During hearing of the Suit No,1112 of 1996 (Abdul Salam and another v. Muhammad Yaqoob), an application under section 21 of the Arbitration Act, 1940 (hereinafter referred to as the Act, 1940) was filed which was disposed of by consent of all the parties who are same in the instant proceeding, in the following manner:-- "All the parties have filed joint application under section 21 of the Arbitration Act praying that the disputes and differences involved in the present proceedings in respect of partnership business known as Crown Hardware Mart and as reflected in the Agreement, dated. 24th December, 1994 (Annexure P/4 to the plaint) may be referred to the sole arbitration of Mr. Justice (Retired) K.A.
Ghani, who may further be advised to conclude arbitration proceedings, preferably within two months. All the three parties, who are present in Court, have voluntarily agreed to this proposal. By consent, this suit is disposed of and the disputes and differences as referred in the application are referred to the sole arbitration of Mr. Justice (Retired) K.A. Ghani, having office at Second Floor, Court Chambers, Opposite City Courts, Karachi. He is advised to conclude his arbitration proceedings within two months after receipt of intimation..."
2. Now the petitioner who was plaintiff in the earlier suit as referred above, has filed this petition under section 8(1)(b) of the Act, 1940, with the prayer that another sole arbitrator be appointed as Mr. Justice (Retd.),K.A. Ghani had expired on 24-10-1997, during the pendency of arbitration proceedings. Notices were issued to both the respondents, as a result of which Mr. Muhammad Zaki, has appeared who has vehemently opposed the grant of this petition. I have heard both the learned counsel at length. The first objection of Mr. M. Zaki Ahmad is that the instant proceedings are premature inasmuch as no notice was issued to the respondents calling upon them to propose or to concur with the name of the proposed arbitrator. He has placed reliance on the provision of subsection (2) of section 8 of the Act, 1940 which provides that if the appointment is not made or the vacancy is not supplied within 15 clear days after service of the notice, the party which gave the notice to the other party will file such petition seeking appointment of an arbitrator through the Court. He has referred to the case In re: Trading Corporation of Pakistan Ltd. and another 1984 CLC
613. Further, reliance was placed on the cases Iqbal Yousaf v. Kishwar Jehan 1991 SCM R 864, Messrs Hafiz Abdul Aziz Cotton Ginning Factory v. Messrs Haji Ali Muhammad Abdullah & Co. and another PLD 1966 Kar. 197, The Chief v. Union Cooperation Club Limited and another 1997 CLC 187, Muhammad Ali Memorial Cooperative Housing Society Ltd. Karachi v. Syed Sibtey Hasan Kazmi PLD 1975 Kar. 428 and Arshad Butt v. Manzoor Ahmed 1992 CLC 723.
3. In reply to the first objection, it was contended by Mr. Neel Keshav that since the cause of action matured during the pendency of the present proceedings, respondents are not entitled to raise this plea and that this application is maintainable. Reliance is also placed on the case of Mst. Amina Begum and others v. Mehar Ghulam Dastgir PLD 1978 SC 220 wherein it was held by a Division Bench of the Honourable Supreme Court that a discretion is vested in the Courts to be judicially exercised in proper cases in order to avoid multiplicity of proceedings, to shorten litigation and to do complete justice between the parties and to mould relief according to the altered circumstances in the larger interest of justice. In that case, it was held that since the cause of action matured during the pendency of an eviction petition, landlord cannot be non-suited on the ground of non-issuance of statutory notice as provided under section 30 of the Displaced Persons (Compensation and Rehabilitation) Act 1958. This view was followed by a full Bench of the Honourable Supreme Court in the case of Iqbal Yousaf (supra). In that case, the question of issuance of notice, as required under section 14 of the Sindh Rented Premises Ordinance, 1979, was under discussion where reference was made to a Full Bench decision of this Court in the case of Barkatullah v. Mirza Muhammad Hasan PLD 1986 Kar. 309 and the majority view of Full Bench was upheld. Further, reference was made to the cases of Raj Muhammad and 11 others v. Haji Muhammad Zareen and 3 others 1980 SCM R 339, Syed Hasan Askari Rizvi v. Muhammad Aziz PLD 1989 SC 1 and Wali Muhammad and another v. Mst. Hamida Bai 1983 SCM R 191, whereafter it was held inter alia, "Reverting to the appeal under consideration, we hold that, as stated above, service of notice as contemplated under section 14 of the said Ordinance, is statutory requirement, which is mandatory and is to be fulfilled. After issuance of notice as prescribed, if application for eviction is filed pre-maturely before expiry of two months, then such defect being procedural in nature, would not vitiate the proceeding if in the meantime cause of action had accrued and matured, provided eviction is granted after expiry of two months from the date of service of notice...".
4. The provisions of section 8 of the Arbitration Act, 1940, are oftenly quoted in several cases and in this case also, it would be pertinent to reproduce them here:-- "...8. Power of Court to appoint arbitrator or umpire.--
(1) In any of the following case
(a) Where an arbitration agreement provides that the reference shall .be to one or more arbitrators to be appointed by consent of the parties, and all the parties do not, after differences have arisen, concur in the appointment or appointments: or
(b) If any appointed arbitrator or umpire neglects or refuses to act, or is incapable of acting, or dies, and the arbitration agreement does not show that it was intended that the vacancy should not be supplied, and the parties or the arbitrators; as the case may be, do not supply the vacancy, or
(c) where the parties or the arbitrators are required to appoint an umpire and do not appoint him; any party may serve the other parties or the arbitrators, as the case may be, with a written notice to concur in the appointment or appointments or in supplying the vacancy.
(2) If the appointment is not made within fifteen clear days after the service of the said notice, the Court may, on the application of the party who gave the notice and after giving the other parties an opportunity of being heard, appoint an arbitrator or arbitrators or umpire, as the case may be, who shall have like power to act in the reference and to make an award as if he or they had been appointed by consent of all parties.
(3) In the instant case, no notice was issued by the petitioner before filing the petition under section 8 of the Act, 1940. In the earlier proceedings an arbitrator was appointed on the intervention of the Court as provided under section 21 of the Act, 1940. It is not in dispute that in such circumstances the provisions of the Arbitration Act, 1940 would not be attracted. Reference could be made to section 25 of the Act, 1940, which at the same time empowers the Court to supersede the arbitration and not to fill in the vacancy as provided under sections 8, 10, 11 and 12 of the Act, 1940.
The instant proceeding was filed on 23-5-1998. On 9th June, 1998, Mr Muhammad Zaki Ahmed, Advocate appeared on behalf of the respondents and filed his Vakalatnama/power. Thereafter, from time to time this matter came up for hearing on 12-6-1998, 17-6-1998, 21-9-1998, 12-10-1998 and 22-10-1998. It was for the first time on 26-10-1998 that the respondents filed counter-affidavit to the main petition with an endorsement that the copy of such counter-affidavit has been supplied to the petitioner. However, on 6-10-1998, respondent No,1, Muhammad Yaqoob filed his affidavit in rejoinder, the noting whereof is made to the fact that the junior of Mr. Amir Hani Muslim, Advocate declined to accept the copy of the affidavit in rejoinder on the ground that he is no more appearing for the petitioner. It is not shown how, on 26-10-1998, counter affidavit to the main petition was supplied and to whom. Nonetheless, it was argued by Mr. Zaki that this question being a legal one, can be raised at any stage and without filing of any objection in writing."
6. In the case of Trading Corporation of Pakistan (supra) it was held by learned K.A. Ghani, J. (as he then was), that were a petition was filed under section 8 of the Act, 1940, without compliance of the provisions of issuing 15 days' notice to the other side, being premature, would not lie. Accordingly, the petition under section 8 of the Arbitration Act, was dismissed. Reference was made to the cases Chief Engineer Pak. P.W.D. and another v. Messrs Samir & Co. and others 1970 DLC 984, Thakurdas v.
Ramdas AIR 1925 Lah. 374, Abdul Ghani v. Din Dayal 50 IC 655, Poran Lal v Rupchand AIR 1931 All. 761 and Durga Parsad v. Barati Lal AIR 1933 Oudh 540. Following is the relevant portion from the case of Trading Corporation of Pakistan (1984 CLC 613) which reads as follows:-- "A careful reading of section 8 reproduced above, could show that the Court is not competent to appoint an arbitrator or assume jurisdiction to act under the said section unless it is shown that a written notice to concur in the appointment of an arbitrator or arbitrators or in supplying the vacancy has been served by the party making the application and that the appointment has not been made within 15 clear days after the service of the said notice. Admittedly, no such notice has been served by the applicant upon the respondent as required under subsection (1) of section 8 of the Act."
7. Both the learned counsel have also cited other case the point of notice.
On the question of issuing notice under section 30(i)(b) of the Displaced Persons (Compensation and Rehabilitation) Act, 1958, Mr. Zaki has referred to the case of E.A. Evans v. Muhammad Ashraf PLD 1964 SC 536, where it was held, inter alia, that the service of the notice under section 30 of the Act, 1958 is not merely a formality for acquainting the tenant of the premises nor a notice of attornment but it is designed to fix the terminus a quo of the period of protection. However, he has referred to another case Muhammad Ramzan v. Ch. Bashir Ahmad PLD 1981 SC 340 where it was held that the provision of section 30 of the Act, 1958, after its repeal, has lost importance and the tenant is no more entitled for the protection of the same. Mr. Neel Keshav has referred to the cases of Syed Azhar Imam Rizvi v. Mst. Saima Khatoon 1985 SCM R 24; Major (Retd.) Muhammad Yousaf v.
Mehraj-ud-Din and others 1986 SCM R 751; Pakistan National Shipping Corporation v. Messrs General Service Corporation 1992 SCM R 871 and Ghulam Waris v. Riaz Ahmed, Advocate 1990 M LD 2300. In all the four cases mentioned, the first two cases arise out of provision of section 13-A of the West Pakistan Urban Rent Restriction Ordinance, 1959 while the last two cases involve section 18 of the Sindh Rented Premises Ordinarice, 1979. Both these provisions are pari materia and give protection to a tenant whose landlord has been changed in order to enable him to pay rents within a specified time to his new landlord upon receiving written intimation. However, in both these provisions, it is not made mandatory for the landlord to file eviction petition after first issuing such notice. The view laid down in these cases is that in an application for eviction where the landlord has stated change of ownership and it was filed without intimating the change of ownership, such application was held to be an intimation and the tenant still defaulting in payment of rent was held to be a defaulter. In the case of Major (Retd.) Muhammad Yousuf (supra) it was held by the Honourable Supreme Coutt that an application seeking ejectment of a tenant could be treated as notice under section 13-A of the West Pakistan Urban Rent Restriction Ordinance, 1959.
8. Besides section 8 of the Act, 1940, there are other provisions in the same Act which make issuance of notice a precondition for appointment of arbitrator or for making award a rule of the Court and to perform other functions as provided in the Act, 1940. In section 9(b), it is provided that where a party fails to appoint arbitrator, either originally or by way of substitution, as mentioned in sub-clause (a) after 15 clear days of receipt of notice in writing, the arbitrator appointed by the other party shall proceed to act as the sole arbitrator. Likewise, section 14(1) of the Act, 1940 provides that when the arbitrators or umpire, as the case may be, have made their award, they shall sign it and shall give notice in writing to the parties of the making and signing of the award and about the amount of fees and charges payable in respect of the arbitrators and award.
Subsection (2) provides that where such award is filed in the Court, the Court shall thereupon give notice to the parties of the filing of award. Subsection (3) provides that where the arbitrators or umpire stated .a special case under section 13(b), the Court after giving notice to the parties and hearing them shall pronounce its opinion which shall be added and shall be treated as part of the award. The object of subsections (1) and (2) of section 14 were considered by a Division Bench of Dacca High Court in the case of Jaker Hossain and others v. M. Ismail Sukhani and others DLR (1957)
233 where it was held as follows:-- "On a reference to the provisions of subsections (1) and (2) of section 14, it will appear that the object is to ensure knowledge of the award actually signed by the arbitrators and also of the suit that may be filed in respect of the award. In the first case, it is the arbitrators who have to give notice; in the second case, it is the Court that has to give notice. The object of these notices is to enable the parties concerned to take necessary steps after the award is made and signed and also when a suit is filed on the basis of the award fora decree, and if the parties come to know that an award has been made, the parties may request the arbitrators to file the award according to section 14 or even they can move the Court for the said direction. In this case, we notice that the copy of the award was made over to each of the parties on the 5th of December, 1947, and, even after the suit was filed, written statement was filed by the respondents. Except that no formal notice in writing was given, it is nobody's case that the parties did not know anything about the signing or making of tht award by the arbitrators. As soon as the arbitrators have made a complete award, the award is regarded as made and published. The absence of notice as required by subsection (1) of section 14 by itself does not invalidate an award. The provisions of subsections (1) and (2) of section 14 relate to the procedure regarding an award and regarding a suit filed in respect of an award, and if the party who is entitled to notice cannot prove any prejudice on account of absence of notice by the arbitrators or by the Court, he cannot claim any reliance and, on account of absence of notice alone, the award cannot be held to be invalid."
9. In the case of Bollaram George v. Kadpak Lingiah AIR 1961 Andhra Pradesh 457, it was held by a Division Bench of Andhra Pradesh High Court that provision of issuing notice under section 14(2) is mandatory but if a party to whom notice is to be issued has knowledge, that would be.sufficient compliance of section 14(2) and no further notice would be necessary. The Division Bench differs with the view taken by the Lahore High Court in the case of Gurdutta Mal v. Firm of Basanta Mal Pannalal AIR 1925 Lah. 619 or with the view of Calcutta High Court in Ranjit Chandra v. Bissay Ram AIR 1926 Cal. 1018 and with the view of Allahbad High Court in Chaturbhuj Das v. Ganesh Ram ILR 20 All. 477 and accepted the view taken by the High Courts of Nagpur and Calcutta in Kawal Singh v.
Baldeo Singh AIR 1957 Nag. 57 and Bholla Nath. Malick v. Mahadev Mailick AIR 1952 Cal. 226. This matter was also considered by a Full Bench of Honourable Supreme Court in the case of Ashfaq Ali Qureshi v. Municipal Corporation, Multan and another 1984 SCM R 597 where references were made to the above said cases where it was held as follows:-- "9. Apparently, the prevalent view is that as the provision of the law is meant to enable the parties to know that the award has been filed In Court so that they may file their objections, if any, within the time prescribed, a formal compliance in strict conformity with the relevant provision of law is not to be insisted upon when substantial compliance has been made of it. In keeping with this view where the fact of filing of the award by the Arbitrator had already been in the knowledge pf the parties and their counsel had in response to notice issued by the Court appeared and taken time to file their objections, as in the present case, an insistence on a formal service of notice under Order XXIX would be a mere technicality. Even otherwise, an objection on this score had neither been taken before the trial Court nor in the memorandum of appeal before the High Court and was, therefore, only an afterthought not entitled to serious consideration."
10. After the case of Trading Corporation of Pakistan 1984 CLC 613, there is a substantial change in the attitude of superior Courts. Preference is being given to do justice on merits of the case rather than to non-suit a party on mere technical grounds unless such technicality is essential for the purpose of administering justice or creates a substantive right in the other party. The purpose of issuing notice as provided in subsection (2) of section 8 of the Act, 1940 is to put the other side under notice that in case he does not concur, such party will invoke the jurisdiction of the Court seeking appointment of arbitrator or umpire as the case may be. In the instant case, no notice was given by the petitioner to the respondents prior to filing instant proceedings under section '8 of the Act, 1940. What would be the consequences if the instant proceedings are dismissed? Again, the petitioner would file the same after removing the objection of notice raised by the respondents and it will come against before this Court. Except for the plea of non-issuance of notice, there is no other relevant objection in the field from the respondents' side. In my considered view, it will amount to pressing technicalities too far if this petition is dismissed on this technical ground. Some of the case-law discussed in this order was not cited before the learned Single Judge who delivered judgment in the case of Trading Corporation (supra)
11. While considering the cases which are based on the question of issuing a notice as provided under section 30 of the Displaced persons (Compensation and Rehabilitation) Act, 1958; or under section 13-A of the West Pakistan Urban Rent Restriction Ordinance, 1959; or under section 18 of the Sindh Rented Premises Ordinance, 1979, one should not ignore the intention of the legislators for enacting such provisions which was to extend protection to the tenants to remain in occupation of the premises for a specified period and that such tenants who are entitled for a statutory notice should not be evicted prior to the period as provided in the relevant laws. In section 8 of the Act, 1940, no such right is conferred on the respondent, who may complain that for such non- compliance he has suffered serious prejudice and hardship. In my view the purpose of providing the course or process for issuance of notice before invoking jurisdiction of the Court under section 8 is that where the parties are in agreement for substitution and/or for supplying of a vacancy, the approach to the Court should be avoided and that the matter be resolved outside the Court; otherwise, in the case of dispute or disagreement between the parties, the jurisdiction of a Court is to be invoked under section 8 of the Act, 1940.
12. To ascertain whether a provision of law or rule is mandatory or directory in nature, it depends upon the language used in the statute and its purpose for which such provisions is enacted. It is to be seen whether any consequence is provided for non-compliance of such provision of law or rule.
If the language of a provision is couched in mandatory form, it is to be performed in the same manner as prescribed by the law. In the case of other provisions which are directory in nature and non-compliance of which at a belated stage, neither results in miscarriage of justice nor causes prejudice or hardship to any party, it can be over looked for the purpose of doing complete and substantial justice and in order to avoid protraction of litigation. It is the second category, where it is held that such technicalities should not be pressed too far and that adjudication of cause should be on the merits of the case. Present is the case where petitioner should not be made to suffer for technicalities.
13. There are other peculiar facts in this case which compel me to take a different view. Firstly, the dispute is between a father in law and son in law; that the petitioner has been deprived of the business since long and the respondent is in control of the business and it may be for this reason that he is raising such technical plea to protract the litigation and to continue enjoying fruits of the business under his control. This petition was filed on 23-5-1998 and is pending since then. The aim and object of the Arbitration Act, 1940 is to save the parties from the cumbersome and tiring proceedings of the civil litigation and to resolve their dispute through arbitration as early as possible. In the case Khan Bahadur Amir-un-Din and others v. West Punjab Province PLD 1956 FC 222 at 225, it was held by a Full Bench of the Honourable Supreme Coutt that when more than one interpretation is possible, that construction should be referred which carries into effect the object of the statute. I am also of the view that the construction of a statute should be made in a manner which would be beneficial to widest maximum extent. (See Mst Zaiban v. Kamal Khan alias Kamla NLR 1990 SCJ 841 at 845 = PLD 1990 SC 1051). Under these circumstances, when there is no other serious objection to the maintainability of this petition, the propose of the Act, 1940 should not be permitted to frustrate it by holding that under such circumstances; issuance of notice under section 8 was a legal precondition to the instant proceedings. It is observed that in the special circumstances of this case, the petition under section 8 of the Act, 1940 may be treated to be a notice.
14. As a result of the above discussion, I overrule the objections to the maintainability of this petition on the ground of non-issuance of notice and grant this petition with no order as to costs. Parties are directed to propose the name of a sole arbitrator within a week.