PLJ 2017 Quetta 23 (DB)
Present : ABDULLAH BALOCH AND MUHAMMAD EJAZ SWATI , JJ.
GOVT. OF BALOCHISTAN through Secretary Education Department, Civil Secretariat,
Quetta --Appellant
versus
M/s. CAMPAIGNER ASSOCIATES (PVT.) LTD. through Chief Executive and others --
Respondents
R.F.A. No. 22 of 2009, decided on 2.5.2017.
Arbitration Act, 1940 (X of 1940) --
----S. 33-- Non-filing of objections by state --Award --Umpire made rule of Court --Challenge
to--Held: Despite server opportunities state counsel was failed to file objections over award
despite of fact that trial Court last opportunity was afforded to DA for state for filing of
objections on next date fixed for hearing, and order sheet shows that DA was present and
failed to file objections and sought time for filing of objections which was opposed by other
side and ultimately right of appellant was strict of for filing objections --Validity --According
to findings of umpire contractor/respondent has completed work to entire satisfaction of
department and departme nt never raised any objection regarding performance of work, since
contract agreement are in existence and work was completed on instruction of education department, therefore, they cannot absolve themselves from liability simply on ground that project has been wind up work so carried out by respondents, they are entitled to relief claim
for, A.A.G. has failed to point out any material illegality or irregularity in impugned judgment and decree passed by trial Court. [Pp. 29 & 30] A & B
Mr. Muhammad Saleem B aloch, Advocate for Appellant.
Ms. Shehnaz Rana and Mr. Rehmatullah Barech, Advocates for Respondent No. 2.
Date of hearing: 17.04.2017.
J
UDGMENT
Abdullah Baloch, J. --This judgement disposes of R.F.A. No. 22 of 2009 filed by the
Government of Balochistan Education Department, Additional through Additional Advocate
General Balochistan, against the judgement & decreed dated 28th February 2009(hereinafter
referred as “the impugned judgment & decree”) passed by learned Civil Judge -V Quetta
(hereinafter referred as, “the trial Court”), whereby the Award dated 6th August 2008 passed
by the Umpire was made as rule of the Court (hereinafter after the Award dated 6th August
2008 is referred as, “the Award”).
2. Facts of the case are that the Respondent No. 1 filed an application under Section 20 of the
Arbitration Act for arbitration award with the averments that the Respondent No. 1 is registered Company under the Companies Act, having its business under the name & style of
M/s. Campaigner Associates (Pvt.) Ltd. 75 -E Maulana Shaukat Ali Road, M.A. Johar Town
Lahore; that an agreement for completion of contract of project “Construction of Additional 6
Workshops, 6 Class Rooms and Hostel for 200 Students in the Government Polytechnic Institute for Boys at Sariab Road , Quetta (Package No. 2) was executed, whereafter the work
was completed to the entire satisfaction of the Engineer Incharge, who has been defined under the terms and conditions of the agreement as M/s. Unique Associates, who verified all the bills, but it was unfortunate on the part of the appellant (Government of Baluchistan) and
other respondents not to follow the terms and conditions of the agreement and denied the payments payable to the Respondent No. 1. It is pertinent to point out that on different occasions the payments were determined in favour of the Respondent No. 1, but the same were withheld without any reason and rhyme, which is also disturbed flow of finance for the execution of the job, resultantly the Respondent No. 1 was left with no alter nate, but to
invoke the jurisdiction of this Court in C.P. No. 1114/1999, which petition was disposed of
vide judgement dated 19th April, 2000 in the following terms:
(i) The agreed amount regarding which there is no dispute at the moment be paid to the
petitioner.
(ii) For disputed amount the mechanism provided in the contract, agreement be followed.
(iii) The work shall not be discontinued/suspended without following the provisions
contained in Clause 55 of the contract.
(iv) In view of the serious apprehensions of Project Director that petitioner may not
complete the Project after getting the amount in question could be met by obtaining surety in accordance with contract agreement.
(v) The requisite certificate for the work done which is not disputed shal l be issued
without further loss of time.
(vi) The bid price Package No. 1 and Package No. 2 shall remain within the agreed limits
of Rs. 61,433,439.58 and Rs. 55,455,399.66 respectively and it shall have not bearing on the extra work done by the petitione r with the mutual consent of the respondents, but total price
shall not cross the limits of Rs. 61,433,439/58 and Rs. 55,455,399/66 (excluding extra work).”
The Respondent No. 1 further averred that in compliance with the above order, he followed the proce dure laid down under the agreement and on 28th September 2004 served a legal
notice to the appellant with the request for appointment of the Arbitrator on the panel of the Arbitration Committee and the Respondent No. 1 suggested his nominate as Mr. M.M. Chandion, Ex -Chief Engineer, House No. 12 Mehran House near citizens Colony,
Hyderabad, but the appellant and the Respondent No. 2 did not rise to the occasion with the target period of the notice to appoint their nominee. The Respondent No. 1 prayed for appointment of the Arbitrators in the following terms:
(a) Payment under the B.O.Q. items amount to Rs. 5,948,869.65
(b) Extra Payment for new items amounting to Rs. 3,448,843.57 cropped up during the
execution of the job for which no rate was available.
(c) Compensation at the rate of 16% per annum for delaying the payment actually done to
the petitioner till the filing of this application for Rs. 14,703,233.11.
(d) During the execution of the job on different occasions the work was stopped and the
petitioner had to suffer losses on account of overhead charge and Idle T&P for Rs.
3,541,457.30.
(e) Loss sustained by the petitioner amounting to Rs. 751,600.00 due to incident on
8.10.2001 within the premises of the job in question.
(f) Litigation charges.
(g) Any other claim at the time of arbitration proceedings.
In the last the Respondent No. 1 prayed that:
(a) The Respondent No. 2 may kindly be file the agreement for the work in dispute in this
Court. (b) The respondents may kindly be directed to nominate their nominee on the panal of the
Arbitration Committee and the nominee so nominated along with the nominee of the
petitioner, may kindly be appointed as arbitrators to adjudicate upon the dispute and file the award in this Court on the date fixed by this Court.
3. It appears that, the appellant filed rejoinder to the application and contested the same.
After filing rejoinder, the parties were directed to file the names of their respective arbitrators, to which both the parties suggested the names of differe nt arbitrators, but no
agreement was arrived at, thus under the circumstances, the trial Court with the consent of both the parties nominated Mr. Sakhi Sultan, Advocate Supreme Court as Umpire to make award independently within 30- days after providing opportunities to both the parties in
accordance with law. In pursuance of such order, the parties have put their award and facts before the umpire, who after hearing both the parties passed a common award dated 6th August 2008, the relevant portion is reproduc ed hereinbelow:
“In view of the facts and circumstances explained hereinabove, the Contractor is entitled to their relief claimed for, except the amount of loss being occurred due to the law and order situation and the award is given in the following manne r:
S.No. Description of claim.
Amount of
Claim
1. Payment of B.O.Q. Items (less
paid/Not paid) Rs. 9,359,433.09
2. Extra Works. Rs. 3,141,740.14
3. Use of SR Cement. Rs. 283,182.00
4. Loss occurred due to the law and
Order situation Not entitled.
5. Idle Charges suspended period Rs. 6,738,398.15
6. Interest on delayed payments Rs.
1,78,00,863.00
7. Compound Interest. Not entitled.
Grand total of claim Rs. 3,73,23,516/ -
4. After passing of final award by Umpire, the same was filed before the learned trial
Court, hence the parties were directed to file their objections, if any, to which the learned counsel for the Respondent No. 1 appeared before the Court and raised no objection over the final award, while despite several opportunities, the State has failed to file any such objection. Hence, under the circumstances the Award dated 6
th August 2008 was made as
Rule of the Court, vide impugned judgement & decree dated 28th February 2009.
5. Learned Additional Advocate General con tended that Arbitration Award passed by
Arbitrator Malik Abdul Rauf and umpire Sakhi Sultan, Advocate have failed to consider the facts and circumstances of the case; that the appellant specifically raised objections in his
rejoinder; that he was not a par ty to the agreement as agreement was executed between
Respondent No. 1 and 2, but this point was not considered by the Arbitrator, umpire, as well
as by the learned trial Court; that the Arbitrator, umpire and the learned trial Court have failed to conside r the facts of the case; that the Respondent No. 1 given undertaking through
written reference in which he stated that he will not claim payment of extra work, but in spite of this fact no one considered this point; that the umpire was appointed by the lea rned trial
Court without the consent and permission of the appellant; that according to clause 21 -1 of
the agreement executed between the parties, in which it was decided that all the disputes arising in connection with the present contract and which cannot be amicably settled between the parties, shall be finally settled under the rules of conciliation and arbitration of international chamber of commerce by one or more arbitrators appointed in accordance with rules; that all the work which was completed by the contractor and payment of that work has
been paid to the Respondent No. 1 and the award is not sustainable; that the Arbitration Award was made us rule of Court by the learned trial Court in a hazard manner which resulted in miscarriage of justice; th at there are sufficient illegalities and irregularities in the
award which is liable to be set aside.
6. Conversely, the learned counsel for the respondents strongly opposed the arguments so
advanced by the learned counsel for the appellant and contended that the respondents had carried out the entire contractual work according to contract agreement executed between the
parties; that the appellant have been failed to discharge their liabilities; that the appellant was
approached by the respondents for sett lement of dispute through amicable settlement and
arbitration, but the appellant delayed the matter by one pretext or the other; that ultimately the respondents after issuing legal notice to the appellant and on failure of reply of the same the
respondents have filed an application in the Court for appointment of arbitrators, which was
contested by the appellant and with consent of the parties the learned trial Court nominated
Mr. Sakhi Sultan, Advocate as umpire to make award independently; that the umpire was
appointed with the consent of the appellant and thereafter the award was passed; that the appellant have been failed to file objections on the award made by the umpire; that the
learned trial Court had rightly made the award as rule of Court.
7. Hear d the counsel for the parties and perused the record with their valuable assistance the
record reveals that the dispute as stated above arose between the parties, initially the parties approached this Court under C.P. No. 1114 of 1999, however, the petition was disposed of
vide Judgment dated 19th April, 2000 with certain terms as stated above in Para No. 2 and in
of compliance the said order the respondents have issued a legal notice to the appellant with
the request for appointment of arbitrator on the pe nal of arbitration committee and
Respondent No. 1 suggested his nominate as Mr. M.M. Chandio Ex -Chief Engineer, but the
appellant and Respondent No. 2 did not rise to the occasion with the target period of notice to appoint their nominees.
8. The record f urther reveals that due to failure of the appellant and Respondent No. 2 the
Respondent No. 1 filed an application before the Arbitration Court for appointment of
Arbitrator on the terms and conditions given therein; it is further transpired from the recor d
that the said application was contested by the appellant by means of filing rejoinder and
thereafter the parties were directed to file the names of their respective Arbitrators, to which
both the parties suggested names of different Arbitrators, but no a greement was arrived at,
thus under these circumstance, the learned trial Court with consent of the parties nominated
Sakhi Sultan. Advocate Supreme Court as umpire to make award independently within 30
(Thirty Days) days after proving opportunities to bot h the parties in accordance with law. The
record further transpires that both the parties have put their claims before the umpire who after hearing both the parties passed a common award on 6th August, 2008.
9. The record further indicates that the award was submitted before the learned trial Court
and the parties were directed to file their objections, if any, however, the learned counsel for the Respondent No. 1 appeared before the trial Court and raised no objection over the final award, while despite o f several opportunities, the appellant (State) has failed to file any such
objections as required under Section 33 of Arbitration Act, 1940. For convenience relevant
provisions of Section 33 of Arbitration Act, 1940 is reproduced as under:
“33. Arbitration agreement or award to be contested by application.--Any party
to an arbitration agreement or any person claiming under him desiring to challenge the existence or validity of an arbitration agreement or an award or to have the effect of either determined s hall apply to the Court and the Court shall decide the question
on affidavits:
Provided that where the Court deems in just and expedient, it may set down
the application for hearing on other evidence also, and it may pass such orders for
discovery and par ticulars as it may do in a suit. “
10. We have also consciously observed that despite several opportunities the State counsel was failed to file objections over the award despite of the fact that it reflects from the order
sheet dated 5.09.2008 of the tri al Court last opportunity was afforded to the D.A for State for
filing of objections on the next date fixed for hearing i.e 20.9.2008 and order sheet dated
20.9.2008 shows that the D.A was present and failed to file objections and sought further time for f iling of objections which was opposed by the other side and ultimately the right of
appellant was struck of for filing of objections.
11. The record further reveals that the said order was not assailed by the appellant in the
appellate forum which attaine d finality, as such, the contentions of learned counsel for the
appellants with regard to non- providing opportunity of filing of objection is not tenable and
in view of the provisions Section 33 of Arbitration Act the appellants have been failed to comply with.
12. The perusal of Arbitration Award passed by the learned Arbitrator indicated that after
proper opportunity of hearing and participation of parties the learned Umpire had rightly
passed the award in accordance with law and thereafter the same award was made as rule of
Court in accordance with law wherein the parties were represented by their counsels and the appellant was duly represented by the learned District Attorney namely Ms. Farhat Shameem,
as such the appellant cannot say the judgment a nd decree was passed by the learned trial
Court in their absence.
13. According to findings of the umpire the Contractor/ respondents has completed the work
to the entire satisfaction of the department and the department never raised any objection
regardi ng the performance of work, since the contract agreement are in existence and the
work was completed on the instruction of Government of Balochistan through Education
department, therefore they cannot absolve themselves from the liability simply on the ground
that the project in question has been wind up. The work so carried out by the respondents
they are entitled to relief claim for. The learned Additional Advocate General has failed to
point out any material illegality or irregularity in the impugned jud gment and decree passed
by the learned trial Court.
In view of the above discussion we are of the considered view that the impugned judgment
and decree passed by the learned trial Court does not suffer from misreading and non- reading
and mis -appreciation of evidence, neither ridiculous nor perverse or suffers from any
infirmities to be interfered by this Court, as such the appeal is devoid to merits and is hereby dismissed. The parties are directed to bear their own costs.
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