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Petitioner: Messrs TRIBAL FRIENDS CO. VS Respondent: PROVINCE OF BALOCHISTAN
Court Name: Supreme Court of Pakistan Judge(s): Sajjad Ali Shah, Saleem Akhter, Ajmal Mian Title: Messrs TRIBAL FRIENDS CO. vs PROVINCE OF BALOCHISTAN Case No.: Civil Appeal No,290 of 1986 C.A. No,56-K of 1987 Date of Judgment:1991-06-02 Reported As: 2002 SCMR 1903 Result: Appeal allowed
JUDGMENT
JUDGMENT ' SALEEM AKHTAR, J.---By this direct appeal the appellant seeks to challenge the judgment passed by the High Court of Balochistan, Quetta, disposing of revision and appeal filed against the judgment of the learned Civil Judge, Quetta. The appellant, a Government approved contractor, was awarded contract for the construction of Weir on Rakhshan river with channel near Panjgoor in the then Makran District vide CA/Ord No,(10) dated 8-6-1960 and was also engaged in several other works independent of the contract in dispute. The appellant had certain dispute but as it could not be settled, it filed claim before the Superintending Engineer in terms of clause 30 of the contract which was decided by him on 13-11-1965. It is alleged by the respondent that the appellant became liable to pay a sum of Rs,38,230 for which notification for recovery as Land Revenue was issued by the Government of Balochistan on 15-11-1969. The appellant remained quiet till 28-5-1973 when it applied to the Minister, Education, Local Government, Irrigation and Power, Government of Balochistan alleging victimization and pleaded that an arbitrator may be appointed. The Minister by order (dated 21-6-1973) appointed Mr. Itat Hussain, Superintending Engineer, as sole arbitrator. It seems that nothing happened in the matter and the appellant filed an application under sections 20/8 of the Arbitration Act in the Court of District Judge, Quetta, on 7-5-1973. The learned District Judge on 13-9-1973 issued notice for 22-10-1973 which was duly served. The respondent was represented by the Government Pleader and after taking three adjournments reply was filed pleading that the appellant was an approved contractor but has been blacklisted and was no longer contractor of the Irrigation Department. The contract was admitted but the appellant's claim was denied. It was pleaded that clause 25 of the Contract provided for arbitration. But did not name the arbitrator. It may be clarified here that clause 25 does not relate to arbitration at all
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land the reference to it was completely wrong. It was averred that final bill was prepared but the appellant did not accept it. In paragraph 8, it was pleaded that as the agreement was time-barred and in view of instructions by the Government of Pakistan directing the Government departments not to refer any dispute to arbitration, the matter could be referred to arbitrator only after the report of the Inquiry Officer was received and the concurrence of the Law Department obtained. In the reply no reference was made to the order of Minister. However, it seems that on 21-12-1973 when reply was filed the learned District Judge with the consent of the Government Pleader and the appellant appointed Mr. Itat Hussain as arbitrator who was directed to make the award before 22- 8-1974. Mr. Itat Hussain did not make the award within time, therefore, by order dated 3-10-1974 by the consent of parties the reference made to him was withdrawn and Mr. Mir Baz Khan Maingal, former Deputy Commissioner was appointed as sole arbitrator and case was fixed on 16-12-1974 for receiving the award. It seems that as award .Had not been filed, the Senior Civil Judge ordered that notice be issued to the arbitrator for filing the award on 2-9-1976. On that date same order was repeated for 28-10-1976. From the order sheet of 27-11-1976, it appears that on that date it was later found that the award had been filed and Government Pleader and parties were informed that if they wanted to file objection to the award the same may be filed within the prescribed time. The appellant filed objection. But no objection was filed by the respondent and the case was fixed on 7- 4-1977. On that date the appellant's advocate and Mr. Khan Muhammad, representative of Irrigation Department were present when last opportunity was given to the respondent to file objection till 18-5-1977. On which date the objection was filed. The respondent pleaded that the District Judge had no jurisdiction in the later. The application under sections 20/8, Arbitration Act was time-barred as dispute had arisen in the year 1964-65. There was no arbitration clause in the contract when written statement on behalf of the respondent was filed and, therefore, the order of reference was bad in law. The decision under clause 30 of he contract was final. The Arbitrator has misconducted as no issues were framed. The award was made on the basis of no evidence. The Arbitrator has not considered the case of the respondent. The Arbitrator was not impartial. The appellant owed Rs,13,72,250 to the respondent and further that interest should not have been awarded. The award has been improperly procured and record of the arbitration has not been filed before the Court. The appellant filed its reply in which, inter alia, it was pleaded that objections were barred by time. The learned Civil Judge, Quetta, framed issue "whether objection petition is within time" and by his order dated 4-8-1977 holding that he has jurisdiction ruled that the objections were time-barred. He thus rejected the objections, made award rule of the Court and decree in terms of the award for Rs,16,90,009 was passed in favour of the appellant. He also granted. Interest @8% per annum from 1-7-1964 to 31-10-1976. The respondent filed appeal against the order refusing to set aside the award and making it rule of the Court. It also filed revision application against the decree passed in pursuance of the order dated 4-10-1976. The High Court by the impugned judgment disposed of both the matters and set aside the award. The revision application was accepted subject to payment of court-fee within a period of two months. It was clarified that on respondent's failure to pay court-fee as ordered the impugned judgment shall cease to be operative. 2. Mr. Samdani, learned Advocate Supreme Court, has raised two preliminary objections. The first objection is that as the judgment disposes of C.A. 6 of 1986 and Revision Application 25 of 1985, the appellant should have filed two appeals instead of one. Mr. Fakhruddin G. Ebrahim, the learned Advocate Supreme Court, for the appellant, contended that the High Court had decided both the matters by a short order by which revision application was accepted and in view of that order the appeal was disposed of, therefore, there was only one order deciding the revision application. There is no doubt that by the common judgment both the revision application as well as the appeal were disposed of. It is not correct to say that only revision application wag decided by the
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impugned judgment. In these circumstances the appellant should have filed two appeals. This appeal shall be treated as appeal against the judgment passed in revision application as well as against the appeal filed by the appellant and it is directed to pay the relevant court-fee within 30 days. ' The second objection is that this appeal is barred by 24 days and the grounds shown in the application for condonation of delay are not sufficient. The learned counsel has referred to 1970 SCMR 558, 1985 SCMR 352 and Province of Balochistan v. Sardar Muhammad Usman Khan Jogezai 1985 SCMR 290. These authorities support the well-settled principle that on expiry of period of limitation a valuable right is created in favour of the other party. Further, that if the defaulting party applied for condonation of delay he must explain and account for the delay of each day. Mr. Samdani has correctly pointed out that no decree was required for filing appeal against the judgment in revision application and any case the appellant filed appeal on 29-6-1986 even before the decree had been received. He further pointed out that appeal is filed against judgment and not against the decree. The impugned judgment was operative from the date of announcement and its operation was ordered to cease, if the court-fee was not paid within two months which was duly paid as discussed below. ' The judgment never ceased to be operative. However, if such a judgment was executable, the same would be operative and can be executed after the payment of the court-fee. Considering the facts and the misunderstanding created due to interpretation of the judgment, we condone the delay. 4. The learned Advocate Supreme Court for the appellant contended that as the respondent paid court-fee after expiry of two months the impugned judgment has ceased to operate. This objection is relevant only in respect of judgment passed in the revision application and not appeal. Therefore, even if it ceases operation then it will be in respect of revision application. The judgment against the, appeal will remain operative. Reverting to the contention it may be noted that judgment was passed on 30-4-1986 while court-fee was paid on 30-6-1986. Relying on Faridson v. Pakistan PLD 1959 Kar. 568, it was contended that the court-fee should have been paid up to 29-6- 1986. In this case notice under section 80, C.P.C. Was served on the defendant on 24-1-1955 and suit was filed on 22-3-1955. The question arose whether the suit was bad for non-compliance with section 80, C.P.C., which at the material time provided that no suit against the Government will be filed before Lie expiry of two months from the date of service of notice. Considering the objection that section 3 of General Clauses Act which defines month to be reckoned as British calendar month, cannot be applied because two months of equal duration could be reckoned from the date of the delivery of the notice and not two months of unequal duration, it was observed as follows:- ' "No difficulty arises on account of unequal number of days of the months. If for instance the notice was delivered to the defendants on the 24th January, 1955, the first month would expire on 23rd of February, 1955, and the second month will expire on 23rd of March, 1955." 5. With respect we may observe that illustration relied upon by the appellant does not seem to take notice of section 9 of the General Clauses Act which provides that while computing time by the use of the word 'from' the first day is excluded and by the use of the word 'to' last day is excluded. Reference can be made to Salahuddin v. Haji Ghulam Muhammad Cheema, PLD 1957 Lah. 728. The applicability of section 9, General Clauses Act is not limited to statutes and notifications but is applied for computing the period of limitation as fixed by any judgment, decree or order. Reference can be made to Dharamraj Mohades v, Additional Deputy Commissioner (AIR 1957 Bombay 154). Section 9 of General Clauses Act prescribes a method for computation of period of limitation. The date from which any act has been ordered to be performed is ,excluded. The last day up to which the act can be performed is also excluded. Thus upon the principle of section 9,
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General Clauses Act computation of two months will start on 1-4-1986 and end on 30-6-1986. The court-fee was thus paid within the time required by the judgment. 6. The appellant's learned Advocate has contended that the objection to the award was filed after the expiry of the period of limitation as provided by Article 158 of the Limitation Act. In this regard it is material to examine the diary sheet of the learned Civil Judge. When the matter was fixed on 27- 11-1976, the appellant and the Government Prosecutor were present and the Court ordered that as arbitration award had not been filed the matter was adjourned to 9-2-1977. However, subsequently another order was passed on the same date as follows:-- ' "At this stage it was found out that the arbitrator has filed the award in Court. Government Pleader and the parties are directed that if they have any objection to the award the same may be filed within the prescribed time." ' Thereafter, on 9-2-1977 when the matter was called the Court noted that the appellant had filed objection, copy of which was given to the Government Pleader and matter was fixed for arguments on 7-4-1977. On this date Public Prosecutor was not present but one Mr. Khan Muhammad, representative of the Irrigation Department was present and the Court ordered as follows:-- ' "Last opportunity is given for filing of objections. To come up on 18-5-1977." ' On this date the objection was filed. According to Mr. Samdani, learned Advocate Supreme Court, section 14 of the Arbitration Act requires the Court to give notice to the parties for filing the award and the time starts to run from the date of actual service of such notice on a party and not on his agent like Government Pleader as in the present case. He relied on Holaram Verhomal v. Governor General of India in the Council AIR 1947 Sindh 145. However, in view of observation in Ashfaq Ali Qureshi v. Municipal Corporation 1985 SCMR 597 and Shafi Corporation Ltd. v. Government of Pakistan PLD 1981 Kar. 730, this contention has no force. Besides the fact that notice to the Provincial Government can be served on a Government Pleader in terms of Order XXVII, rule 4, C.P.C. The fact remains that a representative of the Department had personally appeared and date for filing objections was given. This demonstrates that the respondent had acquired due knowledge of filing of the award as contemplated by section 14(2). The objection filed was barred by time. 7. The appellant's Advocate has contended that both appeal and revision were not maintainable. In support of this contention the learned counsel submitted that appeal could be filed under section 39 (1) (vi) against the order refusing to set aside the award. As there was no objection before the Court question of refusal to set aside did not arise and thus section 39(1)(vi) will not be attracted. The contention seems to be that the objection to the award filed by the respondent was barred by time, therefore, there was no objection before the Court and thus question to refuse to confirm the award did not arise. The contention is not tenable. Section 39 (1) (vi) contemplates appeal against an order where the Court refuses to set aside the award. Such an order can be passed where objection has been filed by the parties. The question is whether an objection which is barred by time can be equated with a situation where no objection has been filed at all. Any party challenging the award can file objection which may be rejected or accepted. If it is rejected on merits or on the ground that it is barred by time it will amount to dismissing the objection and thus there will be an order refusing to set aside the award. The learned counsel referred to Nilkantha S. Nigachatti v. Sommena Nigashettis & Son AIR 1962 SC 66, where it was observed that if any party fails to file objection the question of setting aside the award does not arise and no appeal is maintainable under section 39. This rule is not applicable to the present case where objection was filed though claimed to be barred by time.. Distinction has to be made where no objection has been filed and where objection though filed is barred by time. In the latter situation the Court has to pass an order holding that objection to the award being barred by time is dismissed and consequently refuse to set aside the award. In such a case there is a composite order against
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which appeal under section 39(1)(vi) can be filed. Therefore, on this particular ground maintainability of the appeal cannot be challenged. 8. Now, we will consider whether revision application can be filed against any order passed by the Court under the Arbitration Act. For the purpose of filing appeal section 17 and section 39 can be pressed in service. The question A if any order is not covered by section 17 and section 39, Arbitration Act section 115, C.P.C. Can be pressed in service section 41, Arbitration Act makes Code of Civil Procedure applicable to the proceedings of arbitration before the Court subject to the provisions of Arbitration Act. Therefore, Code of Civil Procedure will be applicable to arbitration proceedings in Court except where such application is expressly excluded by the Act or Rules framed under section 44 of the Arbitration Act. Section 23, subsection (2) provide that where matter is referred to Arbitration the Court shallnot deal with such matter except as provided by the Arbitration Act. Likewise section 32 bars any suit on any ground whatsoever for decision upon the existence effect or validity of an arbitration agreement or award except as provided by the Act. Where any Act is made applicable to any case or procedure than all the procedures and remedies available under that Act can be invoked provided their applicability has not been excluded. The learned Single Judge while holding the revision application maintainable observed as follows:-- ' "That though in the event when decree is passed on the basis of award, according to section 17 of the Arbitration Act appeal is not maintainable yet on the pointation of apparent illegality, lack of jurisdiction of violation of law or established procedure, same can, however, be challenged by way of, revision petition within the purview of section 115, C.P.C." The applicability of section 115 of C.P.C. Has not been completely excluded. In cases where remedy has been provided by appeal within the framework of the Arbitration Act revision application will not lie but in cases where these provisions do not apply the revisional jurisdiction of the High Court under section 115, C.P.C. Can be invoked. Where in. Cases no appeal is provided and the Court has exceeded jurisdiction, acted without jurisdiction, committed material irregularity in the conduct of proceedings, passed order in violation of principles of natural justice and the same cannot be assailed under the provisions of the Arbitration Act and the High Court may exercise its supervisory jurisdiction under section 115, C.P.C. On an application made by any party or suo motu. It should be borne in mind that the proceedings relating to arbitration are to be governed and regulated by the Arbitration Act. The applicability of C.P.C. Is in terms of section 41 and subject to the provision of the Arbitration Act. The respondent had filed revision application against the order passing a decree in terms of the award. Section 17 bars an appeal against a decree passed in terms of the award. In such circumstances in revision application a decree cannot be challenged on grounds set out in sections 30 and 33 of the Arbitration Act. Mr. Fakhruddin G. Ebrahim has referred to the following judgments:-- (1) Combined Enterprises v. WAPDA PLD 1988 SC 53. (2) Sat Bharai & Sons v. Jamiat Raster AIR 1933 Lah. 426. (3) Babu Balak Ram v. Ramjiwan Lal Dixit AIR 1936 Oudh 1. ' In the case of Combined Enterprises this Court while holding that the award could be interfered with in the manner provided by sections 30, 31 and 33 of the Act and except the Courts mentioned therein no other Court could deal with the matter, it was observed:-- ' "However, the exercise of this power is limited by the provisions of the Act when an award has been made on the grounds mentioned in section 30 of the Act. (See sections 31 (2) and 41 (a) of the Act). Therefore, there has to be an order by the Court against which an appeal does not lie to the High Court. It is only then that the revisional jurisdiction can be exercised."
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' In Sat Bharai's case the question was completely different. After the award was made rule of the Court and decree was passed as no objection was filed by members of a firm against which decree was passed filed appeal on the ground that they were not aware of the reference. The appeal was dismissed. They then filed second appeal and pleaded that it may be treated as revision application. It was observed that limited appeal is provided against a decree passed in terms of the award and if such appeal is allowed or not it closes the door to revision. 9. In Babu Balakram's case while relying on Lutaiwan v. Lachya, AIR 1914 All. 446 where it was ruled that only the Court making the reference is competent to hear the objections to the validity of the award. It was observed:- ' "On this view it is clear that whatever the ground of objection may be, if the objection could be taken before the Court which made the reference, and was taken (as in the present case) and was rejected then the decree passed in terms of the award is final and cannot be challenged either by way of appeal or revision." A revision application will be competent against order, judgment and decree on grounds specified in section 115, C.P.C., provided the same cannot be challenged in appeal. In a case where any award is sought to be challenged the revision will lie if only the case is not covered by sections 30/33 and 39 of the Arbitration Act. 10. After holding that the revision application was maintainable and court-fee was payable the learned Judge proceeded to consider the grounds on which the order of the learned Civil Judge has been held to be illegal. The first illegality which attracted the attention was the question of limitation. The learned Judge noted that the objection to the award filed by the respondent was time-barred but observed that before proceeding with the case or pronouncing judgment. The trial Court was bound to fully satisfy itself whether there existed any cause to remit the award as required by section 16 of the Act. Finally it was observed that if the Court finds any patent illegality or glaring violation of law then it remit the award in accordance with section 16. The learned Judge was of the view that the decree was patently illegal as the question of limitation was dealt with mechanically and decided without providing an opportunity for leading evidence to the respondent on this plea. 11. Section 16 deals with remittance of award in part or entirely to the same arbitrator or even to another arbitrator on grounds mentioned in it. The award can be remitted on the ground, inter alia, where objection to the legality of the award is apparent up to the face of the award. The illegality should be so obvious and prominent that by reading the award. One may point it out without referring to any other document or evidence. It is, therefore, to be considered whether the objection of limitation could be termed as an illegality apparent on the face of the award. 12. Mr. Samdani has contended that the appellant's claim filed before the Arbitrator was barred 'by time which should have been noticed by the Arbitrator as well as by the learned Civil Judge while hearing objections to the award. The learned Advocate pointed out to clause 30 of the contract in terms whereof the Superintending Engineer had decided certain claims of the appellant on 13-11- 1965 and some were not decided due to non-availability of certain documents and particulars. ' Thereafter, the appellant did not agitate the matter further. It was on 28-5-1973 when the appellant made an application before the Minister who by order dated 2-6-1973 appointed a sole arbitrator. The respondent's Advocate has not been able to point out to the reply which may have been submitted on behalf of the respondent before the arbitrator. However, the learned counsel pointed out to the decision of,the Superintending Engineer dated 13-11-1965 which was produced before the arbitrator. The claim made before the Superintending Engineer and decided by him is the same which was filed before the arbitrator. In view of these facts the learned counsel contended that it was the duty of the arbitrator to have adverted to the question of limitation before making the award. In any event such inquiry should have been made by the learned Civil
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Judge. The learned counsel for the appellant has pointed out that from the order of the learned Civil Judge it does not appear that such plea was raised and pressed by the Advocate for the respondent. On the other hand Mr. Samdani contended that the same Advocate had raised all these objections before the High Court and there was no reason not to have pressed objection before the learned Civil Judge. 13. In the objection filed by the respondent no plea was raised that the claim was barred by time. The objection was that application under sections 20/8 was time-barred as difference arose in the year 1964-65. This objection could not be treated claiming that the appellant's claim was barred by time. This objection related to the reference made to arbitrator. Although it was raised against the application under sections 20/8 of the Arbitration Act yet on the date of hearing, by consent, Mr. Itat Hussain was appointed as…
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