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First Appeal from Original Order No. 83 of 1983, decided on 11th January, 1986.

---S. 39--Setting aside award--Appeal--Proper forum--Proper forum of appeal, under section 39, Arbitration Act, 1940 from order of Court made at stage when decree was not passed in terms of award, held, was to be determined in accordance with value of suit as fixed in plaint by plaintiff and not by amount of decree which ultimately was passed on basis of award--Appeal filed before High Court after fixing value according to amount of award instead of value of suit, being not maintainable, memorandum of appeal was returned to appellant to be presented in proper Court.

Ch. M. Arif for Appellant.

Malik Muhammad Qayyum for Respondent.

Dates of hearing: 19th and 25th November, 1985.

On 21-6-1978 the respondent filed a suit for declarations-cum -in-junctions-cum-rendition of accounts against the appellant and two others. On 1-7-1978 the appellant moved an application before the Court for stay of the proceedings and reference of the disputes between the parties to arbitration in accordance with the arbitration clauses contained in the agreements between them. By an order, dated 26-7-1978, despite opposition on the part of the respondent, the trial Court allowed-the application. The respondent challenged the order of the trial Court in appeal before the Additional District Judge but without any success. He then moved the High Court on the revisional side. On 17-1-1979 the appellant as well as the respondent appeared before Muhammad Afzal Lone, J. and expressed their willingness to refer their disputes to the sole arbitration of Mr. Salah-ud-Din Ahmed, a former Judge of the Supreme Court of Pakistan. The respondent also agreed to file an amended plaint. In the amended plaint the appellant was cited as the sole defendant. After obtaining the consent of Mr. Salah-ud-Din Ahmad, by an order, dated 2-4-1979, Muhammad Afzal Lone, J., appointed him as the sole arbitrator. On 30-4-1980 Mr. Salah-ud-Din Ahmad signed the award and subsequently filed it in the civil Court seized of the main suit. In his award he inter alia found that the respondent was entitled to recover a sum of Rs.10,00,000 from the appellant. Both parties filed objections to the award but subsequently the respondent withdrew his objections. By an order, dated 1-2-1983, the learned civil Judge rejected the objections of the appellant, made the award rule of the Court and passed a decree in terms thereof.

2. From the decision of the learned civil Court the appellant could file appeals under two different provisions of the Arbitration Act. Thus, under section 17 of the Act he could file an appeal from the decree which followed upon making the award rule of the Court. The scope of this appeal would have been of limited nature for it lay only on the ground that the decree was -in excess of or not in accordance with the award. The other appeal could be preferred under section 39 of the Act. In this appeal it could be inter alia shown that the learned civil Court had erred in declining to set aside the award. The appellant has elected to seek his remedy under section 39 of the Act alone.

3. A preliminary objection has been raised on behalf of the respondent that the appeal under section 39 did not lie in the High Court but that it should have been filed in the Court of District Judge as the value of the suit for the purposes of jurisdiction was Rs.25,000 only. In support of this objection reliance has been placed on two decisions of this Court reported as Muhammad Ramzan v. Nazir Ahmad 1979 C L C 95 and Apollo Textile Mills Ltd. v. Mughal Ltd. 1982 CLC 2393. In these two cases the very question which has been raised before me was considered and it was held that the forum of appeal under section 39 of the Arbitration Act was to be determined in accordance with the value of the suit as fixed by the plaintiff and not by the amount of the decree which was ultimately passed on the basis of the award.

4. On behalf of the appellant it is urged that the suit filed by the respondent was one for rendition of accounts as well. In such a suit the value fixed by the plaintiff for purposes of court-fee and jurisdiction was always of a tentative nature, for, in the event a decree was passed for an amount 'in excess of the amount at which the plaintiff had initially valued his relief, it was the higher amount which determined the forum of appeal as it such a case the value of the suit for purposes of jurisdiction stood automatically enhanced. In support of his contention he referred to Megh Raj v. Rupchand Uttamchand through Diwan Chand A I R 1946 Lah. 280 and Sana Ullah v. Muhammad Akhtar 1979 C L C 578.

5. In my opinion the preliminary objection of the respondent must be upheld. As already noticed the appellant has elected to pursue his remedy under section 39 of the Arbitration Act only. As pointed out in Muhammad Ramzan v. Nazir Ahmad, ibid, remedy relates to a stage prior to the passing of the final decree, and till the final decree is passed the value of the suit for purpose of jurisdiction is not enhanced. Consequently, the forum of appeal from an order made at a stage when A the decree has yet not been passed has to be determined with reference to the value of the suit as mentioned in the plaint. In fact that appellant has taken advantage of this position by paying court-fee in accordance with the value of the suit as fixed by the respondent in his plaint. The authorities cited by the learned counsel for appellant are easily distinguishable. In Megh Raj v Rupchand Uttamchand, ibid, the question before the Full Bench was whether a defendant while preferring an appeal from a preliminary decree in a suit for rendition of accounts had the option to fix his own value for purposes of court-fee and whether in this matter he was not bound by the value cited by the plaintiff in the plaint. The Full Bench answered the question in the negative by a majority judgment, In support of his contention learned counsel for the appellant has relied upon the following observation appearing in the judgment of Abdur Rehman, J.:-

"Once a definite sum of money is found to be due by one party to the other and the appeal is from the final decree and not from the preliminary decree, different considerations would prevail. "

But then, as already mentioned, here the appeal filed by him is not from the final decree, but from an order that was made before the decree was passed in terms of the award. As such the said observation of Abdur Rehman, J. is of no assistance to him. In Sana Ullah v. Muhammad Akhtar, ibid, as the time of passing a decree in a suit for possession, the value of the suit for purposes of jurisdiction was found to be many times higher than that fixed in the plaint. It was held by Aftab Hussain, J. that it was the amount found by the Court as payable by the plaintiff and not the amount at which the plaintiff had valued his relief which determined the forum of appeal. Here again it was the decree which was the subject of the appeal and not an order made prior to the passing of the decree. Thus, this case too has no application to the appeal before me.

6. For the reasons stated above, I hold that the appeal preferred by the appellant did not lie in this Court. The memorandum of appeal may, therefore, be returned to him for presentation to the proper Court. The costs in this appeal shall abide by the final event.

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