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Messrs WASEEM CONSTRUCTION CO.--Plaintiff
versus
GOVERNMENT OF SIND and others--Respondents
Suit No. 336 of 1985, decided on 27th April, 1987.
(a) Arbitration Act (X of 1940)-
---Ss. 20, 30 s 33--Limitation Act (IX of 1908), Ss. 4 & 5 and Sched. Art. 158--Award--Filing of objections to award--Limitation- Objections not filed within. 30 days of filing of award as provided under Art. 158, Limitation Act, 1908 due to closure of Court for summer vacations--Period of limitation having expired during summer vacations of the High Court whether defendants were entitled to file objections on the date when Court reopened--Contention of plaintiff's counsel that objections filed in the case were barred by time appearing to be well-founded--Law on point, however, being somewhat unsettled, objections dealt with on merits.
Port Muhammad Bin Qasim v. National Insurance Corporation, Karachi 1983 CLC 3126; Fazal Karim and others v. Ghulam Jillani 1975 SCMR 452; Ikramullah & others v. Syed Jamal 1980 SCMR 375; Mushtaq Ahmad v. The Vice Chancellor University of the Punjab 1970 SCMR 26; Malim Amin v. Settlement Commissioner (Land) Peshawar 1978 SCMR 166 and Sher Muhammad v. Munir Ahmed 1978 SCMR 166 ref & examined.
(b) Arbitration Act (X of 1940)--
---S. 28--Award--Time for making award--Contention of defendant's counsel that according to the period allowed by Court the award was to be made on or before 21-4-1985 and since award was announced on 30-4-1985 it was beyond time and was, therefore, invalid--Award, however, found to have been signed by Umpire on 3-4-1985 and his notice dated 4-4-1985 showing that the award was fixed for announcement on 11-4-1985--Defendants not having appeared on date so fixed, the date for announcement of award had to be adjourned to 16-4-1985 and then to 30-4-1985--Award, held, was made by Umpire within time granted by Court in circumstances of case--Objection of defendant's counsel overruled.
(c) Arbitration Act (X of 1940)--
---Ss. 20, 30, 8(2), 13(b) & 14(3)--Award--Objections--Jurisdiction of Umpire challenged on ground that the award was to be made in respect of the dispute existing between the parties upto the stage when the application under S. 8(2) was made and not in respect of entire dispute relating to the suit--Prayer in the application of plaintiffs under S. 20 was to appoint an arbitrator for adjudication of "disputes" between the parties and obviously disputes were to be disputes arising out of the contract between the parties and the order of High Court appointing two arbitrators did not restrict the reference to a particular claim--Claims arising out of the work done under the contract and same being referable to arbitration and parties having filed claims before arbitrators appointed pursuant to arbitration agreement, restricting scope of arbitration on a mere technicality would not only be incorrect but also inequitable inasmuch as the parties would then have to go through another round of litigation- Arbitrators appointed by Court, therefore, had jurisdiction to decide all disputes which arose out of the work that was to be done under the contract between the parties and which were referable to arbitration under arbitration clause--Objection overruled as being without any merits.
(d) Arbitration Act (X of 1940)--
---Ss. 13 & 30--Award--Objection--Powers of Umpire--Mere fact that evidence was insufficient, was not enough to sustain reversal of an award on such point--Arbitrator was a Judge of the choice of parties themselves, had wider powers than an ordinary Judge, his decision could not be set aside except on ground, mentioned in S.30--Arbitrator was final Judge of a matter of fact and parties were bound by his decision and Court had no jurisdiction to say that evidence was not sufficient to come to conclusion at which arbitrator had arrived--Award, held, could not be set aside for being against the weight of evidence or even for mis-reception of evidence and arbitrator was fully justified in rejecting the case set up by either party irrespective of the weight of evidence in his favour and in accepting the case of other party in whose favour evidence was less weighty and whether his conclusion was right or wrong was not a matter for the consideration of the Court unless there was absolute lack of evidence to sustain a finding.
Nanakevaka v. Nana Sri Ogori reported in AIR 1933 P.C. 46 ref .
(e) Arbitration Act (X of 1940)--
---Ss. 8, 20 & 30--Award--Two arbitrators not agreeing among themselves and giving conflicting awards and matter referred to Umpire--Plaintiff's arbitrator found to have given details and well considered reasons for his findings on each claim--Umpire, held, was ustified in agreeing with the findings of plaintiff's arbitrator and in disagreeing with the findings of defendant's arbitrator--Objections raised by defendant's counsel found to be without any force and over-ruled--Judgment pronounced accordingly and directed that decree shall follow the award of the Umpire.
Abdul Karim Lakhan for Plaintiff. Syed Ahmed Farooqui for Defendants. Dates of hearing: 21st and 22nd April, 1987.
The facts giving rise to this case are that an application under section 20 of the Arbitration Act, 1940 had been filed in this Court on 8-11-1974 which was registered as Suit No. 3/75, alleging that contract was given to the plaintiff by the Provincial Buildings Department for the construction of certain buildings at Karachi. Dispute having arisen between the parties and the defendants failing to appoint an arbitrator, the plaintiff approached this Court and in ara. 21 of the application under section 20, the plaintiff averred that the defendants neither paid the claim of the plaintiff amounting to Rs.15,18,613 not referred the dispute to the arbitrator inspite of repeated requests and as such they refused to honour the agreement.
2. It was prayed that the defendants be directed to file the original agreement and that the Court be pleased to appoint an arbitrator. Accordingly the defendants appointed Mr. Ghulam Muhammad Junejo as their Arbitrator while with the consent of the defendants Mr. Shamshul Ariefin, the then Deputy Secretary Home Department was appointed as an Arbitrator on behalf of the plaintiff.
3. The above-named two Arbitrators did not agree among themselves and gave conflicting awards and therefore the matter was ordered to be referred to an Umpire to be appointed by the defendants and not to the Umpire appointed by the two arbitrators. The defendants appointed Mr. Shah Nasimuddin as an Umpire. Thereafter, they recalled his authority and appointed Mr. Sajjad Haider as an Umpire to adjudicate the dispute. But he, too, failed to ake his award and therefore the, Court appointed Mr. Agha Imdad Ali, formerly a Judge of this Court as an Umpire by order dated 11-11-1984 and directed him to make an award within two months of the receipt of the notice. On 7-4-1985 on an application the period of making the award was extended by two weeks to be computed from the date of the order.
The Umpire submitted the award dated 3-4-1985 alongwith an application which was presented in the Court on 8-5-1985. He concurred with the award of Mr. Shamsul Arfin and disagreed with that of Mr. Junejo.
4. The plaintiff did not file any objections to the above award. The defendants however, filed objections to the said award. Mr. Abdul Karim Lakhan Advocate has argued the case on behalf of the plaintiff while Mr. A.S. Farooqui, Advocate has argued the case on behalf of the defendants. Mr. A. K. Lakhan took a preliminary objection as to the maintainability of the objections filed by the defendants. His submission in short was that the objections to the award could A have been filed within a period of 30 days of the filing of the award as provided under Article 158 of Limitation Act. The Article 158 reads as under:------
"Description of Period of Time from
application limitation which period
begins to run.
158-Under the Arbitration Thirty days The date of
Act, 1940 to set aside service of
an award or to get the notice
an award remitted of filing of
for reconsideration." the award.
5. The notices of the filing of the award were served on the defendants on various dates viz. 20-5-1985, 24-6-1985 and 25-7-1985 while objections were filed on 31-7-1985 by all the defendants jointly. He pointed out that since all the remaining defendants were subordinate officers of defendant No. 1 therefore service on any one of them would be deemed to be notice to the others as well. Hence, the objections having been filed after a period of more than 30 days were clearly barred under Article 158 of the Limitation Act.
6. Mr. S.A. Farooqui, Advocate submitted that even if it is considered that the notice of the filing of the award had been served by the defendants on 20-5-1985 then albs the objections filed by him are not. time barred because the period of limitation of 30 days had expired during summer vacations of the High Court and the defendants were entitled to file objections on the day when the Court reopened i.e. 4-8-1985 whereas he has filed the objections on 31-7-1985 i.e. 4 days before the time limit. He has relied upon 1983 CLC 3126 (Port Muhammad Bin Qasim v. National Insurance Corporation, Karachi.), where a D.B. of this Court held that inspite of notification of the High Court permitting the litigants to file petition during the summer vacations, the litigants were entitled to the benefits of section 4 of, the Limitation Act and could exclude the period of vacations while computing the time of limitation for filing the suit. This Court had followed the decisions of Supreme Court in the cases of Fazal Karim and others v. Ghulam Jilani reported in 1975 SCMR 452 and Ikramullah & others v. Syed Jamal reported in 1980 SCMR 375.
7. Mr. Abdul Karim Lakhan, the Advocate for the plaintiff distinguished the above two decisions of Supreme Court on the ground that the appeals or petitions in those cases were filed on the day on which the Court had reopened after vacations and the appellant or the Advocate was unaware of the fact that the said appeal or petition could be filed during the vacation. He submitted that the appellant in this case was aware of the fact that the appeal could be filed even during the period of summer vacations which is evident from the fact that he had himself filed the objections on 31-7-1985 which was a day during the summer vacations. In this connection he has relied upon the following two rulings:
1970 SCMR 26 (Mushtaq Ahmad v. The Vice Chancellor University of the Punjab). In this case the Court refused to condone the delay where it was sought to be condoned on the ground that the period of limitation had expired during the vacation and therefore he was entitled to file petition on reopening day. It was held that the petitioner having actually filed it during summer vacation through an Attorney, who is undoubtedly familiar with the fact that petition and other proceedings are received by the Court office during vacation, the delay was not condoned.
1978 SCMR 166 (Malim Amin v. Settlement Commissioner (Land) Peshawar). In this case, it was held as follows:--
"There is no merit in this plea. The practice of this Court, as laid down in Order II, rule 3 of the Supreme Court Rules and Orders is that petitions and other proceedings are received by the Supreme Court during the vacation on all working days (except Saturdays). No ambiguity existed on this point and there could be no scope for a contrary impression. Hence no bona fide excuse for condonation of delay exists. The same view, in somewhat similar circumstances, was taken by this Court in Mushtaq Ahmed v. Vice Chancellor, University of the Punjab, Lahore."
I have also gone through all these rulings. The Division Bench of this Court in the case referred to above has placed reliance on two decisions of Supreme Court cited above. The first decision is in the case of Fazal Karim and another v. Ghulam Jilani and others reported in 1975 SCMR 452, while the second decision is in the case of Ikramullah and others v. Syed Jamal reported in 1980 SCMR 375. The facts of the first ruling of the Supreme Court are somewhat similar to the facts of the present case but that of the second ruling are distinguishable from the facts of the present case inasmuch as it relates to the extension of period of limitation under section 4 with regard to a sale made under Pre-emption which was allegedly made after the expiry of the limitation period of one year permitted by section 31 of pre-emption Act. It was contended that though the sale was made after the expiry of one year from the date of the original sale yet it was within the period of limitation in terms of section 4 of the Limitation Act as the Civil Court was closed on the day when the limitation was to expire and, therefore, could only be filed on its reopening day.
The first ruling cited by the plaintiff's counsel, is the case of Mushtaq Ahmad v. Vice Chancellor, Punjab University reported in 1970 SCMR 26, clearly holds as under:------
"The petition was filed in this Court on 21- 8-1967 which was 8 days out of time making all available allowances as from the 8th June, 1967.
It is sought to bring it within time on the argument that the petitioner thought he could file the petition on the day the Court opened after summer vacation. This is hardly to be accepted for the actually filed it during the summer vacation through an Attorney, who is undoubtedly familiar with the fact that petitions and other proceedings are received by the Court office during vacation time, on all working days except Saturdays.
No reasonable explanation being offered for the delay, we dismiss this petition as barred by time."
The second ruling is in the case of Sher Muhammad v. Munir Ahmed reported in 1978 SCMR 166. The decision given by the Supreme Court in the first case was followed by the Supreme Court in this case and it was clearly held that the delay in filing the petition could not be excused even if the petitioner was under the impression that limitation did not run during the long vacations of the Court.
This ruling is latter in time to the first ruling of the Supreme Court relied upon by the D.B. in the case of Port Muhammad Bin Qasim v. National Insurance Corporation. This ruling was not considered in the above D.B. case.
8. The objection raised by Mr. Abdul Karim Lakhan about the maintainability of these objections on the point of limitation, therefore, B appear to be well founded. But looking to the fact that the law on the point is somewhat unsettled I propose to deal with these objections on merits, as well.
9. The first objection of Mr. S.A. Farooqui was on the point of limitation. He submitted that the award was given by the Umpire after the expiry of the time fixed by the Court and was therefore invalid. He relied upon section 28 of the Arbitration Act which reads as under:--
" '8(1) The Court may, if it thinks fit, whether the time for making the award has expired or not and whether the award has been made or not, enlarge from time to time, time for making the award.
(2) Any provision in an arbitration agreement whereby the Arbitrators or Umpire may, except with the consent of all the parties to the agreement, enlarge the time for making the award, shall be void and of no effect."
10. He submitted that while referring the matter to the Umpire Mr. Agha Imdad Ali a period of two months was granted to him for making the award. Thereafter, only one extension was granted to him by this Court on 7-4-1985 whereby the period for making the award was extended by two weeks which was to be computed from the date of passing of the order. In other words the award was to be made on or before 21-4-1985. He referred me to the photo copy of a notice at page 115 dated 16-4-1985 sent to him by the Arbitrtor intimating that the matter was fixed for announcement of award on 30-4-1985. He submitted that the award was to be considered as having been made on the date on which it was announced. Since the award was announced on 30-4-1985 it was beyond the time fixed by the Court and was therefore invalid.
11. I do not agree with this contention of Mr. S.A. Farooqui. The award was signed by the Umpire on 3-4-1985, as would appear from the body of the award itself. There is a notice from the Umpire dated 4-4-1985 at page 111 which clearly shows that the award was made and signed before that date and was fixed for announcement on 11-4-1985. The arbitrator had called upon the parties to deposit his fee and expenses on that day. It appears that the defendants did not appear on the day so fixed and therefore the date for announcement of award was to be adjourned to 16-4-1985 and then to 30-4-1985. In these circumstances, it is quite clear that the award was made by the Umpire within the time granted to him by the Court. I therefore over rule the objection of the defendant's counsel on this point.
12. The second objection of Mr. S.A. Farooqui was to the effect that the Umpire had no jurisdiction to make this award. The precise question on which he challenged the jurisdiction of the Umpire was that the award was to be made in respect of the dispute existing between the parties upto the stage when the application under subsection (2) of section 8 of the said Act was made in November D 1974 and not in respect of the entire dispute relating to the suit. In this connection it may be recalled that a similar reference was made by one of the Arbitrators Mr. Shamshui Arfin, Deputy Secretary Home Department to this Court by an application under section 13(b) read with section 14(3) of the Arbitration Act, 1940. The same was heard and disposed off by my learned brother Mr. Justice Nasir Aslam Zahid on 21-2-1982. It will be useful to reproduce the following extract of his order:--
"Reference may now be made to the precise question of law on which the opinion of this Court is sought. In this context paras 3 & 4 of C.M.A. No. 3672/81 are reproduced here:--
"3. A question of law has arisen on which great stress has been laid by the parties to the proceedings whether the award in the matter is to be made in respect of the dispute existing between the parties upto the stage when the application under subsection (2) of section 8 of the said Act was made in November, 1974 or the entire dispute relating to the suit contract is to be resolved. Admittedly, the contract work was suspended under the order of the Defendants when the said Application was moved in the High Court but during the pendency of the said Application the plaintiffs at the request of the Defendants have recommended the contract work and complied it on 31-12-1976 whereas the Hon'ble Court was pleased to appoint Arbitrators in the subject matter on 3-6-1979.
4. That the reference to Arbitrators is silent on the point and this difficulty relating to the jurisdiction of the Arbitrators needs to be clarified . "
I have heard Mr. A. K. Lakhan, learned counsel for the plaintiffs and Mr. A. Sattar Shaikh, learned Additional Advocate-General who appears on behalf of the defendants. The factual statement in para. 3 of CMA 3672/81 has not been denied on behalf of the defendants. According to Mr. Lakhan, the entire dispute between the parties arising out of the contract can be decided by the two arbitrators, whereas the learned Additional Advocate-General has contended that the scope of reference to the arbitrators is restricted to the claim of Rs.15,18,613 mentioned in the application under section 20 of the Arbitration Act, 1940 filed by the plaintiffs. On the facts of the present case I am inclined to agree with Mr. A.K. Lakhan that the arbitrators are not restricted to decide only the claim of the plaintiffs as it existed in November, 1974, when they filed the application under section 20. The order appointing the present two arbitrators was passed on 20-5-1979 and much before that, at the request of the defendants, the plaintiffs recommenced the work under the contract and completed the same by 31-12-1986. The claim of the plaintiffs as it existed in November, 1974 and other claims arising thereafter arising out of the same contract between the parties, formed part of the statement of claim of the plaintiffs before the two arbitrators. The prayer in the application of the plaintiffs was to appoint an arbitrator for adjudication of "disputes" between the parties, and obviously the disputes were to be disputes arising out of the contract between the parties. The order, dated 20-5-1979 of this Court appointing the two arbitrators did not restrict the reference to the claim of Rs.15,18,613 mentioned in para. 21 of the application under section 20. If the claims arise out of the work done under the contract and the same are referable to arbitration and the parties have filed the claims before arbitrator who have been appointed pursuant to the arbitration agreement between the parties, to hold otherwise and restrict the scope of arbitration on a mere technicality would not only be incorrect but also inequitable in as much as the parties would then have to go through another round of litigation.
5. Opinion of this Court on the question referred through CMA 3672/81 is that the two arbitrators appointed by order dated 22-5-1979 have jurisdiction to decide all such disputes which arise out of the work to be done under the contract between the parties and which are referable to arbitration under the arbitration clause provided any party has made a claim or claims in respect thereof before the arbitrators."
13. I find myself in agreement with the reasonings given by my learned brother and hold that the objection raised by the defendants' counsel is without any merit and therefore is over-ruled.
14. The next objection of the defendant's counsel relates to the evidence adduced before the Umpire. He has contended that issue No. 3 pertained to claim of payment for extra items. According toy him, there was no evidence before the Umpire with respect of these) items yet he allowed the same. It may be pointed out that in order to sustain the reversal of award on this point it is necessary for the defendants to show that there was absolute lack of evidence. The mere fact that the evidence was insufficient is not enough to sustain the reversal of an award on this point. It may be pointed out that an arbitrator is a Judge of the choice of the parties themselves. He has got wider power than an ordinary Judge. His decision cannot be set aside except on the grounds mentioned in section 30. The arbitrator is final Judge of a matter of fact and so long as he acts within the powers conferred on him with fairness, the parties are bound by his decision and the Court has no jurisdiction to say that the evidence was not sufficient to come to the conclusion at which the arbitrator had arrived. An award cannot be set aside for being against the weight of evidence or even for mis-reception of the evidence. The arbitrator is fully justified in rejecting the case set up by either party irrespective of the weight of evidence in his favour and in accepting the case of the other party in whose favour the evidence is less weighty. Whether his conclusion is right or wrong is not a matter for the consideration of the Court. Their Lordships of P.C. in the case of Nanakevaka v. Nana Sri Ogori reported in AIR 1933 P.C. 46 made it quite clear that the party challenging the award as not being supported by the evidence must show that it is patent on the face of the award that there is no evidence at all on which the arbitrator could have come to his conclusion. It was pointed out by the Umpire in this case that Issues No. 3 and 4 related to the less payment of the due amount of items done in compliance of order of defendants No. 4 and 5 and loss suffered during the suspension of the work. The plaintiff's Arbitrator Mr. Shamsul Arfin had allowed an amount of Rs.6,11,006.39 after taking into consideration the evidence (oral and documentary) led by the parties whereas Mr. Ghulam Muhammad Junejo, the Arbitrator of the defendant's had allowed only Rs.25,380.92 arbitrarily without taking into consideration the evidence available on record. The Arbitrator of the plaintiff dealt with the issues item-wise.
14. I have also gone through the reasoning of the two Arbitrators. The Arbitrator Mr. Shamsul Arfin has dealt with 57 items of the plaintiff. He has given detailed and well considered reasons for his findings on each of these claims. I agree with the Umpire that the findings of the plaintiff's arbitrator are correct and should be accepted in preference to the findings of the defendants' Arbitrator on these claims.
15. I am, therefore, satisfied that the learned Umpire was absolutely justified in agreeing with the findings of the Arbitrator Mr. Shamsul Arifin and in disagreeing with the findings of Mr. Ghulam Muhammad Junejo.
16. Having come to the conclusion that all the objections raised by defendant's counsel are without any force, I overrule all of them and pronounce judgment accordingly and direct that the decree shall follow the award of the Umpire.
S.Q./W-4/H Suit decreed.
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