' This judgment will dispose of Civil Revisions Nos.341-D of 1990 and 342-D of 1990, as the same question of law and fact is involved in both the cases.
2. The facts are that the respondent filed a suit for recovery of Rs,21,000. The suit was contested.
However, during the pendency of the suit, the parties agreed to refer the dispute to Ch. Habib Ullah, President Bhattah Association of Fortabbas through their statements made before the learned trial Court on 15-1-1990 to act as a referee. It was also agreed that the decision of the said referee shall be final and shall not be questioned by either party. According to such oral agreement, the learned trial Court vide order, dated 15-1-1990 referred the matter as agreed.
3. On 1-2-1990, the said referee submitted his report before the learned trial Court wherein he decided that a sum of Rs,21,000 was due in favour of Bashir Ahmad, respondent/plaintiff, against the petitioners. On the same day viz. 1-2-1990, the petitioners filed an application for recalling the order, dated 15-1-1990 and cancellation of appointment of the aforesaid referee. The petitioners also filed objections to the report of the referee.
4. The learned trial Court, however, relied upon the report of the referee, dated 1--1990 and decreed the suit of the respondent vide judgment and decree, dated 8-3-1990.
5. The petitioners filed an appeal which was dismissed by the learned appellate Court vide judgment and decree, dated 13-6-1990. The learned appellate Court found that the referee was appointed with the free consent of the parties and that the petitioners were estopped to apply for the cancellation of the said appointment particularly when they had given an undertaking not to raise any objection against the decision given by the referee.
6. The learned counsel for the petitioners has challenged the concurrent findings of both the learned lower- Courts on the ground that notwithstanding, the employment of the term "referee" in the statement of the parties as well as the order of the learned trial Court, dated 15-1-1990, the person appointed with the nomenclature of a referee was in fact an arbitrator. That being so, according to the learned counsel for the petitioners, it was open for the petitioners to file objections against his report which should have been attended to by the learned trial Court and should not have been brushed aside on the ground that the parties had undertaken not to raise any objection to the said report.
7. When confronted, that in order to treat the proceedings as arbitration through the Court, the provisions of section 21 of the Arbitration Act, 1940 mandated the filing of an application in writing for this purpose, it was contended by the learned counsel that the provisions of section 21 of Arbitration Act were only directory and not mandatory. For this proposition, he made reference to the cases of Mahabit v. Manohar Singh AIR 1924 All. 540, Waliullah v. Bhaggan AIR 1925 Oudh 269 and Gudipoodi Subbayya and another v. Kotapalli Sashayya and others AIR 1928 Mad. 48(2).
8. To further augment his submissions, learned counsel stated that what was submitted by the so- called referee was his report on 1-2-1990 which is akin to the award of an arbitrator and could not be treated to be a statement as a referee under section 20 of the Evidence Act/Article 33 of the Qanun-e-Shahadat Order, 1984. The learned counsel for the petitioners further submitted that the essence of the requirement of section 20 of the Evidence Act is that a matter has to be decided by the referee upon his own knowledge and information and does not include the exercise of gathering information or collecting evidence to come to a conclusion. Relying upon the cases of Sher Zaman Khan v. Noor Zaman Khan and another PLD 1977 Lah. 672 and Naveed Aziz and another v. Rauf Ali Syed 1996 CLC 1932, he contended that the information which is solicited from a referee must be based upon his personal knowledge prior to his appointment as a referee. He further contended that a perusal of the report of the so-called referee would show that he had based his decision upon personal inquiries and investigations and statements of other persons and that in this manner, he acted like an arbitrator although he was appointed as a referee. According to him, if this is so held, his report shall be subject to all the incidents of the Arbitration Act, 1940. He placed reliance upon the case of Muhammad Ashraf v. Abdur Rehman 1993 CLC 1875.
9. Arguments have been heard and record perused.
10. It is admitted on the record that during the pendency of the suit for recovery of money filed by the respondent, both the parties made a conscious statement before the learned trial Court wherein they referred the dispute to the referee Ch. Habib Ullah, President Bhatta Association of Fortabbas whose decision shall be final and which shall not be challenged by either of the two parties. It was in consideration of such an unequivocal statement/undertaking of both the parties that the learned trial Court vide order, dated 15-1-1990 referred the matter to the named referee.
11. In order to determine the true intention of the parties, it is necessary to examine the nature of the claim and the person to whom the dispute was referred. According to the plaint, the claim was in respect of the business of brick-kiln. Both the petitioners and the respondent are running their separate brick-kilns. According to the respondent, the petitioners requested the respondent to supply coal for their brick-kilns of the value of Rs,18,000 which would be repaid by the petitioners after they were able to sell their bricks. The claim of Rs,3,000 was also in respect of the supply of bricks which was made by the respondent to a third person on behalf of the petitioners and which amount was not paid by the petitioners to the respondent as agreed. In the written statement, nature of the business of both the parties was admitted. However, the claim of the respondent was denied. It was in this view of the nature of the dispute between the parties that a reference was made to the President, Bhattah Association of Fortabbas. In the ordinary course of business, the President could have been and was acknowledged to be by both the parties to be able to resolve the dispute between the parties on his own knowledge of the business transactions between the parties. If in arriving at a decision, he affirmed or reaffirmed his decision with the assistance of one or more connected persons, it shall not militate against his information as being based on extraneous evidence which should derogate from his status as a referee. It would have been different if the person to whom the matter was referred to had no connection with the business or the nature of transaction between the parties. Although, it is correct that a referee has to decide according to his personal knowledge yet his act of acquiring further information shall not vitiate his decision. Reference is made to the case of Muhammad Arif and others v. Farrukh Hafeez KLR 2000 Civil Cases 387. The learned counsel for the petitioners is not incorrect when he states that a referee must have previous knowledge of the dispute referred to him. His reliance upon Naveed Aziz's case (supra) is also apt but there is nothing wrong if the referee in order to supplement or augment his knowledge chooses to affirm or re-affirm the same through other sources.
12. In view of the above it is held that the inquiry which is supplemental to and in addition to his personal knowledge is not violative of the provisions of Article 33 of the Qanun-e-Shahadat Order, 1984.
13. The other contention raised by the learned counsel for the petitioners that the appointment made was in the nature of arbitration is also not sustainable. Admittedly, the civil suit regarding the claim of the respondent was pending. If it was a case of referring the matter to arbitration during the suit, the requirement of section 21 of the Arbitration Act has to be fulfilled. Section 21 reads as under:-- "Section 21. Parties to suit may apply for order of reference.---Where in any suit all the parties interested agree that any matter in difference between them in the suit shall be referred to arbitration, they may at any time before judgment is pronounced apply in writing to the Court for an order of reference."
14. A mandatory requirement of this provision of law is that in case the parties desired to resort to arbitration, it shall be done through an application in writing. Admittedly, no such application in writing is on the record. The learned counsel for the petitioners has referred to the cases of Mahabit v. Manohar Singh AIR 1924 All. 540, Waliullah v. Bhaggan AIR 1924 Oudh 269 and Gudipoodi Subbayya and another v. Kotapalli Seshayya and others AIR 1928 Mad. 48(2).
15. On the other hand, it has been held in the cases of Messrs S.M. Qasim & Co. v. Messrs Sh.
Azimuddin PLD 1962 (W.P.) Lah. 95, Municipal Committee Fazilka v. Fazilka Electric Supply Co, Ltd. AIF
(34) 1947 Lah. 309, A.B. Mitchell v. J.C. Dutta AIR 1928 Cal. 209 and Dawarkanath Roy and others v.
Fanindra Nath Roy and others AIR 1919 Cal. 232 that this provision of law is mandatory in nature.
16. In a case where the parties are already before a Civil Court but decided to have their dispute referred to arbitration during the pendency of those proceedings, it is incumbent upon the parties to change such course of resolution of their dispute through an application in writing. In my view, the requirement of an application in writing as envisaged in section 21 of the Arbitration Act, 1940 is mandatory.
' Viewed in this perspective, as there is no such request, it cannot be said that the reference made on 15-1-1990 was a reference to an arbitrator.
17. This civil revision is against a concurrent finding of fact. The parties had themselves opted for a particular mode of resolving their dispute. There was nothing illegal in the course which was adopted. The learned trial Court had only approved the agreement of the parties by referring the matter to the person named by both the parties and who also had implicit nexus with the dispute.
There was nothing in the exercise of jurisdiction by the learned trial Court which could be termed as irregular or infirm. The decree of the learned trial Court based as it was upon the report of the referee was unexceptionable. The learned appellate Court also exercised its discretion in a fair and equitable manner. As in the alternative injustice would have been perpetuated. In revisional jurisdiction, no illegality or infirmity is found in the judgments of the learned lower Courts and there is nothing to warrant interference in the same. This civil revision has no merit which is hereby dismissed. No order as to costs.