Civil Miscellaneous No,441/C of 2001 ' This single order will dispose of the aforenoted civil miscellaneous application as well as Civil Miscellaneous No,442/C of 2001 in Civil Revision No,1602 of 2000, as they are identical in nature and similar in subject-matter.
2. During the pendency of the revision petitions, on 30-5-2001, the learned counsel for the petitioner stated before this Court that the parties have entered into an arbitration agreement, Arbitrators have been appointed, award has been made and consequent thereto an application under sections 14 and 17 of the Arbitration Act, for making the award rule of the Court, has been filed before the Civil Court and, therefore, he requested for the adjournment of the case. On 16-7-2001, the learned counsel for the respondents submitted that the respondents do not subscribe to the alleged award and, therefore, the main revision petitions may be decided in accordance with law and as such the petitions were adjourned for final hearing.
3. On 20-7-2001, the revision petitioner filed these two applications, wherein it was submitted that the parties had agreed to appoint three Arbitrators to decide the matters in controversy, as such an agreement was executed and the Arbitrators, after hearing the parties, announced their award unanimously and the same was filed in the Court of Senior Civil Judge, Faisalabad, on 10-3-2001, for making the award rule of the Court alongwith application under sections 14 and 17 of the Arbitration Act. It was asserted that the award could not be made rule of the Court uptil now, although the contesting parties have entered appearance before the Civil Court if the revision petitions are decided before the award is made rule of the Court, it will create serious complications. It was, thus, prayed that the revision petitions may be kept pending sine die till the decision by the Civil Court, wherein the award and the applications are pending. These applications were replied by the respondents, who, inter alia, pleaded that as the alleged reference and the award have been prepared, during the pendency of the proceedings in the revision petitions, without the intervention of the Court, therefore, the same are violative of the provisions of Arbitration. Act. It was further submitted that all the parties to the revision petitions never agreed to refer the matters in controversy to the Arbitrators. It was asserted that the Arbitrators were never appointed by respondents Nos.4 to 7, they never appeared, before the Arbitrators and the award is the result of collusion and fraud in order to usurp the properties by the petitioner, therefore, the revision petitions may be decided on merits.
4. Learned counsel for the petitioner reiterated the contents of the petitions, whereas the learned counsel for the respondents remained strict to his stance taken in the replies to these applications.
5. In order to decide these applications, it appears necessary to recapitulate the facts of the case.
It is discernible from the record that two counter-suits title Hamid Razi. Sarwar v. Mst. Roohi Sarwar etc. And Mst. Roohi Sarwar and others v. Hamid Razi Sarwar and others were filed and the learned Civil Judge dismissed the first suit filed by Hamid Razi Sarwar, whereas the second suit filed by Mst.
Roohi Sarwar was decreed vide judgment and decree, dated 24-1-2000. The said judgments and decrees were assailed before the learned District Judge by the respective parties and the learned Additional District Judge vide judgments and decrees, dated 17-5-2000, dismissed the appeals filed by the petitioner and accepted the appeals filed by the respondent and thereafter the present revision petitions were filed on 6-7-2000. Those came up for hearing on 7-7-2000, on which date the injunctive order was issued by this Court, which was confirmed on 20-11-2000. On 30-5-2001, as mentioned above, the learned counsel for the petitioner made statement regarding the announcement of award and filing of application for making the award rule of the Court and on 16- 7-2001, these facts were denied by the learned counsel for the respondents. On 30-5-2001, the learned counsel for the petitioners filed certified copies of certain documents before this Court, the perusal whereof manifests that the arbitration agreement between the parties was said to be executed on 11-10-2000, whereas on the very next day another arbitration agreement was signed by the petitioner, alone, statedly in presence of the witnesses. Certified copy of the alleged award has also been filed, which does not show on which date the award was made, yet backside of the first page of this alleged award shows that the stamp paper, on which the said award has been written, was purchased on 4-1-2001, therefore, for the purpose of this alleged award, the said date will be taken as date of making the award. As admitted by the petitioner, pursuant thereto he filed an application under sections 14 and 17 of the Arbitration Act, dated 10-3-2001, for making the award rule of the Court, which is reportedly pending before the learned Senior Civil Judge, Faisalabad.
6. It is evident from the contents of the replies to these applications that the respondents have categorically denied the execution of the arbitration agreement and they are not agreeing with the award, which according to them is result of fraud and collusion. They have also stated that they neither appeared before the Arbitrators nor made any statement. It is clear from the above data that on the one hand the petitioner was pursuing with his remedy in the revision petitions and simultaneously said to have entered into an arbitration agreement, though denied by the other party, without taking this Court into confidence. Although the revision petitions are pending since 7-7-2000 and the arbitration agreement was statedly entered into on 11-10-2000, yet the petitioner failed to file any application before this Court and, thus, did not inform this Court about the alleged arbitration agreement or its proceedings. The award was said to be announced on 4-1-2001, even then the petitioner failed to file any application before this Court thereby divulging the true facts and stated that the award has been announced. It was only, on 30-5-2001, that the learned counsel for the petitioner made the statement to the effect that the award had already been made and the same has been filed before the Civil Court for making it rule of the Court. It is clear from the above narrative that before that date, according to the petitioner, the total arbitration proceedings, which started from 12-11-2000, stood finalized. The only conclusion which can be inferred from this is that the conduct of the petitioner was mala fide, contumacious and the same adversely reflects upon the so-called arbitration proceedings. Had there been genuine arbitration proceedings, the petitioner should have brought all these material facts before this Court for taking this Court into confidence. In this scenario the stance taken by the respondents appears to be more 'plausible to the effect that neither any arbitration agreement was entered into nor any genuine award was announced in respect of the subject-matter of the revision petitions.
7. Now the next question, which has arisen for determination is as to whether the alleged arbitration agreement and the consequent award rendered by the Arbitrators are in accordance with the provisions of the Arbitration Act. Admittedly, when the said arbitration agreement was allegedly entered into, the proceedings in the revision petitions, which arose out of the suits, were pending.
There is no cavil to the proposition that by virtue of section 47 of the Arbitration Act, the provisions of the said Act apply to all arbitration and to all proceedings thereunder. Section 21 of the Arbitration Act provides that when in a suit all the parties are interested/agree that any matter in dispute shall be referred to the Arbitrator they may, before the announcement of the judgment, apply to the Court in writing for an order of reference. It flows therefrom that if the parties to a suit desire to settle their difference through arbitration during the pendency of the suit, they will have to apply to the Court for the same under the said provision of law. Moreover, it is a condition I precedent for referring such matters to the Arbitrators that all the parties must agree to refer the matter to the Arbitrators and all of them are also A under legal obligation to file such an application before the Court. The Court, where the proceedings are pending, under section 23(1) of the Arbitration Act will, then, order the matters to be referred to the Arbitrator and shall also specify the time for making the award. Undoubtedly in this case no application was filed before this Court, whereas filing of such an application, and that too in writing, is mandatory as per the principle laid down in Messrs S.M. Qasim & Co. v. Messrs Sh. Azimuddin PLD 1962 (W.P.) Lah.
95. Similarly no order under section 23(1) of the Arbitration Act was passed by this Court and it could not have possibly been passed as there was no application before this Court. It has been held in Allah Bakhsh v. Mst. Shamshad Begum and 2 others 1990 M LD 1937 that any reference to arbitration without the intervention of the Court, where the suit is pending with regard to the same subject-matter would be violative of sections 21, 23 and 47 of the Arbitration Act. The- said question was also examined in detail in Mst. Hashmat Bibi v. Muhammad Rafi and another 1980 CLC 967 and it was held that the award procured in a pending suit without the intervention of the Court was a nullity and could not be made rule of the Court in accordance with the provisions of sections 14 and 17 of the Arbitration Act, except that it can be made use of as a compromise.
' It has been held in Jugaldas Damodar Modi & Co. v. Pursottam Umedbhai & Co. AIR 1953 Cal. 690 that if the parties to a pending suit proceed to arbitration without an order of reference by this Court, then an award obtained in such arbitration is invalid, illegal and cannot be enforced under the provisions of the Arbitration Act.
8. Now the petitioner may fall back upon the proviso to section 47 of the Arbitration Act, which provides that the arbitration award otherwise obtained with the consent of all the parties can be considered as a compromise or adjustment of the suit. But in the present case, in order to succeed on this plea the petitioner had to cross unsurmountable hurdle, given in the proviso itself, which is to the effect that such an award must be obtained with the consent of all the parties interested.
Undoubtedly in the case in hand all the parties are not consenting to such an award, but on the other hand they are causing aspersion even on the arbitration agreement and the award. In view of this, proviso to section 47 of the Arbitration Act will also be of no help to the petitioner. This question was also examined in the aforestated case of Allah Bakhsh v. Mst. Shamshad Begum and 2 others, and it was held that according to the proviso to section 47 such an arbitration award can be utilized as a compromise or adjustment of the suit by the Court provided all the parties interested consent to it. It was observed in Mst. Hashmat Bibi's case (supra), that without the consent of the parties, the award could not be considered even as adjustment or compromise of the suit. The aforesaid views were further re-affirmed by this Court in the case reported as Hashmat Ali v. Muhammad Rafi and others 1982 CLC 2377.
9. It can be argued from the petitioner's side, though not so contended, that the word "suit" has been used in section 21 of the Arbitration Act and as in the present case no "suit" was pending and only revision petitions were awaiting decision, therefore, section 21 of the Arbitration Act has no applicability. Suffice it to say that the judgment reported as Messrs United Builders Corporation v.
Azad Jammu and Kashmir Mineral and Industrial Development Corporation and another 1989 CLC 1825 provides complete answer to this expected argument, wherein, this Court after relying upon enormous case-law on the subject, came to the conclusion that the word "suit" used in section 21 of the Arbitration Act includes an appeal, revision and, thus, it would include appellate or revisional Court, as the case may be.
10. Being guided by the aforestated case-law, I am considered to hold that the arbitration agreement, dated 11-10-2000 and award dated 4-1-2001, are violative of sections 21, 23 and 47 of the Arbitration Act and the said award procured, while the proceedings in the revision petitions were pending before this Court, without the intervention of the Court is nullity and as such the same could not be made rule of the Court in accordance with the provisions of sections 14 and 17 of the Arbitration Act. However, the said award can be used as a compromise/ adjustment of the suit, if all the parties interested consent to it.
' For the foregoing reasons, the applications in hand are devoid of force, have no merits, thus, both of them are dismissed with the result that the revision petitions shall be decided on merits. Office is directed to fix the main revision petitions for final hearing in the first week of October, 2001.