' The respondent was awarded a contract by the appellant for the construction of school building vide agreement, dated 7-10-1963. The work under the contract was commenced, while work was so in progress, the contract was cancelled on 8-11-1965. The respondent on 10-11-1965 filed an application under section 20 of the Arbitration Act, 1940, for order directing the appellant to file arbitration agreement in Court. The appellant objected to the territorial jurisdiction of the Court at Lahore and the competency of the petition. In the first instance the matter of territorial jurisdiction was dealt with as preliminary issue and answered in favour of the respondent vide order, dated 13- 4-1967. Thereafter, following issues were framed:--
(1) Is petition competent?
(2) Is it necessary, just and proper to appoint an Arbitrator? O.P.A.
(3) Relief.
' Vide order, dated 6-3-1968 these issues were answered in favour of the respondent and Mr. Muhammad Ashraf Khan, Superintending Engineer. Sargodha, Provincial Building Circle at Lyallpur, was appointed as a sole Arbitrator. The Arbitrator entered upon reference and made and published his award on 5-1-1970 awarding a sum of Rs,12,20,547 in favour of respondent. The award was filed in Court and statutory notices were issued. The respondent did not but the appellant did file objections against the said award. The main objection to the award was that very order of appointment of Arbitrator while accepting the petition under section 20 of the Arbitration Act, 1940 was invalid and as such the award is without jurisdiction. It was also alleged that the Arbitrator had not recorded evidence and further that the award is against the evidence on record and that he had misconducted himself and proceedings. The objections were resisted by the respondent.
Following issues were framed on 11-2-1970:--
(1) (1) Whether the objections to the award filed by the respondent Board of Governors are vague and indefinite? If so, what its effect?
(2) Relief.
' On 21-3-1970 learned counsel for the parties made a statement opting not to lead any evidence.
Arguments were addressed. The learned trial Court rejected the objections and refused to set aside the award and made it rule of the Court on which a decree was to follow. This was done vide order, dated 4-6-1970. The present first appeal from order has been filed against the said order. In the first instance the matter was heard by Mr. Justice Shafi-ur-Rehman (as his Lordship then was).
Vide judgment, dated 9-7-1971 the F.A.O. Was allowed on the ground that since terms of clause 56 of the agreement were not complied with, the very reference itself was bad. Against this order L.P.A.
No,8 of 1971 was filed. L.P.A. Was heard by a Division Bench comprising of Mr. Justice Fazal Karim and Mr. Justice Mian Allah Nawaz. The Honourable Judges could not agree with and formulated the following three questions on which they had disagreed:--
(i) Whether the ground of incompetence or invalidity of reference to arbitration can, after once it has been raised by a party and decided against him in proceedings under section 20 of the Arbitration Act, 1940, be a ground for the setting aside of an award under section 30 of that Act?
(ii) Whether in the circumstances of the case there was substantial compliance with the provisions of clause (56) of the contract deed?
(iii) Whether the provisions of clause (56) of the contract deed could be waived and were in point of fact waived by the owner, respondent herein?
' The matter was referred to Mr. Justice Karamat Nazir Bhandari, in terms of section 98, C.P.C. His Lordship answered first question in negative and latter two in affirmative. The result was that L.P.A.
Was allowed and said judgment, dated 8-7-1971 was set aside and appeal remanded for decision on merits.
2. Learned counsel for the appellant contends that the Civil Court at Lahore had no territorial jurisdiction to entertain and decide the petition under section 20 of the Arbitration Act, 1940 and as such the entire proceedings culminating in the impugned award are without jurisdiction and coram non judice. Further contends that the award is based on no evidence.
3. Learned counsel for the respondent on the other hand contends that like matter of competency of the reference, question of territorial jurisdiction was also decided by the Court while allowing the application under section 20 of the Arbitration Act, 1940, and that the same was not appealed against. Replying the said second contention of the learned counsel contends that no attempt was made by the appellant to establish the said objection when Arbitrator had filed his award with all the proceedings and documents in Court.
4. I have examined the records. No doubt the appellant did question the territorial jurisdiction of the Court at Lahore to entertain the application under section 20 of the Arbitration Act, 1940. However, a preliminary issue was framed, and was decided by the Court on 13-4-1967. Thereafter, the other issues arising out of the said application were framed and application itself was decided on 6-3- 1968 and the matter was referred to the Arbitration of Mian Badar-ud-Din Retired Engineer. Now this order for all purposes was an order under section 20 of the Arbitration Act, 1940, calling upon the party to file arbitration agreement within the meaning of section 39 (iv) of the Arbitration Act, 1940 and was appealable. No appeal was filed. On the other hand record shows that pursuant to the said order the fee of the Arbitrator was deposited by the respondent. It appears that said Arbitrator i,e, Mian Badar-ud-Din was not acceptable to the appellant. A joint application was filed by the parties on 11-11-1968 proposing names of three persons requesting the Court to appoint anyone of them as an Arbitrator. It was in fact on this application that order was passed by the learned Senior Civil Judge on 12-11-1968 appointing Muhammad Ashraf Khan as an Arbitrator and he entered upon the reference. The present F.A.O. Has been filed against the order of the learned trial Court refusing to set aside the award. To my mind, no appeal having been filed against the order, dated 6-3-1968 and the Arbitrator having been appointed on the joint request of the parties on 12-11-1968, the appellant stands debarred from raising objection to the territorial jurisdiction of the Court deciding the application under section 20 of the Arbitration Act, 1940. By virtue of section 41(a) of the Arbitration Act, 1940, the provisions of C.P.C. Are to apply to all proceedings before the Court and to all appeals under the said Act. It is by now well-settled that a distinction has to be drawn between want of inherent jurisdiction and irregular exercise or assumption of jurisdiction because the former does render the decree a nullity but the latter cannot be impugned in a collateral action and it can be set aside only in proceedings like appeal, which I have already stated was available to the appellant under section 39 of the Arbitration Act, 1940. However, this right was not exercised.
Apart from this even if the appellant was to file appeal against the said order of accepting application under section 20 of the Arbitration Act, 1940, dated 6-3-1968, then even in the Court of appeal the mere fact that objection was taken in the trial Court would not have been enough justification for raising the objection as section 21, C.P.C. lays down that such an objection will not be allowed by an Appellate Court unless there has been a consequent failure of justice as a result of assumption of territorial jurisdiction by wrong Court. There is no plea and learned counsel is not able to state that as to whether, if any, failure of justice has taken place because of the alleged wrongful assumption of territorial jurisdiction by the Court at Lahore, particularly in the facts and circumstances of this case stated above. I, therefore, do not find any force in the said contention of the learned counsel based on said objection of lack of jurisdiction. Coming to the said second contention I find that Arbitrator had filed his award in Court with all documents and proceedings undertaken by him. I have examined the objections that were filed. I find that objections mainly revolved around the said plea of incompetency of the reference. Other allegations are vague. It has, however, been stated that evidence produced by the appellant has not been recorded in writing and documents were not considered. Neither is there any explanation in the memo. Of objection as to which was that evidence that was not reduced into writing and which are those documents that were not considered. I have already stated above that learned counsel for the parties made a statement that they would not be producing any evidence. I find no attempt on the record on behalf of the appellant to summon Arbitrator for questioning. No other evidence was led.
So far as the affidavit accompanying the memo. Of objection is concerned, it is verbatim copy of the said objections and nothing turns on the same in the absence of any particular I may further state here that the issue was framed on 11-2-1970. The F.A.O. Was filed in the year 1970. The case ultimately came up on its merit in the year 2001. Over a period of more than three decades, there is no objection on record as to the frame of issue or the mode in which, albeit with the agreement of the parties, the proceedings were conducted. In the said state of affairs I do not find any ground being made out for setting aside the award of the Arbitrator. It may be noted here that the matter of reference to arbitration, arbitration proceedings, award, objections and their decision took place during the period 1965-1970. I may, here, refer the observations recorded by the Supreme Court of Pakistan in the case of Ashfaq Ali Qureshi v. M.C., Multan 1985 SCM R 597 appearing at page 602 in para. 12 thereof: "It is well established rule of law that where a dispute is referred to an Arbitrator of the choice of the parties and he makes an award, it becomes the duty of the Court to give every reasonable intendment in favour of the award and lean towards upholding it rather than vitiating it. In this connection I may usefully reproduce the dictum of Koy, L.J., in In re: Heihley, Maxsted & Co. And Durant & Co. The Courts have already been exceedingly cautious in dealing with awards. Prima facie, an award is final and not subject to appeal: the Arbitrator is chosen by the parties who presumably prefer a domestic tribunal which is not bound rigidly by the rules of evidence: and a mistake of law or fact is not, per se a ground for sending back the award of such a Tribunal".
5. For all that has been discussed above, this F.A.O. Has no force and is accordingly dismissed with costs.