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First Appeal from Original Order No.23 of 1982, decided on 19th January, 1984.

‑‑‑S.17‑‑Arbitration‑‑Award‑‑Territorial jurisdiction of civil Court at V to, entertain petition and to make award rule of Court Arbitration agreement to refer to Arbitrator executed at K Arbitration proceedings conducted at K and appellants‑defendants carrying on business at K No cause of action wholly or partly, held, having arisen at civil Court at V, held, had no territorial jurisdiction to entertain petition and make award rule of Court.

Forbes, Forbes, Campbell & Co. v. Chairman and another (1909) 1 I C 938 ref.

S. Shahid Hussain Kadri for Appellants.

Ch. M.A. Latif Amritsari for Respondent.

Date of hearing: 19th January 1983.

This First Appeal arises from the order of the learned Civil Judge, Vehari, whereby, he on 2'1‑12‑1981 made the award dated 13‑1‑1979, rule of the Court.

2. The facts leading 'up to this appeal in brief are that HABIB & SONS LTD., Karachi and MARITIME TRADING CORPORATION Ltd., Karachi were carrying on business in Karachi whereas Azad Cotton Ginners, respondent through Proprietor Ch. Chiragh Din were doing business at Vehari (Punjab). There arose some dispute over some payment. They, however, agreed to refer the; dispute to sole Arbitrator Maulana Abul Wahid. Consequently, agreement EXh.P.l/A was executed on 28‑12‑1978, whereby the parties not only referred the dispute to Maulana Abdul Wahid but also stated that they would abide by his decision, which would be the last and final. The sole Arbitrator after hearing the parties gave his award on 13‑1‑1979 declaring that Rs.7,10,000 were due to the respondent by the appellants. He also awarded Rs.1,00,000 as costs on the ground that Chiragh Din respondent had to stay in .Hotel Park for 12 months to pursue the dispute. On 4‑2‑1981, the respondent herein moved application before the Civil Judge, Vehari, to direct the sole Arbitrator to file the award in Court and same be made rule of the Court. The appellants herein contested the application by raising preliminary objections. and denying assertions made' in the application. On the pleadings the following issues were

(1) Whether, the petition is barred by time O.P.D.

(2) Whether the civil Court has no territorial jurisdiction to entertain this petition 0. P. D.

(3) Whether the petition does not disclose cause of action 0. P. D.

(4) Whether the petition is not maintainable in its present form O. P. D.

(5) Whether the petition is not affixed with proper court‑fees O.P. D.

(6) Whether the petition is bad on account of preliminary objections Nos.1 and 7 to 11 O.P.D.

(7) Whether the award is liable to, be made rule of the Court as prayed for O.P.D.

The respondent examined Maulana Abdul Wahid, the sole Arbitrator as P.W.I. Chiragh Din respondent appeared P.W.2. Maulana Abdul Wahid also produced award Exh. P.2 and the statement of the parties Exh. P.1 recorded by him. The appellants herein examined Iqbal Dossa R.W. 1 and Turab Hussain R.W.2. The trial Court found issues Nos. I to 7 against the appellants. On the issue of relief i.e. issue No.8, the trial Court made the award Exh. P.2, rule of the Court. Hence this Appeal.

3. It is remarkable that the execution of agreement Exh. P.1/A, the appointment of sole Arbitrator and the fact that Award P.2, was delivered by Maulana Abdul Wahid are the admitted facts of the case.

4. Before me, the learned counsel for the appellants has, however, assailed the findings of the trial Court on issue No.2 alone. He submitted that since the appellants/defendants were neither actually or voluntarily residing or carrying on business, nor did the cause of action wholly or in part arose in Vehari, the Civil Judge, Vehari i.e. the trial Court had no jurisdiction to entertain the award and adjudicate the same. As against this, the learned counsel for the respondent herein relied on Forbes, Forbes, Campbell & Co. v. Chairman and another reported as (1909) 1 I C 938 to contend that since the disputed amount was to be paid at Vehari where the respondent /applicant was conducting business, it shall be assumed that the cause of action partly did arise at Vehari and as such the learned civil Judge had territorial jurisdiction to entertain the award and make the same rule of the Court.

5. After hearing the learned counsel I find that the term "Court" has been defined under ,section 2 of the Arbitration Act as;

2. Definition ...

(a)

(b) .

(c) "Court" means a Civil Court having jurisdiction to decide the question forming the subject‑matter of the reference if the same had been the subject‑matter of a suit,, but does not, except for the purpose of arbitration proceedings under section 21, include a Small Cause Court." .

The plain reading of the definition "Court" indicates that the question which engages examination is whether Civil Judge, Vehari was initially competent to entertain a suit in respect of the dispute which is the subject‑matter of reference to arbitration. In the case in hand, the subject‑matter of the suit is certainly the recovery of the money due by the appellants to the respondent. 1, therefore, proceed to see whether the Civil Judge, at Vehari could entertain the suit for the recovery of the disputed amount or not. After having gone through, the record I find that the appellants /defendants were neither residing in Vehari nor carrying any business there; that the contract of business between the parties showing the terms of the payment of the amount to the respondent have not been placed on the record; that Chiragh Din, respondent when appeared as a witness has also not stated the terms of the agreement or the place where the amount was to be paid to him; that he has also not explained his firm's method of doing business; that he has not stated the practice of the payment; that there is nothing on the record to show the place where the amount due from the appellants to the respondent was expressly or impliedly to be paid; that the agreement to refer the dispute to Arbitrator was executed at Karachi; that the arbitration proceedings were conducted at Karachi, that the award was made at Karachi and that the appellants were residing and carrying on business at Karachi. In these circumstances, I am of the considered opinion that no cause of action wholly or part hall arisen in Vehari. As for the case‑law cited by the learned counsel for the respondent, I have read it carefully and find that the same is quite distinguishable inasmuch as in that case the terms of the contract, the practice for payment of the money and the method of doing business of that firm were fully established but in the case in hand, the respondent /applicant has not cared to prove the terms of his business with the appellants, the practice for the payment of the amount due to him and the method of the business of his firm.

6. For what has been stated above, the findings of the trial Court on issue No.2 is reversed and it is held that the trial Court had n territorial jurisdiction to entertain the petition and to make the award rule of the Court. I further find that since the Civil Judge at Vehari had not territorial jurisdiction in the matter, he could not adjudicate the other issues. Resultantly, the order of the trial Court dated. 21‑12‑1981 is set aside leaving the parties to bear their own cots.

M.Y. H Appeal allowed

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