MAULVI ANWARUL HAQ, The parties entered into an agreement wherein the petitioner was to construct some building for the respondents in accordance with the terms of agreement dated 21.4.1973. It appears that disputes arose between the parties which led to tiling of an application under section 20 of the Arbitration Act, 1940 in the Court on 6.1.1976. This application remained pending for some time. On 30.10.1977 a compromise in writing, tiled in Court which was marked as Ex.C. 1 and a copy of it is available at pages 51 and 52 of the Trial Court file, was made. It was agreed that the matter he referred to Mr. Saeed Hassan Zaidi, Director, Housing and Physical Planning Circle, Bahawalpur, as an Arbitrator to decide any claim of the petitioner against the respondents in connection with construction of 512 Multi Storeyed Flats for industrial workers at Lyallpur. One. Of the conditions of the said agreement dated 30.10.1977 was that the petitioner withdrew the application pending in the Court. The application was withdrawn on 5.11.1977. The said Arbitrator entered upon the reference and conducted some proceedings over a period of more than a year. It was on 17.1.1980 that the respondents raised an objection before the said Arbitrator questioning his appointment as such, whereupon the Arbitrator stopped proceedings, On 2.7,1980 an application under Section 33 of Arbitration Act, 1940 was tiled by the petitioner complaining that the Arbitrator has wrongly stopped the proceedings. On 10.3.1981 the said Arbitrator formally refused to act saying that he is doing so for personal reasons. A notice in terms of Section 8(1) of Arbitration Act, 1940 was served by the petitioner on the respondents on 14.3.1981 informing the appointment of Mr. Muhammad Ashraf Khan as an Arbitrator and requesting the respondents to concur in so supplying the vacancy. The respondents refused. On 25.4:1981 and application under Section 8(1)(b) of the Arbitration Act, 1940 was tiled for Appointment of a new Arbitrator. The application was dismissed by a learned Senior Civil Judge, Lahore on .4.10.1981 on the ground that since the reference was to a named Arbitrator and as such a substitution cannot be made. Against this order a revision was tiled in the COurt of learned District Judge, Lahore who allowed the same on 1.9.1982. The respondents filed W.P. No. 3987/82 in this Court which was allowed on 12.7,1984 as it was found that the learned District Judge has no pecuniary jurisdiction to entertain. And try the Civil Revision. The result was that the Civil Revision was deemed to he pending in the Court of learned District Judge. The Civil Revision was returned to the petitioner on 13.8,1984 and was tiled in this Court on 20.8.1984.
2. Learned counsel for the petitioner contends that the impugned order is contrary to the letter and spirit of Section 8(1)(b) of the Arbitration Act, 1940.. Relies on the case of Yar Muhammad and another Vs. Ghulam Sarwar and others (PLD 1952 Lahore 563) to urge that there is a presumption that the parties to an arbitration agreement have agreed that the vacancy shall he supplied. Also places reliance upon the case of University of the Punjab Vs. Perfra Electric Concern (PLD 1980 Lahore 305) to contend that the learned Trial Court ought to have made orders for supplying the vacancy. Mr. Muhammad Akram Khawaja, learned counsel for the respondents, on the other hand, contends that the Civil Revision is barred by time and ought to he dismissed on this short ground.
Supports the impugned order relying upon the cases of Secy. Of State Vs. Balwant Singh (AIR 1933 Lahore 18), Rajani Kanta Karati and another Vs. Panchanan Karati (AIR 1937 Calcutta 388), Vishwas Balwant Davare Vs. Bhalchandra Ganesh Thakar (AIR 1931 Bombay 529), Design Group of Pakistan Vs. Clifton Cantonment Board (1990 M LD 2010), Messrs Middle East Contractors, Mirpur Vs. Project Director, Resettlement Organization, Mangla Dam Project (WAPDA) and 2 others (PLD 1980 Azad J and K 12), District Co-operative Federation Ltd. Vs. Khuh Chand (AIR 1961 Himachal Pradesh 35) and Chid' Engineer, Buildings and Roads, Jaipur and another Vs. Harbans Singh (AIR 1955 Rajasthan 30).
I have gone through the record of the Trial Court with the assistance of the learned counsel for the parties. In the original agreement the arbitration clause bearing No. 25-A provides that any question, difference or objection whatsoever in any way connected with or arising out of the agreement or the meaning or operation of any part thereof or the rights, duties and liabilities of either party shall he referred for arbitration to the Officer on Special Duty, Government of Punjab, Housing and Physical Planning Department. I was obviously for the enforcement of this clause that the petitioner initially approached the Court where the matter was settled in the form of agreement dated 30.10.1977. It deem it necessary to reproduce the relevant portion of the said agreement dated 10.10.1977:- "Whereas both the parties have agreed that Mr. Saeed Hasan Zaidi, Director Housing and Physical Planning Circular, Bahawalpur will act as an Arbitrator in their case if there is any claim against the Department in connecfion with construction of 512-Multi Storeyed Flats fin Industrial Workers at Lyallpur, and Whereas the first party has agreed to file a "Razi Nama" in the learned Court and is agreed to withdraw the suit tiled in the Court of Law. This agreement has, therefore, been signed in the presence of witnesses that Mr. Saeed Hasan Zaidi, Director Housing and Physical Planning Department presently posted at Bahawalpur is appointed Arbitrator subject to the condition that the first party wili withdraw the suit in the Court of Law without any, condition and the 2nd party will issue orders for the settlement of the claims, if any of the 1st Party."
This agreement was entered into between the petitioner and the respondents Government represented by the Director General Housing and Physical Planning Department. It is an admitted fact that the said Mr. Saeed Hasan Zaidi did enter upon reference and conducted some proceedings and it is also admitted that he refused to act .Statedly for personal reasons. It will also he beneficial to reproduce the provisions of Section 8(1)(b) of the Arbitration Act, 1940:- "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 he supplied, and the parties or the arbitrators, as the case may he do not supply the vacancy."
A reading of the above provision of law leads on to the conclusion that on the fulfilment of the following conditions the Court may appoint an Arbitrator who shall have like powers to act in the reference and to make an award as if he had been appointed by consent of parties:-
(i) An appointed Arbitrator refuses to act,
(ii) The Arbitration agreement does not show that it was intended that the vacancy should not he supplied, and
(iii) The parties do not supply the vacancy.
There is no dispute about the existence of conditions Nos. (i) and (iii) above. It is to he seen as to whether condition (ii) stands fulfilled or not. Apart from the judgment in the case of Yar Muhammad and another Vs. Ghulam Sarwar and others (PLD 1952 Lahore 563) relied up by Mr. A.K.
Dogar, Advocate, the wording of the Section itself leads to the inference that law pre-supposes that unless proved otherwise it shall he presumed that the intention of the parties to the arbitration agreement was that the vacancy should he supplied. The learned Trial Court relied upon the case of Secy. Of State Vs. Balwant Singh to conclude that there was no intention of supplying the vacancy. The facts of the said case are that in a dispute between the Secretary of the State and Balwant Singh the matter of a contract for execution of some works on the Kangra Valley Railway one Mr. Lawton was appointed as an Arbitrator by the parties. The said Mr. Lawton refused to act whereupon Balwant Singh approached the Court for appointment of a new Arbitrator. The application was allowed and an order was accordingly passed for fresh appointment. The Secretary of State appealed with the contention that since Mr.' Lawton was specifically appointed by agreement of the parties, the said agreement deed did away with the previous agreement and upon the refusal of. Mr.Lawton to act the arbitration clause ceased to have any force. Dalip Singh, J.
Observed as under:- "It seems to me that the question is a question of intention in each case. If the dominant intention of the parties is that the matter should be referred to arbitration then the fact that in the ame or subsequent agreement the parties agreed on the personnel of the arbitrator makes no difference, and when that arbitrator either becomes incapable or refuses to act the agreement to refer to arbitration remains and the Court can appoint a fresh arbitrator. If on the other hand the agreement of the parties in essence is to refer the case to the arbitration of a particular person or persons and to him or to them alone, then on the failure of that person or persons to act or his or their incapacity to do so the agreement to refer to arbitration is itself gone and therefore the Court has no 'power to appoint an arbitrator."
H is Lordship further observed:- ''It seems to me, looking at the'matter from this point of view, that it makes no difference whatsoever whether the contract itself contains the name of the arbitrator or whether the contract merely contains a clause to refer to arbitration and the Arbitrator is appointed by the subsequent agreement."
The appeal was ultimately dismissed. I wonder as to how the judgment supports the case of the respondents. To my mind it wholly supports the case of the petitioner. I have already referred to the main arbitration clause in the agreement. For all intents and purposes the matter was referred to Mr. Saeed Hassan Zaidi who was an officer of the Department holding the post of a Director. The dominant intention as would be evident from the second paragraph of agreement dated 30.10.1977 reproduced above was that the Director General of the respondents Department gave an undertaking that it will be seen that the dispute between the parties in the form of a claim of the petitioner against the respondents shall be settled. This settlement is of course to be by way of resorting to arbitration. In this view of the matter I do not find anything in the agreement or the reference to show that the intention of the parties was not to supply the vacancy in case Mr. Saeed Hasan Zaidi refuses to act.
3. Regarding the objection of limitation it is a matter of record that the revision petition was tiled against the order dated 4.10.1981 in the Court of District Judge. It was entertained. The respondents were served and were represented by a Government Pleader. It is true that the learned Government Pleader raised objection regarding the pecuniary jurisdiction of the learned District Judge but the point involved a question of law which was thrashod out by the learned District Judge who found that the Court had jurisdiction. This Court, however, took a contrary view while deciding the writ petition against the order dated 1.9.1982 of learned District Judge, Lahore. To my mind the Civil Revision is to be treated as an application and as such since I am not inclined to hold that the proceedings were not being conducted bona fide in the Court of learned District Judge or being defended in this Court in the course of writ petition with the same intent the petitioner would not be entitled to the benefit of Section 14 of the Limitation Act, 1908. The original Civil Revision filed before the learned District Judge and refilled in this Court shows that the same was filed on 25.10.1981 against the order dated 4.10.1981 of the learned Trial Court. It remained pending (in the light of the order passed by this Court in W.P. No. 3987/82) till 13.8.1984 when it was returned. It was filed in this Court on 20.8.1984. Thus excluding the said period out of available period of limitation of 90 days, the Civil Revision would still be within time. I may state here that the Civil Revision pertains to a period when there was no statutory period of limitation prescribed for filing of the Civil Revision and in this view of the matter 1 do not find it a case suffering from !Aches as well.
4. As a result of the above observation this Civil Revision is allowed . The order dated 4.10.1981 of learned Senior Civil Judge, Lahore is set aside. The application of the petitioner is allowed. In the first instance it is directed that the Director General of the respondents Department shall appoint an officer holding the post of Director in his Department to he an Arbitrator who shall enter upon the reference and make and publish his award within the prescribed period. The Director General shall see to it that the Arbitrator is so appointed within four weeks of this order. In case the Director General fails to make the said appointment, the petitioner shall approach the Court and for the purposes the application filed under Section 8 of the Arbitration Act, 1940 will he deemed to be pending. The Court shall after hearing the parties pass an appropriate order in accordance with law to appoint an Arbitrator. Parties are left to bear their own costs. Record he remitted hack to the learned Senior Civil Judge, Lahore alongwith a copy of this order for compliance.