An arbitration award dated 18-7-1977, the value of the subject-- matter of which was Rs.30,000 was made a rule of Court by Syed Irshad Hussain Abidi, Civil Judge, 1st Class, Jauharabad on 31-7-1977.
An application. Under section 12(2), C.P.C. Read with sections 20 and 33 of the Arbitration Act was made by respondent No.1 that the said decree was the result of fraud and misrepresentation. It was contested by the petitioners and was dismissed on 7-5-1983 by Mian Hameed Jalani, Civil Judge, 1st Class, Khushab. This order was challenged by respondent No. l by filing revision, which revision petition was accepted on 13-2-1985 and the matter was remanded for decision in accordance with law with a direction to the parties A to appear before Mr. Saif-ur-Rehman Khan, Civil Judge, 1st Class, Jauharabad. Eventually the said application came to be decided by Syed A.I Naqi Tanvir, Civil Judge, 3rd Class, Jauharabad on 16-7-1986 and was accepted by setting aside the decree, dated 31-7-1977. The petitioners filed a revision thereafter, which was dismissed by the learned District Judge, Khushab on 28-1-1987. These orders have been challenged through this petition under Article 199 of the Constitution of Islamic Republic of Pakistan (1973).
2. The learned counsel for the parties have addressed arguments on the point of jurisdiction of the learned Civil Judge, who had decided the application. The contention of the learned counsel for the petitioners is that value of the subject-matter of the Award was Rs.30,000, which was made rule of Court by a Civil Judge, 1st Class, the said decree could not be set aside by a Civil Judge, 3rd Class as the value of the subject-matter was B beyond his pecuniary jurisdiction. It is contended that the view taken by the learned Civil Judge as also the learned District Judge that successor Civil Judge could set aside such a decree is not correct as the application under section 12(2), C.P.C. Would lie before a Court having jurisdiction in the matter.
3. On the other hand, the learned counsel for respondent No.1 contends that it is the same Court which had passed the final judgment and decree which is competent to decide the application under section 12(2), C.P.C. According to him, the Civil Judge who had passed the order in the present case being the successor Court, which granted the decree was alone competent to decide the application. It is further contended that this point was not pressed before the learned Civil Judge concerned, therefore, could not be allowed to be raised at latter stages.
4. There is no dispute that value of the subject-matter of Arbitration Award was Rs.30,000, which was made rule of Court by a Civil Judge, 1st Class. It is also not disputed that pecuniary jurisdiction of a Civil Judge, 3rd Class was upto Rs.25,000. In the first round the application was heard and decided by Mian Hameed Jilani, Civil Judge, 1st Class and was dismissed and it was on remand by the learned District Judge that it had to be heard afresh. The direction contained in the remand order, dated 13-2-1985 was for appearance before the Civil Judge, 1st Class, Jauharabad for further proceedings in the matter. It is, however, not apparent from the record, how that application came up before a Civil Judge 3rd Class.
5. Be that as it may, there was an objection before the Civil Judge as to the lack of jurisdiction in the matter. However, he rejected the objection that he was the successor of the Court of Mr. Irshad Hussain Abidi, Civil Judge, who had passed the decree. The objection again was raised before the learned District Judge, who dealt with the same as follows:-- "I have come to the conclusion that the argument advanced by the learned counsel for the petitioner that application under section 12(2), C.P.C. Could not be disposed of by Civil Judge 3rd Class because the subject-matter was beyond his jurisdiction is without any force because the pecuniary jurisdiction relates to the passing of the decree and not to application under section 12(2), C.P.C."
The learned counsel for the parties have confined their initial arguments as to the jurisdiction of the Civil Judge, 3rd Class in passing the impugned decree, no arguments were advanced on merits for if the Civil Judge, 3rd Class had no jurisdiction, the matter would have to be remanded to the Court of competent jurisdiction. Both the learned counsel have, however, stated that there is no direct precedent on the point.
6. In order to resolve, the controversy, it will have to be seen as to which Court would have been competent to entertain the application under section 14(2) of the Arbitration Act, 1940 for making an award rule of the Court. Section 2(c) of Arbitration Act (hereinafter to be mentioned as the Act) defines the Court as follows:-- "'Court' means a Civil Court having jurisdiction to decide the question forming the subject-matter of the reference if the same had been the subject-matter of a suit."
Clause (e) of section 2 of the Act defines "reference" means a reference to arbitration. It is this Court which is competent to entertain and decide the application under section 14 of the Arbitration Act. The reading of section 31 of the Act, removes any doubt whatsoever that an award is to be filed in a Court having jurisdiction in the matter to which the reference relates. Clause (c) of section 2 of the Act had been subject of judicial interpretation in some cases. In M.A. Jalil v. Group Capt. (Retd.) Salah-ud-Din Khan 1983 CLC 1685 it came to be considered in somewhat different context as to the competency of .Revision petition before the District Judge, but has relevancy in respect of true construction of section 2(c) of the Act. It was observed that "it also provides for the Court where an award is to be filed. By reading section 31 with the definition of the term "Court" given in section 2(c) of the Act, it is plain that the award is to be filed in that Court, which will have jurisdiction to decide question forming the reference if the same had been the subject-matter of the suit". It was further observed that `in view of the provisions of section 14 read with section 31 of the Arbitration Act, it is reasonable to construe that the award is to be filed in that Court which will have the jurisdiction to decide the question forming the subject-matter of the reference, if the same had been the subject-matter of the suit". In Province of Punjab through Secretary to Government of Punjab Housing and Physical Planning Department and another v. District Judge, Lahore and 3 others PLD 1984 Lah. 515, it was observed that under section 2lc) of the Arbitration Act, a reference is to be considered as identical to a suit and the amount or value of the subject-matter of the reference furnishes a basis for fixation of the forum for hearing the application". It was further observed that "computation of the subject-matter of the reference is to be made according to the market value thereof". Reading section 2(c) of the Act with Rule 4 of the Arbitration Rules framed by the High Court, it was observed that "the value of the subject-matter of reference is the test for discovery as to whether revision lies before the District Court or the High Court". If the market value of the reference is the test for determining the forum of appeal or revision the same test and principle will determine the forum for any application under the Act.
7. In Hitachi Limited and another v. Rupali Polyester and others 1998 SCMR 1618, section 2(c) and section 33 of the Act were considered and it was observed as follows:-- "It may be observed that clause (c) of section 2 of the Act gives the definition of the Court by providing that 'Court' means a Civil Court having 'jurisdiction to decide the questions forming the subject-matter of the reference if the same had been the subject-matter of a suit, but does not, except for the purpose of arbitration proceedings under section 21, include a Small Cause Court'. In other words, by virtue of above definition the same Court will have jurisdiction in respect of arbitration matter, which would have jurisdiction if the matter would not have been covered by the arbitration agreement. It may further be observed that section 33 of the Act, referred to hereinabove, not only covers the question as to the existence or validity of an arbitration agreement but also of an award and also to have the effect of either determined."
8. That seems to be the basis that when application under section 14(2) of the Act was filed, although the value for the purposes of court-fee and jurisdiction was fixed as Rs.2, it was entrusted to a Civil Judge 1st Class, in view of the value of reference (the subject-matter of award), which was made the rule of Court by a Civil Judge, 1st Class. It is also of some relevance that when the first application filed by respondent No.1 was dismissed by the Civil Judge, 1st Class, while accepting the revision petition there against, it E was remanded and the parties were directed to appear before the Civil Judge 1st Class. It had, thus, to be heard and decided by the Civil Judge, who had the pecuniary jurisdiction in the matter.
9. Undisputedly the Civil Judge; who accepted the application by order, dated 16-7-1986 had the pecuniary limitation upto Rs.25,000. Since he could not have decided the suit of higher value, he could not decide the application under the Act as, well. 'The expression "Court" used in E section 12(2), C.P.C. Has, thus, to be construed as a Court having jurisdiction in the matter. Such a construction finds a support from section 6, C.P.C:, which provides "nothing herein contained shall operate to give any Court jurisdiction over suits the amount or value of the subject-matter of which exceeds the pecuniary limits (if any) of its ordinary jurisdiction".
10. It appears to be quite anomalous that though a Civil Judge 3rd Class will not be competent to pass a decree in view of the value of the subject---matter, yet would be competent to pass an order to set aside such a decree. I am of the view that since the value of the subject-matter of the reference, the award and the decree passed by the Court was beyond the pecuniary limits of Civil Judge 3rd Class, he lacked jurisdiction in the matter. In The Chief F Settlement Commissioner, Lahore v. Raja Muhammad Fazil Khan and others PLD 1975 SC 331, it was held that "an order is treated to he as void which is made by a Court or Tribunal which had no jurisdiction either as regards the subject-matter, the pecuniary value or the territorial limits where the dispute arose". It was, thus, held that "such an order would amount to usurpation of power unwarranted by law, and accordingly it would be nullity". In Suba Khan v. Rehmat Din and 2 others 1980 CLC 589 it was observed that "an order passed by a Court having no pecuniary jurisdiction is ultra vires.
11. In view of ,the above, order of Civil Judge 3rd Class, dated 16-7-1986 accepting the petition filed by respondent No.1 was illegal and without lawful authority as also its affirmation by the learned revisional Court. Both are declared as of no legal effect. As a consequence of the above, the application filed by respondent No. 1 shall be heard and decided afresh in accordance with law.
The parties are directed to enter appearance before the learned District Judge, Khushab on 31-1- 2001, who will entrust the matter for its hearing to a Court of competent jurisdiction. This petition is accordingly accepted to this extent. No order as to costs.