PLJ 2022 Quetta (Note) 18
Arbitration Act, 1940 (X of 1940)--
----Ss. 34 & 39--Agreement for construction of shopping mall--Application for soliciting of matter through arbitrator--Dismissed--Obligation of respondent--Arbitration clause--Plaintiff/respondent was under obligation have resorted to proceedings to be carried out by Abitration for resolution of controversies, as per clear terms and conditions of clause 45 of Agreement--Arbitration, clause clearly and unequivocally provided that all disputes between appellant and contractor will referred to Director Military Lands and Cantonment Quetta Region who shall be sole arbitrator and his decision would be final and binding on parties--Respondent having entered into contracts voluntarily which contained arbitration clause, could not be allowed to avoid arbitration agreement lightly--Trial Court, was not justified in rejecting application under Act filed by appellant--Appeal allowed. [Para 6 & 7] A, B & C
Syed Iqbal Shah, Deputy Attorney General (“DAG”) for Appellant.
Mr. Muhammad Akram Shah, Advocate for Respondent.
Date of hearing: 1.10.2019.
PLJ 2022 Quetta (Note) 18
Present: Rozi Khan Barreech, J.
CANTONMENT BOARD QUETTA--Appellant
versus
M/s. MUHAMMAD RAHIM KHAN & CO. through Managing
Partner--Respondent
C. Misc. A. No. 12 of 2015, decided on 27.12. 2019.
Judgment
This appeal is directed against the order dated 08.07.2015 (hereinafter “the impugned Order”) passed by the learned Judicial Magistrate-IX/Civil Judge, Quetta, (hereinafter “the trial Court”) whereby application filed by the appellant under Section 34 of Arbitration Act, 1940 (“the Act”) was dismissed.
2. The brief and essential facts leading to the present appeal are that the bids offered by the plaintiff/respondent, a registered firm, for construction of Jinnah Shopping Mall Quetta Cantt was accepted by the appellant/defendant's department dated 29.10.2010. This was followed by an agreement between the parties (“the Agreement”), however, certain grievances of the plaintiff/respondent arose and it instituted a suit for recovery of Rs.4,82,64,240.88 against the appellant/defendant, disputing therein measurement process of the work done, preparation of wrong bill, deduction of certain due amount and security of the plaintiff/respondent deposited with the appellant/defendant in connection of the work.
3. The appellant/defendant, when put to notice, before filing his written statement filed an application under Section 34 of the Act soliciting therein that the matter may be sent to the Arbitrator for carrying arbitration proceedings, in view of clause 45 of the Agreement. The said application was contested by the plaintiff/ respondent by filing a replication thereto.
4. The learned trial Court after hearing both the parties, dismissed the application of the appellant/defendant dated 08.07.2015. Hence this appeal.
5. I have heard the learned counsel for the parties and have gone through the available record with their able assistance. It is apparent from the record that the parties had entered into the Agreement, which clearly provides clause 45 of the Agreement for arbitration, which reads as under:
“If any dispute or difference of any kind whatsoever shall arise between the Cantonment Board and the contractor in connection with or arising out of the contract or the carrying out of the work (whether during the progress of the work or after their completion and whether before or after the termination abandonment or breach of the contract) by the mutual consent of owner and contractor shall be referred to and settled by the Director Military Lands and Cantonments Quetta Region who calling on the advice of the consultant within a period of 90 days after bring the requested by either party to do shall give written notice of his decision to the owner and the contractor. Save as hereinafter provided such decision in respect of every matter so referred shall be final and binding upon the owner and the contractor until the completion of the work and shall forthwith be given effect to by the contractor who shall precede with works with all due diligence”.
6. Surely, the 'disagreement' or 'dispute' between the parties has arisen out of the Agreement for execution of works, which under clause 45 was mandated to be referred to Arbitration in the manner and mode provided by the said clause. However, the plaintiff/ respondent instead of adopting the said mandatory recourse, resorted to institute a civil suit for recovery of certain amount on the basis of a different stance contrary to the stance of the defendant/appellant. The plaintiff/respondent was under obligation to have resorted to the proceedings to be carried out by the Arbitration for resolution of the controversies, as per clear terms and conditions of clause 45 of the Agreement.
7. There is no allegation that the Agreement containing the above Arbitration clause was executed under duress, undue influence or on account of any misrepresentation on the part of defendant/ appellant at the time of its execution. The arbitration, clause clearly and unequivocally provided that all disputes between the appellant and contractor will referred to the Director Military Lands and Cantonment Quetta Region who shall be the sole arbitrator and his decision would be final and binding on the parties. The plaintiff/ respondent having entered into the contracts voluntarily which contained the arbitration clause, could not be allowed to avoid the arbitration agreement lightly. Thus, the learned trial Court, therefore, was not justified in rejecting the application under Section 34 of the Act filed by the appellant/defendant.
8. As far as the argument of the learned counsel for the plaintiff/respondent that appellant/defendant sought adjournments before filing the application for referring the matter to arbitration, the same is not in consonance with the facts of the present case. The record reveals otherwise. Notice was served on 08.06.2015 and application for arbitration was filed by the appellant/defendant on 15.06.2015. Hence, the said application can hardly be said to be delayed. Reliance may be placed on Sqd. Ldr. (R) Khurram Zaman v. Mrs. Afia Zafar 2008 CLD 662, Muratab Ali v. Liaqat Ali 2004 SCMR 1124, and Dar Okaz Printing and Publishing Limited Liability Company v. Printing Corporation of Pakistan Private Limited PLD 2003 SC 808.
9. In view of the above, the order dated 08.07.2015 passed by learned Judicial Magistrate-IX/Civil Judge, Quetta, is set aside and the application filed by the appellant/defendant under Section 34 of the Act is accepted and the proceedings before the learned trial Court in Civil Suit No. 60 of 2015 is hereby stayed, adjourned 'sine dia' and the matter is hereby referred to the Arbitrator for decision.
(Y.A.)
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