2024 M L D 1918
[Balochistan]
Before Shaukat Ali Rakhshani, J
CHIEF ENGINEER (WEST) PAKISTAN PUBLIC WORKS DEPARTMENT,
QUETTA ---Petitioner
Versus
M/S NIP CONSTRUCTION AND ENGINEERING CONSTRUCTION BUILDERS AND MANUFACTURERS through Karim Dad ---Respondents
Civil Revision No. 822 of 2022, decided on 1st Nove. 2023.
(a) Arbitration Act (X of 1940) ---
---- Ss. 20 & 30--- Qanun- e-Shahadat (10 of 1984), Art. 114--- Arbitration award ---
Arbitrator--- Objection --- Estoppel, principle of --- Applicability --- Respondent company filed
application under S.20 of Arbitration Act, 1940, for settlement of dispute through appointment of arbitrator --- Trial Court appointed sole arbitrator and his award was made
Rule of the Court --- Lower Appellate Court maintained the Rule of the Court passed by Trial
Court --- Petitioner authorities assailed Rule of the Court on the plea of misconduct of sole
arbitrator --- Validity --- Sole arbitrator was appointed consensually and his appointment was
never challenged before any higher forum --- Appointment of sole arbitrator was made in
agreement with both the parties --- Up till rendering the award by him no objection was raised
by the parties to the lis upon the appointment of sole arbitrator, which amounte to waiver of their objection, within the purview of law of estoppel as contemplated under Art.114 of Qanun- e-Shahadat, 1984--- Such objection could not be allowed to be raised at subsequent
stage, particularly only for viewing purpose and after rendering arbitration award, more particularly when petitioner authorities had failed to assert that what bias the sole arbitrator was carrying at the time of rendering the arbitration award --- Arbitration award could only be
objected, if specific allegations of misconduct were alleged, which did not figure in the present case--- High Court in exercise of revisional jurisdiction declined to interfere in orders passed by
two Courts below as there was no illegality, perversity or jurisdictional error in decrees rendered by both the fora below, as contemplated under S.115 of C.P.C.---Revision was dismissed, in circumstances.
Injum Aqeel v. Latif Muhammad Chaudhry 2023 SCMR 1361; Ijaz Ahmed v. Noor -
ul-Ameen 2022 SCMR 1522; 2002 SCMR 1662; PLD 1998 SC 39; 1986 SCMR 1493; 2000
CLC 467; PLD 1993 Quetta 121; 2023 CLC 600 and 2023 CLC 788 ref.
Government of Balochistan v. Abdul Nabi 1988 SCMR 1906; Saifullah Khan v.
Karachi Customs agents Association 2011 YLR 202; Sh. Saleem Ali v. Sh. Akhtar Ali PLD 2004 Lahore 404; Province of Punjab v. Mian Muhammad Saleem and Co. 1985 SCMR 1215; President of Islamic Republic of Pakistan v. Tasneem Hussain Naqvi 2004 SCMR 590 and Mian Corporation v. Lever Brothers of Pakistan Ltd. PLD 2006 SC 169 rel.
(b) Arbitration Act (X of 1940)---
----S. 30 ---Arbitration award can only be set -aside if arbitrator has mis -conducted himself or
proceedings or award is made after issuance of order by Court superseding the arbitration or after arbitration proceedings become invalid or if an award has been procured improperly or is otherwise invalid.
(c) Civil Procedure Code (V of 1908) ---
---- S. 115--- Revisional jurisdiction --- Principle --- Unless grave perversity and illegality is
found to be floating on the record, revisional Court must not overturn decrees passed by
Courts below.
2022 SCMR 1054; Gul Rehman v. Gul Nawaz Khan 2009 SCMR 589 and Rahim Jan
v. Mrs. Ikram Gardezi PLD 2004 SC 752 rel.
Rauf Atta, Additional Attorney General and Anwar Naseem Kasi, Deputy Attorney
General -I for the Petitioners.
Masood Ahmed and Barrister Zahoor Hassan Jamote for Respondents.
Date of hearing: 5th October, 2023.
JUDGMENT
SHAUKAT ALI RAKHSHANI, J .--- The petitioners seek annulment of order and
decree dated 19.12.2013 (rectified on 19.03.2014) ("impugned judgment") handed down by
learned Civil Judg -ecum - Judicial Magistrate -IX, Quetta ("trial court"), whereby the
application filed under section 20 of the Arbitration Act (X of 1940) ("Act of 1940") was accepted, and consequently the Arbitration Award dated 10.09.2013 ("Arbitration Award") rendered by the sole Arbitrator was made rule of the court amounting to Rs.136,335,587/ - as
well as judgment and decree dated 13.09.2022 ("impugned judgment") authored by learned Additional District Judge -II, Quetta, ("appellate court"), whereby appeal filed by the
petitioners was dismissed for being devoid of merits and the impugned order and decree was upheld.
2. Unfurled facts of the lis in hand are that respondent filed an application under section
20 of the Act of 1940 for making the Arbitration Award rendered by sole Arbitrator namely Mir Ahmed Mengal, Executive Engineer C&W Department as rule of the court with the
averments that the respondent -company is engaged in the business of construction of
buildings and roads, which participated in a tender advertised by the petitioners in the first quarter of the year 2007 for a scheme viz "Musakhail Tonsa Road (35 Kms) stretched road to be constructed and linked with Zhob" and as such succeeded to get the tender, henceforth vide order dated 20.01.2007, the said tender was awarded to the respondent in accordance with law, whereof an agreement was also executed between the parties. It was further contended that the respondent mobilized the machinery, skilled and unskilled workers and commenced with the work on site as per drawings and specifications provided by the petitioners, whereof certain work was also done and measurements were also entered in the measurement books accordingly, however, the total estimated cost of the project was enhanced and revised from Rs.478.061 million to Rs.1475.826 millions, but the amount released to the respondent was very meager i.e., 8.19 % of the revised estimated cost, beside a huge cut in the allocated amount; moreover, the project was not included in the PSDP, casting huge loss and liability upon the respondent, thus no fault of the company the project could not be completed within 36 months i.e. commencing in May 2007 up till May 2010, but due to the obligation not fulfilled by the petitioners by not releasing sufficient funds and above all, subsequently the project was shifted from Balochistan to Muzaffargarh, Punjab vide order dated 16.02.2012 without intimation to the respondent and lawful justification, therefore, having no alternative the respondent resorted to the remedy by filing application under section 20 of the Act of 1940 before the trial court.
3. In response to the notice, the petitioners contested the application ibid on factual and
legal premises, controverting the claims of the respondent -company. In the meanwhile the
respondent filed an application for appointment of arbitrator, which was initially objected, however, thereafter, statedly with the consent of the parties Mir Ahmed Mengal, Executive Engineer C&W was appointed as sole Arbitrator, who after due deliberation and consultation rendered the impugned Arbitration Award.
4. The petitioners objected the impugned award on various counts, which shall be
discussed ahead while drawing reasons.
5. After hearing the adversarial parties, the trial court vide impugned order and decree
dated 19.12.2013 allowed the application filed under section 20 of the Act of 1940, and thereby made the Arbitration Award as rule of the court, which order and decree was
impugned before the appellate court, where it met the same fate as the appeal culminated into
dismissal and upholding the impugned order and decreed.
6. Mr. Rauf Atta, learned Additional Attorney General for the petitioners inter alia
contended that due to recklessness and negligence of the respondent -company the project
could not be completed within the stipulated period, which fact has not been considered by
both the fora below and have rendered the impugned decrees by misreading the evidence. He further maintained that the petitioners did not agree with the appointment of the arbitrator
and urged that the very appointment of the arbitrator is illegal, who had no mandate to render
the impugned award. It was also argued that the arbitrator while rendering the impugned
award has miserably failed to take into consideration the relevant documents on record and that the courts below also did not attend thereto such objection, particularly the appellate court, which has rendered the judgment and decree in utter violation of Order XLI Rule 31 of C.P.C., which has made both the decrees impugned herein perverse and illegal, which merits to be set -aside by allowing the petition.
Adversely, M/s. Masood Ahmed and Barrister Zahoor Hassan Jamote, learned counsel
for the respondent vigorously resisted the petition and urged that the petition is not only barred by time but also the petitioners have failed to show any perversity or illegality in the impugned order on the basis whereof the impugned judgment is required to be set at naught. They further maintained that the scope of section 115 of C.P.C. is very limited, which cannot
be exercised unless grave illegality or perversity is found or there is any material misreading
of fact, but none of such grounds are available to the petitioners. Added further that the
arbitrator was appointed with consent of both the parties and no objection was ever raised till
the Arbitration Award was rendered, which fact alone shows mala fide of the petitioners.
Furthermore, it was also argued that the appointment of arbitrator was never assailed before any higher forum nor any allegation of misconduct has been levelled against the arbitrator, thus the courts below have rightly drawn the decrees in favour of the respondent, which
needs not be interfered with, henceforth requested for dismissal of the petition. Reliance has
been placed upon the judgments reported as 2023 SCMR 1361, 2022 SCMR 1054, 2022
SCMR 1522, 2009 SCMR 589, PLD 2004 SC 752, 2002 SCMR 1662, PLD 1998 SC 39, 1988 SCMR 1906, 1986 SCMR 1493, 2011 YLR 202, PLD 2004 Lahore 404, 2000 CLC 467, PLD 1993 Quetta 121, 2023 CLC 600 and 2023 CLC 788.
7. Heard. Record has been pondered upon with utmost muse and care. Admitted features
of the instant case are that in pursuance of tenders invited by the petitioners through publication in daily newspapers, the respondent company participated and stood successful in getting the contract for the project of road viz "Musakhail Tonsa Road (35 Kms) stretched road to be constructed and linked with Zhob", which was to be completed within 36 months, commencing from May 2007 till May 2010. However, the controversial aspect of the matter is that the respondent -company commenced with the work accordingly by mobilizing the
labourers according to the site plan and specifications provided by the petitioners and did a substantial amount of work, whereof measurement books were prepared by the respondent -
company and the petitioners released an amount, however, the total estimated cost of the project was subsequently revised and enhanced from Rs.478.061 millions to Rs.1475.826 millions, which was 8.19% of the revised estimated cost, but the revised cost did not reflect in the PSDP, causing loss and insecurity and above all the project was shifted from Balochistan to Muzaffargarh, Punjab vide order dated 16.02.2012 without intimation to the respondent and lawful justification.
8. The petitioners, while contesting the appeal filed under section 20 of the Act of 1940
came up with a plea that the respondent -company did not fulfill the terms of contract as the
project was not completed within the stipulated period. However, subsequently, whilst consenting to appoint arbitrator(s) each party provided four names, which was initially not agreed upon, but subsequently the parties agreed and consented to appoint Mir Ahmed Mengal, Executive Engineer C&W Department as sole Arbitrator, who thereafter rendered the Arbitration Award.
The petitioners resisted the Arbitration Award by filing formal objections, whereupon
the submissions were heard by the trial court from both the ends, which ultimately culminated into the impugned order and decree penned by learned trial judge, which was assailed in appeal before the appellate court, which after hearing the adversarial parties dismissed the appeal vide impugned judgment and decree and upheld the order and decree of the trial court.
9. Evidently, Mir Ahmed Mengal, Executive Engineer C&W Department was
consensually appointed as sole Arbitrator, which also transpires from the fact that his
appointment was never challenged before any higher forum, therefore, no other view can be ascertained except that the appointment of the sole Arbitrator was made in agreement with both the parties. As stated hereinabove, after appointment of the sole Arbitrator up till
rendering the award by him no objection was raised by the parties to the lis upon the
appointment of the arbitrator and above all by the petitioners in particular, which amounts to
waiver of their objection, squaring within the purview of law of estoppel as contemplated under section 114 of the Qanun- e-Shahadat Order, 1984, which cannot be allowed to be
raised at subsequent stage, particularly after rendering the Arbitration Award, more particularly when the petitioners failed to assert that what bias the sole Arbitrator was carrying at the time of rendering the Arbitration Award.
10. One of the objections of the petitioners was that they were not given ample
opportunity to defend and put forth their case, thus the arbitrator proceeded ex- parte and has
rendered the Arbitration Award while condemning them unheard. Hence, I would like to refer to the judgment of the apex court in the case of "Injum Aqeel v. Latif Muhammad Chaudhry" (2023 SCMR 1361), wherein it was held that decision of an arbitrator should not
be lightly interfered by the court while deciding the objection thereto, until a clear and
definite case within the purview of section 30 of the Act of 1940 is made out. The apex Court
while dealing with the question of non- affording opportunity to defend the proceedings by
the arbitrator has been dilated upon the issue and held that when neither the learned counsel
nor the petitioner appeared before the arbitrator despite being afforded repeated opportunities initiated ex -parte proceedings and delivered the award after adopting the proper procedure,
the award was not to be meddled with when the petitioner failed to point out any misconduct
of the arbitrator and also remained unsuccessful in demonstrating any other deficiency, error
or legal infirmity in the award with further observation that mere filing of an objection under
section 30 of the Act of 1940 carries no great weight and is inconsequential unless some substantial grounds are alleged in the objections warranting and deserving the setting aside of the award which the petitioner failed to underline. The record reflects that an ample opportunity was afforded to join the proceedings but the petitioner was reluctant to join the arbitration proceedings for which the Arbitrator cannot be blamed. So be it, after appointment of sole Arbitrator the law of estoppel comes into play, which debars the petitioners to agitate his appointment after rendering of the Arbitration Award. In this regard reference can be made to the case of "Saifullah Khan v. Karachi Customs Agents Association" (2011 YLR 202), wherein it was held that principle of estoppel and acquiescence is applicable with full force to which parties have consented to arbitrate and participate in proceedings before arbitrator. In the case of "Sh. Saleem Ali v. Sh. Akhtar Ali" (PLD 2004 Lahore 404), it was held that the party having submitted to the jurisdiction of the arbitrators and having allowed them to deal with the matter, taking a chance of the decision being favourable to him, had acquiesced in the arbitration proceedings and that having never raised any protest shall amount to waiver of his right. It was also observed that a party cannot be permitted to attack the very authority of the arbitrators after final determination when the award goes against him.
11. The Arbitration Award can only be objected, if specific allegations of misconduct are
alleged, which in the instant case does not figure. An Arbitration Award can only be set -
aside if the arbitrator has mis -conducted himself or the proceedings or the award has been
made after issuance of an order by the court superseding the arbitration or after arbitration proceedings becomes invalid or if an award has been procured improperly or is otherwise invalid. For ease of reference section 30 of the Act of 1940 is reproduced hereunder;
"30. Grounds for setting aside award. An award shall not be set aside except on one or more of the following grounds, namely
(a) that an arbitrator or umpire has misconducted himself or the proceedings;
(b) that an award has been made after the issue of an order by the Court superseding the arbitration or after arbitration proceedings have become invalid under section 35;
(c) that an award has been improperly procured or is otherwise invalid."
12. In the instant case at no point of time the petitioners ever came up with specific
allegations of misconduct of the sole Arbitrator, particularly in the peculiar circumstances
when consensually at their free will the sole Arbitrator was appointed to render the award. In
this regard reliance can be placed upon the cases "Province of Punjab v. Mian Muhammad Saleem and Co." (1985 SCMR 1215), "President of Islamic Republic of Pakistan v. Tasneem Hussain Naqvi" (2004 SCMR 590) and "Mian Corporation v. Lever Brothers of Pakistan Ltd." (PLD 2006 SC 169). Relevant excerpt of Province of Punjab's case is reproduced
herein below;
"The only question in issue between the parties was "whether the arbitrator has
misconducted himself". All the Courts dealing with the question have on the factual and legal plane found out concurrently that no case of misconduct was made out. What was established during the proceedings was only a typographical error which was corrected by the Courts. In other respects, the award was found not liable to interference by the Court. The submissions made by the learned counsel for the petitioner do not make out to be a case of misconduct such as may vitiate the award itself. No question of law arises in the petition which may require further examination in this Court. Leave to appeal is, therefore, refused."
[Emphasis is mine]
It may also be observed that the proceedings carried out by the arbitrators are quasi -
judicial proceedings and the court while parting with the objections or making the award as rule of the court may not sit as a court of appeal, looking into the nitty- gritty of the
proceedings and the Arbitration Award. Reference can be made to the case of "Mian Corporation v. Lever Brothers of Pakistan Ltd." (PLD 2006 SC 169). The relevant excerpt of para- 7 of the case ibid is as infra;
"7. Learned counsel attempted to persuade us to examine the merits of the claim of the petitioner involving disputed questions of Fact. It is well -settled that the arbitrator
acts in a quasi -judicial manner and his decision is entitled to utmost respect and
weight, unless the misconduct is not only alleged, but also proved against him to the satisfaction of the Court. The arbitration award may however, be discarded, if the findings are contrary to law and the material on record. Learned counsel has been unable to pinpoint any inherent legal infirmity or defect or want of jurisdiction on the part of the arbitrator who has elaborately dealt with the claim of the petitioner in minute details with reference to the explanation furnished by the respondent -
Company. Suffice it to observe that while examining the award, the Court does not sit in appeal over the award and has to satisfy itself that the award does not run counter to the settled principles of law and the material available on record. Indeed, a arbitrator is final judge on the questions of law and facts and it is not open to a party to challenge the decision, if it is otherwise valid. If an IB arbitrator has made an award in terms of the submissions made before him, no adverse inference can be drawn against him. An award cannot be lawfully disturbed on the premise that a different view was possible if the facts were appreciated from a different angle. In fact Court while examining the correctness and legality of award does not act as a court of appeal and cannot undertake reappraisal of evidence recorded by a arbitrator in order to discover the error or infirmity in the award. Learned counsel for the respondent has referred to Pakistan Steel Mills Corporation v. Mustafa Sons (Pvt.) Ltd. PLD 2003 SC 301, which fully supports the impugned judgment as well as the view taken by us in this petition."
[Emphasis supplied]
13. Besides above, the petitioners have failed to point out any illegality, perversity and
jurisdictional error in the impugned decrees of the fora below, which could persuade the court to meddle with the findings arrived at by both the courts below. Now it is a settled principle of law that unless grave perversity and illegality is found to be floating on the record, the revisional court must not overturn the impugned decree(s). In this regard reference can be made upon the judgments rendered by the apex Court in the case of "Gul Rehman v. Gul Nawaz Khan" (2009 SCMR 589), "Rahim Jan v. Mrs. Ikram Gardezi" (PLD 2004 SC 752) and "Ijaz Ahmed v. Noor ul Ameen" (2022 SCMR 1522). The relevant excerpt of para -6 of the judgment ibid in Ijaz Ahmed's case is reproduced herein below;
"6. The language used under section 115 of C.P.C. unequivocally visualizes that the
revisional court has to analyze the allegations of jurisdictional error such as exercise
of jurisdiction not vested in the court below or a jurisdiction vested in it by law was failed to exercise and/or the court has acted in exercise of its jurisdiction illegally or with material irregularity or committed some error of procedure in the course of the trial which is material in that it may have affected the ultimate decision but it is also
ground reality that while exercising the revisional jurisdiction under section 115,
C.P.C., the powers of the court are limited. In the case of Ahmad Nawaz Khan v.
Muhammad Jaffar Khan and others (2010 SCMR 984), this Court expressed that that High Court has very limited jurisdiction to interfere in the concurrent conclusions arrived at by the courts below while exercising power under section 115, C.P.C. whereas in the case of Cantonment Board through Executive Officer, Cantt. Board, Rawalpindi v. Ikhlaq Ahmed and others (2014 SCMR 161), this Court held that the provisions of section 115, C.P.C under which a High Court exercises its revisional jurisdiction, confer an exceptional and necessary power intended to secure effective exercise of its superintendence and visitorial powers of correction unhindered by
technicalities. The revisional jurisdiction of the High Court cannot be invoked against
conclusion of law or fact, which do not, in any way affect the jurisdiction of the court.
In the case of Sultan Muhammad and another v. Muhammad Qasim and others (2010 SCMR 1630) this Court has held that the concurrent findings of three courts below on a question of fact, if not based on misreading or non- reading of evidence and not
suffering from any illegality or material irregularity affecting the merits of the case
are not open to question at the revisional stage."
14. The respondent -company also vigorously opposed the instant revision petition filed
under section 115 of C.P.C. for being barred by limitation as the appellate court rendered the
judgment and decree on 13.09.2022, whereas the application for grant of copy was submitted
on 24.09.2022, which was completed and delivered on 26.09.2022, but the instant revision
petition was filed on 23.12.2022, which is admittedly barred by time as the appeal was to be filed within 90 days, whereof albeit the petitioners have filed an application under section 5 of the Limitation Act of 1908 bearing C.M.A. No.8099/2022 for condonation of delay on the ground that the petition could not be filed on time due to lengthy procedure for approval and correspondence amongst the department. In this regard reference can be made to the case of "Government of Balochistan v. Abdul Nabi" (1988 SCMR 1906), wherein it was held that delay caused in completing departmental proceedings as sanctioned from various concerned quarters including law department would not constitute sufficient grounds for condonation of delay and that each day of limitation must properly and satisfactorily be explained otherwise
delay in limitation cannot be condoned, which is not sufficient and plausible ground, thus the
condonation of delay cannot be condoned, henceforth the above C.M.A. No.8099/2022
stands dismissed.
15. Aftermath of the above discussion is that there appears no illegality, perversity or
jurisdictional error in the impugned decrees rendered by both the fora, persuading this Court to exercise revisional jurisdiction as contemplated under section 115 of C.P.C.
Thus, I am reluctant to meddle with the impugned order and judgment of both the
courts below.
16. Corollary, in view of the foregoing reasons, the instant petition being shorn of merits
is dismissed with no order as to cost.
MH/5/Bal. Revision dismissed.This judgment is reproduced from a publicly available source for informational purposes and does not constitute legal advice. If you believe this listing contains an error,
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