Al Wakeelo
Your Digital Lawyer, Always on Duty
Initializing Secure Chambers
Your Digital Lawyer, Always on Duty
Initializing Secure Chambers
Petitioner: PROVINCE OF BALUCHISTAN VS Respondent: MESSRS TRIBAL FRIENDS COMPANY, LORALAI
Court Name: Balochistan High Court Judge(s): Munawar Ahmed Mirza Title: PROVINCE OF BALUCHISTAN vs MESSRS TRIBAL FRIENDS COMPANY, LORALAI Case No.:Civil Revision No, 25 of 1977 Civil Revision No, 25 and Miscellaneous Civil
JUDGMENT
Reported As: PLD 1986 Quetta 321 Result: Petition accepted Judgment JUDGMENT ' This Appeal No, 6 of 1977 is directed against order/judgment, dated 4th August, 1977 whereby trial Court has refused to set aside the award of the Arbitrator, dated 30th October, 1976. Whereas Revision No, 25 of 1977 is directed against decree passed by the said Court in pursuance of aforesaid judgment/order. 2. Brief facts in this matter are that on 8th June, 1960 respondent was granted a contract C. A. Order No, (10) by the Irrigation Department for construction of Weir on Rakhshan river with channel near Panjgoor, District Mekran." It is alleged that execution of said contract work was at its final stages when merely on account of political victimisation General Manager of respondent's Firm was involved in criminal case registered with the Anti-Corruption Police on account of which he had faced ordeals of trial and ultimately charges against him were found to be groundless by the Special Judge. It has been asserted that in spite of that Irrigation Department failed to pay the dues of respondent, therefore, concerned authorities were approached whereupon Mr. Itaat Hussain, former Superintending Engineer, was appointed as Inquiry Officer to probe into the matter. But as no fruitful results were coming forth and matter was being delayed therefore it initially a notice was given and thereafter on 21st August, 1978 respondent filed an application under section 8/20 of Arbitration Act before District Judge, Quetta seeking appointment of the Arbitrator for finalization of dispute. Prayer clause is however reproduced below :- "It is, therefore, prayed that the respondent may kindly be called upon to file the agreement and the order dated 2nd June, 1973 passed on the applicant's application dated 28-5-1973 in the Court
---
## Page 2
and to make an order of reference to the said Arbitrator for settlement/decision of all the disputes after obtaining parties respective claims and giving them due hearing." ' The Notice of this application was given to petitioner in response to the same on 21st December, 1973 Executive Engineer Mekran appeared in the Court alongwith Government pleader and filed written statement styling himself as respondent No, 2. Although factum of appointment of Enquiry Officer was admitted, yet request for appointment of Arbitrator for the disposal of dispute in this case was refuted in para. "8" in the following terms :- "It is submitted that on the one hand the agreement was time-barred and on other hand it was decided by the Government of Pakistan that no Government Department should go to arbitration hence forthwith vide Letter No, D. 0. 7/72/72/Card/1, dated 17th June, 1972. The matter therefore could not be given to the Arbitration because it was clear violation of Government instruction. Hence Mr. Itaat Hussain was appointed as Inquiry Officer to finalise the matter. The question of appointment of Arbitrator can be considered after the report of the Inquiry Officer is received and concurrence of the Law Department obtained." ' The order sheet indicate that on the same date Mr. Itaat Hussain, was appointed as Arbitrator, but on account of his failure to submit the award within specified time subsequently his nomination was changed vide order, dated 30th October, 1974 and Mir Baz Khan Mengal was appointed as Arbitrator. The said order is reproduced below :- "30th October, 1974. The parties with counsel. ' Mr. Itaat was appointed Arbitrator on 21st December, 1973 since then he has not proceeded in the matter in spite of repeated adjournment. By consent, the reference to Mr. Itaat is withdrawn and Mir Baz Khan Mengal, _Former Deputy Commissioner has been appointed sole Arbitrator. He be informed for award to come up 16th December, 1974." ' Mir Baz Khan gave his award on 30th October, 1976. Objections to the award were tiled by petitioner on 18th May, 1977. In this case, respondent had also filed objections seeking direction to the Arbitrator to give award in respect of damages as well. 3. It may be seen that from petitioners' side a request was also made to the Court for issuance of direction, to the Arbitrator for producing in the Court, all the documents on the basis whereof the "Award" was made. This request was rejected by the trial Court by means of order, dated 18th May, 1977 which is reproduced below :- "Application is rejected as the Arbitrator is not bound under the law to file any document." ' A Review Petition was also filed by the petitioner on 27th July, 1977 for recalling aforesaid order as above order was in clear violation of requirements of section 14 of Arbitration Act. 4. In the meantime for determination of objection to the award ; trial Court framed following issue on 7th June, 1977 :- "Whether, the objection petition is within time ?" 5. Record reveals that after framing the above-mentioned issue case was adjourned to 27th July, 1977 for arguments on said issue, without allowing any opportunity of leading evidence. On 27th July, 1977 Review Petition referred to above was entertained and notice thereof was given to opposite side for filing reply on 4th August, 1977. Arguments on the question of limitation appeal to have been heard on the same date, viz. 21th July, 1977. Thereafter on 4i h August, 977 award was made rule of the Court and objection petition was dismissed. Besides Review Petition was simultaneously dismissed without receiving any reply or hearing arguments in respect thereof. In order to appreciate various steps taken by the trial Court, it would be profitable to refer relevant order sheets :- {{URDU TEXT}} ' Whether the objection Petition is within time. {{URDU TEXT}}
---
## Page 3
' Thus on the basis of judgment, dated 4th August, 1977 trial Court refused to set aside "the Award" and passed a decree which has now been challenged by way of appeal and revision. 6. Mr. Muhammad Aslam Chishti, learned counsel for petitioner has urged that ; (i) civil Court at Quetta had no territorial jurisdiction to adjudicate upon the claim in suit as the matter pertained to District Mekran, therefore, all the proceedings before the trial Court including appointment of arbitrator, etc. Are a nullity in the eyes of law. (ii) In the contract there does not exist any clause for referring the dispute to the Arbitrator for settlement, therefore in the absence of Arbitration clause all the proceedings drawn in the matter are without lawful authority and of no legal effect. (iii) In the absence of Arbitration clause in the contract, party cannot under any circumstances approach the Court under section 8/20 or seek appointment of Arbitrator. Therefore, original application made by respondent is contrary to spirit of Arbitration Act and, therefore, all the actions recorded in the matter have no legal significance and are of no effect. (iv) ft was mandatory requirement of law that Arbitrator should file all the documents alongwith the award. Observation of trial Court rejecting this request by means of order, dated 18th May, 1977 and failure to review the same is unwarranted and contrary to settled principles. (v) Neither any term of reference were specified by the Court nor the same were settled or ascertained by the Arbitrator, nor are they indicated from the award, therefore, all the proceedings drawn by the Arbitrator are illegal and improper ; (vi) Arbitration Award is vague and does not indicate, what material was examined or which of the documents were taken into consideration by the Arbitrator and what admissions were made by the department. Therefore "Award" is not valid". (vii) That Arbitrator has not maintained any record of the proceeding, which renders the award as void, (viii) The "Award" is given in an "arbitrary" manner without applying mind to the facts of the case which is evident from the fact that in two connected cases culminating in Appeal Nos. "5" and "6" of 1977 wherein, one of the grievance, which pertained to "Loss of business on account of withholding of bills" Was common but in all these three matters different conclusions have been arrived at. (ix) That original application, dated 24th August, 1973 which was filed by respondent in the Court was hopelessly barred by time, which aspect has not been taken into consideration either by trial Court or by the Arbitrator. ' Mr. Ehsanul Haq, learned counsel for respondent opposing the maintainability of appeal has vehemently contended that (i) both (a) appeal and (b) revision simultaneously against the same judgment and decree are not maintainable. (ii) Court-fee has not been paid as required under law, therefore, Appeal as well as Revision merits dismissal. (iii) Since petitioner has failed to establish misconduct of Arbitrator, therefore, Award would be deemed to have been properly procured as such impugned judgment and decree is proper. ' It would be appropriate to deal with legal objections regarding maintainability of appeal and Revision petition first. ' Learned counsel for petitioner had contended that order of rejection of application to set aside award and judgment for pronouncing the decree on the basis of award are deemed to be two independent acts of for which separate remedies are provided by the law. It is argued that order of refusal to set aside the award is independently appealable under section 39, subsection (4) of the Arbitration Act. ' For proper appreciation of the above contentions reference to sections 17, 39 and 41 of the Arbitrator Act hereinafter called "The Act" is necessary which are therefore reproduced below :- "Section 17. "Judgment in terms of award -Where the Court sees no cause to remit the award or any of the matters referred to arbitration for consideration or to set aside the award the Court, shall, after the time for making an application to set aside the award has expired, or such application having been made after refusing it, proceed to pronounce judgment according to the award, and upon
---
## Page 4
the judgment so pronounced a decree shall follow, and no appeal shall lie from such decree except on the ground that it is in excess, of, or not otherwise in accordance with, the award." ' Section 39. Appealable Orders.-(1) An appeal shall lie from the following orders passed uder this Act (and from no others) to the Court autriorised by law to hear appeals from original decrees of the Court passing the order ' An Order- "(i) superseding an arbitration ; (ii) on an award stated in the form of a special case ; (iii) modifying or correcting an award ; (iv) filing or refusing to file an arbitration agreement ; (v) staying or refusing to stay legal proceedings where there is an arbitration agreement ; (vi) setting aside or refusing to set aside an award : ' Provided that the provisions of this section shall not apply to any order passed by a Small Cause Court. (2) No second appeal shall lie from an order passed in appeal under this section, but nothing in this section shall affect or take away any right to appeal to the Supreme Court." Section 41. Procedure and powers of Court.-Subject to the provisions of this Act and of rules made thereunder- (a) the provisions of the Code of Civil Procedure, shall apply to all proceedings before the Court, and to all appeals, under this Act, and (b) the Court shall have, for the purpose of, and in relation to, arbitration proceedings, the same power of making orders in respect of any of the matters set out in the Second Schedule as it has for the purpose of, and in relation to, any proceedings before the Court. "Provided that nothing in clause (b) shall be taken to prejudice any power which may be vested in an arbitrator or umpire for making orders with respect any of such matters." ' Apparently when decree is passed in accordance with award, appeal is not maintainable under section 17 of Arbitration Act. It is thus contended that when remedy by way of appeal is not available, aggrieved party can invoke revisional jurisdiction by virtue of section 41 of Arbitration Act. Bare perusal of aforesaid provisions would indicate that appeal against decree pronounced on the basis of award is completely barred under section 17 of "The Act". This position has also been candidly conceded by learned counsel for respondent. Careful examination of aforesaid provision of law indicates that although there exists a casual connection between order, rejecting the application to set aside the award and pronouncement of judgment upot which decree has to follow. Yet obviously these are two independent actions of the Court, designed to have different consequences, therefore evidently remedies to challenge are not the same. ' Reference to subsection (iv) of section 39 of "the Act" specifically provides appeal against an order whereby petition of seeking to set aside "the award" has been refused. Therefore, it has to be seen whether on account of subsequent step, which in so cases may be simultaneously taken by the Court whether remedy, available to the aggrieved party against earlier action is automatically nullified. For proper appreciation it is profitable to consider following decisions on this point Soudamini Ghose v. Copal Chandra Ghose (1). "A preliminary objection has been taken to the competence of the appeal, on the ground that as a decree has already been drawn up in accordance with the judgment pronounced on the basis of the award and as such decree is not open to appeal under clause (2) of paragraph 21, the order must be deemed to have merged in the decree and to be no longer liable to be challenged by way of appeal. In our opinion, the preliminary objection must be overrules. It cannot be disputed that under clause (f) of subsection (1) of section 104 of the Code, an appeal lies from an order filing or refusing to file, an award in an arbitration without the intervention of the Court. Sub-appeal may be
---
## Page 5
preferred at any time within the period prescribed therefar, by the Indian Limitation Act. The fact that a decree is drawn upon the basis of the judgment which follows the order cannot take away the right of appeal of the party aggrieved by the order. No doubt the decree cannot be assailed by way of appeal, except on the ground that it is in excess of or not in accordance with the award. But this does not justify the inference that as soon as the decree is drawn up, the order which is its foundation becomes merged therein, and loses it character as an appealable order." ' Khetternath Ganguly and another v. Ushabala Dasi (2). "Besides, the matters to be considered in an appeal against an order filing the award are toally different from the matters to be considered in an appeal against the decree based upon the award. An appeal will lie against the decree only if, and in so far, as it is not in accordance with or is in excess of the award. A decree may be perfectly in accordance with the award, but a party may have good ground for complaint against the order filing the award, and we are unable to hold that although a party is expressly given a right of appeal against such an order, such right is taken away as soon as the Court makes a decree in accordance with the award. ' Reference was also made to that class of case where it has been held that it is not open to an appellant to challenge the correctness of an interlocutory order or preliminary decree without preferring an appeal against the final decree, where (as explained in subsequent cases) the final decree has been made before the appeal against the (1) (1915) 28 C 557 (2) (1915) 27 T C 391 interlocutory order or preliminary decree has been referred. But the analogy of these cases cannot apply to a case like this. The reason of the decision in that class of cases, is that the appellant could have appealed against the final decree, whereas a decree based upon an award is not Appealable where such decree is in accordance with the award." ' Considering the view opined in the above-mentioned reports and clear provisions of section 17 and section 39(iv) of the Act it is quite manifest that order refusing to set aside award is independently challengeable and is evidently distinct from "decree" which may follow subsequently or by a simultaneous Act. In case Zafar Hussain Rizvi v. Muhammad Hanif (1), briefly almost same view has been expressed at page 2179. "On parity of reasoning, an order setting aside or refusing to set aside an award under section 30, Arbitration Act by its own force does not have the effect of a decree notwithstanding the fact that decree may be subsequently prepared in terms of the award. The Full Bench of the Dacca High Court in Mrs. Mumtaz Malik v. Taxing Officer considered the question of court-fees, in somewhat similar way in an appeal from an award passed under the East Bengal (Emergency) Requisition of Property Act, 1948. They also took the view that the Memorandum of appeal from an award under the said enactment was not a decree or an order having the force of a decree....... Concurring with the above view it is ruled that when appeal challenges only order of rejection of application to set aside the award the same is appealable under section 39(iv) of the Arbitration Act and for such appeal Court-fee would be regulated by Article 11 Schedule II of the Court Fees Act, 1870. In the circumstances with utmost respect, I am not persuaded to agree with observation of this Court in Province of Baluchistan v. Sardar Muhammad Usman Khan (Appeals Nos. 2 to 5 of 1980), in so far it conflicts with the above quoted view. It is however, clarified that such appeal will be restricted only to the question relating to cause of refusal to set aside the award. Such an appeal thus cannot be deemed to challenge the decree if passed in the case. Thin line of distinction prescribed under the law is therefore, to be kept intact, else provision of section 39(iv) would be straightaway frustrated. ' Now it has to be seen whether any remedy is at all available to the petitioner, as regards decree passed in this case on the basis of award. As already observed appeal is not maintainable against the decree in view of clear provision of section 17 of the Act. Therefore, can revisional and
---
## Page 6
supervisory jurisdiction of this Court for considering illegality misexercise or illegal exercise of jurisdiction, material irregularity in the proceeding or judgment or glaring violations of law be exercised. There are host of judicial pronouncements on this aspect. However, to arrive at correct finding it would be appropriate to examine some of the case-laws. Amod Kumar Verma v. Hari Prasad Burman and others (2). 17. Though the trial Court has ordered a decree to be passed no decree has been prepared yet. What purports to be a decree is nothing but a formal order; it reproduces the operative words of the order of the trial Court. It is on the form of a decree but that would not convert it into a decree in accordance to its contents it was not a decree. I do (1) 1980 CLC 2177 (2) AIR 1958 All. 720 not understand how it can be treated as a decree when it itself directs a decree to be prepared.. ' Since a decree is to be prepared in compliance with it, it itself cannot be a decree. Since there is no decree the bar imposed by section 17 on an appeal does not operate. Moreover, section 17 bars an appeal from a decree (Except on the ground of its being in excess of the award) only if the decree is passed in a proceeding governed by sections 14 and 15, 16 and 17. Surely if some Court passed a decree on the basis of an award without having jurisdiction or without the award having been filed properly before it, it cannot be contended that no appeal would lie from it except on the ground that it is in excess of the award. ' It is true that there is no right of any appeal from any order except an order setting aside or refusing to set aside the award. Here the appeal is from an order refusing to set aside the award, but when disposing of the appeal it is open to this Court, to set aside any consequential or incidental order passed by the trial Court. Even if the order refusing to set aside the award is maintained on appeal any consequential or incidental order passed by it without jurisdiction or wrongly can be set aside. ' In any case it can be set aside by us in exercise of our revisional jurisdiction and we can exercise our revisional jurisdiction while exercising our revisional jurisdiction while exercising our appellate jurisdiction. It is not essential that there should be an application under section 115, C. P. C. Before we can exercise our revisional jurisdiction. Revisional jurisdiction certainly discretionary, but in the present case there is every reason for our exercising it to set aside the order of the trial Court which was not only without jurisdiction but also against the principles of estoppel and the principle of natural justice that no order should be passed against a person without giving him an opportunity to be heard. ' Sri Jagdish Swarup pleaded that if substantial justice had been done by the direction of the trial Court that a decree shall follow we should not interfere but justice ought to be done in accordance with the law, and moreover, since we do not know the merits of the disputes between the parties we are not in a position to say that the decree is in accordance with the legitimate rights of the parties. "Even if the formal order were treated as a decree we would have jurisdiction to set aside decree. Section 17 as said already does not bar an appeal from any decree passed in any circumstance whatsoever; it bars an appeal only if the decree was passed in a proceeding under sections 14, 15, 16 and 17. If it was passed in another proceeding it would be appealable as a decree under the Code of Civil Procedure." (ii) Gunendralal Das Chowdhury and others v. Mitandralal Das Chowdhury (1) :- So, in view of the fact that the requirements as contemplated under section 17 of the Arbitration Act having not been complied with in the instant case the decision of the learned Munsif according to to Mr. Sen, is not a decree under section 17 of the Act and as such the provisions of appeal as made under section 17 of the Act are not attracted in the facts and circumstances of the present case. Mr Sen also contends that in the instant case the provisions as
---
## Page 7
(1) 1969 D L C 49 laid down in section 39, subsection (1), clause (6) as to appeal are not also attracted in the facts and circumstances of the present case so after referring to the provisions of law from the Arbitration Act as mentioned above. Mr. Sen then contends that the revisional application against the decision of the learned Courts below before me is quite maintainable in accordance with the law. Before I go to discuss the decisions which have been referred to me by Mr. Sen and also Mr. Banil appearing on behalf of the opposite party, I would like to say that the provisions as laid down under section 115 of the Code of Civil Procedure is wide enough to call for an interference by this Hon'ble Court in a case like this, particularly because the High Court can suo motu interfere with a wrong decision under section 115 of the Code of Civil Procedure. In support of his contention. Mr. Sen has reterred me to the decision of various High Courts and particularly to a decision of Supreme Court in the case of Muhammad Swaleh and another v. Messrs United Grain and Fodder Agencies PLD 1964 SC 97. Their Lordships of the Supreme Court in para. II of the said decision have clearly decided the law on the point and I would like to quote the same in this connection:- "When questioned as to why the illegal order of 22nd April, 1960 should not have been set aside in the exercise of revisional powers all that learned counsel for the respondents urged was that the limitation for filing an application for revision had expired when the learned single Judge decided the case, and the Revision before him was not directed against the order or 22nd April, 1960, but against the order of the trial Court setting aside the ex parte decree. This contention is wholly devoid of force. The Limitation Act does not provide for any period of limitation for an application in Revision. The only article which could be applicable was the residuary Article 181 which provides a limitation of three years for an application but even that Article will not stand in the way of the exercise of revisional power for these powers can be exercised suo motu. At the same it should be remembered that the respondents had themselves approached the High Court in the exercise of its revisional jurisdiction and once the High Court is seized of the case in the exercise…
Read the unabridged text and precedent citation network on Al Wakeelo Legal Research Platform.