' A suit for possession of 6 marlas of land after removing the buildings constructed thereon, was filed by the respondents against the petitioner. On the 28th of October 1975 the parties made a statement that they were willing to refer their dispute to Mr, Rafiq Ali Khan as a referee and accordingly the case might be decided as per his statement. Mr. Rafiq Ali Knan was directed to appear in Court on the 22nd of November 1976. He put in appearance on that date but did not make a statement because obviously he had no knowledge about the facts of the case as will be apparent from his subsequent conduct nor was he able to entertain any belief in that respect. The case was adjourned to the 28th of November 1975. Mr. Rafiq Ali Khan submitted a report dated 24- 11-1975 on the 26th of November 1975 after making inquiries at the spot in the presence of the parties and after taking the evidence. He did not put in appearance in Court thereafter. On the same date an application was submitted by the petitioner resiling from the statement made by him on the 28th of October 1975. He alleged collusion between the respondents and referee. The learned trial Court, however, decreed the suit of the respondents on the basis of the report received from the referee. An appeal was filed by the petitioner but the same was dismissed by Mr. Z. A. K.
Yousafi, District Judge, Mianwali on the ground that the petitioner was bound by the decision of the referee since he did not withdraw his undertaking to abide by his decision before the 26th of November 1975. Hence this revision petition.
2. The learned counsel for the petitioner argued that since no statement as required by the statements of the parties made on the 28th of October 1975, was made in the Court by the referee, the Court was bound to give effect to the resilience of the petitioner in view of the principle that if a person resiles from his agreement before the statement of referee is made, the Courts should generally allow him to resift. He referred particularly to Basdeo Singh v. Barn Raj Singh and others (1). This authority does support the petitioner. It appears from the order of the learned District Judge that he was also acting on the same proposition.
3. The learned counsel for the respondents, however, argued on the
(1) AIR 1932 All. 166 basis of section 20 of the Evidence Act and Umral Ali Khan and others v. Intizami Begum and others
(1) that a report of the referee amounted to a statement and once that statement was filed in Court, the principle referred to by the learned counsel for the petitioner would cease to apply.,
3. In my view the first question to be determined is whether the reference in this case was to a referee or to an arbitrator. I agree with the learned counsel for the parties that since the reference was to a referee and the matter had to be decided in accordance with the statement of that referee presumably to be made before the Court, this was a reference under section 20 of the Evidence Act. The difference between such a reference and a reference to arbitration has been considered in a number of cases. In Udit Singh and others v. Ram Lakhan and others (2) it was held that where the reference was to three gentlemen and they had to make statements on the basis of decisions arrived at by them, the reference was a reference to arbitration and not merely a reference under the Oaths Act. In a Full Bench decision of the same Court in Mt. Akbari Begum v.
Rehmat Hussain and others (3), the following distinction has been drawn in the judgment of Snlaiman, C. J.:- "In concurrence with the opinions of the learned Judges who have made this reference, I hold that an agreement to abide by the statement of a particular witness is in substance not a reference to arbitration. The essence of arbitration is that the arbitrator decides the case and his award is in the nature of a judgment which is later on incorporated into a decree of the Court. The arbitrator can either proceed on the basis of his own knowledge or make enquiries and take evidence and then give his decision on such evidence. But where parties agree to abide by the statement of a third person or a reference, the referee merely makes a statement according to his knowledge or belief and the Court then decides the case and pronounces its judgment on the basis of such a statement and passes a decree thereon. The referee is not authorised to make enquiries and take evidence, and then announce his decision on the basis of such evidence. He is called upon to make a statement according to the knowledge or belief. In the ease of an arbitration, as the arbitrator's award is an expression of an opinion and his procedure resembles that of Court, a party is entitled to file objections and challenge the validity of the award. The making of a statement by a referee or a third person has no resemblance to a proceeding conducted by him as if he were a Court of law, and accordingly there can be no procedure for filing objections as to its validity."
' Similar distinction was drawn by the High Court of West Pakistan in Muhammad Akram v. Ch. Muhammad Salim (4) between an arbitrator and a mediator. It was held by the High Court that the essential difference between a mediator and an arbitrator is that in the former case the mediator merely brings about and records a settlement arrived at between the parties which operates as a contract between the parties, while in the case of an arbitrator or arbitrators, he or they give an award and it is his or their decision which constitutes the award irrespective of whether the parties accept it or not, after it is given. If the parties agree to accept the decision of an
(1) AIR 1939 All. 176 (2) AIR 1933 All. 313
(3) AIR 1933 All. 861 (4) PLD 1964 Lah. 490 ' arbitrator and he has given his decision, it is an award, though he may in his award embody what he has pursuaded the parties to agree to.
' On appeal against the same judgment the Supreme Court of Pakistan in Ch. Muhammad Salim v.
Muhammad Akram (1) held that the most important characteristic of an award is that it must emanate from a judicial determination. If a dispute is referred to a person and if that person decides that dispute by holding an inquiry and comes to a decision, then undoubtedly what that person decides would constitute an award. On the other hand if a matter is referred to a person and he is not called upon either to hold an inquiry or to give a decision but by the exercise of his sagacity, knowledge or experience to bring about merely an understanding between the parties and restoring peace between them, then ho would be discharging only the functions other than those of arbitrator or arbitrators.
' Although in the case referred to by the learned counsel for the respondents even a written- statement submitted by a referee has been given the status of a statement under section 20 of the Evidence Act and there are observations by Sulaiman, C. J. In Mst. Akbari Begum v. Rehmat Hussain and others to the effect that it is not necessary that a referee under section 20 must act on his personal knowledge, but this does not mean that the referee under section 20 can be allowed to make a statement after following the procedure of an arbitrator. It is a different matter if a referee does not have any personal knowledge about the situation or locality of the particular property and visits the spot in order to find out that situation and makes a sstatement before the Court after having obtained some personal knowledge or even after obtaining belief regarding the truthfulness of matter. Such a statement may yet be considered to be a statement under section 20 of the Evidence Act. But a person who cannot make a statement without making what may be called a judicial inquiry and without taking evidence cannot be called a referee under section 20 of the Evidence Act. There is a clear distinction between an arbitrator and a referee. An arbitrator as held by the West Pakistan High Court and the Supreme Court of Pakistan is a person who decides a dispute after an inquiry. The determination of dispute by such a person is essentially by following a judicial procedure keeping in view the principles of natural justice and the law of the land. Such decision I known as an award and can be made a rule of the Court after following the procedure of the Arbitration Act. The statement of a referee is not his finding. It is a statement made before the Court on the basis of knowledg or belief of the referee and has all the characteristics to operate as an admission of the parties on which a decree can be based by the Court. A statement made by the referee on the basis of inference drawn from evidence taken by him is an award and not the statement of a referee under section 2 of the Evidence Act.
5. Applying these principles to the facts of the present case it will be seen that although the reference was a reference under section 20 of the Evidence Act and Rafiq Ali Khaa was expected to make a statement presumably before the Court on the basis of his knowledge/or belief and not on the basis of inquiries made by him in a judicial manner, the agreement to reference ceased to be ef1ective as soon as Mr. Rafiq Ali Khan appeared oa the 22nd of November 1975 and impliedly proved his ignorance about the matter and his inability to make such a statement. This inability is also supported by the report made by him later on which is a finding based upon .Evidence of witnesses and judicial inquiry conducted by him. In these
(1) PLD 1971 SC 516 ' circumstances the report of Mr. Rafiq Ali Khan could not be treated to be statement under section 20 of the Evidence Act. It is in fact an award. As he was not accepted by the parties as an arbitrator, the learned trial Co should have refused to act upon his report and allowed the petitioner to resit from his agreement. By relying upon that report both the learned Courts below have exceeded their jurisdiction.
7. Even if it be held that a report also falls within the ambit of statement under section 20, it will not be helpful to the respondent. In the present case it is clear from the statement dated 28th of October 1975 that what the parties intended was that Rafiq Ali Khan should make a statement before the Court. In these circumstances the learned Courts below had no jurisdiction to rely upon his bare report. Since the stage to make a statement before the Court was never reached and the petitioner had already resile from the statement made by him, on the principle acted upon by the learne District Judge and emanating from the authorities relied upon by the learned counsel for the petitioner, the petitioner should have been allowed to revoke the statement made by him.
7. This revision petition is accepted, the orders of the learned Courts below are set aside, and the case is remanded to the learned trial Court for deciding the suit in accordance with law. I leave the parties to bear their own costs.