' Learned Civil Judge, vide order, dated 2-3-1992, has made the award, dated 9-3-1986, pronounced and signed by Mr. Yousaf Ghani, the Chief Executive of Burewala Textile Mills Ltd., the Arbitrator, between the parties, as rule of the Court, by rejecting the objections to the award filed by the appellant and has granted a decree in favour of the respondent to the tune of Rs,5,31,651.58. Hence this appeal.
2. Briefly stated the facts of the case are that on 2-1-1990, respondent filed a petition under section 20 of the Arbitration Act, against the appellant, claiming that by virtue of an agreement, dated 6-10-1990 between the parties, the respondent appointed the appellant as its distributor for the sale and supply of product "Gamma Feed"; there is an arbitration clause in the agreement, postulating that in case of any dispute between the parties qua their rights and liabilities under the agreement, the same shall be referred for the determination by the named Arbitrator i,e, Yousaf Ghani, Chief Executive of the Burewala Textile Mills Ltd. It was the case of the respondent that the appellant committed certain breach of the terms and conditions of the agreement and issued cheques to the respondent to the tune of Rs,3,81,651.58, which were dishonoured, thus, a dispute had arisen between the parties, in term of the arbitration clause, which should be referred to the Arbitrator named above. This application was contested by appellant. However, learned Judge allowed the application and matter was referred to the Arbitrator.
3. Learned Arbitrator, after conducting the arbitration proceedings, made and pronounced his award on 9-3-1986, awarding a sum of Rs,5,31,651.58, to the respondent. Appellant filed objections to the award, which were contested by the respondent; the trial Court, framed the following issues:--
(1) Whether the objections filed to the award are barred by limitation? OPA
(2) Whether the award of the arbitration is liable to be annulled for the grounds mentioned in the objection petition? OPO
(3) Relief.
' After recording of the evidence, objections have been rejected and the award has been made rule of the Court, through the order, dated 2-3-1992. Hence this appeal.
4. Learned counsel for the appellant contends that Yousaf Ghani, Chief Executive, Burewala Textile Mills was an interested person and thus, on account of the bias, he was disqualified to act as an Arbitrator and to pronounce his award. It is also submitted that the Arbitrator has committed an error of misreading and non-reading of. The evidence produced before him, particularly, has taken into consideration the photo copies of the cheques, which were allegedly, claimed by respondent having been issued by the appellant and dishonoured by the Bank; the photo copies of the cheques in absence of the original were inadmissible in evidence and, therefore, could neither be produced on the record nor relied upon by the Arbitrator. It is also submitted that the Arbitrator, has wrongly awarded Rs,1,50,000, as compensation/damages to the respondents; no reason for justifying the compensation to the tune of Rs,1,50,000 has been given in the award. The Arbitrator could not award such compensation on the basis of his whims and caprice, without there being any material on the record to establish that respondent is entitled to such compensation. It is also submitted that the Arbitrator has violated the provisions of section 26-A, as no valid reason has been given in the award.
5. I have heard learned counsel for the parties. As regard the first objection is concerned, suffice it to say that from the record, it does not stand established that Yousaf Ghani had any personal interest in the matter and was disqualified to act as an Arbitrator. He at the relevant time, when the agreement was entered into between the parties, was the Chief Executive of Burewala Textile Mills and the appellant had full knowledge that the products, the subject-matter of the agreement were manufactured by Burewala Textile Mills, thus, being fully conscious of nature of his office, still the appellant with open eyes and out of his freewill accepted him as an Arbitrator. It is not reflected on the record that if on account of his association with Burewala Textile Mills, the Arbitrator has imported his personal knowledge into the matter or has acted in a manner, which could render the arbitration proceedings or the award as bias.,/b>
6. As regard the other submission, that the arbitration has considered the various photo copies of the cheques, without original being produced in evidence, suffice it to say that the issuance of the cheques, had not been disputed by the respondent. Even otherwise at the relevant time, when the cheques were accepted on the record by the Arbitrator, no objection was raised by the respondent. It may not be out of place to mention here that according to Article 1 of the Qanun- eShahadat Order, 1984, the provisions of the Order (ibid) are not applicable to the arbitration proceedings, thus, even if the photocopies were taken on record by the Arbitrator, and have been relied upon by him, it cannot be held that the proceedings on the above account stand vitiated. Moreover, as has been argued by the learned counsel for the appellant that the cheques, the photo copies whereof, were placed on record, were subsequently returned to the appellant by the respondent and thereafter new cheques were issued in lieu thereof, which were duly encashed. It was for the appellant to have produced evidence on the record to establish the above plea. This is conspicuously missing, no bank record has been produced by the appellant to substantiate this fact, therefore, at this stage, the appellant has no merits to raise objection to the conduct of the arbitration proceedings and the award, due to the lack of proper proof of the cheques.
7. The other plea that the reasons have not been given, thus, provisions of section 26-A, have been violated, I have carefully read the award and find that the Arbitrator has taken pains to give the reasons in granting amount of Rs,3,81,651.58 i,e, the amount, which is qua the dishonoured cheque, therefore, the plea raised has no substance.
8. The submission of learned counsel that the award has been given against a person, who was stranger to the proceedings, i,e, Messrs Malik Distributor and had nothing to do with the appellant, suffice it to say that according to the main agreement between the parties, the appellant is proprietor of Malik Distributor/Malik Agency and has throughout been acting as proprietor thereof; the cheques in question have also been issued by him, therefore, it is not an award against the stranger to the proceedings, rather against the appellant, who was conducting his business in the name and style of Malik Distributor or Malik Agency, which was his business name and thus, respondent could sue the appellant, either in his personal or in his business name, as is envisaged by provisions of Order 30, Rule 10, C.P.C.
9. As regard the last submission that learned Arbitrator has awarded compensation amounting to Rs,1,50,000 without there being any evidence on the record produced by the respondent to justify the said damages/compensation, I have perused and considered the award and find that respondent has failed to prove the exact damages to the tune of Rs,1,50,000. The Arbitrator, just on the basis of his assumption has awarded this amount to the respondent, for which no valid reasons have been given in the award, therefore, to this extent, the award is bad and could not be made rule of the Court.
10. Accordingly, the award to the extent of Rs,1,50,000, as also the order impugned of the learned Civil Judge, in this appeal, is set aside and the award of the Arbitrator to the tune of Rs,3,81,651.58, is made rule of the Court and a decree is passed accordingly.
11. Before parting I must observe that the argument of learned counsel for the appellant that the Arbitrator has misread the evidence on record, it may be held that according to Ashfaq Ali Qureshi's case 1985 SCM R 597, the Court while considering the objection to an award, should not sit as a Court of appeal and find out the latent error in the award, rather it is to be seen if any blatant illegality has been committed by the Arbitrator, which constitutes misconduct. In the instant case, I am not convinced that while pronouncing his award, the Arbitrator has committed any error of misreading or non-reading of the record before him, which could result in vitiating the award.
' In view of what has been stated above, this appeal is partially allowed, the award and the impugned order of the learned Civil Judge to the extent of Rs,1,50,000 granted as compensation/damages is set aside. But for the remaining amount of Rs,3,81,651.58, the award and the order is upheld. Disposed of.