakistan Small Industries Corporation. v.
23. Bashir Ahmad reported as PLD 1977 Lahore 656), wherein it was held that an unstamped award may be admitted in evidence and filed in Court after payment of the penalty under the provisions of the Stamp Act.
24. 12.Accordingly, while accepting the civil revision petition, I set aside the judgments and decrees of the two Courts below and making the Award rule of the Court by passing a decree in accordance with the terms and conditions of the Award subject to payment of Rs,500 as penalty and Rs,50 as stamp duty on the award. No orders as to costs.