This civil revision is directed against the order, dated 26-2-1991 passed by the learned Civil Judge, Lahore, whereby the application filed by the respondent under section 8 read with section 20 the Arbitration Act was accepted and the matter was referred for the arbitration.
2. The relevant facts are that the respondent being an approved contractor was granted work for the construction of grain godowns of 2000 tons capacity at Mughalpura, Lahore, for an estimated amount of Rs,18,72,820. According to the petitioner/ respondent, he started work on 12-4-1975 and ten running payments for the work done were made to the respondent but despite the fact that the work was completed in the extended period, yet instead of preparing the final' bill for the gross amount of Rs,18,64,437, the respondent was paid an amount of Rs,1,03,528.83 vide cheque and voucher, dated 4-4-1977. It is averred that the bill did not include the entire work executed at the site and numerous stores stocked in the godowns and certain measurements were not taken and counted -for. In all, an amount of Rs,6,00,000 was ignored from the 10th running bill for the work done. It was the case of the respondent that all substantial work was done by him and when the remaining work was to be done and final touches were to be given, the work was withdrawn by the petitioner and was got completed at the risk and cost of the respondent. The completion certificate has also not been issued to the respondent and the security deposit had also not been released to him. In the background aforenoted, the respondent had issued notice to the petitioners on 20-2- 1990 and had claimed cause of action/therefrom. It was lastly submitted that according to the arbitration clause, the matter be referred to Mr. Ijaz Ahmad, Superintending Engineer, Provincial Build Department, Lahore, while the petitioners be called upon to nominate their arbitrator to adjudicate the dispute between the parties. On the basis of above said averments, the petitioners prayed that the arbitration agreement be filed in the Court and the matter be referred to the arbitrators.
3. The petition aforenoted was resisted by the petitioners who inter alia maintained that the same is barred by time and is not competent for the reason that the firm is no . registered under the Partnership Act and that ' the same does not disclose any cause of action. It was also submitted that the total payment has been made to the respondent in accordance with the final measurements recorded in the presence of the respondent. It was the submitted that the remaining work was carried out at the risk and cost of the respondent.
4.The learned trial Court having heard the arguments proceeded to repel the objection of limitation as also the other objection that there being no auotitration clause in the agreement, the question of referring the alleged dispute to the arbitrators does not arise vide its order, date 26-2-1991 which is impugned in the present revision petition.
5.Learned counsel for the petitioners argued that the contract was terminated in the year 1977 and the remaining work was completed at the risk and cost of respondent, therefore, the three years' period for filing the application of the kind expired in the year 1980 while the application was filed in the year 1990, therefore, the same was hopelessly barred by limitation. It was then contended that the clause providing for arbitration in the condition of contract, having been crossed and scored out, the 'respondent could not take benefit of the same muchless the matter be referred to the arbitrators. Learned counsel for the respondent on the other hand application that the limitaion in filing an application under sections 8 and 20 of the "Arbitration Act starts from the notice issue in / that regard and that being so, the application was well within limitation. He relied upon the case reported as The West Pakistan Water and Power Development Authority, Lahore v. Messrs Omar Sons. Ltd. (PLD 1970 Lahore 398) and Karachi Shipyard and Engineering Works Ltd. v. Muhammad Aslam Khan (PLD 1979 Karachi 635). It was then argued that clause No,25 providing for arbitration has been scored out by the petitioners without the consent of the respondent. It was also submitted that it was nowhere written in the contract that the clause providing for arbitration has been deleted. The question as to limitation for filing an application under sections 8 and 20 of the Arbitration Act as also the terminus qua for the said limitation fell for interpretation in the case of West Pakistan Water and Power Development Authority, Lahore v. Messrs Omar Sons Ltd. (PLD 1970 Lahore 398) which was answered by the Division Bench of this Court thus: "Application for appointment of arbitrator in terms of contract was contested on the plea that it was time-barred because the same was made after three years of the execution of 'work contracted for. The contractor' had, however, sent notice to the other party under section 8(1) of the Arbitration Act which was not complied with be the opposite-party and the plea of the contractor was that the limitation for application under section 8, Arbitration Act should run not from the date of completion of work but from date of 'expiry of notice under section 8(1). The plea of the contractor was accepted and the High Court observed: According to the provision in the third column, the terminus a quo for limitation is the date or time 'when the right to apply accrues'. It is important to bear in mind the distinction between 'cause of action' giving rise to a claim and the right of -sue' on the basis of that claim. 'Cause'of action' has been generally defined as covering every fact which traversed, it would be necessary for the plaintiff to prove in order to support his right to the judgment or- the Court. This is clearly different from 'right to 'sue'. For insfance, a person may have cause of action against the Government or' the Railway Administration but will have no right to sue unless gives a notice of suit under section 80, C.P.C. or 177 it the Railways Act, 1890, as the case may be. Strictly speaking, notice does not form part of the cause of action. though it is a necessary preliminary for the suit. Similarly, Order XXII. rules 1 and 2, C.P.C. speak of survival of 'right to sue' in contra distinction with 'cause of action' in section 20 of the Code upon which, the 'right to sue' is based.
It is true that the Contractor's claim rests on the plea that he completed the execution of works and therefore, performed his part of the contract but this is not to say that simultaneously with the completion of works, the right to apply for the appointment of the arbitrator under section 8 of the Arbitration Act also accrued in his favour. The date when the 'right to apply' for the arbitrators' appointment accrued to the Contractor will have to be determined with reference to the provisions of section 8, Arbitration Act.
On the plain reading of the entry in the third column of Article 181 of Limitation Act with section 8 of the Arbitration Act there can be no manner of doubt that the right to apply for the appointment of anyone of the three, gentlemen as the sole arbitrator arises on the expiry of fifteen days of the notice and not at any time before that date.'"
6. The rule of law laid down in the case reported as Karachi Shipyard and Engineering Works Ltd. v.
Muhammad Aslam Khan is also to the same effect. It is pleaded in para. 7 of the petition that the notice, dated 20-2-1990 was served on. The petitioners and the said averments had not been specifically denied by tile petitioners, therefore, respectfully following the rule of law laid down in the two judgments aforenoted, would affirm the findings recorded by the learned trial Court that the application as filed by the respondent was within limitation: Coming to the plea that no arbitration clause existed in the basic contract, it would be noted that no such plea was taken in the written statement filed in the case, therefore, the petitioners could not be heard to say that no clause for arbitration was entered into between the parties. As far the argument that this clause was scored out by the petitioners, suffice it to observe here that the cross mark appearing on clauses 25 and 26 of the contract is not authenticated by a writing duly signed by the parties to the contract that the said clause has been deleted from the tormat of the contract, therefore, it is hard to believe that the said clause was scored out with the consent of the parties.
8. In the circumstances, the learned trial Court does not appear to have committed any illegality in the exercise of its jurisdiction while repelling the objections of the petitioners.
9. In result, this revision petition is dismissed with no order as to costs.