I. MAHMUD, J..-This Letters Patent Appeal is directed against the judgment and decree passed by a Single Judge of the High Court on the Original Side (Qadir Nawaz Awan, J. As he then was) dated 2nd December 1967 in Suit No. 272 of 1966, whereby the learned Judge dismissed the appellant's objections to the award and made it rule of the Court.
2. By two contracts dated 25-10-1949 and 10.1-1952 the Governor---General of Pakistan through the Director of Purchase (Defence), Ministry of Food and Agricultural. Government of Pakistan (hereinafter referred to as "the appellant"), constituted the respondent, Chaudhry Brothers Limited.
As Agent for the purchase and supply of milk Ghee of the quality and quantity specified therein for the use of the Armed Forces. 'The Agent's function was to purchase Ghee from the various markets in West Pakistan at the cheapest price within the ceiling price fixed by the Director, and he was to bill the Government on the basis of the invoices from the dealers from whom the Ghee had been purchased. The Agent was required to maintain, true accounts which were open to inspection by any officer authorised by- the Director. The agent was to provide a security of Rs. 1,50.000 under the first and Rs. 1,00,000 under the second contract and was to be compensated by commission for his services. The Ghee was supplied under the first contract and, while it was being supplied under the second contract, the appellant registered a criminal case of cheating and forgery against the Managing director of the respondent and during the investigation, the police seized some quantity which was later released and (he Managing Director was ultimately acquitted.
3. After the termination of the criminal proceedings, disputes arose between the parties. Eventually by an agreement in writing dated 14-11-1955, the parties agreed to refer the disputes to the arbitration of Mr. M. H. Rehman, Joint Secretary, Ministry of Food and Mr. M. A. Cheema, Deputy Secretary, Ministry of Agriculture, Government of Pakistan. After hearing the parties and considering the evidence, the arbitrators gave an unanimous award on 19-3-1956. The award was filed in the High Court in proceedings registered as Suit No. 420/56 and, after dismissing the objections filed en behalf of the appellant, the Court accepted the award and decreed the suit is terms of the award.
Certain items were left unsettled by the arbitrators who gave directions in the award as to how they were to be settled by the parties. It is only relevant to state, for purposes of this Appeal, that the directions which were incorporated in paragraph 4 of the decree provided that "the security of the second contract may be refunded on the finalisation of the accounts''. The accounts under the second contract were not finalised as directed, as the respondent did not produce the required accounts pertinent to certain arthias as requested in appellant's letter dated 20-8-1960. Therefore, the appellant carried out a local audit and wrote to the respondent on 3rd May 1961, that according to the Audit Report, it was found that the respondent had charged excess price, high rates and obtained payment on bogus beechaks to the tune of Re. 15,03,795.80 and demanded payment of Rs. 14.08,795.80 after adjusting the security amount of Re. 1,00,000 of the second contract. In view of this demand the respondent moved an application in the said Suit No. 420/56 on 16.5-19131 under Order XX, rule 17 read with section 151, C. P. C., praying the Court, Inter alia to appoint a Commissioner to finalise the accounts relating to the second contract. This application was disposed of by consent of the counsel, by Qadeeruddin Ahmed, J. (as lie then was) by the following order dated 20-9-1961: "Mr. Muzaffar Hassan offered during the last hearing that the disputes which are said to have been left undecided might be referred freshly to arbitration. Mr. Abdul Asia wanted instruction of his clients to agree to this offer. He has reported convent to this offer of his clients. The decision of the application, therefore, is that the points which have been raised by Mr. Abdul Asia may be referred to r fresh arbitration by the above consent of the parties. Mr. Abdul Aziz says that his clients would also like to refer certain disputes to arbitration. I need not decide this question which has to be left to the arbitrator to consider.
The effect of this order is that another reference to arbitration will per made In terms of the basic contract. The application is disposed of accordingly."
4. Pursuart to the aforesaid order, the appellant appointed Mr. A. M. Khan sole arbitrator, but the respondent objected to his appointment as sole arbitrator as not being in accordance with the agreement of arbitration dated 14-11-1955 and, therefore, filed J. Misc. Appeal 44 of 1963 under section 11 of the Arbitration Act, 1940, and obtained an order of the Court for his removal, and for a reference to two arbitrators, one to be nominated by each party respectively. Thereafter, Mr. Nazir Ahmed was appointed arbitrator by the appellant while Mr. Malik Khalid Dad Noon by the respondent as their arbitrator. The nominated arbitrators could not agree on the terms of the reference. 'Therefore Mr. Nazir Ahmed resigned and the vacancy was filled in by Mr. Vaqar Ahmed, Joint Secretary, Ministry of Agriculture and Works: They also could not agree on the scope of the reference with the result, that the Umpire Mr. Justice Muhammad Munir, retired Chief Justice of Pakistan, entered on the reference. Before the Umpire, the parties put in their respective statements of claims. Only the appellant's claims before the Umpire are relevant for the purposes of this appeal. These claims were : (1) A counter-claim against the respondent for Rs. 15,41.509 on account of excess rates charged, unauthorised and excess payments and using false "beechaks" and (2) a claim to forfeit the security amount of Rupees one Lakh under the second contract. By his award dated 8-6-1966, the Umpire disallowed both these claims on the ground that they were neither competent nor were they referred to arbitration under the Court's order dated 20-9-1961.
5. The award of the Umpire was filed in proceedings registered as Suit No. 272166 and after the objections filed by the appellant were rejected--- the award was made rule of the Court by the impugned judgment of the, learned Single Judge dated 2-12-1967. The present Letters Patent Appeal by the appellant is directed against the said impugned judgment.
6. The first submission of Mr. Sayead A. Shaikh, the learned counsel for the appellant, is that the Court's order dated 20th September 1961 (above-quoted) was an order referring the dispute to arbitration and was bad in law, invalid and without jurisdiction, as it contravened the mandatory requirements of sections 21, 22 and 23 of the Arbitration Act, 1940. His second submission is that the Court's order was vague and indefinite because the specific disputes which have to be determined by the arbitrators, wore not specified. These submissions will be considered together. According to appellant's counsel. Chapter IV, Arbitration Act, 1940 (hereinafter referred to as the Act) which comprise of sections 21, 22 and 23 relating to "arbitration in suits" applies to this case. A combined reading of sections 21, 22 and 23 of the Act shows that (a) there must be an application in writing signed by both parties to the suit for an order of reference, (b) the order of reference can be made by the Court only at the stage before judgment is pronounced (c) the disputes to he referred must be specified in the order of reference, (d) the arbitrators have to he named or manner of their appointment stated and (e) time for making the award must be prescribed. But it is contended that the Court's order of reference dated 20 9-1961 was made on the respondent's application under Order XX, rule 17, C. P. C. After the judgment was pronounced and decree was passed in the suit and, therefore, the Court's order of reference was incompetent. Moreover, neither the disputes were specified, nor were arbitrators named or the time for making the award prescribed by the Court. According to counsel, these provisions of law were mandatory and their omission in the order of reference gave to the arbitrator no jurisdiction to make the award and the award made was null and void. In support of this submission Mr. Saved A. Shaikh cited, Badaria Kamakrishnamma and others v. Vattlkonda Lakshmi bayamma and others AIR 1958 Andh. Pra.
497. In that case, the Court made at; order of reference to arbitrators in a pending suit, but omitted to specify the time for making the award, although the time was mentioned in the note sheet of the file. The Court observed that fixing of time for making award was mandatory under section 23 of the Act, but is the circumstances, time mentioned in the note sheet was sufficient compliance with the mandatory requirement. Section 28 of the Act, which empowers the Court to enlarge time for making award in its discretion, was not considered in the judgment end the decision may be questionable on the point that omission to specify time to make the award, makes the award a nullity. Mr. Saeed A. Shaikh also cited T. Wang v. Sona Wangdi AIR 1925 Cal. 812. In support of his contention that if an order of reference by the Court is not in accordance with the mandatory provisions of sections 21, 22 and 23 of the Act, the resulting award being without jurisdiction, the appellant's participation in the .Arbitration proceeding is immaterial and does not amount to estoppel. Counsel also cited Messrs Munawar & Co. v. Messrs S. A. Rauf & Co. PLD 1954 Sind 30, which held that an appearance before an arbitrator, whose appointment is without jurisdiction and ultra wires, even though it is not made under protect, does not amount to a waiver of the right of a party to contest that the arbitrator had no jurisdiction to act. This decision .Was upheld on appeal and is reported in Manawar & Co v. Messrs S. A. Rauf & Co, PLD 1959 Kar. 325.
7. In reply to Mr. Shaikh's submission, Mr, Naseen Faruqui, learned .Counsel for the respondent, submitted that the appellant not only participated in the arbitration proceedings, but accepted the appointment of the arbitrator by invoking the jurisdiction of the Court from time to tune by making application in J. Misc. Application No. 44 of 1963 for removal of Mr. S. A. Khan as sole arbitrator and, in J. Misc. Application No. 59 of 1965, the appellant consented to respondent's application under section 28 of tae Act for extending time to matte the award ; that finally in J. Misc. Applica--petition No. 1 of 1966, the appellant consented to the appointment of the Umpire. Fe cited Messrs Pakistan Builders Co. v. Pakistan PLD 1961 Kar. 365and Karachi .Cooperative Housing Society's Union v. Sofia Bat and others PLD 1970 Kar. 379 in support of the submission that a party, who submits to jurisdiction of the arbitrator and files his claim, cannot later on question his appointment. We are inclined to agree with Mr. Naseem Faruqui. However, it is not necessary to decide the question whether non-compliance strictly with the requirements of sections 21 to 23 of the Act makes the award a nullity, because we are firmly of the view that the Court's order dated 20th September 1961 was not .An order of reference to arbitration under section 23 of the Act. In our view, the order merely disposed of an application of the respondent under Order XX, rule 17, C. P. C. Pending before it and recorded the consent an intention of parties that their clients had agreed to have a fresh arbitration of the outstanding disputes in terms of "the basic contract'". Tile basic contract was the arbitration agreement in writing dated 14-11-56 which was very wide in scope and embraced all tile undecided disputes arising under the first and second contracts and, although one award had been made thereunder, the arbitration agreement was not exhausted. The undecided disputes existing on the date of the Court's order dated 20th September 1961 were covered by the basic contract and could be referred to arbitration thereunder. It was. Therefore, not necessary for the Court to specify the prise dispuses in its consent order dated 2.0-9-196". Therefore, the contention of Mr. Sated A. Shaikh that the Court's order was vague and! Indefinite cannot be sustained and, in this view of the matter, it is not necessary to discuss the decision relied on by him in Baba Lal Pardhan v. Badri Lal Pardhan and another AIR 1919 Patna.
74. Sheedut v. Pandit Vishnudatta AIR 1955 Nag. 116 and Deep Narain Singh and others v. Mst. Dhaneshwari and others AIR 1960 Pat. 201 to the effect that if an arbitration agreement is indefinite and vague, the award is vitiated. The Court's order not being an order of reference in a suit, the .Question of contravention of sections 21, 22 and 23 of the Act therefore, in our opinion does not arise. We accordingly find no force in the first and :second submission of the learned counsel for the appellant.
8. The thud submission of Mr. Saeed A. Shaikh was that the Umpire had misconducted the proceedings in that he refused to entertain the appellant's counter-claim against the respondent for Rs. 15.41,509 which, according to him, was raised in appellant's letter dated 3-5-1961 addressed to the respondent and which compelled the respondent on 16-5-1961 to move the application under Order XX, rule 17, C. P. C. For appointment of Commissioner. It was this dispute, according to counsel, which was the subject-matter of arbitration in the Court's order dated 20th September 1961. As stated in the narration of the facts, the Umpire made a specific Issue No. 2 about the counter-claim. Viz. "Has the counter-claim of the contractor for Its. 15,41,509 on the ground of unauthorised and excess payment and using false beechaks been referred to arbitration by the Court's order dated 20th September 19612" The Umpire, who was no less a person than a Retired Chief Justice of Pakistan, considered this issue and gave valid reasons for reaching leis conclusion thereon that the said counter-claim had already been decided in the first arbitration and was not competent before him. He held that with regard to the first-mentioned counter-claim relating to excess rates charged and excess payments and false 'beechaks . That issue had already been considered by the first arbitrators, who had disallowed the same except to the extent of Rs. 8,287- 14- and that, therefore, there was no occasion for them to repeat the finding on the issue relating to use of false 'beechaks' on the second contract. Therefore, it had to be held that the claim based on falsity of 'beechaks' used in the second contract was disallowed by the first arbitrators, whose decision became conclusive, because the objec--tions to the award filed by the Director ref the appellant including objections relevant to these issues wore dismissed. Sad that decisionbecame incor--porated into the decree dated 18-12-1957. That in the absence of any apeci6c direction in the Court's order dated 20th September 1961 referring this particular matter to the arbitrators, it had to be held that the counter claim of the respondent could not sue agitated before him. Moreover, the claim has n9 reference to the "finalisation of accounts". We. Therefore, agree with the view expressed by the learned Single Judge that there is no case that the Umpire had misconducted the proceedings.
9. The final submission of Mr. Saeed A. Shaikh is that the Umpire was guilty of misconduct in declaring to entertain the appellant's claim relating to forfeiture of the security amount of Rs.
1.00,000 under the second contract. The reason given by the Umpire was that this question had been considered and decided by the award of the first arbitrator who held that "security of the second contract may be refunded an the finalisation of the accounts". Therefore, the Umpire held that he could not reopen this question again. In the circumstances we are is agreement with the view of the learned Single Judge that the appellant has failed to mate out a case of misconduct on the part of the Umpire in declining to entertain the claim for forfeiture of the deposit.
10. For the foregoing reasons, we find no merit in this appeal. It is accordingly dismissed with no order as to costs.