AMJAD ALI, J. -- Pursuant to an offer for the sale of ninety percent shares of Ravi Engineering Limited made by the Privatisation Commission. The hid of M/s. Pertosin Products (Pvt.) Limited, a company incorporated under the laws of Singapore, at the rate of Rs.17.8 per share was accepted. The total sale price of sixteen million rupees offered by the petitioners was agreed to he paid to the respondent Commission in the following manner:-
(i) Forty percent of the total sale price, to he paid before the date of the sale and agreement; and
(ii) sixty percent of the balance price was to he paid in three equal instalments or six equal half yearly instalments with mark up at the rate of sixteen percent per annum, amounting to three million seventy-two thousand rupees (Rs .3,72,000/-).
2. According to the agreement, dated the 21st December, 1995, executed between the petitioner's Company and the Privatisation Commission, Ministry of Finance, Government of Pakistan, the forty percent of the sale price was paid through four bank drafts, dated 1.6.1995, 13.6.1995, 27.6.1995 and 13.7.1995 amounting to Rs.5,00,000/-. Rs.8,00,000/-, Rs.28,60,000/- and Rs.22,40,000/-. For the balance amount of Rs.96,00,000/- (Nine million six hundred thousand rupees) representing sixty percent of the consideration the petitioner gave an irrevocable and unconditional Bank Guarantee, dated 21.7.1996, of M/s. Hong Kong and Shanghai Banking Corporation Limited, Islamabad Branch, for an amount of Rs.12,672,000/-.
3. The petitioner's Company (lid not pay the remaining 60% of the sale price referred to above on the ground that the authorised Auditor appointed by the respondent Commission had reported in terms of the agreement that the liabilities of the Ravi Engineering Limited exceeded its assets and determined that it had a negative change in the not worth amounting to Rs.20.664 millions. It was claimed that instead a sum of Rs.18.50 million was payable by the Privatisation Commission to the petitioner's Company. The relevant part of clause 11 of the agreement dated 21.12.1995 is reproduced below:- "(a) The Seller shall appoint an Auditor from its approved panel of Auditors (with the consent of the Buyer) to determine the change in the Net Worth of the company between the following dates:- Date of financial statements provided to the Buyer as part of the Information Memoranda, at the time of bidding (Audited accounts as on June 30, 1994).
(2) Date of transfer of the company as defined in Clause 4 above" (which was determined as 6.1.1996).
4. Since the matter could not be resolved between the parties, the petitioner moved a petition under Section 20 of the Arbitration Act, 1940, for referring the matter to the sole Arbitrator, namely, Secretary, Ministry of Finance, Government of Pakistan, in terms of the agreement, dated 21.12.1995.
An application under Section 41 of the Arbitration Act, 1940, read with Sections 94 and 151 of the Code of Civil Procedure and Order XXXIX rules 1 and 2 thereof was also tiled alongwith the petition moved under Section 20 ibid, praying that the respondent Privatisation Commission be restrained from encashing the Bank Guarantee, dated 21.7.1996, given as security for payment of 60% of the balance amount of consideration till the disposal of the said petition and completion of arbitration process. This application was turned down by order dated 25.9.1997 of the learned Civil Judge, 1st Class, Islamabad, seized of the matter.
The instant revision petition has, therefore, been brought assailing the order of rejection of the application for interim relief prayed by the petitioner's Company.
5. The revision petition was opposed on behalf of the Federal Government and the Privatisation Commission, whereas Hong Kong and Shanghai Banking Corporation Limited, Islamabad, the respondent No. 4, which had given the Bank Guarantee on behalf of the petitioner, came up with the plea that, since the period of Bank Guarantee had expired, the same cannot be encashed by the Privatisation Commission of Pakistan.
6. The contesting respondents also assailed the maintainability of the revision petition on the ground that instead of revision petition, an appeal should have been filed under the provisions of clause (r) of rule 1 of Order XLIII of the Code of Civil Procedure. In this respect, reliance was placed on Province of Baluchistan Vs. Sardar Muhammad Usman Khan (PLD 1987 Quetta 33) to urge that in such cases appeal was maintainable in the High Court and not before the successor District Judge.
7. Sh. Saeed Ahmad, Advocate, the learned counsel representing the Privatisation Commission contended that although this Court is empowered to convert the revision petition into an appeal, but at this belated stage when the arbitration proceedings have already been completed, the petitioner does not deserve such application moved under Section 41 of the Arbitration Act, 1940, read with Sections 94, 151 and Order XXXIX rules 1 and 2 of the Code of Civil Procedure shall, therefore, be taken as a part of the said proceedings, notwithstanding that certain provisions of the Code of Civil Procedure had been referred to in the said application and that the proceedings under the Arbitration Act are civil proceedings and by virtue of Section 41 of the Arbitration Act, 1940, the provisions of the Code of Civil Procedure apply to the proceedings under the said Act. But the provisions of the Code of Civil Procedure would not apply when the Act itself, provides a specific procedure for any proceeding or invests with a substantive rights. In this respect, Section 39 of the Arbitration Act, 1940, which specifies the orders against which an appeal lies is reproduced below:-
(I) "An appeal shall lie from the following orders passed under this act (and from no others) to the Court authorised by law to hear appeals from original decrees of the Court passing the order:- An order-
(i) superseding an arbitration;
(ii) on an award stated in the form of a special case;
(iii) modifying or correcting an award;
(iv) tiling or refusing to tile an arbitration agreement;
(v) staying or refusing to stay legal proceedings where there is an arbitration agreement:
(vi) setting aside or refusing to set aside an award.
Provided that the provisions of this section shall not apply to any order passed by a Small Cause Court."
8. It is clear from the above that the aforesaid provisions do not provide tor an appeal where the Court refuses to grant interim injunction. In such matters, a revision would he maintainable. In this respect, support is drawn from a case reported in NLR 1980 AC 542 where in a similar matter it was held by this Court that power to grant temporary injunction is to he found in Section 41 read with Second Schedule of the Arbitration Act, 1940, but where the Court refuses to grant temporary injunction an appeal under Section 39 of the Arbitration Act, 1940, is not maintainable. Similar view was taken in The State of Himachal Pradesh and another Vs. M/s. H.S. Sobti and Co. (AIR 1973 Himachal Pradesh 1) and M/s. Sharma Ice Factory Vs. M/.s. Jewel Ice Factory and others (AIR 1975 Jammu and Kashmir 25). It is thus clear that no appeal against the refusal of interim injunction in an application moved under Section 41 of the Arbitration Act, 1940, was maintainable under the law and in that case only a revision could have been tiled. Accordingly, the instant revision petition was in order.
9. Learned counsel for the Privatisation Commission relying upon Pakistan Engineering Consultants Vs. Pakistan International Airlines Corp. & BCCI and others (1993 CLC 882) and Messrs National Construction Ltd. Vs. Aiwan-e-lqbal Authority (PLD 1994 SC 311), contended that, since under the terms of the agreement the petitioner was hound to make the payment of remaining 60% of the consideration within a specified period, any deviation therefrom would he a clear breach of the contract. In case of grant of temporary injunction prayed by the petitioner, the Privatisation Commission and the Government of Pakistan were likely to suffer a collosal loss of revenue and thereby the balance of convenience does not lie with the petitioner's Company for such relief.
10. The main question which requires determination is whether in view of any negative not wealth of the Ravi Engineering Limited stated to have been determined by the authorised Auditors, the petitioner can withhold or refuse to make payment of 60% of the consideration as agreed between the parties or the payment of 60% of the balance amount of consideration is independent of the determination of the not wealth of the Unit sold to the petitioner. It is admitted between the parties that pursuant to the petition under Section 20 of the Arbitration Act, 1940, moved by the petitioner's Company, the matter was referred to the Arbitrator who has already submitted his award. After the passing of award and its filing in the Court, the petitioner has also moved an application to the Court for making it a rule of the Court. The acceptance of the plea of the petitioner for referring the matter to the Arbitrator prima fide proves that a dispute had arisen between the parties which required determination through Arbitration. It was therefore, not justified for the learned Civil Judge to deny the relief of temporary injunction after he had referred the dispute between the parties to the Arbitrator for determination. It is also admitted fact that till this date the Guarantee submitted by the petitioner has not been encashed. Because of the earlier stay order issued by the Civil Court and then by this Court. Hence, at this belated stage when even the arbitration award has been filed in the Court, it would not he in the interest of justice to deny the interim relief prayed by the petitioner as the same would render-the whole proceedings as infructuous.
11. The learned counsel representing the Hong Kong and Shanghai Banking Corporation, the respondent No. 4, was, however, of the view that at this stage, the Privatisation Commission was not competent to encash the Bank Guarantee given on behalf of the petitioner's Company for the reason that such Guarantee was given for a period of one year only which period has already been expired. After the expiry of the said period of one year, respondent No. 4 was not liable to pay any amount under the Guarantee even if the Privatisation Commission may desire to encash the same.
This claim is obviously outside the scope of the controversy involved in the present revision. The issue whether the impugned Bank Guarantee is still operative or it has expired because of the afflux of time and has thus rendered ineffective are the matters which require consideration by the Privatisation Commission. If the position taken by respondent No". 4 is correct it is for the Privatisation Commission to ask for further Guarantee or extension thereof for any further period or take any other action against the petitioner or respondent No. 4 permissible under the law and the agreement executed between the parties. Nevertheless, such controversy does not require determination by this Court in the instant proceedings.
12. In view of the above, the impugned order, dated 25.9.1997 passed by the learned Civil Judge, Islamabad, in respect of the application moved under Section 41 of the Arbitration Act read with Sections 94 and 151 of the Code of Civil Procedure and Order XXXIX rules 1 and 2 thereof is set aside and the respondents are restrained from encashing the Bank Guarantee numbering 95-1-042, dated 21.7.1996 till the disposal of the petition moved by the petitioner under Section 20 of the Arbitration Act, 1940. The present revision petition is alleged accordingly without an order as to costs.