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Civil Appeal No. 1 of 1959, decided on 23rd November 1959.

(On appeal from the judgment and decree of the High Court of West Pakistan at Lahore, dated the 4th April 1956, in Civil Revision No. 224 of 1955).

(a) Arbitration Act (X of 1940), S. 10-Agreement appointing four persons as arbitrators and another as Sarpanch----All five held to be arbitrators---Sarpanch a Chairman and nut an umpire : [Abdul Hamid v. H. M. Qureshi P L D 1957 S C (Pak.) 145 ref.]

(b) Arbitration Act (X of 1940), S. 30-Misconduct-One arbitrator absenting himself for one or two sittings with consent of other arbitrators--Business of disputed character not transacted in such sittings-Decision by all arbitrators-No misconduct-Party not raising objection against absence of arbitrator-Irregularity, held, waived: [British Metal Corporation v. Ludlow (1938) 1 All. E R 135 ; Thammiraju and others v. Bapiraju I L R 12 Mad. 113 Ramnath Misra v. Ramranjan Misra A I R 1922 Cal. 181 and (Pundit) Bhim Sen v. (Pundit) Tara Chand A I R 1932 All. 154 ref].

Muhammad Iqbal Hussain, Advocate Supreme Court, instructed by Naziruddin, Attorney for Appellant.

Respondent No. 1 : In person.

Respondents Nos. 2 to 6 : Ex parte

Date of hearing : 23rd November 1959.

.-This is an appeal by special leave of this Court from the judgment and decree of a single Judge of the High Court of West Pakistan at Lahore passed in revision upholding those of the District Judge and the Senior Civil Judge, Jhelum.

The facts of the case are that on the 20th September 1953, the appellant and the respondent No. 1, who are full brothers, by an arbitration agreement referred their dispute with regard to a house to the arbitration of five persons including a Surpanch in the following terms :- ---

"We with our free consent and without any bodily infirmity fully conscious without any compulsion of any person, appoint arbitrators and Surpanch as following for the decision of our dispute :-

(1) Soofi Muhammad Din, Ex-Municipal Commissioner,

(2) Sethi Abdul Karim, Municipal Commissioner,

(3) Sheikh Abdul Qadir, Timber Merchant,

(4) Moulvi Karam Dad, Timber Merchant, as arbitrators, and

(5) Moulvi Abdul Halim Khateeb, as Surpanch.

Whatever decision the above-mentioned arbitrators and Surpanch will do, will be acceptable to us, the executants, in every way and we, executants, will abide by the said decision. The award will be operative by the decision of majority. Therefore, this agreement for the appointment of arbitrators and Surpanch has been executed, so that it shall remain as a document."

In two sittings dated the 10th and 11th October 1953, the arbitrators and the Surpanch held their proceedings in the absence of one arbitrator, Sethi Abdul Karim. The appellant in his concise statement states that on the 13th October 1953, he served a notice on the arbitrators and the Surpanch that they should decide the dispute between the appellant and the respondent No. 1 and not bring under consideration other matters of the alleged right of strangers. This notice, however, was not brought on the record and was not before any of the Courts who dealt with this matter. It was, however, significant that in the concise statement, where mention of this notice is made, the appellant does not state that he took exception to the arbitration proceedings on the ground of the absence of one of the arbitrators, The house in dispute appears to have two portions, one including 2 or 3 marlas of land and the other consisting of 6 marlas, On the 15th November 1953, the arbitrators gave their award. The award was unanimous, and signed by all the arbitrators including Sethi Abdul Karim any the Surpanch. By this award the appellant and tire respon dent No. 1 were given a 7/24th share each in bigger portion and equal half shares in the smaller portion of the house. On the 3rd December 1953, the respondent No. 1 filed a petition before the Senior Civil Judge, Jhelum, purporting to be one under section 20, but which more appropriately comes under section 17 of the Arbitration Act, praying that the arbitrators and the Umpire' might be asked to file the agreement and the award and a decree might formally be passed according to the award. On the 25th January 1954, the appellant filed a written statement contesting the petition and objecting to the award as being collusive, dishonest and against law and facts and following it up by an application dated the 27th February 1954, under section 33 of the Arbitration Act for setting aside the award on the ground that it determined the alleged shares of the strangers in one part of the house, and that the absence of one of the arbitrators from the proceedings had vitiated the award, as also the fact that he was not served any notice to argue his case. On the 27th January 1955, the Senior Civil Judge refused the appellant's application and pro nounced judgment according to the award. The appellant then filed an appeal in the Court of the District Judge, Jhelum, who dismissed it on the 2nd July 1955. A revision petition filed by the appellant was heard in the presence of both the parties by a single Judge of the High Court of West Pakistan at Lahore, and dismissed on the 4th April 1956. Against this order of the High Court the appellant obtained our special leave to appeal, which has resulted in the present appeal.

The principal issues raised before the Senior Civil Judge related to the absence of Sethi Abdul Karim from a part of the arbitration proceedings and of the determination of the rights of strangers in the arbitration proceedings. Two issues related to alleged collusion of the arbitrators with the plaintiff and their misconduct in not providing the appellant with an opportunity, to argue his case. The Senior Civil Judge gave his findings on all these issues against the appellant. He held as regards the absence of the arbitrator, Sethi Abdul Karim, from the two sittings on the 10th and 11th October 1953, that he was asked by the other arbitrators to attend on those dates but that he informed them that he could not be present on account of his other pressing engagements and that they should go on with the arbitration proceedings and that they would give the award together, and he was actually a party to the award. With regard to the determination of the shares of the strangers, he held that it was necessary for the arbitrators to do this in order to find the proper share of the plaintiff and that of the defendant. With regard to the denial of opportunity to the appellant to argue his case before the arbitrators he held that the appellant himself, after giving notice to the arbitrators to stop the proceedings on the ground of the shares of the strangers having been brought in, refrained from attending the arbitration proceedings. He, therefore, decreed the suit in favour of respondent No. 1. It appears only two points were raised in appeal before the District Judge, Jhelum, by the appellant, namely, the absence of one of the arbitrators and the determination of the shares of the strangers along with those of the parties. The District Judge recorded his findings on these points in the following words:-----

"I have gone through the record of the arbitration proceedings and have found that there have been two meetings of the arbitra tors, one was on 10th October 1953 and the other on 11th October 1953. It is true that on both these dates Sethi Abdul Karim was not present but nothing prejudicial to the interests of the appellant was done on these dates. It is significant that the appellant who was present on both the dates did not raise any objection as regards the absence of Sethi Abdul Karim. On the other hand, the appellant submitted to the arbitrators that he would submit his written statement the following day. To the same effect was the oral statement made by Inayat Karim, respondent. Four of the five arbitrators including the umpire who were present adjourned the proceedings to 11th October 1953, and on that day besides making an oral statement the appellant submitted his written statement. The respondent also submitted his statement. The arbitrators thereupon gave their award which was not only signed by the four arbitrators but was also signed by Sethi Abdul Karim. In these circumstances I do not think that the award given by the arbitrators is vitiated. Nor do I see any force in the contention of the appellant's counsel that the arbitrators had gone beyond the scope of the agreement of arbitration in taking into consideration extraneous matters or the rights of strangers. What the arbitrators did was that they determined the share in portion of the house in dispute, of all the heirs of Nizam Din, deceased, the father of the appellant and the respondent No. 1. This was necessary for the arbitrators 1o do in order to determine the proper shares in the house in dispute, of the appellant as well as respondent No. I. The arbitrators merely determined the matter under reference, in its proper context and against the proper back-ground. Nor was any separate notice for arguments necessary to the appellant, for the written statement that he submitted to the arbitrators, set out his whole case. There is nothing on the record to show that any opportunity given to Inayat Karim, respondent, was denied to Abdul Ghani, appellant."

At the hearing of the revision case before the High Court the appellant appears to have urged only one point with regard to the absence of Sethi Abdul Karim from some sittings of the arbitration, and it was held by the High Court that the conduct in the proceedings of the appellant amounted to a waiver and the High Court relied on the decision in the cases of Ramnath Misra v. Ramranjan Misra (A I R 1922 Cal. 181) and Pandit Bhirn Sen v. Pandit Tara Chand (A I R 1932 All. 154).

Before applying the law to the circumstances of this case the following facts found by the Senior Civil Judge and the District Judge relating to the absence of one of the arbitrators must be kept in view :-

(1) It was at the request of Sethi Abdul Karim to the remain ing arbitrators to proceed with the work of arbitration on the said dates promising to join them at later stage of the pro ceedings that the other arbitrators proceeded in his absence.

(2) That the appellant, who was present on both the dates, did not raise any objection as regards the absence of Sethi Abdul Karim ; on the first day he told the arbitrators that he would submit his written statement on the following day, and all that was done on that day was to receive his written statement. It does not appear that anything of much importance was transacted on those dates. It appears that later Sethi Abdul Karim joined the arbitrators and signed the award along with them.

On a construction of the arbitration agreement it appears that all the five were to act as arbitrators and the Surpanch was also one of the arbitrators and not an "Umpire" in the strict sense of the term. He was only to be the Chairman of the Arbitration Committee, and the parties agreed to abide by the decision of the majority including the Surpanch. A similar arbitra tion agreement came up for the consideration of this Court in the case of Abdul Hamid v. H. M. Qureshi (P L D 1957 S C (Pak.) 145), in which it was held as follows;

"In fact it provided for appointment of a Surpanch, and it is very doubtful indeed whether a Surpanch, as the term is under stood in this country, can be thought to occupy a position equivalent to that of an umpire in the law relating to arbitra tion. For an umpire, in arbitration law, is a person appointed to take over the reference from arbitrators who are unable to agree among themselves, or who have exceeded the time allowed by law for making their award. Under the Arbitration Act, 1940, the umpire acts, not with the arbitrators, but in lieu of the arbitrators. On the other hand, a Surpanch as the expres sion indicates, is a Punch, or member of the board, like the other members but is invested with the duty of sitting with the board as its chairman."

In the case of British Metal Corporation v. Ludlow ((1938) 1 All. E R 135 l), the dis pute was referred to two arbitrators who having heard the parties decided that it was necessary to appoint a third arbitrator. The third arbitrator did not hear the parties nor was his appointment com municated to them and they only became aware of it upon receiving the award. It was held that when a third arbitrator was appointed, the arbitral tribunal then consisted of all three, and, by the rules of the London Metal Exchange, the hearing must take place before them all, and that it was impossible to treat the award in that case as being the award of two arbitrators only, and therefore it was set aside. It was also held that the third arbitrator was not an umpire, but an arbitrator. Except this, that case is distinguishable from the present case, as it was decided under the rules of the London Metal Exchange, which were relied upon in the arbitration agreement, we, therefore, hold in the present appeal that all the five were members of the arbitral tribunal and there was no umpire.

It was argued in support of this appeal that there were only two hearings in the arbitration proceedings and from both of them one arbitrator, Sethi Abdul Karim, was absent, but the learned Advocate appearing for the appellant could not say what was actually done on those dates. All that we find from the judgment of the District Judge is that there was nothing of importance done on those dates by the arbitrators except receiving a written state ment from the appellant. He could not satisfy us that anything of importance was done on those dates but relied on the case of Thammiraju and others v. Bapiraju (ILR 12 Mad, 113), where it was held that one of the arbitrators absenting himself was guilty of misconduct and the other two arbitrators were guilty of misconduct in examining witnesses in the absence of third arbitrator; and the award should be set aside. In that case there were only three arbitrators and the absence of one arbitrator caused the risk of the proceed ings ending in a deadlock in case of the two arbitrators not agreeing on any point. It appears that important work was done during the absence of one arbitrator and regular evidence was taken. Apart from the circumstances being slightly different in the present case and the Madras case the general view taken by the Single Judge, who decided that case, that an arbitrator absenting himself from any sitting of the arbitration is guilty of misconduct and the other arbitrators in holding sittings in his absence are also guilty of misconduct, is an extreme view with which we cannot agree. Besides the Madras case, the learned Advocate was not able to cite any other case in which it has been held that mere absence of an arbitrator amounts to misconduct. If an arbitrator is absent from one or two sittings of the Arbitration Board with the consent of the other arbitrators and nothing of a disputed character is done in those sittings and where the decision of the arbitrators is that of all the arbitrators, we do not think the arbitrator absenting himself or the remaining arbitrators continuing the work can be said to be guilty of misconduct.

The next question to consider is whether the appellant had waived his right by his conduct to have his case heard by all the arbitrators at every stage. The High Court in disposing of the appeal on the ground of waiver and upholding in revision the judgment and decree of the Courts below relied on two cases, one of the Calcutta and the other of the Allahabad High Court. In the Calcutta case of Ramnath Misra v. Ramranjan Misra there were five arbitrators and they were to act jointly under the submission. One arbitrator was present one day for a short time but did not hear the evidence or take part in the deliberations of the arbitra tors and there was no evidence to show that the absent arbitrator signed the award after actually going through the papers and considering them. The question arose whether the defendant waived his right to have his case tried by the continuous presence of the absent arbitrator during the judicial portion of the arbitra tion case, and the finding of fact was that he did not take objection to the proceedings on that ground and from that his waiver of the objection was inferred. The High Court held that although there was no doubt that the arbitrators must be present during the whole of the deliberation, it is open to the parties to waive the absence of one of them. But then it was argued that whatever the defendant had done with regard to the absence of the arbitrate: for the evidence he did not waive his absence from the final deliberation and the waiver did not extend to this. It was held that the defendant waived the whole of the irregularity caused by the absence of the arbitrator from any part of the proceeding having regard to the finding of the first Court thereon. In the present case, however, the question only related to the absence from the sittings of the arbitrator on the two dates only, namely, the l0th and 11th October 1953, on both of which the appellant was present and did not raise any objection to the absence of the arbitrator.

In the Allahabad case, namely, the case of Pandit Bhim Sen v. Pandit Tara Chand a registered agreement was executed by the parties referring the dispute to the arbitration of live persons The award was delivered by only four arbitrators, the fifth remain ing absent, both the parties agreeing that the remaining four arbitrators should proceed with the case and dispose of the matter. But subsequently the award was objected to as being invalid on account of the absence of one arbitrator. It was held that the later oral agreement of the parties could not Modify the terms of the previous registered agreement of reference to arbitration so as to make the award by four only out of the five arbitrators per fectly regular. Nevertheless, it was held that where the defendant himself agreed to the procedure, it was not a fit case for the High Court to exercise its revisional powers in his favour.

Agreeing in principle with the decisions in the above, case: we hold on the facts and circumstances of the present case that the irregularity, if any, caused by the absence of one of the arbitrators was waived by the conduct of the appellant. There is no reason to interfere with the judgment of the High Court and the appeal is accordingly dismissed with costs of this Court.

R. M. A./A. H. Appeal dismissed.

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